Result center

Strong organic growth and performance improvement continued

1 January – 31 March 2023

  • Order backlog: EUR 2,034.3 (1,951.6) million, up by 4.2 (20.0) percent. Services backlog increased by 2.2 (20.5) percent. Projects backlog increased by 6.9 (19.2) percent.
  • Revenue: EUR 614.8 (528.1) million, up by 16.4 (2.5) percent. Organic growth was 13.5 (2.4) percent. Services business revenue increased by 15.3 (4.3) percent. Projects business revenue increased by 18.5 (-1.0) percent.
  • Adjusted EBITA: EUR 24.5 (17.4) million, or 4.0 (3.3) percent of revenue, up by 40.5 percent.
  • EBITA: EUR 22.4 (15.0) million, or 3.6 (2.8) percent of revenue, up by 49.5 percent.
  • Operating profit: EUR 18.3 (11.4) million, or 3.0 (2.2) percent of revenue, up by 60.8 percent.
  • Operating cash flow before financial and tax items: EUR 52.1 (39.1) million, up by 33.5 percent.
  • Cash conversion (LTM): 103.6 (89.6) percent.
  • Earnings per share, undiluted: EUR 0.09 (0.04) per share.
  • Net debt/Adjusted EBITDA: 1.2x (0.9x).
  • Acquisitions: Caverion closed the acquisition of TM Voima group's substation and power transmission line business in Finland and in Estonia in February 2023, with a total revenue of EUR 47.7 million in 2022.
    Unless otherwise noted, the figures in brackets refer to the corresponding period in the previous year..

“I am pleased that we continued improving our underlying business and increased our revenue and earnings during the first quarter of 2023. I am satisfied that we had a strong order intake and organic growth. Recent acquisitions and business mix development supported our revenue growth and earnings levels for the quarter. In addition, our consistent efforts in improving project risk management have gradually resulted in a healthier and more profitable project portfolio. This demonstrates our capability to deliver sustainable, profitable growth in line with our strategy.

The positive momentum of the previous year continued also in the first quarter of 2023. Our first quarter revenue increased by 16.4 percent to EUR 614.8 (528.1) million and organic growth was 13.5 percent. The organic growth was partially driven by the increased costs of materials and external services, that we were able to successfully factor in our sales prices. In the previous year, our first quarter performance was still modest compared to the rest of the year 2022 due to high sickness levels and the corona pandemic. Acquisitions and divestments increased the first quarter revenue by 6.5 percent compared to the previous year.

Our adjusted EBITA improved by 40.5 percent to EUR 24.5 (17.4) million, or 4.0 (3.3) percent of revenue during the first quarter of 2023. Even if the corona pandemic in large scale seems to be behind us, we are still experiencing a much higher sickness rate than before the pandemic, which continues to have a negative impact on our activity level and thereby our profitability. Overall, our business has however proved to be relatively resilient to the high inflation. I am also pleased that our continuous focus on cash flow improved our operating cash flow before financial and tax items to EUR 52.1 (39.1) million in the first quarter.

Our order backlog amounted to EUR 2,034.3 (1,951.6) million at the end of March, 4.2 percent higher compared to the previous year. We expect our solid order backlog to support revenue growth also going forward. The high inflation still continues to have some impact on the building technology market, although we have already seen the material price inflation slowing down. On the other hand, we expect wage inflation to gradually increase during the year. In 2023, we expect the underlying demand to be overall positive in Services. In Projects, we expect the underlying business activity to remain stable in 2023, however, the economic uncertainty driven by the increasing inflation and interest rates as well as the war in Ukraine is impacting the demand environment for new construction negatively.

As part of the implementation of our Sustainable Growth strategy, we closed one acquisition in the first quarter of 2023 with a total revenue of EUR 47.7 million in 2022 and whereby we welcomed about 70 new colleagues from TM Voima group's substation and power transmission line business in Finland and in Estonia. We continue to screen high quality companies that complement our existing capabilities or geographical footprint.

Once again I would like to thank our customers, partners, shareholders and our 14,600 employees for their great contribution and cooperation. Despite the continuing volatility and uncertainty, I am proud that we together delivered great achievements and financial results for the first quarter 2023. Updated status on the recent tender offers has been presented under “Events after the reporting period” in this report. The announced tender offers provide clear evidence that our goal to achieve Sustainable Growth by serving our customers along the entire lifecycle of the built environment and assisting in green transition to smart buildings is an attractive strategy.”

The economic uncertainty increased since February 2022 due to the Ukraine conflict, resulting in
subsequent energy crisis, mounting inflation, rising interest rates and lowered economic growth
prospects. Caverion has no operations in Russia, Ukraine or Belarus. Therefore, the impact of the
Ukraine war on Caverion is currently indirect.

Inflation has remained on an elevated level even during the first quarter of 2023. This can still be seen
in the cost inflation related to material prices, which continued to impact also the building technology
market. There are already some signs of easing supply constraints contributing to less price
pressures ahead, especially in the industrial sector. Caverion has continued to manage any increases in
material prices and delays in the supply chain on a daily basis without having a significant impact on
performance during the first quarter of 2023.

The recent drop in sentiment indicators has stabilised in the EU during the first quarter of 2023, but the
operating environment is still impacted by lower economic growth prospects and the recent interest
rate hikes. Also the corona pandemic still continued to have some impact on the operating environment
through sick leaves.


In Services, the market demand and general investment activity remained positive. Caverion has
continued to see a general increasing interest for services supporting sustainability, such as energy
management and advisory services, driven by regulation and by the expected governmental and EU
stimulus packages supporting investments in green growth. There has also been increasing interest
towards long-term and large-scale service agreements. Growth has been limited by the availability of competent workforce and delays in the supply chain.


In Projects, the market demand remained mostly stable. The interest for energy improvement projects
has picked up, driven by the focus on energy consumption. The market was impacted by increases in material
prices, delays in decision-making and supply chain as well as uncertainty in the business environment,
especially related to new construction.

Market outlook for 2023

Caverion expects the underlying demand to be overall positive in Services during 2023.

In Projects, the economic uncertainty driven by the increasing inflation and interest rates as well as the war in
Ukraine is impacting the demand environment for new construction negatively. With its balanced Projects business portfolio, Caverion still expects the underlying business activity to remain stable in 2023.

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.

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.

  • Order backlog at the end of March increased by 4.2 percent to EUR 2,034.3 million from the end
    of March in the previous year (EUR 1,951.6 million).
  • At comparable exchange rates the order backlog increased by 7.3 percent from the end of March
    in the previous year
  • Order backlog increased by 2.2 (20.5) percent in Services and increased by 6.9 (19.2) percent in
    Projects from the end of March in the previous year.
  • The Group’s operating cash flow before financial and tax items improved to EUR 52.1 (39.1) million
    in January–March and cash conversion (LTM) was 103.6 (89.6) percent. The period’s cash flow was
    negatively impacted by a payment of EUR 5.5 million for civil claims relating to the German anti-trust matter. The respective cost was recognised in 2022 and reported in items affecting comparability in the same year. A similar payment of EUR 8.8 million negatively affected the cash flow in January-March 2022.
  • The Group’s free cash flow amounted to EUR 17.8 (29.1) million. Cash flow after investments
    was EUR 14.8 (23.8) million.
  • The Group’s working capital was EUR -151.5 (-158.2) million at the end of March.

In January–March, the Group’s working capital was affected by the following items: The amount of trade
and POC receivables increased to EUR 596.3 (516.8) million, other current receivables decreased to EUR
29.2 (31.2) million and inventories increased to EUR 29.5 (18.3) million. On the liabilities side, advances
received increased to EUR 286.0 (241.3) million, other current liabilities increased to EUR 300.3 (282.4)
million and trade and POC payables increased to EUR 220.2 (200.9) million.

Caverion’s cash and cash equivalents amounted to EUR 62.5 (149.2) million at the end of March. In addition, Caverion had undrawn revolving credit facilities amounting to EUR 100.0 million and undrawn overdraft facilities amounting to EUR 19.8 million.

The Group’s gross interest-bearing loans and borrowings excluding lease liabilities amounted to EUR 131.0 (137.6) million at the end of March, and the average effective interest rate was 3.6 (2.5) percent. Approximately 38 percent of the loans have been raised from banks and other financial institutions and approximately 62 percent from capital markets. Lease liabilities amounted to EUR 136.1 (137.2) million at the end of March 2023, resulting to total gross interest-bearing liabilities of EUR 267.1 (274.8) million.

  • The Group’s interest-bearing net debt excluding lease liabilities amounted to EUR 68.5 (-11.6) million at the end of March and including lease liabilities to EUR 204.6 (125.6) million. Net debt was especially impacted by investments in acquisitions with a negative cash flow effect of EUR 26.6 million in January-March 2023 and EUR 84.1 million in April-December 2022.
  • At the end of March, the Group’s gearing was 100.2 (67.7) percent and the equity ratio 18.1 (17.3) percent.

Caverion has a balanced debt maturity profile, where most of the long-term debt matures in 2025 and in 2027.

In March, Caverion repaid the remaining part of the EUR 75 million senior unsecured bond according to its
terms and conditions which totalled EUR 3.5 million following the tender offer in February 2022. 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.

There have been no material changes in Caverion’s significant short-term risks and uncertainties reported in the Board of Director’s Report presented in the Annual Review of 2022. Those risks and uncertainties are still valid. The most significant factor creating uncertainty is the war in Ukraine and its potential implications on the operating environment of Caverion. Further escalation or prolongation of the conflict or regional unrest in neighbouring areas could negatively affect Caverion's operating environment.

The prolonged public tender offer processes may also have certain adverse impacts for Caverion’s operations.

The short-term risks related to the lack of availability of materials and supply as well as the increase in material prices are still valid. The same applies to the risk of rising energy and fuel prices. Possible problems with the availability and cost of materials, labour, energy and fuel may impact the operating environment in the near future. These risks have already partly materialised. The key measures how Caverion is managing the situation include price increase clauses in tenders and agreements covering these costs.

The elevated inflation in the EU countries poses several risks and may lead to a recession within the EU and also wider. The situation may have an impact on the market demand going forward due to a weakening economic sentiment. The potential risk is balanced by the growing need for energy efficiency in
the built environment where Caverion is able to support its customers.

Cyber risks have increased due to the Ukraine crisis. There have been concrete cases of cyber-attacks on business enterprises and government authorities. Government authorities have warned of an increasing number of cyber-attacks. Caverion has improved the company’s cyber security operations and technologies continuously and is well prepared against cyber security threats. However, it cannot be excluded that also Caverion could face cyber-attacks with potential impact on operations. 

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