Financial position at the end of March 2020

Caverion’s liquidity position was strong and Caverion had a high amount of undrawn credit facilities on 31 March 2020. Caverion’s cash and cash equivalents amounted to EUR 113.2 (101.3) 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 19.0 million.

The Group’s gross interest-bearing loans and borrowings excluding lease liabilities amounted to EUR 125.1 (128.4) million at the end of March, and the average interest rate was 2.8 percent. Approximately 40 percent of the loans have been raised from banks and other financial institutions and approximately 60 percent from capital markets. Lease liabilities amounted to EUR 131.0 (135.6) million at the end of March 2020, resulting to total gross interest-bearing liabilities of EUR 256.0 (263.9) million.

The Group’s net debt excluding lease liabilities amounted to EUR 11.8 (27.1) million at the end of March and including lease liabilities to EUR 142.8 (162.7) million. At the end of March, the Group’s gearing was 62.3 (75.1) percent and the equity ratio 22.0 (21.3) percent. Excluding the effect of IFRS 16, the gearing would have amounted to 5.2 (12.5) percent and the equity ratio to 25.1 (24.6) percent.

In the beginning of March Caverion considered issuance of new capital securities and announced a voluntary tender offer for its outstanding hybrid notes. Due to the extremely high market volatility driven by the deepening of the coronavirus crisis after the announcement, Caverion concluded that the terms for such a new issue would not be economically attractive at that time. Accordingly, Caverion decided not to proceed with the tender offer nor the issue of new capital securities.

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 March, the Group’s Net debt to EBITDA was 1.1x according to the confirmed calculation principles. The confirmed calculation principles exclude the effects of the IFRS 16 standard and contain certain other adjustments such as treating the hybrid notes as debt as of December 2019 and excluding the German anti-trust fine and related legal and advisory fees.

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Cash flow and working capital

The Group’s operating cash flow before financial and tax items improved to EUR 56.1 (30.1) million in January-March and cash conversion (LTM) was 162.4 percent. The Group’s free cash flow improved to EUR 46.0 (27.0) million. Cash flow after investments was EUR 42.7 (23.5) million.

The Group’s working capital improved to EUR -127.3 (-60.4) million at the end of March. There were improvements in divisions Finland, Sweden, Industrial Solutions and particularly in Germany compared to the previous year. The amount of trade and POC receivables decreased to EUR 492.8 (519.7) million and other current receivables to EUR 29.6 (30.0) million. On the liabilities side, advances received increased to EUR 219.4 (188.1) million and other current liabilities to EUR 269.2 (251.4) million, while trade and POC payables decreased to EUR 179.5 (187.4) million.