07.02.2018 Stock exchange release

Caverion Corporation’s Financial Statement Release for January 1 – December 31, 2017

Turnaround and new strategy paving the way for the future

October 1 – December 31, 2017

  • Revenue: EUR 590.3 (606.0) million
  • EBITDA excluding restructuring costs: EUR 3.7 (-10.5) million, or 0.6 (-1.7) percent of revenue
  • EBITDA: EUR 8.6 (-22.2) million, or 1.5 (-3.7) percent of revenue
  • Free cash flow: EUR 82.0 (28.0) million
  • Earnings per share, undiluted: EUR -0.03 (-0.17) per share

January 1 – December 31, 2017

  • Order backlog: EUR 1,491.0 (1,408.1) million
  • Revenue: EUR 2,282.8 (2,364.1) million
  • EBITDA excluding restructuring costs: EUR 18.3 (15.6) million, or 0.8 (0.7) percent of revenue
  • EBITDA: EUR 11.0 (-11.4) million, or 0.5 (-0.5) percent of revenue
  • Working capital: EUR 6.1 (-2.6) million
  • Free cash flow: EUR -8.5 (-72.1) million
  • Earnings per share, undiluted: EUR -0.19 (-0.25) per share

Unless otherwise noted, the figures in brackets refer to the corresponding period in the previous year.


EUR million  10–12/17 10–12/16 Change 1–12/17 1–12/16 Change
Order backlog 1,491.0 1,408.1 5.9%
Revenue  590.3 606.0 -2.6% 2,282.8 2,364.1 -3.4%
EBITDA excluding restructuring costs 3.7 -10.5 18.3 15.6 17.5%
EBITDA margin excluding restructuring costs, % 0.6 -1.7 0.8 0.7
EBITDA  8.6 -22.2 11.0 -11.4
EBITDA margin, %  1.5 -3.7 0.5 -0.5
Operating profit  0.8 -29.2 -19.3 -40.8 52.7%
Operating profit margin, %  0.1 -4.8 -0.8 -1.7
Result for the period -2.6 -21.7 88.2% -20.9 -31.7 34.2%
Earnings per share, undiluted, EUR -0.03 -0.17 83.9% -0.19 -0.25 25.3%
Free cash flow 82.0 28.0 192.9% -8.5 -72.1 88.2%
Working capital  6.1 -2.6
Interest-bearing net debt  64.0 145.5 -56.0%
Gearing, %  24.4 78.7
Personnel, end of period  16,216 16,913 -4.1%


The Board of Directors proposes to the Annual General Meeting that no dividend will be paid for 2017. 

Word from the President and CEO Ari Lehtoranta

“Caverion’s turnaround programme continued in 2017. For the full year of 2017, our EBITDA excluding restructuring costs improved to EUR 18.3 (15.6) million. Our result for the year was far from satisfactory. Even though we continued implementing numerous corrective actions to improve our project business performance, we were forced to book write-downs and negative forecast changes in a number of older projects. During the year it became evident that while our newer projects are already showing better performance, it takes some time before the impacts of our corrective actions are more visible in our results. At the same time we started to build a new stronger Caverion and implement our “Fit for Growth” strategy, which is paving our way for the future.

In the fourth quarter of 2017, we continued our selective approach towards the Projects business and the further strengthening of our Services business. Our EBITDA excluding restructuring costs was EUR 3.7 (-10.5) million. The result was still impacted by project write-downs of EUR 5.7 (39.9) million and other one-off costs, as an example, legal costs for settling risk projects, as well as a capital gain from the sale of the non-core product business under the Krantz brand in Germany. The result was also impacted by negative forecast changes in other older projects and our more prudent revenue recognition related to change orders in projects. Performance in the Projects business unit was poor. On the other hand, the Services business unit continued to improve its performance.

Caverion’s revenue for the fourth quarter of 2017 was EUR 590.3 (606.0) million. In accordance with our target, the Services business grew by 4.1 percent. The revenue of the Projects business decreased by 10.1 percent due to our more selective project business tendering. The growth in Services led to our highest ever Q4 order backlog. Our Services order backlog increased by 18.5 percent year-on-year, while in Projects the order backlog decreased by 2.8 percent. In addition to being selective in tendering, we closed down several poor-performing project units during the year. This is part of our strategic transformation. For the full year of 2017, our revenue was EUR 2,282.8 (2,364.1) million.

By division, Denmark-Norway improved its performance significantly in the fourth quarter. Divisions Finland and Austria also delivered further increasing results. The result in Industrial Solutions improved gradually from the previous quarters. The result in Germany was positive due to the Krantz capital gain, while the underlying performance was still negative due to project write-downs and negative forecast changes. Sweden materially improved its performance but the result remained negative.

About one third of projects in our project order backlog have been started in 2016 or earlier and there are some risks remaining until these projects are completed. However, we believe that the remaining project risks mainly relate to three completed Large Projects in Industrial Solutions, the impacts of which will be separately reported under “Items affecting comparability”. The project business should materially improve its result in 2018.

We continued to realise savings from the completed restructuring actions and discretionary fixed cost savings. Our personnel expenses decreased by 4.9 percent and other operating expenses by 4.6 percent from the previous year in January–December. This is satisfying, while taking into account that we simultaneously had turnaround related one-off costs.

One of the highlights of the fourth quarter was our improved financial position. Our cash flow and working capital improved substantially. Our free cash flow was EUR 82.0 (28.0) million. We were able to free up cash, for example, by making an important settlement agreement regarding the Berlin Airport project. Through the agreement we agreed on all existing change orders in the project so far and on the finalisation of the project. Our working capital decreased to EUR 6.1 million from EUR 75.7 million at the end of the third quarter. Our net debt reduced to EUR 64.0 (145.5) million and the gearing to 24.4 (78.7) percent. I am happy about the improved cash flow as it is a good indicator of the direction of the underlying business.

We took forward the implementation of our new strategy, in particular the actions of the “Top Performance at Every Level” Must-Win. This programme has different performance management sub-streams touching all pivotal areas of our operations. Our main focus will be the implementation of this Must-Win during the “Fit” phase of our strategy. We will also develop further our service and digital solutions offering.

Looking forward into 2018, our market environment remains favourable. At the same time, our customer satisfaction has improved, our personnel is getting good feedback on their competences and service mindset and our renewed leadership team is in place to take next important steps in improving our performance.”


Market outlook for Caverion’s services and solutions

The megatrends in the industry, such as the increase of technology in built environments, energy efficiency requirements, increasing digitalisation and automation as well as urbanisation continue to promote demand for Caverion’s services and solutions over the coming years.


The underlying demand for Services is expected to remain strong. As technology in buildings increases, the need for new services and the demand for Life Cycle Solutions are expected to increase. Clients’ tendency towards focusing on their core operations continues to open opportunities for Caverion in terms of outsourced operations and maintenance especially for public authorities, industries and utilities.


The Projects market is expected to remain on a good level. Good demand is expected to continue from both private and public sectors. However, price competition is expected to remain tight. Low interest rates and availability of financing are expected to support investments. The demand for Design & Build of Total Technical Solutions is expected to develop favourably in large and technically demanding projects. Requirements for increased energy efficiency, better indoor conditions and tightening environmental legislation will be significant factors supporting the positive market development.

Turnaround programme ‒ Items affecting EBITDA and operating profit*

EUR million  10–12/17 10–12/16 1–12/17 1–12/16
EBITDA  8.6 -22.2 11.0 -11.4
EBITDA margin, %  1.5 -3.7 0.5 -0.5
Items affecting EBITDA and operating profit 
-  Project write-downs** 5.7 39.9 31.2 59.0
-  Restructuring costs -4.9 11.7 7.3 26.9

* The effect of the risk from overdue trade receivables and the utilisation risk excluded for 2017. 

** Project write-downs figure for 2017 and 2016 are not fully comparable. The project write-downs in 2017 only include cost estimate adjustments, cost overruns and provision increases from a pre-defined risk project list.

Guidance for 2018 

Caverion estimates that the Group’s revenue for 2018 will decrease compared to the previous year (2017: EUR 2,282.8 million). Caverion estimates that the Group’s adjusted EBITDA will more than double in 2018 (2017: EUR 22.3 million).

Adjusted EBITDA = EBITDA before items affecting comparability (IAC).

Items affecting comparability (IAC) are material items or transactions, which are relevant for understanding the financial performance of Caverion when comparing profit of the current period with previous periods. These items can include (1) capital gains and losses from divestments; (2) write-downs, expenses and/or income from separately identified major risk projects; (3) restructuring expenses and (4) other items that according to Caverion management’s assessment are not related to normal business operations. In 2018, major risk projects include three completed Large Projects from Industrial Solutions. The financial impacts of these will be reported separately by Caverion under “Items affecting comparability (IAC)”. The adjusted EBITDA figure for 2017 has been calculated accordingly.

Adjusted EBITDA ‒ Items affecting comparability

EUR million  1–12/17
EBITDA  11.0
EBITDA margin, %  0.5
Items affecting EBITDA 
-  Write-downs, expenses and income from major risk projects 16.3
-  Restructuring costs 7.3
-  Capital gains and losses from divestments -12.3
Adjusted EBITDA 22.3
Adjusted EBITDA margin, % 1.0

Caverion’s current guidance for 2018 is based on the IFRS standards applied on the balance sheet date. As a result of the adoption of new IFRS 15 accounting principles effective from January 1, 2018, Caverion’s revenue recognition will change in 2018. The IFRS 15 restated figures for 2017 will be published in March 2018. At the same time, Caverion will update its guidance according to IFRS 15.

In its revenue guidance Caverion applies the following guidance terminology.

Positive change   Lower limit Upper limit
% %
Increases  0%
Negative change Lower limit Upper limit
% %
Decreases  0%

In its adjusted EBITDA guidance Caverion applies the following guidance terminology, with a +/- 2pp (percentage point) threshold to the said limits.

Positive change   Lower limit Upper limit
% %
At last year’s level  -5% 5%
Grows  5% 30%
Grows significantly  30% 100%
Doubles  100%
Negative change Lower limit Upper limit
% %
Decreases  -30% -5%
Decreases significantly  -30%


Caverion will hold a news conference and webcast on the Financial Statement Release on Wednesday, February 7, 2018, at 11:00 a.m. (Finnish Time, EET) at the Glo Hotel Kluuvi (VideoWall meeting room), Kluuvikatu 4, 2nd floor, Helsinki, Finland. The news conference can also be viewed live on Caverion’s website at www.caverion.com/investors. It is also possible to participate in the event through a conference call by calling the assigned number +44 (0)330 336 9105 at 10:55 a.m. (Finnish time, EET) at the latest. Participant code for the conference call is “5038191 / Caverion”. More practical information on the news conference can be found on Caverion's website, www.caverion.com/investors.

Financial information to be published in 2018

The Annual Report, including the financial statements for 2017, will be published on Caverion's website and IR App in English and Finnish during week 9/2018, at the latest. Interim/Half-yearly Reports will be published on April 24, July 25 and October 25, 2018.

Financial reports and other investor information are available on Caverion's website, www.caverion.com/investors, and IR App. The materials may also be ordered by sending an e-mail to IR@caverion.com.


Distribution: Nasdaq Helsinki, principal media, www.caverion.com


Contact us or subscribe

For further information, please contact: Martti Ala-Härkönen, Chief Financial Officer, Caverion Corporation, tel. +358 40 737 6633, martti.ala-harkonen@caverion.com Milena Hæggström, Head of Investor Relations, Caverion Corporation, tel. +358 40 5581 328, milena.haeggstrom@caverion.com
Subscribe to releases: