Financial position at the end of June 2018

Caverion’s cash and cash equivalents amounted to EUR 62.2 (19.8) million at the end of June. In addition, Caverion has undrawn revolving credit facilities amounting to EUR 100.0 million and undrawn overdraft facilities amounting to EUR 19.0 million.

On 14 June 2018 Caverion announced the launch of a directed share issue of new shares in order to maintain a strong balance sheet and to retain strategic flexibility after the payment of the anti-trust fine. Strategic flexibility for Caverion means, inter alia: continuation of the shift towards the Services business, support for strategic projects and operational development, investments in digitalisation and a solid cash position to finance bolt-on acquisitions in selected areas in services especially in well-performing divisions. On 15 June 2018 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. Approximately 17 percent of the shares were allocated to international investors. The share issue was priced at EUR 6.30 per share raising gross proceeds of EUR 60 million. The subscription price represented a discount of 6.5 percent to the closing price on 14 June 2018. The total number of issued shares in the Company following the share issue is 138,920,092 and the number of shares outstanding is 135,655,641.

The Group’s interest-bearing loans and borrowings amounted to EUR 72.4 (118.4) million at the end of June and the average interest rate after hedges was 2.65 percent. Approximately 83 percent of the loans have been raised from banks and other financial institutions and approximately 15 percent from insurance companies. A total of EUR 28.3 million of the interest-bearing loans and borrowings will fall due during the next 12 months. The Group’s net debt amounted to EUR 10.2 (98.6) million at the end of June. At the end of June, the Group’s gearing was 3.9 (41.7) percent and equity ratio 28.2 (25.8) percent. On June 9, 2017 Caverion Corporation issued a EUR 100 million hybrid bond, an instrument subordinated to the company's other debt obligations and treated as equity in the IFRS financial statements. In June 2018, Caverion paid EUR 4.6 million (no interests paid in 2017) in hybrid bond annual interest.

Caverion’s external loans are subject to a financial covenant based on the ratio of the Group’s net debt to EBITDA. Financial covenant shall not exceed 3.5:1. At the end of June, the Group’s Net debt to EBITDA was 0.2x according to the confirmed calculation principles. Caverion agreed with its lending parties in June that the German anti-trust fine and there-related legal and advisory fees are excluded from the calculation of EBITDA related to Group’s financial covenant Net Debt to EBITDA.

Debt maturity

Sources of funds in the loan portfolio
Interest rate type (after hedges)

Net debt (EURm)

Gross debt to net debt

Liquidity reserve

Cash flow and working capital

The Group’s operating cash flow before financial and tax items amounted to EUR 4.9 (-38.1) million in the first half of the year. Operating cash flow improved in all divisions except Denmark due to better profitability and improved working capital management. The Group’s free cash flow improved to EUR -5.1 (-46.7) million.

The Group’s working capital improved to EUR -57.2 (-8.6) million at the end of June. Working capital also improved from the level of EUR -41.4 million at the end of March 2018. The amount of POC receivables decreased to EUR 249.4 (273.1) million and trade receivables to EUR 280.1 (300.6) million at the end of June. There was good development also in old overdue trade receivables. By the end of the period, working capital tied to risk projects in Industrial Solutions started to decline, while working capital in Germany was impacted by an anti-trust fine related current liability of EUR 40.8 million. The anti-trust fine will be paid in the third quarter.