Financial position at the end of September 2018

Caverion’s cash and cash equivalents amounted to EUR 18.7 (18.4) 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.

On 14 June 2018, Caverion announced the launch of a directed share issue of new shares in order to maintain a strong balance sheet and to retain strategic flexibility after the payment of the anti-trust fine. Strategic flexibility for Caverion means, among other things, a continuation of the shift towards the Services business, support for strategic projects and operational development, investments in digitalisation, and a solid cash position to finance bolt-on acquisitions in selected areas in services, especially in well-performing divisions. On 15 June 2018, the Company announced that it had directed a share issue of 9,524,000 new shares in the Company to institutional investors, corresponding to approximately 7.36 percent of all the shares and votes in the Company immediately prior to the share issue. Approximately 17 percent of the shares were allocated to international investors. The share issue was priced at EUR 6.30 per share, raising gross proceeds of EUR 60 million. The subscription price represented a discount of 6.5 percent on the closing price on 14 June 2018. The total number of issued shares in the Company following the share issue is 138,920,092, and the number of shares outstanding is 135,655,641.

The Group’s interest-bearing loans and borrowings amounted to EUR 68.9 (159.6) million at the end of September, and the average interest rate after hedges was 2.64 percent. Approximately 87 percent of the loans have been raised from banks and other financial institutions, and approximately 11 percent from insurance companies. A total of EUR 28.2 million of the interest-bearing loans and borrowings will fall due during the next 12 months. The Group’s net debt amounted to EUR 50.2 (141.3) million at the end of September. At the end of September, the Group’s gearing was 18.9 (59.5) percent and its equity ratio 30.9 (24.8) percent. On 9 June 2017, Caverion 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. In June 2018, Caverion paid EUR 4.6 million in annual interest on this hybrid bond (no interest was paid in 2017).

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 1.1x according to the confirmed calculation principles. Caverion agreed with its lending parties in June that the German anti-trust fine and related legal and advisory fees are excluded from the calculation of EBITDA related to the Group’s financial covenant Net Debt to EBITDA.

Debt maturity


Net debt (EURm)

Gross debt to net debt

Liquidity reserve

Cash flow and working capital

The Group’s operating cash flow before financial and tax items amounted to EUR -32.1 (-75.6) million in the first nine months of the year. The cash flow was impacted by the German cartel fine payment of EUR 40.8 million in August. Excluding the fine, the operating cash flow improved materially by EUR 84.3 million compared to the previous year, improving in all divisions except Denmark. The Group’s free cash flow improved to EUR -43.9
(-90.5) million.

During the third quarter, operating cash flow before financial and tax items was EUR -37.0 (-37.5) million. Excluding the German fine, operating cash flow improved materially by EUR 41.3 million compared to the previous year.

The Group’s working capital improved to EUR -3.2 (37.0) million at the end of September. The amount of POC receivables decreased to EUR 259.3 (296.1) million and trade receivables to EUR 268.0 (317.6) million at the end of September. There was also positive development in old overdue trade receivables compared to the previous year. Working capital tied to risk projects in Industrial Solutions continued to decline and a similar trend was observable in Germany during the third quarter. The German anti-trust fine was paid during the third quarter, which impacted the working capital level compared to the second quarter.