Financial position at the end of September 2017

Caverion’s cash and cash equivalents amounted to EUR 18.4 (37.0) million at the end of September. In addition, Caverion has undrawn revolving credit facilities amounting to EUR 100.0 million and undrawn overdraft facilities amounting to EUR 19.0 million.

The Group’s interest-bearing loans and borrowings amounted to EUR 159.6 (206.8) million at the end of September and the average interest rate after hedges was 1.76 percent. Approximately 50 percent of the loans have been raised from banks and other financial institutions, approximately 38 percent directly from the money markets and approximately 10 percent from insurance companies. A total of EUR 89.7 million of the interest-bearing loans and borrowings will fall due during the next 12 months. The Group’s net debt amounted to EUR 141.3 (169.7) million at the end of September.

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. The hybrid bond does not confer to its holders the rights of a shareholder and does not dilute the holdings of current shareholders. The coupon of the hybrid bond is 4.625 per cent per annum until June 16, 2020. The hybrid bond does not have a maturity date but the issuer is entitled to redeem the hybrid for the first time on June 16, 2020, and subsequently, on each coupon interest payment date. If the hybrid bond is not redeemed on June 16, 2020, there will be a step-up of 500 basis points in the coupon. The hybrid bond strengthened Caverion Group’s capital structure and financial position. At the end of September, the Group’s gearing was 53.2 (81.5) percent and equity ratio 27.0 (20.5) percent.

Caverion’s external loans are subject to a financial covenant based on the ratio of the Group’s net debt to EBITDA. Caverion and its core banks agreed on changes in the loan documentation in connection with the hybrid transaction in June. Financial covenant shall not exceed 5.0:1 by the end of September 2017 and thereafter the ratio shall not exceed 3.5:1. EBITDA calculation principles related to the Group’s financial covenant were amended in September related to the third quarter of 2017. At the end of September, the Group’s Net debt to EBITDA was 4.1x according to the confirmed calculation principles. 

Debt maturity Q3 2017

Sources of funds
Interest rate type

Net debt development Q3 2017

Gross debt to net debt

Liquidity reserve Q3 2017

Cash flow and working capital

In January-September, the Group's free cash flow was negative although improving from the corresponding period last year. Free cash flow amounted to EUR -90.5 (-100.1) million. Free cash flow was impacted by the increase in working capital in the risk projects. Free cash flow was improved by the lower level of investments compared to last year. 

The Group's operating cash flow before financial and tax items amounted to EUR -75.6 (-57.6) million in January–September. 

The Group’s working capital was 75.7 (56.1) million at the end of September. There was a positive development in working capital in divisions Finland, Sweden and Denmark-Norway. Working capital was tied by risk projects mainly in divisions Industrial Solutions and Germany. 

The amount of POC receivables amounted to EUR 321.1 (331.0) million at the end of September. Trade receivables amounted to EUR 331.3 (323.6) million at the end of September.