credit investor presentation - caverion group · company presentation february 2017 . 2016 figures...

Credit Investor Presentation

June, 2017

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Credit Investor Presentation June 2017 2


Company representatives

Martti Ala-Härkönen CFO

Ari Lehtoranta President and CEO

Paula Vesanto Group Treasurer


Contents

1. Business overview

2. Strategy and key credit highlights

3. Financials overview

4. Financing and capital structure

5. Hybrid transaction

6. Appendix

Business overview

We are a leading European service company

6

17,000 employees

EUR 2.4 billion revenue

Headquartered in Helsinki, Finland 12 countries

30,000 spaces in service

6.3 Work safety,

LTIFR

Listed on Nasdaq Helsinki

93 % ISO 14001

Services 48% Project

52%

Germany 22%

Sweden 20%

Denmark-Norway

19%

Industrial Solutions

16%

Finland 14%

Austria 6%

Eastern Europe

3 %

Revenue by division

Revenue by business

unit

Company presentation February 2017

2016 figures

Disciplines Caverion designs, builds, operates and maintains user-friendly and energy-efficient solutions for buildings, infrastructure and industrial plants

EUR 15.6 million EBITDA1

2.8x Net debt / EBITDA2

1 excl. restructuring costs

2 In connection with the financing arrangement agreed on December 22, 2016, Caverion and its lending parties confirmed the EBITDA calculation principles related to the Group’s financial covenant (Net Debt/EBITDA). The Net Debt/EBITDA for 2016 has been calculated accordingly.

Technical Maintenance ° Small and mid size maintenance

agreements ° Single or multiple technologies ° E.g. ServiFlex and ServiFlex+

agreements ° Some 25,000 agreements

Managed Services ° At its widest form Managed Life Cycle

Solutions ° Executed by Caverion or our

subcontractors ° Some 100 agreements


Business units: Services and Projects

Technical Installation ° ≤ EUR 5 million small and mid

size projects ° Single or multiple technologies ° Some 3,000 projects

Large Projects ° Contract size > EUR 5m ° Integrated solutions with customisation ° Life Cycle focus ° Some 50 projects of this type

Number of competitors Barriers of entry, complexity, margin potential, risk level

13%

35%

33%

19%

Revenue split in 2016

Serv

ices

Pr

ojec

ts

Elements of growth towards Services and Life Cycle Solutions


Life Cycle Solutions ° Covers the whole life cycle

° Includes design, installation of building systems, operation, maintenance as well as renovation throughout the contract period

° Maintenance period of up to 20-25 years against a fixed monthly fee in PPP projects

° Investment phase typically run in a consortium

Technical Maintenance ° Fixed price preventive maintenance contract ° Add-on corrective maintenance

(“ad-hoc”) ° Small improvement projects

(“service projects”)

Managed Services ° Medium-term contracts to optimally manage the

disciplines, systems and processes in commercial, industrial and residential buildings or uptime for industrial production lines.

° Including both hard services and sometimes some contracted soft services sourced from a third party

Projects

Services

Technical Installations ° Renovations and new buildings,

may include one or several disciplines ° Technical design is done by the client, or

his representative ° Responsibility for Project Execution

Large Projects ° Proactively sold Large Projects with Total

Technical Solutions to secure optimal outcome of integrated disciplines

° Typically include Advisory Services, Design & Engineering, Project Management and Project Execution

° Responsibility for project fulfilment


Some examples of our clients Broad and diversified client base

AstraZeneca, Sweden

Metsä Fibre, Pulp Mills Finland

National courthouse Viborg, Denmark

TOTAL Refinery Leuna, Germany

Karolinska University Hospital Solna, Sweden

"Marine Façade”, passenger port of St. Petersburg Russia

Managed Services Technical maintenance

Managed Operations

Valio, Vantaa, Finland Palais Quartier Frankfurt a. M., Germany

DC Tower Vienna, Austria

Project Execution

Outokumpu Tornio, Finland

Industrial Installations Managed Life Cycle

Söderhamn municipality, Sweden

Energy Performance contracting

Design & Engineering, Project Management & Execution

Knowledge Centre, St. Olav’s Hospital Trondheim, Norway

Strategy and key credit highlights

Our strategy

11 Credit Investor Presentation June 2017

We are a leading European

provider of advanced and sustainable life cycle solutions for buildings and industries.

Profitability (EBITDA) over 6% of

revenue

Average annual revenue growth > 10%

Negative working capital

Increasing profits

Profitable growth

Innovative and advanced solutions

We design, build, operate and maintain user-friendly and energy-efficient solutions for buildings, infrastructure and industrial plants.

Step ahead + Cooperation + Responsibility + High performance

Vision

Financial targets

Strategic focus areas

Mission

Values

Operational excellence

Strong company image

Excellent leadership

1. Megatrends drive our strategy

3. Closer cooperation with clients

2. Developed business mix to drive profitable growth

Reaching our strategic targets

Megatrends support the future demand of our business

Positive market sentiment and short-term demand prospects in key markets

Strong market position in Central and Northern Europe

Diversified client base provides hedge from economic cycles

Growing service business performing well Actions implemented to improve project business profitability


Key credit highlights

1.

2.

3.

4.

5.

6.

Megatrends support the future demand of our business


◦ Built environment data is managed over the whole lifecycle ◦ All built environments will have an IP address ◦ Availability of real time data in built environments

◦ Tightening legislation relating to energy efficiency ◦ Diversified energy production, growth of renewable energy sources and need for energy balancing ◦ Increasing demand for energy-efficient solutions

◦ Technology in built environments currently accounts for 40−60% of total initial investment costs ◦ Built environments require expertise in integration of technologies ◦ Conditions of built environments are based on preventive measures as well as on actual needs

◦ Urban centers currently occupy less than 5% of the world’s landmass, consume over two-thirds of the energy, and are responsible for over 70% of CO2 emissions.

◦ Needs for necessary infrastructure (water, sanitation, energy, information, transportation, tunnels) ◦ Smart cities require innovative solutions

Growing digitalisation

Improving energy efficiency

Increasing technology

Continuing urbanisation

1.

40

60

80

100

120

140

160

180

Finland SwedenGermany DenmarkAustria

60

70

80

90

100

110

120

130

Finland SwedenGermany DenmarkAustria

Lead indicators for Caverion countries Economic indicators suggest favourable market environment going forward

14

ECONOMIC SENTIMENT INDICATOR (1/2007 – 3/2017) CONSTRUCTION CONFIDENCE INDICATOR (1/2007 – 3/2017)

Long-term

average

Long-term

average

Note: Mean-adjusted figures

Credit Investor Presentation June 2017 Source: European Commission, April 2017

2.

Short-term demand prospects Demand prospects positive, particularly in the Service businesses

Credit Investor Presentation June 2017 15 Sources: Caverion annual report 2016, based on Euroconstruct data and management estimates

2.

Strong market position in Central and Northern Europe Caverion well-positioned in growing markets

16

*) 2015 figure

Source: Company information, Caverion

750

798

1,116

1,564

2,364

2,909

5,145

Assemblin*

Coor

Strabag Property and Facility Services*

Bravida

Caverion

Apleona*

SPIE

Total revenue of Caverion’s main competitors EUR million, 2016

#5

#5

#1 #3

#2

#2

Credit Investor Presentation June 2017

3.

Diversified client base provides hedge from economic cycles

Low customer concentration supporting business stability ° Caverion is not

dependent on individual clients

° In 2016, the three largest clients represented <7% of our revenue and the ten largest <14%


13%

33%

13%

27%

16%

Public

Industry

Real estate investors anddevelopersReal estate users

General contractors

Revenue breakdown by client segments in 2016

14%

86%

Top 10 largest clientsOthers

Client concentration in 2016 (% of revenue)

Five main client segments ° Dependency on

economic cycles is reduced through various client groups in the private and public sectors

° Geographically extensive presence in 12 countries

Thousands of clients representing all sizes of businesses and organisations

4.

Growing service business performing well


10,000 Employees in

Services

EUR 1.1 billion revenue

in 2016

1,000,000 Service orders

annually

30,000 spaces in service

28% Managed Services of

total Services

250 Service locations

5,500 Service cars

5,000 Mobile tools in

use

263 281 267 320 293

Q1 Q2 Q3 Q4 Q1

Services revenue EUR million 2016: 1,131

° Demand for Technical Maintenance and Managed Services is expected to remain strong. As technology in buildings increases, the need for new services and the demand for Life Cycle Solutions are expected to increase

° Services business revenue grew organically by 11.5% in Q1/2017, while in Projects revenue declined by 2.8% (y-o-y)

° Share of service business over 50% of total revenue in Q1/2017

° Services business continues to perform well

5.

2017

Actions implemented to improve project business profitability

Actions completed in Q1/2017

19

Further improvement actions in Q2/2017

Credit Investor Presentation June 2017

6.

° New Projects business unit on Group level ° Improved analysis of risk

projects and enhanced project portfolio analysis

° Strengthened bidding and steering ° Decision authorisation model

improved and tender margin requirements increased

° New monthly steering model introduced to all organisation levels

° Mandatory project manager trainings to be rolled out

° Improved steering and performance management ° Focus on up-to-date project

business KPIs and forecasting ° Improved steering and risk

management ° Early warning mechanisms

° Roll-out of updated Project Management Guidelines

° Common PM-tool selection

Financials

563 638

574

668

561 616 582 606 582

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Revenue development


° Revenue was EUR 582.3 (560.6) million in Q1/2017, growth of 3.9%

° Services business revenue grew by 11.5%, while in Projects revenue declined by 2.8% (y-o-y)

° Share of service business over 50% of total revenue

° Revenue growth strong in Industrial Solutions, Finland and Denmark-Norway

° Project write-downs still affecting revenue in Germany

° Order backlog increased by 9.6% from the end of last year, but decreased by 2.9% from Q1/2016

° A stricter project tendering process implemented since Q2/2016

2015: 2,443 2016: 2,364 2017

Growth of 3.9% in Q1/2017 – Services business +11.5%

1,392 1,393

1,477 1,461

1,589 1,554

1,451 1,408

1,544

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Group revenue EUR million

Order backlog EUR million

2017 2016 2015

° EBITDA EUR 6.8 million for Q1/2017 (Q1/2016: 11.5) ° EBITDA margin 1.2 (2.0)% ° Revenue-adjusted cost savings from personnel and

other operating expenses totalled EUR 8.0m (Q1/2016 vs. Q1/2017)

° Q1 EBITDA affected by project write-downs totalling EUR 5.7 (0.0) million ° Related to the project portfolio mainly in divisions

Industrial Solutions and Germany ° Negative forecast changes and write-downs to earlier

identified risk projects

° No restructuring costs in Q1/2017


EBITDA turning positive − Still affected by project write-downs

14.2

22.0 21.3

34.0

11.5

-14.4

13.8

-22.2

6.8 2.5 %

3.4 % 3.7 % 5.1 %

2.0 %

-2.3 %

2.4 %

-3.7 %

1.2 %

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

EBITDA, EUR millionEBITDA margin, %

1−12/2015: 91.5 (3.7%) 1−12/2016: -11.4 (-0.5%) 2017

-15.8 -7.1

14.4

87.6

0.8

-6.3 -14.2

73.6

-28.8 -32.6 -38.8

28.0

-18.5

3.1 5.2 4.3 10.8 7.3 5.5 5.0 9.0 7.1

17.3 7.6 6.1 5.0

Cash flow and investments


° Cash flow seasonally strong particularly in Q4 ° Service business volume and invoicing

higher in the fourth quarter

° Completion of projects towards year end

° Free cash flow negative but improving by EUR 10.3m year-on-year ° Free cash flow EUR -18.5m (-28.8) in

Q1/2017

° Free cash flow partly improved by the lower level of investments

° Capital expenditure (incl. acquisitions) totalled EUR 5.0m (7.1) in Q1/2017 ° IT investments: EUR 4.2m (5.1) ° Other investments, incl. acquisitions: EUR

0.8m (2.0)

-11.1

4.1 20.5

100.0

9.8 1.8

-8.9

83.1

-18.8 -12.3 -26.6

35.2

-12.1

Operating cash flow before financial and tax items, EUR million

Capex, EUR million Free cash flow, EUR million

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17

Free cash flow = Operating cash flow before financial and tax items – Taxes paid – Net cash used in investing activities (net, including acquisitions and disposals)

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17

° Working capital was EUR 17.3 (3/2016: 15.6) million at the end of March 2017

° POC receivables amounted to EUR 291.0 million (3/2016: 284.0) at the end of March 2017

° Trade receivables increased by EUR 8.6 million from Q1/2016, impacted by revenue growth, and amounted to EUR 313.4 million (3/2016: 304.8) at the end of March 2017

° Working capital still tied in a few challenging risk projects


Financial target: Negative working capital

100

120

44

63

47 48

-21 -15

6

34

-15

16 15

56

-3

17

4% 5%

2% 2%

2% 2%

-1% -1% 0%

1%

-1%

1% 1%

2%

0% 1%

Working capital, EUR millionWorking capital to sales, % (LTM)

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2013 2014 2015 2016 2017

Remaining project performance risks still about EUR 20 million

° After write-downs of EUR 5.7m in Q1/2017, the total project performance risks for the full year may be over EUR 5 million higher than earlier anticipated.

Risks related to overdue trade receivables up to EUR 10m ° No write-downs in overdue trade receivables in Q1/2017 ° Full-year maximum risk slightly lower than earlier anticipated

Full-year utilisation risk up to EUR 10m ° Risk for the full year should not exceed the level above. ° No restructuring costs in Q1/2017. However, Caverion announced

performance and utilisation improvement actions in Sweden on May 29 ° Expected restructuring costs of approx. EUR 6.3 million and estimated total

savings impact of approx. EUR 2.7 million in 2017 and EUR 5.5 million in 2018

Company Presentation May 2017 25

Status update on key operational risk areas for 2017

Guidance for 2017 and strategic financial targets


2016 (actual) ° Revenue growth: -3.2% ° EBITDA margin (excl. restructuring

costs): 0.7% ° Working capital: EUR -2.6m

Strategic financial targets ° Revenue growth: > 10% average annual

growth ° EBITDA margin: > 6% ° Working capital: negative New timeline for the reaching the targets will be given later.

Guidance for 2017* ° Revenue: will remain at the previous

year's level in 2017 (2016: EUR 2,364 million)

° EBITDA excl. restructuring costs: will more than double in 2017 (2016: EUR 15.6 million)

Revenue ° Focus on Services with a higher growth

profile and stable earnings contribution ° Selectivity in Projects, actions from

tendering to execution to secure profitability improvement

° Focus on Life Cycle Solutions

Profitability ° Profitability improvement from

restructuring and fixed cost reduction ° Stricter project tendering process ° Increased tender margin requirement

and focus towards higher margin potential

° Increasing procurement and administrative efficiency

Working capital ° Focus on efficient invoicing and working

capital management ° Provides flexibility to manage the other

two financial targets

*Given February 7, 2017

Key actions supporting achievement of strategic financial targets

Financing and capital structure overview

Liquidity and leverage (March 31, 2017)


25

119

Unused creditfacilitiesCash and cashequivalents

Liquidity reserve EUR 144 million at the end of March 2017, EUR million

104

143 132

50 50 85

102

30 59

131 170

146 165

1.5x

2.4x 2.3x

0.7x 0.7x 0.9x 1.1x

0.3x 0.7x

2.1x 2.8x 2.8x

3.7x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16* Q2/16* Q3/16* Q4/16**Q1/17**

Net debt (EURm) Net debt/EBITDA (12m)

124 165

65 25

Long-term borrowings Short-term borrowings Cash and cashequivalents

Net debt

Gross debt to net debt (EURm)

* The Net Debt/EBITDA for Q1-Q3/16 calculated excluding restructuring costs ** In connection with the financing arrangement agreed on December 22, 2016, Caverion and its lending parties confirmed the EBITDA calculation principles related to the Group’s financial covenant (Net Debt/EBITDA). The Net Debt/EBITDA for Q4/16 and Q1/17 has been calculated accordingly.

Financial covenant (Net Debt/EBITDA): ° Net debt/EBITDA in Q1/2017: 3.7x according to

confirmed calculation principles

° The agreed covenant maximum level 5.0x for Q1/2017

° In connection with the hybrid transaction, Caverion has agreed with the lending parties the covenant maximum level of 5.0x for Q2/2017 and Q3/2017

° Covenant shall remain below 3.5x from Q4/2017 onwards

Unused credit facilities comprise of undrawn revolving credit facility amounting to EUR 100.0 million and undrawn overdraft facilities amounting to EUR 19.0 million. The committed revolving credit facility matures on May 2020.

20 20 20 10

60 5 9 7

35

2

2

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62

31 27

10

60

Debt maturity profile, 31 March 2017, EUR million

Debt Structure and impact of EUR 100m hybrid transaction


° Net interest-bearing debt EUR 164.9 (145.5) million at end of March 2017

° Average interest rate after hedges 2.1% at the end of March 2017 (12/2016: 1.9%)

° Floating-rate loans accounted for approx. 87% and fixed-rate loans approx. 13 % of the Group’s borrowings

° Issuer shall use the proceeds of the hybrid transaction for refinancing its existing debt and to strengthen its capital structure

° EUR 40 million from hybrid proceeds used to repay term loans maturing in 2021

° Post-transaction, existing bank loan facilities (EUR 90 million remaining on 31 March 2017) combined into one common agreement with final maturity in May 2020

20 20 20 30 5 9 7

35

2

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31 27 30

Pro forma debt maturity profile after EUR 100m hybrid capital, EUR million

Note: Loan portfolio based on end of March 2017 situation.

Key credit ratios after EUR 100m hybrid transaction Transaction provides a platform to further develop the business


11.7 % 78.7 % 90.1 %

23.4 %

2015 2016 Q1/2017 Pro forma*Q1/2017

Gearing, %

26.4 % 18.7 % 19.2 %

26.8 %

2015 2016 Q1/2017 Pro forma*Q1/2017

30

146 165

66

0.3x

2.8x 3.7x

1.5x 0.01.02.03.04.05.0

2015 2016 Q1/2017 Pro forma*Q1/2017

Interest bearing net debt, EURmNet Debt/EBITDA (12m)

In connection with the financing arrangement agreed on December 22, 2016, Caverion and its lending parties confirmed the EBITDA calculation principles related to the Group’s financial covenant (Net Debt/EBITDA). The Net Debt/EBITDA for Q4/16 and Q1/17 has been calculated accordingly. * Pro forma is based on the assumption that Hybrid Bond would have been issued at 31 March 2017. Transaction costs assumed to amount to approximately 1% of the hybrid bond amount.

Equity ratio, %

Q1/2017

183.0

35.0 20.7

129.6

Pro forma* Q1/2017

183.0

99.0 4.3 35.0

20.7 89.6

° Post the EUR 100m hybrid transaction (pro forma comparison to actual Q1/2017 figures): ° Equity ratio improves to 26.8%

(19.2%) ° Gearing improves to 23.4% (90.1%) ° Net debt reduces to EUR 66m (165m) ° Net debt to EBITDA improves to 1.5x

(3.7x) ° According to agreed principles in

force on 31 March 2017 ° The transaction provides Caverion a

platform to further develop its business

Capital structure

Equity

Hybrid

Other

Commercial papers

Insurance

Banks

4.3

Hybrid transaction

EUR 100m 4.625% Hybrid Capital Securities – Term Sheet


Issuer Caverion Corporation

Size / currency EUR 100 million

Issuer rating Unrated

Status / ranking Hybrid (capital security) NC3. Deeply subordinated, lowest ranking subordinated obligations of the Issuer

Accounting treatment Equity classification under IFRS

Trade Date 9 June 2017

Settlement Date 16 June 2017

Maturity Perpetual

Interest rate 4.625%, Fixed rate for the first 3 years. Payable annually in arrears. Basis is ACT/ACT. Thereafter reset every 3 years at the relevant 3-year swap rate + initial credit spread + step-up of 500 bps. Unpaid interest accumulates. Deferrable at issuer's discretion

Interest deferral Optional, cash cumulative and compounding 12 months look-back pusher event. In the event a minority dividend is declared when deferred interest is outstanding, this triggers a step-up of 500 bps

Optional redemption due to special events

Tax Event (101% / par), Accounting Event (101% / par), Corporate Restructuring Event (101% / par), Withholding Tax Event (par), Replacing Capital Event (103%). Change of Control (par; 500 bps step-up if not called, investment grade rating carve-out)

Governing law Finnish law

Listing No listing

Form of securities Dematerialised securities issued in book-entry form in the book-entry system maintained by Euroclear Finland

Clearing system Euroclear Finland

Denomination EUR 100,000 / EUR 20,000

Joint lead managers Nordea, OP, and SEB

Rationale for hybrid bond transaction: ° Diversifying financing

sources to capital markets ° Balance sheet support

and creating an equity buffer for the short-term turnaround phase in the company

Use of proceeds ° EUR 40 million is utilised

towards the repayment of existing loan facilities

° Remainder is retained as cash for general corporate purposes or utilised towards the repayment of commercial papers

Appendix

Key figures


EUR million Q1/17 Q1/16 Change 2016 2015

Order backlog 1,543.5 1,589.4 -2.9% 1,408.1 1,461.4

Revenue 582.3 560.6 3.9% 2,364.1 2,443.0

EBITDA excluding restructuring costs 6.8 - 15.6 -

EBITDA margin excluding restructuring costs, % 1.2 - 0.7 -

EBITDA 6.8 11.5 -41.0% -11.4 91.5

EBITDA margin, % 1.2 2.0 -0.5 3.7

Operating profit -0.8 4.8 -40.8 65

Operating profit margin, % -0.1 0.9 -1.7 2.7

Earnings per share, basic, EUR -0.02 0.03 -0.25 0.37

Working capital 17.3 15.6 10.8% -2.6 -15.4

Free cash flow -18.5 -28.8 35.6% -72.1 53.9

Interest-bearing net debt 164,9 59.2 178.4% 145.5 29.8

Gearing, % 90.1 26.7 78.7 11.7

Personnel, end of period 16,679 17,499 16,913 17,399


EUR million 2016 2015 Revenue 2 364.1 2 443.0

Other operating income 1.9 3.3 Materials and supplies -648.2 -663.8 External services -450.8 -426.9 Employee benefit expenses -989.1 -978.2 Other operating expenses -289.2 -286.0 Share of results in associated companies -0.1 0.0 Depreciation, amortisation and impairment -29.5 -26.5

Operating profit -40.8 65.0

Financial income 1.2 0.8 Exchange rate differences (net) 0.2 0.0 Financial expenses -4.1 -4.6

Financial income and expenses -2.6 -3.7

Profit before taxes -43.5 61.3 Income taxes 11.8 -14.7

Net profit for the financial year -31.7 46.6

Attributable to: Owners of the parent -31.7 46.6 Non-controlling interests 0.0 0.0

Income statement


Balance sheet EUR million 2016 2015

Equity attributable to owners of the parent

Share capital 1.0 1.0 Treasury shares -3.2 -3.2 Translation differences -5.5 -6.5 Fair value reserve -0.7 -0.7 Retained earnings 193.1 262.9*)

184.6 253.4*) Non-controlling interests 0.4 0.4 Total equity 185.0 253.7

Non-current liabilities Deferred tax liabilities 51.1 58.3 Pension obligations 45.4 42.5*) Provisions 7.1 9.0 Interest-bearing debts 127.6 75.2 Other liabilities 0.6 0.4 Total non-current liabilities 231.7 185.5

Current liabilities Trade payables 214.1 232.2 Advances received 192.5 195.3 Other payables 258.7 242.6 Income tax liabilities 6.5 8.1 Provisions 30.1 17.7 Interest-bearing debts 65.7 22.7 Total current liabilities 767.6 718.5

Total liabilities 999.3 904.0

TOTAL EQUITY AND LIABILITIES 1 184.3 1 157.7

*) Items in Consolidated Statement of financial position have been corrected to reflect prior period adjustments made in 2016.

EUR million 2016 2015

Non-current assets

Property, plant and equipment 28.3 27.4 Goodwill 339.8 335.7 Other intangible assets 53.0 47.5 Investments in associated companies 0.1 0.2 Available-for-sale financial assets 1.2 1.4 Receivables 3.3 2.6 Deferred tax assets 10.6 1.8*) Total non-current assets 436.4 416.6

Current assets Inventories 30.7 25.4 Trade receivables 378.2 351.7 POC receivables 244.4 254.0*) Other receivables 40.4 41.3 Income tax receivables 6.4 0.6 Cash and cash equivalents 47.7 68.1 Total current assets 747.9 741.2

TOTAL ASSETS 1 184.3 1 157.7


Cash flow statement EUR million 2016 2015

Net profit for the financial year -31.7 46.6

Depreciation, amortisation and impairment 29.5 26.5

Reversal of accrual-based items 12.1 0.0

Financial Income and expenses 2.6 3.7

Gains on the sale of tangible and intangible assets 0.3 -0.1

Taxes -11.8 14.7

Total adjustments 32.8 44.8 Change in trade and other receivables -12.5 -52.2 Change in inventories -2.9 -5.1 Change in trade and other payables -8.2 51.7 Total change in working capital -23.5 -5.6

Operating cash flow before financial and tax items -22.4 85.8 Interest paid -3.9 -4.5 Taxes -12.4 -9.9

Other financial items 1.6 0.1

Net cash generated from operating activities -37.0 71.6

Acquisition of subsidiaries -4.2 0.8

Purchases of property, plant and equipment -10.3 -8.8

Purchases of intangible assets -23.5 -15.5

Other items 0.6 1.4

Net cash used in investing activities -37.4 -22.1

Proceeds from borrowings 80.0 100.0

Repayment of borrowings -24.9 -150.5

Change in current liabilities 34.6 -0.7

Dividends -35.1 -27.6

Other items -0.9 -0.9

Net cash used in financing activities 53.8 -79.6

Net change in cash and cash equivalents -20.6 -30.0

Cash and cash equivalents at the end of the financial period 47.7 68.1


Strong and stable shareholder base As per May 31, 2017

Largest shareholders*

Shares, pcs

% of share Capital

Change after Mar. 2017, pcs

Change after Mar. 2017, %

1 Herlin Antti 17,690,180 14.09 650,000 3.81

2 Structor S.A. (Ehrnrooth family) 17,565,000 13.99 0 0.00

3 Ilmarinen Mutual Pension Insurance Company 5,488,946 4.37 0 0.00

4 Varma Mutual Pension Insurance Company 4,155,706 3.31 0 0.00

5 Fondita funds 3,465,000 2.76 0 0.00

6 Mandatum companies 3,107,618 2.47 16,871 0.55

7 The State Pension Fund 1,850,000 1.47 0 0.00

8 Elo Pension Company 1,611,089 1.28 0 0.00

9 Aktia funds 1,518,860 1.21 0 0.00

10 Nordea funds 1,492,122 1.19 -948,203 -38.86 10 largest, total 57,944,521 46.14

All shares 125,596,092 100

*) Directly registered shareholders as of May 31, 2017. Solero Luxco S.A.R.L (Triton) holding nominee registered since April 2017. Their latest directly registered holding as of March 31, 2017 was 9,716,223 shares (7.74%).

Nominee reg. and non-Finnish 35.7%

Households19.4%

General government11.3%

Financial and insurancecorporations 9.4%

Non-profit institutions4.6%

Non-financial corporationsand housing corporations19.6%

Sector distribution

29,352 owners

Board of Directors as of March 17, 2017

Michael Rosenlew, Chairman Born 1959, M.Sc. (Econ.). Professional board member. Finnish citizen.

Thomas Hinnerskov Born 1971, M.Sc. (Fin. and Accounting). Executive VP, KONE Central and North Europe and member of the Executive Board, KONE Corporation. Danish citizen.

Anna Hyvönen Born 1968, Lic.Tech. Managing Director, Vianor Holding Oy. Member of the Nokian Tyres’ Management team. Finnish citizen.

Eva Lindqvist Born 1958, M.Sc. (Eng.), MBA. Professional board member. Swedish citizen.

Jussi Aho Born 1968, M.Sc. (Civil Engineering). CEO of Fira Group Oy and Fira Oy. Finnish citizen.

Markus Ehrnrooth, Deputy Chairman Born 1985, M.Sc. (Tech.), B.Sc. Pol. Sc. (Econ.). Co-Founder of Knomi Oy. Finnish and Swedish citizen.

Joachim Hallengren Born 1964, M.Sc. (Civil Engineering). CEO of Bonava AB. Swedish citizen.

Antti Herlin Born 1956, D.Sc. (Econ.) h.c., D.Arts h.c., D.Sc. (Tech) h.c. Chairman of the Board, KONE Corporation. Finnish citizen.


Management Board


Divisions

Knut Gaaserud Denmark-Norway

Werner Kühn Germany

Manfred Simmet Austria

Erkki Huusko Industrial Solutions

Niclas Sacklén Eastern Europe

Ville Tamminen Finland

Klas Tocklin Sweden

Matti Malmberg Services Thomas Hietto as of 1/7/2017

Martti Ala-Härkönen Finance

Merja Eskola HR & People Minna Schrey-Hyppänen as of 26/6/2017

Ari Lehtoranta President and CEO

Jarno Hacklin Projects

Anne Viitala Legal & Governance

Sakari Toikkanen Strategy & IT & Communications

6.5%

2.0%

5.4%

2.2%

2.7%

1.6%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

New

Ren

ovat

ion

New

Ren

ovat

ion

Con

stru

ctio

n

GD

P

RES. . NON-RES.

. TOTAL

CAGR 17-18

GDP and Constr. growth estimates for the Nordics (CAGR 2017-18) Strong new building growth expected in DK, renovation to outgrow new building in Finland

41

FINLAND

Total Construction = Residential, Non-residential and Civil Engineering in total (New and Renovation).

SWEDEN NORWAY DENMARK 1.

7%

1.5%

1.2%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

New

Ren

ovat

ion

New

Ren

ovat

ion

Con

stru

ctio

n

GD

P

RES. . NON-RES.

. TOTAL

CAGR 17-18

3.3%

1.5%

1.7%

2.4%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

New

Ren

ovat

ion

New

Ren

ovat

ion

Con

stru

ctio

n

GD

P

RES. . NON-RES.

. TOTAL

CAGR 17-18

1.9%

2.4%

1.1%

3.5%

1.5%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

New

Ren

ovat

ion

New

Ren

ovat

ion

Con

stru

ctio

n

GD

P

RES. . NON-RES.

. TOTAL

CAGR 17-18

Credit Investor Presentation June 2017 Source: Euroconstruct, December 2017 (construction) and World Economic Outlook, January 2017 (GDP).

3.0%

9.5%

3.5%

7.5%

1.1%

-1.0%

1.0%

3.0%

5.0%

7.0%

9.0%

New

Ren

ovat

ion

New

Ren

ovat

ion

Con

stru

ctio

n

GD

P

RES. . NON-RES.

. TOTAL

CAGR 17-18

4.7%

1.4%

-1.0%

1.0%

3.0%

5.0%

7.0%

9.0%

New

Ren

ovat

ion

New

Ren

ovat

ion

Con

stru

ctio

n

GD

P

RES. . NON-RES.

. TOTAL

CAGR 17-18

GDP and Construction growth est. for Central and Eastern Europe Modest non-residential outlook for Germany going forward, Russia to recover

42

GERMANY AUSTRIA BALTIC COUNTRIES RUSSIA

Total Construction = Residential, Non-residential and Civil Engineering in total (New and Renovation).

1.6%

1.5%

1.8%

1.1%

1.5%

1.2%

-1.0%

1.0%

3.0%

5.0%

7.0%

9.0%

New

Ren

ovat

ion

New

Ren

ovat

ion

Con

stru

ctio

n

GD

P

RES. . NON-RES.

. TOTAL

CAGR 17-18

1.4%

2.7%

3.1%

3.0%

3.3%

3.1%

-1.0%

1.0%

3.0%

5.0%

7.0%

9.0%

New

Ren

ovat

ion

New

Ren

ovat

ion

Con

stru

ctio

n

GD

P

RES. . NON-RES.

. TOTAL

CAGR 17-18

Credit Investor Presentation June 2017 Source: Euroconstruct, December 2017 (construction) and World Economic Outlook, January 2017 (GDP).

Headcount development by division Total reduction of 985 employees from the end of June 2016


17,664

16,679

6/2016 Sweden-443 HC

Dk-Nor-264 HC

IndustrialSolutions-238 HC

Finland-43 HC

GroupServices-38 HC

EasternEurope23 HC

Austria-6 HC

Germany24 HC

3/2017

16,679 employees at the end of March


Group-wide efforts to develop a Caverion way of working ° Work safety, well-being and code of

conduct as a constant priority. ° Developing further service and

performance excellence culture.

Developing competitiveness through people ° Activities to match business demand

and supply of right resources continued in all divisions

° Special attention paid to project management capabilities

° Strengthening of managerial capabilities

Denmark-Norway 20%Sweden 18%Germany 15%Industrial Solutions 16%Finland 15%Austria 5%Eastern Europe 11%Group Services 1%

Employees by division 3/2017

17,399 17,499

17,664

17,281

16,913

16,679

Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17

Number of employees (end of period)

credit investor presentation - caverion group · company presentation february 2017 . 2016 figures...

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