2
Caverion Annual Review 2022
Table of contents
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Caverion Annual Review 2022
We enable
performance and
people’s wellbeing
in smart and
sustainable built
environments
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Caverion Annual Review 2022
Caverion – Building Performance
Caverion is an expert for smart and sustainable
built environments, enabling performance and
people’s well-being. Customers can trust our
expert guidance during the entire lifecycle of
their buildings, infrastructure or industrial sites.
Our offering covers the installation and
maintenance of base and smart technologies all
the way to managed services, advisory and
engineering services and digital solutions.
Our customers are supported by almost 14,500 professionals in
10 countries in Northern and Central Europe. Our revenue in
2022 was over EUR 2.3 billion. Caverion’s shares are listed on
Nasdaq Helsinki. Caverion’s head office is located in Vantaa,
Finland.
Sustainable impact
What makes our company unique is that we create sustainable
impact for every customer with the solutions we design and
deliver, reliably and transparently every time. Sustainable impact
for our customers means we develop and deliver long-lasting
solutions for their built assets and improve the sustainability and
energy efficiency of their built environment.
Caverion is a member of the UN Global Compact, the world’s
largest corporate sustainability initiative. In February 2022,
Caverion committed to the Science Based Targets initiative
(SBTi), which is driving ambitious climate action.
Our business units: Services and Projects
Services
Caverion is a partner for its customers within built environment
services, from technical maintenance, installation and property
management services to solutions based on smart technologies
and advisory services. Being a forerunner in sustainability,
digitalisation and technology, supported by a wide local service
network, we are able to offer our customers reliable, transparent
and high-quality services nationwide and internationally. Our
focus is on supporting our customers’ core business and
delivering impactful outcomes: carbon footprint decreases,
energy savings, improved end-user satisfaction and optimal
building conditions.
Our goal is to be a leading service company and our customers’
trusted partner, and to profitably grow faster than the market.
Projects
Caverion delivers building technology and infrastructure projects
for new building investments and modernisations. As a lifecycle
partner with design & build expertise, we install all building
technologies. We enable our customers’ building performance
with smart and energy efficient solutions, always focusing on
connectivity and human-centric design. Our customers count on
us for future-proof installations and technical solutions that
comply with regulations and the safety and sustainability
requirements of the future.
As a selective master of projects, our goal is to set the optimal
foundation for a long-term customer relationship which we
further grow with our service capabilities throughout the entire
lifecycle.
For industrial customers
Caverion improves production efficiency, operational reliability
and maintenance processes for its industrial customers. We help
them meet increasing sustainability requirements and develop
towards knowledge-based management and operator-driven
reliability. When the customers’ production or energy generation
assets and processes operate as planned, production disruptions,
uncontrolled emissions and waste are minimised. Caverion offers
solutions for the entire lifecycle of the investment - from pre-
engineering to implementation and ensuring production
continuity.
In Brief
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Caverion Annual Review 2022
From the CEO
2022 was an eventful and positive year for Caverion.
After the pandemic years 2020-2021, 2022 was another
exceptional year. The war in Ukraine has had a big impact, not
only on the political and social environment, but also on the
economic environment in Europe and the whole world. As a
consequence, the energy crisis and inflation became more and
more predominant concerns as the year progressed. Caverion
managed the challenges well because we continued to stay
close to our customers and supported them in addressing their
priorities – navigating the energy crisis, mitigating supply chain
issues and inflation and following tightened sustainability
regulations.
In May, our Capital Markets Day marked the launch of our
updated strategy, Sustainable Growth. Driven by our purpose of
Building Performance, we defined how we will differentiate and
focus in a market full of opportunities: we create sustainable
impact for every customer with the solutions we design and
deliver, reliably and transparently every time.
As evidence of our strategic progress and of increasing interest
in our company, a public tender offer for all the shares in
Caverion was announced in November. Since then, we have
seen development in this front, including another tender offer,
and our Board of Directors has worked diligently in the best
interests of our company and all of its shareholders. I believe
that this development is a unique opportunity to accelerate our
growth and the implementation of our strategy and I am
looking forward to this new chapter for our company.
Focusing on People at the center
In 2022, we acquired 12 companies in 5 countries. More than 560
new experts joined our Caverion family through these acquisitions,
further increasing our capabilities for building performance. Our
almost 14,500
employees cover a vast area of special expertise and
come from a diverse background of 52 different nationalities. We are
all united by the values that define our daily work: We do it together.
We deliver what we promise. We explore and improve.
Safety is the foundation, it always comes first. In 2022, we
maintained the positive trend of the previous years. Our LTIFR was as
low as 4.0. Nevertheless, any accident is one too many. We further
increased our focus on safety with additional preventive and
proactive measures in all our divisions.
The “race for talent” can be felt in our industry. Therefore, I am
particularly proud that our people have relatively long careers at
Caverion, and our recruitment efforts are working well. We have also
been able to show externally how great it is to work at Caverion; and
our company and business have been recognised for this. Part of
strengthening the building performance culture is also to reward the
right behaviour: a highlight each year is when we hand out the Golden
Helmet awards for special achievements to exceptional teams and
individuals across all divisions.
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Caverion Annual Review 2022
Digitalisation – for performance and well-being
Making built environment smart ultimately means using data-driven insights to make decisions and
to achieve tangible outcomes for the benefit of efficiency, performance and people’s well-being.
With Caverion SmartView, we are continuously expanding our ability to provide our customers with
actionable data and clear recommendations on the status of their buildings.
Embracing digitalisation means utilising automation for increased efficiency, security and insights.
With the acquisition of DI-Teknik in Denmark, we increased our expertise in industrial automation.
This strengthened our capability to provide smart, digital and sustainable solutions for the industrial
segment. We also grew in renewables by acquiring Wind Controller whose services include remote
24/7 monitoring of wind and industrial solar parks, growing sources of renewable electricity.
Internally too, we are digitalising more and more workflows and processes, always with the focus
on how this improves the way we can serve our customers.
Sustainability – energy efficiency as number one priority
Energy efficiency has been at the top of our agenda for many years. In 2022, it has become the top
priority for the majority of our customers. We have been able to support them with fast, flexible and
sustainable solutions to reduce their energy cost and carbon footprint. Furthermore, we advise on
how to adapt to fluctuations in energy availability and cost not only now but also in the mid- and
long-term. By improving our customers’ footprint, we increase our own handprint.
The other side of reaching our ambitious environmental targets is our own footprint. In 2022, we
communicated our commitment to electrifying our car fleet. Early in 2022, we also signed up to the
Science Based Targets initiative. We are proud that we received the EcoVadis Gold certificate, which
is awarded for scoring within the top 5% in the industry.
Customer Experience – together we improve every day
Doing well in the above three areas has an immediate effect on our fourth key theme: providing and
continuously improving the experiences our customers have in every interaction with Caverion. We
are proud that in 2022 our NPS (net promoter score, the main standard industry key performance
indicator in this area) results have for the sixth time in a row reached an all-time high. 2022 marked
another big improvement, although we were already above comparable industry averages. The
aggregated feedback is important, but personally I always gain most from speaking to our
customers individually and I appreciate the many opportunities I had to meet in person with
customers throughout the year.
Part of creating a great customer experience is join forces with other industry leaders in strong
partnerships. Since the summer, we have been collaborating with ABB to accelerate the
development of energy efficient and sustainable buildings. We are united by our common purpose
to fight climate change and we are driven by the impact we can make with the solutions we provide
to our customers.
**
Financially, our year 2022 was marked by a clear profitability uplift as a result of the determined
performance improvement actions made during the past years. Our revenue grew by 9.9 percent
and our EBITA was record-high during our nearly ten-year history as a publicly listed company.
I want to thank everyone who contributed to our successful 2022. Thanks go to my almost 14,500
colleagues across our divisions, to the thousands of customers who trusted us, to the partners that
work with us towards common goals and to our investors who share the belief in the purpose we
work for every day.
Jacob Götzsche
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Caverion Annual Review 2022
Sustainability highlights 2022
Electrifying our car fleet to reduce emissions
Our goal is to electrify our service fleet, 4,400 vehicles. Our estimation is that by the end of 2025,
half of our service vans would be electric, and all of them by 2030. For new service van orders in
cities, fully electric vehicles are now the default. As the majority of our carbon footprint currently
comes from the service vehicle fleet, the electrification our cars is an important step for us to reduce
local emissions significantly.
Helping to save the Baltic Sea for
future generations
During 2022, Caverion donated to the John
Nurminen Foundation and to the Baltic Sea
Action Group for efforts to protect the fragile
Baltic Sea. Our donation was a culmination of
many sustainability-related activities and
events carried out over the past year. In
addition, we continued to support the Smart
Building technology research at Aalto University
in Finland.
Collaborating with ABB
Together with ABB, we accelerate the
development of energy efficient and sustainable
buildings. The aim of the collaboration is to
jointly offer customers advanced, smart
solutions for achieving carbon-neutral buildings
and reaching their sustainability targets.
Continuing strong track record in
safety
We care about the safety, health and wellbeing
of our people and have improved safety
systematically throughout the company. Our
LTIFR level for 2022 is well above the industry
average, 4.0. Proactive safety work will
continue to be our focus in the future as our
goal is zero accidents.
Joining Science Based Targets
initiative
Caverion is committed to the Science Based
Targets initiative (SBTi), which is driving
ambitious climate action globally. SBTi enables
companies to set science-based emissions
reduction targets in line with the Paris Climate
Agreement and to limit global warming to 1.5
degrees. Our environmental targets will be
validated against science-based criteria by SBTi
in 2023.
Read more in our Sustainability Report 2022.
Welcoming 700 apprentices; adding
560 experts through acquisitions
Our people are the heart of Caverion. During the
year 2022, we offered apprenticeships to more
than 700 young potentials across our company.
560 experts joined our team through
acquisitions, increasing our capabilities in
various areas, including industrial automation,
wind power and security and safety.
Supporting our customers to save
energy
Saving energy is a priority topic for all our
customers.
Our experts offer proven advice how
to improve energy efficiency and save costs with
short-term actions. We also help our customers
to prepare for the future as the shift towards
fossil free energy production will mean that large
fluctuations in energy prices are likely to
continue.
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Caverion Annual Review 2022
Our strategy
In 2022, we launched our updated
strategy for Sustainable Growth. Our
strategy builds on our purpose of enabling
performance and people’s wellbeing in
smart and sustainable built environments.
After improving its profitability and delivering on its previous
strategy, Caverion is now ready for sustainable growth. During
this strategic period, launched in May 2022, we aim to increase
the share of our solutions business and to grow both organically
and through balanced M&A. Our ultimate strategic goal is to build
a clear differentiation from the competition.
Our strategic themes build a bridge between the previous and the
future strategy periods. We continue to focus on these four
themes:
﴿
People – becoming the most attractive employer
﴿
Digitalisation – developing more valuable and
transparent solutions for our customers
﴿
Sustainability – delivering sustainable value for our
stakeholders
﴿
Customer experience – ensuring the best customer
experience
The strategic themes guide all our actions. For example, in 2022,
we grew with 12 acquisitions in line with these themes.
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Caverion Annual Review 2022
Building a clear differentiation
What makes our company unique is that
we create sustainable impact for every customer with the
solutions we design and deliver, reliably and transparently every time
. Sustainable impact for our
customers means we develop and deliver long-lasting solutions for their built assets and improve
the sustainability and energy efficiency of their built environment. We build our clear differentiation
from competitors by focusing on carefully selected winning capabilities and by investing in focal
business areas. The strategic winning capabilities guiding our work are:
﴿
operational excellence in the field
﴿
the best experts in the right places
﴿
segment expertise and commercial excellence
﴿
customer-centric solutions
In 2022, in advancing on our winning capability of having operational excellence in the field, we have
focused a notable part of our development efforts on improving the digital tools our people use in
the field. To have the best experts in the right places, we have actively managed our presence to
make sure that we are close to our customers and have the right skills and competencies in each
location. In developing our capabilities in segment expertise and commercial excellence, we have
developed our customer engagement initiatives and made significant steps in advancing our focus
on strategic growth customer accounts. For our customer-centric solutions, we have invested in
solutions design with customers and in our solutions expertise and we have seen the start of
strategic partnerships in this area.
Our future business focus defines the development of our business portfolio going forward. We grow
by strengthening and investing in these three key areas:
﴿
outstanding installation and maintenance throughout our regions and disciplines
﴿
services throughout the lifecycle
﴿
adding value through Advisory, Engineering and Digital.
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Caverion Annual Review 2022
Read more about our sustainability targets in Board of
Directors’ report page 27.
Caverion drives sustainable impact
Sustainability is one of key themes of our strategy. We have
four focus ESG areas:
﴿
Caring for our people
﴿
Ensuring sustainable value chain
﴿
Increasing our handprint
﴿
Decreasing our footprint
Our overall target is to create sustainable impact through our
solutions, with a positive carbon handprint 10 times greater
than our own carbon footprint (Scope 1-2) by 2030.
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Caverion Annual Review 2022
Board of Directors’ Report January 1 –December 31, 2022
Operating environment in 2022
The economic uncertainty increased during 2022 due to the geopolitical tensions related to the
Ukraine conflict, resulting in subsequent energy crisis, mounting inflation, rising interest rates and
lowered economic growth prospects. Inflation accelerated during the year and the cost inflation
related to material prices, including fuel costs, continued to impact also the building technology
market. There have also been supply shortages and delays in some areas. Caverion has proactively
taken various measures to optimise the supply chain and to manage pricing.
Economic sentiment weakened in the EU during 2022 along with lower economic growth
prospects. Also the corona pandemic still continued to have some impact on the operating
environment through sick leaves.
More information on the operating environment of the business units has been presented in the
Financial Statements Release published on 9 February 2023.
Market position
Caverion has a strong market position and is ranked among the top-5 players in the building solutions
market in most of its operating countries measured by revenue. The market is overall still very
fragmented in countries where Caverion operates. Caverion is the largest company in its market in
Finland and among the two or three largest companies in Austria and Norway and the fourth largest
company in Sweden in its market. In Germany and Denmark, the company is among the top-10
players in the market. Additionally, Caverion is one of the leading industrial solutions companies in
Finland. The largest industrial client segments are the forest and bioproducts industry and the energy
sector.
(
Source of market sizes: the company’s estimate based on public information from third parties and
management calculation
).
Caverion’s year 202 2
Caverion’s year 2022 was marked by a clear profitability uplift as a result of the determined
performance improvement actions made during the past years. Caverion achieved a record-high
EBITA during its nearly ten-year history as a publicly listed company, amounting to EUR 86.1 (59.4)
million in 2022. The performance improvement was supported by the overall revenue growth mainly
in Services. In addition, consistent efforts in improving project risk management have gradually
resulted in healthier and more profitable project portfolio. This demonstrates Caverion’s strong
capability to deliver sustainable, profitable growth in line with its strategy that was updated during
the year.
For the full year, Caverion’s revenue increased by 9.9 percent to EUR 2,352.1 (2,139.5) million.
Organic growth was 8.6 percent. Revenue increased in all divisions as a result of increased underlying
activity and partly indirectly due to inflation impact. The Group’s Services business revenue increased
by 12.0 percent and amounted to EUR 1,570.1 (1,402.4) million. The Projects business revenue
increased by 6.1 percent to EUR 782.0 (737.1) million. Order backlog amounted to EUR 1,943.3
(1,863.8) million at the end of December, 4.3 percent higher compared to the previous year. The solid
order backlog is expected to support revenue growth also going forward. During the year, Caverion
also completed 12 acquisitions and continues to actively screen for suitable acquisitions. More
information about these transactions can be read under Group’s 2022 financial statement note 4.1
“Acquisitions and disposals”.
Caverion published its guidance for 2022 on 10 February 2022, according to which the Group’s
revenue (2021: EUR 2,139.5 million) and adjusted EBITA (2021: EUR 87.7 million) were estimated to
grow compared to 2021. The guidance remained valid up until the publication of the Financial
Statement Release on 9 February 2023. The Group’s revenue amounted to EUR 2,352.1 (2,139.5)
million and the adjusted EBITA to EUR 105.8 (87.7) million, or 4.5 percent of revenue.
Caverion’s operating cash flow before financial and tax items amounted to EUR 144.3 (103.8)
million in 2022 and cash conversion (LTM) was 100.6 (91.2) percent. The Group’s working capital at
the end of 2022 was EUR -141.4 (-144.7) million. Caverion had a high amount of undrawn credit
facilities at the end of the year. The Group’s gearing was 89.1 (69.8) percent and the equity ratio 19.8
(19.0) percent at the end of December. Interest-bearing net debt amounted to EUR 200.9 (140.7)
million at the end of December and the net debt/adjusted EBITDA ratio was 1.2x (1.0x).
Information on potential risk factors is given under “Short-term risks and uncertainties”.
A consortium of investors led by Bain Capital in the name of North Holdings 3 Oy announced on 3
November 2022 a public tender offer to the shareholders of Caverion. The Board of Directors of
Caverion, represented by a quorum comprising the non-conflicted members of the Board of Directors,
decided unanimously to recommend that the shareholders of Caverion accept the tender offer. More
information can be found under “Public tender offer for the shares in Caverion Corporation”, “Events
after the review period“ and in stock exchange releases.
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Caverion Annual Review 2022
Group strategy and financial targets
Caverion’s previous Fit for Growth strategy and the financial targets remained valid until 9 May 2022,
when Caverion launched its updated Sustainable Growth strategy and the updated financial targets
until the end of 2025. The strategy will deliver on Caverion’s purpose of enabling performance and
people’s wellbeing in smart and sustainable built environments. The updated strategy is based on a
clear differentiation and focuses on sustainable revenue growth, profitability improvement and
investments to support building performance.
The four strategic themes continue to be the focus on
people, sustainability and digitalisation leading to an outstanding customer experience.
Caverion builds on several sources of growth, both organic and inorganic. The company aims to
grow throughout its businesses and divisions with focus on evolving its business mix towards
Solutions business at the higher end of the value chain, including Advisory, Engineering and Digital
solutions, Managed Services as well as installation and maintenance in Smart disciplines. In base
disciplines, Caverion aims to grow with focus on Technical Maintenance, while continuing its
selectivity approach in Technical Installation projects. Potential acquisitions are mostly bolt-ons
focused on complementary capabilities required to support customers better locally, and also
platform acquisitions in existing geographical markets. Caverion is progressing well in intensifying
focus on the commercial agenda with further strengthening of the organisation and strategic focus
to customers as well as cross-border collaboration. The scaling up of the Strategic Growth Accounts
Program has resulted into winning some significant international contracts.
Supporting customers on their digitalisation journey while improving efficiency and long-term
sustainable outcomes, provides great opportunities for Caverion. The company’s digital solutions
such as Caverion SmartView, Remote Services and building automation solutions differentiate
Caverion from its competitors already today and will also be important elements in future growth.
Caverion has also invested in building expertise in selected Smart disciplines such as Building
Automation and Analytics, Refrigeration and Clean Heat as well as Security. These solutions require
regular maintenance and provide further opportunities for value-adding services, which links to
Caverion’s core competence of supporting customers throughout the lifecycle of their built
environments. This is delivered by Caverion’s almost 14,500 highly skilled employees.
Climate change continues to be the biggest threat our earth is facing. Especially urban
environments are a major source of carbon emissions, and solutions to change the trajectory are
urgent. Caverion is contributing to a carbon-neutral society through its energy-efficient and
sustainable solutions. There is an increased interest for services supporting sustainability, such as
energy management. For Caverion, this provides a significant opportunity to modernise buildings and
to improve energy-efficiency together with its customers. In 2023, Caverion will report for the first
time its EU taxonomy alignment levels for 2022, which, together with the sustainability targets, KPIs
and actions, are described in more detail under “Disclosure regarding non-financial information”.
Financial targets
Sustainably strong cash conversion, adjusted EBITA margin as well as organic and M&A revenue
growth are the Group’s most important financial targets in the Sustainable Growth strategy,
supported by a moderate debt leverage level.
The focus is on revenue growth and profitability improvement. Organic growth is supported by
bolt-on acquisitions in selected growth areas and complementary capabilities. Caverion aims to reach
its profitability target through operating and financial leverage as well as improving scalability and
efficiency. Productivity is also improved by sharing common expertise across the company.
Furthermore, higher profitability is expected from M&A activities.
The following table presents the updated financial targets and the progress in them in 2022.
Financial targets (until the end of 2025)
Progress in 2022
Cash conversion (LTM)
= Operating cash flow
before financial and tax items / EBITDA > 100%
- Cash conversion 100.6 (91.2)% in 2022
- Operating cash flow EUR 144.3 (103.8) million
in 2022
Profitability
: Adjusted EBITA > 5.5% of revenue
- Adjusted EBITA amounted to EUR 105.8
million or 4.5 (4.1) % of revenue in 2022
Growth over the strategy period
:
- Organic revenue growth: 3−4% p.a.
- M&A revenue growth: 2−3% p.a.
- Organic revenue growth 8.6% in 2022
- M&A revenue growth 2.2% in 2022
Debt leverage
: Net debt/LTM Adjusted EBITDA
< 2.5x
- At the level of 1.2x (1.0x) as per 12/2022
Dividend policy
: Distribute at least 50% of the
result for the year after taxes, however, taking
leverage level into account.
Dividend distribution
:
The Board of Directors
proposes to the Annual General Meeting to be
held on 27 March 2023 that a dividend of EUR
0.20 per share will be paid for the year 2022.
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Caverion Annual Review 2022
Group financial development 2022
The key figures have been presented in more detail in the Consolidated Financial Statements. Unless
otherwise noted, the figures in brackets refer to the corresponding period in the previous year.
Order backlog
Despite the challenges posed by the operating environment, order backlog at the end of December
increased by 4.3 percent to EUR 1,943.3 million from the end of December in the previous year (EUR
1,863.8 million). Around 63 percent of the order backlog is estimated to be realised as revenue during
2023. At comparable exchange rates the order backlog increased by 6.3 percent from the end of
December in the previous year. Order backlog increased by 8.2 (14.1) percent in Services and
decreased by 0.6 (+18.0) percent in Projects from the end of December in the previous year.
Revenue
Revenue for January–December was EUR 2,352.1 (2,139.5) million. Revenue increased by 9.9 percent
compared to the previous year. At the previous year’s exchange rates, revenue was EUR 2,371.9
million and increased by 10.9 percent compared to the previous year. Organic growth was 8.6 percent.
Revenue increased by 2.2 (-0.2) percent as a result of acquisitions and divestments.
Revenue was negatively impacted by fluctuations in currency exchange rates of EUR 19.8 million,
equalling a decrease of 0.9 percent. Changes in Swedish krona had a negative effect of EUR 21.7
million and Norwegian krone had a positive effect of EUR 2.2 million.
Revenue increased in all divisions as a result of increased underlying activity and partly indirectly
due to inflation impact.
The revenue of the Services business unit increased and was EUR 1,570.1 (1,402.4) million in
January–December, an increase of 12.0 percent, or 12.9 percent in local currencies. The revenue of
the Projects business unit was EUR 782.0 (737.1) million in January–December, an increase of 6.1
percent, or 7.0 percent in local currencies. Caverion continued a selective approach in the Projects
business.
The share of Services revenue developed in line with the strategy. The Services business unit
accounted for 66.8 (65.5) percent of Group revenue, and the Projects business unit for 33.2 (34.5)
percent of Group revenue in January–December.
Distribution of revenue by Division and Business Unit
Revenue, EUR million
1-12/2022
%
1-12/2021
%
Change
Sweden
455.0
19.3
424.4
19.8
7.2%
Finland
431.9
18.4
403.9
18.9
6.9%
Germany
406.0
17.3
374,1
17.5
8.5%
Norway
368.5
15.7
352.5
16.5
4.5%
Industry
285.5
12.1
256.8
12.0
11.2%
Austria
237.0
10.1
188.7
8.8
25.6%
Denmark
122.1
5.2
80.0
3.7
52.6%
Other countries*
46.0
2.0
59.0
2.8
-22.0%
Group, total
2,352.1
100.0
2,139.5
100.0
9.9%
Services
1,570.1
66.8
1,402.4
65.5
12.0%
Projects
782.0
33.2
737.1
34.5
6.1%
* Other countries include the Baltic countries and Russia. Caverion divested its Russian subsidiary in December 2021, which
explains the
year-on-year decline in revenue. Baltic countries revenue increased slightly in 2022 compared to last year.
Organic growth
Revenue change
Change
Change in
comparable
rates *
Organic
growth **
Currency
impact
Acquisitions and
divestments
impact
Services
12.0%
12.9%
9.5%
-1.0%
3.4%
Projects
6.1%
7.0%
6.8%
-0.9%
0.1%
Group, total
9.9%
10.9%
8.6%
-0.9%
2.2%
* Revenue change in local currencies
** Revenue change in local currencies, excluding acquisitions and divestments
15
Caverion Annual Review 2022
Profitability
Adjusted EBITA, EBITA and operating profit
Adjusted EBITA for January–December increased to EUR 105.8 (87.7) million, or 4.5 (4.1) percent of
revenue and EBITA to EUR 86.1 (59.4) million, or 3.7 (2.8) percent of revenue.
Profitability improved during the period despite the cost inflation and higher sick leave levels. Both
Services and Projects improved their profitability. Caverion has managed to cover material cost
increases in pricing and improve efficiency.
Divisions Austria, Finland, Industry and Norway progressed well. Division Denmark continued the
positive performance improvement.
The operating profit (EBIT) for January–December was EUR 69.9 (43.5) million, or 3.0 (2.0) percent
of revenue.
Costs related to materials and supplies increased to EUR 615.4 (523.9) million and external
services increased to EUR 446.0 (398.4) million in January–December. Personnel expenses increased
to a total of EUR 923.6 (889.9) million for January–December. Other operating expenses increased to
EUR 226.1 (216.3) million. Other operating income amounted to EUR 2.3 (2.8) million.
Depreciation, amortisation and impairment amounted to EUR 73.5 (70.3) million in January–
December. Of these EUR 57.2 (54.3) million were depreciations on tangible assets and EUR 16.2 (15.9)
million amortisations on intangible assets. Of the depreciations, the majority related to right-of-use
assets in accordance with IFRS 16 amounting to EUR 51.0 (48.3) million and EUR 6.2 (6.0) million
related to machinery and equipment and other tangible assets. The amortisations were related to
allocated intangibles on acquisitions amounting to EUR 5.9 (3.9) million as well as IT and developed
solutions amounting to EUR 10.3 (12.1) million.
There was a EUR 4.0 million write-down from the last separately identified major risk project. The
company no longer expects to report items in this category under items affecting comparability going
forward.
The Group’s restructuring costs amounted to EUR 1.1 million. There were restructuring costs
related to changes in the Group Management Board and Division Norway. Other items totalled EUR
9.2 million. Caverion settled certain civil claims related to its old cartel case in Germany, totalling EUR
6.7 million. Other items includes also EUR 2.5 million of advisory costs and personnel bonuses related
to the ongoing public tender offers. Transaction costs related to acquisitions and divestments totalled
EUR 5.4 million in January–December.
EBITA is defined as Operating profit + amortisation and impairment on intangible assets. Adjusted
EBITA = EBITA before items affecting comparability (IAC). Items affecting comparability (IAC) in 2022
are material items or transactions, which are relevant for understanding the financial performance of
Caverion when comparing the profit of the current period with that of the previous periods. These
items can include (1) capital gains and/or losses and transaction costs related to divestments and
acquisitions; (2) write-downs, expenses and/or income from separately identified major risk projects;
(3) restructuring expenses and (4) other items that according to Caverion management’s assessment
are not related to normal business operations. In 2021 and 2022, major risk projects include only one
old risk project in Germany reported under category (2). In 2021 and 2022, provisions and legal and
other costs for civil claims related to the German anti-trust matter were reported under category (4).
Category (4) includes also advisory costs and personnel bonuses related to the ongoing public tender
offer and in 2021, previously capitalised expenses that were booked as operative expenses due to a
change in the accounting principle of implementation costs in cloud computing arrangements.
Adjusted EBITA and items affecting comparability (IAC)
EUR million
1–12/22
1–12/21
EBITA
86.1
59.4
EBITA margin, %
3.7
2.8
Items affecting comparability (IAC)
-
Capital gains and/or losses and transaction costs related to
divestments and acquisitions
5.4
10.7
-
Write-downs, expenses and income from major risk projects*
4.0
4.0
-
Restructuring costs
1.1
2.9
-
Other items**
9.2
10.6
Adjusted EBITA
105.8
87.7
Adjusted EBITA margin, %
4.5
4.1
*
Major risk projects include only one old risk project in Germany during 2021 and 2022.
** In 2021 and 2022, provisions and legal and other costs for civil claims related to the German anti-trust matter. 2022 includes
also EUR 2.5 million of advisory costs and personnel bonuses related to the ongoing public tender offer. In 2021 EUR 1.4 million
previously capitalised expenses were booked as operative expenses due to change in accounting principle of implementation
costs in cloud computing arrangements.
Adjusted EBITDA is affected by the same adjustments as adjusted EBITA, except for restructuring
costs, which do not include depreciation and impairment relating to restructurings.
Result before taxes, result for the period and earnings per share
Result before taxes amounted to EUR 60.9 (34.9) million, result for the period to EUR 46.2 (25.1)
million, and earnings per share to EUR 0.32 (0.17) in January–December. Net financing expenses in
January–December were EUR 9.0 (8.6) million. This includes an interest cost on lease liabilities
amounting to EUR 4.1 (3.8) million. In January-March 2022, net finance expenses included one-off
exchange settlement cost related to bond refinancing amounting to EUR 1.2 million.
The Group's effective tax rate was 24.1 (28.2) percent in January–December 2022. Income taxes
in the income statement amounted to EUR 14.7 (9.8) million January–December 2022.
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Caverion Annual Review 2022
Capital expenditure, acquisitions and disposals
Gross capital expenditure on non-current assets (excluding capital expenditure on leased assets),
including acquisitions, totalled EUR 112.8 (26.0) million in January–December, representing 4.8 (1.2)
percent of revenue. Investments in information technology totalled EUR 8.5 (8.0) million representing
0.4 (0.4) percent of revenue. IT investments continued to be focused on building a harmonised IT
infrastructure and common platforms, with migration to the cloud. Caverion SmartView and mobile
tools were also further developed. Acquisitions were EUR 98.8 (13.8) million and other investments
amounted to EUR 5.5 (4.2). The investments in acquisitions were the largest in the history of Caverion
as a listed company in line with the company’s Sustainable Growth Strategy.
Information on acquisitions and disposals during 2022 is presented in the Group’s 2022 financial
statement note 4.1 “Acquisitions and disposals”.
Research and development
The Group’s expenditure related to research and development activities related to product and service
development amounted to approximately EUR 5.2 (4.9) million in 2022, representing 0.2 (0.2) percent
of revenue. Of the total amount EUR 2.7 (2.5) million was recognised as an expense in the income
statement and EUR 2.5 (2.4) million of the development expenses was capitalised.
Investments in research and development amounted to 3.6 million in 2020, representing 0.2
percent of revenue. Of the total amount EUR 1.8 million was recognised as an expense in the income
statement and EUR 1.8 million of the development expenses was capitalised in 2020.
Cash flow, working capital and financing
The Group’s operating cash flow before financial and tax items improved to EUR 144.3 (103.8) million
in January–December and cash conversion (LTM) was 100.6 (91.2) percent. The cash flow was
negatively impacted by the payment of EUR 8.8 million for civil claims relating to the German anti-
trust matter. The respective cost was recognised in 2021 and reported in items affecting
comparability in 2021.
The Group’s free cash flow amounted to EUR 32.9 (67.2) million. Cash flow after investments was
EUR 23.4 (58.2) million. The Group’s working capital was EUR -141.4 (-144.7) million at the end of
December.
The amount of trade and POC receivables increased to EUR 611.2 (541.9) million and other current
receivables decreased to EUR 31.6 (33.8) million. On the liabilities side, advances received increased
to EUR 286.2 (261.3) million, other current liabilities increased to EUR 293.3 (278.3) million and trade
and POC payables increased to EUR 227.1 (197.7) million.
Caverion’s cash and cash equivalents amounted to EUR 81.2 (130.9) million at the end of
December. In addition, Caverion had undrawn revolving credit facilities amounting to EUR 100.0
million and undrawn overdraft facilities amounting to EUR 19.7 million.
The Group’s gross interest-bearing loans and borrowings excluding lease liabilities amounted to
EUR 144.6 (135.9) million at the end of December, and the average effective interest rate was 3.0
(2.6) percent. Approximately 39 percent of the loans have been raised from banks and other financial
institutions and approximately 61 percent from capital markets. Lease liabilities amounted to EUR
137.5 (135.7) million at the end of December 2022, resulting to total gross interest-bearing liabilities
of EUR 282.0 (271.6) million.
The Group’s interest-bearing net debt excluding lease liabilities amounted to EUR 63.4 (5.0)
million at the end of December and including lease liabilities to EUR 200.9 (140.7) million. The net
debt was impacted by investments in the acquisitions with a negative cash flow effect of EUR 85.3
million in January-December 2022 and dividend payment of EUR 23.2 million.
At the end of December, the Group’s gearing was 89.1 (69.8) percent and the equity ratio 19.8
(19.0) percent.
Caverion has a balanced debt maturity profile, where most of the long-term debt matures in 2025
and in 2027.
In February Caverion issued a senior unsecured bond of EUR 75 million with an issue price of
99.425 percent. The 5-year bond matures on 25 February 2027 and carries a fixed annual interest of
2.75 percent. Also, Caverion carried out a tender offer for the EUR 75 million bond maturing in March
2023 resulting to a EUR 71.5 million acceptance level. The new bond extends the maturity profile,
lowers the interest expenses and supports Caverion’s strategy for sustainable profitable growth.
On 15 May 2020 Caverion issued a EUR 35 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 6.75 percent per annum until 15 May
2023. The hybrid bond does not have a maturity date but the issuer is entitled to redeem the hybrid
for the first time on 15 May 2023, and subsequently, on each coupon interest payment date. If the
hybrid bond is not redeemed on 15 May 2023, the coupon will be changed to 3-month EURIBOR
added with a Re-offer Spread (706.8 bps) and a step-up of 500bps.
Caverion’s external loans are subject to a financial covenant based on the ratio of the Group’s net
debt to EBITDA according to the calculation principles confirmed with the lending parties. The financial
covenant shall not exceed 3.5:1. Caverion is in compliance with the quarterly monitored financial
covenant.
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Caverion Annual Review 2022
Board of Directors, Auditors, President and CEO
Board of Directors
The Annual General Meeting was held on 28 March 2022. The Annual General Meeting elected a
Chairman, a Vice Chairman and five ordinary members to the Board of Directors. Mats Paulsson was
elected as the Chairman of the Board of Directors, Markus Ehrnrooth as the Vice Chairman and Jussi
Aho, Joachim Hallengren, Thomas Hinnerskov, Kristina Jahn and Jasmin Soravia as members of the
Board of Directors for a term of office expiring at the end of the Annual General Meeting 2023. The
same members served in the Board of Directors also from the beginning of 2022 until the closing of
the Annual General Meeting 2022.
The Vice Chairman of the Board, Markus Ehrnrooth is closely associated with two of the members
of the consortium of investors led by Bain Capital (“Bain Consortium”) that in the name of North
Holdings 3 Oy announced on 3 November 2022 a public tender offer for all of the shares in Caverion
Corporation. To avoid any actual or perceived conflicts of interests, Markus Ehrnrooth has not
participated in and has refrained from all the work of the Board of Directors and its committees during
the pendency of the discussions between the Bain Consortium and the company concerning the Bain
Consortium tender offer, and during the pendency of the discussions between Triton Investment
Management Limited (“Triton”) and the company concerning the Triton tender offer announced in the
name of Crayfish BidCo Oy on 10 January 2023.
More detailed information of Caverion’s board members and their remuneration as well as board
committees can be found in Corporate Governance Statement and Remuneration Report, which are
published separately on Caverion’s website www.caverion.com/Investors – Corporate Governance.
Auditors
The Annual General Meeting elected Authorised Public Accountants Ernst & Young Oy, auditing firm,
to audit the company’s governance and accounts in 2022. The auditor with the main responsibility is
Antti Suominen, Authorised Public Accountant.
President and CEO
Caverion's Board of Directors nominates the President and CEO and decides on his/her remuneration
and other terms of employment.
Caverion Corporation's President and CEO is Jacob Götzsche as of 9 August 2021.
Personnel
Personnel by division,
end of period
12/22
12/21
Change
Finland
2,894
2,819
3%
Sweden
2,559
2,528
1%
Norway
2,344
2,331
1%
Germany
2,225
2,177
2%
Industry
1,850
2,243
-18%
Austria
1,023
903
13%
Denmark
759
528
44%
Other countries
666
609
9%
Group Services
170
160
6%
Group, total
14,490
14,298
1%
Information on the effect of acquisitions on Group personnel can be found in financial statement note 4.1
“Acquisitions and disposals”.
Caverion Group employed 14,570 (14,831) people on average in January–December 2022. At the end
of December, the Group employed 14,490 (14,298) people. Personnel expenses for January–
December increased to EUR 923.6 (889.9) million.
Employee safety continued to be a high focus area also in 2022. Due to the corona situation, many
extra actions have been taken to protect the employees, to organise the work in a way that it is safe
to complete and to establish different supportive trainings, tools and communication methods.
However, due to the corona pandemic, sick leave levels increased significantly compared to the
previous year.
The Group’s accident frequency rate at the end of December was 4.0 (4.0).
Changes in Caverion’s Group Management
Deputy CEO Thomas Hietto, responsible for Services, Sustainability & Smart City Solutions, resigned
as of 28 January 2022. Group Management Board member Kari Sundbäck, responsible for Strategy,
Marketing & Communications and Supply Operations, assumed interim responsibility for Services as
well as Sustainability & Smart City Solutions on top of his other responsibilities.
As Caverion announced on 10 February 2022, Kari Sundbäck initially took responsibility for
Services business, smart technologies, advisory, engineering and digital solutions as well as for
strategic and operations development. As of 1 August 2022 Sundbäck is responsible for Services
business, smart technologies, advisory, engineering and digital solutions as well as for sustainability.
Reinhard Poglitsch was appointed as EVP, Head of Commercial, responsible for International
customers and commercial development as of 14 March 2022. Poglitsch joined Caverion after a long
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Caverion Annual Review 2022
career in ISS, a global provider of facility services. His most recent position was as Commercial
Director, ISS Europe, during 2019−2021. He is also a Group Management Board member of Caverion.
Mikko Kettunen was appointed as CFO of Caverion Group and a member of the Group
Management Board of Caverion as of 22 August 2022. Kettunen’s latest position has been the CFO
of the Finnish stock-listed composite solutions manufacturer Exel Composites Plc, where he has also
acted earlier in a combined role as CFO and Business Unit Manager for Finland.
Riitta Palomäki held the position of interim CFO in March−August 2022. The previous CFO Martti
Ala-Härkönen had resigned to join another company and continued as CFO until 31 March 2022.
Short-term risks and uncertainties
There have been no material changes in Caverion’s significant short-term risks and uncertainties
compared to those reported in the Interim Report Q3/2022. Those risks and uncertainties are still
valid.
Operating environment.
The impacts of the corona pandemic and the consequent economic
downturn on Caverion, and the actions taken by the company are summarised separately in this
report.
Caverion is exposed to different types of strategic, operational, political, market, customer,
financial and other risks. Caverion estimates that the trade, health and political risks are increasing
globally and have partly already materialised in form of the corona pandemic. The increasing cost
base, including increasing material and energy prices, could have a material adverse effect on
Caverion.
Operational risks and uncertainties.
Projects business. These include risks related to tendering (e.g. calculation and pricing), contractual
terms and conditions, partnering, subcontractors and the supply chain, procurement and price of
materials, long-term service commitments, guaranteed service levels, and availability of qualified
personnel and project management. To manage these risks, risk assessment and review processes
for both the sales and execution phase are in place, and appropriate risk reservations are being made.
The Group’s Projects Business Unit and Services Business Unit are overseeing the overall risk of
Projects and Services, respectively, and addressing the necessary actions to Divisions to mitigate and
manage the risks.
Given the risks materialised in the Projects business, the Group Projects Business Unit is
dedicated to the overall improvement of project risk management, to steering the project portfolio
and to improving project management capabilities. Despite clearly defined project management
processes and project controls, it is possible that some risks which could lead to project write-downs,
provisions, disputes and litigations may materialise and could have a negative impact on Caverion’s
financial performance and position.
Caverion made a large amount of project write-downs during the past strategy period. Systematic
performance management continues to be part of the core project management processes in all
divisions. In 2019 to, 2022, Caverion reported only one old major risk project from Germany in
adjusted EBITA, the completion of which was delayed to the end of 2021. The project has been
handed over to the customer in the end of 2021. In 2022, there were EUR 4.0 million write-downs
from this last separately identified major risk project. The company no longer expects to report items
in this category under items affecting comparability going forward. It is possible that further risks may
emerge in regard to this old project or other projects.
Receivables.
it is probable that no payment can be expected. Caverion Group follows a policy in valuing trade
receivables and the bookings include estimates and critical judgements. The estimates are based on
experience with write-offs realised in previous years, empirical knowledge of debt collection,
customer-specific collaterals and analyses as well as the general economic situation of the review
period. Caverion carries out risk assessments related to POC and trade receivables in its project
portfolio on an ongoing basis. There are certain individual larger receivables where the company
continues its actions to negotiate and collect the receivables. There is remaining risk in the identified
receivables, and it cannot be ruled out that there is also risk associated with other receivables. The
corona crisis has increased the general risk level related to the financial standing of customers and
the collection of receivables.
Disputes.
involved in disputes and legal proceedings in several projects. These disputes and legal proceedings
typically concern claims made against Caverion for allegedly defective or delayed delivery. In some
cases, the collection of receivables by Caverion may result in disputes and legal proceedings. There is
a risk that the client presents counter claims in these proceedings. The outcome of claims, disputes
and legal proceedings is difficult to predict. Write-downs and provisions are booked following the
applicable accounting rules.
Compliance.
Office (FCO) in a cartel case that had been investigated by the authority since 2014. The investigation
concerned several companies providing technical building services in Germany. Caverion Deutschland
GmbH (and its predecessors) was found to have participated in anti-competitive practices between
2005 and 2013. According to the FCO’s final decision issued on 3 July 2018, Caverion Deutschland
GmbH was imposed a fine of EUR 40.8 million. In the end of March 2020, the FCO issued its final
decision on the cartel case against the other building technology companies involved in the matter.
There is a risk that civil claims may be presented against the involved companies, including Caverion
Deutschland GmbH. It is not possible to evaluate the magnitude of the risk for Caverion at this time.
Some civil claims were settled between the parties in the fourth quarter of 2021 and in 2022. Caverion
will disclose any relevant information on the potential civil law claims as required under the applicable
regulations.
As part of Caverion’s co-operation with the authorities in the cartel matter, the company identified
activities between 2009 and 2011 that were likely to fulfil the criteria of corruption or other criminal
commitment in some of its client projects executed in that time. Caverion brought its findings to the
attention of the authorities and supported them in investigating the case. In the end of June 2020, the
public prosecutor's office in Munich informed Caverion that no further investigative measures are
intended and that no formal fine proceedings against Caverion will be initiated related to those cases.
There is a risk that civil claims may be presented against Caverion Deutschland GmbH. It is not
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Caverion Annual Review 2022
possible to evaluate the magnitude of the risk for Caverion at this time. Caverion will disclose any
relevant information on the potential civil law claims as required under the applicable regulations.
Caverion has made significant efforts to promote compliance in order to avoid any infringements
in the future. As part of the compliance programme all employees must complete an annual e-
learning module and further training is given across the organisation. All new employees have to
familiarise themselves with Caverion’s Code of Conduct and to take the e-learning. All employees are
required to comply with Caverion’s Code of Conduct, which has a policy of zero tolerance on anti-
competitive practices, corruption, bribery or any unlawful action.
Financing.
Group’s net debt to EBITDA. Breaching this covenant would give the lending parties the right to
declare the loans to be immediately due and payable. It is possible that Caverion may need
amendments to its financial covenant in the future. The level of the financial covenant ratio is
continuously monitored and evaluated against actual and forecasted EBITDA and net debt figures.
The outbreak of the coronavirus pandemic has increased the general risk level related to the
availability of financing as well as foreign exchange related risks.
Financial guarantees.
Caverion’s business typically involves granting financial guarantees to
customers or other stakeholders, especially in large projects, e.g. for the security of advance
payments received, performance of contractual obligations, and defects during the warranty period.
Such guarantees are typically granted by financial intermediaries on behalf of Caverion. There is no
assurance that the company would have continuous access to sufficient guarantees from financial
intermediaries at competitive terms or at all, and the absence of such guarantees could have an
adverse effect on Caverion’s business and financial situation. To manage this risk, Caverion’s target
is to maintain several guarantee facilities in the countries where it operates. The outbreak of the
coronavirus pandemic has increased the general risk level related to the availability of guarantee
facilities.
Information security.
continuous operations. Prolonged disruption in the key systems could limit Caverion’s ability to
conduct operations in a profitable and efficient manner. In addition, increasing sophistication of and
frequency of unauthorised access and cyber threats pose a risk to Caverion's information assets. Data
privacy related breaches may have a negative impact on Caverion's reputation. Over time Caverion
has made significant investments in its IT systems, and there is a risk that the expected pay-back of
these investments is not fully materialised.
Goodwill.
annually for any impairment. The amount by which the carrying amount of goodwill exceeds the
recoverable amount is recognised as an impairment loss through profit and loss. If negative changes
take place in Caverion’s result and growth development, this may lead to an impairment of goodwill,
which may have an unfavourable effect on Caverion’s result of operations and shareholders' equity.
Financial risks have been described in more detail in the 2022 Financial Statements under Note
5.5 “Financial risk management”.
Risks related to non-financial information have been described in more detail under “Disclosure
regarding non-financial information”.
Caverion’s risk management principles and the description of Caverion’s key risks are available on
the Company’s website
Impact of corona pandemic on Caverion
The corona pandemic continued to negatively impact Caverion’s business in 2022. While there was
less impact on the demand, the level of sick leaves was particularly high in the Nordics and also higher
than normally in Central Europe especially during the first half of the year 2022. During the second
half of the year 2022, the effects of the pandemic started to normalise but it still had an impact on
business.
The business volume and the amount of new order intake are important determinants of
Caverion’s performance. Despite the somewhat more optimistic outlook of the corona pandemic, a
negative scenario whereby new waves of the corona pandemic or new pandemics would emerge
cannot be ruled out. However, a large part of Caverion’s services is vital in keeping critical services for
buildings, industries and infrastructure up-and-running at all times.
Should the new waves of the corona pandemic or new pandemics emerge, Caverion’s business
would be exposed to various risks. These include, for example, suspension or cancellation of existing
contracts by customers, lack of demand for new services, absenteeism of employees and
subcontractor staff, closures of work sites and other work premises by customers or authorities and
defaults in customer payments.
Impacts of the Ukraine crisis on Caverion’s business during
2022
Russia’s invasion of Ukraine at the end of February 2022 increased geopolitical tensions especially in
Europe overnight. The war has created uncertainties weakening the growth prospects in several
countries where Caverion operates. The duration of the Ukrainian conflict and its future effects on the
industry, and Caverion in particular, remain uncertain, and the overall situation remains highly volatile.
Caverion divested its Russian subsidiary at the end of 2021 and has no operations in Ukraine or
Belarus. Therefore, the impact of the conflict on Caverion is currently indirect. Caverion has
experienced increases in material prices and delays in the supply chain and in decision-making,
however Caverion continued to manage them on a daily basis without having a significant impact on
performance during 2022.
Authorisations
Repurchase and/or acceptance as pledge of own shares of the company
The Annual General Meeting of Caverion Corporation, held on 28 March 2022, authorised the
Board of Directors to decide on the repurchase and/or on the acceptance as pledge of the company’s
own shares in accordance with the proposal by the Board of Directors. The total number of own
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Caverion Annual Review 2022
shares to be repurchased and/or accepted as pledge shall not exceed 13,500,000 shares, which
corresponds to approximately 9.7% of all the shares in the company. The company may use only
unrestricted equity to repurchase own shares on the basis of the authorisation. Purchase of own
shares may be made at a price formed in public trading on the date of the repurchase or otherwise at
a price formed on the market. The Board of Directors resolves on the manner in which own shares
will be repurchased and/or accepted as pledge. Repurchase of own shares may be made using, inter
alia, derivatives. The repurchase and/or acceptance as pledge of own shares may be made otherwise
than in proportion to the share ownership of the shareholders (directed repurchase or acceptance as
pledge).
The authorisation cancelled the authorisation given by the Annual General Meeting on 24 March
2021 to decide on the repurchase and/or acceptance as pledge of the company’s own shares. The
authorisation is valid until 28 September 2023. The Board of Directors has not used the authorisation
to decide on the repurchase of the company’s own shares during the period.
As part of the implementation of the Matching Share Plan announced on 7 February 2018, the
company has accepted as a pledge the shares acquired by those key employees who took a loan from
the company. As a result, Caverion had 623,122 Caverion Corporation shares as a pledge at the end
of the reporting period on 31 December 2022.
Share issues
The Annual General Meeting of Caverion Corporation, held on 28 March 2022, authorised the Board
of Directors to decide on share issues in accordance with the proposal by the Board of Directors. The
total number of shares to be issued under the authorisation may not exceed 13,500,000 shares,
which corresponds to approximately 9.7% of all the shares in the company. The Board of Directors
decides on all the conditions of the issuance of shares. The authorisation concerns both the issuance
of new shares as well as the transfer of treasury shares. The issuance of shares may be carried out in
deviation from the shareholders’ pre-emptive rights (directed issue). The authorisation can be used,
e.g. in order to develop the company’s capital structure, to broaden the company’s ownership base,
to be used as payment in corporate acquisitions or when the company acquires assets relating to its
business and as part of the company’s incentive programs. The authorisation cancelled the
authorisation given by the Annual General Meeting on 24 March 2021 to decide on the issuance of
shares. The authorisation is valid until the end of the next Annual General Meeting, however no later
than 30 June 2023.
The Board of Directors has not used the current authorisation to decide on share issues during
the period. The decision on the directed share issue without payment described under “Shares and
share capital” was based on the previous authorisation.
Information about shares in Caverion Corporation
Updated lists of Caverion’s largest shareholders and ownership structure by sector as per December
31, 2022 are available on Caverion’s website at www.caverion.com/investors. The total combined
holdings of the members of the Board of Directors, President and CEO and other members of the
Group Management Board as per December 31, 2022 are presented in the notes to the financial
statements.
Public tender offer for the shares in Caverion Corporation
A consortium of investors led by Bain Capital announced in the name of North Holdings 3 Oy on 3
November 2022 a public tender offer to the shareholders of Caverion. The Board of Directors of
Caverion, represented by a quorum comprising the non-conflicted members of the Board of Directors,
then unanimously decided to recommend that the shareholders of Caverion accept the tender offer.
More information can be found in the stock exchange releases published on 3 November 2022 and
18 November 2022 as well as in the tender offer document published on 24 November 2022.
More updated information related to the tender offer and a subsequent competing tender offer
has also been presented under the section “Events after the review period”.
Shares and share capital
Caverion Corporation has a single series of shares, and each share entitles its holder to one vote at
the general meeting of the company and to an equal dividend. The company’s shares have no nominal
value. Caverion’s articles of association neither have any redemption or consent clauses nor any
provisions regarding the procedure of changing the articles.
The number of shares was 138,920,092 and the share capital was EUR 1,000,000 on 1 January
2022. Caverion held 2,502,467 treasury shares on 1 January 2022. At the end of the reporting period,
the total number of shares in Caverion was 138,920,092. Caverion held 2,447,447 treasury shares
on 31 December 2022, representing 1.76 percent of the total number of shares and voting rights. The
number of shares outstanding was 136,472,645 at the end of December 2022.
The Board of Directors of Caverion Corporation decided on a directed share issue without payment
for Caverion’s Restricted Share Plan 2019–2021 reward payment, as described in stock exchange
release published on 24 February 2022. In the directed share issue without payment, 55,020 Caverion
Corporation shares held by the company were on 24 February 2022 conveyed to 22 key employees
according to the terms and conditions of the plan. No new shares were issued in connection with the
plan and therefore the plan had no diluting effect. The decision on the directed share issue without
payment was based on the authorisation granted to the Board of Directors by the Annual General
Meeting of Shareholders held on 24 March 2021. Prior to the directed share issue, Caverion held a
total of 2,502,467 treasury shares, of which 2,447,447 treasury shares remained with the company
after the conveyance.
Information on the incentive plans is presented in the Consolidated Financial Statements for 2022
under Note 6.2 “Share-based payments”.
Caverion Corporation does not have any stock option programmes in place.
Trading in shares
The closing price of Caverion's share was EUR 6.39 at the end of the year 2021. The closing rate on
the last trading day of the review period on 31 December 2022 was EUR 6.93. The share price
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Caverion Annual Review 2022
increased by 8 percent during January–December. The highest price of the share during the review
period January–December was EUR 6.98, the lowest was EUR 4.09 and the average price was EUR
5.68. Share turnover on Nasdaq Helsinki in January–December amounted to 33.4 million shares. The
value of share turnover was EUR 190.3 million (source: Nasdaq Helsinki). Caverion's shares are also
traded in other marketplaces, such as Cboe and Turquoise.
The market capitalisation of the Caverion Corporation at the end of the review period was EUR
945.8 million. Market capitalisation has been calculated excluding the 2,447,447 shares held by the
company as per 31 December 2022.
Outlook for 2023
Guidance for 2023
Guidance for 2022
: In 2023, Caverion Group’s revenue (2022: EUR 2,352.1 million) and adjusted
EBITA (2022: EUR 105.8 million) will grow compared to 2022.
Market outlook for 2023
Caverion expects the underlying demand to be overall positive in Services during 2023.
In Projects, Caverion expects the underlying business activity to remain stable in 2023. In Projects,
however, the economic uncertainty may start to impact the demand environment negatively. The
market instability resulting from the war in Ukraine and the high inflation are expected to dampen the
willingness to invest in new construction.
This scenario assumes a sufficient control of the corona pandemic impacts with no significant
unforeseen setbacks in 2023 and no further escalation of the conflict in Ukraine.
The digitalisation and sustainability megatrends are in many ways favourable to Caverion and
they are believed to increase demand for Caverion’s offerings going forward. The increased energy
efficiency requirements, and the increasing digitalisation, automation and technology requirements
in the built environment remain strong, together with the urbanisation megatrend. Increasing
awareness of sustainability is supported by both EU-driven regulations and national legislation
setting higher targets and actions for energy efficiency and carbon-neutrality. The continued focus on
energy efficiency and CO2 reduction activities and projects continues to support activity and business
volume in Caverion’s operating environment.
Events after the review period
Crayfish BidCo Oy ("Crayfish BidCo"), a Finnish company controlled by Triton Fund V, announced on
10 January 2023 a voluntary public cash tender offer for all the shares in Caverion Corporation,
pursuant to which Crayfish BidCo proposes to acquire all issued and outstanding shares in Caverion
Corporation at an offer price of EUR 8.00 per share. This tender offer is subject to certain conditions,
as described in the announcement by Crayfish BidCo attached to Caverion’s stock exchange release
as per 10 January 2023.
Caverion Corporation received on 12 January 2023 an announcement under Chapter 9, Section 5
of the Finnish Securities Markets Act, according to which the holding of Crayfish BidCo had exceeded
the threshold of 5 per cent. According to the announcement, the direct holding of Crayfish BidCo in
Caverion, and the indirect holding of Triton V LuxCo 87 SARL in Caverion, increased on 12 January
2023 to 13,647,263 shares, corresponding to 9.82 per cent of Caverion’s shares and voting rights.
North Holdings 3 Oy (“North Holdings”) announced on 11 January 2023, that it will extend the
offer period for its tender offer announced on 3 November 2022 until January 31, 2023, at 4:00 p.m.
(Finnish time) as well as provided updated information of its financing and regulatory approvals. In
addition, North Holdings commented on the competing offer announced by Crayfish BidCo on10
January 2023. On 13 January 2023, North Holdings also supplemented its tender offer document
published on 24 November 2022 with this information and also confirmed that it had received the
merger control clearance decision of the European Commission. Additional information has been
presented in Caverion’s stock exchange releases and their attachments on 11 and 13 January 2023,
respectively.
The Board of Directors of Caverion announced on 13 January 2023 that it continues evaluating
Triton’s tender offer and provided information on discussions with Triton. The Board said that it will
present its view on the two offers, including a potential change in recommendation, latest on 24
January 2023.
North Holdings announced on 24 January 2023 that it improves the consideration in its tender
offer. Furthermore, North Holdings extended the offer period until 28 February 2023 and lowered the
acceptance threshold from more than 90 percent to more than 66 2/3 percent of all shares. The
shareholders of Caverion are given the possibility to choose either: (i) a debt instrument entitling to a
fixed cash payment of EUR 8.50 per share in nine months from the completion of the tender offer, or
(ii) an immediate cash consideration of EUR 8.00 per share upon completion of the tender offer. It was
also announced on 24 January 2023 that the Board of Directors of Caverion maintained its
recommendation for the tender offer by North Holdings based on the improved offer terms.
Additional information has been presented in Caverion’s stock exchange releases on 24 January 2023.
On 26 January 2023, North Holdings announced that it had received all necessary regulatory
approvals for its voluntary recommended public tender offer for all the shares in Caverion
Corporation.
22
Caverion Annual Review 2022
Disclosure regarding non-financial
information
Driving sustainable impact
Caverion’s purpose is to enable performance and people’s well-
being in smart and sustainable built environments. As built
environments are a major source of carbon emissions today,
Caverion drives sustainable impact by helping its customers save
energy and decrease the carbon footprint of their buildings,
infrastructure or industrial sites and processes. In addition,
optimising the conditions in the buildings have a positive effect on
the end-users and society as a whole. Caverion is committed to
operating in a financially, environmentally and socially responsible
way. This approach is integrated into the strategic decision-
making and daily business.
Caverion’s business model and strategy are described on
pages 9-11 of the Annual Review 2022. More information on
Caverion’s approach to sustainability can be found in the
Sustainability Report 2022 which is available at
www.caverion.com.
Sustainability is one of the key themes in Caverion’s Sustainable
Growth strategy. At Caverion, sustainability is managed through
four focus areas. The company aims for continuous development
by decreasing its carbon footprint, increasing its carbon handprint,
caring for its people and ensuring sustainable operations
throughout the value chain. Each of the four focus areas have KPIs
and action plans until 2025.
Beyond the ongoing strategy period, Caverion aims to create a
sustainable impact through its solutions by 2030 with a positive
carbon handprint 10 times greater than its own carbon footprint
(Scope 1-2). Caverion is also committed to the UN Global Compact
and Sustainable Development Goals.
23
Caverion Annual Review 2022
The Board of Directors addresses sustainability-related matters through its Human Resources
Committee and Audit Committee. The Group Management Board prepares the Group’s sustainability
related strategic and annual planning, supervises the implementation of these plans as well as
develops cooperation and common development within the Group regarding sustainability. The Group
sustainability team leads the execution, development and reporting of the sustainability work in
active collaboration with the divisions and functions such as human resources and procurement.
Caverion has compiled Group-level policies, instructions and guidelines in a structured manner
into Caverion Guidelines. Caverion’s Code of Conduct is the cornerstone of Caverion’s policies. It
defines Caverion’s ethical principles and the way of conducting business and behaving with a focus
on people, health and safety, business ethics and integrity as well as the environment. The Code of
Conduct applies to everyone working for Caverion and every employee is expected to report if they
suspect a breach. Any breaches of the Code of Conduct will result in actions being taken. A separate
Supplier Code of Conduct is used with suppliers, subcontractors, and other business partners. In 2022,
the sign-off rate for the Supplier Code of Conduct by major Caverion suppliers was 74%.
contributing to a carbon-neutral society by reducing its own emissions and by promoting its energy-
efficient and sustainable solutions.
Environmental aspects
Caverion’s most significant impact on the environment originates from its energy-efficient and
sustainable solutions, which help customers to reduce their environmental impact. In addition,
Caverion is contributing to a carbon-neutral society by reducing its own emissions.
Caverion’s environmental focus areas include decreasing its carbon footprint and increasing the
handprint. Caverion is committed to achieving a positive carbon handprint five times greater than its
Scope 1–2 carbon footprint by 2025. This is supported by the company’s objectives to define and
measure its total carbon footprint and have a defined carbon handprint for its offering.
In order to reliably and transparently measure the total carbon footprint, Caverion announced its
commitment to the Science Based Targets initiative (SBTi) at the beginning of 2022. By joining the
SBTi, Caverion’s environmental sustainability targets will be validated against science-based criteria
in the future, while taking into consideration the relevant Scope 1-3 emissions.
Caverion’s environmental management systems are certified to the international standard ISO
14001. These certifications covered 90% of the company’s business in 2022. Caverion’s Supplier Code
of Conduct sets out the minimum requirements for suppliers regarding their environmental impact.
Carbon footprint
A key component in Caverion’s carbon footprint is its service vehicle fleet that consisted of 4,400
service vans and cars in 2022. To mitigate service fleet emissions, the company is focusing on
increasing its remote services, optimising routes and increasing the use of biofuels and electric
vehicles.
During 2022, Caverion accelerated the shift towards electric powered service vans. For new
service van orders in cities, fully electric vehicles will be the default option and going forward this is
expected to reduce the carbon footprint significantly. By 2025, Caverion aims to have more than
2,000 electric service vans in use.
In 2022, the CO2 emissions of Caverion’s service fleet remained on the same level as the previous
year, at 15,000 tCO2. The service vehicle fleet emissions continued to be more substantial than the
emissions from Caverion’s facilities. 98% of the fuel used by the vehicle fleet was diesel, with an
increasing number of biodiesels in use.
Caverion’s operations are not extensively energy intensive. Scope 2 emissions derive mainly from
Caverion’s leased office buildings. Caverion is committed to increasing the share of renewable energy
use in its buildings and implementing everyday energy efficiency activities. These activities have
already been deployed at many locations. In 2022, Caverion shifted to utilising 100% renewable
energy in some of its operating countries.
Caverion aims to be a forerunner in its industry in carbon footprint work. Caverion has screened
all the Scope 3 emission categories already in 2021. Purchased goods and services and the use of
sold products were identified as the biggest emission sources. Based on the current estimate, Scope
3 accounts for over 90% of the company’s carbon emissions. The aim is to externally communicate
emissions for each Scope 3 category in the future. Caverion has also drawn up Group-level Scope 3
emission reduction plans. The key reduction areas include efficient waste and material management
as well as the procurement of products and services.
By working with its suppliers, Caverion ensures that the existing and new products it installs are
fit for circularity. The company aims to calculate the environmental footprint of the key solutions and
services provided to customers. A collaboration with key suppliers is planned to reduce the emissions
and the waste generated by the products. Acknowledging the biggest Scope 3 emission sources,
Caverion aims to further improve and mitigate the environmental impacts of its offering.
Carbon handprint
There is an increased market demand for services supporting sustainability, such as improved energy
efficiency and better indoor climate. The awareness of sustainability is supported by both EU-driven
regulations and national legislations setting higher targets and actions for energy efficiency and
carbon-neutrality. With its solutions, Caverion can help its customers in reaching their sustainability
targets. In 2022, Caverion’s carbon handprint was three times the size of its footprint.
The main parts of Caverion’s carbon handprint accumulate from, for example, smart building
automation, smart heating and cooling, EV charging, installations connecting solar panels, energy
management, Energy Performance Contracting (EnPC), industrial solutions and advisory services.
These solutions offer major CO2-saving potential for customers and society.
Caverion has proactively strengthened its capabilities in energy efficiency enhancing services
already before the ongoing energy crisis. During 2022, Caverion continued to support its customers
in this area by providing solutions for short-term and long-term energy optimisation, including energy
advisory, energy savings projects and remote monitoring.
24
Caverion Annual Review 2022
Energy Performance Contracting, energy management and EV charging stations are already
saving three times the CO2 amount of Caverion’s own Scope 1–2 footprint annually. As Caverion adds
more services with a positive handprint impact, the company will be well positioned for achieving a
carbon handprint five times greater than its footprint (Scope 1-2) by 2025.
As a provider of technical services and projects for buildings, infrastructure as well as industrial sites
and processes, Caverion is part of the solution for a green, low-carbon transition. In 2022, 30.5 per
cent of Caverion’s Group revenue was considered eligible with EU Taxonomy. Caverion’s taxonomy
eligible revenue consists mainly of building technology and energy generation-related projects and
services, which have a positive impact through carbon emissions reductions.
Activities not considered eligible with EU Taxonomy accounted for 69.5 per cent of Group revenue
in 2022, consisting of technical building services and industrial services outside the renewable energy
sector. 1 per cent of Caverion revenue was aligned with EU Taxonomy.
Caverion’s capital expenditure resulting from services or products associated with economic
activities considered eligible with EU taxonomy amounted to 62 per cent and Operating Expenditure
KPI 3 per cent, respectively.
Assessment of eligibility with EU taxonomy
Caverion has identified over 20 EU taxonomy activities in seven sectors of economic activity. The most
significant sectors for Caverion include Construction & Real Estate and Energy, together representing
over 65% of the total EU taxonomy eligible revenue. Eligibility assessment was done on division level
and information consolidated at group level. Revenue figures are based on purchasing data and
including work to the calculation. Capital expenditure and operating expenditure were determined and
allocated from acquisitions, vehicles, IT services and buildings and structures.
With taxonomy-aligned activities, Caverion focuses on activities 7.3 and 7.4. For these activities,
Caverion has carried out the process of meeting alignment requirements. All alignment testing was
made on Caverion Group level.
Minimum safeguards requirements are met through due diligence and human rights assessment
processes. Environmental impacts assessment was carried out to meet Do-No-Significant-Harm
(DNSH) testing criteria. Temperature related chronic and acute hazards were identified to be the most
significant climate-related environmental risks for Caverion business. Substantial contribution and to
meet the 7.3 technical screening criteria Caverion conducted a screening on purchased materials and
services to acknowledge the number of appliances rated in the highest two populated classes of
energy efficiency. All Caverion eligible business in activity 7.4 meets the technical screening criteria.
Caverion did not classify any activities under categories “Construction of new buildings (7.1)” and
“Renovation of existing buildings (7.2)” as the company interprets these categories as belonging
building construction and renovation activities rather than technical building system related
installations and services. However, had this approach been adopted, Caverion would have been able
to report a material additional share of its building technology revenue as taxonomy eligible.
With regard to taxonomy activity category “Energy”, Caverion’s interpretation is that
“Construction or operation of energy generation facilities” includes Caverion’s installation projects as
well as preventive maintenance and other services that are crucial to the energy generation process
(i.e. to keeping energy generation running) although the company does not engage in energy
generation activities as such.
Social and employee aspects
People are at the core of Caverion’s business and customer interface. Therefore, one of the four
strategic themes in the updated strategy launched in 2022 is people. Caverion aims to become the
most attractive employer in its industry. According to Caverion’s people strategy, the company will be
focusing on attracting and growing the right people, empowering Building Performance culture as
well as leading people and performance with passion and care.
The Building Performance culture and values – We deliver what we promise, We do it together
and We explore and improve – form the foundation for our everyday work and all our activities. HR
Policy, including Diversity Policy and Safety Guidelines, explain the approaches and rules around the
social and employee aspects. Supplier Code of Conduct sets out the minimum requirements for
suppliers regarding, for example, occupational health and safety.
In 2022, Caverion continued to focus on developing its Building Performance culture to support
its updated strategy, including the launch of the company’s updated values. A large number of
employees in different countries contributed through workshops and questionnaires to make the
values relevant for the Caverion people. Introducing values-based behaviours helped demonstrate to
employees how the culture becomes visible in everyday life. Workshops and toolkits, including a
virtual game, were utilised to support the implementation and communication of these behaviours.
Caverion also worked on defining its Employee Value Proposition and will continue with related
actions in 2023.
Caverion Leader Forum gathers key executives once a year to discuss strategic topics. In 2022,
this was complemented by two virtual Leader Forum sessions and the divisions’ own events in order
to translate the strategy to local activities.
During the year, Caverion continued the planned actions based on the previous year’s Spirit
employee engagement survey and monitored the progress of these plans. Attention was especially
paid to feedback culture, performance follow-up and skills development. The Spirit employee
engagement survey is conducted every other year.
Caverion provides continuous training and development opportunities to strengthen its business
capabilities and enable professional growth. The competence development efforts in 2022 focused
especially on service performance management, project management and sales capabilities. One of
the key events was the launch of Caverion Sales Academy to provide systematic and modular sales
training. Training employees on sustainability is one of Caverion’s targets and a company-wide
sustainability eLearning was launched at the year-end. The highly appreciated mentoring programme
continued in 2022.
25
Caverion Annual Review 2022
Diversity, equity and inclusion are high priorities for Caverion and these topics are an integral part
of the Building Performance culture. During the year, the main focus was on increasing awareness.
For example, a campaign raising awareness of harassment and discrimination was run in several
countries. In addition, diversity and inclusion had a central role in the implementation of the
company’s values during the year and it was one of the key themes in the annual Leader Forum.
At the end of 2022, Caverion employed 14,490 (14,298) people in 10 countries. A total of 12
acquisitions were completed during the year, resulting in more than 560 new employees joining
Caverion from the acquired companies. Caverion also offered apprenticeships to more than 700
young potentials across the company.
In 2022, 11 % of the employees were female. Caverion’s Board of Directors represents 5
nationalities and 29 % of the members are female. From the Group Management Board members, 23
% are female and representing 6 nationalities.
Work safety
Work safety is the top priority for Caverion and the company follows a systematic and proactive
approach in preventing accidents. Safety matters have developed favourably across the company
year after year. The occupational health and safety management systems are externally certified
according to international standard ISO 45001. These certifications covered 90% of Caverion’s
business in 2022.
Caverion is among the top performers in terms of safety in its industry. We believe that all
personal injuries and work-related illness can be prevented, and the long-term target is to get as
close to zero accidents as possible. Every Caverion employee has the right and responsibility to
perform their work safely. The lost time injury frequency (LTIFR) rate was in 2022 4.0 which is same
level as 2021. The safety result in 2022 stayed on low level. We strive for continuous improvement,
and our safety performance is still on the right track.
We have in 2022 started to roll out a health, safety and well-being culture program. This will be
the core of our health, safety and well-being work for the years to come. For us it is important that
our employees are safe, feel well, are motivated and enjoy their job – moreover we believe that a
strong safety culture is good business.
In 2022 a more systematic approach has been taken on learning and sharing best practise
between the divisions. Numerous safety related improvements have been the fruit of that work and
expect more to come.
We recognise exemplary performance through the company-wide Golden Helmet awards were
safety leadership plays a key role.
Human rights
In accordance with Caverion’s Code of Conduct, the company does not allow any kind of discrimination
related to age, gender, nationality, social status, religion, physical or mental disability, political or other
opinions, sexual orientation or any other factor. The Code of Conduct also provides active guidance
towards improved equality and promotes gender equality and diversity.
Human rights safeguarded by international conventions are respected. Caverion applies a zero-
tolerance approach to discrimination, harassment or any unlawful act and does not permit any kind
of bullying in the workplace.
Caverion complies with the labour laws and regulations of its operating countries. Employees
have freedom of association and, in 2022, 93 % of the employees were covered by collective
bargaining agreements.
Aspects related to human rights are included in the company-wide Code of Conduct eLearning. In
2022, the eLearning was rolled out to all employees with an excellent completion rate of 97%. The
training is also part of the employee onboarding during the first weeks of employment.
According to Caverion’s Supplier Code of Conduct, suppliers, subcontractors and other business
partners shall respect human rights by following international conventions, in particular the United
Nations’ Universal Declaration of Human Rights. They shall also comply with fundamental
conventions as defined by the International Labour Organization and ensure that their own suppliers
comply with requirements that meet or exceed the requirements laid down in Caverion’s Supplier
Code of Conduct.
Anti-corruption and bribery
Caverion applies a zero-tolerance approach to corruption, bribery or any anti-competitive practices or
unlawful acts. To prevent corruption and bribery, the company has several standard control processes
as part of the sales and delivery of its services and projects. Checks and controls are conducted in
tender preparation and procurement activities as well as in the delivery and execution phases. Among
other things, these include monitoring, reviews, due diligence measures, approvals and the use of
ethical reporting channels.
Caverion has a compliance programme to ensure that all Caverion’s business is conducted legally,
ethically and in a compliant manner. Caverion also has a Group-level Compliance unit and a network
headed by the Compliance Officer. The compliance network aims to enhance a culture of integrity and
responsibility all around the organisation. It builds leadership capabilities by rolling out the compliance
programme locally, for example through training.
Caverion also operates a Group Ethics & Compliance Committee consisting of the President and
CEO, CFO, Group General Counsel, Head of HR and Safety and the Compliance Officer. The committee
reviews the annual compliance plan and its progress, the compliance cases reported or otherwise
identified and other Group-level ethics and compliance matters.
Regarding its relationships with its suppliers, Caverion does everything in its power to reject
bribery, corruption and white-collar crimes. Caverion does not tolerate any form of bribery or other
illegal payments.
Caverion supports open and fair competition in all its markets. The company complies with the
applicable legislation regarding competition in every activity and avoids situations where there is a
risk that regulations concerning competition could be violated. A mandatory eLearning on competition
law has been rolled out for all such employees who work in positions in which knowledge of this topic
is especially important, such as in management, sales and procurement.
26
Caverion Annual Review 2022
Non-financial risks
Environmental risks and impacts of Caverion own direct operations are moderate due to the nature
of the business. Caverion is not mainly manufacturing products but operates as an expert in services
and projects. More significant climate and environmental risks are originating from the company’s
wide value chain. The products installed and maintained by Caverion can have a potentially negative
impact on the environment, for example through components, raw materials and chemicals used by
the key suppliers. Caverion aims to collaborate with suppliers with a low environmental risk rate and
has recently increased its supplier dialogue to mitigate the environmental impacts of its offering.
The key risks related to social and employee aspects are linked to occupational safety and the
availability of qualified personnel. These risks can be potentially further fuelled by the effects of the
COVID-19 pandemic. The occupational safety risks are mitigated by continuously ensuring a proactive
focus on the topic on different management levels and conducting various safety initiatives such as
trainings, campaigns and reminders. The availability of key talent is essential for the company’s ability
to conduct its operations. To manage this risk, Caverion pays particular attention to recruitment,
onboarding, resource flexibility and enhancing its digital capabilities as well as to the development of
its employer brand and company culture.
Caverion primarily operates in developed, transparent markets. Potential human rights risks
relate to the uncertainty or unawareness of how subcontractors conduct their daily business. The
risks of a breach in the area of human rights are predominantly located further away in Caverion’s
supply chain. Through Caverion’s ethical reporting channel, employees and suppliers can
confidentially and anonymously report their observations of suspected misconduct. In addition,
reports can be submitted via email. A separate Supplier Code of Conduct sets out the requirements
for suppliers regarding the respect of human rights. To ensure a sustainable value chain, the company
aims to increase its Supplier Code of Conduct sign-off rate.
To manage the anti-corruption and bribery related risks, Caverion has made significant efforts to
promote compliance in order to avoid any infringements. As part of the compliance programme, all
employees must complete an annual e-learning module and further training is given across the
organisation. All new employees must familiarise themselves with Caverion’s Code of Conduct and
pass the mandatory e-learning. All employees are required to comply with Caverion’s Code of
Conduct, which has a policy of zero tolerance on anti-competitive practices, corruption, bribery or any
unlawful action.
More information on compliance related risks and their management is presented in the Board of
Directors’ Report in chapter “Short-term risks and uncertainties”.
Caverion sustainability performance and KPIs
For more information on Caverion sustainability KPIs and actions, please read the Sustainability
Report 2022.
27
Caverion Annual Review 2022
Focus area
KPI
Definition of KPI
Actions
2020
2021
2022
Target
2025
Decreasing Caverion´s
footprint
Total carbon footprint defined
and measured
The material Scope 1-3 emission categories
defined. All emissions from those material
categories measured.
We continued improving Scope 1-2 measurements. Scope 3
categories defined and improved measurements on total
Scope 3 emissions.
66%
80%
90%
100%
Increasing Caverion´s
handprint
Five times carbon handprint
over footprint (Scope 1-2)
Caverion offering´s carbon savings for customers
and society in relation to Caverion own Scope 1-2
carbon emissions.
We expanded carbon emission for our positive handprint
offering. Simultaneously aimed to decrease our own carbon
footprint (Scope 1-2).
>1x
>2x
>3x
5X
Increasing Caverion´s
handprint
Our offering has a defined
carbon handprint
Caverion offering which has a relevant positive
carbon handprint defined. All that offering is
measured with its CO2 savings for customers and
society.
We collaborated with key suppliers and engaged customers
to development offering and handprint measurements.
-
20%
25%
100%
Caring for our people
Lost Time Injury Frequency
Rate (LTIFR)
LTIFR refers to the amount or number of lost time
injuries per 1,000,000 hours worked.
We invested in systematic safety work and strong proactive
measures in safety.
4.2
4.0
4.0
<2
Caring for our people
Share of female employees
Share of female employees.
We created a plan for longer term activities, started building
awareness and local specific actions.
11%
11%
11%
15%
Caring for our people
All employees trained in
sustainability
Number of employees (excl. temporary, inactive,
etc. employees) who have conducted Sustainability
eLearning.
Our Sustainability eLearning was launched in 2022.
-
N/A *
30% **
100%
Ensuring sustainable
value chain operations
Supplier Code of Conduct
(SCoC) sign-off rate
Share of purchase volume of suppliers who have
approved Caverion SCoC or who have a CoC/SCoC
which Caverion has approved.
We followed up on each Caverion division to increase the
sign-off rate of SCoC.
63%
66%
74%
>90%
Ensuring sustainable
value chain operations
All tender requests include
sustainability criteria
Sustainability criteria for tender requests defined.
Include sustainability criteria in all the major tender
requests.
We held sustainability discussions with chosen key suppliers
during 2022.
-
-
-
100%
Changes of specifications for the KPI All employees trained in sustainability.
* Sustainability eLearning not yet available. Two other ESG related eLearnings conducted with performance rates of 86% (Safety eLearning) and 92% (Code of Conduct eLearning).
** Sustainability eLearning available since Q4/2022. During the year two other ESG related eLearnings conducted with performance rates of 97% (InfoSec eLearning) and 97% (Code of Conduct eLearning).
28
Caverion Annual Review 2022
2022 proportion of turnover from products or services associated with Taxonomy-aligned economic activities
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic activities
(1)
Code(s)
(2)
Absolute
turnover
(3)
Proportion
of
turnover
(4)
Climate
change
mitigation
(5)
Climate
change
adaptation
(6)
Water
and
marine
resources
(7)
Circular
economy
(8)
Pollution
(9)
Biodiversity
and
ecosystems
(10)
Climate
change
mitigation
(11)
Climate
change
adaptation
(12)
Water
and
marine
resources
(13)
Circular
economy
(14)
Pollution
(15)
Biodiversity
and
ecosystems
(16)
Minimum
safeguards
(17)
Taxonomy-
aligned
proportion
of
turnover,
year N
(18)
Taxonomy
- aligned
proportion
of
turnover,
year N-1
(19)
Category
(enabling
activity or)
(20)
Category
'(transi-
tional
activity)'
(21)
MEUR
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy aligned)
Installation, maintenance and repair of energy efficiency
equipment
7.3
4.1
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
n/a
Y
n/a
n/a
Y
n/a
Y
0.2%
n/a
E
n/a
Installation, maintenance and repair of charging stations
for electric vehicles in buildings (and parking spaces
attached to buildings)
7.4
16.2
0.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
n/a
Y
n/a
n/a
n/a
n/a
Y
0.7%
n/a
E
n/a
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
20.3
0.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
n/a
Y
n/a
n/a
Y
n/a
Y
0.9%
n/a
E
n/a
A.2 Taxonomy-Eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities)
Installation, maintenance and repair of energy-efficiency
equipment
7.3
400.8
17.0%
Installation, maintenance and repair of charging stations
for electric vehicles in buildings (and parking spaces
attached to buildings)
7.4
0.0
0.0%
Installation, maintenance and repair of instruments and
devices for measuring, regulation and controlling energy
performance of buildings
7.5
60.9
2.6%
Installation, maintenance and repair of renewable
energy technologies
7.6
1.3
0.1%
Manufacture of energy efficiency equipment for
buildings
3.5
0.0
0.0%
Electricity generation using solar photovoltaic
technology
4.1
6.4
0.3%
Electricity generation from hydropower
4.5
0.0
0.0%
Electricity generation from renewable non-fossil
gaseous and liquid fuels
4.7
0.1
0.0%
Transmission and distribution of electricity
4.9
39.0
1.7%
District heating/cooling distribution
4.15
15.2
0.6%
Installation and operation of electric heat pumps
4.16
20.0
0.9%
Cogeneration of heat/cool and power from solar energy
4.17
5.9
0.3%
29
Caverion Annual Review 2022
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic activities
(1)
Code(s)
(2)
Absolute
turnover
(3)
Proportion
of
turnover
(4)
Climate
change
mitigation
(5)
Climate
change
adaptation
(6)
Water
and
marine
resources
(7)
Circular
economy
(8)
Pollution
(9)
Biodiversity
and
ecosystems
(10)
Climate
change
mitigation
(11)
Climate
change
adaptation
(12)
Water
and
marine
resources
(13)
Circular
economy
(14)
Pollution
(15)
Biodiversity
and
ecosystems
(16)
Minimum
safeguards
(17)
Taxonomy-
aligned
proportion
of
turnover,
year N
(18)
Taxonomy
- aligned
proportion
of
turnover,
year N-1
(19)
Category
(enabling
activity or)
(20)
Category
'(transi-
tional
activity)'
(21)
MEUR
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
Production of heat/cool from bioenergy
4.24
2.9
0.1%
Production of heat/cool using waste heat
4.25
57.8
2.5%
Construction, extension and operation of water
collection, treatment and supply systems
5.1
2.0
0.1%
Renewal of waste water collection and treatment
5.4
3.3
0.1%
Collection and transport of non-hazardous waste in
source segregated fractions
5.5
2.0
0.1%
Infrastructure for rail transport
6.14
37.9
1.6%
Infrastructure enabling low-carbon road transport and
public transport
6.15
3.7
0.2%
Infrastructure enabling low carbon water transport
6.16
7.4
0.3%
Low carbon airport infrastructure
6.17
1.3
0.1%
Data-driven solutions for GHG emissions reductions
8.2
3.9
0.2%
Programming and broadcasting activities
8.3
9.5
0.4%
Professional services related to energy performance of
buildings
9.3
14.5
0.6%
Turnover of Taxonomy-eligible but
not environmentally sustainable activities
(not Taxonomy-aligned activities)
(A.2)
696.0
29.6%
Total (A.1 + A.2)
748.0
30.5%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible
activities (B)
1,656.0
69.5%
Total (A + B)
2,352.1
100.0%
30
Caverion Annual Review 2022
2022 proportion of CapEx from products or services associated with Taxonomy-aligned economic activities
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic activities
(1)
Code(s)
(2)
Absolute
CapEx
(3)
Proportion
of
CapEx
(4)
Climate
change
mitigation
(5)
Climate
change
adaptation
(6)
Water
and
marine
resources
(7)
Circular
economy
(8)
Pollution
(9)
Biodiversity
and
ecosystems
(10)
Climate
change
mitigation
(11)
Climate
change
adaptation
(12)
Water
and
marine
resources
(13)
Circular
economy
(14)
Pollution
(15)
Biodiversity
and
ecosystems
(16)
Minimum
safeguards
(17)
Taxonomy-
aligned
proportion
of
CapEx,
year N
(18)
Taxonomy
- aligned
proportion
of
CapEx,
year N-1
(19)
Category
(enabling
activity or)
(20)
Category
'(transi-
tional
activity)'
(21)
MEUR
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy aligned)
CapEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
A.2 Taxonomy-Eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities)
Electricity generation from wind power
4.3
7.2
4.5%
Installation, maintenance and repair of instruments and
devices for measuring, regulation and controlling energy
performance of buildings
4.5
16.1
9.9%
Transmission and distribution of electricity
4.9
1.7
1.1%
Renewal of waste water collection and treatment
5.4
5.4
3.3%
Transport by motorbikes, passenger cars and light
commercial vehicles
6.5
27.9
17.2%
Installation, maintenance and repair of energy efficiency
equipment
7.3
19.3
11.9%
Acquisition and ownership of buildings
7.7
21.3
13.1%
Data processing, hosting and related activities
8.1
2.2
1.3%
CapEx of Taxonomy-eligible but
not environmentally sustainable activities
(not Taxonomy-aligned activities)
(A.2)
101.1
62.4%
Total (A.1 + A.2)
101.1
62.4%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible
activities (B)
61.0
37.6%
Total (A + B)
162.1
100.0%
31
Caverion Annual Review 2022
2022 proportion of OpEx from products or services associated with Taxonomy-aligned economic activities
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic activities
(1)
Code(s)
(2)
Absolute
OpEx
(3)
Proportion
of
OpEx
(4)
Climate
change
mitigation
(5)
Climate
change
adaptation
(6)
Water
and
marine
resources
(7)
Circular
economy
(8)
Pollution
(9)
Biodiversity
and
ecosystems
(10)
Climate
change
mitigation
(11)
Climate
change
adaptation
(12)
Water
and
marine
resources
(13)
Circular
economy
(14)
Pollution
(15)
Biodiversity
and
ecosystems
(16)
Minimum
safeguards
(17)
Taxonomy-
aligned
proportion
of
OpEx,
year N
(18)
Taxonomy
- aligned
proportion
of
OpEx,
year N-1
(19)
Category
(enabling
activity or)
(20)
Category
'(transi-
tional
activity)'
(21)
MEUR
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy aligned)
OpEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
A.2 Taxonomy-Eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities)
Transport by motorbikes, passenger cars and light
commercial vehicles
6.5
0.4
0.6%
Data processing, hosting and related activities
8.1
2.1
2.80%
OpEx of Taxonomy-eligible but
not environmentally sustainable activities
(not Taxonomy-aligned activities)
(A.2)
2.5
3.4%
Total (A.1 + A.2)
2.5
3.4%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible
activities (B)
71.8
96,6%
Total (A + B)
74.3
100.0%
32
Caverion Annual Review 2022
Key figures
33
Caverion Annual Review 2022
Calculation of key figures
IFRS key figures
Earnings / share, undiluted =
Result for the financial year (attributable for equity holders) – hybrid
capital expenses and accrued unrecognised interests after tax
Weighted average number of shares outstanding during the period
Earnings / share, diluted =
Result for the financial year (attributable for equity holders) – hybrid
capital expenses and accrued unrecognised interests after tax
Weighted average number of shares, dilution adjusted
Alternative performance measures
ESMA (European Securities and Markets Authority) has issued guidelines regarding Alternative Performance Measures (“APM”). Caverion presents APMs to improve the analysis of business and financial
performance and to enhance the comparability between reporting periods. APMs presented in this report should not be considered as a substitute for measures of performance in accordance with the IFRS.
EBITDA =
Operating profit (EBIT) + depreciation, amortisation and impairment
Adjusted EBITDA =
EBITDA before items affecting comparability (IAC)
1)
EBITA =
Operating profit (EBIT) + amortisation and impairment
Adjusted EBITA =
EBITA before items affecting comparability (IAC)
1)
Organic growth =
Defined as the change in revenue in local currencies excluding the impacts
of (i) currencies; and (ii) acquisitions and divestments. The currency impact
shows the impact of changes in exchange rates of subsidiaries with a
currency other than the euro (Group’s reporting currency). The acquisitions
and divestments impact shows how acquisitions and divestments
completed during the current or previous year affect the revenue reported.
1)
Items affecting comparability (IAC) are material items or transactions, which are relevant for understanding the financial performance
of Caverion when comparing the profit of the current period with that of the previous periods. These items can include (1) capital gains
and/or losses and transaction costs related to divestments and acquisitions; (2) write-downs, expenses and/or income from separately
identified major risk projects; (3) restructuring expenses and (4) other items that according to Caverion management’s assessment are
not related to normal business operations. In 2021 and 2022, major risk projects include only one old risk project in Germany reported
under category (2). In 2021 and 2022, provisions and legal and other costs for civil claims related to the German anti-trust matter were
reported under category (4). Category (4) includes also advisory costs and personnel bonuses related to the ongoing public tender offer
and in 2021, previously capitalised expenses that were booked as operative expenses due to a change in the accounting principle of
implementation costs in cloud computing arrangements.
Adjusted EBITDA is affected by the same adjustments as adjusted EBITA, except for restructuring costs, which do not include
depreciation and impairment relating to restructurings
34
Caverion Annual Review 2022
Working capital =
Inventories + trade and POC receivables + other current
receivables - trade and POC payables - other current payables -
advances received - current provisions
Interest-bearing net debt =
Interest-bearing liabilities - cash and cash equivalents
Equity ratio (%) =
Equity + non-controlling interest x 100
Total assets - advances received
Gearing ratio (%) =
Interest-bearing liabilities - cash and cash equivalents x 100
Shareholder’s equity + non-controlling interest
Return on equity, % =
Result for the period x100
Total equity (average of the figures for the accounting period)
Cash conversion (%) =
Operating cash flow before financial and tax items (LTM) x100
EBITDA (LTM)
Average number of
employees =
The average number of employees at the end of previous financial
year and of each calendar month during the accounting period
Equity per share =
Shareholders’ equity
Number of outstanding shares at the end of the period
Dividend per share =
Dividend per share for the period
Adjustment ratios of share issues during the period and afterwards
Dividend per earnings (%) =
Dividend per share x 100
Earnings per share
Effective dividend yield (%) =
Dividend per share x 100
Share price on December 31
Price/earnings ratio (P/E
ratio) =
Share price on December 31
Earnings per share
Net debt / Adjusted EBITDA =
Interest-bearing net debt
Adjusted EBITDA (LTM)
Average price =
Total EUR value of all shares traded
Average number of all shares traded during the accounting period
Market capitalisation =
(Number of shares – treasury shares) x share price on the closing
date
Share turnover =
Number of shares traded during the accounting period
Share turnover (%) =
Number of shares traded x 100
Average number of outstanding shares
35
Caverion Annual Review 2022
Shareholders
At the end of December 2022, the number of registered shareholders in Caverion was 26,409 (2021:
27,582). At the end of December 2022, a total of 36.4 percent of the shares were owned by nominee-
registered and non-Finnish investors (2021: 31.1%).
Updated lists of Caverion’s largest shareholders, the holdings of public insiders and ownership
structure by sector as per December 31, 2022, are available on Caverion’s website at
www.caverion.com/investors.
No shareholder, member or other person is controlling Caverion as meant in the Securities
Markets Act section 2 paragraph 4. Caverion is not subject to any arrangements which separate the
possession of the securities and the economic rights vested in them. The Board of Directors is not
aware of any shareholder agreements or other similar type of arrangements having effect on
Caverion shareholders or that might have a significant impact on share price.
Caverion Corporation’s essential financing agreements include a change of control clause which
is applicable in case more than 50 percent of company’s shares are acquired by a single entity or
parties controlled by it.
Ownership structure by sector on December 31, 2022
Sector
Share-
holders
% of
owners
Shares
% of all
shares
Nominee registered and non-Finnish holders
131
0.5
50,589,476
36.4
Households
25,120
95.1
22,780,206
16.4
General government
18
0.1
18,844,192
13.6
Financial and insurance corporations
45
0.2
31,555,745
22.7
Non-profit institutions
206
0.8
4,584,427
3.3
Non-financial corporations and housing corporations
889
3.4
10,566,046
7.6
Total
26,409
100.0
138,920,092
100.0
Largest shareholders on December 31, 2022
Shareholder
Shares,
% of all
shares
1. Funds held by Antti Herlin, including directly held shares
21,054,392
15.2
2. Fennogens Investments SA
14,169,850
10.2
3. Varma Mutual Pension Insurance Company
9,035,780
6.5
4. Mandatum companies
6,114,441
4.4
5. Ilmarinen Mutual Pension Insurance Company
4,162,955
3.0
6. Säästöpankki funds
3,704,062
2.7
7. Elo Mutual Pension Insurance Company
2,565,640
1.8
8. Caverion Oyj
2,447,447
1.8
9. The State Pension Fund
2,050,000
1.5
10. Brotherus Ilkka
1,803,765
1.3
11. Aktia funds
1,250,000
0.9
12. OP funds
1,073,136
0.8
13. S-Bank funds
1,062,605
0.8
14. Kaleva Mutual Insurance Company
969,025
0.7
15. Nordea funds
913,044
0.7
16. Veritas Pension Insurance Company Ltd.
754,610
0.5
17. Sinituote Oy
572,400
0.4
18. Samfundet folkhälsan i Svenska Finland rf
374,400
0.3
19. Pivosto Oy
326,416
0.2
20. Foundation for Economic Education
300,000
0.2
20 largest, total
74,703,968
53.8
Other shareholders
28,222,560
20.3
Nominee registered total
35,993,564
25.9
All shares
138.920.092
100.0
36
Caverion Annual Review 2022
Public insider ownership of Caverion Group on December 31, 2022
Board of Directors
Direct
holdings
Holdings of
controlled
companies
Total
Aho Jussi
Member
54,671
-
54,671
Ehrnrooth Markus
Vice Chairman of the Board
18,809
-
18,809
Hallengren Joachim
Member
20,671
11,000
31,671
Hinnerskov Thomas
Member
54,671
-
54,671
Jahn Kristina
Member
10,459
-
10,459
Paulsson Mats
Chairman of the Board
24,828
136,200
161,028
Soravia Jasmin
Member
10,459
-
10,459
Total
194,568
147,200
341,768
Group Management Board
Direct
holdings
Holdings of
controlled
companies
Total
Engman Elina
Head of Division Industry
-
-
-
Gaaserud Knut
Head of Division Norway
110,967
-
110,967
Götzsche Jacob
President and CEO
55,000
-
55,000
Kaiser Michael
Head of Business Unit Projects
164,578
-
164,578
Kettunen Mikko
Chief Financial Officer (CFO)
10,000
-
10,000
Lundberg Uno
Head of Division Sweden
10,000
-
10,000
Poglitsch Reinhard
Head of International customers and
commercial development
1,500
-
1,500
Schrey-Hyppänen Minna
Head of Human Resources & Safety
87,361
-
87,361
Simmet Manfred
Head of Divisions Germany and Austria
87,901
-
87,901
Sundbäck Kari
Head of Services, Solutions, Digital and
Sustainability
94,224
-
94,224
Sørensen Carsten
Head of Division Denmark
93,006
-
93,006
Tamminen Ville
Head of Division Finland & Baltics
65,934
-
65,934
Viitala Anne
Head of Legal & Compliance
80,100
-
80,100
Total
860,571
-
860,571
37
Caverion Annual Review 2022
Consolidated income statement
EUR million
Note
1.1.-31.12.2022
%
1.1.-31.12.2021
%
Revenue
2.1
Other operating income
2.2
Materials and supplies
-615.4
-523.9
External services
-446.0
-398.4
Employee benefit expenses
2.2
-923.6
-889.9
Other operating expenses
2.2
-226.1
-216.3
Share of results in associated companies
5.7
Depreciation, amortisation and impairment
2.3
-73.5
-70.3
Operating profit
3.0
2.0
Financial income
Exchange rate differences (net)
Financial expenses
-10.7
-9.4
Financial income and expenses
2.4
-9.0
-8.6
Result before taxes
2.6
1.6
Income taxes
2.5
-14.7
-9.8
Result for the financial year
2.0
1.2
Attributable to:
Owners of the parent
Non-controlling interests
Earnings per share for profit attributable
to owners of the parent:
Earnings per share, basic, EUR
2.6
Earnings per share, diluted, EUR
Consolidated statement of comprehensive
income
EUR million
Note
1.1.-31.12.2022
1.1.-31.12.2021
Result for the period
Other comprehensive income
Items that will not be reclassified to profit or loss:
Change in the fair value of defined benefit pension
-0.1
-Deferred tax
-2.1
-0.5
Change in fair value of other investments
5.4
-0.1
- Deferred tax
Items that may be reclassified subsequently to profit or
loss:
Translation differences
-3.7
Other comprehensive income, total
Total comprehensive income
Attributable to:
Owners of the parent
Non-controlling interests
The notes are an integral part of the consolidated
financial statements.
Konsernitilinpäätös
38
Caverion Annual Review 2022
Consolidated statement of financial position
EUR million
Note
Dec 31, 2022
Dec 31, 2021
ASSETS
Non-current assets
Property, plant and equipment
4.3
Right-of-use assets
5.9
Goodwill
4.2
Other intangible assets
4.3
Investments in associated companies and joint ventures
5.7
Investments
5.4
Receivables
3.2
Deferred tax assets
3.5
Total non-current assets
Current assets
Inventories
3.1
Trade receivables
3.2
POC receivables
3.2
Other receivables
3.2
Income tax receivables
Cash and cash equivalents
Total current assets
TOTAL ASSETS
The notes are an integral part of the consolidated financial statements.
EUR million
Note
Dec 31, 2022
Dec 31, 2021
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
5.2
Share capital
Treasury shares
-2.0
-2.4
Translation differences
-9.6
-6.0
Fair value reserve
-0.3
-0.2
Hybrid capital
Unrestricted equity reserve
Retained earnings
Total equity attributable of owners of the parent
Non-controlling interests
Total equity
Non-current liabilities
Deferred tax liabilities
3.5
Pension obligations
5.8
Provisions
3.4
Lease liabilities
5.9
Other interest-bearing debts
5.4
Other liabilities
3.3
Total non-current liabilities
Current liabilities
Trade payables
3.3
Advances received
3.3
Other payables
3.3
Income tax liabilities
Provisions
3.4
Lease liabilities
5.9
Other interest-bearing debts
5.4
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
39
Caverion Annual Review 2022
Consolidated statement of cash flows
EUR million
Note
1.1.-
31.12.2022
1.1.-
31.12.2021
Cash flow from operating activities
Result for the financial year
Adjustments for:
Depreciation, amortisation and impairment
Reversal of accrual-based items
-8.3
Financial income and expenses
Gains on the sale of tangible and intangible
assets
-0.2
Taxes
Total adjustments
Change in working capital:
-57.7
-40.4
-2.9
-0.5
Total change in working capital
-21.0
Operating cash flow before financial and tax items
Interest paid
-11.4
-10.0
Other financial items, net
Interest received
Dividends received
Taxes paid
-14.3
-14.3
Net cash generated from operating activities
EUR million
Note
1.1.-
31.12.2022
1.1.-
31.12.2021
Cash flow from investing activities
Acquisition of subsidiaries and businesses,
net of cash
4.1
-85.3
-9.7
Disposals of subsidiaries and businesses,
net of cash
4.1
-0.9
Dividends from equity accounted investments
5.7
Purchases of property, plant and equipment
4.3
-5.8
-4.8
Purchases of intangible assets
4.3
-8.5
-7.4
Proceeds from sale of tangible and intangible assets
Proceeds from sale of investments
Net cash used in investing activities
-97.1
-22.3
Cash flow from financing activities
Change in loan receivables
Proceeds from borrowings
5.3
Repayments of borrowings
5.3
-75.4
-53.2
Repayments of lease liabilities
5.4
-49.8
-46.9
Change in current liabilities, net
5.3
Hybrid capital expenses and interests
-2.4
-2.4
Dividends paid
-23.2
-27.3
Net cash used in financing activities
-65.4
-79.5
Net change in cash and cash equivalents
-42.0
-21.3
Cash and cash equivalents at the beginning of the financial year
Foreign exchange rate effect on cash and cash equivalents
-7.7
Cash and cash equivalents at the end of the financial year
The notes are an integral part of the consolidated financial statements.
STATEMENT OF CHANGES IN EQUITY
40
Caverion Annual Review 2022
Consolidated statement of changes in equity
Attributable to owners of the parent
Share
Retained
Translation
Fair value
Treasury
Unrestricted equity
Hybrid
Non-controlling
Total
EUR million
Note
capital
earnings
differences
reserve
shares
reserve
capital
Total
interests
equity
Equity January 1, 2022
-6.0
-0.2
-2.4
Comprehensive income 1-12/2022
Result for the period
Other comprehensive income:
Change in fair value of defined benefit pension
- Deferred tax
-2.1
-2.1
-2.1
Change in fair value of other investments
5.4
-0.1
-0.1
-0.1
-Deferred tax
Translation differences
-3.7
-3.7
-3.7
Comprehensive income 1-12/2022, total
-3.7
-0.1
Dividend distribution
5.2
-23.2
-23.2
-23.2
Share-based payments
6.2
Transfer of own shares
5.2
-0.4
Hybrid capital interests and costs after taxes
5.2
-1.9
-1.9
-1.9
Equity on December 31, 2022
-9.6
-0.3
-2.0
STATEMENT OF CHANGES IN EQUITY
41
Caverion Annual Review 2022
Attributable to owners of the parent
Share
Retained
Translation
Fair value
Treasury
Unrestricted equity
Hybrid
Non-controlling
Total
EUR million
Note
capital
earnings
differences
reserve
shares
reserve
capital
Total
interests
equity
Equity January 1, 2021
-14.1
-0.1
-2.8
Comprehensive income 1-12/2021
Result for the period
Other comprehensive income:
Change in fair value of defined benefit pension
-0.1
-0.1
-0.1
- Deferred tax
-0.5
-0.5
-0.5
Change in fair value of investments
5.4
-Deferred tax
Translation differences
Comprehensive income 1-12/2021, total
Dividend distribution
5.2
-27.3
-27.3
-27.3
Share-based payments
6.2
Transfer of own shares
5.2
-0.4
Hybrid capital interests and costs after taxes
5.2
-1.9
-1.9
-1.9
Equity on December 31, 2021
-6.0
-0.2
-2.4
The notes are an integral part of the consolidated financial statements.
42
Caverion Annual Review 2022
1
Basis of
preparation
The consolidated financial statements of Caverion
Corporation have been prepared in accordance with
the International Financial Reporting Standards (IFRS)
as adopted by the European Union.
Accounting principles
can be found next to the relevant notes
in sections 2–6.
BASIS OF PREPARATION
43
Caverion Annual Review 2022
General Information
“Caverion” or “Caverion Group”) is a
. Caverion designs, builds, operates and maintains user-friendly
and energy-efficient technical solutions for buildings and industries throughout the life cycle of the
property. Caverion’s services are used in offices and retail properties, housing, public premises,
industrial plants and infrastructure, among other places.
Caverion
,
, Finland. The company’s shares are listed on the NASDAQ OMX Helsinki Ltd as of July
1, 2013. The copies of the consolidated financial statements are available at www.caverion.com or at
the parent company’s head office,
, Finland.
On June 30, 2013, the partial demerger of Building Systems business (the “demerger”) of YIT
Corporation became effective. At this date, all of the assets and liabilities directly related to Building
Systems business were transferred to
, a new company established in the partial
demerger.
These consolidated financial statements were authorised for issue by the Board of Directors in
their meeting on 8 February 2023 after which, in accordance with Finnish Company Law, the financial
statements are either approved, amended or rejected in the Annual General Meeting.
The consolidated financial statements have been prepared in accordance with the basis of
preparation and accounting policies set out below.
The consolidated financial statements of
with the International Financial Reporting Standards (IFRS) as adopted by the European Union
observing the standards and interpretations effective on December 31, 2022. The notes to the
consolidated financial statements also comply with the requirements of Finnish accounting and
corporate legislation complementing the IFRS regulation.
The figures in these consolidated financial statements are presented in million euros, unless
stated otherwise. Rounding differences may occur.
Caverion Group’s consolidated financial statements for the financial year ended 2022 have been
prepared under the historical cost convention, except for investments, financial assets and liabilities
at fair value through profit and loss and derivative instruments at fair value. Equity-settled share-
based payments are measured at fair value at the grant date.
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of
applying the Group’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed under “Critical accounting estimates and judgements” below.
Consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern the financial and operating
policies generally accompanying a shareholding of more than 50% of the voting rights. The existence
and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are deconsolidated from the date that control
ceases.
The Group applies the acquisition method to account for business combinations. The total
consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred,
the liabilities incurred and the equity interests issued by Caverion Group. The total consideration
includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisition-related costs are expensed as incurred. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair value at
the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling
interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of
the acquiree’s assets.
Inter-company transactions, balances and unrealised gains and losses on transactions between
Group companies are eliminated.
Disposal of subsidiaries
When the Group ceases to have control, any remaining interest in the entity is re-measured to its fair
value at the date when control is lost, with the change in the carrying amount recognised through
profit and loss. In addition, any amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if realised and recognised in the income statement. If the
interest is reduced but control is retained, only a proportionate share of the amounts previously
recognised in other comprehensive income are booked to non-controlling interest in equity.
Transactions with non-controlling interests
The Group accounts transactions with non-controlling interests that do not result in loss of control
as equity transactions. The difference between the fair value of any consideration paid and the
relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity.
Gains or losses on disposals to non-controlling interests are also recorded in equity.
BASIS OF PREPARATION
44
Caverion Annual Review 2022
Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRS requires management to make
estimates and exercise judgement in the application of the accounting policies. Estimates and
judgements are continually evaluated and are based on historical experience and expectations of
future events that are believed to be reasonable under the circumstances. The resulting accounting
estimates may deviate from the related actual results. The estimates and assumptions that have a
significant risk of causing material adjustment to the carrying amounts of assets and liabilities within
the next financial year are addressed below. Accounting estimates and judgements are commented
in more detail in connection with each item.
>
Goodwill
>
Acquisitions and disposals
>
Revenue from contracts with customers
>
Income taxes
>
Provisions
>
Employee benefit obligations
>
Trade receivables
Foreign currency translation and transactions
Items included in the consolidated financial statements of each of the Group’s entities are measured
using the currency of the primary economic environment in which the entity operates (the functional
currency). These consolidated financial statements are presented in euros, which is the Group’s
presentation currency.
The income statements of foreign Group companies are translated into euro using the average
exchange rate for the reporting period. The balance sheets are translated at the closing rate at the
date of that balance sheet. Translating the result for the period using different exchange rates in the
income statement and balance sheet results in a translation difference, which is recognised in other
comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as
assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences
arising are recognised in other comprehensive income. When a foreign subsidiary is disposed of or
sold, exchange differences that were recorded in equity are recognised in the income statement as
part of the gain or loss on sale.
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing on the date of transaction or valuation, where items are re-measured. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at year-
end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement. Foreign exchange gains and losses that relate to borrowings and
cash and cash equivalents are presented in the income statement within “Finance income and
expenses”. All other foreign exchange gains and losses are presented in the income statement above
operating profit. Non-monetary items are mainly measured at the exchange rates prevailing on the
date of the transaction date.
Caverion Group applies exchange rates published by the European Central Bank in the
consolidated financial statements. Exchange rates used in euros:
Income statement
January-December
2022
Income statement
January-December
2021
Statement of
financial position
Dec 31, 2022
Statement of
financial position
Dec 31, 2021
DKK
7.4396
7.4371
7.4365
7.4364
NOK
10.1019
10.1635
10.5138
9.9888
PLN
4.6856
4.5647
4.6808
4.5969
RUB
112.4265
87.2208
117.2010
85.3004
SEK
10.6278
10.1452
11.1218
10.2503
.
Operating segments
The profitability of Caverion Group has been presented as one operating segment from 1 January
2014 onwards. The chief operating decision-maker of Caverion is the Board of Directors. Due to the
management structure of Caverion, nature of its operations and its business areas, Group is the
relevant reportable operating segment.
New standards and amendments adopted
Evaluation of the future impact of new standards and interpretations
Caverion has adopted the new standards and interpretations that were effective during the
accounting period and are relevant to its operations. These amendments had no impact on the
consolidated financial statements of Caverion. A number of new standards and amendments to
standards and interpretations are effective for annual periods beginning after 1 January 2022, and
have not been applied in preparing these consolidated financial statements. The Group is not
expecting a significant impact of those to the consolidated financial statements.
45
Caverion Annual Review 2022
2
Financial performance
Revenue, EUR million
2,352.1
EBITDA, EUR million
143.4
EBITA, EUR million
86.1
In this section
This section comprises the following notes
describing Caverions’s financial performance in
2022:
FINANCIAL PERFORMANCE
46
Caverion Annual Review 2022
2.1
Revenue from contracts with customers
The disaggregation of revenue is set out below by Business Units and by division. The reportable
segment of Caverion is the Group and thus, no reconciliation between segments and revenue from
contracts with customers is presented.
Disaggregated revenue information
EUR million
2022
%
2021
%
Business units
Services
1,570.1
67%
1,402.4
66%
Projects
782.0
33%
737.1
34%
Total revenue from contracts with customers
2,352.1
100%
2,139.5
100%
Revenue by division
Sweden
455.0
19%
424.4
20%
Finland
431.9
18%
403.9
19%
Germany
406.0
17%
374.1
17%
Norway
368.5
16%
352.5
16%
Industry
285.5
12%
256.8
12%
Austria
237.0
10%
188.7
9%
Denmark
122.1
5%
80.0
4%
Other countries*
46.0
2%
59.0
3%
Total revenue from contracts with customers
2,352.1
100%
2,139.5
100%
* Other countries include the Baltic countries and Russia. Caverion divested its Russian subsidiary in December 2021, which explains the
year on year decline in revenue. Baltic countries revenue increased slightly in 2022 compared to last year.
Revenue from contracts with customers is recognised mainly over time.
Revenue increased in both Business units, Services business revenue increased by 12.0% and
Projects business unit revenue by 6.1%. Revenue increased in all divisions during 2022, despite the
geopolitical tensions related to the war in Ukraine and resulting energy crisis, mounting inflation
and rising interest rates that lowered the economic growth prospects. Rapid rise in inflation during
the year had a positive effect on revenue. Caverion has managed to cover material cost increases
in pricing. In Services, the market demand and general investment activity remained positive during
the period. Caverion has continued to see a general increasing interest for services supporting
sustainability, such as energy management and advisory services. In Projects, the market demand
remained mostly stable. The interest for energy improvement projects has picked up, driven by the
focus on energy consumption due to the energy crisis. Caverion carried out 12 acquisitions during
the year, revenue increased by 2.2 (-0.2) percent as a result of acquisitions and divestments.
Contract balances
EUR million
12/31/2022
12/31/2021
Contract assets
POC receivables
231.3
195.6
Work in progress
7.5
3.2
Contract liabilities
Advances received
1)
286.2
261.3
Accrued expenses from long-term contracts
28.7
30.2
1)
Advances received consist of advances received in cash and advances relating to percentage of completion method.
Amounts included in the contract liabilities at the beginning of the year are mainly recognised as
revenue during the financial year. Revenue recognised from performance obligations satisfied in
the previous years was not material in 2022 or 2021.
Performance obligations
A performance obligation is a distinct good or service within a contract that customer can benefit
on stand-alone basis.
In Projects and Services business, performance obligation is satisfied by transferring control of
a work delivered to a customer. At Caverion, control is transferred mainly over time and payment
is generally due within 14-45 days.
In most of the contracts that Caverion has with its customers only one performance obligation
is identified. Many contracts include different building systems (e.g. heating, sanitation, ventilation,
air conditioning and electricity) that the customer has ordered from Caverion. All the different
building systems (i.e. disciplines) could be distinct, because the customer could benefit from those
on their own or together with other resources that are readily available. However, those are not
concluded to be distinct in the context of the contract while based on the management’s view, the
customer has wanted to get all the building systems as a whole and the customer has requested
for all technical solutions / services as one package. In addition, Caverion provides also project
management services and is responsible for managing the project. This integrates the different
FINANCIAL PERFORMANCE
47
Caverion Annual Review 2022
goods and services as one total deliverable / combined output to the customer, which has been
agreed in the contract and from the commercial point there are no separable risks related to the
different parts of the project, as the project has one total price for the full delivery and possible
sanctions are defined at the contract level.
In Services business performance obligations are maintenance agreements and separate
repair orders which are distinct. Caverion has lifecycle contracts, where maintenance phases are
recognised over time as separate performance obligations. During the maintenance period,
Caverion receives payments on a monthly basis. The consideration of the maintenance periods are
tied to the maintenance index. Revenue is recognised under percentage of completion method and
the stage of completion of these contracts are measured by reference to the contract costs
incurred up to the end of the reporting period as a percentage of total estimated costs for the
contract.
Remaining performance obligations
The transaction price allocated to the remaining performance obligations (unsatisfied or partially
unsatisfied) as at 31 December is as follows:
EUR million
2022
2021
Within one year
1,228.7
937.5
More than one year
714.6
926.3
Total (order backlog)
1,943.3
1,863.8
Accounting principles
Income from the sale of products and services is recognised as revenue at fair value net of indirect
taxes and discounts.
Revenue from sales of goods is recorded when the significant risks and rewards and control
associated with the ownership of the goods have been transferred to the buyer. Revenue for sales
of short-term services is recognised in the accounting period in which the services are rendered.
Revenue is recognised when, or as, the customer obtains control of the goods or services in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services.
Contracts under percentage of completion method are recognized as revenue on the stage of
completion basis when the outcome of the project can be estimated reliably. The stage of
completion of these contracts are measured by reference to the contract costs incurred up to the
end of the reporting period as a percentage of total estimated costs for the contract or evaluated
based on physical stage of completion. Invoicing which exceeds the revenue recognized based on
the stage of completion is recognized in advances received. Invoicing which is less than the revenue
recognized on the percentage of completion basis is deferred and presented as related accrued
income. Costs in excess of the stage of completion are capitalised as work in progress and costs
below the stage of completion are recorded as accrued expenses from long-term contracts.
Due to estimates included in the revenue recognition of contracts under percentage of
completion method, revenue and profit presented by financial period only rarely correspond to the
equal distribution of the total profit over the duration of the project. When revenue recognition is
based on the percentage of completion method, the outcome of the projects and contracts is
regularly and reliably estimated. Calculation of the total income of projects involves estimates on
the total costs required to complete the project as well as on the development of billable work. If
the estimates regarding the outcome of a contract change, the revenue and result recognised are
adjusted in the reporting period when the change first becomes known and can be estimated. If it
is probable that the total costs required to complete a contract will exceed the total contract
revenue, the expected loss is recognised as an expense immediately.
Revenue is recognised from any variable consideration at its estimated amount, if it is highly
probable that no significant reversal of revenue will occur.
Caverion’s customer contracts do not usually include any significant financing components.
The Group can also carry out a pre-agreed single project or a long-term service agreement
through a construction consortium. The construction consortium is not a separate legal entity. The
participating companies usually have a joint responsibility. Projects and service agreements
performed by the consortium are included in the reporting of the Group company and revenue is
recognised on the stage of completion basis according to the Group company’s share in the
consortium.
FINANCIAL PERFORMANCE
48
Caverion Annual Review 2022
2.2
Costs and expenses
Employee benefit expenses
EUR million
2022
2021
Wages and salaries
¹⁾
740.5
715.2
Pension costs
²⁾
68.1
61.5
Share-based compensations
2.6
4.0
Other indirect employee costs
112.4
109.3
Total
923.6
889.9
Average number of personnel
14,570
14,831
1)
Division Sweden received a grant from the government relating to the corona pandemic for short-term layoffs and sick-leave
compensation amounting to about EUR 1.4 (1.5) million. This has been presented in income statement as a reduction of personnel
expenses. Usually government grants are recognised as other operating income unless they compensate a specific cost item in
the income statement.
2)
In 2021, division Sweden received a payment from collectively bargained AGS group sickness insurance policy amounting to EUR
7.5 million. Payment was made to the employers that had previously received repayment of AGS premiums for the years 2004–
2008 and which had a valid insurance contract in December 2020, when the Confederation of Swedish Enterprise and the Swedish
Trade Union Confederation reached an agreement concerning the payment. This has been presented in income statement as a
reduction of pension expenses, where also the original actual expenses have been recognised.
Information on the management’s salaries and fees and other employee benefits is presented in
note 6.1 Key management compensation.
Other operating income and expenses
EUR million
2022
2021
Loss on disposal of tangible and intangible assets
1)
0.1
10.7
Expenses for office facilities
4.2
5.0
Other expenses for leases
29.7
24.6
Voluntary indirect personnel expenses
12.3
10.3
Other variable expenses
42.8
40.4
Travel expenses
38.5
33.6
IT expenses
40.6
40.8
Premises expenses
10.3
9.7
Other fixed expenses
2)
47.6
41.2
Total of other operating expenses
226.1
216.3
Other operating income
3)
2.3
2.8
Total of other operating items
223.8
213.4
1)
In 2021 EUR 10.0 million related to divestment of our non-core Russian subsidiary.
2)
Other fixed expenses include consulting, legal, administrative, marketing and other fixed costs. In 2022, Caverion settled certain
civil claims related to its old cartel case in Germany, totalling EUR 6.7 million (EUR 9.1 million).
3)
Other operating income includes e.g. gains on the sale of tangible and intangible assets and rental income.
The Group’s expenditure related to research and development activities related to product and
service development amounted to approximately EUR 5.2 (4.9) million in 2022, representing 0.2
(0.2) percent of revenue. Of the total amount EUR 2.7 (2.5) million was recognised as an expense
in the income statement and EUR 2.5 (2.4) million of the development expenses was capitalised.
Audit fee
The Annual General Meeting, held on 28 March 2022, re-elected Authorised Public Accountants
Ernst & Young Oy as the company's auditor until the end of the next Annual General Meeting. The
auditor’s remuneration will be paid according to invoice approved by Caverion.
EUR million
2022
2021
Ernst & Young
Audit fee
0.8
0.8
Statement
0.0
0.0
Tax services
0.0
0.1
Other services
0.1
0.3
Others
0.0
0.0
Total
0.9
1.1
FINANCIAL PERFORMANCE
49
Caverion Annual Review 2022
Restructuring costs
EUR million
2022
2021
Personnel related costs
1.0
3.0
Rents
0.1
-0.1
Other restructuring costs
0.0
0.0
Total
1.1
2.9
The Group’s restructuring costs for the year 2022 related to changes in the Group Management
Board and to closing of project unit in Division Norway.
2.3
Depreciation, amortisation and impairment
EUR million
2022
2021
Depreciation and amortisation by asset category
Intangible assets
Allocations from business combinations
5.9
3.9
Other intangible assets
10.3
12.1
Tangible assets ¹
⁾
57.2
54.3
Total
73.5
70.3
1)
Depreciations on right-of-use assets in accordance with IFRS 16 have been presented in note 5.9 Lease agreements.
Accounting principles
The depreciation and amortisation are recorded on a straight-line basis over the economic useful
lives of the assets:
Intangible assets
Tangible assets
Allocations from business combinations
3–10 years
Buildings
40 years
Other intangible assets
2–5 years
Machinery and equipment
3-7 years
Other tangible assets
3-15 years
2.4
Financial income and expenses
EUR million
2022
2021
Financial income
Dividend income on investments
0.0
0.0
Interest income on loans and other receivables
0.7
0.4
Other financial income on loans and other receivables
0.0
0.1
Financial income, total
0.8
0.5
Financial expenses
Interest expenses on liabilities at amortised cost
-4.6
-4.2
Other financial expenses on liabilities at amortised cost
-1.9
-1.5
Interest expenses on leases
-4.1
-3.8
Changes in fair values on financial instruments at fair value
through profit and loss account
-0.1
0.0
Financial expenses, total
-10.7
-9.4
Exchange rate gains
32.2
19.0
Exchange rate losses
-31.2
-18.6
Exchange rate differences, net
1.0
0.3
Financial expenses, net
-9.0
-8.6
Accounting principles
Interest income and expenses are recognised using the effective interest method and dividend
income when the right to receive payment is established. More detailed information about financial
assets and interest-bearing liabilities can be found in note 5.4.
FINANCIAL PERFORMANCE
50
Caverion Annual Review 2022
2.5
Income taxes
Income taxes in the income statement
EUR million
2022
2021
Tax expense for current year
11.8
6.7
Tax expense for previous years
0.3
-0.3
Change in deferred tax assets and liabilities
2.6
3.4
Total income taxes
14.7
9.8
The reconciliation between income taxes in the consolidated income statement and income taxes
at the statutory tax rate in Finland 20.0% is as follows:
EUR million
2022
2021
Result before taxes
60.9
34.9
Income taxes at the tax rate in Finland (20.0%)
12.2
7.0
Effect of different tax rates outside Finland
-0.3
-1.0
Tax exempt income and non-deductible expenses
0.1
1.4
Impact of the changes in the tax rates on deferred taxes
0.0
0.0
Impact of losses for which deferred taxes is not recognised
2.6
3.3
Reassessment of deferred taxes
-0.2
-0.6
Taxes for previous years
0.3
-0.3
Income taxes in the income statement
14.7
9.8
Group's effective tax rate was 24.1 (28.2) percent in January-December 2022. The deferred tax
asset on losses was not fully recorded for two divisions.
Accounting principles
Tax expenses in the income statement comprise current and deferred taxes. Taxes are recognised
in the income statement except when they are associated with items recognised in other
comprehensive income or directly in shareholders' equity. Current taxes are calculated on the
taxable income on the basis of the tax rate stipulated for each country by the balance sheet date.
Taxes are adjusted for the taxes of previous financial periods, if applicable. Management evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation is subject
to interpretation. The tax provisions recognised in such situations are based on evaluations by
management. Evaluating the total amount of income taxes at the Group level requires significant
judgement, so the amount of total tax includes uncertainty.
2.6
Earnings per share
2022
2021
Result for the financial year, EUR million
46.2
25.0
Hybrid capital expenses and accrued interest after tax, EUR million
-1.9
-1.9
Adjusted result for the financial year, EUR million
44.3
23.1
Weighted average number of shares (1,000 shares)
136,465
136,298
Earnings per share, basic, EUR
0.32
0.17
Accounting principles
Earnings per share is calculated by dividing the result for the financial year attributable to the
owners of the parent company (adjusted with the paid hybrid capital expenses and interests and
accrued unrecognised interest after tax) by the weighted average number of shares outstanding
during the period. Diluted earnings per share is calculated by adjusting the number of shares to
assume conversion of all diluting potential shares. There were no diluting effects in 2022 and 2021.
51
Caverion Annual Review 2022
3
Working capital and
deferred taxes
Working capital,
EUR million
-141.4
EUR million
2022
2021
Inventories
22.3
16.9
Trade and POC receivables
611.2
541.9
Other current receivables
31.6
33.8
Trade and POC payables
-227.1
-197.7
Other current liabilities
-293.3
-278.3
Advances received
-286.2
-261.3
Working capital
-141.4
-144.7
In this section
This section comprises the following notes describing Caverion’s
working capital and deferred taxes for 2022:
....................................................................
WORKING CAPITAL AND DEFERRED TAXES
52
Caverion Annual Review 2022
3.1
Inventories
EUR million
2022
2021
Raw materials and consumables
14.7
13.7
Work in progress
7.5
3.2
Advance payments
0.1
0.0
Total
22.3
16.9
The Group did not make any material write-downs in inventories in 2022 or 2021.
Accounting principles
Inventories are stated at the lower of cost and net realisable value. The acquisition cost of
materials and supplies is determined using the weighted average cost formula. The acquisition
cost of work in progress comprises the value of materials, direct costs of labour, other direct costs
and a systematic allocation of the variable manufacturing overheads and fixed overhead. The net
realisable value is the estimated selling price in the course of ordinary business less the estimated
cost of completion and the estimated cost to make the sale.
3.2
Trade and other receivables
2022
2021
EUR million
Carrying value
Carrying value
Trade receivables
379.6
346.0
POC-receivables
231.3
195.6
Prepayments and other accrued income
17.1
20.5
Other receivables
15.0
13.9
Non-current receivables
1)
8.4
9.6
Total
651.4
585.6
1)
EUR 3.7 (4.4) million were loan receivables, EUR 4.0 (3.3) million defined benefit pension plan assets and EUR 0.7 (1.9) million
other receivables.
The average amount of trade receivables was EUR 303.9 (287.9) million in 2022.
Aging profile of trade receivables
Age analysis of trade receivables December 31, 2022
EUR million
Carrying amount
Impaired
Gross
Not past due
1)
314.8
-1.1
315.8
1 to 90 days
37.7
-0.2
37.9
91 to 180 days
2.3
-0.4
2.7
181 to 360 days
2.4
-0.6
3.0
Over 360 days
22.5
-2.5
25.0
Total
379.6
-4.8
384.4
Age analysis of trade receivables December 31, 2021
EUR million
Carrying amount
Impaired
Gross
Not past due
1)
254.9
-0.7
255.6
1 to 90 days
35.1
-0.1
35.2
91 to 180 days
25.2
-0.4
25.6
181 to 360 days
4.6
-0.5
5.1
Over 360 days
26.1
-2.8
28.9
Total
346.0
-4.5
350.5
1)
Not past due trade receivables include IFRS 9 credit risk allowance.
Operational credit risk of receivables
Caverion’s operational credit risk arises from outstanding receivable balances and long-term
agreements with customers. Customer base and the nature of commercial contracts are different
in each country, and local teams are responsible for ongoing monitoring of customer-specific credit
risk. The exposure to credit risk is monitored on an ongoing basis.
The Group manages credit risk relating to operating items, for instance, by advance payments,
upfront payment programs in projects, payment guarantees and careful assessment of the credit
quality of the customer. Majority of Caverion Group’s operating activities are based on established,
reliable customer relationships and generally adopted contractual terms. The payment terms of
the invoices are mainly from 14 to 45 days. Credit background of new customers is assessed
comprehensively and when necessary, guarantees are required and client’s paying behavior is
monitored actively. Caverion Group does not have any significant concentrations of credit risk as
the clientele is widespread and geographically spread into the countries in which the Group
operates.
The Group’s largest overdue trade receivables relate to legal cases of old projects, for which
there exist separate legal opinions justifying the validity of the receivables. Caverion Group did not
experience any major unexpected credit losses in 2022. Group management also critically
assessed the level of the expected credit loss accrual in accordance with IFRS 9 at year-end closing
WORKING CAPITAL AND DEFERRED TAXES
53
Caverion Annual Review 2022
and it was assessed to be sufficient. Overall, Group management assessed the Group’s credit risk
position to be at about previous year’s level.
Credit losses and impairment of receivables amounted to EUR -0.3 (+1.4) million. The Group’s
maximum exposure to credit risk at the balance sheet date (December 31, 2022) is the carrying
amount of the financial assets. There are EUR 24.9 (30.7) million overdue receivables that are more
than 180 days old. Receivables and the related risk are monitored on a regular basis and risk
assessments are updated always when there are changes in circumstances. The receivable is
impaired if payment is considered unlikely.
Current receivables include operative risks which are described in more detail in the Board of
Directors’ Report.
Accounting principles
Trade receivables are amounts due from customers for merchandise sold or services performed in
the ordinary course of business. If collection is expected in 12 months or less, they are classified
as current. If not, they are presented as non-current.
The Group recognises an impairment loss on receivables when there is objective evidence that
payment is not expected to occur. Recognised impairment loss includes estimates and critical
judgements. The estimates are based on historical credit losses, past practice of credit
management, client specific analysis and economic conditions at the assessment date. In addition
to impairment losses recognized based on the evidence that the receivable cannot be collected in
full, IFRS 9 establishes a new model for recognition and measurement of impairments in loans and
receivables - the so-called expected credit losses model. Caverion has chosen to apply a simplified
credit loss matrix for trade receivables as the trade receivables do not contain significant financing
components. The provision matrix is based on an entity’s historical default rates over the expected
life of the trade receivables and is adjusted for forward-looking estimates. The lifetime expected
credit loss provision is calculated by multiplying the gross carrying amount of outstanding trade
receivables by an expected default rate. Changes in expected credit losses are recognized in other
operating expenses in the consolidated income statement.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed through the income statement.
Due to the application of the percentage of completion method, part of reliably estimated
impairment losses are included in the cost estimate of a project and considered as weakened
margin forecast. Therefore impairment losses of trade receivables in onerous projects are included
in the loss reserve.
3.3
Trade and other payables
2022
2021
EUR million
Carrying value
Carrying value
Non-current liabilities
Other liabilities
12.7
7.1
Total non-current payables
12.7
7.1
Current liabilities
Trade payables
198.5
167.4
Accrued expenses
153.2
144.1
Accrued expenses from long-term contracts
28.7
30.2
Advances received
1)
286.2
261.3
Other payables
112.9
102.1
Total current payables
779.3
705.2
1)
Advances received consist of advances received and invoiced advances.
Accounting principles
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Trade payables are classified as current liabilities if payment is
due within 12 months or less. If not, they are presented as non-current liabilities.
WORKING CAPITAL AND DEFERRED TAXES
54
Caverion Annual Review 2022
3.4
Provisions
EUR million
Warranty provision
Provisions for loss making projects
Restructuring provisions
Legal provisions
Other provisions
Total
January 1, 2022
24.2
9.8
1.5
3.4
5.8
44.6
Translation differences
-0.3
-0.1
-0.0
-0.0
0.0
-0.5
Provision additions
4.1
1.6
0.5
2.1
0.3
8.7
Released during the period
-6.4
-6.7
-1.5
-0.6
-2.4
-17.5
Reversals of unused provisions
0.0
0.0
-0.0
-0.1
-0.0
-0.1
Acquisitions through business combinations
1.2
0.1
0.0
0.0
1.6
2.9
Business disposals
December 31, 2022
22.7
4.8
0.5
4.8
5.3
38.1
Non-current provisions
6.9
0.2
0.1
1.5
8.7
Current provisions
15.8
4.8
0.3
4.8
3.7
29.4
Total
22.7
4.8
0.5
4.8
5.3
38.1
EUR million
Warranty provision
Provisions for loss making projects
Restructuring provisions
Legal provisions
Other provisions
Total
January 1, 2021
24.1
7.8
5.2
3.7
7.2
48.0
Translation differences
0.1
0.0
0.0
0.0
0.0
0.1
Provision additions
5.5
9.2
1.1
1.3
1.0
18.0
Released during the period
-5.4
-7.2
-4.2
-0.9
-2.4
-20.1
Reversals of unused provisions
0.0
0.0
-0.6
-0.6
0.0
-1.3
Acquisitions through business combinations
Business disposals
December 31, 2021
24.2
9.8
1.5
3.4
5.8
44.6
Non-current provisions
8.8
0.2
0.1
1.5
10.6
Current provisions
15.4
9.8
1.3
3.3
4.3
34.0
Total
24.2
9.8
1.5
3.4
5.8
44.6
The recognition of provisions involves estimates concerning probability, time of realization and quantity. As of December 31, 2022 the provisions amounted to EUR 38.1 (44.6) million.
Accounting principles
Provisions are recorded when the Group has a legal or constructive obligation on the basis of a past
event, the realisation of the payment obligation is probable and the amount of the obligation can be
reliably estimated. Provisions are measured at the present value of the expenditure required to settle
the obligation. If reimbursement for some or all of the obligations can be received from a third party,
the reimbursement is recorded as a separate asset, but only when it is practically certain
that said reimbursement will be received. Provisions are recognised for onerous contracts when the
unavoidable costs required to meet obligations exceed the benefits expected to be received under the
contract. The amount of the warranty provision is set on the basis of experience of the realisation of
these commitments.
Provisions for restructuring are recognised when the Group has made a detailed restructuring
plan and initiated the implementation of the plan, or has communicated of it.
WORKING CAPITAL AND DEFERRED TAXES
55
Caverion Annual Review 2022
3.5
Deferred tax assets and liabilities
EUR million
2022
2021
Deferred tax asset
15.0
16.8
Deferred tax liability
-38.5
-34.0
Deferred tax liability, net
-23.4
-17.1
Changes in deferred tax assets and liabilities:
Deferred tax liability, net January 1
-17.1
-12.0
Translation difference
0.4
-0.4
Changes recognised in income statement
-2.6
-3.5
Changes recognised in comprehensive income
-2.1
-0.5
Changes recognised in equity
0.5
0.5
Acquisitions and allocations
-2.2
-0.9
Disposals
-0.2
-0.4
Deferred tax liability, net December 31
-23.4
-17.1
WORKING CAPITAL AND DEFERRED TAXES
56
Caverion Annual Review 2022
Changes in deferred tax assets and liabilities before the offset
2022
EUR million
January 1
Translation
difference
Recognised in the
income statement
Recognised in
comprehensive income
Recognised in
equity
Acquisitions and
allocations
Disposals
December 31
Deferred tax assets:
Provisions
6.7
-0.1
-1.2
0.9
6.3
Tax losses carried forward
22.7
-0.1
0.6
23.2
Pension obligations
9.4
-0.1
-0.5
-1.9
6.8
Percentage of completion method
1.4
0.0
-0.3
0.5
-0.1
1.5
Right-of-use assets (IFRS 16)
1.1
0.0
0.1
1.2
Other items
4.2
-0.1
1.8
0.7
-0.1
6.5
Total deferred tax assets
45.4
-0.4
0.5
-1.9
2.2
-0.2
Deferred tax liabilities:
Allocation of intangible assets
1)
40.2
-0.7
-0.2
3.7
43.0
Accumulated depreciation differences
2.0
0.0
-0.1
1.9
Pension obligations
1.0
-0.3
0.2
1.0
Percentage of completion method
18.1
-0.1
3.2
0.7
21.9
Other items
1.1
0.0
0.6
-0.5
1.2
Total deferred tax liabilities
62.5
-0.8
3.1
0.2
-0.5
4.4
69.0
2021
EUR million
January 1
Translation
difference
Recognised in the
income statement
Recognised in
comprehensive income
Recognised in
equity
Acquisitions and
allocations
Disposals
December 31
Deferred tax assets:
Provisions
6.5
0.1
0.1
6.7
Tax losses carried forward
23.1
0.0
0.0
-0.3
22.7
Pension obligations
9.7
0.1
-0.1
-0.3
9.4
Percentage of completion method
0.7
0.0
0.8
-0.2
1.4
Right-of-use assets (IFRS 16)
0.9
0.0
0.1
1.1
Other items
3.8
0.0
0.3
0.3
-0.2
4.2
Total deferred tax assets
44.8
0.2
1.2
-0.3
0.3
-0.7
45.4
Deferred tax liabilities:
Allocation of intangible assets
1)
38.7
0.6
-0.1
1.0
40.2
Accumulated depreciation differences
2.4
0.0
-0.3
0.0
2.0
Pension obligations
0.8
0.1
0.1
1.0
Percentage of completion method
13.6
4.6
0.1
-0.3
18.1
Other items
1.3
0.0
0.4
-0.5
0.0
0.0
1.1
Total deferred tax liabilities
56.8
0.6
4.7
0.1
-0.5
1.1
-0.3
62.5
1)
Capitalisation of intangible assets include, besides capitalisation of intangible assets, the deductible amount of the deferred taxes of
goodwill from the separate entities.
The Group's unused tax losses carried forward amounted to EUR 57.4 million, for which corresponding deferred
tax assets of EUR 16.4 million have not been recorded as of 31 December 2022 since the realisation of the
related tax benefit through future taxable profits was considered not probable. These tax losses carried forward
do not have an expiration date.
WORKING CAPITAL AND DEFERRED TAXES
57
Caverion Annual Review 2022
Accounting principles
Deferred taxes are calculated on all temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. No deferred taxes are calculated on
goodwill impairment that is not deductible in taxation and no deferred taxes are recognised on the
undistributed profits of subsidiaries to the extent that the difference is unlikely to be reverse in the
foreseeable future. Deferred taxes have been calculated using the statutory tax rates or the tax rates
substantively enacted by the balance sheet date. Deferred tax assets are only recognised to the
extent that it is probable that future taxable profit will be available against which the temporary
difference can be utilized.
The most significant temporary differences arise from differences between the recognised
revenue from long-term contracts using the percentage of completion method and taxable income,
measurement at fair value in connection with business combinations and unused tax losses.
Deferred tax assets on taxable losses are booked to the extent the benefit is expected to be possible
to deduct from the taxable profit in the future. Deferred tax liability on undistributed earnings of
subsidiaries, where the tax will be paid on the distribution of earnings, has not been recognized in the
statement of financial position, because distribution of the earnings is in the control of the Group and
it is not probable in the foreseeable future. Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets against current tax liabilities and when the
deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities where there is an intention to settle the
balances on a net basis.
58
Caverion Annual Review 2022
4
Business
combinations and
capital expenditure
In 2022, Caverion completed 12 acquisitions.
In this section
This section comprises the following notes, which describe Caverion’s
business combinations and capital expenditure in 2022:
..................................................................
BUSINESS COMBINATIONS AND CAPEX
59
Caverion Annual Review 2022
4.1
Acquisitions and disposals
Acquisitions
Acquisitions completed in 2022
Acquired unit
Division
Business unit
Technical area
Acquisition
type
Acquisition
period
Number of
employees
Annual sales for fiscal
year prior to acquisition,
EUR million
1)
EBITDA for fiscal year
prior to acquisition,
EUR million
1)
Frödéns Ventilation
Sweden
Services
Ventilation and air conditioning
Business
January
12
2.7
0.1
DI-Teknik A/S
Denmark
Services
Automation
Shares
April
185
27.8
2.3
Kaldt og Varmt
Norway
Services
Cooling and heating
Business
May
5
1.8
0.1
Wind Controller Group
Industry
Services
Energy utilities operation and
maintenance
Shares
May
40
5.1
0.3
WT-Service Oy
Industry
Services
Industrial maintenance
Shares
May
17
1.7
0.3
Visi Oy
Finland
Services
Security and safety
Shares
July
22
4.6
1.0
PORREAL GmbH
2)
Austria
Services
Technical maintenance
Shares
August
120
2)
23.3
2)
2.4
2)
Elicentra AB
Sweden
Services
Electricity
Shares
August
18
2.4
0.3
CS electric A/S
Denmark
Services
Industrial engineering and automation
Shares
September
70
13.4
1.6
Simex Klima & Kulde AS
Norway
Services
Cooling and heating
Shares
October
25
4.2
0.3
LukkoPro Oy
Finland
Services
Security and safety
Shares
November
35
5.6
0.7
Carrier's food retail
refrigeration business
Finland
Services
Refrigeration
Business
December
17
1.7
3)
-
3)
Acquisitions completed in 2021
Acquired unit
Division
Business unit
Technical area
Acquisition
type
Acquisition
period
Number of
employees
Annual sales for fiscal
year prior to acquisition,
EUR million
1)
EBITDA for fiscal year
prior to acquisition,
EUR million
1)
Electro Berchtold
Austria
Services
Technical maintenance
Business
January
13
1.8
4)
0.1
4)
RPH Linc
Sweden
Services
Security and safety
Business
July
9
2.5
0.6
GTS Immobilien GmbH
Austria
Projects
Building automation
Shares
July
40
5.6
4)
0.3
4)
Felcon GmbH
Austria
Services
Ventilation and air conditioning
Shares
September
13
2.4
0.2
Bott Kälte- und Klimatechnik
Germany
Services
Cooling
Business
October
8
0.7
0.2
Rørlegger'n Innlandet
Norway
Services
Heating and sanitation
Business
December
7
0.7
0.0
Merius
Industry
Services
Industrial design and advisory
Business
December
20
1.4
0.1
1)
Figures for the fiscal year prior to acquisition are in accordance with the local accounting standards of the acquired businesses. Full acquisition year figures are not available for all acquired businesses due to merger and integration activities following the acquisitions. Therefore,
the revenue and EBITDA for the fiscal year prior to acquisition provides a good estimate of the impact the acquisitions would have had on Caverion's figures had all the acquisitions been carried out on 1 January of the acquisition year.
2)
Caverion's acquisition of PORREAL Group in August 2022 comprised PORREAL GmbH and its subsidiary ALEA GmbH. ALEA GmbH was divested in December 2022 and the above figures only contain those of PORREAL GmbH.
3)
For Carrier's food retail refrigeration business, the annual sales for the fiscal year prior to the acquisition contains only the sales arising from the transferred business. A comparable EBITDA for the prior fiscal year is not available for the business transferred to Caverion.
4)
The annual sales and EBITDA figures for Electro Berchtold and GTS Immobilien GmbH are for the fiscal year 2021.
BUSINESS COMBINATIONS AND CAPEX
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Caverion Annual Review 2022
Assets and liabilities of the acquired businesses (including fair value adjustments)
EUR million
2022
2021
Property, plant and equipment
3.7
0.4
Right-of-use assets
7.2
0.7
Intangible assets
17.0
8.7
Investments
0.1
0.1
Deferred tax assets
0.1
0.3
Inventories
3.1
0.4
Trade and other receivables
25.9
2.6
Cash and cash equivalents
6.7
0.9
Total assets
63.6
14.1
Deferred tax liabilities
2.3
1.1
Pension obligations
0.0
0.1
Trade payables
6.4
0.4
Advances received
6.5
0.1
Other liabilities
11.2
1.1
Provisions
3.9
0.2
Lease liabilities
7.2
0.7
Interest-bearing debt
0.5
0.2
Total liabilities
38.1
3.9
Net assets
25.6
10.2
Acquisition cost paid in cash during the fiscal period
88.5
10.6
Contingent consideration, recognised as liability
10.2
4.5
Goodwill
73.2
4.9
Year 2022
In 2022, Caverion completed 12 acquisitions, the largest of which were the acquisitions of the
Austrian PORREAL Group and the Danish DI-Teknik A/S and CS electric A/S. In the fair value
measurement of the 2022 acquisitions, customer relationships, order backlog, technology and
trademarks were identified as intangible assets. A total fair value of EUR 9.7 million was allocated to
customer relationships, EUR 3.4 million to order backlog, EUR 2.2 million to technology and EUR 1.2
million to trademarks. The acquisition prices contained EUR 2.7 million of payments which were
conditional to continuing employment and therefore treated as personnel benefit expenses during
the period to which they relate.
The goodwill arising from the 2022 acquisitions amounted to EUR 73.2 million and was mainly
attributable to personnel know-how, expected synergies and geographical coverage. From the
generated goodwill, EUR 1.4 million was considered tax deductible. The nominal and fair values of the
acquired trade and other receivables did not differ materially. The transaction costs from the
acquisitions completed during 2022 amounted to EUR 3.5 million and were expensed during the fiscal
year as a part of other operating expenses.
DI-Teknik
On 1 April 2022, Caverion closed on an agreement to acquire the shares of the Danish DI-Teknik A/S.
DI-Teknik is one of Denmark’s largest industrial automation companies with approximately 185
employees at the time of the acquisition. DI-Teknik operates as a full-service provider (design,
dimensioning, programming, installation and maintenance) in industrial automation, IT and
electrification. The acquisition brought completely new expertise and capabilities in industrial
automation to Caverion in Denmark as well as strengthened Caverion's capability to provide smart,
digital and sustainable solutions for the industrial segment also more widely outside Denmark.
80% of DI-Teknik’s shares were transferred into Caverion's ownership in April 2022 and Caverion
is committed to purchasing the remaining 20% latest in April 2026. Based on this, Caverion
consolidated DI-Teknik into the Group's figures based on 100% ownership already in 2022 and
recognised a purchase consideration liability for the remaining 20%. The revenue of DI-Teknik A/S for
the fiscal year 1 July 2020 - 30 June 2021 amounted to EUR 27.8 million and EBITDA to EUR 2.3
million according to the company's local accounting standards. DI-Teknik's nine-month IFRS revenue
after the acquisition date for the year 2022 amounted to EUR 24.7 million and EBITDA excluding IFRS
16 adjustments to EUR 2.4 million. The transaction price was not disclosed.
PORREAL
On 2 August 2022, Caverion closed on an agreement to acquire all the shares in PORREAL GmbH in
Austria, also including its fully owned subsidiary ALEA GmbH. PORREAL offers technical facility
services and real estate consulting services while ALEA offers soft facility services. The acquisition
strengthened Caverion's position in the Austrian facility services market. At the time of the
acquisition, PORREAL Group employed approximately 380 employees, 120 of which were employed
by PORREAL GmbH. On 28 December 2022, Caverion divested the shares of ALEA GmbH.
The 2021 revenue of PORREAL GmbH amounted to EUR 23.3 million and EBITDA to EUR 2.4
million according to the company’s local accounting standards. The five-month IFRS revenue after
the acquisition date for the year 2022 amounted to EUR 11.7 million and EBITDA excluding IFRS 16
adjustments to EUR 1.0 million. ALEA GmbH's revenue amounted to EUR 4.2 million during Caverion's
ownership and it did not have a material effect on the Group's profitability. The transaction price was
not disclosed.
CS electric
On 1 September 2022, Caverion closed on an agreement to acquire the shares of the Danish CS
electric A/S. CS electric is a leading player in Denmark in technical engineering, electrification and
BUSINESS COMBINATIONS AND CAPEX
61
Caverion Annual Review 2022
automation services. The acquisition supported Caverion’s sustainable growth strategy and expanded
its footprint especially in the marine, energy and industrial customer segments. The company
employed approximately 70 people at the time of the acquisition. The 2022 revenue of CS electric
amounted to EUR 26.6 million and EBITDA to EUR 3.9 million according to the company's local
accounting standards. The four-month IFRS revenue after the acquisition date for the year 2022
amounted to EUR 13.7 million and EBITDA excluding IFRS 16 adjustments to EUR 2.2 million. The
transaction price was not disclosed.
Other acquisitions
In December 2021, Caverion signed an agreement to acquire the business of Frödéns Ventilation AB
in Sweden. The transaction was completed on 3 January 2022. Frödéns offers service and
maintenance, inspections, energy optimisations and smaller projects in the area of ventilation and
mainly operates in the Jönköping area. The acquisition was a bolt-on acquisition for Caverion in the
ventilation business in Sweden.
in Norway. Kaldt og Varmt is a heating and cooling specialist based in Askim, Norway and the
acquisition complements Caverion's regional service offering in relation to cooling and heat pumps.
On 2 May 2022, Caverion closed on an agreement to acquire the shares of the Finnish Wind
Controller JV Oy ("WiCo"). The transaction included WiCo's subsidiaries WiCo Inspections Oy and WiCo
Safety Oy. WiCo is the leading technical consultant and service provider for the Finnish wind power
industry. Its customer base includes turbine suppliers and wind farm owners, operators and
developers. By entering the wind power segment, Caverion widened its offering in the energy sector.
The transaction also complemented Caverion's strong expertise in the energy industry and supported
its growth strategy.
On 11 May 2022, Caverion closed on an agreement to acquire the shares of the Finnish WT-
Service Oy. WT-Service provides industrial maintenance, installation and project services in the Vaasa
region in Finland. The acquisition strengthened Caverion’s regional footprint with new experts and a
solid customer base.
On 1 July 2022, Caverion closed on an agreement to acquire the shares of the Finnish Visi Oy. Visi
is an industrial security service specialist providing industrial video and access control services as well
as work and safety communication services. The acquisition supported Caverion’s sustainable growth
strategy and strengthened the Group's capabilities in technical security services.
On 31 August 2022, Caverion closed on an agreement to acquire the shares of the Swedish
Elicentra AB. Elicentra provides electrical installation services in the Sundsvall area in Sweden and the
acquisition strengthened Caverion's reginal service offering in the area of electricity solutions.
On 1 October 2022, Caverion closed on an agreement to acquire the shares of the Norwegian
Simex Klima & Kulde AS. The company is one of Norway's Stavanger region's leading suppliers in
technical installations of indoor climate, cooling and heat pump systems for commercial buildings.
The acquisition complemented Caverion's service capacity in the region and strengthened its market
position.
On 30 November 2022, Caverion closed on an agreement to acquire the shares of the Finnish
LukkoPro Oy. LukkoPro specialises in locking and safety services and its digital services offering
includes the EasyKey automated key management service. The acquisition broadened Caverion's
offering in smart security services.
On 1 December 2022, Caverion closed on an agreement to acquire Carrier's food retail
refrigeration business in Finland. The acquisition strengthened Caverion's refrigeration business and
expertise and also brought Carrier's market-leading food refrigeration product portfolio to Caverion's
offering.
On 31 December 2022, Caverion acquired Metsä Fibre Oy's shares in Oy Botnia Mill Service Ab
(50.17%) as a part of an arrangement where Metsä Fibre took over the maintenance operations of
their pulp mills and the Rauma sawmill as well as the related workshop and design services. These
operations were previously performed by Oy Botnia Mill Service Ab, a joint venture company owned
by the parties. Apart from the share purchase, the transaction was treated as a termination of an
outsourcing agreement.
On 27 October 2022, Caverion signed an agreement to acquire TM Voima Group’s substation and
transmission line business in Finland and Estonia. The acquisition will strengthen Caverion’s presence
in the energy sector and enable growth especially in the substation business. In 2021, the revenue of
TM Voima Group’s substation and transmission line business amounted to EUR 30.5 million and the
number of employees was 66. The closing of the acquisition was subject to the approval by the
Finnish Competition and Consumer Authority and the acquisition was completed on 1 February 2023.
Year 2021
In 2021, Caverion completed seven bolt-on acquisitions, the largest of which was the acquisition of
the Austrian GTS Immobilien GmbH. In the fair value measurement of the 2021 acquisitions, customer
relationships, technology and order backlog were identified as intangible assets. A total fair value of
EUR 5.6 million was allocated to customer relationships, EUR 2.7 million to technology and EUR 0.5
million to order backlog. The acquisition prices contained EUR 0.4 million of payments which were
conditional to continuing employment and therefore treated as personnel benefit expenses during
the period to which they relate.
The goodwill arising from the 2021 acquisitions amounted to EUR 4.9 million and was mainly
attributable to personnel know-how, expected synergies and geographical coverage. From the
generated IFRS goodwill, EUR 1.6 million was considered tax deductible. The transaction costs from
the acquisitions completed in 2021 amounted to EUR 0.1 million and were expensed during the fiscal
year as a part of other operating expenses.
GTS
On 2 July 2021, Caverion completed the acquisition of Austrian GTS Immobilien GmbH including its
subsidiaries. The transaction excluded, however, the non-automation business of GTS as well as its
Swiss operations. Through its subsidiary GTS Automation GmbH, GTS Group is a well-known company
on the Austrian market for building automation. Through the acquisition, Caverion supported its
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growth strategy and strengthened its market position in smart technologies. At the time of
acquisition, GTS employed approx. 40 employees.
The full year 2021 revenue of the acquired business amounted to EUR 5.6 million and EBITDA to
EUR 0.3 million according to the acquired companies' local accounting standards. IFRS revenue after
the acquisition date for year 2021 amounted to EUR 3.2 million and EBITDA excluding IFRS 16
adjustments to EUR 0.3 million. The transaction price was not disclosed.
Other acquisitions
In December 2020, Caverion signed an agreement to acquire the business of Electro Berchtold GmbH
in Austria. The transaction was completed on 1 January 2021. Electro Berchtold is a provider of
maintenance services for ski lift and snow systems.
On 1 July 2021, Caverion closed on an agreement to acquire the business of Swedish RPH Linc AB
and further strengthened its smart security solutions offering. RPH Linc is a system integrator in the
area of electrical security focusing on high-end security solutions for enterprise and multisite
customers and the public sector. The acquisition was a bolt-on acquisition for Caverion in the area of
smart technology services.
On 13 September 2021, Caverion closed on an agreement to acquire the shares of Felcon GmbH
in Austria. Felcon is a small clean room specialist based in Vienna, Austria and provides design,
construction, installation, validation as well as technical services, among others. Its customers include
companies in the pharma & medical, biotech as well as food & cosmetics industries. Through the
acquisition, Caverion supported its growth strategy and strengthened its market position in the clean
room business.
On 29 October 2021, Caverion closed on an agreement to acquire the business of Bott Kälte- und
Klimatechnik in Germany. Bott is a small cooling and air conditioning specialist based in Wiesbaden,
Germany. Through the acquisition, Caverion supported its growth strategy and strengthened its
market position in smart technologies.
On 1 December 2021, Caverion closed on an agreement to acquire the business of a small
Norwegian company Rørlegger'n Innlandet AS. Rørlegger'n Innlandet is based in Raufoss, Norway and
provides services in the area of plumbing, heating and sanitation.
On 15 December 2021, Caverion closed on an agreement to acquire the industrial design and
advisory business of the Finnish company Merius Oy. Merius provides surveying, design and
consulting services for industrial investments by using 3D digitalisation, virtual and visualisation
technologies. The acquisition complemented the design and advisory services of Caverion Industry to
provide added value in industrial plant investments and to utilise digital design technologies.
Accounting principles
Caverion applies the acquisition method to account for business combinations. The total
consideration transferred for the acquisition is the fair value of the assets transferred, the liabilities
incurred and the possible equity interests issued by Caverion Group. The total consideration includes
the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisition-related costs are expensed as incurred. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair value at
the acquisition date. The measurement of the fair values requires management judgement and is
based partly on management's estimates.
The consolidation of the acquired businesses in accordance with IFRS 3 is still provisional as of 31
December 2022. Therefore, the fair value measurement of the assets and liabilities acquired during
2022 is preliminary and subject to adjustments during the 12-month period during which the
acquisition calculations will be finalized.
Disposals
Assets and liabilities of the disposed businesses
EUR million
2022
2021
Property, plant and equipment
0.8
0.1
Right-of-use assets
0.3
Goodwill
0.5
Deferred tax assets
0.2
0.4
Inventories
0.3
Trade and other receivables
1.2
5.8
Cash and cash equivalents
0.2
0.9
Total assets
2.9
7.8
Trade payables
0.5
0.7
Advances received
0.3
Other liabilities
1.4
2.1
Provisions
0.3
Lease liabilities
0.3
Total liabilities
2.1
3.4
Net assets
0.8
4.4
Consideration to be received in cash (including
contingent consideration)
1)
0.8
0.2
Translation differences
-5.6
Other items affecting gain/loss on sales
-0.4
Gain/loss on sales
1)
0.0
-10.1
1)
In 2022, Caverion decreased its estimate of the contingent consideration receivable related to the 2021 divestment of JSC "Caverion
Rus" by EUR 0.1 million.
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Caverion Annual Review 2022
Year 2022
On 28 December 2022, Caverion sold the shares of ALEA GmbH to Avalon GmbH. ALEA provides soft
facility services in Austria and was transferred to Caverion's ownership in the August 2022 acquisition
of the PORREAL Group. ALEA employed 230 persons at the time of the divestment and its revenue
for the time in Caverion's ownership amounted to EUR 4.2 million. The divestment did not have a
material effect on Caverion's profitability. The transaction price was not disclosed. The transaction
costs were expensed during the fiscal year and were not material in value.
Year 2021
In the end of December 2021, Caverion sold the share capital of its subsidiary JSC “Caverion Rus” in
Russia to Aim Cosmetics Rus, LTD. The transaction covered Caverion’s entire operations in Russia
which are focused on the St. Petersburg and Moscow regions and employed 421 persons at the end
of 2021. The divestment of the Russian subsidiary was a part of Caverion's strategy to focus on the
Group's core businesses in its main market areas and to improve the Group's financial performance.
The IFRS revenue of Caverion's Russian operations amounted to EUR 13.9 million and EBITDA to
EUR 0.5 million in 2021. The figures of JSC “Caverion Rus" were included in the Group's consolidated
income statement until the end of 2021. Caverion recognised a capital loss of EUR 10.0 million in
relation to the divestment in its 2021 result. The largest part of the capital loss was related to
negative translation differences which had no cash flow effect or effect on the Group’s total equity.
In 2022, Caverion decreased its estimate of the contingent consideration receivable by EUR 0.1
million. The transaction costs amounted to EUR 0.3 million and were expensed partly during the fiscal
year 2021 and partly in 2022.
4.2
Goodwill
Goodwill is allocated to the cash generating units (CGU) as follows:
EUR million
2022
2021
Finland
96.4
80.8
Germany
77.7
77.7
Norway
72.3
69.8
Industry
71.6
64.6
Sweden
49.1
47.7
Austria
42.8
21.6
Denmark
32.7
7.8
Total goodwill
442.5
369.9
In 2022, Caverion completed 12 acquisitions, the largest of which were the acquisitions of the
Austrian PORREAL Group and the Danish DI-Teknik A/S and CS electric A/S. In 2022 Goodwill
increased by EUR 72.6 million and the goodwill arising from the 2022 acquisitions amounted to EUR
73.2 million and was mainly attributable to personnel know-how, expected synergies and
geographical coverage.
In 2021, Caverion completed seven bolt-on acquisitions, the largest of which was the acquisition
of the Austrian GTS Immobilien GmbH. The goodwill arising from the 2021 acquisitions amounted to
EUR 4.9 million and was mainly attributable to personnel know-how, expected synergies and
geographical coverage.
Goodwill is reviewed for potential impairment whenever there is an indication that the current
value may be impaired, or at least annually. Impairment testing of goodwill is carried out by allocating
goodwill to the lowest cash generating unit level (CGU) which generates independent cash flows. The
recoverable amounts of the cash generating units (CGU) are determined on the basis of value-in-use
calculations. The future cash flow projections are based on the budget approved by the top
management and the Board of Directors and other long-term financial plans. After this there is a
critical assessment of the cash flows related to the goodwill impairment testing. Cash flow
projections cover three years, the terminal value is defined by extrapolating it on the basis of average
development during the forecasted planning horizon. Cash flows beyond the forecast period are
projected by using 1.75 percent long-term growth rate that is based on a prudent estimate about the
long-term growth rate and inflation. Future growth estimates are based on the former experience
and information available by external market research institutions on market development.
The discount rate used in the impairment testing is the weighted average pre-tax cost of capital
(WACC). The discount rate reflects the total cost of equity and debt and the market risks related to
the segment. The country-specific WACC components are: the risk-free interest rate, the market risk
premium and the credit spread. The common components for all tested CGUs are; the comparable
peer industry beta, the Group capital structure and the size premium based on Caverion Group's size.
Estimating the future cash flows of CGUs has been challenging in 2022 due to the corona
pandemic, the war in Ukraine and there-related uncertainty in the economic environment. As part of
the goodwill impairment testing, management cautiously assessed the future cash flows of the CGUs
while taking into account the current economic environment. Management considered the fact that
the Group’s cash flows have been strong in the past few years and also profitability of most of the
CGUs was on an improving track in 2022.
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Caverion Annual Review 2022
Assumptions used in goodwill impairment testing 2022
CGU 1 =
Finland
CGU 2 =
Sweden
CGU 3 =
Norway
CGU 4 =
Denmark
CGU 5 =
Industry
CGU 6 =
Germany
CGU 7 =
Austria
Pre-tax WACC
10.97%
10.27%
12.86%
10.18%
10.97%
10.55%
11.27%
Recoverable amount exceeds balance sheet value
>50%
>50%
>50%
20-50%
20-50%
20-50%
>50%
Recoverable amount in different sensitivity analysis scenarios in
relation to balance sheet value
Revenue -10% and operating profit -1%
>50%
>50%
>50%
Impairment
Impairment
Impairment
20-50%
WACC +2%-points
>50%
>50%
>50%
0-20%
0-20%
0-20%
>50%
Long-term growth rate -0,5%-points
>50%
>50%
>50%
20-50%
20-50%
20-50%
>50%
All the above
>50%
20-50%
>50%
Impairment
Impairment
Impairment
Impairment
The goodwill test results are evaluated by comparing the recoverable amount (E) with the carrying
value of the CGU assets (T), as follows:
Ratio
Estimate
E
<
T
Impairment
E
0 - 20%
>
T
Slightly above
E
20 - 50%
>
T
Clearly above
E
50% -
>
T
Substantially above
As a result of the impairment tests performed, no impairment loss has been recognised in 2022 or in
2021. In the 2022 testing the recoverable amount exceeded the balance sheet value in Germany,
Denmark and Industry clearly and in other CGUs substantially. In the 2021 testing the recoverable
amount exceeded the balance sheet value in Germany clearly and in other CGUs substantially.
Management has assessed that in Germany (CGU 6) a reasonably possible change in key assumptions
might lead into impairment. Management has prepared sensitivity analysis for that CGU:
Values for sensitivity analysis in separate
scenarios (1, 2, 3), with which recoverable amount
= balance sheet value, Germany
Basic assumption
Change in value
resulting in
break even
Revenue in the forecast period (scenario 1)
4.0% average growth (CAGR)
-5.5% p.p.
Average EBITDA percentage in the forecast period
(scenario 1)
5.8%
-0.9% p.p.
Pre-tax WACC (scenario 2)
10.55%
+3.2% p.p.
Terminal growth assumption (scenario 3)
1.75%
-2.5% p.p.
Accounting principles
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration
transferred over the Group’s interest in the net fair value of the net identifiable assets of the acquiree
and the fair value of the non-controlling interest in the acquiree on the date of acquisition. The net
identifiable assets include the assets acquired and the liabilities assumed as well as the contingent
liabilities. The consideration transferred is measured at fair value.
Impairment testing
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in
circumstances indicate a potential impairment. For the purpose of impairment testing, goodwill is
allocated to cash-generating units. Goodwill is measured at the original acquisition cost less
impairment. Impairment is expensed immediately in the income statement and is not subsequently
reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill
relating to the entity disposed of.
Goodwill is tested for any impairment annually in accordance with the accounting policy. The
recoverable amounts of cash-generating units have been determined based on value-in-use
calculations. The cash flows in the value-in-use calculations are based on the management's best
estimate of market development for the subsequent years. The discount rate may be increased with
a branch specific risk factor.
The recoverable amounts have been assessed in relation to different time periods and the
sensitivity has been analysed for the changes of the discount rate, profitability and the terminal
growth rate.
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Caverion Annual Review 2022
4.3
Tangible and intangible assets
Property, plant and equipment
2022
EUR million
Land and
water
areas
Buildings
and
structures
Machinery
and
equipment
Other
tangible
assets
1)
Advance
payments
Total
Historical cost on Jan 1, 2022
0.6
6.8
43.7
21.6
0.2
72.8
Translation differences
-0.0
-0.0
-0.9
-0.1
-0.0
-1.0
Increases
0.1
4.3
1.2
0.1
5.6
Acquisitions
0.2
5.8
2.5
8.5
Decreases
-0.0
-0.1
-4.5
-0.3
-0.1
-5.0
Business disposals
-0.5
-0.4
-0.9
Reclassifications between
classes
0.1
0.0
-0.1
-0.1
Historical cost on Dec 31, 2022
0.6
6.9
47.9
24.4
0.1
79.9
Accumulated depreciation and
impairment on Jan 1, 2022
-4.7
-33.9
-16.7
-55.3
Translation differences
0.0
0.8
0.1
0.8
Depreciation
-0.3
-4.2
-1.7
-6.2
Accumulated depreciation of
increases and acquisitions
-0.0
-2.9
-1.8
-4.8
Accumulated depreciation of
decreases and business disposals
0.1
4.2
0.3
4.7
Reclassification between classes
0.0
0.0
Accumulated depreciation and
impairment on Dec 31, 2022
-4.9
-36.1
-19.8
-60.8
Carrying value on January 1, 2022
0.6
2.1
9.7
4.9
0.2
17.6
Carrying value on Dec 31, 2022
0.6
2.0
11.8
4.6
0.1
19.1
1)
Other tangible assets include, among other things, capitalised leasehold improvement costs.
2021
EUR million
Land and
water
areas
Buildings
and
structures
Machinery
and
equipment
Other
tangible
assets
1)
Advance
payments
Total
Historical cost on Jan 1, 2021
0.6
7.1
50.4
21.2
0.2
79.5
Translation differences
-0.0
-0.0
0.1
0.1
0.2
Increases
0.1
3.0
1.4
0.4
4.7
Acquisitions
0.4
0.4
Decreases
-0.4
-8.4
-1.1
-9.8
Business disposals
-2.0
0.0
-2.0
Reclassifications between
classes
0.0
0.2
0.0
-0.4
-0.2
Historical cost on Dec 31, 2021
0.6
6.8
43.7
21.6
0.2
72.8
Accumulated depreciation and
impairment on Jan 1, 2021
-4.6
-39.9
-16.1
-60.6
Translation differences
0.0
0.0
-0.1
-0.1
Depreciation
-0.3
-4.1
-1.6
-6.0
Accumulated depreciation of
increases and acquisitions
0.0
0.0
Accumulated depreciation of
decreases and business disposals
0.2
10.2
1.1
11.4
Reclassification between classes
0.0
0.0
Accumulated depreciation and
impairment on Dec 31, 2021
-4.7
-33.9
-16.7
-55.3
Carrying value on Jan 1, 2021
0.6
2.5
10.4
5.1
0.2
18.9
Carrying value on Dec 31, 2021
0.6
2.1
9.7
4.9
0.2
17.6
Accounting principles
Property, plant and equipment are stated at historical cost less accumulated depreciation and
impairment. Land is not depreciated. Depreciation on other assets is calculated using the straight-
line method to allocate the cost over their estimated useful lives.
The residual values and useful lives of assets are reviewed at the end of each reporting period.
If necessary, they are adjusted to reflect the changes in expected economic benefits. Capital gains
or losses on the disposal of property, plant and equipment are included in other operating income
or expenses.
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Caverion Annual Review 2022
Intangible assets
2022
EUR million
Goodwill
Allocations
from business
combinations
Other
intangible
assets
1)
Total other
intangible
assets
Historical cost on January 1, 2022
369.9
86.7
126.8
213.5
Increases
8.5
8.5
Acquisitions
73.2
16.5
0.6
17.1
Decreases
-9.4
-9.4
Business disposals
-0.5
-0.0
-0.0
Reclassifications between classes
0.1
0.1
Translation differences
-0.1
-1.8
-1.5
-3.4
Historical cost on December 31, 2022
442.5
101.4
124.9
226.4
Accumulated amortisation and
impairment on January 1, 2022
-59.0
-106.8
-165.8
Amortisation and impairment
-5.9
-10.3
-16.2
Translation differences
1.6
1.2
2.8
Accumulated amortisation of increases
and acquisitions
-0.2
-0.2
Accumulated amortisation of decreases
and reclassifications
9.4
9.4
Accumulated amortisation of business
disposals
0.0
0.0
Accumulated amortisation and
impairment on December 31, 2022
-63.3
-106.6
-170.0
Carrying value on January 1, 2022
369.9
27.7
20.0
47.7
Carrying value on December 31, 2022
442.5
38.1
18.3
56.4
2021
EUR million
Goodwill
Allocations
from business
combinations
Other
intangible
assets
1)
Total other
intangible
assets
Historical cost on January 1, 2021
365.0
79.3
123.3
202.6
Increases
7.5
7.5
Acquisitions
4.9
8.7
0.0
8.8
Decreases
-1.0
-4.3
-5.2
Business disposals
0.0
0.0
Reclassifications between classes
0.2
0.2
Translation differences
-0.4
0.1
-0.3
Historical cost on December 31, 2021
369.9
86.7
126.8
213.5
Accumulated amortisation and
impairment on January 1, 2021
-56.7
-97.5
-154.2
Amortisation and impairment
-3.9
-12.1
-15.9
Translation differences
0.4
0.0
0.4
Accumulated amortisation of increases
and acquisitions
0.0
Accumulated amortisation of decreases
and reclassifications
1.1
2.8
3.9
Accumulated amortisation of business
disposals
0.0
0.0
Accumulated amortisation and
impairment on December 31, 2021
-59.0
-106.8
-165.8
Carrying value on January 1, 2021
365.0
22.9
26.2
49.1
Carrying value on December 31, 2021
369.9
27.7
20.0
47.7
1)
Other intangible assets consist mainly of IT infrastructure, systems and solutions.
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Caverion Annual Review 2022
Allocations from business combinations carrying value split:
EUR million
2022
2021
Customer relations and contract bases
26.8
21.7
Unpatented technology
5.2
3.7
Trademarks
1.9
1.1
Patents
0.7
0.9
Order backlog
3.4
0.4
Total
38.1
27.7
Accounting principles
An intangible asset is initially recognised in the balance sheet at acquisition cost when the
acquisition cost can be reliably determined and the economic benefits are expected to flow from
the asset to the Group. Intangible assets with a known or estimated limited useful life are expensed
in the income statement on a straight-line basis over their useful life.
Other intangible assets acquired in connection with business acquisitions are recognised
separately from goodwill if they meet the definition of an intangible asset: they are separable or
are based on contractual or other legal rights. Intangible assets recognised in connection with
business acquisitions include e.g. the value of customer agreements and associated customer
relationships, prohibition of competition agreements, the value of acquired technology and
industry related process competences. The value of customer agreements and their associated
customer relationships and industry related process competence is determined using the cash
flows estimated according to the durability and duration of the assumed customer relations.
Impairment of tangible and intangible assets
At each closing date, the Group evaluates whether there is an indication that an asset may be
impaired. If any such indication exists, the recoverable amount of said asset is estimated. In
addition, the recoverable amount is assessed annually for each of the following assets regardless
of whether there is any indication of impairment: goodwill, intangible assets with an indefinite
useful life and intangible assets not yet available for use. The need for impairment is assessed at
the level of cash-generating units.
The recoverable amount is the higher of an asset’s fair value less costs of disposal and the
value in use. The value in use is determined based on the discounted future net cash flows
estimated to be recoverable from the assets in question or cash-generating units. The discount
rate used is a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the asset. An impairment loss is recognised if the carrying amount of the
asset is higher than its recoverable amount. The impairment loss is recognised immediately in the
income statement and is initially allocated to the goodwill allocated to the cash-generating unit
and thereafter to other assets pro rata on the basis of their carrying amounts. An impairment loss
is reversed when the circumstances change and the amount recoverable from the asset has
changed since the date when the impairment loss was recorded. However, impairment losses are
not reversed beyond the carrying amount of the asset that would have been determined had no
impairment loss been recognised in prior years. Impairment losses on goodwill are never reversed.
68
Caverion Annual Review 2022
5
Capital structure
Net debt, EUR million
200.9
Equity ratio, %
19.8
Net debt/Adjusted EBITDA
1.2x
In this section
This section comprises the following
notes describing Caverion’s capital structure for
2022:
CAPITAL STRUCTURE
69
Caverion Annual Review 2022
5.1
Capital management
The objective of capital management in Caverion Group is to maintain an optimal capital structure,
maximise the return on the respective capital employed and to minimise the cost of capital within
the limits and principles stated in the Treasury Policy. The capital structure is modified primarily by
directing investments and working capital employed.
In February Caverion issued a senior unsecured bond of EUR 75 million with an issue price of
99.425 percent. The 5-year bond matures on 25 February 2027 and carries a fixed annual interest
of 2.75 percent. Also, Caverion carried out a tender offer for the EUR 75 million bond maturing in
March 2023 resulting to a EUR 71.5 million acceptance level. The new bond extends the maturity
profile, lowers the interest expenses and supports Caverion’s strategy for sustainable profitable
growth.
Caverion has an outstanding hybrid bond in amount of EUR 35 million, Hybrid bond is an
instrument subordinated to the company’s other debt obligations and treated as equity in the IFRS
financial statements. The hybrid bond does not have a maturity date but the issuer is entitled to
redeem the hybrid for the first time on 15 May 2023, and subsequently, on each coupon interest
payment date.
Caverion's business model is asset light and typically requires little investments. Caverion’s
targeted operational capex level (excluding acquisitions and capitalised lease contracts) should not
exceed 1 percent of revenue. Growth will be supported by bolt-on acquisitions in selected growth
areas and complementary capabilities. Caverion aims at 100 per cent cash conversion (operating
cash flow before financial and tax items/EBITDA) in order to ensure a healthy cash flow.
Caverion’s management evaluates and continuously monitors the amount of funding required
in the Group’s business activities to ensure it has adequate liquid funds to finance its operations,
repay its loans at maturity and pay annual dividends. The funding requirements have been
evaluated based on an annual budget, monthly financial forecasts and short-term, timely cash
planning. Caverion’s Group Treasury is responsible for maintaining sufficient funding, availability
of different funding sources and a controlled maturity profile for the external loans. Caverion
targets a net debt to adjusted EBITDA ratio of less than 2.5 times.
Cash management and funding is centralised in Group Treasury. With a centralised cash
management, the use of liquid funds can be optimised between different units of the Group.
Caverion’s aim is to distribute at least 50 % of the result for the year after taxes, however,
taking profitability and leverage level into account.
Capital
EUR million
2022
2021
Share capital
1.0
1.0
Hybrid capital
35.0
35.0
Unrestricted equity reserve
66.0
66.0
Other equity
123.2
99.1
Equity attributable to owners of the parent company
225.2
201.1
Non-controlling interest
0.2
0.3
Total equity
225.4
201.4
Non-current borrowings
221.3
226.9
Current borrowings
60.7
44.7
Total interest-bearing debt
282.0
271.6
Total capital
507.4
473.0
Total interest-bearing debt
282.0
271.6
Cash and cash equivalents
81.2
130.9
Net debt
200.9
140.7
Net debt/Adjusted EBITDA
1.2
1.0
Gearing ratio, %
89.1
69.8
Equity ratio, %
19.8
19.0
5.2
Shareholders’ equity
Share capital and treasury shares
Number of
outstanding shares
Share capital
EUR million
Treasury shares
EUR million
Ja
n 1, 2022
136,417,625
1.0
-2.4
Transfer of treasury shares
55,020
0.4
Dec 31, 2022
136,472,645
1.0
-2.0
Jan 1, 2021
136,112,101
1.0
-2.8
Transfer of treasury shares
352,501
0.4
Return of treasury shares
46,977
0.0
Dec 31, 2021
136,417,625
1.0
-2.4
CAPITAL STRUCTURE
70
Caverion Annual Review 2022
The total number of
's shares was 138,920,092 (138,920,092) and the share
capital amounted to EUR 1.0 (1.0) million on December 31, 2022.
All the issued and subscribed shares have been fully paid to the company. Shares do not have
a nominal value.
Treasury shares
Caverion held 2,447,447 (2,502,467) treasury shares on December 31, 2022.
The consideration paid for the treasury shares amounted to EUR 2.0 million on December 31,
2022 and is disclosed as a separate fund in equity. The consideration paid on treasury shares
decreases the distributable equity of Caverion Corporation. Caverion Corporation holds the own
shares as treasury shares and has the right to return them to the market in the future.
Translation differences
Translation differences include the exchange rate differences recognised in Group consolidation.
In addition, the portion of the gains and losses of effective hedges on the net investment in foreign
subsidiaries, which are hedged with currency forwards, is recognised in equity. There were no
hedges of a net investment in a foreign operation in 2022 or 2021.
Fair value reserve
Fair value reserve includes movements in the fair value of the investments that are not held for
trading, and the derivative instruments used for cash flow hedging.
Hybrid capital
On 15 May 2020 Caverion issued a EUR 35 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 6.75 per cent per annum until 15 May
2023. The hybrid bond does not have a maturity date but the issuer is entitled to redeem the hybrid
for the first time on 15 May 2023, and subsequently, on each coupon interest payment date. If the
hybrid bond is not redeemed on 15 May 2023, the coupon will be changed to 3-month EURIBOR
added with a Re-offer Spread (706.8 bps) and a step-up of 500bps. The accrued unrecognized
interest on the bond was EUR 1.5 (1.5) million at 31 December 2022.
The interest from the hybrid bond must be paid to the investors if Caverion Corporation pays
dividends. If dividends are not paid, a separate decision regarding interest payment on the hybrid
bond will be made. The hybrid bond is initially recognised at fair value less transaction costs and
subsequently the bond is measured at cost. If interest is paid to the hybrid bond, it is debited
directly to equity, net of any related income tax benefit. In 2022, EUR 2.4 million interest was paid.
According to IAS 33, interest accrued in local books has been taken into account as an expense
in earnings per share calculation as described in calculation of key figures.
Unrestricted equity reserve
Caverion announced in a stock exchange release on 7 February 2018 the establishment of a new
share-based incentive plan directed at the key employees of the Group (“Matching Share Plan
2018-2022”). In connection with the technical execution of the plan a total of 3,800,000 new
shares were subscribed for in Caverion Corporation’s share issue directed to the company itself
without payment, and were entered into the Trade Register on 19 February 2018. The total capital
raised amounted to EUR 6.67 million and was recorded in entirety into the unrestricted equity
reserve.
Caverion executed a directed share issue of new shares in June 2018 in order to maintain a
strong balance sheet and to retain strategic flexibility after the payment of the German anti-trust
fine. On 15 June 2019, the Company announced that it had directed a share issue of 9,524,000
new shares in the Company to institutional investors, corresponding to approximately 7.36 percent
of all the shares and votes in the Company immediately prior to the share issue raising gross
proceeds of EUR 60.0 million. The subscription price was recorded in its entirety into the
unrestricted equity reserve of the company.
Dividends
The Annual General Meeting held on 28 March 2022 decided that a dividend of EUR
will be paid for the year 2021.
The Board of Directors proposes to the Annual General Meeting to be held on 27 March 2023
that a dividend of EUR 0.20 per share will be paid for the year 2022.
CAPITAL STRUCTURE
71
Caverion Annual Review 2022
5.3
Change in net debt
Net debt is defined as the total of interest-bearing liabilities less cash and cash equivalents.
Liabilities from financing activities
EUR million
Non-current
borrowings including
repayments
Lease
liabilities
Current
loans
Cash
and cash
equivalents
Net
debt
Net debt as at 1 January 2022
135.9
135.7
0
130.9
140.7
Change in net debt, cash:
Proceeds from non-current borrowings
74.8
Repayment of non-current borrowings
-75.4
-50.6
Change in current liabilities
10.1
Change in non-current liabilities
Change in cash and cash equivalents
-42.0
Change in net debt, non-cash:
Additions
50.5
Acquisitions
7.2
Disposals and business divestitures
-2.3
Foreign exchange adjustments
1)
-3.1
-7.7
Other non-cash changes
-0.9
Net debt as at 31 December 2022
134.5
137.5
10.1
81.2
200.9
Liabilities from financing activities
EUR million
Non-current
borrowings including
repayments
Lease
liabilities
Current
loans
Cash
and cash
equivalents
Net
debt
Net debt as at 1 January 2021
138.7
129.2
149.3
118.6
Change in net debt, cash:
Proceeds from non-current borrowings
50.2
Repayment of non-current borrowings
-53.2
-47.7
Change in current liabilities
Change in non-current liabilities
Change in cash and cash equivalents
-21.3
Change in net debt, non-cash:
Additions
54.7
Acquisitions
0.7
Disposals and business divestitures
-2.3
Foreign exchange adjustments
1)
1.1
2.9
Other non-cash changes
0.2
Net debt as at 31 December 2021
135.9
135.7
130.9
140.7
1)
The cash flow statements of foreign subsidiaries are translated into euro using the financial year’s average foreign currency
exchange rates, and the cash and cash equivalents are translated using the exchange rates quoted on the balance sheet date.
CAPITAL STRUCTURE
72
Caverion Annual Review 2022
5.4
Financial assets and liabilities by category
IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income
(FVTOCI) and fair value through profit and loss (FVTPL). The standard has been applied as of 1 January 2018.
2022
EUR million
Valuation
Fair value
through profit
and loss
Fair value through
other comprehensive
income
Amortised
cost
value
Non-current financial assets
Investments
0.4
0.7
1.1
Trade receivables and other receivables
4.4
4.4
Current financial assets
Trade receivables and other receivables
625.8
625.8
Derivatives (hedge accounting not applied)
0.0
Cash and cash equivalents
81.2
81.2
Total
0.4
0.7
711.4
712.5
Non-current financial liabilities
Loans from financial institutions
50.0
50.0
Bonds
73.3
73.3
Pension loans
4.5
4.5
Other loans
0.0
0.0
Lease liabilities
93.5
93.5
Total non-current interest-bearing
liabilities
221.3
221.3
Trade payables and other liabilities
7.4
7.4
Current financial liabilities
Loans from financial institutions
0.1
0.1
Bonds
3.5
3.5
Pension loans
3.0
3.0
Other loans
0.1
0.1
Commercial papers
10.0
10.0
Lease liabilities
43.9
43.9
Total current interest-bearing liabilities
60.7
60.7
Trade payables and other liabilities
597.5
597.5
Derivatives (hedge accounting not applied)
0.1
Total
0.1
886.9
887.0
jj
2021
EUR million
Valuation
Fair value
through profit
and loss
Fair value through
other comprehensive
income
Amortised
cost
value
Non-current financial assets
Investments
0.6
0.7
1.3
Trade receivables and other receivables
6.1
6.1
Current financial assets
Trade receivables and other receivables
555.4
555.4
Derivatives (hedge accounting not applied)
0.1
0.1
Cash and cash equivalents
130.9
130.9
Total
0.7
0.7
692.4
693.8
Non-current financial liabilities
Loans from financial institutions
49.9
49.9
Bonds
74.8
74.8
Pension loans
7.5
7.5
Other loans
0.5
0.5
Lease liabilities
94.1
94.1
Total non-current interest-bearing
liabilities
226.9
226.9
Trade payables and other liabilities
2.0
2.0
Current financial liabilities
Loans from financial institutions
0.1
0.1
Bonds
Pension loans
3.0
3.0
Other loans
Commercial papers
Lease liabilities
41.6
41.6
Total current interest-bearing liabilities
44.7
44.7
Trade payables and other liabilities
530.9
530.9
Derivatives (hedge accounting not applied)
0.1
0.1
Total
0.1
804.5
804.6
jjj
CAPITAL STRUCTURE
73
Caverion Annual Review 2022
The carrying amount of financial assets and liabilities except for non-current loans approximate their
fair value. The fair value of non-current loans amounted to EUR 140.1 (136.8) million at the end of
2022. The fair values of non-current loans are based on discounted cash flows and are categorised
within level 2 of the fair value hierarchy. Discount rate is defined to be the rate that the Group was to
pay for an equivalent external loan at year end. It consists of a risk-free market rate and a company
and maturity related risk premium of 2.00% p.a (1.00% - 2.00% in 2021).
Investments consist of as follows:
2022
2021
Quoted shares (level 1 in fair value hierarchy)
0.4
0.6
Unquoted shares (level 3 in fair value hierarchy)
0.7
0.7
Total
1.1
1.3
The fair value of financial instruments traded in active markets is based on quoted market prices at
the balance sheet date. A market is regarded as active if quoted prices are readily and regularly
available from an exchange and those prices represent actual and regularly occurring market
transactions on an arm’s length basis. The quoted market price used for financial assets held by the
Group is the current bid price. These instruments are included in Level 1. Instruments included in
Level 1 comprise primarily funds and OMXH equity investments. Investments categorised in Level 3
are non-listed equity instruments and they are measured at acquisition cost less any impairment or
prices obtained from a broker as their fair value cannot be measured reliably.
Accounting principles
Financial assets
Classification and measurement
Financial assets are classified at initial recognition into the following categories according to IFRS 9:
at fair value through profit or loss, at fair value through other comprehensive income and at amortised
cost. The classification depends on the objective of the business model and the characteristics of
contractual cash flows of the item.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss are financial assets or derivatives that do not
meet the criteria for hedge accounting. A financial asset is classified in this category if acquired
principally for the purpose of selling in the short term. Derivatives and other financial assets at fair
value through profit and loss are initially measured at fair value and transaction costs are expensed
in the income statement. Subsequent to initial recognition, they are measured at fair value. Realised
and unrealised gains and losses arising from changes in fair value are recognised in the income
statement in the period in which they arise. Assets in this category are classified as non-current
assets (Receivables) if expected to be settled after 12 months and as current assets (Trade and other
receivables) if expected to be settled within 12 months.
Amortised cost
The Group’s non-derivative financial assets and cash and cash equivalents are classified to amortised
cost category. This category comprises loans receivables, trade receivables, cash and cash
equivalents and other receivables. These are included in current assets, except for maturities greater
than 12 months after the reporting period, which are classified as non-current. These assets are
initially recognised at fair value and transaction costs are expensed in the income statement.
Subsequent to initial recognition, they are carried at amortised cost using the effective interest rate
method less any impairment. Due to the nature of short-term receivables and other receivables, their
book value is expected to equal to the fair value.
Cash and cash equivalents include cash at hand, bank deposits withdrawable on demand and
liquid short-term investments with original maturities of three months or less.
Financial assets at fair value through other comprehensive income
Equity investments in non-listed investments that are not held for trading, are classified as equity
instruments designated at fair value through other comprehensive income.
These assets are initially recognised at fair value, plus any transaction costs. Subsequent to initial
recognition, they are carried at fair value. Changes in the fair value are recognised in other
comprehensive income and are presented in the fair value reserves under shareholders' equity, net
of tax. When investments are sold or impaired, the accumulated fair value adjustments recognised in
equity are never recycled to income statement.
These assets are non-current financial assets when the Group intends not to dispose them within
the next 12 months.
Recognition and derecognition
Regular purchases and sales of financial assets are recognised on the trade-date which is the date on
which Caverion Group commits to purchase or sell the asset. Financial assets are derecognised when
the rights to receive cash flows from the investment have expired or have been transferred and the
Group has transferred substantially all risk and rewards of ownership.
Gains or losses arising from changes in the fair value of the financial assets at fair value through
profit or loss category are presented in the income statement within finance income and expenses in
the period in which they arise. Interest income from items at amortised cost are presented in the
income statement within finance income in the period in which they arise. Dividend income from
financial assets is recognised in the income statement as part of financial income when the Group’s
right to receive payments is established.
CAPITAL STRUCTURE
74
Caverion Annual Review 2022
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when
there is a legally enforceable right to offset the recognised amounts and there is an intention to
settle on a net basis or realise the asset and settle the liability simultaneously.
Impairment of financial assets
Assets carried at amortised costs
Caverion Group assesses at the end of each reporting period whether there is objective evidence that
a financial asset or group of financial assets is impaired as a result of one or more events that occurred
after the initial recognition of the asset (“a loss event”). That loss event must impact on the estimated
future cash flows of the financial asset or group of financial assets that can be reliably estimated.
Objective evidence that financial assets are impaired includes: default or delinquency in interest
or principal payments, significant financial difficulty, restructuring of an amount due to the Group,
indications that a debtor will enter bankruptcy or other financial reorganisation, observable data
indicating that there is measurable decrease in expected cash flows, such as changes in arrears or
economic conditions that correlate with defaults.
For loans and receivables, the amount of the loss is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash flows discounted at the
asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount
of the loss is recognised in the consolidated income statement within other operating expenses.
Caverion Group considers evidence of impairment at both an individual asset and a collective level. All
individually significant assets are individually assessed for impairment. Collective assessment is
carried out by grouping together assets with similar risk characteristics.
Risks related to trade and other operative receivables are described in note 3.2.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed through the income statement.
Financial liabilities
Borrowings are recorded on the settlement date and initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost and any difference between the
proceeds and the redemption value is recognised in the income statement over the period of the
borrowings using the effective interest method. Other borrowing costs are expensed in the period
during which they are incurred. Fees paid on the establishment of loan facilities are recognised as
expenses over the period of the facility to which it relates. Borrowings are derecognised when its
contractual obligations are discharged or cancelled, or expire.
Borrowings are classified as current liabilities if payment is due within 12 months or less. If not,
they are presented as non-current.
5.5
Financial risk management
Caverion Group is exposed in its business operations to liquidity risk, credit risk, foreign exchange risk
and interest rate risk. The objective of Caverion’s financial risk management is to minimise the
uncertainty which the changes in financial markets cause to its financial performance.
The year closed with a high market uncertainty, which is reflected to Caverion figures especially
by weaker Norwegian and Swedish krone, as well as higher interest on floating rate loans. The
defining feature of the markets in 2022 has been the inflation and market volatility. The central banks
have fought the inflation with rapid rate increases. Energy prices have been declining, but there are
still risks that the pressure on wage inflation will keep the overall inflation figures high, thus the
interest rate peak and its timing is hard to predict. Continuing high volatility on foreign exchange rates
is also expected. Caverion monitors the risks closely and at the moment does not see any need for
changes in the risk management principles. The risks related to the availability of financing, the
availability of guarantee facilities as well as foreign exchange and interest rate related risks are in
control.
Risk management is carried out by Caverion Group Treasury in co-operation with divisions under
policies approved by the Board of Directors. Financing activities are carried out by finance personnel
and management in the divisions and subsidiaries. Responsibilities in between the Group Treasury
and divisions are defined in the Group’s Treasury Policy. Divisions are responsible for providing the
Group Treasury timely and accurate information on their financial position, cash flows and foreign
exchange position in order to ensure the Group’s efficient cash and liquidity management, funding
and risk management. In addition, the Group’s Treasury Policy defines main principles and methods
for financial risk management, cash management and specific financing-related areas e.g.
commercial guarantees, relationships with financiers and customer financing.
Interest rate risk
Caverion has interest-bearing receivables in its cash and cash equivalents but otherwise its revenues
and cash flows from operating activities are mostly independent of changes in market interest rates.
Caverion’s exposure to cash flow interest rate risk arises mainly from current and non-current
loans. Borrowing issued at floating interest rates expose Caverion to cash flow interest rate risk. To
manage the interest rate risk, the Board of Directors of Caverion Group has defined an average
interest rate fixing term target for the Group’s net debt (excluding cash). At the reporting date the
average interest rate fixing term of net debt (excluding cash) was 28.1 (13.6) months. At the end of
December 2022 Caverion has not used interest rate derivatives to hedge interest rate risk.
The weighted average effective interest rate of the whole loan portfolio excluding IFRS 16 effects
was 3.0% (2.6%) at the end of December 2022. Fixed-rate loans accounted for approximately 59 (66)
percent of the Group’s borrowings.
In addition to the targeted average interest rate fixing term of net debt, Caverion Group’s
management monitors regularly the effect of the possible change in interest rate level on the Group’s
financial result. The monitored number is the effect of one percentage point rise in interest rate level
on yearly net interest expenses.
CAPITAL STRUCTURE
75
Caverion Annual Review 2022
Interest rate risk sensitivity
EUR million
Result before taxes
2022 2021
Interest rate of net debt 1 percentage point higher
0.2
1.0
Net debt includes interest-bearing liabilities and cash and cash equivalents. Sensitivities are
calculated based on the situation at the balance sheet date.
Financial counterparty risk
The financial instruments the Group has agreed with its banks and financial institutions contain a risk
of the counterparty being unable to meet its obligations. The Group Treasury is responsible for the
counterparty risk of derivative instruments and financial investment products.
Counterparties to the financial instruments are chosen based on Caverion Group management’s
estimate on their reliability. The Board of Directors of Caverion Group accepts the main banks used
by the Group and counterparties to derivative instruments. CFO accepts conterparties to short-term
investments. Short-term investments related to liquidity management are made according to
Caverion’s Treasury Policy. No impairment has been recognised on derivative instruments or
investment products in the reporting period. Caverion Group’s management does not expect any
credit losses from non-performance by counterparties to investment products or derivative
instruments.
As a result of the partial demerger of YIT Corporation registered on 30 June 2013, a secondary
liability has been generated to Caverion Corporation, a new company established in the partial
demerger, for those liabilities that have been generated before the registration of the demerger and
remain with YIT Corporation after the demerger. Caverion Corporation has a secondary liability
relating to the Group guarantees that remain with YIT Corporation after the demerger, if YIT
Corporation falls into default. These Group guarantees amounted to EUR 20.4 (24.3) million at the
end of December 2022.
Refinancing and liquidity risk
Refinancing risk is defined as a risk that funds are not available or the costs of refinancing maturing
debt is high at the time a debt needs to be refinanced. The objective of liquidity risk management is
to maintain a sufficient liquidity reserve in all situations. Liquidity and refinancing risk is managed by
diversifying the maturities of external loans and monitoring the proportion of short-term debt
(maturing in less than one year’s time) and the long-term liquidity forecast for the Group. The Group
shall always have liquidity reserve available to meet the need for debt repayments falling due during
the calendar year and to cover the potential funding need over the planning period of business
operations including planned capital expenditure. Adequate liquidity is maintained by keeping
sufficient amount of unused committed credit facilities as a reserve.
In 2022 Caverion took actions to prolong its loan maturity and strengthen long-term liquidity. In
February Caverion issued a senior unsecured bond of EUR 75 million with an issue price of 99.425
percent. The 5-year bond matures on 25 February 2027 and carries a fixed annual interest of 2.75
percent. Also, Caverion carried out a tender offer for the EUR 75 million bond maturing in March 2023
resulting to a EUR 71.5 million acceptance level.
Caverion Group’s interest-bearing loans and borrowings amounted to 144.6 (135.9) million at the
end of December. Approximately 40 percent of the loans have been raised from financial institutions
and 60 percent from investors. The Group’s net debt amounted to EUR 63.4 (5.0) million at the end of
December excluding IFRS 16 effects and EUR 200.9 (140.7) including IFRS 16 effects. At the end of
December, the Group’s gearing was 89.1 (69.8) percent and its equity ratio 19.8 (19.0) percent
including IFRS 16 effects. The hybrid bond in amount of EUR 35 million that Caverion issued in 2020
is an instrument subordinated to the company’s other debt obligations and treated as equity in the
IFRS financial statements. The hybrid bond does not have a maturity date but the issuer is entitled to
redeem the hybrid for the first time on 15 May 2023, and subsequently, on each coupon interest
payment date.
Caverion’s external loans are subject to a financial covenant based on the ratio of the Group’s net
debt to EBITDA. The financial covenant shall not exceed 3.5:1. At the end of December, the Group’s
Net debt to EBITDA was 1.3x according to the confirmed calculation principles.
To manage liquidity risk, Caverion uses cash and cash equivalents, Group accounts with overdraft
facilities, credit facilities and commercial papers. Caverion’s cash and cash equivalents amounted to
EUR 81.2 (130.9) million at the end of December 2022. In addition, Caverion has undrawn overdraft
facilities amounting to EUR 19.7 (19) million and undrawn committed revolving credit facilities
amounting to EUR 100 (100) million. The committed revolving credit facilities are valid until January
2025.
The following table describes the contractual maturities of financial liabilities. The amounts are
undiscounted. Interest cash flows of floating rate loans and derivative instruments are based on the
interest rates prevailing on December 31, 2022 (December 31, 2021). Cash flows of foreign currency
denominated loans are translated into euro at the reporting date. Cash flows of foreign currency
forward contracts are translated into euro at forward rates.
Contractual maturity analysis of financial liabilities
and interest payments at December 31, 2022
EUR million
2023
2024
2025
2026
2027
2028
Total
Loans from financial institutions
17.3
3.4
52.2
2.1
77.1
152.1
Pension loans
3.1
3.0
1.5
7.6
Lease liabilities
47.8
35.7
22.1
14.8
8.8
20.5
149.8
Other financial liabilities
Trade and other payables
597.5
597.5
Foreign currency derivatives
0.1
0.1
CAPITAL STRUCTURE
76
Caverion Annual Review 2022
Contractual maturity analysis of financial liabilities
and interest payments at December 31, 2021
EUR million
2022
2023
2024
2025
2026
2027-
Total
Loans from financial institutions
3.1
78.1
0.7
50.0
131.9
Pension loans
3.2
3.2
3.1
1.5
11.0
Lease liabilities
44.5
34.6
22.8
14.0
9.3
20.1
145.1
Other financial liabilities
0.5
0.5
Trade and other payables
530.9
530.9
Foreign currency derivatives
0.1
0.1
Foreign exchange risk
Caverion Group operates internationally and is exposed to foreign exchange risks arising from the
currencies of the countries in which it operates. Risk arises mainly from the recognised assets and
liabilities and net investments in foreign operations. In addition, commercial contracts in the
subsidiaries cause foreign exchange risk, but the contracts are mainly denominated in the entity’s
own functional currencies.
The objective of foreign exchange risk management is to reduce uncertainty caused by foreign
exchange rate movements on income statement through measurement of cash flows and
commercial receivables and payables. By the decision of the Board of Directors of Caverion Group, the
investments in foreign operations are not hedged for foreign exchange translation risk.
Foreign currency denominated net investments at the balance sheet date
EUR million
2022
Net
investment
2022
EUR
strengthens
by 10%, effect
on equity
2022
EUR
weakens
by 10%, effect
on equity
2021
Net
investment
2021
EUR
strengthens
by 10%, effect
on equity
2021
EUR
weakens
by 10%, effect
on equity
SEK
34.1
-3.1
3.8
6.5
-0.6
0.7
NOK
32.5
-3.0
3.6
18.6
-1.7
2.1
DKK
-3.9
0.4
-0.4
7.3
-0.7
0.8
Other currencies
0.7
-0.1
0.1
0.0
0.0
0.0
Here net investment comprises equity invested in foreign subsidiaries and internal loans that qualify
for net investment classification deducted by possible goodwill in the subsidiaries balance sheet.
According to Caverion Group’s Treasury policy, all Group companies are responsible for identifying and
hedging the foreign exchange risk related to the foreign currency denominated cash flows. All firm
commitments of over EUR 0.2 million must be hedged by intra-group transactions with Group
Treasury. Group Treasury hedges the net position with external counterparties but does not apply
hedge accounting to derivatives hedging foreign exchange risk. Accordingly, the fair value changes of
derivative instruments are recognized in the consolidated income statement. There were no foreign
exchange hedges, which relate to commercial contracts on the reporting date.
Excluding the foreign exchange differences due to translation risk related to the investments in
foreign operations, the strengthening or weakening of the Euro does not have a significant impact on
the Group’s result. The foreign exchange derivate contracts made for hedging internal and external
loans and receivables offset the effect of changes in foreign exchange rates.
5.6
Derivative instruments
All derivatives are hedges according to Caverion Group’s Treasury Policy, but hedge accounting as
defined in IFRS 9 is not applied for valid derivative contracts. Foreign exchange forward contracts are
mainly designated as hedges of financial items and have been charged to P/L in finance
income/expenses. Foreign exchange forward contracts mature in 2023. There were no outstanding
interest rate swaps in December 2022.
The Group’s derivative instruments are subject to offsetting, enforceable master netting
arrangements or similar agreements. In certain circumstances – e.g. when a credit event such as a
default occurs, all outstanding transactions under the agreement are terminated, the termination
value is assessed and only a single net amount is payable in settlement of all transactions. Master
netting agreements do not meet the criteria for offsetting in the statement of financial position and
amounts are presented on a gross basis. Other financial assets or liabilities, for example trade
receivables or trade payables, do not include any amounts subject to netting agreements.
The fair value of financial instruments that are not traded in an active market (for example, over-
the-counter derivatives) is determined by using valuation techniques. These valuation techniques
maximise the use of observable market data where it is available and rely as little as possible on entity
specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2. The fair values for the derivative instruments categorised in Level 2
have been defined as follows: the fair values of foreign exchange forward and forward rate
agreements have been defined by using the market prices at the closing day. The fair values of
interest rate swaps are based on discounted cash flows.
Nominal values
EUR million
2022
2021
Foreign exchange forward contracts, hedge accounting not applied
121.1
65.2
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Fair values
EUR million
2022
Positive
fair value
(carrying
value)
2022
Negative
fair value
(carrying
value)
2022
Net
value
2021
Positive
fair value
(carrying
value)
2021
Negative
fair value
(carrying
value)
2021
Net
value
Foreign exchange forward
contracts
Hedge accounting not
applied
0.0
-0.1
-0.1
0.1
-0.1
0.0
Total
0.0
-0.1
-0.1
0.1
-0.1
0.0
Netting fair values of
derivative financial
instruments subject to
netting agreements
0.0
0.0
0.0
0.0
Net total
0.0
-0.1
-0.1
0.1
-0.1
0.0
Accounting principles
Derivatives are initially recognised at fair value on the date Caverion Group becomes party to an
agreement and are subsequently re-measured at their fair value. Directly attributable transaction
costs are recognised in the income statement. The method of recognising the resulting gain or loss
depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the
item being hedged. Currency forward contracts are used for hedging against the currency exposure
of exchange rates and resulting changes in fair value are included in operating profit or financial
income and expenses based on their nature in the financial period in which they were incurred.
Interest rate swaps are used to hedge against changes in market interest rates. Changes in the fair
value of interest rate swaps that do not meet the hedge accounting criteria under IFRS 9, are entered
in financing income or expenses in the financial period in which they were incurred. Derivatives are
classified as non-current liabilities when their contractual maturity is more than 12 months (Other
liabilities) and current liabilities when maturity is less than 12 months (Trade and other payables).
Derivative instruments used in hedge accounting which meet the hedge accounting criteria under
IFRS 9 are entered in the balance sheet at fair value on the day that Caverion Group becomes
counterpart to the agreement. The Group has applied hedge accounting to hedge the benchmark rate
of floating rate loans (cash flow hedging). The Group documents at inception of the transaction the
relationship between the hedged item and the hedging instruments and assesses both at hedge
inception and on an ongoing basis, of whether the derivatives are effective in offsetting changes in
cash flows of hedged items. The effectiveness is assessed at each balance sheet date at minimum.
The effective portion of changes in the fair value of derivative instruments that qualify for cash flow
hedges is recognised in other comprehensive income and accumulate in the fair value reserve. The
gain or loss relating to the ineffective portion is recognised immediately in the income statement
within financial income and expenses. Gains and losses accumulated in shareholders' equity are
reclassified to income statement within financial income or expenses in the periods when the hedged
item affects profit or loss. When a hedging instrument expires or is sold, or when a hedge no longer
meets the criteria of hedge accounting, any cumulative gain or loss existing in equity at that time
remains in equity and is recognised when the forecast transaction occurs. Nevertheless, if the hedged
forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in
equity is immediately transferred to the income statement within financial income or expense.
5.7
Investments in associated companies and joint ventures
2022
2021
EUR million
Associated
companies
Joint
ventures
Total
Associated
companies
Joint
ventures
Total
Carrying value on Jan 1
0.1
1.4
1.5
0.1
1.6
1.7
Share of the profit
0.0
0.0
0.0
0.0
0.0
0.0
Decreases
-0.1
-0.3
-0.3
Dividends received
-1.3
Carrying value on Dec 31
0.1
0.0
0.1
0.1
1.4
1.5
The carrying amounts of the shares in associated companies do not include goodwill.
2022
EUR million
Domicile
Assets
Liabilities
Revenue
Profit/
loss
Ownership
Joint ventures
CG FH St. Pölten GmbH
Wien
0.1
0.0
0.0
0.0
50%
Associated companies
Arandur Oy
Vantaa
5.3
4.9
4.9
0.0
33%
Total
5.3
4.9
4.9
0.0
-
2021
EUR million
Domicile
Assets
Liabilities
Revenue
Profit/
loss
Ownership
Joint ventures
CG FH St. Pölten GmbH
Wien
42.2
39.5
38.6
0.0
50%
Associated companies
Arandur Oy
Vantaa
5.1
4.8
4.9
0.0
33%
Total
47.3
44.2
43.5
0.0
-
Joint Venture CG FH St. Pölten Gmb relates to life-cycle project for the University of Applied Sciences
in St. Pölten in Austria, together with the construction company Granit. Project phase was completed
CAPITAL STRUCTURE
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Caverion Annual Review 2022
in 2022 and Caverion has taken over the Managed Services and Technical Maintenance of the
property for the next 25 years.
Sales of goods and services sold to associated companies and joint ventures amounted to EUR
1.3 (1.4) million in 2022.
Accounting principles
The consolidated financial statements include associated companies in which the Group either holds
20%-50% of the voting rights or in which the Group otherwise has significant influence but not control.
Companies where the Group has joint control with another entity are considered as joint ventures.
Investments in associated companies and joint ventures are accounted for using the equity method:
they are initially recorded at cost and the carrying amount is increased or decreased by Caverion’s
share of the profit or loss. The Group determines at each reporting date whether there is any
indication of impairment.
share of post-acquisition movements in other comprehensive income with a corresponding
adjustment to the carrying amount of the investment. Dividends received from an associated
company or joint venture reduce the carrying amount of the investment. When the Group’s share of
losses in an associate exceeds its interest in the associate, including any other unsecured receivables,
the Group does not recognise further losses, unless it has incurred legal or constructive obligations or
made payments on behalf of the associate. Unrealised gains on transactions between the Group and
its associates are eliminated to the extent of the Group’s interest in each associate.
CAPITAL STRUCTURE
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Caverion Annual Review 2022
5.8
Employee benefit obligations
Obligations in the statement of financial position:
EUR million
2022
2021
Defined benefit plans
41.9
50.6
Liability in the statement of financial position
41.9
50.6
Pension asset in the statement of financial position
-4.0
-3.3
Net liability
37.8
47.2
Income statement charge:
EUR million
2022
2021
Defined benefit plans
-0.1
-0.8
Included in financial expenses
-0.5
-0.3
Income statement charge, total (income (+) / expense (-))
-0.6
-1.1
Remeasurements, included in other comprehensive income:
EUR million
2022
2021
Defined benefit plans
6.6
1.1
Change in foreign exchange rates
0.0
-1.2
Included in other comprehensive income. total
6.6
-0.1
Defined benefit pension plans
The Group has defined benefit pension plans in Norway, Germany, Austria and Finland. In all plans the
pension liability has been calculated based on the number of years employed and the salary level.
Most of the pension plans are managed in insurance companies, which follow the local pension
legislation in their management.
The amounts recognised in the statement of financial position are determined as follows:
EUR million
2022
2021
Present value of funded obligations
4.0
5.8
Fair value of plan assets
-8.0
-9.1
Net deficit of funded plans
-4.0
-3.3
Present value of unfunded obligations
41.9
50.6
Total net deficit of defined benefit pension plans
37.8
47.2
Liability in the statement of financial position
41.9
50.6
Receivable in the statement of financial position
-4.0
-3.3
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Caverion Annual Review 2022
The movement in the net defined benefit obligation over the year is as follows:
EUR million
Present value
of obligation
Fair value
of plan
assets
Total
net
obligation
At January 1, 2022
56.3
-9.1
47.3
Current service cost
0.1
0.0
0.1
Interest expense
0.5
-0.1
0.5
Past service costs
Gains on settlements
Remeasurements:
Return on plan assets. excluding interest expense
0.8
0.8
Gain (-) / loss (+) from change in demographic assumptions
Gain (-) / loss (+) from change in financial assumptions
-8.3
-8.3
Experience gains (-) / losses (+)
0.3
0.3
Exchange difference
-0,5
-0,5
Employers' contributions
-0.3
-0.0
-0.4
Acquired pension liability
Benefit payments from plans
-2.1
0.3
-1.9
At December 31, 2022
45.9
-8.1
37.8
EUR million
Present value
of obligation
Fair value
of plan
assets
Total
net
obligation
At January 1, 2021
57.1
-8.3
48.9
Current service cost
0.8
0.8
Interest expense
0.3
0.0
0.3
Past service costs
Gains on settlements
Remeasurements:
Return on plan assets. excluding interest expense
-1.0
-1.0
Gain (-) / loss (+) from change in demographic assumptions
Gain (-) / loss (+) from change in financial assumptions
-1.7
-1.7
Experience gains (-) / losses (+)
1.6
1.6
Exchange difference
0.4
0.4
Employers' contributions
-0.4
0.0
-0.4
Acquired pension liability
0.2
-0.2
0.0
Benefit payments from plans
-2.0
0.2
-1.8
At December 31, 2021
56.3
-9.1
47.2
The weighted average duration of the defined benefit plan obligation in Caverion Group is 13 (14)
years.
The significant actuarial assumptions were as follows:
2022
Discount rate
Salary growth rate
Pension growth rate
Finland
3.30%
2.50%
2.70%
Norway
3.20%
3.75%
3.50%
Germany
3.00%
3.25%
2.30%
Austria
3.00%
-
3.00%
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Caverion Annual Review 2022
2021
Discount rate
Salary growth rate
Pension growth rate
Finland
0.80%
1.95%
2.25%
Norway
1.50%
2.50%
2.25%
Germany
0.90%
3.00%
2.00%
Austria
0.80%
-
2.25%
The sensitivity of the defined benefit obligation to changes in the weighted principal
assumptions is:
2022
Impact on defined benefit obligation
1)
Change in
assumption
Increase in
assumption
Decrease in
assumption
Discount rate
0.50%
decrease 5.6%
increase 6.1%
Salary growth rate
0.50%
increase 0.1%
decrease 0.1%
Pension growth rate
0.50%
increase 4.3%
decrease 3.2%
2021
Impact on defined benefit obligation
1)
Change in
assumption
Increase in
assumption
Decrease in
assumption
Discount rate
0.50%
decrease 6.8%
increase 7.6%
Salary growth rate
0.50%
increase 0.2%
decrease 0.2%
Pension growth rate
0.50%
increase 5.4%
decrease 5.0%
1)
Based on the sensitivity analyses of the Group's most significant pension arrangements. The impacts of the other pension
arrangements are similar.
The above sensitivity analyses are based on a change in an assumption while holding all other
assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions
may be correlated. When calculating the sensitivity of the defined benefit obligations to significant
actuarial assumptions the same method has been applied as when calculating the pension liability
recognised within the statement of financial position.
Plan assets are comprised as follows:
EUR million
2022
2021
Equity instruments
3.9
49
4.8
52
Debt instruments
2.5
31
2.7
29
Property
1.4
18
Investment funds
Cash and cash equivalents
0.1
1
0.2
2
Other investments
0.2
2
0.2
2
Total plan assets
8.0
100
9.1
100
Expected employer contribution is expected to be zero in year 2023.
Multi-employer plan in Sweden
In Sweden, Caverion participates in a multi-employer defined benefit plan in Alecta insurance
company. 870 employees of Caverion Sverige AB are insured through this pension plan in 2022. This
multi-employer plan has not been able to deliver sufficient information for defined benefit accounting
purposes, thus Caverion has accounted for this pension plan as a contribution plan.
Alecta's possible surplus may be credited to the employer company or to employee. The expected
contributions to the plan for the next annual reporting period are EUR 6.8 million.
Through its defined benefit pension plans the Group is exposed to a number of risks, the most
significant of which are detailed below:
Changes in bond yields
Inflation risk
will lead to higher liabilities.
Life expectancy
member, so increases in life expectancy will result in an increase in the plans’ liabilities.
Accounting principles
Caverion Group has several different pension schemes, both defined benefit and defined contribution
pension plans, in accordance with local regulations and practices in countries where it operates.
Contributions to defined contribution pension plans are recognised in the income statement in the
financial period during which the charge is due. Caverion Group has no legal or constructive obligations
to pay further contributions if the fund does not hold sufficient assets to pay all employees the
benefits relating to employee service in the current or prior periods.
The Group has defined benefit pension plans in Norway, Austria, Germany and Finland.
Obligations connected with the Group's defined benefit plans are calculated annually by independent
actuaries using the projected unit credit method. The discount rate used in calculating the present
value of the pension obligation is the market rate of high-quality corporate bonds. The maturity of the
bonds used to determine the reference rate substantially corresponds to the maturity of the related
pension obligation. In defined benefit plans, the pension liability recognised on the balance sheet is
the present value of the defined benefit obligation at the end of the reporting period less the fair value
of the plan assets. Pension expenditure is expensed in the income statement, allocating the costs
over the employment term of the employees. Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are charged or credited to equity in other
comprehensive income in the period in which they arise. Past service costs are recognised
immediately in the income statement.
Occupational pensions in Sweden have been insured under a pension scheme shared with
numerous employers. It has not been possible to acquire sufficient information on these pension
obligation for allocating the liabilities and assets by employers. Occupational pensions in Sweden
have been treated on a defined contribution basis.
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The present value of pension obligations depends on various factors that are determined on an
actuarial basis using a number of assumptions, including the discount rate. Changes in the
assumptions rate have an effect on the carrying amount of pension obligation. The discount rate used
is the market rate of high-quality corporate bonds or the interest rate of treasury notes for the
currency in which the benefits will be realised. The maturity of the instruments used to determine the
reference rate used corresponds substantially to the maturity of the related pension obligation. Other
assumptions are based on actuarial statistics and prevailing market conditions.
5.9
Lease agreements
Group as lessee
Set out below are the carrying amounts of the Group's right-of-use assets and their movements
during the period.
Right-of-use assets
EUR million
Buildings and
structures
Cars
Other assets
Total
1 January 2022
83.8
47.2
0.2
131.2
Translation differences
-1.8
-1.2
0.0
-3.0
Acquisitions
5.6
1.6
7.2
Additions
22.5
28.0
50.5
Disposals and business divestitures
-1.1
-1.3
-0.0
-2.4
Depreciation and impairment
-25.0
-25.9
-0.1
-51.0
31 December 2022
84.1
48.4
0.0
132.6
Right-of-use assets
EUR million
Buildings and
structures
Cars
Other assets
Total
1 January 2021
79.5
44.6
1.3
125.5
Translation differences
0.6
0.4
0.0
1.0
Acquisitions
0.5
0.2
0.7
Additions
27.9
26.7
0.0
54.7
Reclassifications
1.1
-1.1
Disposals and business divestitures
-1.5
-0.9
-2.4
Depreciation and impairment
-23.3
-24.9
-0.1
-48.3
31 December 2021
83.8
47.2
0.2
131.2
In 2022, the depreciation and impairment of right-of-use assets included EUR 0.1 million of
impairment relating to the restructuring of premises. No impairments were booked in 2021.
Lease liabilities
EUR million
2022
2021
1 January
135.7
129.2
Translation differences
-3.1
1.1
Acquisitions
7.2
0.7
Additions
50.5
54.7
Disposals and business divestitures
-2.3
-2.3
Interest expenses
4.1
3.8
Payments
-54.7
-51.5
31 December
137.5
135.7
The Group recognised rent expenses from short-term lease contracts in the amount of EUR 2.7
million (EUR 2.9 million) and from leases of low-value assets in the amount of EUR 3.4 million (EUR
3.4 million) in 2022. The nominal amount of leasing commitments of low-value and short-term leases
amounted to EUR 5.4 million at the end of 2022 (EUR 8.8 million). The present value of lease liability
of leases not yet commenced to which Caverion is committed amounted to EUR 1.1 million at the end
of 2022 (EUR 0.1 million).
The Group has subleased some of its leased premises. The income recognised by the Group for
these premises during the year 2022 was EUR 0.8 million (EUR 0.9 million in 2021).
Group as lessor
As a lessor, the Group has finance lease contracts for which the net investment in the balance sheet
amounted to EUR 0.3 million at the end of the year 2022 (EUR 0.3 million). The income statement
effect of these finance lease contracts amounted to EUR 0.1 million in 2022 (EUR 0.0 million)
comprising the selling profit of the contract and interest income.
Accounting principles
Group as lessee
The lease liability is initially measured at the present value of the remaining lease payments,
discounted by using an estimate of the lessee’s incremental borrowing rate at the date of initial
application. Since the interest implicit in the lease contracts is not available, a management estimate
is used to determine the incremental borrowing rate. The components of the rate are the following:
the currency-specific reference rate and the interest margin that is derived from each individual
company’s risk assessment, adjusted to reflect the maturity of the lease contract.
At the inception of the lease, Caverion measures the right-of-use asset at an amount equal to the
lease liability. After the initial measurement, the right-of-use asset is measured at cost less
accumulated depreciation and accumulated impairment.
Caverion does not recognise an IFRS 16 lease liability for leases for which the underlying asset is
not material. The assessment of whether the underlying asset is material and is within the scope or
excluded from the recognition requirements of IFRS 16 is based on the concept of materiality in the
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Caverion Annual Review 2022
Conceptual Framework and IAS 1. Caverion recognises lease payments associated with such leases
as an expense on a straight-line basis.
Caverion does not recognise short-term leases on the balance sheet. Short-term leases are lease
contracts that have a lease term of 12 months or less, and which do not include an option to purchase
the underlying asset. Caverion has analysed lease contracts where the lease term is not fixed but both
the lessor and lessee have an option to terminate the lease within 1-12 months’ notice. Management
judgement based on realistic estimates is used when determining the lease term for short-term
leases and leasing agreements with non-fixed terms. If the termination of the short-term contract is
practically realistic within the time of the notice period (1-12 months), those contracts have been
excluded from the lease liability.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components and
instead account for a lease and its associated non-lease components as a single arrangement.
Caverion has used the practical expedient for car leases that include service components. On the other
hand, the non-lease component from real estate lease contracts has been separated and the non-
lease components have been booked as expenses.
Group as lessor
Under IFRS 16, a lessor classifies arrangements which convey a right to use a specific asset as either
finance leases or operating leases and accounts for these two types of leases differently. Caverion's
lease contracts relate to different types of machinery and equipment which are installed to operate
within the customer's buildings and structures. These lease contracts vary in terms of conditions.
In finance leases, the risks and rewards incidental to ownership of the leased asset have
substantially transferred from Caverion to the lessee. Sales derived from finance leases are
recognized at the beginning of the lease period in accordance with the same principles as in the
outright sale of similar assets. The net investment in finance leases is recognized as a part of non-
current and current receivables and lease payments are disclosed as repayments of the finance lease
receivable and interest income. The interest income is recognised on the income statement over the
lease term so as to achieve a constant interest rate on the outstanding balance.
In operating leases, the risks and rewards incidental to ownership of the leased asset remain with
the lessor. The leased assets are recognised on the balance sheet as a part of tangible assets and
depreciated in accordance with the policy applied to similar assets in own use as well as considering
the planned use after the lease period. The lease income from operating leases is recognized on a
straight-line basis over the lease term on the income statement.
Under IFRS 16, an intermediate lessor is additionally required to classify its subleases as finance
or operating leases by reference to the right-of-use assets arising from the head lease. Caverion has
not reclassified any of its sublease agreements as finance leases.
5.10
Commitments and contingent liabilities
EUR million
2022
2021
Other commitments
Other contingent liabilities
0.2
Accrued unrecognised interest on hybrid bond
1.5
1.5
The Group’s parent company has guaranteed obligations of its subsidiaries. On December 31, 2022
the total amount of these guarantees was EUR 493.1 (497.7) million. These consist of counter
guarantees for external guarantees and parent company guarantees given according to general
contracting practices.
Given the nature of Caverion’s Projects business, Group companies are involved in disputes and
legal proceedings in several projects. These disputes and legal proceedings typically concern claims
made against Caverion for allegedly defective or delayed delivery. In some cases, the collection of
receivables by Caverion may result in disputes and legal proceedings. There is a risk that the client
presents counter claims in these proceedings. The outcome of claims, disputes and legal proceedings
is difficult to predict. Write-downs and provisions are booked following the applicable accounting
rules.
In June 2018, Caverion reached a settlement for its part with the German Federal Office (FCO) in
a cartel case that had been investigated by the authority since 2014. The investigation concerned
several companies providing technical building services in Germany. Caverion Deutschland GmbH (and
its predecessors) was found to have participated in anti-competitive practices between 2005 and
2013. According to the FCO’s final decision issued on 3 July 2018, Caverion Deutschland GmbH was
imposed a fine of EUR 40.8 million. In the end of March 2020, the FCO issued its final decision on the
cartel case against the other building technology companies involved in the matter. There is a risk that
civil claims may be presented against the involved companies, including Caverion Deutschland GmbH.
It is not possible to evaluate the magnitude of the risk for Caverion at this time. Some civil claims
presented against Caverion Deutschland GmbH have been settled in 2022 and 2021, totalling EUR
6.7 and 9.1 million, respectively.
As part of Caverion’s co-operation with the authorities in the cartel matter, the company identified
activities between 2009 and 2011 that were likely to fulfil the criteria of corruption or other criminal
commitment in one of its client projects executed in that time. Caverion has brought its findings to
the attention of the authorities and supported them in further investigating the case. In the end of
June 2020, the public prosecutor's office in Munich informed Caverion that no further investigative
measures are intended and that no formal fine proceedings against Caverion will be initiated related
to those cases There is a risk that civil claims may be presented against Caverion Deutschland GmbH.
It is not possible to evaluate the magnitude of the risk for Caverion at this time. Caverion will disclose
any relevant information on the potential civil law claims as required under the applicable regulations.
Entities participating in the demerger are jointly and severally responsible for the liabilities of the
demerging entity which have been generated before the registration of the demerger. As a
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Caverion Annual Review 2022
consequence, a secondary liability up to the allocated net asset value was generated to Caverion
Corporation, incorporated due to the partial demerger of YIT Corporation, for those liabilities that were
generated before the registration of the demerger and remain with YIT Corporation after the
demerger. Creditors of YIT Corporation’s major financial liabilities have waived their right to claim for
settlement from Caverion Corporation on the basis of the secondary liability. Caverion Corporation
has a secondary liability relating to the Group guarantees which remain with YIT Corporation after the
demerger. These Group guarantees amounted to EUR 20.4 (24.3) million at the end of December
2022.
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Caverion Annual Review 2022
6
Others
In this section
This section comprises the following notes:
......................................................
KEY MANAGEMENT COMPENSATION
86
Caverion Annual Review 2022
6.1
Key management compensation
Key management includes members of the Board of Directors and Group Management Board of
Caverion Corporation. The compensation paid to key management for employee services is
depicted in the table below.
Compensation paid to key management
EUR thousand
2022
2021
Salaries and other short-term employee benefits
5,439
4,726
Post-employment benefits
1)
124
169
Termination benefits
802
949
Share-based payments
2)
280
3,401
Total
6,646
9,245
1)
The post-employment benefits above include separate supplementary executive pension schemes but exclude statutory
pension payments and country specific group pension arrangements to which key management maybe be party to.
2)
Comprises the total value of transferred shares, portion paid in cash and transfer tax.
Compensation paid to the members of the Board of Directors and President and CEO
EUR thousand
2022
2021
President and CEO
1)
Jacob Götzsche, as from 9 August 2021
774
302
Mats Paulsson, 28 February - 8 August 2021
2)
235
Ari Lehtoranta, until 28 February 2021
3)
198
Total
774
735
Members of the Board of Directors
Jussi Aho
74
59
Markus Ehrnrooth
70
73
Joachim Hallengren
99
59
Thomas Hinnerskov
97
59
Kristina Jahn
74
60
Mats Paulsson, Chairman of the Board
133
91
Jasmin Soravia
72
58
Total
619
459
1)
The above presented compensation paid to the President and CEO includes only separate supplementary executive pension
schemes in regards to post-employment benefits and does not include any statutory pension payments.
2)
Mats Paulsson acted as the Interim President and CEO and his termination notice period was one week for both parties with no
entitlement to severance pay. Mr. Paulsson was included in the Swedish statutory social security pension and he was paid a
supplementary defined contribution pension to compensate for the difference between country specific pension practices. Mats
Paulsson was not a participant in any of Caverion’s short-term or long-term incentive plans.
3)
The compensation paid to Ari Lehtoranta in the above table contains only the remuneration paid from his period as Caverion's
President and CEO. After 28 February 2021, Mr. Lehtoranta was paid the contractual six months' notice period salary of EUR
330,000 in 2021. He was also entitled to a severance payment amounting to 12 months' base salary as monthly payments after
the termination date. The severance paid amounted to EUR 220,000 in 2021 and EUR 440,000 in 2022. The whole severance
payment amount was recognised as an expense in Caverion's 2021 result. Mr. Lehtoranta did not receive any short-term incentive
payments or share payments in 2021 or 2022. Ari Lehtoranta also had a supplementary defined contribution pension plan, annual
contribution being 20% of the base salary (including the six months' notice period salary but excluding severance payments).
Additionally, he was eligible for the Finnish statutory pension.
For the board membership period starting in March 2022, Board membership fees are paid as
annual fees, 60% of which are paid as cash and 40% as Caverion shares according to the decision
by the Annual General Meeting (50% as cash and 50% as shares for the board membership period
starting in March 2021).
More detailed information on share-incentive schemes has been presented in note 6.2 Share-
based payments.
Remuneration of the President and CEO
Jacob Götzsche joined Caverion Corporation as President and CEO in August 2021. Mr. Götzsche's
fixed annual base salary is EUR 620,000 in addition to which he is entitled to customary fringe
benefits. In 2022, the actual base salary and fringe benefits paid to Mr. Götzsche amounted to EUR
649,976 (EUR 253,036 in 2021). Caverion does not provide pension coverage for Jacob Götzsche,
but to compensate for this he is paid an additional 20% cash allowance calculated from his fixed
annual base salary to obtain a pension coverage by himself. No specific retirement age has been
agreed.
Jacob Götzsche was not a participant in Caverion Corporation’s short-term incentive plan 2021
and thus no short-term incentive was paid for him in 2022 for financial year 2021. His short-term
incentive annual earning opportunity for 2022 was at the target level 40% and at the maximum
level 80% of the annual fixed base salary.
Jacob Götzsche’s strategic short-term incentive targets for the financial year 2022 were
Caverion Group’s Adjusted EBITA with 70% weight and Caverion Group’s Adjusted Cash flow with
30% weight. The President and CEO’s short-term incentive related to 2022 amounted to 71% of
the annual salary, with a corresponding value of EUR 443,226, payable in April 2023. In addition,
Jacob Götzsche is eligible for a one-time cash bonus corresponding to four months of base salary,
with a corresponding value of EUR 206,667, as a reward for the extraordinary contribution in
connection with the public tender offer, payable in 2023. Mr. Götzsche did not receive any share-
based payments during the years 2021 and 2022 but he is a participant in the share-based
incentive plan PSP 2022-2024.
In case of termination, Mr. Götzsche's notice period is six months for both parties. Mr. Götzsche
is entitled to a severance pay amounting to 12 months’ base salary if the company terminates the
agreement.
Remuneration of the Group Management Board (excluding President and CEO)
EUR thousand
Fixed base
salary
Fringe
benefits
Short-term
Incentive
Share-based
payments
Total
2022
Group Management Board
members excluding President and
CEO
1)
3,207
118
994
131
4,450
1)
Includes the members’ total remuneration for the period they have been members of the Group Management Board.
SHARE-BASED PAYMENTS
87
Caverion Annual Review 2022
In 2022, a total of 23,621 Caverion Corporation shares were transferred to the Group
Management Board (excluding President and CEO) as a reward from the Restricted Share Plan
2019-2021. In 2021, a total of 215,270 Caverion Corporation shares were transferred to the Group
Management Board as a reward from the Matching Share Plan 2018-2022 as well as from the
Restricted Share Plan 2018-2020.
In addition to the above compensation, some of the Group Management Board members take
part in country specific group pension arrangements. The members of the Group Management
Board do not, however, have any supplementary executive pension schemes and the statutory
retirement age applies.
Also, a total of EUR 362 thousand of compensation related to the termination of the Group
Management Board members' employment was paid during financial year 2022 (EUR 399
thousand in 2021).
Additional information on Management remuneration is presented in the parent company
financial statements
6.2
Share-based payments
Caverion has long-term share-based incentive schemes which are a part of the remuneration and
commitment programme for the management and key personnel of Caverion Group. The key aim
is to align the interests of the shareholders and the executives in order to promote shareholder
value creation and to commit the key executives to the company and its strategic targets and to
offer them a competitive reward plan based on the ownership of the company’s shares.
Caverion’s Board of Directors approved a rolling long-term share-based incentive plan for the
Group’s senior management and key employees in December 2015. The share-based incentive
plan consists of a Performance Share Plan (PSP) as the main structure, complemented by a
Restricted Share Plan (RSP) structure for specific situations. Both plans consist of annually
commencing individual plans, each lasting a three-year period. The commencement of each new
plan is subject to a separate decision of the Board. Of the plans depicted below, the performance
share plan commencing in 2018 was based on the rolling incentive structure approved in
December 2015. Also all restricted share plans commencing during years 2018-2022 are based
on the rolling structure originally approved in December 2015.
In December 2018, Caverion’s Board of Directors approved the establishment of a new share-
based long-term incentive plan which is based on a performance share plan (PSP) structure. This
new incentive structure consists of annually commencing individual performance share plans, each
with a three-year performance period, which is followed by the payment of the potentially attained
share reward. The performance share plans commencing during years 2019-2022 are based on
the rolling incentive structure approved in December 2018.
Share-based long-term incentive plan 2018-2020
In its December 2017 meeting, Caverion's Board of Directors approved the commencement of
Performance Share Plan 2018-2020 and Restricted Share Plan 2018-2020. The targets for PSP
2018-2020 were partially met and, in a share issue without consideration, 28,169 Caverion
Corporation shares were conveyed to 77 participants during 2021. For RSP 2018-2020, 35,483
Caverion Corporation shares were conveyed to 16 key employees in 2021.
Matching Share Plan 2018-2022
In February 2018, Caverion announced the establishment of a share-based incentive plan directed
at the key employees of the Group, “Matching Share Plan (MSP) 2018−2022”. The aim of the plan
is to align the objectives of the shareholders and the key employees in order to increase the value
of the company in the long-term, to encourage the key employees to personally invest in the
company’s shares, to retain them at the company and to offer them a competitive reward plan that
is based on acquiring, receiving and holding the company’s shares. The prerequisite for
participating in MSP 2018-2022 is that a key employee acquires company shares up to the number
and in the manner determined by the Board of Directors. The rewards from the plan will be paid in
four instalments, one instalment each in 2019, 2020, 2021 and 2022. However, the reward
payment will be deferred if the yield of the share has not reached the pre-set minimum yield level
by the end of the matching period in question. The deferred reward will be paid as soon as practical
after the pre-set minimum yield level has been reached. If the pre-set minimum yield level has not
been reached by the end of reward instalment specific grace periods ending in 2021-2022, no
reward from the matching period in question will be paid. Furthermore, the receiving of the reward
is tied to the continuance of the participant’s employment or service upon reward payment.
The target group of MSP 2018-2022 consists of approximately 20 key executives, including
the members of the Group Management Board. The rewards to be paid on the basis of the MSP
correspond to the value of an approximate maximum total of 2,520,000 Caverion Corporation
shares (including also the portion to be paid in cash). In 2019, Caverion's Board of Directors decided
on share issues without consideration in which 391,469 shares were conveyed to key employees
participating in MSP 2018-2022 as a reward from the matching period 1 March 2018 - 28
February 2019. A total of 4,431 shares from these issues were returned to Caverion during 2020.
In the spring 2021, 120,199 Caverion Corporation shares were conveyed as a reward from the
matching period 1 March 2018 - 29 February 2020 and, for participants who joined the plan at a
later stage, also as a reward from the matching period 1 March 2018 - 28 February 2019.
Additionally, in the fall of 2021, 168,650 Caverion Corporation shares were conveyed as a reward
from the matching period 1 March 2018 - 28 February 2021. From the 2021 share issues, a total
of 46,977 shares were returned to Caverion.
No rewards were paid during 2022 under MSP 2018-2022. However, the Board of Directors
has in December 2022 decided to supplement the terms of the MSP. Notwithstanding the grace
period for the fourth instalment terminating on 31 December 2022, the Board maintained full
discretion to resolve on any partial or full pay-out under the fourth instalment under certain
conditions.
Share-based long-term incentive plan 2019-2021
In December 2018, Caverion's Board of Director's approved the commencement PSP 2019-2021
and RSP 2019-2021. PSP 2019-2021 could include a maximum of approximately 75 key
SHARE-BASED PAYMENTS
88
Caverion Annual Review 2022
employees of Caverion Group. The performance target KPI’s were the relative total shareholder
return of the Company’s share and earnings per share. The targets for PSP 2019-2021 were not
met and, therefore, no rewards were paid. Within RSP 2019-2021, share allocations were made
for individually selected key employees in special situations. On 24 February 2022, 55,020
Caverion Corporation shares were conveyed in a share issue without consideration to 22 key
employees participating in RSP 2019-2021.
Share-based long-term incentive plan 2020-2022
In December 2019, Caverion's Board of Director's approved the commencement PSP 2020-2022
and RSP 2020-2022. However, on 30 April 2020, the Board decided, upon management's
suggestion, to postpone the commencement of PSP 2020-2022 until the beginning of the year
2021. PSP 2020-2022 may include a maximum of approximately 90 key employees of Caverion
Group. The performance targets for the plan are the relative total shareholder return of the
Company's share and earnings per share. If all targets are met, the share rewards based on PSP
2020-2022 will comprise a maximum of approximately 1.6 million Caverion shares (gross before
the deduction of applicable taxes). The targets set for PSP 2020-2022 will be evaluated in the
spring of 2023 after which the potential share rewards will be delivered to the participants.
Within RSP 2020-2022, share allocations are made for individually selected key employees in
special situations. The maximum number of shares that may be allocated and delivered totals
230,000 shares (gross before the deduction of applicable taxes). The share rewards will be
delivered to the participants in spring 2023 provided that their employment with Caverion
continues until the delivery of the share reward.
Share-based long-term incentive plan 2021-2023
Caverion’s Board of Directors approved in December 2020 the commencement of PSP 2021-2023
and RSP 2021-2023. PSP 2021–2023 may include a maximum of approximately 90 key
employees of Caverion Group. The performance targets for the plan are the relative total
shareholder return of the Company’s share and earnings per share. If all targets will be met, the
share rewards based on PSP 2021–2023 will comprise a maximum of approximately 1.6 million
Caverion shares (gross before the deduction of applicable taxes) delivered in the spring of 2024.
Within RSP 2021-2023, share allocations are made for individually selected key employees in
special situations. The maximum number of shares that may be allocated and delivered totals
165,000 shares (gross before the deduction of applicable taxes). The share rewards will be
delivered to the participants in spring 2024 provided that their employment with Caverion
continues until the delivery of the share reward.
Share-based long-term incentive plan 2022-2024
Caverion’s Board of Directors approved in December 2021 the commencement of PSP 2022-2024
and RSP 2022-2024. PSP 2022–2024 may include a maximum of approximately 90 key
employees of Caverion Group. The performance targets for the plan are the relative total
shareholder return of the Company’s share and earnings per share. If all targets will be met, the
share rewards based on PSP 2022–2024 will comprise a maximum of approximately 1.6 million
Caverion shares (gross before the deduction of applicable taxes) delivered in the spring of 2025.
Within RSP 2022-2024, share allocations are made for individually selected key employees in
special situations. The maximum number of shares that may be allocated and delivered totals
85,000 shares (gross before the deduction of applicable taxes). The share rewards will be delivered
to the participants in spring 2025 provided that their employment with Caverion continues until
the delivery of the share reward.
Costs recognised for the share-based incentive plans
The consolidated financial statements include costs from share plans amounting to EUR 2.6 (4.0)
million. EUR 1.0 (1.5) million of the cost recognised is related to the Group Management Board.
SHARE-BASED PAYMENTS
89
Caverion Annual Review 2022
Plan
Performance share plan
Restricted share plan
Matching
share plan
Instrument
PSP 2022–2024
PSP 2021–2023
PSP 2020–2022
PSP 2019–2021
RSP 2022-2024
RSP 2021-2023
RSP 2020-2022
RSP2019-2021
MSP 2018-2022
Maximum number of shares
1,600,000
1,301,250
85,000
165,000
230,000
135,000
2,520,000
Dividend adjustment
No
No
No
No
No
No
No
No
Yes
Grant date
Jun 9, 2022
May 5, 2021
Jan 25, 2021
Apr 3, 2019
Apr 12, 2022
Feb 17, 2021
May 18, 2020
Apr 12, 2019
Mar 1, 2018
Beginning of earning period
Jan 1, 2022
Jan 1, 2021
Jan 1, 2020
Jan 1, 2019
Jan 1, 2022
Jan 1, 2021
Jan 1, 2020
Jan 1, 2019
Mar 1, 2018
End of earning period
Dec 31, 2024
Dec 31, 2023
Dec 31, 2022
Dec 31, 2021
Dec 31,2024
Dec 31,2023
Dec 31, 2022
Dec 31, 2021
Dec 31, 2022
End of restriction period
Apr 30, 2025
Apr 30, 2024
Apr 30, 2023
Apr 30, 2022
Feb 28, 2025
Feb 28, 2024
Feb 28, 2023
Feb 28, 2022
Jul 1, 2022
Vesting conditions
1)
TSR
2)
3)
TSR
2)
3
TSR
2)
3
TSR
2)
3
Division EBITA
for selected
participants
Minimum yield of
the share
Maximum contractual life, years
3.3
3.3
3.3
3.3
3.2
3.2
3.2
3.2
4.8
Remaining contractual life, years
2.3
1.3
0.3
-
2.2
1.2
0.2
-
-
Number of persons at the end of
the reporting year
81
77
74
-
7
32
30
-
13
Payment method
Cash and shares
Cash and shares
Cash and shares
Cash and shares
Cash and shares
Cash and shares
Cash and shares
Cash and shares
Cash and shares
Changes in plan during the period
Outstanding at the beginning of the
reporting period, 1 January 2022
-
1,348,250
1,272,500
722,500
-
59,000
195,000
125,500
433,947
Changes during the period
Granted
1,260,167
52,000
55,000
Forfeited
149,000
186,250
70,000
9,000
11,000
5,500
90,000
Earned (gross)
120,000
Expired
652,500
Outstanding at the end of the
period, 31 December 2022
1,260,167
1,199,250
1,086,250
-
52,000
105,000
184,000
-
343,947
Delivered during the period (net)
-
-
-
-
-
-
-
55,020
-
1)
Continued employment with Caverion until the delivery of the share reward is included as a vesting condition in all share incentive plans.
2)
Relative total shareholder return (TSR)
3)
Earnings per share (EPS)
RELATED PARTY TRANSACTIONS
90
Caverion Annual Review 2022
The public tender offers made for Caverion’s shares can have an effect on the payments made under
Caverion’s outstanding share incentive plans. Additional information on the possible effects can be
found in North Holdings 3 Oy’s tender offer document published on 24 November 2022.
Accounting principles
Caverion's share-based incentive plans, which include a net settlement feature, are in principle
accounted for as fully equity settled plans even though Caverion pays the withholding taxes in cash
on behalf of the participants. The share-based incentive plans are valued at their fair value on grant
date and are recognised as an employee benefit expense over the vesting period with corresponding
entry in equity. The difference realised upon the settlement date is also accounted for against equity.
Insofar as the decision regarding the settlement method of the share-based incentive plans is
outside of Caverion's discretion, the company's management has had to utilise its judgement based
on the information available at the time. Caverion has estimated the effect of the public tender offers
and other available information on the share-based incentive plans and their classification at the
reporting date. Based on these estimates, Caverion has not deemed it necessary to change the
classification used in the treatment of the share-based incentive plans from the previously applied
treatment.
The fair value of the share-based rewards is based on the market price of Caverion Corporation's
share at the grant date. Some of Caverion's share-based incentive plans also contain market-based
vesting conditions which are taken into consideration when determining the fair value of the reward
at grant date. For these, the reward's fair value is determined by utilising the Monte Carlo simulation
which reflects also the probability of not achieving the market-based vesting condition. For the
market-based vesting conditions, the expense is recognised regardless of whether the condition is,
in the end, satisfied. For non-market-based vesting conditions, the achievement of the condition is
taken into account in the number of shares which are expected to vest at the end of the vesting period.
6.3
Related party transactions
Caverion announced in February 2018 the establishment of a new share-based incentive plan
directed for the key employees of the Group (“Matching Share Plan 2018-2022”). The company
provided the participants a possibility to finance the acquisition of the company’s shares through an
interest-bearing loan from the company, which some of the participants utilised. By the end of
December 2022 the total outstanding amount of these loans amounted to approximately EUR 3.7
(4.4) million. The loans will be repaid in full on 29 December 2023, at the latest. Company shares have
been pledged as a security for the loans. As a result, Caverion had 623,122 Caverion Corporation
shares as a pledge at the end of the reporting period on 31 December 2022.
Share-based incentive plans have been described in more detail in note 6.2 Share-based
payments.
Transactions with key management and entities controlled by key management
EUR million
2022
2021
Sale of goods and services
0.0
0.0
Purchase of goods and services
0.1
0.1
Receivables
3.7
4.4
Liabilities
0.0
0.0
Caverion had a fixed term contract until 28 February 2021 with a member of the Board concerning
consulting services. The value of the contract was not material.
Caverion entered into a new fixed term contract until 31 March 2022 with a member of the Board
concerning consulting services in August 2021. After the reporting period, this contract has been
prolonged until 31 December 2022. The value of the contract was not material.
All transactions with entities controlled by key management personnel have been carried out on
normal market terms and conditions and at market prices. Transactions with associated companies
are listed in note 5.7. Investments in associated companies.
EVENTS AFTER THE REPORTING DATE
91
Caverion Annual Review 2022
6.4
Subsidiaries
Company name
Domicile
Holding of
Caverion Group,
%
Holding of
Caverion
Corporation, %
Caverion Danmark A/S
Fredericia
100.00
100.00
Caverion Emerging Markets Oy
Helsinki
100.00
100.00
Caverion GmbH
Munich
100.00
100.00
Caverion Industria Oy
Helsinki
100.00
100.00
Caverion Internal Services AB
Stockholm
100.00
100.00
Caverion Norge AS
Oslo
100.00
100.00
Caverion Suomi Oy
Helsinki
100.00
100.00
Caverion Sverige AB
Stockholm
100.00
100.00
Caverion Österreich GmbH
Vienna
100.00
100.00
Huurre Technologies Oy
Kuopio
100.00
100.00
Caverion Deutschland GmbH
Munich
100.00
-
Caverion Eesti AS
Tallinn
100.00
-
Caverion Huber Invest Oy
Helsinki
100.00
-
Caverion Latvija SIA
Riga
100.00
-
Caverion Lietuva UAB
Vilnius
100.00
-
Caverion Poland S.A.
Zabrze
100.00
-
CS Electric A/S
Esbjerg
100.00
-
Duatec GmbH
Munich
100.00
-
Elicentra AB
Sundsvall
100.00
-
GTS Automation GmbH
Bad Vöslau
100.00
-
GTS Automation System SRL (RO)
Jilava
100.00
-
Huurre Sweden Ab
Västerås
100.00
-
LukkoPro Oy
Ylivieska
100.00
-
MISAB Sprinkler & VVS AB
Stockholm
100.00
-
Oy Botnia Mill Service Ab
Kemi
100.00
-
Simex Klima & Kulde AS
Stavanger
100.00
-
Teollisuus Invest Oy
Helsinki
100.00
-
Visi Oy
Kotka
100.00
-
DI-Teknik A/S
Køge
80.00
-
Kiinteistö Oy Leppävirran Teollisuustalotie 1
Leppävirta
60.00
-
CG FH St. Pölten GmbH
Vienna
50.00
-
6.5
Events after the reporting date
Crayfish Bidco Oy ("Crayfish Bidco"), a Finnish company controlled by Triton Fund V, announced on
10 January 2023 a voluntary public cash tender offer for all the shares in Caverion Corporation,
pursuant to which Crayfish Bidco proposes to acquire all issued and outstanding shares in Caverion
Corporation at an offer price of EUR 8.00 per share. This tender offer is subject to certain
conditions, as described in the announcement by Crayfish Bidco attached to Caverion’s stock
exchange release as per 10 January 2023.
Caverion Corporation received on 12 January 2023 an announcement under Chapter 9, Section
5 of the Finnish Securities Markets Act, according to which the holding of Crayfish BidCo had
exceeded the threshold of 5 per cent. According to the announcement, the direct holding of
Crayfish BidCo Oy in Caverion, and the indirect holding of Triton V LuxCo 87 SARL in Caverion,
increased on 12 January 2023 to 13,647,263 shares, corresponding to 9.82 per cent of Caverion’s
shares and voting rights.
North Holdings announced on 11 January 2023, that it will extend the offer period for its tender
offer announced on 3 November 2022 until January 31, 2023, at 4:00 p.m. (Finnish time) as well
as provided updated information of its financing and regulatory approvals. In addition, North
Holdings commented on the competing offer announced by Crayfish BidCo Oy on January 10, 2023.
On 13 January 2023, North Holdings 3 Oy also supplemented its tender offer document published
on 24 November 2022 with this information and also confirmed that it had received the merger
control clearance decision of the European Commission. Additional information has been
presented in Caverion’s stock exchange releases and their attachments on 11 and 13 January
2023, respectively.
The Board of Directors of Caverion announced on 13 January 2023 that it continues evaluating
Triton’s tender offer and provided information on discussions with Triton. The Board said that it
will present its view on the two offers, including a potential change in recommendation, latest on
24 January 2023.
North Holdings 3 Oy announced on 24 January 2023 that it improves the consideration in its
tender offer. Furthermore, North Holdings 3 Oy extended the offer period until 28 February 2023
and lowered the acceptance threshold from more than 90 percent to more than 66 2/3 percent of
all shares. The shareholders of Caverion are given the possibility to choose either: (i) a debt
instrument entitling to a fixed cash payment of EUR 8.50 per share in nine months from the
completion of the tender offer, or (ii) an immediate cash consideration of EUR 8.00 per share upon
completion of the tender offer. The Board of Directors of Caverion Corporation also maintained its
recommendation for the tender offer by North Holdings 3 Oy based on the improved offer terms.
Additional information has been presented in Caverion’s stock exchange releases on 24 January
2023.
On 26 January 2023, North Holdings announced that it had received all necessary regulatory
approvals for its voluntary recommended public tender offer for all the shares in Caverion
Corporation.
INCOME STATEMENT AND BALANCE SHEET
92
Caverion Annual Review 2022
Income statement,
Parent company, FAS
EUR
Note
1.1.-31.12.2022
1.1.-31.12.2021
Other operating income
1
58,815,501.43
55,478,581.90
Personnel expenses
2
-15,915,905.16
-14,651,322.59
Depreciation, amortisation and impairments
3
-628,912.64
-871,219.88
Other operating expenses
4
-49,753,006.01
-45, 894,744.45
Operating profit / loss
-7,482,322.38
-5,938,705.02
Financial income and expenses
5
7,131,797.80
-6 ,504, 496.75
Result before appropriations and taxes
-350,524.58
-12,443,201.77
Appropriations
6
13,800,000.00
9 ,067, 160.67
Income taxes
7
-7,809.65
-112, 381.62
Result for the period
13,441,665.77
-3,488,422.72
Balance sheet,
Parent company, FAS
EUR
Note
31.12.2022
31.12.2021
Assets
Non-current assets
Intangible assets
8
5,059,115.95
5,661,797.26
Tangible assets
8
345,795.70
589,793.25
Investments
9
535,898,113.55
503,426,384.15
Total non-current assets
541,303,025.20
509,677,974.66
Current assets
Non-current receivables
10
98,684,944.50
21,529,360.58
Current receivables
11
27,967,962.75
29,107,838.94
Cash and cash equivalents
54,520,323.61
102,823,909.98
Total current assets
181,173,230.86
153,461,109.50
Total assets
722,476,256.06
663,139,084.16
Equity and liabilities
Equity
12
Share capital
1.000.000.00
1,000,000.00
Unrestricted equity reserve
66.676.176.49
66,676,176.49
Retained earnings
42,263,056.21
69,116,233.71
Result for the period
13,441,665.77
-3,488,422.72
Treasury shares
-1,999,469.16
-2,358,078.82
Total equity
121,381,429.31
130,945,908.66
Liabilities
Non-current liabilities
15
164,137,537.05
167,499,999.99
Current liabilities
16
436,957,289.70
364,693,175.51
Total liabilities
601,094,826.75
532,193,175.50
Total equity and liabilities
722,476,256.06
663,139,084.16
CASH FLOW STATEMENT
93
Caverion Annual Review 2022
Cash flow statement, Parent company, FAS
EUR
1.1.-31.12.2022
1.1.-31.12.2021
Cash flow from operating activities
Result before appropriations and taxes
-350,524.58
-12,443,201.77
Adjustments for:
Depreciation, amortisation and impairments
628,912.64
871,219.88
Other adjustments
194,204.53
307,769.00
Financial income and expenses
-7,131,797.80
6,504,496.75
Cash flow before change in working capital
-6,659,205.21
-4,759,716.14
Change in working capital
Change in trade and other current receivables
6,501,083.87
678,793.24
Change in trade and other current payables
-14,471,047.73
1,911,905.37
Cash flow before financial items and taxes
-14,629,169.07
-3,526,604.01
Cash flow from operating activities
Interest paid and other financial expenses
-42,766,550.18
-25,988,015.78
Dividends received
13,374,796.79
0.00
Interest received and other financial income
36,235,702.00
23,238,729.16
Income taxes paid
-113,041.96
-2.127,832.34
Cash flow from operating activities
-7,898,262.42
-8,403,722.97
EUR
1.1.-31.12.2022
1.1.-31.12.2021
Cash flow from investing activities
Purchases of tangible and intangible assets
-7,980,545.45
-7,094,951.84
Proceeds from the sales of tangible and intangible
assets
8,198,311.67
6,512,869,74
Investments in subsidiaries
-11,430,108.25
-14,119,545.49
Cash flow from investing activities
-11,212,342.03
-14,701,627.59
Cash flow from financing activities
Group contributions received
9,000,000.00
18,000,000.00
Repayment of non-current borrowings
-74,457,000.00
-53,000,000.00
Change in non-current loan receivables
-77,155,583.92
-244,406.77
Proceeds from non-current borrowings
74,637,537.06
50,000,000.00
Change in short-term financing
61,982,359.68
22,634,945.58
Dividends paid
-23,200,294.74
-27,234,901.60
Cash flow from financing activities
-29,192,981.92
10,155,637.21
Net change in cash and cash equivalents
-48,303,586.37
-12,949,713.35
Cash and cash equivalents at the beginning of the
financial year
102,823,909.98
115,773,623.33
Cash and cash equivalents at the end of the financial
year
54,520,323.61
102,823,909.98
NOTES
94
Caverion Annual Review 2022
Notes to the financial statements, Parent company
Caverion Corporation accounting principles
The financial statements have been prepared in accordance with the Finnish accounting standards
(FAS).
Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the exchange rate
prevailing on the date of the transaction. The balance sheet has been translated using the European
Central Bank rates on the closing date.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are
presented in the income statement within “Financial income and expenses”.
Valuation of assets
Intangible and tangible assets are recognized in the balance sheet at original acquisition cost less
planned depreciation and amortisation and possible impairment.
Planned depreciation and amortisation are calculated using the straight-line method over the
estimated useful lives of the assets.
The estimated useful lives of assets are the following:
Intangible assets
2-5 years
Buildings and structures
10 years
Machinery and equipment
3 years
Investments in subsidiaries as well as other investments are recognized at original acquisition cost or
at fair value if fair value is lower than acquisition cost.
Income recognition
The parent company’s income consists of services provided to Group subsidiaries. These service sales
are booked to other operating income. The income is recognized once the services have been
provided.
Future expenses and losses
Future expenses and losses which relate to the current or previous financial years and which are likely
or certain to materialize and do not relate to a likely or certain future income, are recognized as an
expense in the appropriate income statement category. When the precise amount or timing of the
expenses is not known, they are recorded as provisions in the balance sheet.
Accrual of pension costs
The pension cover of the parent company is handled by external pension insurance companies.
Pension costs are recognized in the income statement in the year to which these contributions relate.
Loans and other receivables
Loans and other receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Loans and receivables are included in current assets, except
for maturities greater than 12 months after the reporting period end. These are classified as non-
current. The assets are recognized at acquisition cost, and transaction costs are expensed in the
income statement over the period of the loan to which they relate.
Trade receivables are amounts due from customers for merchandise sold or services performed
in the ordinary course of the business. If collection is expected in 12 months or less, they are classified
as current. If not, they are classified as non-current.
Cash and cash equivalents include cash in hand, bank deposits withdrawable on demand and
other liquid short-term investments with original maturities of three months or less.
Financial liabilities and other liabilities
Hybrid bond is presented as a financial liability in the balance sheet of the parent company’s financial
statements. Borrowings are recorded on the settlement date at acquisition cost, and transaction
costs are expensed in the financing expenses of the statement of income over the period of the
liability to which they relate. Other borrowing costs are expensed in the period during which they are
incurred. Fees paid on the establishment of loan facilities are recognised as an expense over the
period of the facility to which they relate. Borrowings are derecognised when their contractual
obligations are discharged, cancelled or expire.
Borrowings are classified as current liabilities if payment is due within 12 months or less. If not,
they are classified as non-current.
NOTES
95
Caverion Annual Review 2022
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of the business from suppliers. Accounts payable are classified as current liabilities if payment
is due within 12 months or less. If not, they are presented as non-current liabilities. Trade payables
are recognized at acquisition cost.
Derivative instruments
Derivative contracts that are used to hedge currency and interest rate risks are valued at fair value.
The fair values of foreign exchange derivatives are presented in Note 18 Derivative instruments. At
the end of December 2022 Caverion has not used interest rate derivatives to hedge interest rate risk.
Foreign exchange derivatives are used to hedge against changes in forecasted foreign currency
denominated cash flows and changes in value of receivables and liabilities in foreign currency. Foreign
exchange derivatives are valued employing the market forward exchange rates quoted on the balance
sheet date. Foreign exchange gains and losses related to business operations are included in
operating profit. Foreign exchange gains and losses associated with financing are reported in financial
income and expenses. Foreign exchange derivatives mature within 2023. Hedge accounting is not
applied to foreign exchange derivatives.
Income taxes
Income taxes relating to the financial year are recognized in the income statement. Deferred taxes
have not been booked in the parent company`s financial statements.
NOTES TO THE INCOME STATEMENT
96
Caverion Annual Review 2022
Notes to the income statement, Parent company
1.
Other operating income
1,000 EUR
1.1.-31.12.2022
1.1.-31.12.2021
Service income
58,815.5
55,478.6
Total
58,815.5
55,478.6
2.
Information concerning personnel and key management
1,000 EUR
1.1.-31.12.2022
1.1.-31.12.2021
Personnel expenses
Wages and salaries
13,434.7
12,615.2
Pension expenses
2,083.2
1,930.6
Other indirect personnel costs
398.0
105.5
Total
15,915.9
14,651.3
Average number of personnel during the financial period
97.0
94.0
Salaries and fees to the management
President and CEO
774.0
735.0
Members of the Board of Directors
619.3
458.6
Total
1,393.2
1,193.6
3.
Depreciation, amortisation and impairments
1,000 EUR
1.1.-31.12.2022
1.1.-31.12.2021
Amortisation of intangible assets
384.9
422.5
Depreciation of buildings and structures
16.1
16.1
Depreciation of machinery and equipment
227.9
432.6
Total
628.9
871.2
4.
Other operating expenses
1,000 EUR
1.1.-31.12.2022
1.1.-31.12.2021
Fees paid to the Auditor of the company
Audit fee
283.0
297.3
Tax services
41.0
36.2
Other services
34.0
62.1
Total
358.0
395.7
Ernst & Young Oy, Authorized Public Accountants, operated as the company’s auditor.
5.
Financial income and expenses
1,000 EUR
1.1.-31.12.2022
1.1.-31.12.2021
Dividend income
From Group companies
13,374.8
0.0
Interest and financial income
From Group companies
4,078.3
3,916.7
From others
324.0
135.7
Total
4,402.3
4,052.4
Impairment on investment assets
Subsidiary shares
0.0
-3,839.0
Total
0.0
-3,839.0
Other interest and financial expenses
Interest expenses to Group companies
-2,540.2
-296.3
Interest expenses to others
-5,641.3
-5,651.7
Other expenses to others
-3,477.7
-1,104.0
Total
-11,659.3
-7,051.9
Exchange rate gains
32,214.5
19,490.6
Change in the fair value of derivatives
-117.4
-323.4
Exchange rate losses
-31,083.1
-18,833.1
Total
1,013.9
334.1
Total financial income and expenses
7,131.8
-6,504.5
NOTES TO THE BALANCE SHEET
97
Caverion Annual Review 2022
Notes to the balance sheet, Parent company
6.
Appropriations
1,000 EUR
1.1.-31.12.2022
1.1.-31.12.2021
Change in the difference between planned and taxation
depreciation
0.0
67.2
Group contributions received
13,800.0
9,000.0
7.
Income taxes
1,000 EUR
1.1.-31.12.2022
1.1.-31.12.2021
Income taxes on operating activities, current year
-7.8
-112.4
Total
-7.8
-112.4
8.
Changes in fixed assets
1,000 EUR
31.12.2022
31.12.2021
Intangible assets
Intangible rights
Acquisition cost on Jan 1
14,518.0
14,518.0
Acquisition cost on Dec 31
14,518.0
14,518.0
Accumulated amortisation and impairments on Jan 1
-11,592.2
-11,199.5
Amortisation for the period
-351.8
-392.7
Accumulated amortisation and impairments on Dec 31
-11,944.1
-11,592.2
Book value on December 31
2,573.9
2,925.7
Renovations
Acquisition cost on Jan 1
314.7
251.8
Additions
0.0
62.9
Book value on December 31
314.7
314.7
Accumulated amortisation and impairments on Jan 1
-67.9
-38.1
Amortisation for the period
-33.1
-29.8
Accumulated amortisation and impairments on Dec 31
-101.0
-67.9
Book value on December 31
213.8
246.9
Advance payments and construction in progress
Acquisition cost on Jan 1
2,489.2
1,970.0
Additions
7,980.5
7,032.1
Disposals
-8,198.3
-6,512.9
Acquisition cost on Dec 31
2,271.4
2,489.2
Book value on December 31
2.271.4
2,489.2
Total intangible assets
5,059.1
5,661.8
NOTES TO THE BALANCE SHEET
98
Caverion Annual Review 2022
9.
Investments
1,000 EUR
31.12.2022
31.12.2021
Tangible assets
Land and water areas
Acquisition cost on Jan 1
109.8
109.8
Acquisition cost on Dec 31
109.8
109.8
Book value on December 31
109.8
109.8
Buildings and structures
Acquisition cost on Jan 1
160.9
160.9
Acquisition cost on Dec 31
160.9
160.9
Accumulated depreciation and impairments on Jan 1
-136.8
-120.7
Depreciation for the period
-16.1
-16.1
Accumulated depreciation and impairments on Dec 31
-152.8
-136.8
Book value on December 31
8.0
24.1
Machinery and equipment
Acquisition cost on Jan 1
1,918.8
1,918.8
Acquisition cost on Dec 31
1,918.8
1,918.8
Accumulated depreciation and impairments on Jan 1
-1,463.0
-1,030.4
Depreciation for the period
-227.9
-432.6
Accumulated depreciation and impairments on Dec 31
-1,690.9
-1,463.0
Book value on December 31
227.9
455.8
Total tangible assets
345.8
589.8
1,000 EUR
31.12.2022
31.12.2021
Shares in Group companies
Acquisition cost on Jan 1
503,426.4
474,895.9
Additions
32,471.7
32,369.4
Impairments
0.0
-3,839.0
Acquisition cost on Dec 31
535,898.1
503,426.4
Total investments
535,898.1
503,426.4
10.
Non-current receivables
1,000 EUR
31.12.2022
31.12.2021
Receivables from Group companies
Loan receivables
95,019.3
17,170.0
Receivables from associated personnel
Loan receivables
3,665.6
4,359.4
Total non-current receivables
98,684.9
21,529.4
Loan arrangements with Group key personnel are descriped in more detail in Note 19 Salaries and
fees to the management.
11.
Current receivables
1,000 EUR
31.12.2022
31.12.2021
Receivables from group companies
Trade receivables
7,856.5
11,334.8
Loan receivables
350.0
0.0
Other receivables
14,969.1
9,757.0
Receivables, external
Trade receivables
20.5
20.2
Other receivables
22.6
640.1
Accrued income
4,749.3
7,355.8
Total
27,968.0
29,107.8
Accrued income consists of:
Accrued financial expenses
649.3
767.8
Tax receivables
78.0
0.0
Other receivables
4,022.1
6,587.9
Total
4,749.3
7,355.8
NOTES TO THE BALANCE SHEET
99
Caverion Annual Review 2022
12.
Equity
1,000 EUR
31.12.2022
31.12.2021
Share capital on Jan 1
1,000.0
1,000.0
Share capital on Dec 31
1,000.0
1,000.0
Unrestricted equity reserve on Jan 1
66,676.2
66,676.2
Unrestricted equity reserve on Dec 31
66,676.2
66,676.2
Retained earnings on Jan 1
63,269.7
93,685.5
Share-based incentive plans
-164.4
-109.3
Dividend distribution
-23,200.3
-27,235.2
Distribution of own shares
358.6
417.1
Retained earnings on Dec 31
40,263.6
66,758.2
Result for the period
13,441.7
-3,488.4
Total equity
121,381.4
130,945.9
Distributable funds on Dec 31
Retained earnings
40,263.6
66,758.2
Net result for the financial period
13,441.7
-3,488.4
Unrestricted equity reserve
66,676.2
66,676.2
Distributable funds from shareholders' equity
120,381.4
129,945.9
Treasury shares of Caverion Corporation
December 31, 2022 parent company had treasury shares as follows:
Number of
treasury shares
Total number
of shares
% of total
share capital
and voting rights
2,447,447
138,920,092
1,76 %
13.
Appropriations
1,000 EUR
31.12.2022
31.12.2021
Accumulated depreciation difference on Jan 1
0.0
67.2
Increase / decrease
0.0
-67.2
Accumulated depreciation difference on Dec 31
0.0
0.0
14.
Deferred taxes and liabilities
1,000 EUR
31.12.2022
31.12.2021
Deferred tax assets
Accumulated depreciation difference
41.5
27.9
Total
41.5
27.9
Deferred taxes have not been recognized in the parent company’s financial statements.
15.
Non-current liabilities
1,000 EUR
31.12.2022
31.12.2021
Liabilities to Group companies
Other loans
4,500.0
7,500.0
Liabilities, external
Loans from credit institutions
50,000.0
50,000.0
Hybrid bond
35,000.0
35,000.0
Senior bond
74,637.5
75,000.0
Total
164,137.5
167,500.0
NOTES TO THE BALANCE SHEET
100
Caverion Annual Review 2022
16.
Current liabilities
1,000 EUR
31.12.2022
31.12.2021
Liabilities to Group companies
Trade payables
1168.7
405.8
Accrued expenses
21,184.0
19,388.8
Other liabilities
382,989.5
330,834.3
Liabilities, external
Trade payables
4,708.7
3,503.1
3,543.0
0.0
Commercial papers
9,964.5
0.0
Other currect liabilietes
840.4
337.2
Accrued expenses
12,558.7
10,223.8
Total
436,957.5
364,693.1
Accrued expenses consist of:
Personnel expenses
6,332.3
4,021.4
Interest expenses
3,383.4
3,369.9
Accrued expenses to group companies
21,184.0
19,388.8
Other expenses
2,843.1
2,832.4
Total
33,742.7
29,612.6
17.
Commitments and contingent liabilities
1,000 EUR
31.12.2022
31.12.2021
Leasing commitments
Payable during the next fiscal year
2,832.9
2,669.1
Payable during subsequent years
18,049.6
20,763.6
Total
20,882.5
23,432.8
Guarantees
On behalf of Group companies
Contractual work guarantees
466,897.3
467.947.9
Loan guarantee
7,500.0
10,500.0
Leasing commitment guarantees
17,340.0
17,254.9
Factoring related guarantees
1,349.3
1,989.9
18.
Derivate instruments
1,000 EUR
31.12.2022
31.12.2021
External foreign currency forward contracts
Fair value
-101.4
3.9
Value of underlying instruments
121,110.6
65,177.0
Internal foreign currency forward contracts
Fair value
8.9
21.2
Value of underlying instruments
1,050.3
2,150.6
Derivative instruments are categorized to be on Level 2 in the fair value hierarchy. The fair values for
the derivative instruments categorized in Level 2 have been defined as follows: The fair values of
foreign exchange forward agreements have been defined by using the market prices at the closing
day of the fiscal year.
NOTES TO THE BALANCE SHEET
101
Caverion Annual Review 2022
19.
Salaries and fees to the management
Decision-making procedure regarding remuneration
Caverion Corporation’s Annual General Meeting decides on the remuneration of the Board of
Directors. The Human Resources Committee of the Board of Directors prepares the proposal on the
remuneration of the Board of Directors for the Annual General Meeting. The Human Resources
Committee also prepares the general remuneration principles, short- and long-term incentive
schemes and the Remuneration Policy of Caverion Group which is approved by the Board of Directors.
The Board of Directors appoints the President and CEO and approves his/her terms of
employment including remuneration. The Board of Directors also appoints the members of the Group
Management Board. According to Caverion Guidelines all individual remuneration decisions have to
be approved by the manager’s manager. The Chairman of the Board approves the remuneration of
the Group Management Board members.
Remuneration of the Board of Directors
Based on the decisions of Caverion Corporation's Annual General Meeting on March 28, 2022, the
members of the Board of Directors are entitled to the following fees:
>
Chairman of the Board of Directors EUR 6,600 per month (EUR 79,200 per year)
>
Vice Chairman of the Board of Directors EUR 5,000 per month (EUR 60,000 per year)
>
Members of the Board of Directors EUR 3,900 per month (EUR 46,800 per year)
A meeting fee of EUR 550 was paid for each Board and Committee meeting held in the member’s
domicile or electronically and EUR 900 per meeting held outside the member’s domicile for their
participation in meetings of the Board of Directors and its committees during 1.1.-28.3.2022. A
meeting fee of EUR 900 was paid for each Board and Committee meeting held during 29.3.-
31.12.2022. Possible travel expenses were reimbursed in accordance with the principles related to
remuneration of tax-exempt travel expenses approved by the Finnish Tax Administration. No other
financial benefits were paid in relation to the Board membership.
In addition to and separate from the role as the Chairman of the Board and Chairman of the HR
Committee, a company solely owned by Mats Paulsson has had a consulting agreement with the
Company. The agreement was effective until 31.12.2022. The fees under the agreement totaled EUR
119,999 during 2022. The consulting agreement has been made in accordance with the
Remuneration Policy. Apart from the said consulting agreement with a company owned by Mats
Paulsson, none of the board members have an employment relationship or service agreement with
Caverion Group and they are not part of any of Caverion Group's short- or long-term incentive
schemes or pension plans.
Fees paid to the Board of Directors
Board
membership
annual fee*
Permanent
committee
meeting fee
Ad hoc
committee
meeting fee
Board
meeting
fee
Total
2022
Total
2021
Jussi Aho
46,800
5,600
21,250
73,650
58,700
Markus Ehrnrooth**
60,000
2,350
7,750
70,100
73,000
Joachim Hallengren
46,800
5,050
25,200
22,150
99,200
58,900
Thomas Hinnerskov
46,800
5,050
24,300
21,150
97,400
58,900
Kristina Jahn
46,800
5,050
22,150
74,000
59,800
Mats Paulsson
79,200
5,600
24,300
23,950
133,050
91,100
Jasmin Soravia
46,800
4,700
20,350
71,850
58,150
Total
373,200
33,400
73,800
138,850
619,250
458,550
* Board membership fees were paid as annual fees, 60% of which were paid as cash and 40% in Caverion shares according to the
decision by the Annual General Meeting.
** The Vice Chairman of the Board, Markus Ehrnrooth did not participate in and refrained from the work of the Board of Directors
and its committees during the pendency of the discussions pertaining to the public tender offers for all the shares in the
company as described in more detail in the Board of Directors’ Report January 1-December 31, 2022.
Management remuneration
The remuneration paid to the Group’s Management Board members consists of:
>
Fixed base salary
>
Fringe benefits
>
Short-term incentive scheme, such as annual performance bonus plan, and
>
Long-term incentive schemes, such as share-based incentive plans
Short term incentive schemes
The basis of remuneration at Caverion is a fixed base salary. In addition, the Group’s management and
most of the salaried employees are included in a performance based short-term incentive plan. The
aim of the annual short-term incentive plan is to reward the management and selected employees
based on the achievement of pre-defined and measurable financial and strategic targets. The Board
of Directors approves the terms of the short-term incentive plan every year, according to which
possible incentives are paid. Performance of the Group, the President and CEO as well as Group
Management Board members is evaluated by the Board of Directors. Potential incentives are
approved by the Board of Directors and they are paid out after the financial statements have been
finalised.
The amount of the possible incentive payment is based on the achievement of the pre-set
financial performance targets, such as the Group’s and/or division’s and/or unit’s financial result,
strategic targets and/or development objectives set separately. Individual target and maximum
NOTES TO THE BALANCE SHEET
102
Caverion Annual Review 2022
incentive opportunity are defined on the role based responsibilities. Possible incentive payments can
vary from zero payment to the pre-defined maximum incentive payment based on the achievement
of set targets.
Performance and development discussions are an essential part of the annual incentive plan and
performance development process at Caverion. Possible individual targets, their relative weighting
and achievement of the previously agreed targets are set and reviewed in these discussions.
The maximum short-term incentive paid to the President and CEO may be at maximum level 80%
of the annual fixed base salary. The maximum short-term incentive paid to the members of the Group
Management Board may equal at maximum level to 70-80% of the annual fixed base salary.
Long-term incentive schemes
Long-term incentive schemes at Caverion are determined by the Board of Directors and they are part
of the remuneration of the management and key personnel of Caverion Group. The aim is to align the
interests of the shareholders and the executives in order to promote shareholder value creation and
to support Caverion in becoming a leading service company and a selective master of projects by
covering the whole life cycle of buildings, industries and infrastructure. In addition, the aim is to
commit the key executives to the company and its strategic targets and to offer them a competitive
reward plan based on the ownership of the company’s shares.
Matching Share Plan 2018–2022
Caverion's Board of Directors approved a new share-based long-term incentive plan "Matching Share
Plan 2018-2022" in its February 2018 meeting. The prerequisite for participating in the Plan is that a
key employee shall acquire company shares up to the number and in the manner determined by the
Board of Directors. The Plan includes four matching periods, all beginning on 1 March 2018 and ending
on 28 February 2019, 29 February 2020, 28 February 2021 or 28 February 2022. The plan participant
may not participate in the Performance Share Plan 2018-2020 and/or 2019-2021 simultaneously
with participating in the Matching Share Plan.
The rewards from the plan will be paid in four instalments, one instalment each in 2019, 2020,
2021 and 2022. However, the reward payment will be deferred, if a yield of the share has not reached
the pre-set minimum yield level by the end of the matching period in question. If the pre-set minimum
yield level has not been reached by the end of reward instalment specific grace periods ending in
2021–2022, no reward from a matching period in question will be paid.
In a directed share issue without consideration, 120,199 Caverion Corporation shares held by the
company were on 30 April 2021 conveyed to key employees included in the Matching Share Plan
2018-2022. The shares were delivered as a reward from the matching period 1 March 2018 - 29
February 2020 and, for participants who have joined the plan at a later stage, also as a reward from
the matching period 1 March 2018 - 28 February 2019.
In a directed share issue without consideration, 168,650 Caverion Corporation shares held by the
company were on 25 August 2021 conveyed to key employees included in the Matching Share Plan
2018 - 2022. The shares were delivered as a reward from the matching period 1 March 2018 - 28
February 2021.
From the 2021 share issues, a total of 16,911 own shares were returned to Caverion on 14
September 2021 and 30,066 own shares on 16 November 2021. No rewards were paid during 2022
under the MSP.
The Board of Directors has in December 2022 decided to supplement the terms of the MSP.
Notwithstanding the Grace Period for the fourth instalment terminating on 31 December 2022, the
Board maintained full discretion to resolve on any partial or full payout under the fourth instalment
under certain conditions.
Share-based long-term incentive plan 2019–2021
Caverion’s Board of Directors decided on a new share-based long-term incentive plan for key
employees of the Group in its December 2018 meeting. The new plan is based on a performance share
plan (PSP) structure. The Board approved at the same time the commencement of a new plan period
2019−2021 in the Restricted Share Plan (RSP) structure, a complementary share-based incentive
structure for specific situations. Both plans consist of annually commencing individual plans, each
with a three-year period. The commencement of each new plan is subject to a separate decision of
the Board.
The Performance Share Plan 2019-2021 consists of a three-year operative financial performance
period (2019-2021). The potential reward is based on the targets set for the Relative Total
Shareholder Return and Earnings per share (EPS). The Board of Directors evaluates the target
achievement in March 2022 and the potential share reward will be paid to the participants in April
2022.
Within RSP 2019-2021, share allocations were made for individually selected key employees in
special situations. The maximum number of shares that may be allocated and delivered totals
135,000 shares (gross before the deduction of applicable taxes). The share rewards were delivered
to the participants in spring 2022 provided that their employment with Caverion continues until the
delivery of the share reward. 55,020 shares were conveyed in a share issue without consideration to
22 key employees participating in RSP 2019-2021.
Share-based long-term incentive plan 2020-2022
Caverion's Board of Directors decided on a commencement of new plan period 2020-2022 of the
company's performance share plan (PSP) structure in its December 2019 meeting. The Board
approved at the same time the commencement of a new plan period 2020−2022 in the Restricted
Share Plan (RSP) structure, a complementary share-based incentive structure for specific situations.
Both plans consist of annually commencing individual plans, each with a three-year period.
The Performance Share Plan 2020-2022 consists of a three-year operative financial performance
period (2020-2022). The potential reward is based on the targets set for Total Shareholder Return
and Earnings per share (EPS). On 30 April 2020, Caverion's Board of Directors decided, upon
management's suggestion, to postpone the commencement of PSP 2020-2022 until the beginning
NOTES TO THE BALANCE SHEET
103
Caverion Annual Review 2022
of the year 2021. The Board of Directors will evaluate the target achievements and potential share
rewards will be delivered to the participants in spring 2023.
Share-based long-term incentive plan 2021-2023
Caverion's Board of Directors decided on a commencement of new plan period 2021-2023 of the
company's performance share plan (PSP) structure in its December 2020 meeting. The Board
approved at the same time the commencement of a new plan period 2021−2023 in the Restricted
Share Plan (RSP) structure, a complementary share-based incentive structure for specific situations.
Both plans consist of annually commencing individual plans, each with a three-year period.
The Performance Share Plan 2021-2023 consists of a three-year operative financial performance
period (2021-2023). The potential reward is based on the targets set for Total Shareholder Return
and Earnings per share (EPS). Potential share rewards will be delivered to the participants in spring
2024.
Share-based long-term incentive plan 2022-2024
Caverion's Board of Directors decided on a commencement of new plan period 2022-2024 of the
company's performance share plan (PSP) structure in its December 2021 meeting. The Board
approved at the same time the commencement of a new plan period 2022−2024 in the Restricted
Share Plan (RSP) structure, a complementary share-based incentive structure for specific situations.
Both plans consist of annually commencing individual plans, each with a three-year period.
The Performance Share Plan 2022-2024 consists of a three-year operative financial performance
period (2022-2024). The potential reward is based on the targets set for Total Shareholder Return
and Earnings per share (EPS). Potential share rewards will be delivered to the participants in spring
2025.
Remuneration of the President and CEO
The Board of Directors decides on the remuneration, benefits and other terms of the Managing
Director agreement of the President and CEO. The remuneration paid to the President and CEO
consists of fixed base salary, fringe benefits, annual short-term incentive plan, long-term incentive
plan and other possible benefits such as defined contribution pension scheme. The President and
CEO’s annual short-term incentive can be up to 80% of the annual fixed base salary and the measures
are based in Caverion's strategic targets set by the Board.
Termination compensation, pensions and retirement age of the President and CEO
Jacob Götzsche joined Caverion Corporation's as the President and CEO on 9 August 2021. In case of
termination, his notice period is six months for both parties. Jacob Götzsche is entitled to a severance
pay amounting to 12 months’ base salary if the company terminates the agreement. The company
will not provide a pension coverage for Jacob Götzsche, but to compensate for this he is paid an
additional 20 percent cash allowance calculated from his fixed annual base salary to obtain a pension
coverage by himself. No specific retirement age has been agreed.
Ari Lehtoranta held the position of Caverion Corporation's President and CEO until 28 February
2021 when the Board of Directors of Caverion Corporation and Ari Lehtoranta mutually agreed that
he leaves his position as President and CEO. Mr Lehtoranta was entitled to a severance payment
amounting to 12 months' base salary as monthly payments after the termination date. The severance
paid in 2022 was 440,000 euros. The last monthly severance payment was paid in August 2022, total
severance payment being 660,000 euros.
Remuneration paid to the President and CEO in 2022
Jacob Götzsche's base salary and fringe benefits as the President and CEO in 2022 were in total EUR
649,976. Jacob Götzsche was not a participant in Caverion Corporation’s short-term incentive plan
2021 and thus no short-term incentive was paid for him in 2022 for financial year 2021. His short-
term incentive annual earning opportunity for 2022 was at the target level 40% and at the maximum
level 80% of the annual fixed base salary.
Jacob Götzsche’s strategic short-term incentive targets for the financial year 2022 were Caverion
Group’s Adjusted EBITA with 70% weight and Caverion Group’s Adjusted Cash flow with 30% weight.
The President and CEO’s short-term incentive related to 2022 amounted to 71% of the annual salary,
with a corresponding value of EUR 443,226, payable in April 2023. In addition, Jacob Götzsche is
eligible for a one-time cash bonus corresponding to four months of base salary, with a corresponding
value of EUR 206,667, as a reward for the extraordinary contribution in connection with the public
tender offer, payable in 2023. Mr. Götzsche did not receive any share-based payments during 2022
but he is a participant in the share-based incentive plan PSP 2022-2024.
EUR
Fixed
base salary
Fringe
benefits
Short-term
incentive
payment
Long-term
incentive
payment
Supplementary
pension
scheme
Total
2022
Jacob Götzsche*
620,000
29,976
124,000
773,976
President and CEO’s pension costs
Total 2022
Jacob Götzsche
Statutory pension scheme
305
Supplementary defined contribution pension scheme *
124,000
* Jacob Götzsche is paid a 20% cash allowance calculated of his fixed annual base salary to obtain a pension coverage.
A regularly updated table on the Group Management Board members' holdings of shares is available
in insider register.
Loans to associated parties
The President and CEO and the members of the Board of Directors did not have cash loans from the
company or its subsidiaries on December 31, 2022.
NOTES TO THE BALANCE SHEET
104
Caverion Annual Review 2022
Caverion announced on 7 February 2018 in a stock exchange release the establishment of a new
share-based incentive plan directed for the key employees of the Group (“Matching Share Plan 2018-
2022”). The company provided the participants a possibility to finance the acquisition of the
company’s shares through an interest-bearing loan from the company, which some of the
participants utilised. By the end of December 2022 the total outstanding amount of these loans
amounted approximately to EUR 3.7 million. The loans will be repaid in full on 31 December 2023, at
the latest. Company shares have been pledged as a security for the loans.
SIGNATURES AND AUDITOR’S NOTE
105
Caverion Annual Review 2022
Signatures to the Board of Directors’ report and
Financial statements and Auditor’s note
Board of Directors’ proposal for the distribution of distributable
equity
The distributable equity of the parent company Caverion Corporation on December 31, 2022 is
(EUR):
Retained earnings
40,263,587.05
Result for the period
13,441,665.77
Retained earnings, total
53,705,252.82
Unrestricted equity reserve
66,676,176.49
Distributable equity, total
120,381,429.31
The Board of Directors proposes to the Annual General Meeting to be held on 27 March 2023 that a
dividend of EUR 0.20 per share will be paid for the year 2022.
Signature of the report of the Board of Directors and Financial
statements
Helsinki, 8 February 2023
Caverion Corporation
Board of Directors
Mats Paulsson Markus Ehrnrooth*
Chairman Vice Chairman
Jussi Aho Joachim Hallengren Thomas Hinnerskov
Kristina Jahn Jasmin Soravia
Jacob Götzsche
President and CEO
*The Vice Chairman of the Board, Markus Ehrnrooth has not participated in and has refrained from all the work of the Board of
Directors and its committees for part of 2022 as described in the Board of Directors’ Report January 1 – December 31, 2022 and
has also refrained from signing the Board of Directors’ Report January 1 – December 31, 2022 and the Annual Accounts January 1
– December 31, 2022 of the Company.
The Auditor’s note
Our auditor’s report has been issued today
Helsinki, 8 February 2023
Ernst & Young Oy
Authorized Public Accountant Firm
Antti Suominen
Authorized Public Accountant
106
Caverion Annual Review 2022
Auditor’s report (Translation of the Finnish original)
To the Annual General Meeting of Caverion Oyj
REPORT ON THE AUDIT OF
FINANCIAL STATEMENTS
Opinion
We have audited the financial statements of Caverion Oyj
(business identity code 2534127-4) for the year ended 31
December 2022. The financial statements comprise the
consolidated balance sheet, income statement, statement of
comprehensive income, statement of changes in equity,
statement of cash flows and notes, including a summary of
significant accounting policies, as well as the parent company’s
balance sheet, income statement, statement of cash flows and
notes.
In our opinion
>
the consolidated financial statements give a true and fair
view of the group’s financial position as well as its
financial performance and its cash flows in accordance
with International Financial Reporting Standards (IFRS)
as adopted by the EU.
>
the financial statements give a true and fair view of the
parent company’s financial performance and financial
position in accordance with the laws and regulations
governing the preparation of financial statements in
Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to
the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice
in Finland. Our responsibilities under good auditing practice are
further described in the
Auditor’s Responsibilities for the Audit of
Financial Statements
We are independent of the parent company and of the group
companies in accordance with the ethical requirements that are
applicable in Finland and are relevant to our audit, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements.
In our best knowledge and understanding, the non-audit
services that we have provided to the parent company and group
companies are in compliance with laws and regulations applicable
in Finland regarding these services, and we have not provided any
prohibited non-audit services referred to in Article 5 (1) of
regulation (EU) 537/2014. The non-audit services that we have
provided have been disclosed in note 2.2 to the consolidated
financial statements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
We have fulfilled the responsibilities described in the
Auditor’s
responsibilities for the audit of the financial statements
our report, including in relation to these matters. Accordingly, our
audit included the performance of procedures designed to respond
to our assessment of the risks of material misstatement of the
financial statements. The results of our audit procedures, including
the procedures performed to address the matters below, provide
the basis for our audit opinion on the accompanying financial
statements.
We have also addressed the risk of management override of
internal controls. This includes consideration of whether there was
evidence of management bias that represented a risk of material
misstatement due to fraud.
107
Caverion Annual Review 2022
Key audit matter
How our audit addressed the Key Audit Matter
Revenue recognition
The accounting principles and disclosures concerning revenue recognition are disclosed in Note 2.1.
In accordance with its accounting principles Caverion applies the percentage-of-completion
method for recognizing significant portion of its revenues.
The recognition of revenue by applying percentage-of-completion method and the estimation of
the outcome of projects require significant management judgment in estimating the cost-to-
complete as well as total revenues. From the financial statement perspective, significant judgment
is required especially when the project execution and the associated revenues extend over two or
more financials years.
The areas where significant judgment is required are more prone to the risk that the assumptions
may be deliberately misappropriated. Based on above, revenue recognition was a key audit matter.
This matter was also a significant risk of material misstatement referred to in EU Regulation No
537/2014, point (c) of Article 10(2).
Our audit procedures to address the risk of material misstatement included:
>
Assessing of the Group’s accounting policies over revenue recognition of projects.
>
Examination of the project documentation such as contracts, legal opinions and other
written communication.
>
Analytical procedures and review of financial KPI’s as well as development of projects by
>
reviewing the changes in estimated total revenues, cost-to-complete and
changes in reserves, and
>
discussing with the different levels of the organization including project, division
and group management.
>
Analyzing key elements in management’s estimates such as the estimated future costs-
to-complete and the estimated time necessary to complete the project.
>
Evaluating the appropriateness of the Group’s disclosures in respect of revenue
recognition.
Key audit matter
How our audit addressed the Key Audit Matter
Valuation of goodwill associated with German business operations
The accounting principles and disclosures concerning goodwill are disclosed in Note 4.2.
The valuation of goodwill associated with German business operations was a key audit matter
>
because the assessment process is judgmental, it is based on assumptions relating to
market or economic conditions extending to the future,
>
because of the significance of the goodwill 77,7 million euro to the financial
statements, and
>
as the management views that a reasonably possible change in key assumption may
result in an impairment.
German business operations form a one cash generating unit. The valuation of goodwill is based
on the management’s estimate about the value-in-use calculations of the cash generating unit.
There are number of underlying assumptions used to determine the value-in-use, including the
revenue growth, EBITDA and discount rate applied on net cash-flows.
Estimated value-in-use may vary significantly when the underlying assumptions are changed
and the changes in above-mentioned individual assumptions may result in an impairment of
goodwill.
Our audit procedures regarding the valuation of goodwill in German business operation included
involving EY valuation specialists to assist us in evaluating testing methodologies, impairment
calculations and underlying assumptions applied by the management in the impairment testing.
In evaluation of methodologies, we compared the principles applied by the management in the
impairment tests to the requirements set in IAS 36 Impairment of assets standard and ensured the
mathematical accuracy of the impairment calculations associated with German business operations.
The key assumptions applied by the management were compared to
>
approved budgets and forecasts,
>
information available in external sources, as well as
>
our independently calculated industry averages such as weighted average cost of
capital used in discounting the cashflows.
We also assessed the sufficiency of the disclosures associated with the German business
operations.
108
Caverion Annual Review 2022
Responsibilities of the Board of
Directors and the Managing Director
for the Financial Statements
The Board of Directors and the Managing Director are responsible
for the preparation of consolidated financial statements that give
a true and fair view in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU, and of financial
statements that give a true and fair view in accordance with the
laws and regulations governing the preparation of financial
statements in Finland and comply with statutory requirements.
The Board of Directors and the Managing Director are also
responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Board of Directors
and the Managing Director are responsible for assessing the
parent company’s and the group’s ability to continue as going
concern, disclosing, as applicable, matters relating to going
concern and using the going concern basis of accounting. The
financial statements are prepared using the going concern basis of
accounting unless there is an intention to liquidate the parent
company or the group or cease operations, or there is no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of
Financial Statements
Our objectives are to obtain reasonable assurance on whether the
financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with good auditing practice will always
detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial
statements.
As part of an audit in accordance with good auditing practice,
we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
>
Identify and assess the risks of material misstatement
of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of
internal control.
>
Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of
the parent company’s or the group’s internal control.
>
Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
>
Conclude on the appropriateness of the Board of
Directors’ and the Managing Director’s use of the going
concern basis of accounting and based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant
doubt on the parent company’s or the group’s ability to
continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in our auditor’s report to the related
disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future
events or conditions may cause the parent company or
the group to cease to continue as a going concern.
>
Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures,
and whether the financial statements represent the
underlying transactions and events so that the financial
statements give a true and fair view.
>
Obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business
activities within the group to express an opinion on the
consolidated financial statements. We are responsible
for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and communicate with
them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General
Meeting on 26 March 2018, and our appointment represents a
total period of uninterrupted engagement of 3 years.
Other information
The Board of Directors and the Managing Director are responsible
for the other information. The other information comprises the
report of the Board of Directors and the information included in
the Annual Report, but does not include the financial statements
and our auditor’s report thereon. We have obtained the report of
the Board of Directors prior to the date of this auditor’s report, and
the Annual Report is expected to be made available to us after that
date.
109
Caverion Annual Review 2022
Our opinion on the financial statements does not cover the
other information.
In connection with our audit of the financial statements, our
responsibility is to read the other information identified above and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated. With respect to report of the Board of Directors, our
responsibility also includes considering whether the report of the
Board of Directors has been prepared in accordance with the
applicable laws and regulations.
In our opinion, the information in the report of the Board of
Directors is consistent with the information in the financial
statements and the report of the Board of Directors has been
prepared in accordance with the applicable laws and regulations.
If, based on the work we have performed on the other
information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have
nothing to report in this regard.
Helsinki, 8 February 2023
Ernst & Young Oy
Authorized Public Accountant Firm
Antti Suominen
Authorized Public Accountant
110
Caverion Annual Review 2022
Independent Auditor’s report on Caverion Oyj’s ESEF Consolidated
Financial Statements (Translation of the Finnish original)
To the Board of Directors of Caverion Oyj
We have performed a reasonable assurance engagement on the
iXBRL tagging of the consolidated financial statements included in
the digital files 7437007ECQWVPCJIS695-2022-12-31-fi.zip of
Caverion Oyj for the financial year 1.1.-31.12.2022 to ensure that
the financial statements are marked/tagged with iXBRL in
accordance with the requirements of Article 4 of EU Commission
Delegated Regulation (EU) 2018/815 (ESEF RTS).
Responsibilities of the Board of Directors and Managing Director
The Board of Directors and Managing Director are responsible for
the preparation of the Report of Board of Directors and financial
statements (ESEF financial statements) that comply with the
ESESF RTS. This responsibility includes:
>
preparation of ESEF financial statements in accordance
with Article 3 of ESEF RTS
>
tagging the consolidated financial statements included
within the ESEF financial statements by using the iXBRL
mark ups in accordance with Article 4 of ESEF RTS
>
ensuring consistency between ESEF financial
statements and audited financial statements
The Board of Directors and Managing Director are also
responsible for such internal control as they determine is
necessary to enable the preparation of ESEF financial statements
in accordance with the requirements of ESEF RTS.
Auditor’s Independence and Quality Control
We are independent of the company in accordance with the ethical
requirements that are applicable in Finland and are relevant to the
engagement we have performed, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
The auditor applies International Standard on Quality Control
(ISQC) 1 and therefore maintains a comprehensive quality control
system including documented policies and procedures regarding
compliance with ethical requirements, professional standards and
applicable legal and regulatory requirements.
Auditor’s Responsibilities
In accordance with the Engagement Letter we will express an
opinion on whether the electronic tagging of the consolidated
financial statements complies in all material respects with the
Article 4 of ESEF RTS. We have conducted a reasonable assurance
engagement in accordance with International Standard on
Assurance Engagements ISAE 3000.
The engagement includes procedures to obtain evidence on:
>
whether the tagging of the primary financial statements
in the consolidated financial statements complies in all
material respects with Article 4 of the ESEF RTS
>
whether the tagging of the notes to the financial
statements and the entity identifier information in the
consolidated financial statements complies in all
material respects with Article 4 of the ESEF RTS
>
whether the ESEF financial statements are consistent
with the audited financial statements
The nature, timing and extent of the procedures selected
depend on the auditor’s judgement including the assessment of
risk of material departures from requirements sets out in the ESEF
RTS, whether due to fraud or error.
We believe that the evidence we have obtained is sufficient
and appropriate to provide a basis for our statement.
Opinion
In our opinion the tagging of the consolidated financial statement
included in the ESEF financial statement of Caverion Oyj for the
year ended 31.12.2022 complies in all material respects with the
requirements of ESEF RTS.
Our audit opinion on the consolidated financial statements of
Caverion Oyj for the year ended 31.12.2022 is included in our
Independent Auditor’s Report dated 8.2.2023. In this report, we do
not express an audit opinion or any other assurance on the
consolidated financial statements.
Helsinki, 28 February 2023
Ernst & Young Oy
Authorized Public Accountant Firm
Antti Suominen
Authorized Public Accountant
111
Caverion Annual Review 2022