Earnings Release • Feb 9, 2023
Earnings Release
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Unless otherwise noted the figures in brackets refer to the corresponding period in the previous year.
* Excluding the revenue of Alea GmbH which was transferred into Caverion's ownership in the August 2022 acquisition of PORREAL Group and divested in December 2022.
Guidance for 2023: In 2023, Caverion Group's revenue (2022: EUR 2,352.1 million) and adjusted EBITA (2022: EUR 105.8 million) will grow compared to 2022.
| EUR million | 10-12/22 | 10-12/21 | Change | 1-12/22 | 1-12/21 | Change |
|---|---|---|---|---|---|---|
| Revenue | 682.9 | 585.3 | 16.7% | 2,352.1 | 2,139.5 | 9.9% |
| Organic growth, % | 14.9 | -1.1 | 8.6 | -2.0 | ||
| Adjusted EBITDA | 53.8 | 44.5 | 21.1% | 163.0 | 142.1 | 14.7% |
| Adjusted EBITDA margin, % | 7.9 | 7.6 | 6.9 | 6.6 | ||
| EBITDA | 39.8 | 23.0 | 72.8% | 143.4 | 113.8 | 26.0% |
| EBITDA margin, % | 5.8 | 3.9 | 6.1 | 5.3 | ||
| Adjusted EBITA | 38.7 | 30.1 | 28.7% | 105.8 | 87.7 | 20.7% |
| Adjusted EBITA margin, % | 5.7 | 5.1 | 4.5 | 4.1 | ||
| EBITA | 24.6 | 8.6 | 185.0% | 86.1 | 59.4 | 44.9% |
| EBITA margin, % | 3.6 | 1.5 | 3.7 | 2.8 | ||
| Operating profit | 20.0 | 5.1 | 291.2% | 69.9 | 43.5 | 60.6% |
| Operating profit margin, % | 2.9 | 0.9 | 3.0 | 2.0 | ||
| Result for the period | 13.1 | 1.6 | 739.4% | 46.2 | 25.1 | 84.6% |
| Earnings per share, undiluted, EUR | 0.09 | 0.01 1,067.0% | 0.32 | 0.17 | 91.5% | |
| Operating cash flow before | ||||||
| financial and tax items | 106.9 | 76.7 | 39.4% | 144.3 | 103.8 | 39.0% |
| Order backlog | 1,943.3 | 1,863.8 | 4.3% | |||
| Cash conversion (LTM), % | 100.6 | 91.2 | ||||
| Working capital | -141.4 | -144.7 | 2.3% | |||
| Interest-bearing net debt | 200.9 | 140.7 | 42.8% | |||
| Net debt/Adjusted EBITDA | 1.2 | 1.0 | ||||
| Gearing, % | 89.1 | 69.8 | ||||
| Equity ratio, % | 19.8 | 19.0 | ||||
| Personnel, end of period | 14,490 | 14,298 | 1.3% |
"Our year 2022 was marked by a clear profitability uplift as a result of the determined performance improvement actions made during the past years. Our revenue grew by 9.9 percent to EUR 2,352.1 (2,139.5) million and adjusted EBITA increased by 20.7 percent to EUR 105.8 (87.7) million in line with our guidance. Our EBITA was record-high during our nearly ten-year history as a publicly listed company and amounted to EUR 86.1 (59.4) million in 2022. Our earnings per share almost doubled from 2021. The performance improvement was supported by the overall revenue growth mainly in Services. In addition, our consistent efforts in improving project risk management have gradually resulted in healthier and more profitable project portfolio. This demonstrates our strong capability to deliver sustainable, profitable growth in line with our strategy that was updated during the year.
The positive momentum of the first nine months of the year continued also in the fourth quarter of 2022. Our fourth quarter revenue increased by 16.7 percent to EUR 682.9 (585.3) million and organic growth was 14.9 percent. The organic growth was partially driven by the increased costs of materials and external services, that we were able to successfully factor in our sales prices. We estimate this inflation impact to account for roughly one third of the organic growth.
Our adjusted EBITA improved by 28.7 percent to EUR 38.7 (30.1) million, or 5.7 (5.1) percent of revenue during the fourth quarter of 2022, even though the high sick leave levels and operating expense increases continued to negatively impact our profitability. Overall, our business has however proved to be relatively resilient to the rapid inflation. I am also pleased that we could improve our operating cash flow before financial and tax items to EUR 106.9 (76.7) million in the fourth quarter.
Our order backlog amounted to EUR 1,943.3 (1,863.8) million at the end of December, 4.3 percent higher compared to the previous year. We expect our solid order backlog to support revenue growth also going forward. Around 63.2 percent of our order backlog is estimated to be realised as revenue during 2023. The high inflation still continues to have some impact on the building technology market, although we have seen some first signs of the material price inflation cooling down. In 2023, we expect the underlying demand to be overall positive in Services. In Projects, we expect the underlying business activity to remain stable in 2023, however, the economic uncertainty may start to impact the demand environment negatively.
The effects of the corona pandemic continued to stabilise during the fourth quarter. We remain somewhat cautious with the pandemic as unpredictable virus variants and new waves of the pandemic may continue to emerge.
As part of the implementation of our Sustainable Growth strategy, we closed 12 acquisitions in 2022 with total annual revenue of EUR 94.3 million and welcomed more than 560 new colleagues from the acquired companies. In the fourth quarter, we closed three acquisitions bringing us additional capabilities in smart security services, refrigeration and technical installation. Our fourth quarter revenue increased by 4.1 percent as a result of acquisitions and divestments compared to the previous year. We continue to screen high quality companies that complement our existing capabilities or geographical footprint.
As we close the year 2022 with strong results, I would like to thank our customers, partners, shareholders and our almost 14,500 employees for their contribution during our journey so far. Updated status on the recent tender offers has been presented under "Events after the reporting period" in this report. The tender offers announced provide clear evidence that our goal to achieve Sustainable Growth by serving our customers along the entire lifecycle of the built environment and assisting in green transition to smart buildings is an attractive strategy."
Russia's invasion of Ukraine at the end of February 2022 increased geopolitical tensions especially in Europe overnight. The war has created uncertainties weakening the growth prospects in several countries where Caverion operates. The duration of the Ukrainian conflict and its future effects on the industry, and Caverion in particular, remain uncertain, and the overall situation remains highly volatile.
Caverion divested its Russian subsidiary at the end of 2021 and has no operations in Ukraine or Belarus. Therefore, the impact of the conflict on Caverion is currently indirect. Caverion has experienced increases in material prices and delays in the supply chain and in decision-making, however Caverion continued to manage them on a daily basis without having a significant impact on performance during 2022.
Caverion expects the underlying demand to be overall positive in Services during 2023.
In Projects, Caverion expects the underlying business activity to remain stable in 2023. In Projects, however, the economic uncertainty may start to impact the demand environment negatively. The market instability resulting from the war in Ukraine and the high inflation are expected to dampen the willingness to invest in new construction.
This scenario assumes a sufficient control of the corona pandemic impacts with no significant unforeseen setbacks in 2023 and no further escalation of the conflict in Ukraine.
The digitalisation and sustainability megatrends are in many ways favourable to Caverion and they are believed to increase demand for Caverion's offerings going forward. The increased energy efficiency requirements, and the increasing digitalisation, automation and technology requirements in the built environment remain strong, together with the urbanisation megatrend. Increasing awareness of sustainability is supported by both EU-driven regulations and national legislation setting higher targets and actions for energy efficiency and carbon-neutrality. The continued focus on energy efficiency and CO2 reduction activities and projects continues to support activity and business volume in Caverion's operating environment.
Caverion updated its financial targets in connection with publishing its updated strategy on 9 May 2022. Sustainability targets remained unchanged. Previous financial targets and results for 2021 are available at Caverion's website at www.caverion.com/investors.
| Mid-term financial targets until the end of 2025 | |||||||
|---|---|---|---|---|---|---|---|
| Cash conversion (LTM) | Operating cash flow before financial and tax items / EBITDA > 100% |
100.6% | |||||
| Profitability | Adjusted EBITA > 5.5% of revenue | 4.5% | |||||
| Organic revenue growth | 3−4% p.a. over the strategy period | 8.6% | |||||
| M&A revenue growth | 2−3% p.a. over the strategy period | 2.2% | |||||
| Debt leverage | Net debt/LTM Adjusted EBITDA < 2.5x | 1.2x | |||||
| Dividend policy | Distribute at least 50% of the result for the year after taxes, however, taking leverage level into account |
62% * |
*Calculated as Dividend per earnings (%). Board of Directors' proposal to the Annual General meeting.
| Sustainability targets until 2025 | 2025 target | 2022 | 2021 |
|---|---|---|---|
| Decreasing our footprint | |||
| Total carbon footprint defined and measured | 100% | 90% | 80% |
| Increasing our handprint | |||
| Our offering has a defined carbon handprint | 100% | 25% | 20% |
| Carbon handprint over footprint (Scope 1−2) | 5x | >3x | >2x |
| Caring for our people | |||
| Lost Time Injury Frequency Rate (LTIFR) | <2 | 4.0 | 4.0 |
| Share of female employees | 15% | 11% | 11% |
| Our employees trained in sustainability | 100% | 30%* | N/A** |
| Ensuring sustainable value chain | |||
| Supplier Code of Conduct sign-off rate | >90% | 74% | 66% |
| Our tender requests include sustainability criteria | 100% | - | - |
* Sustainability eLearning available since Q4/2022. During the year two other ESG related eLearnings conducted with performance rates of 97% (InfoSec eLEarning) and 97% (Code of Conduct eLEarning).
** Sustainability eLearning not yet available. Two other ESG related eLearnings conducted with performance rates of 86% (Safety eLearning) and 92% (Code of Conduct eLearning).
Caverion will hold a news conference on its Financial Statement Release on Thursday, 9 February 2023, at 10.00 a.m. Finnish time (EET) at Hotel Kämp, Room Symposion, Helsinki, Finland. The news conference can 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 registering beforehand on the following link: https://palvelu.flik.fi/teleconference/?id=1009619. Phone numbers and the conference ID to access the conference will be provided after the registration. To ask a question, press *5 on your telephone keypad to enter the queue. More practical information on the news conference can be found on Caverion's website, www.caverion.com/investors.
Annual Review 2022 including the financial statements will be published during week 9/2023, at the latest. Interim/Half-yearly Reports for 2023 will be published on 27 April, 3 August and 3 November 2023.
Financial reports and other investor information are available on Caverion's website www.caverion.com/investors. The materials may also be ordered by sending an e-mail to [email protected].
Mikko Kettunen, CFO, Caverion Corporation, tel. +358 50 347 7462, [email protected]
Milena Hæggström, Head of Investor Relations and External Communications, Caverion Corporation, tel. +358 40 5581 328, [email protected]
Distribution: Nasdaq Helsinki, principal media, www.caverion.com
The economic uncertainty increased during 2022 due to the geopolitical tensions related to the Ukraine conflict, resulting in subsequent energy crisis, mounting inflation, rising interest rates and lowered economic growth prospects. Inflation accelerated during the year and the cost inflation related to material prices, including fuel costs, continued to impact also the building technology market. There have also been supply shortages and delays in some areas. Caverion has proactively taken various measures to optimise the supply chain and to manage pricing.
Economic sentiment weakened in the EU during 2022 along with lower economic growth prospects. Also the corona pandemic still continued to have some impact on the operating environment through sick leaves.
In Services, the market demand and general investment activity remained positive. Caverion has
continued to see a general increasing interest for services supporting sustainability, such as energy management and advisory services, driven by regulation and by the expected governmental and EU stimulus packages supporting investments in green growth. There has also been increasing interest towards long-term and large-scale service agreements. Growth has been limited by the availability of competent workforce and delays in the supply chain.
In Projects, the market demand remained mostly stable. The interest for energy improvement projects has picked up, driven by the focus on energy consumption due to the energy crisis.
The market was impacted by increases in material prices, delays in decision-making and supply chain as well as uncertainty in the business environment, especially related to new construction.
(EUR million)
| Change in | Acquisitions and | ||||||
|---|---|---|---|---|---|---|---|
| 10-12/ | 10-12/ | comparable | Organic | Currency | divestments | ||
| EUR million | 2022 | 2021 | Change | rates * | growth ** | impact | impact |
| Services | 466.2 | 390.1 | 19.5% | 22.1% | 15.6% | -2.6% | 6.5% |
| Projects | 216.8 | 195.3 | 11.0% | 12.8% | 13.3% | -1.8% | -0.5% |
| Group total | 682.9 | 585.3 | 16.7% | 19.0% | 14.9% | -2.3% | 4.1% |
* Revenue change in local currencies
** Revenue change in local currencies, excluding acquisitions and divestments
The revenue of the Services business unit increased and was EUR 466.2 (390.1) million in October– December, an increase of 19.5 percent, or 22.1 percent in local currencies.
The revenue of the Projects business unit was EUR 216.8 (195.3) million in October–December, an increase of 11.0 percent, or 12.8 percent in local currencies.
% of revenue 1-12/2022
Revenue by division
| Change in | Acquisitions and | ||||||
|---|---|---|---|---|---|---|---|
| 1-12/ | 1-12/ | comparable | Organic | Currency | divestments | ||
| EUR million | 2022 | 2021 | Change | rates * | growth ** | impact | impact |
| Services | 1,570.1 | 1,402.4 | 12.0% | 12.9% | 9.5% | -1.0% | 3.4% |
| Projects | 782.0 | 737.1 | 6.1% | 7.0% | 6.8% | -0.9% | 0.1% |
| Group total | 2,352.1 | 2,139.5 | 9.9% | 10.9% | 8.6% | -0.9% | 2.2% |
* Revenue change in local currencies
** Revenue change in local currencies, excluding acquisitions and divestments
The revenue of the Services business unit increased and was EUR 1,570.1 (1,402.4) million in January– December, an increase of 12.0 percent, or 12.9 percent in local currencies. The revenue of the Projects business unit was EUR 782.0 (737.1) million in January–December, an increase of 6.1 percent, or 7.0 percent in local currencies. Caverion continued a selective approach in the Projects business.
The share of Services revenue developed in line with the strategy. The Services business unit accounted for 66.8 (65.5) percent of Group revenue, and the Projects business unit for 33.2 (34.5) percent of Group revenue in January–December.
| Revenue, EUR million | 10-12/22 | % 10-12/21 | % | Change | 1-12/22 | % | 1-12/21 | % | Change | |
|---|---|---|---|---|---|---|---|---|---|---|
| Sweden | 132.4 | 19.4 | 121.7 | 20.8 | 8.8% | 455.0 | 19.3 | 424.4 | 19.8 | 7.2% |
| Finland | 120.7 | 17.7 | 109.2 | 18.6 | 10.6% | 431.9 | 18.4 | 403.9 | 18.9 | 6.9% |
| Germany | 112.5 | 16.5 | 99.7 | 17.0 | 12.8% | 406.0 | 17.3 | 374.1 | 17.5 | 8.5% |
| Norway | 105.0 | 15.4 | 92.8 | 15.8 | 13.2% | 368.5 | 15.7 | 352.5 | 16.5 | 4.5% |
| Industry | 80.5 | 11.8 | 71.3 | 12.2 | 13.0% | 285.5 | 12.1 | 256.8 | 12.0 | 11.2% |
| Austria | 75.1 | 11.0 | 51.8 | 8.8 | 44.9% | 237.0 | 10.1 | 188.7 | 8.8 | 25.6% |
| Denmark | 44.2 | 6.5 | 22.1 | 3.8 | 100.2% | 122.1 | 5.2 | 80.0 | 3.7 | 52.6% |
| Other countries* | 12.6 | 1.9 | 16.8 | 2.9 | -24.8% | 46.0 | 2.0 | 59.0 | 2.8 | -22.0% |
| Group, total | 682.9 | 100 | 585.3 | 100 | 16.7% | 2,352.1 | 100 | 2,139.5 | 100 | 9.9% |
| Services | 466.2 | 68.3 | 390.1 | 66.6 | 19.5% | 1,570.1 | 66.8 | 1,402.4 | 65.5 | 12.0% |
| Projects | 216.8 | 31.7 | 195.3 | 33.4 | 11.0% | 782.0 | 33.2 | 737.1 | 34.5 | 6.1% |
* Other countries include the Baltic countries and Russia. Caverion divested its Russian subsidiary in December 2021, which explains the year-on-year decline in revenue. Baltic countries revenue increased slightly in 2022 compared to last year.
Adjusted EBITA, EBITA and operating profit
(EUR million)
The operating profit (EBIT) for October–December was EUR 20.0 (5.1) million, or 2.9 (0.9) percent of revenue.
Costs related to materials and supplies increased to EUR 183.4 (154.3) million and external services increased to EUR 136.9 (118.9) million in October– December. Personnel expenses increased to a total of EUR 249.0 (223.8) million for October–December. Other operating expenses amounted to EUR 74.3 (66.2) million. Other operating income decreased to EUR 0.5 (0.9) million.
Depreciation, amortisation and impairment amounted to EUR 19.8 (17.9) million in October–December. Of these EUR 15.1 (14.4) million were depreciations on tangible assets and EUR 4.7 (3.5) million amortisations on intangible assets. Of the depreciations, the majority related to right-of-use assets in accordance with IFRS 16 amounting to EUR 13.3 (12.7) million and EUR 1.8 (1.7) million related to machinery and equipment and other tangible assets. The amortisations were related to allocated intangibles on acquisitions amounting to EUR 1.8 (0.9) million as well as IT and developed solutions amounting to EUR 2.9 (2.6) million.
The operating profit (EBIT) for January–December was EUR 69.9 (43.5) million, or 3.0 (2.0) percent of revenue.
Costs related to materials and supplies increased to EUR 615.4 (523.9) million and external services increased to EUR 446.0 (398.4) million in January– December. Personnel expenses increased to a total of EUR 923.6 (889.9) million for January–December. Other operating expenses increased to EUR 226.1 (216.3) million. Other operating income amounted to EUR 2.3 (2.8) million.
Depreciation, amortisation and impairment amounted to EUR 73.5 (70.3) million in January–December. Of these EUR 57.2 (54.3) million were depreciations on tangible assets and EUR 16.2 (15.9) million amortisations on intangible assets. Of the depreciations, the majority related to right-of-use assets in accordance with IFRS 16 amounting to EUR 51.0 (48.3) million and EUR 6.2 (6.0) million related to machinery and equipment and other tangible assets. The amortisations were related to allocated intangibles on acquisitions amounting to EUR 5.9 (3.9) million as well as IT and developed solutions amounting to EUR 10.3 (12.1) million.
| EUR million | 10-12/2022 | 10-12/2021 | 1-12/2022 | 1-12/2021 |
|---|---|---|---|---|
| EBITA | 24.6 | 8.6 | 86.1 | 59.4 |
| EBITA margin, % | 3.6 | 1.5 | 3.7 | 2.8 |
| Items affecting comparability (IAC) | ||||
| - Capital gains and/or losses and transaction costs | ||||
| related to divestments and acquisitions | 1.3 | 10.2 | 5.4 | 10.7 |
| - Write-downs, expenses and income from major | ||||
| risk projects* | 4.0 | 2.0 | 4.0 | 4.0 |
| - Restructuring costs | 0.0 | 1.4 | 1.1 | 2.9 |
| - Other items** | 8.8 | 7.8 | 9.2 | 10.6 |
| Adjusted EBITA | 38.7 | 30.1 | 105.8 | 87.7 |
| Adjusted EBITA margin, % | 5.7 | 5.1 | 4.5 | 4.1 |
* Major risk projects include only one old risk project in Germany during 2021 and 2022.
** In 2021 and 2022, provisions and legal and other costs for civil claims related to the German anti-trust matter. The fourth quarter of 2022 includes also EUR 2.5 million of advisory costs and personnel bonuses related to the ongoing public tender offer. In the fourth quarter of 2021 EUR 1.4 million previously capitalised expenses were booked as operative expenses due to change in accounting principle of implementation costs in cloud computing arrangements.
Transaction costs related to acquisitions and divestments totalled EUR 1.3 million in October– December.
There was a EUR 4.0 million write-down from the last separately identified major risk project. The company no longer expects to report items in this category under items affecting comparability going forward.
The Group's restructuring costs amounted to EUR 1.1 million. There were restructuring costs related to changes in the Group Management Board and Division Norway. Other items totalled EUR 9.2 million. Caverion settled certain civil claims related to its old cartel case in Germany, totalling EUR 6.7 million. Other items includes also EUR 2.5 million of advisory costs and personnel bonuses related to the ongoing public tender offers. Transaction costs related to acquisitions and divestments totalled EUR 5.4 million in January– December.
EBITA is defined as Operating profit + amortisation and impairment on intangible assets. Adjusted EBITA = EBITA before items affecting comparability (IAC). Items affecting comparability (IAC) in 2022 are material items or transactions, which are relevant for understanding the financial performance of Caverion when comparing the profit of the current period with that of the previous periods. These items can include (1) capital gains and/or losses and transaction costs related to divestments and acquisitions; (2) writedowns, 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 2021 and 2022, major risk projects include only one old risk project in Germany reported under category (2). In 2021 and 2022, provisions and legal and other costs for civil claims related to the German anti-trust matter were reported under category (4). Category (4) includes also advisory costs and personnel bonuses related to the ongoing public tender offer and in 2021, previously capitalised expenses that were booked as operative expenses due to a change in the accounting principle of implementation costs in cloud computing arrangements .
Adjusted EBITDA is affected by the same adjustments as adjusted EBITA, except for restructuring costs, which do not include depreciation and impairment relating to restructurings.
Result before taxes, result for the period and earnings per share
Result before taxes amounted to EUR 60.9 (34.9) million, result for the period to EUR 46.2 (25.1) million, and earnings per share to EUR 0.32 (0.17) in January– December. Net financing expenses in January– December were EUR 9.0 (8.6) million. This includes an interest cost on lease liabilities amounting to EUR 4.1 (3.8) million. In January-March 2022, net finance expenses included one-off exchange settlement cost related to bond refinancing amounting to EUR 1.2 million.
The Group's effective tax rate was 24.1 (28.2) percent in January–December 2022. Income taxes in the income statement amounted to EUR 14.7 (9.8) million.
Gross capital expenditure on non-current assets (excluding capital expenditure on leased assets), including acquisitions, totalled EUR 112.8 (26.0) million in January–December, representing 4.8 (1.2) percent of revenue. Investments in information technology totalled EUR 8.5 (8.0) million representing 0.4 (0.4) percent of revenue. IT investments continued to be focused on building a harmonised IT infrastructure and common platforms, with migration to the cloud. Caverion SmartView and mobile tools were also further developed. Acquisitions were EUR 98.8 (13.8) million and other investments amounted to EUR 5.5 (4.2). The investments in acquisitions were the largest in the history of Caverion as a listed company in line with the company's Sustainable Growth Strategy.
On 3 January 2022, Caverion closed on an agreement to acquire the business of Frödéns Ventilation AB in Sweden. Frödéns offers service and maintenance, inspections, energy optimisations and smaller projects in the area of ventilation and mainly operates in the Jönköping area. The revenue of Frödéns amounted to EUR 2.7 million in 2021 and the company had 12 employees at the time of the acquisition. The transaction value was not disclosed.
On 1 April 2022, Caverion closed on an agreement to acquire the shares of DI-Teknik A/S in Denmark. DI-Teknik is one of Denmark's largest industrial automation companies with around 185 employees at the time of the acquisition. The company's revenue in 2020/2021 amounted to EUR 27.8 million. This acquisition brought completely new expertise and capabilities in industrial automation to Caverion in Denmark. On 1 April 2022, 80% of DI-Teknik's shares transferred into Caverion's ownership and Caverion is committed to acquire the remaining 20% of the shares at the latest in April 2026. The transaction value was not disclosed.
On 1 May 2022, Caverion closed on an agreement to acquire the business of Kaldt og Varmt AS in Norway. Kaldt og Varmt is a heating and cooling specialist based in Askim, Norway. The acquisition complemented Caverion's service offering in the region and five employees were transferred into Caverion's service. The acquisition is expected to bring approximately EUR 1 million in revenue for Caverion. The purchase price was not disclosed.
On 2 May 2022, Caverion closed on an agreement to acquire the shares of the Finnish Wind Controller JV Oy ("WiCo"). The transaction included WiCo's subsidiaries WiCo Inspections Oy and WiCo Safety Oy. WiCo is the leading technical consultant and service provider for the Finnish wind power industry. Its customer base includes turbine suppliers and wind farm owners, operators and developers. By entering the wind power segment, Caverion widened its offering in the energy sector. The transaction also complemented Caverion's strong expertise in the energy industry and supported its growth strategy. WiCo had approximately 40 employees at the time of the acquisition and its revenue was EUR 5.1 million in 2021. The purchase price was not disclosed.
On 11 May 2022, Caverion closed on an agreement to acquire the shares of the Finnish WT-Service Oy. WT-Service provides industrial maintenance, installation and project services in the Vaasa region in Finland. The acquisition strengthened Caverion's regional footprint with new experts and a solid customer base. The company had 17 employees at the time of the acquisition and its revenue was EUR 1.7 million in 2021. The purchase price was not disclosed.
On 1 July 2022, Caverion closed on an agreement to acquire the shares of the Finnish Visi Oy. Visi is an industrial security service specialist providing industrial video and access control services as well as work and safety communication services. The acquisition supported Caverion's sustainable growth strategy and strengthened the Group's capabilities in technical security services. Visi had 22 employees at the time of the acquisition and the company's revenue amounted to EUR 4.6 million for the financial year ending in April 2022. The purchase price was not disclosed.
On 2 August 2022, Caverion closed on an agreement to acquire all the shares in PORREAL GmbH in Austria, also including its fully owned subsidiary ALEA GmbH (together "PORREAL Group"). PORREAL Group offers technical and soft facility services in Austria thus strengthening Caverion's position in the Austrian facility services market. The stand-alone revenues of PORREAL and ALEA amounted to EUR 23.3 million and EUR 12.0 million in 2021, respectively. PORREAL Group employed approximately 380 employees at the time of the acquisition, 120 of which were employed by PORREAL GmbH. The purchase price was not disclosed. Caverion divested the shares of ALEA GmbH on 28 December 2022.
On 31 August 2022, Caverion closed on an agreement to acquire the shares of the Swedish Elicentra AB. Elicentra provides electrical installation services in the Sundsvall area in Sweden and had 18 employees at the time of the acquisition. The acquisition strengthened Caverion's regional service offering in the area of electrification. Elicentra's revenue for the financial year ending in June 2022 amounted to EUR 2.4 million. The purchase price was not disclosed.
On 1 September 2022, Caverion closed on an agreement to acquire the shares of the Danish CS electric A/S. CS electric is a leading player in Denmark in technical engineering, electrification and automation services. The acquisition supported Caverion's sustainable growth strategy and expanded its footprint especially in the marine, energy and industrial customer segments. CS electric employed approximately 70 people at the time of the acquisition and its revenue amounted to EUR 13.4 million in 2021. The purchase price was not disclosed.
On 1 October 2022, Caverion closed on an agreement to acquire the shares of the Norwegian Simex Klima & Kulde AS. The company is one of Norway's Stavanger region's leading suppliers in technical installations of indoor climate, cooling and heat pump systems for commercial buildings. The acquisition complemented Caverion's service capacity in the region and strengthened its market position. Simex Klima & Kulde had 25 employees at the time of the acquisition and the company's 2021 revenue amounted to EUR 4.2 million. The purchase price was not disclosed.
On 30 November 2022, Caverion closed on an agreement to acquire the shares of the Finnish LukkoPro Oy. LukkoPro specialises in locking and safety services and its digital services offering includes the EasyKey automated key management service. The acquisition broadened Caverion's offering in smart security services. LukkoPro had 35 employees at the time of the acquisition and the company's 2021 revenue amounted to EUR 5.6 million. The purchase price was not disclosed.
On 1 December 2022, Caverion closed on an agreement to acquire Carrier's food retail refrigeration business in Finland. The acquisition strengthened Caverion's refrigeration business and expertise and also brought Carrier's market-leading food refrigeration product portfolio to Caverion's offering. 17 employees were transferred into Caverion's service in the acquisition and it is expected to bring approximately EUR 1.7 million in revenue for Caverion. The purchase price was not disclosed.
On 31 December 2022, Caverion acquired Metsä Fibre Oy's shares in Oy Botnia Mill Service Ab (50.17%) as a part of an arrangement where Metsä Fibre took over the maintenance operations of their pulp mills and the Rauma sawmill as well as the related workshop and design services. These operations were previously performed by Oy Botnia Mill Service Ab, a joint venture company owned by the parties. Apart from the share purchase, the transaction was treated as a termination of an outsourcing agreement.
On 27 October 2022, Caverion signed an agreement to acquire TM Voima group's substation and transmission line business in Finland and Estonia. The acquisition will strengthen Caverion's presence in the energy sector and enable growth especially in the substation business. In 2021, the revenue of TM Voima group's substation and transmission line business amounted to EUR 30.5 million and the number of employees was 66. The completion of the acquisition required the approval by the Finnish Competition and Consumer Authority and the acquisition was closed on 1 February 2023. The purchase price was not disclosed.
More information on Caverion's acquisitions in the review period can be found in Note 5 to this Financial Statement Release.
On 28 December 2022, Caverion sold ALEA GmbH, an Austrian provider of soft facility services with 230 employees, to Avalon GmbH. ALEA was acquired in August 2022 as a part of the acquisition of PORREAL Group. The divestment did not have a material effect on Caverion's revenue or profitability. The transaction price was not disclosed.
A disposal affecting comparability between the periods is that in the end of December 2021, Caverion sold the share capital of its subsidiary JSC "Caverion Rus" in Russia to Aim Cosmetics Rus, LTD. The transaction covered Caverion's entire operations in Russia which were focused on the St. Petersburg and Moscow regions. The divested business had a revenue of EUR 13.9 million in 2021 and employed 421 persons at the end of the year. The divestment of the Russian subsidiary was a part of Caverion's strategy to focus on the Group's core businesses in its main market areas and to improve the Group's financial performance.
In October–December, the Group's operating cash flow before financial and tax items improved to EUR 106.9 (76.7) million. The Group's free cash flow improved to EUR 88.1 (64.9) million. Cash flow after investments was EUR 86.2 (62.1) million.
The amount of trade and POC receivables increased to EUR 611.2 (541.9) million and other current receivables decreased to EUR 31.6 (33.8) million. On the liabilities side, advances received increased to EUR 286.2 (261.3) million, other current liabilities increased to EUR 293.3 (278.3) million and trade and POC payables increased to EUR 227.1 (197.7) million.
Caverion's cash and cash equivalents amounted to EUR 81.2 (130.9) million at the end of December. In addition, Caverion had undrawn revolving credit facilities amounting to EUR 100.0 million and undrawn overdraft facilities amounting to EUR 19.7 million.
The Group's gross interest-bearing loans and borrowings excluding lease liabilities amounted to EUR 144.6 (135.9) million at the end of December, and the average effective interest rate was 3.0 (2.6)
percent. Approximately 39 percent of the loans have been raised from banks and other financial institutions and approximately 61 percent from capital markets. Lease liabilities amounted to EUR 137.5 (135.7) million at the end of December 2022, resulting to total gross interest-bearing liabilities of EUR 282.0 (271.6) million.
Caverion has a balanced debt maturity profile, where most of the long-term debt matures in 2025 and in 2027.
In February Caverion issued a senior unsecured bond of EUR 75 million with an issue price of 99.425 percent. The 5-year bond matures on 25 February 2027 and carries a fixed annual interest of 2.75 percent. Also, Caverion carried out a tender offer for the EUR 75 million bond maturing in March 2023 resulting to a EUR 71.5 million acceptance level. The new bond extends the maturity profile, lowers the interest expenses and supports Caverion's strategy for sustainable profitable growth.
On 15 May 2020 Caverion issued a EUR 35 million hybrid bond, an instrument subordinated to the company's other debt obligations and treated as equity in the IFRS financial statements. The hybrid bond does not confer to its holders the rights of a shareholder and does not dilute the holdings of the current shareholders. The coupon of the hybrid bond is 6.75 percent per annum until 15 May 2023. The hybrid bond does not have a maturity date but the issuer is entitled to redeem the hybrid for the first time on 15 May 2023, and subsequently, on each coupon interest payment date. If the hybrid bond is not redeemed on 15 May 2023, the coupon will be changed to 3-month EURIBOR added with a Re-offer Spread (706.8 bps) and a step-up of 500bps.
Caverion's external loans are subject to a financial covenant based on the ratio of the Group's net debt to EBITDA according to the calculation principles confirmed with the lending parties. The financial covenant shall not exceed 3.5:1. Caverion is in compliance with the quarterly monitored financial covenant.
at the end of December 2022
| Personnel by division, end of period | 12/2022 | 9/2022 | Change 12/2022 12/2021 | Change | ||
|---|---|---|---|---|---|---|
| Finland | 2,894 | 2,836 | 2% | 2,894 | 2,819 | 3% |
| Sweden | 2,559 | 2,521 | 2% | 2,559 | 2,528 | 1% |
| Norway | 2,344 | 2,325 | 1% | 2,344 | 2,331 | 1% |
| Germany | 2,225 | 2,218 | 0% | 2,225 | 2,177 | 2% |
| Industry | 1,850 | 2,299 | -20% | 1,850 | 2,243 | -18% |
| Austria | 1,023 | 1,245 | -18% | 1,023 | 903 | 13% |
| Denmark | 759 | 773 | -2% | 759 | 528 | 44% |
| Other countries | 666 | 654 | 2% | 666 | 609 | 9% |
| Group Services | 170 | 166 | 2% | 170 | 160 | 6% |
| Group, total | 14,490 | 15,037 | -4% | 14,490 | 14,298 | 1% |
Information on the effect of acquisitions on Group personnel can be found in Note 5 to this Financial Statement Release.
Deputy CEO Thomas Hietto, responsible for Services, Sustainability & Smart City Solutions, resigned as of 28 January 2022. Group Management Board member Kari Sundbäck, responsible for Strategy, Marketing & Communications and Supply Operations, assumed interim responsibility for Services as well as Sustainability & Smart City Solutions on top of his other responsibilities.
As Caverion announced on 10 February 2022, Kari Sundbäck initially took responsibility for Services business, smart technologies, advisory, engineering and digital solutions as well as for strategic and operations development. As of 1 August 2022 Sundbäck is responsible for Services business, smart technologies, advisory, engineering and digital solutions as well as for sustainability.
Reinhard Poglitsch was appointed as EVP, Head of Commercial, responsible for International customers and commercial development as of 14 March 2022. Poglitsch joined Caverion after a long career in ISS, a global provider of facility services. His most recent position was as Commercial Director, ISS Europe, during 2019−2021. He is also a Group Management Board member of Caverion.
Mikko Kettunen was appointed as CFO of Caverion Group and a member of the Group Management Board of Caverion as of 22 August 2022. Kettunen's latest position has been the CFO of the Finnish stock-listed composite solutions manufacturer Exel Composites Plc, where he has also acted earlier in a combined role as CFO and Business Unit Manager for Finland.
Riitta Palomäki held the position of interim CFO in March−August 2022. The previous CFO Martti Ala-Härkönen had resigned to join another company and continued as CFO until 31 March 2022.
There have been no material changes in Caverion's significant short-term risks and uncertainties reported in the Interim Report Q3/2022. Those risks and uncertainties are still valid. The most significant factor creating uncertainty is the war in Ukraine and its potential implications on the operating environment of Caverion. The impacts of the war on Caverion's business during 2022 have been described earlier in the report in "Impacts of the Ukraine war on Caverion's business during 2022". Further escalation or prolongation of the conflict or regional unrest in neighbouring areas could negatively affect Caverion's operating environment.
The short-term risks related to the lack of availability of materials and supply as well as the increase in material prices are still valid. The same applies to the risk of rising energy and fuel prices. Possible problems with the availability and cost of materials, labour, energy and fuel may impact the operating environment in the near future. These risks have already partly materialised. The key measures how Caverion is managing the situation include price increase clauses in tenders and agreements covering these costs.
The soaring inflation in the EU countries poses several risks and may lead to a recession within the EU and also wider. The situation may have an impact on the market demand going forward due to a weakening economic sentiment. The potential risk is balanced by the growing need for energy efficiency in the built environment where Caverion is able to support its customers.
Cyber risks have increased due to the Ukraine crisis. There have been concrete cases of cyber-attacks on business enterprises and government authorities. Government authorities have warned of an increasing amount of cyber-attacks. Caverion has improved the company's cyber security operations and technologies continuously and is well prepared against cyber security threats. However, it cannot be excluded that also Caverion could face cyber-attacks with potential impact on operations.
The impacts of the corona pandemic and the actions taken by the company are summarised separately after this section and described earlier in the report in the "Market outlook in 2023" and "Operating environment in the fourth quarter and in 2022".
Financial risks have been described in more detail in the financial tables of this Financial Statement Release under Note 7 "Financial risk management".
The comprehensive description of Caverion's key risks is available on the company's website www.caverion.com/investors.
The corona pandemic continued to negatively impact Caverion's business in 2022. While there was less impact on the demand, the level of sick leaves was particularly high in the Nordics and also higher than normally in Central Europe especially during the first half of the year 2022. During the second half of the year 2022, the effects of the pandemic started to normalise but it still had an impact on business.
The business volume and the amount of new order intake are important determinants of Caverion's performance. Despite the somewhat more optimistic outlook of the corona pandemic, a negative scenario whereby new waves of the corona pandemic or new pandemics would emerge cannot be ruled out. However, a large part of Caverion's services is vital in keeping critical services for buildings, industries and infrastructure up-and-running at all times.
Should the new waves of the corona pandemic or new pandemics emerge, Caverion's business would be exposed to various risks. These include, for example, suspension or cancellation of existing contracts by customers, lack of demand for new services, absenteeism of employees and subcontractor staff, closures of work sites and other work premises by customers or authorities and defaults in customer payments.
Caverion Corporation's Annual General Meeting, which was held on 28 March 2022 in Helsinki under the socalled Temporary Act without the shareholders' or their proxy representatives' presence at the meeting venue, adopted the Financial Statements and the consolidated Financial Statements for the year 2021 and discharged the members of the Board of Directors and the President and CEOs from liability. In addition, the Annual General Meeting resolved on the use of the profit shown on the balance sheet and the payment of dividend, the approval of the presented Remuneration Report for Governing Bodies, on the composition of members of the Board of Directors and their remuneration, the election of the auditor and its remuneration as well as authorised the Board of Directors to decide on the repurchase of the company's own shares and/or acceptance as pledge of own shares as well as share issues.
The Annual General Meeting elected a Chairman, a Vice Chairman and five (5) ordinary members to the Board
The Board of Directors proposes to the Annual General Meeting to be held on 27 March 2023 that a dividend of EUR 0.20 per share will be paid for the year 2022.
The Annual General Meeting, held on 28 March 2022, approved the proposal of the Board of Directors according to which a dividend of EUR 0.17 per share was paid from the distributable funds of the company for the financial year 2021. The dividend was paid to shareholders who on the record date of the dividend payment 30 March 2022 were recorded in the shareholders' register held by Euroclear Finland Oy. The dividend was paid on 6 April 2022.
The Caverion Corporation is a public limited company organised under the laws of the Republic of Finland, incorporated on 30 June 2013. The company has a single series of shares, and each share entitles its holder to one vote at the General Meeting of the company and to an equal dividend. The company's shares have no nominal value.
The number of shares was 138,920,092 and the share capital was EUR 1,000,000 on 1 January 2022. Caverion held 2,502,467 treasury shares on 1 January 2022. At the end of the reporting period, the total number of shares in Caverion was 138,920,092. Caverion held 2,447,447 treasury shares on 31 December 2022, representing 1.76 percent of the total of Directors. Mats Paulsson was elected as the Chairman of the Board of Directors, Markus Ehrnrooth as the Vice Chairman and Jussi Aho, Joachim Hallengren, Thomas Hinnerskov, Kristina Jahn and Jasmin Soravia as members of the Board of Directors for a term of office expiring at the end of the Annual General Meeting 2023. The stock exchange release on the resolutions passed at the Annual General Meeting is available on Caverion's website at http://www.caverion.com/newsroom.
The Board of Directors held its organisational meeting on 28 March 2022. At the meeting the Board decided on the composition of the Human Resources Committee and the Audit Committee. A description of the committees' tasks and charters are available on Caverion's website at www.caverion.com/investors - Corporate Governance.
Caverion's dividend policy is to distribute as dividends at least 50 percent of the result for the year after taxes, however, taking leverage level into account. Even though there are no plans to amend this dividend policy, there is no guarantee that a dividend or capital redemption will actually be paid in the future, and also there is no guarantee of the amount of the dividend or return of capital to be paid for any given year.
number of shares and voting rights. The number of shares outstanding was 136,472,645 at the end of December 2022.
The Board of Directors of Caverion Corporation decided on a directed share issue without payment for Caverion's Restricted Share Plan 2019–2021 reward payment, as described in stock exchange release published on 24 February 2022. In the directed share issue without payment, 55,020 Caverion Corporation shares held by the company were on 24 February 2022 conveyed to 22 key employees according to the terms and conditions of the plan. No new shares were issued in connection with the plan and therefore the plan had no diluting effect. The decision on the directed share issue without payment was based on the authorisation granted to the Board of Directors by the Annual General Meeting of Shareholders held on 24 March 2021. Prior to the directed share issue, Caverion held a total of 2,502,467 treasury shares, of which 2,447,447 treasury shares remained with the company after the conveyance.
Caverion's Board of Directors approved in December 2021 the commencement of a new plan period 2022- 2024 in the share-based long-term incentive scheme. The scheme is based on a performance share plan (PSP) structure targeted to Caverion's management and selected key employees. The Board approved at the same time the commencement of a new plan period 2022−2024 in the Restricted Share Plan (RSP) structure, which is a complementary share-based incentive structure for specific situations. More information on the plans have been published in a stock exchange release on 14 December 2021. Any potential share rewards based on PSP 2022−2024 and RSP 2022−2024 will be delivered in the spring 2025.
Caverion's long-term share-based incentive schemes for the Group's senior management and key employees were approved by the Board of Directors in December 2015 and in December 2018. The targets set for the Performance Share Plan 2019−2021 were not achieved, and no rewards thereof were paid. If all targets will be achieved, the share rewards subject to Board approval will comprise a maximum of
The Annual General Meeting of Caverion Corporation, held on 28 March 2022, authorised the Board of Directors to decide on the repurchase and/or on the acceptance as pledge of the company's own shares in accordance with the proposal by the Board of Directors. The total number of own shares to be repurchased and/or accepted as pledge shall not exceed 13,500,000 shares, which corresponds to approximately 9.7% of all the shares in the company. The company may use only unrestricted equity to repurchase own shares on the basis of the authorisation. Purchase of own shares may be made at a price formed in public trading on the date of the repurchase or otherwise at a price formed on the market. The Board of Directors resolves on the manner approximately 1.6 million Caverion shares (gross before the deduction of applicable taxes) for each of PSP 2020−2022, PSP 2021−2023 as well as PSP 2022−2024.
The Restricted Share Plan (RSP) is based on a rolling plan structure originally announced on 18 December 2015. The commencement of each new plan within the structure is conditional on a separate Board approval. Share allocations within the Restricted Share Plan will be made for individually selected key employees in specific situations. Each RSP plan consists of a three-year vesting period after which the allocated share rewards will be delivered to the participants provided that their employment with Caverion continues at the time of the delivery of the share reward. The potential share rewards based on the Restricted Share Plans for 2020−2022, 2021−2023 as well as 2022−2024 total a maximum of approximately 480,000 shares (gross before the deduction of applicable payroll tax). Of these plans, a maximum of 230,000 shares will be delivered in the spring of 2023, a maximum of 165,000 shares in the spring of 2024 and a maximum of 85,000 shares in the spring of 2025.
The public tender offers made for Caverion's shares can have an effect on the payments made under Caverion's outstanding share incentive plans. Additional information on the possible effects can be found in North Holdings 3 Oy's tender offer document published on 24 November 2022.
More information on the share-based incentive plans has been published in stock exchange releases.
Caverion has not made any decision regarding the issue of option rights or other special rights entitling to shares.
in which own shares will be repurchased and/or accepted as pledge. Repurchase of own shares may be made using, inter alia, derivatives. The repurchase and/or acceptance as pledge of own shares may be made otherwise than in proportion to the share ownership of the shareholders (directed repurchase or acceptance as pledge).
The authorisation cancelled the authorisation given by the Annual General Meeting on 24 March 2021 to decide on the repurchase and/or acceptance as pledge of the company's own shares. The authorisation is valid until 28 September 2023. The Board of Directors has not used the authorisation to decide on the repurchase of the company's own shares during the period.
As part of the implementation of the Matching Share Plan announced on 7 February 2018, the company has accepted as a pledge the shares acquired by those key employees who took a loan from the company. As a result, Caverion had 623,122 Caverion Corporation shares as a pledge at the end of the reporting period on 31 December 2022.
The Annual General Meeting of Caverion Corporation, held on 28 March 2022, authorised the Board of Directors to decide on share issues in accordance with the proposal by the Board of Directors. The total number of shares to be issued under the authorisation may not exceed 13,500,000 shares, which corresponds to approximately 9.7% of all the shares in the company. The Board of Directors decides on all the conditions of the issuance of shares. The authorisation concerns both the issuance of new shares as well as the transfer of treasury shares. The issuance of shares
The closing price of Caverion's share was EUR 6.39 at the end of the year 2021. The closing rate on the last trading day of the review period on 31 December 2022 was EUR 6.93. The share price increased by 8 percent during January–December. The highest price of the share during the review period January–December was EUR 6.98, the lowest was EUR 4.09 and the average price was EUR 5.68. Share turnover on Nasdaq Helsinki in January–December amounted to 33.4 million shares. The value of share turnover was
A consortium of investors led by Bain Capital announced in the name of North Holdings 3 Oy on 3 November 2022 a public tender offer to the shareholders of Caverion. The Board of Directors of Caverion, represented by a quorum comprising the non-conflicted members of the Board of Directors, then unanimously decided to recommend that the shareholders of Caverion accept the tender offer. More information can be found in the stock exchange
At the end of December 2022, the number of registered shareholders in Caverion was 26,409 (9/2022: 30,273). At the end of December 2022, a total of 36.4 percent of the shares were owned by nominee-registered and non-Finnish investors (9/2022: 29.2%).
Caverion Corporation received on 5 January 2022 an announcement under Chapter 9, Section 5 of the Finnish Securities Markets Act, according to which the holding of Antti Herlin in Caverion Corporation through Security Trading Oy (a company owned by Antti Herlin)
may be carried out in deviation from the shareholders' pre-emptive rights (directed issue). The authorisation can be used, e.g. in order to develop the company's capital structure, to broaden the company's ownership base, to be used as payment in corporate acquisitions or when the company acquires assets relating to its business and as part of the company's incentive programs. The authorisation cancelled the authorisation given by the Annual General Meeting on 24 March 2021 to decide on the issuance of shares. The authorisation is valid until the end of the next Annual General Meeting, however no later than 30 June 2023.
The Board of Directors has not used the current authorisation to decide on share issues during the period. The decision on the directed share issue without payment described under "Share capital and number of shares" was based on the previous authorisation.
EUR 190.3 million (source: Nasdaq Helsinki). Caverion's shares are also traded in other marketplaces, such as Cboe and Turquoise.
The market capitalisation of the Caverion Corporation at the end of the review period was EUR 945.8 million. Market capitalisation has been calculated excluding the 2,447,447 shares held by the company as per 31 December 2022.
releases published on 3 November 2022 and 18 November 2022 as well as in the tender offer document published on 24 November 2022.
More updated information related to the tender offer and a subsequent competing tender offer has also been presented under the section "Events after the review period".
had exceeded the threshold of 15 percent on 5 January 2022, as Security Trading Oy acquired 100% of the share capital in Hisra Consulting and Finance Oy. The combined direct and indirect holding of Antti Herlin and Security Trading in Caverion increased to 21,054,392 shares, corresponding to 15.1558 percent of Caverion's shares and voting rights.
Updated lists of Caverion's largest shareholders and ownership structure by sector as per 31 December 2022, are available on Caverion's website at www.caverion.com/investors.
| The distributable equity of the parent company Caverion Corporation on 31 December 2022 (EUR) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Retained earnings | 40,263,587.05 | |||||||
| Result for the period | 13,441,665.77 | |||||||
| Retained earnings, total | 53,705,252.82 | |||||||
| Unrestricted equity reserve | 66,676,176.49 | |||||||
| Distributable equity, total | 120,381,429.31 |
The Board of Directors proposes to the Annual General Meeting to be held on 27 March 2023 that a dividend of EUR 0.20 per share will be paid for the year 2022.
Helsinki, 8 February 2023
Caverion Corporation
Board of Directors
Mats Paulsson Chairman
Markus Ehrnrooth*
Vice Chairman
Jussi Aho Joachim Hallengren Thomas Hinnerskov
Kristina Jahn Jasmin Soravia
Jacob Götzsche President and CEO
* The Vice Chairman of the Board, Markus Ehrnrooth has not participated in and has refrained from all the work of the Board of Directors and its committees for part of 2022 as described in the Board of Directors' Report January 1 – December 31, 2022 and has also refrained from signing the Board of Directors' Report January 1 – December 31, 2022 and the Annual Accounts January 1– December 31, 2022 of the Company.
The Financial Statement Release is based on the audited Financial Statements for 2022.
| EUR million | 10-12/2022 | 10-12/2021 | 1-12/2022 | 1-12/2021 |
|---|---|---|---|---|
| Revenue | 682.9 | 585.3 | 2,352.1 | 2,139.5 |
| Other operating income | 0.5 | 0.9 | 2.3 | 2.8 |
| Materials and supplies | -183.4 | -154.3 | -615.4 | -523.9 |
| External services | -136.9 | -118.9 | -446.0 | -398.4 |
| Employee benefit expenses | -249.0 | -223.8 | -923.6 | -889.9 |
| Other operating expenses | -74.3 | -66.2 | -226.1 | -216.3 |
| Share of results of associated companies | 0.0 | 0.0 | 0.0 | |
| Depreciation, amortisation and impairment | -19.8 | -17.9 | -73.5 | -70.3 |
| Operating result | 20.0 | 5.1 | 69.9 | 43.5 |
| % of revenue | 2.9 | 0.9 | 3.0 | 2.0 |
| Financial income and expense, net | -2.1 | -2.5 | -9.0 | -8.6 |
| Result before taxes | 17.9 | 2.6 | 60.9 | 34.9 |
| % of revenue | 2.6 | 0.4 | 2.6 | 1.6 |
| Income taxes | -4.7 | -1.0 | -14.7 | -9.8 |
| Result for the period | 13.1 | 1.6 | 46.2 | 25.1 |
| % of revenue | 1.9 | 0.3 | 2.0 | 1.2 |
| Attributable to | ||||
| Equity holders of the parent company | 13.2 | 1.6 | 46.2 | 25.0 |
| Non-controlling interests | 0.0 | 0.0 | 0.0 | 0.0 |
| Earnings per share attributable to the equity | ||||
| holders of the parent company | ||||
| Earnings per share, undiluted, EUR | 0.09 | 0.01 | 0.32 | 0.17 |
| Diluted earnings per share, EUR | 0.09 | 0.01 | 0.32 | 0.17 |
| EUR million | 10-12/2022 | 10-12/2021 | 1-12/2022 | 1-12/2021 |
|---|---|---|---|---|
| Result for the review period | 13.1 | 1.6 | 46.2 | 25.1 |
| Other comprehensive income | ||||
| Items that will not be reclassified to profit/loss: | ||||
| - Change in fair value of defined benefit pension plans | 5.1 | 0.6 | 6.6 | -0.1 |
| -- Deferred tax | -2.1 | -0.5 | -2.1 | -0.5 |
| - Change in fair value of other investments | 0.0 | -0.1 | 0.0 | |
| -- Deferred tax | ||||
| Items that may be reclassified subsequently | ||||
| to profit/loss: | ||||
| - Translation differences | 1.0 | 6.3 | -3.7 | 8.1 |
| Other comprehensive income, total | 3.9 | 6.4 | 0.7 | 7.5 |
| Total comprehensive result | 17.1 | 8.0 | 46.9 | 32.5 |
| Attributable to | ||||
| Equity holders of the parent company | 17.1 | 8.0 | 46.9 | 32.5 |
| Non-controlling interests | 0.0 | 0.0 | 0.0 | 0.0 |
Condensed consolidated statement of financial position
| EUR million | Dec 31, 2022 | Dec 31, 2021 |
|---|---|---|
| Assets | ||
| Non-current assets | ||
| Property, plant and equipment | 19.1 | 17.6 |
| Right-of-use assets | 132.6 | 131.2 |
| Goodwill | 442.5 | 369.9 |
| Other intangible assets | 56.4 | 47.7 |
| Shares in associated companies and joint ventures | 0.1 | 1.5 |
| Other investments | 1.1 | 1.3 |
| Other receivables | 8.4 | 9.6 |
| Deferred tax assets | 15.0 | 16.8 |
| Total non-current assets | 675.3 | 595.6 |
| Current assets | ||
| Inventories | 22.3 | 16.9 |
| Trade receivables | 379.6 | 346.0 |
| POC receivables | 231.3 | 195.6 |
| Other receivables | 32.1 | 34.4 |
| Income tax receivables | 2.9 | 0.6 |
| Cash and cash equivalents | 81.2 | 130.9 |
| Total current assets | 749.4 | 724.4 |
| Total assets | 1,424.7 | 1,320.0 |
| Equity and liabilities | ||
| Equity attributable to equity holders of the parent company | ||
| Share capital | 1.0 | 1.0 |
| Hybrid capital | 35.0 | 35.0 |
| Other equity | 189.2 | 165.1 |
| Non-controlling interest | 0.2 | 0.3 |
| Equity | 225.4 | 201.4 |
| Non-current liabilities | ||
| Deferred tax liabilities | 38.5 | 34.0 |
| Pension liabilities | 41.9 | 50.6 |
| Provisions | 8.7 | 10.6 |
| Lease liabilities | 93.5 | 94.1 |
| Other interest-bearing debts | 127.8 | 132.9 |
| Other liabilities | 12.7 | 7.1 |
| Total non-current liabilities | 323.1 | 329.2 |
| Current liabilities | ||
| Advances received | 286.2 | 261.3 |
| Trade payables | 198.5 | 167.4 |
| Other payables | 294.7 | 276.5 |
| Income tax liabilities | 6.8 | 5.5 |
| Provisions | 29.4 | 34.0 |
| Lease liabilities | 43.9 | 41.6 |
| Other interest-bearing debts | 16.8 | 3.1 |
| Total current liabilities | 876.2 | 789.4 |
| Total equity and liabilities | 1,424.7 | 1,320.0 |
| EUR million | Dec 31, 2022 | Dec 31, 2021 |
|---|---|---|
| Inventories | 22.3 | 16.9 |
| Trade and POC receivables | 611.2 | 541.9 |
| Other current receivables | 31.6 | 33.8 |
| Trade and POC payables | -227.1 | -197.7 |
| Other current liabilities | -293.3 | -278.3 |
| Advances received | -286.2 | -261.3 |
| Working capital | -141.4 | -144.7 |
| Equity attributable to owners of the parent | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| EUR million | Share capital | Retained earnings |
Cumulative translation differences |
Fair value reserve |
Treasury shares | equity reserve Unrestricted |
Hybrid capital | Total | Non-controlling interest |
Total equity |
| Equity on January 1, 2022 | 1.0 | 107.6 | -6.0 | -0.2 | -2.4 | 66.0 | 35.0 | 201.1 | 0.3 | 201.4 |
| Comprehensive income Result for the period Other comprehensive income: |
46.2 | 46.2 | 0.0 | 46.2 | ||||||
| Change in fair value of defined benefit pension |
||||||||||
| plans | 6.6 | 6.6 | 6.6 | |||||||
| -Deferred tax Change in fair value of |
-2.1 | -2.1 | -2.1 | |||||||
| other investments -Deferred tax |
-0.1 | -0.1 | -0.1 | |||||||
| Translation differences | -3.7 | -3.7 | -3.7 | |||||||
| Comprehensive income, total | 50.7 | -3.7 | -0.1 | 46.9 | 0.0 | 46.9 | ||||
| Dividend distribution | -23.2 | -23.2 | 0.0 | -23.2 | ||||||
| Share-based payments | 2.2 | 2.2 | 2.2 | |||||||
| Transfer of own shares | -0.4 | 0.4 | ||||||||
| Hybrid capital interests and costs after taxes |
-1.9 | -1.9 | -1.9 | |||||||
| Equity on December 31, 2022 | 1.0 | 135.1 | -9.6 | -0.3 | -2.0 | 66.0 | 35.0 | 225.2 | 0.2 | 225.4 |
| Equity attributable to owners of the parent | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| EUR million | Share capital | Retained earnings |
Cumulative translation differences |
Fair value reserve |
Treasury shares | equity reserve Unrestricted |
Hybrid capital | Total | Non-controlling interest |
Total equity |
| Equity on January 1, 2021 | 1.0 | 111.3 | -14.1 | -0.1 | -2.8 | 66.0 | 35.0 | 196.3 | 0.3 | 196.6 |
| Comprehensive income Result for the period Other comprehensive income: Change in fair value of defined benefit pension |
25.0 | 25.0 | 0.0 | 25.1 | ||||||
| plans | -0.1 | -0.1 | -0.1 | |||||||
| -Deferred tax Change in fair value of |
-0.5 | -0.5 | -0.5 | |||||||
| other investments -Deferred tax |
0.0 | 0.0 | 0.0 | |||||||
| Translation differences | 8.1 | 8.1 | 8.1 | |||||||
| Comprehensive income, total Dividend distribution Share-based payments |
24.4 -27.3 1.5 |
8.1 | 0.0 | 32.5 -27.3 1.5 |
0.0 0.0 |
32.5 -27.3 1.5 |
||||
| Transfer of own shares Hybrid capital interests and costs after taxes |
-0.4 -1.9 |
0.4 | -1.9 | -1.9 | ||||||
| Equity on December 31, 2021 | 1.0 | 107.6 | -6.0 | -0.2 | -2.4 | 66.0 | 35.0 | 201.1 | 0.3 | 201.4 |
| EUR million | 10-12/2022 | 10-12/2021 | 1-12/2022 | 1-12/2021 |
|---|---|---|---|---|
| Cash flows from operating activities | ||||
| Result for the period | 13.1 | 1.6 | 46.2 | 25.1 |
| Adjustments to result | 25.8 | 35.0 | 88.7 | 99.8 |
| Change in working capital | 68.0 | 40.1 | 9.4 | -21.0 |
| Operating cash flow before financial and tax items | 106.9 | 76.7 | 144.3 | 103.8 |
| Financial items, net | -1.9 | -2.8 | -9.5 | -9.0 |
| Taxes paid | -5.8 | -4.8 | -14.3 | -14.3 |
| Net cash from operating activities | 99.2 | 69.1 | 120.5 | 80.4 |
| Cash flows from investing activities | ||||
| Acquisition of subsidiaries and businesses, | ||||
| net of cash | -11.7 | -3.1 | -85.3 | -9.7 |
| Disposal of subsidiaries and businesses, | ||||
| net of cash | 0.4 | -0.9 | 0.4 | -0.9 |
| Dividends from equity accounted investments | 1.3 | 1.3 | ||
| Capital expenditure and other investments, net | -3.0 | -3.1 | -13.5 | -11.7 |
| Net cash used in investing activities | -13.0 | -7.0 | -97.1 | -22.3 |
| Cash flow after investing activities | 86.2 | 62.1 | 23.4 | 58.2 |
| Cash flow from financing activities | ||||
| Change in loan receivables, net | 0.8 | |||
| Change in current liabilities, net | -35.5 | 0.0 | 9.9 | |
| Proceeds from borrowings | 50.2 | 74.7 | 50.3 | |
| Repayments of borrowings | -2.3 | -51.7 | -75.4 | -53.2 |
| Repayments of lease liabilities | -13.1 | -12.2 | -49.8 | -46.9 |
| Hybrid capital costs and interests | -2.4 | -2.4 | ||
| Dividends paid and other distribution of assets | -23.2 | -27.3 | ||
| Net cash used in financing activities | -50.9 | -13.7 | -65.4 | -79.5 |
| Change in cash and cash equivalents | 35.3 | 48.4 | -42.0 | -21.3 |
| Cash and cash equivalents at the beginning of the period | 46.8 | 81.5 | 130.9 | 149.3 |
| Change in the foreign exchange rates | -1.0 | 1.1 | -7.7 | 2.9 |
| Cash and cash equivalents at the end of the period | 81.2 | 130.9 | 81.2 | 130.9 |
| EUR million | 10-12/2022 | 10-12/2021 | 1-12/2022 | 1-12/2021 |
|---|---|---|---|---|
| Operating cash flow before financial and tax items | 106.9 | 76.7 | 144.3 | 103.8 |
| Taxes paid | -5.8 | -4.8 | -14.3 | -14.3 |
| Net cash used in investing activities | -13.0 | -7.0 | -97.1 | -22.3 |
| Free cash flow | 88.1 | 64.9 | 32.9 | 67.2 |
Caverion Corporation's Financial Statement Release for 1 January – 31 December, 2022 has been prepared in accordance with IAS 34, 'Interim Financial Reporting'. The information presented in this Financial Statement Release is based on the audited Financial Statements for 2022. Caverion has applied the same accounting principles in the preparation of the
In the Financial Statement Release the figures are presented in million euros subject to rounding, which may cause some rounding inaccuracies in column and total sums.
| 12/2022 | 12/2021 | |
|---|---|---|
| Revenue, EUR million | 2,352.1 | 2,139.5 |
| Organic growth, % | 8.6 | -2.0 |
| EBITDA, EUR million | 143.4 | 113.8 |
| EBITDA margin, % | 6.1 | 5.3 |
| Adjusted EBITDA, EUR million | 163.0 | 142.1 |
| Adjusted EBITDA margin, % | 6.9 | 6.6 |
| EBITA, EUR million | 86.1 | 59.4 |
| EBITA margin, % | 3.7 | 2.8 |
| Adjusted EBITA, EUR million | 105.8 | 87.7 |
| Adjusted EBITA margin, % | 4.5 | 4.1 |
| Operating profit, EUR million | 69.9 | 43.5 |
| Operating profit margin, % | 3.0 | 2.0 |
| Result before taxes, EUR million | 60.9 | 34.9 |
| % of revenue | 2.6 | 1.6 |
| Result for the review period, EUR million | 46.2 | 25.1 |
| % of revenue | 2.0 | 1.2 |
| Earnings per share, undiluted, EUR | 0.32 | 0.17 |
| Earnings per share, diluted, EUR | 0.32 | 0.17 |
| Equity per share, EUR | 1.6 | 1.5 |
| Equity ratio, % | 19.8 | 19.0 |
| Interest-bearing net debt, EUR million | 200.9 | 140.7 |
| Gearing ratio, % | 89.1 | 69.8 |
| Total assets, EUR million | 1,424.7 | 1,320.0 |
| Operating cash flow before financial and tax items, EUR million | 144.3 | 103.8 |
| Cash conversion (LTM), % | 100.6 | 91.2 |
| Working capital, EUR million | -141.4 | -144.7 |
| Gross capital expenditures, EUR million | 112.8 | 26.0 |
| % of revenue | 4.8 | 1.2 |
| Order backlog, EUR million | 1,943.3 | 1,863.8 |
| Personnel, average for the period | 14,570 | 14,831 |
| Number of outstanding shares at the end of the period (thousands) | 136,473 | 136,418 |
| Average number of shares (thousands) | 136,465 | 136,298 |
| EUR million | 10-12/2022 7-9/2022 4-6/2022 1-3/2022 10-12/2021 7-9/2021 4-6/2021 1-3/2021 | |||||||
|---|---|---|---|---|---|---|---|---|
| Revenue | 682.9 | 564.1 | 577.0 | 528.1 | 585.3 | 493.7 | 545.1 | 515.3 |
| Organic growth, % | 14.9 | 11.8 | 4.7 | 2.4 | -1.1 | -4.6 | 3.3 | -5.4 |
| EBITDA | 39.8 | 39.3 | 35.8 | 28.5 | 23.0 | 31.2 | 31.5 | 28.1 |
| EBITDA margin, % | 5.8 | 7.0 | 6.2 | 5.4 | 3.9 | 6.3 | 5.8 | 5.5 |
| Adjusted EBITDA | 53.8 | 41.1 | 37.3 | 30.8 | 44.5 | 35.0 | 33.2 | 29.4 |
| Adjusted EBITDA margin, % | 7.9 | 7.3 | 6.5 | 5.8 | 7.6 | 7.1 | 6.1 | 5.7 |
| EBITA | 24.6 | 25.1 | 21.4 | 15.0 | 8.6 | 17.7 | 18.0 | 15.1 |
| EBITA margin, % | 3.6 | 4.5 | 3.7 | 2.8 | 1.5 | 3.6 | 3.3 | 2.9 |
| Adjusted EBITA | 38.7 | 26.9 | 22.9 | 17.4 | 30.1 | 21.5 | 19.7 | 16.4 |
| Adjusted EBITA margin, % | 5.7 | 4.8 | 4.0 | 3.3 | 5.1 | 4.4 | 3.6 | 3.2 |
| Operating profit | 20.0 | 21.1 | 17.5 | 11.4 | 5.1 | 13.5 | 13.9 | 11.0 |
| Operating profit margin, % | 2.9 | 3.7 | 3.0 | 2.2 | 0.9 | 2.7 | 2.5 | 2.1 |
| 10-12/2022 7-9/2022 4-6/2022 1-3/2022 10-12/2021 7-9/2021 4-6/2021 1-3/2021 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Earnings per share, undiluted, EUR | 0.09 | 0.10 | 0.09 | 0.04 | 0.01 | 0.05 | 0.06 | 0.05 |
| Earnings per share, diluted, EUR | 0.09 | 0.10 | 0.09 | 0.04 | 0.01 | 0.05 | 0.06 | 0.05 |
| Equity per share, EUR | 1.6 | 1.5 | 1.4 | 1.4 | 1.5 | 1.4 | 1.4 | 1.3 |
| Equity ratio, % | 19.8 | 19.0 | 18.6 | 17.3 | 19.0 | 19.0 | 18.1 | 17.2 |
| Interest-bearing net debt, EUR million | 200.9 | 274.0 | 215.4 | 125.6 | 140.7 | 185.0 | 147.3 | 98.0 |
| Gearing ratio, % | 89.1 | 131.8 | 111.3 | 67.7 | 69.8 | 96.2 | 79.9 | 55.2 |
| Total assets, EUR million | 1,424.7 | 1,360.5 | 1,289.5 | 1,313.9 | 1,320.0 | 1,254.2 | 1,258.3 | 1,280.9 |
| Operating cash flow before | ||||||||
| financial and tax items, EUR million | 106.9 | 7.7 | -9.3 | 39.1 | 76.7 | -10.1 | -3.4 | 40.6 |
| Cash conversion (LTM), % | 100.6 | 90.1 | 81.3 | 89.6 | 91.2 | 96.4 | 80.3 | 137.4 |
| Working capital, EUR million | -141.4 | -75.8 | -106.5 | -158.2 | -144.7 | -101.7 | -139.9 | -176.0 |
| Gross capital expenditures, EUR | 20.0 | 54.8 | 33.3 | 4.7 | 5.2 | 13.7 | 2.8 | 4.3 |
| % of revenue million |
2.9 | 9.7 | 5.8 | 0.9 | 0.9 | 2.8 | 0.5 | 0.8 |
| Order backlog, EUR million | 1,943.3 | 1,971.0 | 1,907.9 | 1,951.6 | 1,863.8 | 1,889.7 | 1,789.0 | 1,626.7 |
| Personnel at the end of the period | 14,490 | 15,037 | 14,612 | 14,272 | 14,298 | 14,773 | 14,958 | 14,892 |
| Number of outstanding shares at | ||||||||
| end of period (thousands) | 136,473 | 136,473 | 136,473 | 136,473 | 136,418 | 136,448 | 136,296 | 136,176 |
| Average number of shares | ||||||||
| (thousands) | 136,473 | 136,473 | 136,473 | 136,440 | 136,433 | 136,361 | 136,258 | 136,138 |
| Result for the period (attributable for equity holders) | |
|---|---|
| - hybrid capital expenses and accrued unrecognised interests after tax | |
| Earnings / share, undiluted = | Weighted average number of shares outstanding during the period |
| Result for the period (attributable for equity holders) | |
| - hybrid capital expenses and accrued unrecognised interests after tax | |
| Earnings /share, diluted = | Weighted average dilution adjusted number of shares |
| outstanding during the period |
ESMA (European Securities and Markets Authority) has issued guidelines regarding Alternative Performance Measures ("APM"). Caverion presents APMs to improve the analysis of business and financial performance and to enhance the comparability between reporting periods. APMs presented in this report should not be considered as a substitute for measures of performance in accordance with the IFRS.
| EBITDA = | Operating profit (EBIT) + depreciation, amortisation and impairment |
|---|---|
| Adjusted EBITDA = | EBITDA before items affecting comparability (IAC) * |
| EBITA = | Operating profit (EBIT) + amortisation and impairment |
| Adjusted EBITA = | EBITA before items affecting comparability (IAC) * |
| Equity ratio (%) = | (Equity + non-controlling interest) × 100 Total assets - advances received |
| Gearing ratio (%) = | (Interest-bearing liabilities - cash and cash equivalents) × 100 Shareholders' equity + non-controlling interest |
| Interest-bearing net debt = | Interest-bearing liabilities - cash and cash equivalents |
| Working capital = | Inventories + trade and POC receivables + other current receivables - trade and POC payables - other current payables - advances received - current provisions |
| Free cash flow = | Operating cash flow before financial and tax items – taxes paid – net cash used in investing activities |
| Cash conversion (%) = | Operating cash flow before financial and tax items (LTM) ×100 EBITDA (LTM) |
| Equity / share = | Shareholders' equity |
| Number of outstanding shares at the end of the period | |
| Dividend / earnings (%) = | Dividend per share x 100 |
| Earnings per share |
Net debt / Adjusted EBITDA =
Organic growth = Defined as the change in revenue in local currencies excluding the impacts of (i) currencies; and (ii) acquisitions and divestments. The currency impact shows the impact of changes in exchange rates of subsidiaries with a currency other than the euro (Group's reporting currency). The acquisitions and divestments impact shows how acquisitions and divestments completed during the current or previous year affect the revenue reported.
*Items affecting comparability (IAC) in 2022 are material items or transactions, which are relevant for understanding the financial performance of Caverion when comparing the profit of the current period with that of the previous periods. These items can include (1) capital gains and/or losses and transaction costs related to divestments and acquisitions; (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 2021 and 2022, major risk projects only include one old risk project in Germany reported under category (2). In 2021 and 2022, provisions and legal and other costs for civil claims related to the German anti-trust matter were reported under category (4). Category (4) includes also advisory costs and personnel bonuses related to the ongoing public tender offer and in 2021, previously capitalised expenses that were booked as operative expenses due to a change in the accounting principle of implementation costs in cloud computing arrangements.
Adjusted EBITDA is affected by the same adjustments as adjusted EBITA, except for restructuring costs, which do not include depreciation and impairment relating to restructurings.
| Acquired unit | Division | Business unit |
Technical area | Acquisition type |
Acquisition period |
Employees | Prior fiscal year annual sales, EUR million |
|---|---|---|---|---|---|---|---|
| Frödéns Ventilation | Sweden | Services | Ventilation and air conditioning |
Business | Jan | 12 | 2.7 |
| DI-Teknik A/S | Denmark | Services | Automation | Shares | Apr | 185 | 27.8 |
| Kaldt og Varmt | Norway | Services | Cooling and heating |
Business | May | 5 | 1.8 |
| Wind Controller Group |
Industry | Services | Energy utilities operation and maintenance |
Shares | May | 40 | 5.1 |
| WT-Service Oy | Industry | Services | Industrial maintenance |
Shares | May | 17 | 1.7 |
| Visi Oy | Finland | Services | Security and safety |
Shares | Jul | 22 | 4.6 |
| PORREAL GmbH* | Austria | Services | Technical maintenance |
Shares | Aug | 120* | 23.3* |
| Elicentra AB | Sweden | Services | Electricity | Shares | Aug | 18 | 2.4 |
| CS electric A/S | Denmark | Services | Industrial engineering and |
Shares | Sep | 70 | 13.4 |
| Simex Klima & Kulde AS |
Norway | Services | automation Cooling and heating |
Shares | Oct | 25 | 4.2 |
| LukkoPro Oy | Finland | Services | Security and safety |
Shares | Nov | 35 | 5.6 |
| Carrier's food retail refrigeration business |
Finland | Services | Refrigeration | Business | Dec | 17 | 1.7** |
| TM Voima Group | Industry | Projects | Industrial project installations |
Shares | Feb 2023*** |
66 | 30.5 |
* Caverion's acquisition of PORREAL Group in August 2022 comprised PORREAL GmbH and its subsidiary ALEA GmbH. ALEA GmbH was divested in December 2022 and the above figures only contain those of PORREAL GmbH.
** For Carrier's food retail refrigeration business, the annual sales for the fiscal year prior to the acquisition contain only the sales arising from the transferred business.
*** Caverion signed the agreement to acquire TM Voima Group's substation and transmission line business in October 2022 and the acquisition was closed on 1 February 2023 after the approval by the Finnish Competition and Consumer Authority.
In the next table, the assets and liabilities of the acquired businesses are reported in aggregate. The consolidation of the acquired businesses is still provisional as of 31 December 2022. Therefore, the fair value measurement of the acquired assets and liabilities is preliminary and subject to adjustments during the 12-month period during which the acquisition calculations will be finalized.
| Assets and liabilities of the acquired businesses (including fair value adjustments) | |||||
|---|---|---|---|---|---|
| EUR million | Dec 31, 2022 | ||||
| Property, plant and equipment | 3.7 | ||||
| Right-of-use assets | 7.2 | ||||
| Intangible assets | 17.0 | ||||
| Investments | 0.1 | ||||
| Deferred tax assets | 0.1 | ||||
| Inventories | 3.1 | ||||
| Trade and other receivables | 25.9 | ||||
| Cash and cash equivalents | 6.7 | ||||
| Total assets | 63.6 | ||||
| Deferred tax liabilities | 2.3 | ||||
| Pension obligations | 0.0 | ||||
| Trade payables | 6.4 | ||||
| Advances received | 6.5 | ||||
| Other liabilities | 11.2 | ||||
| Provisions | 3.9 | ||||
| Lease liabilities | 7.2 | ||||
| Interest-bearing debt | 0.5 | ||||
| Total liabilities | 38.1 | ||||
| Net assets | 25.6 | ||||
| Cash consideration paid during the fiscal period | 88.5 | ||||
| Contingent consideration, recognised as liability | 10.2 | ||||
| Goodwill | 73.2 |
Caverion announced on 7 February 2018 in a stock exchange release the establishment of a new sharebased incentive plan directed for the key employees of the Group ("Matching Share Plan 2018−2022"). The company provided the participants a possibility to finance the acquisition of the company's shares through an interest-bearing loan from the company, which some of the participants utilised. In the end of December 2022, the total outstanding amount of these loans amounted approximately to EUR 3.7 (4.4) million. The loans will be repaid in full on 29 December
Caverion's main financial risks are the liquidity risk, credit risk as well as market risks including the foreign exchange and interest rate risk. The objectives and principles of financial risk management are defined in the Treasury Policy approved by the Board of Directors. Financial risk management is carried out by Group Treasury in co-operation with the Group's subsidiaries.
2023, at the latest. Company shares have been pledged as a security for the loans.
Caverion has a fixed term contract with a member of the Board concerning consulting services. The contract was valid until 31 December 2022 and the value is not material.
The year closed with a high market uncertainty, which is reflected to Caverion figures especially by weaker Norwegian and Swedish krone, as well as higher interest on floating rate loans. The defining feature of the markets in 2022 has been high inflation and market volatility. The central banks have fought the inflation with rapid rate increases. Energy prices have been declining, but there are still risks that the pressure on wage inflation will keep the overall inflation figures high, thus the interest rate peak and its timing is hard to predict. Continuing high volatility on foreign exchange rates is also expected. Caverion monitors the risks closely and at the moment does not see any need for changes in the risk management principles. The risks related to the availability of financing, the availability of guarantee facilities as well as foreign exchange and interest rate related risks are in control.
The objective of capital management in Caverion Group is to maintain an optimal capital structure, maximise the return on the respective capital employed and to minimise the cost of capital within the limits and principles stated in the Treasury Policy. The capital structure is modified primarily by directing investments and working capital employed.
No significant changes have been made to the Group's financial risk management principles in the reporting period. Further information is presented in Group's 2022 financial statement in note 5.5 Financial risk management.
Caverion continues the sharpened focus on optimising cash flow and working capital management. Ensuring adequate liquidity has been prioritised to support the growth strategy through acquisitions.
Caverion's external loans are subject to a financial covenant based on the ratio of the Group's net debt to EBITDA according to the calculation principles confirmed with the lending parties. The covenant ratio is continuously monitored and evaluated against actual and forecasted EBITDA and net debt figures.
The next table presents the maturity structure of interest-bearing liabilities. Interest-bearing borrowings are based on contractual maturities of liabilities excluding interest payments. Lease liabilities are presented based on discounted present value of remaining lease payments. Cash flows of foreigndenominated liabilities are translated into the euro at the reporting date.
| EUR million | 2023 | 2024 | 2025 | 2026 | 2027 | 2028-> | Total |
|---|---|---|---|---|---|---|---|
| Interest-bearing borrowings | 16.5 | 3.0 | 51.5 | 0.0 | 75.0 | 0.0 | 146.0 |
| Lease liabilities | 43.9 | 33.0 | 20.3 | 13.5 | 7.8 | 18.9 | 137.5 |
| Total | 60.4 | 36.0 | 71.8 | 13.5 | 82.8 | 18.9 | 283.5 |
| Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|
| EUR million | Carrying amount | Carrying amount |
| Non-current liabilities | ||
| Senior bonds | 73.3 | 74.9 |
| Loans from financial institutions | 50.0 | 50.0 |
| Other financial loans | 0.0 | 0.5 |
| Pension loans | 4.5 | 7.5 |
| Lease liabilities | 93.5 | 94.1 |
| Total non-current interest-bearing liabilities | 221.3 | 226.9 |
| Current liabilities | ||
| Senior bonds | 3.5 | |
| Pension loans | 3.0 | 3.0 |
| Other financial loans | 0.3 | 0.1 |
| Commercial papers | 10.0 | |
| Lease liabilities | 43.9 | 41.6 |
| Total current interest-bearing liabilities | 60.7 | 44.7 |
| Total interest-bearing liabilities | 282.0 | 271.6 |
| Total interest-bearing liabilities (excluding | ||
| IFRS 16 lease liabilities) | 144.6 | 135.9 |
| Cash and cash equivalents | 81.2 | 130.9 |
| Interest-bearing net debt | 200.9 | 140.7 |
| Interest-bearing net debt excluding IFRS 16 | ||
| lease liabilities | 63.4 | 5.0 |
The fair value of senior bonds amounted to EUR 71.0 million at the end of December 2022. The carrying amounts of all other financial assets and liabilities are reasonably close to their fair values.
| Nominal amounts | ||
|---|---|---|
| EUR million | Dec 31, 2022 | Dec 31, 2021 |
| Foreign exchange forwards | 121.1 | 65.2 |
| Fair values | ||
| EUR million | Dec 31, 2022 | Dec 31, 2021 |
| Foreign exchange forwards | ||
| positive fair value | 0.0 | 0.1 |
The fair values of the derivative instruments have been defined as follows: The fair values of foreign exchange forward agreements have been defined by using market prices on the closing day. The fair values of interest rate swaps are based on discounted cash flows.
| EUR million | Dec 31, 2022 | Dec 31, 2021 |
|---|---|---|
| Guarantees given on behalf of associated companies and | ||
| joint ventures | 32.1 | |
| Parent company's guarantees on behalf of its subsidiaries | 493.1 | 497.7 |
| Other commitments | ||
| - Other contingent liabilities | 0.2 | |
| Accrued unrecognised interest on hybrid bond | 1.5 | 1.5 |
The nominal amount of leasing commitments of lowvalue and short-term leases amounted to EUR 5.4 million at the end of 2022 (EUR 8.8 million). The present value of lease liability of leases not yet commenced to which Caverion is committed amounted to EUR 1.1 million at the end of 2022 (EUR 0.1 million).
Entities participating in the demerger are jointly and severally responsible for the liabilities of the demerging entity which have been generated before the registration of the demerger. As a consequence, a secondary liability up to the allocated net asset value was generated to Caverion Corporation, incorporated due to the partial demerger of YIT Corporation, for those liabilities that were generated before the registration of the demerger and remain with YIT Corporation after the demerger. Caverion Corporation has a secondary liability relating to the Group guarantees which remain with YIT Corporation after the demerger. These Group guarantees amounted to EUR 20.4 (24.3) million at the end of December 2022.
The short-term risks and uncertainties relating to the operations have been described in section "Significant short-term risks and uncertainties".
Crayfish BidCo Oy ("Crayfish BidCo"), a Finnish company controlled by Triton Fund V, announced on 10 January 2023 a voluntary public cash tender offer for all the shares in Caverion Corporation, pursuant to which Crayfish BidCo proposes to acquire all issued and outstanding shares in Caverion Corporation at an offer price of EUR 8.00 per share. This tender offer is subject to certain conditions, as described in the announcement by Crayfish BidCo attached to Caverion's stock exchange release as per 10 January 2023.
Caverion Corporation received on 12 January 2023 an announcement under Chapter 9, Section 5 of the Finnish Securities Markets Act, according to which the holding of Crayfish BidCo had exceeded the threshold of 5 per cent. According to the announcement, the direct holding of Crayfish BidCo in Caverion, and the indirect holding of Triton V LuxCo 87 SARL in Caverion, increased on 12 January 2023 to 13,647,263 shares, corresponding to 9.82 per cent of Caverion's shares and voting rights.
North Holdings 3 Oy ("North Holdings") announced on 11 January 2023, that it will extend the offer period for its tender offer announced on 3 November 2022 until January 31, 2023, at 4:00 p.m. (Finnish time) as well as provided updated information of its financing and regulatory approvals. In addition, North Holdings commented on the competing offer announced by Crayfish BidCo on 10 January 2023. On 13 January 2023, North Holdings also supplemented its tender offer document published on 24 November 2022 with this information and also confirmed that it had received the merger control clearance decision of the European Commission. Additional information has been presented in Caverion's stock exchange releases and their attachments on 11 and 13 January 2023, respectively.
The Board of Directors of Caverion announced on 13 January 2023 that it continues evaluating Triton's tender offer and provided information on discussions with Triton. The Board said that it will present its view on the two offers, including a potential change in recommendation, latest on 24 January 2023.
North Holdings announced on 24 January 2023 that it improves the consideration in its tender offer. Furthermore, North Holdings extended the offer period until 28 February 2023 and lowered the acceptance threshold from more than 90 percent to more than 66 2/3 percent of all shares. The shareholders of Caverion are given the possibility to choose either: (i) a debt instrument entitling to a fixed cash payment of EUR 8.50 per share in nine months from the completion of the tender offer, or (ii) an immediate cash consideration of EUR 8.00 per share upon completion of the tender offer. It was also announced on 24 January 2023 that the Board of Directors of Caverion maintained its recommendation for the tender offer by North Holdings based on the improved offer terms. Additional information has been presented in Caverion's stock exchange releases on 24 January 2023.
On 26 November 2023, North Holdings announced that it had received all necessary regulatory approvals for its voluntary recommended public tender offer for all the shares in Caverion Corporation.
Annual Review 2022: during week 9/2023, at the latest Interim report for January−March: 27 April 2023 Half-year financial report for January−June: 3 August 2023 Interim report for January−September: 3 November 2023
Caverion Corporation • P.O.Box 71, FI-01601 Vantaa • Tel. +358 10 4071 • [email protected] • www.caverion.com @CaverionGroup facebook.com/CaverionGroup www.linkedin.com/company/caverion
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