Operating environment

Half-year Financial Report for January-June 2019 (published 24 July 2019)

Operating environment in the second quarter and during the first half of 2019

The overall market situation was positive and stable throughout the period. Demand developed favourably in the Finnish and German markets. In the Industrial Solutions division, the market was stable in industrial maintenance. The markets for Denmark, Norway, Austria and Other countries also remained stable. In Sweden, the activity levels in projects showed signs of slowing down.

Services

The demand for Services continued being strong. There is a trend towards a deeper collaboration between customers and service providers in order to gain business benefits instead of mere cost savings. International customers are looking for unified operating models across countries, especially in the Nordic region. There is an increasing interest for services supporting sustainability, such as energy management and advisory services.

Projects

The market for Projects remained stable. In the residential construction market segment, there were indications of the market slowing down. In the non-residential construction segment, which is more relevant for Caverion, the market remained favourable. Customer demand for total technical deliveries, life cycle projects and different types of partnership projects such as alliance projects has been increasing, mainly driven by risk management. The requirements for increased energy efficiency, better indoor climate and tightening environmental legislation are increasing the costs of building systems investments. There have been some shortages in project manager and installer resources in growth centers. In Germany, the cost of subcontracting has also increased.