Caverion’s liquidity position was strong and Caverion had a high amount of undrawn credit facilities on 30 September 2020. Caverion’s cash and cash equivalents amounted to EUR 84.8 (83.4) million at the end of September. In addition, Caverion had undrawn revolving credit facilities amounting to EUR 100.0 million and undrawn overdraft facilities amounting to EUR 19.0 million.
The Group’s gross interest-bearing loans and borrowings excluding lease liabilities amounted to EUR 140.2 (125.0) million at the end of September, and the average interest rate was 2.6 (3.0) percent. Approximately 36 percent of the loans have been raised from banks and other financial institutions and approximately 64 percent from capital markets. Lease liabilities amounted to EUR 132.1 (131.3) million at the end of September 2020, resulting to total gross interest-bearing liabilities of EUR 272.3 (256.3) million.
The Group’s interest-bearing net debt excluding lease liabilities amounted to EUR 55.3 (41.7) million at the end of September and including lease liabilities to EUR 187.5 (172.9) million. At the end of September, the Group’s gearing was 93.8 (79.5) percent and the equity ratio 19.8 (22.6) percent. Excluding the effect of IFRS 16, the gearing would have amounted to 27.7 (19.1) percent and the equity ratio to 22.7 (26.2) percent.
Caverion raised a 5-year TyEL pension loan of EUR 15 million on 29 April 2020.
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 previously outstanding EUR 66.06 million 2017 Hybrid Capital Securities were redeemed in full on 16 June 2020 in accordance with their terms and conditions.
In June a one-year extension option to move the maturity of RCF (100M€) and term loan (50M€) from 2022 to February 2023 was utilised.
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 September, the Group’s Net debt to EBITDA was 0.8x according to the confirmed calculation principles. The confirmed calculation principles exclude the effects of the IFRS 16 standard and contain certain other adjustments.
Cash flow and working capital
The Group’s operating cash flow before financial and tax items improved to EUR 76.3 (63.0) million in January-September and cash conversion (LTM) was 138.2 (177.5) percent. The Group’s free cash flow improved to EUR 60.5 (49.6) million. Cash flow after investments was EUR 53.6 (43.0) million.
In July-September, the Group’s operating cash flow before financial and tax items was EUR -28.0 (3.8) million. Cash flow was impacted by postponed authority payments due to corona totalling EUR 22.4 million paid in the third quarter. The final postponed authority payments totalling EUR 10.2 million will be paid in the fourth quarter of 2020 and in the first quarter of 2021. The Group’s free cash flow was EUR -30.5 (-2.5) million. Cash flow after investments was EUR -32.1 (-4.3) million.
The Group’s working capital improved to EUR -94.5 (-46.8) million at the end of September. There were improvements in divisions Finland, Sweden, Industry, Germany and Austria compared to the previous year. The amount of trade and POC receivables increased to EUR 517.1 (513.4) million and other current receivables to EUR 25.1 (24.0) million. On the liabilities side, advances received increased to EUR 236.9 (207.9) million and other current liabilities to EUR 238.2 (209.1) million, while trade and POC payables decreased to EUR 182.9 (184.0) million.