Financial position at the end of March 2019

Caverion’s cash and cash equivalents amounted to EUR 101.3 (37.2) million at the end of March. 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 gross interest-bearing loans and borrowings excluding lease liabilities amounted to EUR 128.4 (84.4) million at the end of March, and the average interest rate after hedges was 2.9 percent. Approximately 39 percent of the loans have been raised from banks and other financial institutions, approximately 58 percent from capital markets and approximately 3 percent from insurance companies. A total of EUR 3.3 million of the interest-bearing borrowings will fall due during the next 12 months. Lease liabilities at the end of March 2019 amounted to EUR 135.6 million, resulting to total gross interest-bearing liabilities of EUR 263.9 million.

The Group’s net debt excluding lease liabilities amounted to EUR 27.1 (47.2) million at the end of March and including the lease liabilities EUR 162.7 million. At the end of March, the Group’s gearing was 75.1 (19.4) percent and the equity ratio 21.3 (27.7) percent. Excluding the effect of IFRS 16, the gearing would have amounted to 12.5 percent and the equity ratio to 24.6 percent.

At the end of the quarter, Caverion issued new EUR 75 million senior unsecured fixed rate notes with maturity on 28 March 2023 as well as carried out a voluntary cash tender offer for its EUR 100 million hybrid notes issued on 16 June 2017. The 4-year notes carry a fixed annual interest rate of 3.25% per annum. The use of proceeds from the notes included, in addition to the partial redemption of the hybrid notes, general corporate purposes and investments and acquisitions in accordance with Caverion’s strategy. The final acceptance amount of the hybrid tender offer was EUR 33.94 million. The purchase price of the hybrid notes was 101.20%. The rationale of the transactions was to proactively manage the Group’s debt portfolio, to extend the Group’s debt maturity profile and to decrease overall funding costs. Furthermore, Caverion also refinanced its bank loans and revolving credit facilities at the beginning of February 2019.

On 16 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. After the execution of the hybrid bond buy-back in March 2019, the remaining amount of the hybrid bond outstanding is EUR 66.06 million.

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 0.7x 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 excluding the German anti-trust fine and related legal and advisory fees.

Debt maturity

Net debt (EURm)

Gross debt to net debt

Cash flow and working capital

The Group’s operating cash flow before financial and tax items amounted to EUR 30.1 (19.8) million in January-March. The Group’s free cash flow improved to EUR 27.0 (12.2) million.

The Group’s working capital improved to EUR -60.4 (-41.4) million at the end of March. The amount of trade and POC receivables increased to EUR 519.7 (510.3) million, while other current receivables decreased to EUR 30.0 (47.8) million. On the liabilities side, other current liabilities increased to EUR 251.4 (241.4) million and advances received to EUR 188.1 (168.9) million. There was also positive development in old overdue trade receivables compared to the previous year. Positive group level trend in working capital continued during the first quarter, while division Germany was still on a high level. Working capital improved further in divisions Norway, Finland and Industrial Solutions.