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Caverion Organisation

Caverion Organisation 12
Company Presentation August, 2015 Milena Hæggström, Head of Investor RelationsContents ° Business and strategy ° Market overview ° Financials ° AppendixBusiness and strategyCaverion in brief Revenue by country in 2014 Key figures in 2014 Caverion designs, Revenue builds, operates and Sweden 25 maintains 2,407 Finland 22 userfriendly and EUR million Norway 19 energyefficient Germany 21 solutions for buildings, Order backlog Austria 6 infrastructure and 1,324 Denmark 5 industrial plants. EUR million Other countries 3 EBITDA Personnel by country in 2014 EBIT EBIT 67.5 Sweden 23 EUR million Finland 28 (2.8 of revenue) 61 61 Norway 16 EUR million EUR million Operating cash flow before Germany 14 financial and tax items Austria 4 2.2 2.2 113.5 Denmark 6 of revenue of revenue EUR million Other countries 9 Revenue based on the Group company location Caverion 4 Company Presentation August 2015Megatrends in the market support our longterm strategy Increasing Improving energy Growing Fragmented technology efficiency digitalisation market Technology in buildings Tightening legislation A lot of small companies All technologies in currently account for in the market relating to energy efficiency buildings have an IP 40−60 of building costs address. In 2020, all new buildings Extensive services a Integrated technologies are required to be on a competitive advantage passive house level (almost require multidiscipline Demand for remote especially in large selfsufficient energywise) expertise monitoring is increasing. projects Increasing demand for Maintenance is 10,000 buildings currently increasingly based on energyefficient solutions Growth potential under Caverion’s remote preventive measures as especially in German also for existing buildings control. well as on actual needs speaking areas and conditions. Caverion 5Life cycle view is included in everything we do ° We understand the Energy complexity of building technologies and Maintenance industrial processes. Investment Managed Operations ° We have technical and Technical Managed The life cycle model decreases the management skills in all Maintenance Life Cycle costs related to the property and disciplines throughout related processes the life cycle. Project Execution Client benefits ° We manage the life cycle Project Advisory from individual Management Services o Functionality and safety technologies to Design advanced total solutions o Sustainability Engineering and decrease the costs o Energy and cost efficiency related to the property. o Process efficiency Caverion 6 Company Presentation August 2015We are a leading European Vision provider of advanced and sustainable life cycle solutions for buildings and industries. We design, build, operate and maintain userfriendly and energyefficient solutions for buildings, infrastructure and industrial plants. Mission Financial Profitability Average annual Negative Targets (EBITDA) over 6 of revenue growth 10 working capital 2016 revenue Increasing Strong Innovative profits growth and advanced solutions Strategic focus areas Strong Excellent Operational company leadership excellence image Step ahead + Cooperation + Responsibility + High performance Values CaverionClear implementation plan to reach 2016 targets Operational Strong company Enables profitable Market Offer excellence image growth ° Advisory Services ° Design Engineering Services ° Project Management ° Project Execution ° Technical Maintenance ° Managed Operations ° Managed Life Cycle Excellent Leadership Caverion 8 Company Presentation August 2015Delivering on growth and profitability 04 Reach Operational excellence – Most efficient service company 03 Create Innovative and Innovative and advanced solutions advanced – Strong own solutions 02 Build concepts and – Developing capabilities in business mix both projects and Operational services excellence Strong growth – Developing internal – Back on track 01 Fix Strong company processes and image harmonization Increasing profits – Demerger and Excellent leadership restructuring – Lean organization and winning team Caverion 9 Company Presentation August 2015Our integrated offering for life cycle solutions Design Project Advisory Project Technical Managed Managed Engineering Manage Services Execution Maintenance Operations Life Cycle Services ment Public Commercial view for Industry each service Value proposition area Real estate for each client owners and segment developers Real estate users General contractors Disciplines Caverion 10 Company Presentation August 2015Delivering on growth and profitability improvement 1. Megatrends 2. Our 3. Clear in the market competitive implementation support our long edge is built on plan to reach term strategy life cycle 2016 targets solutions Caverion 11 Company Presentation August 2015Market overviewWe have strong growth potential in the fragmented market Main competitors by country Strong market position in all Finland key operating o Are, Royal Imtech, Consti countries Sweden o Bravida, Royal Imtech, Midroc Electro AB Norway o Gunnar Karlsen, Bravida, Oras Denmark o Kemp Lauritzen, Wicotec Kirkebjerk, Bravida Germany o Bilfinger Facility Services, Royal Imtech, Revenue Strabag PFS Austria by business area o Ortner, EQOS Energie, Cofely Industry Service o Maintpartner, BIS Production Partner and maintenance (Bilfinger Industrial Services), Empower 54 Projects 46 Caverion 13 Company Presentation August 2015Market outlook for Caverion’s business in 2015 Technical installation Large projects Managed services o o and maintenance Large tenders for buildings Need for new services and the and industry expected to demand for life cycle solutions o Expected to be stable. increase during the year. are expected to increase. o Requirements for increased o o Low interest rates and Customers’ focus on their core energy efficiency and better availability of financing are operations opens opportunities indoor conditions and expected to support in outsourced operation and tightening environmental investments. maintenance mainly for public legislation support positive o authorities, industries and Demand for design build of market development. utilities. total technical solutions is expected to develop favourably. Overall changes in the operating environment due to growing uncertainty over the general macroeconomic development and mounting geopolitical tensions may lead to some expected cautiousness in project startups and service demand. Caverion 14 Company Presentation August 2015FinancialsTargeting average annual growth in revenue of 10 by the end of 2016 ° Revenue was EUR 1,201.5 Group revenue million in January−June, an EUR million increase of 2 percent compared 1−12/13: 2,5441−12/14: 2,407 to the previous year. 16/12: X,XXX 688 ° Revenue increased in all 660 653 638 608 595 591 588 countries apart from Norway. 567 563 ° In Norway the full effect of the exit of one large technical installation and maintenance and IT services contract is now fully visible. Revenue breakdown by country Revenue by business area 1−6/2015 EUR million Service and (5) (1) (5) (11) maintenance 307 292 54 257 258 245 242 230 217 (16) (15) (1−6/2014: 54) (11) 72 60 64 70 32 36 Projects Sweden Finland Germany Norway Austria Denmark Other 46 (46) countries 1−6/141−6/15 Caverion 16 Company Presentation August 2015Service and maintenance: activity level remained stable o The technical installation and Service and Service and maintenance revenue maintenance market was maintenance stable overall. revenue, EUR million o Successful in Industrial of total Group Solutions in executing revenue seasonal shutdowns. 1−12/13:1−12/14: o General interest in managed 1,409 (55) 1,297 (54) services and life cycle solutions continued to 386 increase. 363 350 340 340 323 320 319 311 305 56 56 56 55 55 54 54 54 53 53 Caverion 17 Company Presentation August 2015Several multimillion projects announced in Q2 ° Finland: Project market is improving Project business slowly and Caverion has been revenue, Project business revenue active and able to secure some EUR million large new deals, especially in Industrial solutions. of total Group revenue ° Norway: Lower activity related to the oil industry. 1−12/14: 1−12/13: ° Germany, Austria and Sweden: 1,110 (46) 1,134 (45) Demand remained favourable in a stable market environment. ° Denmark and Eastern Europe: Good development with new 310 302 298 290 clients. 274 268 268 270 262 253 47 47 46 46 46 45 44 45 44 44 Caverion 18 Company Presentation August 2015Stable order backlog development in Q2 ° Order backlog grew by 3 Order backlog compared to the previous year EUR million and remained on a par with the previous quarter. Q1 Q2 Q3 Q4 +3 +4 1 393 1 392 1 350 1 335 3/12 3/13 3/14 3/15 6/12 6/13 6/14 6/15 9/12 9/13 9/14 12/1212/1312/14 Caverion 19 Company Presentation August 2015Profitability on track to reach financial target EBITDA, EUR million EBITDA margin, o EBITDA for Q2 amounted to EUR 22.0 million, up from the previous 1−12/13: 70.9 (2.8)1−12/14: 67.5 (2.8) year. 34,3 25,3 o The improved performance in the 23,3 22,0 21,5 5,2 second quarter compared to last 3,9 3,7 year, is largely explained by the 3,4 3,8 14,2 12,9 write downs connected to the 9,4 9,6 project portfolio reviews done in 2,5 2,1 2,0 2014. 1,5 1,6 0,4 o The performance during the rest of the year is considered to be more in line with last year. EBITDA, EUR million (rolling 12m) 92,0 72,1 70,9 71,1 67,5 60,3 58,5 10−12/131−3/144−6/147−9/14 10−12/141−3/154−6/15 Caverion 20 Company Presentation August 2015Guidance for 2015 reiterated Revenue Caverion estimates that the Group’s revenue will remain at the previous year's level. EBITDA Caverion estimates that the Group’s EBITDA margin for 2015 will grow significantly. Caverion 21 Company Presentation August 2015Firm grip on managing working capital o More than EUR 110 million of Working capital, Working capital working capital released since EUR million 9/2013: Working capital to sales, (LTM) ° Advances received stable at a level of EUR 176.9 million (79/2013: EUR 160.9 million) 120 ° Improvement from more 100 efficient invoicing process 5 4 64 49 46 49 3 ° Efficient working capital 2 2 management enables us to 2 develop our strategic business 8 mix. ° Successful in Industrial 1 0 1 Solutions in executing seasonal shutdowns. 13 19 ° As the invoicing is done at the end of the project the working capital is reflected accordingly. 4−6/13 7−9/13 10−12/13 1−3/14 4−6/14 7−9/14 10−12/14 1−3/154−6/15 Caverion 22 Company Presentation August 2015Rolling 12month cash flow up to EUR 132 million Operating cash flow before financial and tax items o Strong rolling 12month cash EUR million flow supported by efficient management of working Rolling 12 months 134,4 132.2 capital 114.8 113,5 108.5 105.4 100.0 101.3 90.1 20.5 11.1 9,8 7.2 4.1 1,8 11.1 11.2 1−3/13 4−6/13 7−9/13 10−12/13 1−3/14 4−6/14 7−9/14 10−12/14 1−3/15 4−6/15 Caverion 23 Company Presentation August 2015Low level of capital expenditure Development and Capital expenditure (EUR million) investment of sales ° Continuous development and investment in technologies, processes and competences 27,8 ° IT investments focused on 23,4 common SAP in big 6 countries, which will benefit 1,09 Caverion in the form of increased admin efficiency 0.97 Capex investments ° Mainly relating to IT and the development of common 6,6 6,1 business processes ° 2014: EUR 23.4 million 0,24 o Q2/2015: EUR 5.5 million 1,5 0,21 0,06 2010 2011 2012 2013 2014 ) Capital expenditures consist of investments in tangible (property, plant and equipment) and intangible assets, excluding acquisitions. Caverion 24 Company Presentation August 2015Balanced debt structure Debt maturity New financing arrangement EUR million totalling EUR 200 million agreed in May 2015 o Strengthened debt maturity structure 40 o Fiveyear syndicated unsecured revolving credit 22 22 20 14 facility of EUR 100 million 10 o Fiveyear bilateral unsecured term loans in 2015 2016 2017 2018 2019 2020 total of EUR 100 million Loan portfolio Interest rate type (after hedges) o Loan portfolio total: Banks 93 Fixed EUR 127.3 million interest 86 Insurance o Average interest rate Floating companies 5 after hedges: 1.41 interest Others 2 14 Caverion 25 Company Presentation August 2015Strong balance sheet and liquidity Development of net debt o Net debt remains in Q4 EUR million 2014 level 194 190 143 132 o Strong cash position 104 enabled voluntary 86 85 repayment of gross debt 50 50 by EUR 20 million 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 Liquidity reserve EUR 161 million Gross debt to net debt EUR million EUR million Unused credit facilities 41 42 119 86 85 Cash and cash equivalents 42 Longterm borrowings Shortterm Cash and cash Net debt borrowings equivalents Caverion 26 Company Presentation August 2015Dividend policy Dividend payout at least 50 per cent of the net profit for the period. o A dividend of EUR 0.22 per share was paid on April 2, 2015. Caverion 27 Company Presentation August 2015AppendixKey figures EUR million4−6/15 4−6/14 Change1−6/14 Change 1−6/151−12/14 Order backlog 1,393.1 1,350.3 1,393.1 1,350.3 1,323.6 Revenue 638.1 588.4 1,201.5 1,179.7 2,406.6 EBITDA 22.0 2.1 36.2 11.7 67.5 EBITDA margin, 3.4 0.4 3.0 1.0 2.8 Earnings per share, basic, EUR 0.08 0.03 0.13 0.02 0.22 Working capital 7.7 48.6 7.7 48.6 19.3 Operating cash flow before 1.8 4.1 11.7 7.0 113.5 financial and tax items Interestbearing net debt 84.9 142.5 84.9 142.5 50.2 Personnel, average for the period 17,032 17,333 17,018 17,354 17,300 Caverion 29 Company Presentation August 2015Examples of orders received in April−June Deutsche Telekom Dixi, Vantaa, Finland Deutsche Telekom, Hamburg, Germany Caverion continues cooperation with YIT in Dixi’s second phase by Caverion provides building providing total technical solutions solutions to a new Deutsche for the Office and Commercial Telekom office complex in Centre. Caverion was also Hamburg. Caverion is responsible responsible for delivering the for project execution and covers building systems of the first phase the technical disciplines of heating which was completed and came and sanitation, cooling and into use in January 2015. electricity. ° Service areas: Design, Project Execution ° Service areas: Project ° Technical disciplines: All Execution building systems of the property ° Technical disciplines: Heating ° Contract value: EUR 7.6 and sanitation, Cooling, million Electricity ° Lifespan: Second phase is set ° Contract value: EUR 14.3 to be completed in 2017 million 2 ° Size: 4,000 m of commercial ° Lifespan: 6/2015−6/2016 2 premises and 8,000 m of office ° Size: 34,000 m² space Caverion 30 Company Presentation August 2015Examples of orders received in April−June Metsä Fibre, Äänekoski, Finland Metsä Fibre Caverion will deliver a total of five pulp towers to Metsä Fibre’s new bioproduct plant. Two of these towers are among the largest in the world with a volume of 15,000 m3. The contract covers project management, design, materials purchase, prefabrication and installation. The bioproduct plant under construction is the largest investment in the history of woodprocessing industry in Finland. ° Service areas: Design, Project Management ° Contract value: not disclosed ° Lifespan: The design and prefabrication will begin in 2015, installation will take place in 2016. Metsä Fibre Caverion 31 Company Presentation August 2015Examples of orders received in April−June Frankfurt School of Finance Moss municipal property Frankfurt School of Finance and Management, Frankfurt and Management company, Norway am Main, Germany Caverion delivers Managed Life cycle services for Moss municipal Caverion implements a large property in the form of Energy project with total technical Performance Contracting (EPC). solutions to the new campus of The aim is to reduce the energy Frankfurt School of Finance and consumption of these properties Management. Caverion is by 45 through upgrading, responsible for design and modernising and optimising the engineering and project execution. building systems. Campus will be equipped by Krantz Multifunctional AVACS sails. ° Service areas: Managed Life Cycle (Design Engineering, Project Execution, Project ° Service areas: Design Management, Managed Engineering, Project Execution Operations) ° Technical disciplines: Heating ° Technical disciplines: Heating, and sanitation, Ventilation and Ventilation and air conditioning, air conditioning, Cooling, Automation Electricity, Automation, Security and safety ° Contract value: not disclosed ° Contract value: not disclosed ° Lifespan: The first of three phases starts in June 2015 ° Lifespan: completed in June 2017 ° Size: 91,000 m² ° Size: 32,500 m² Caverion 32 Company Presentation August 2015Examples of orders received in April−June The Royal College of Music, Uppsala University, Uppsala University Stockholm, Sweden Uppsala, Sweden Caverion helps to turn one of Caverion provides building Sweden’s oldest universities into a systems on the new campus of modern office building by The Royal College of Music in delivering building solutions. Stockholm and installs heating and sanitation, cooling and Caverion delivers ventilation air electricity systems to the property. conditioning, electricity solutions as well as information and communications to Uppsala ° Service areas: Project University’s new office building, Execution, Project Management Segerstedthuset. ° Technical disciplines: Heating and Sanitation, Cooling, ° Service areas: Project Electricity Execution, Project Management ° Contract value: EUR 4.3 ° Technical disciplines: Ventilation million and air conditioning, Electricity, ° Lifespan: work on site underway Information and communication and will be completed in 2016 ° Contract value: EUR 5.4 million 2 ° Size: 21,000 m ° Lifespan: completed during spring 2017 ° Size: 22,100 m² Caverion 33 Company Presentation August 2015Acquisitions have contributed to revenue growth through the cycle Group revenue Revenue, EUR million EUR million 2,876 2,803 2,544 2 407 2,396 2,353 2,140 2,125 1,892 1,797 1,680 1,021 678 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 MCE AG caverion GmbH Calor AB ABB Building Systems Acquisition Integration and Acquisition Integration and period development period development 20022009 figures based on official segment reporting, i.e. sum of building systems and industrial services related revenue figures of YIT, including also internal sales. 20102012 figures are external revenue figures based on Caverion’s carveout segment reporting. 2013 figures: 16/2013 carveout + 712/2013 actual. Caverion 34 Company Presentation August 2015MA as a growth driver 50 of revenue growth over cycle from acquisitions MA criteria Valuation criteria o Good strategic fit o Internal valuation always prepared  Geographical coverage o Key multiples analysed:  Business portfolio o EV/Sales  Customer sectors o EV/EBITDA o Complementary skills o EV/EBIT resources o P/E o Business culture o Payback time o Value creation potential o Multiple levels vary o Profitability turnaround depending on the target as well as market o Strong local market situation position Caverion 35 Company Presentation August 201517,113 employees at the end of June Employees by country During the period we at the end of continued to develop a June 2015 winning team: ° Organisational management ° Talent management ° Leadership development ° International teams strengthened with key professionals and local trainees. Finland 28 Continuous improvement Sweden 22 for occupational health and Norway 15 safety Germany 14 Denmark 6 Safety and wellbeing of Austria 4 employees as a key target Other countries 10 Caverion 36 Company Presentation August 201530,651 shareholders on July 31, 2015 Largest shareholders Owners by category by Change after Change after shares owned Shares, share of June 2015, June 2015, pcs Capital pcs 1. Structo M r Sajor shareholders .A. on June 28,2013 17,840,000 14.20 0 0.00 2. Herlin Antti and companies controlled by him 13,370,180 10.65 0 0.00 Nominee registered and nonFinnish 3. Ilmarinen Mutual Pension Insurance Company 3,978,381 3.17 217,170 5.18 holders 35.7 (Jun 30, 2015: 35.6) 4. Fondita funds 3,542,000 2.82 0 0.00 Households 5. Varma Mutual Pension Insurance Company 2,864,393 2.28 0 0.00 19.1 (19.1) 6. Nordea funds 2,890,634 2.30 69,311 2.46 General government 7. OP funds 2,183,055 1.74 127,463 5.52 9.5 (9.8) 8. Aktia funds 2,155,512 1.72 0 0.00 Financial and insurance corporations 9. The State Pension Fund 1,850,000 1.47 0 0.00 13.8 (13.8) 10. Danske Invest funds 1,763,568 1.40 15,000 0.86 Nonprofit institutions 11. Elo Pension Company 1,344,468 1.07 0 0.00 5.6 (5.5) 12. SEB Investment Funds 1,339,605 1.07 35,000 2.68 Nonfinancial corporations and housing 13. Evli funds 1,217,318 0.97 55,300 4.76 corporations 14. Brotherus Ilkka 1,048,265 0.83 0 0.00 16.3 (16.3) 15. Etera Mutual Pension Insurance Company 757,446 0.60 0 0.00 16. Säästöpankki funds 731,052 0.58 0 0.00 30,651 owners 17. Odin funds 526,311 0.42 0 0.00 (Jun 30, 2015: 18. Caverion Oyj 510,987 0.41 30,744) 0 0.00 19. FIM funds 506,465 0.40 140,211 38.28 20. Danske Invest Finland Opportunities 430,000 0.34 0 0.00 20 largest, total 60,849,640 48.45 All shares 125,596,092 100.00 Caverion 37Board of Directors Elected by the Annual General Meeting on March 16, 2015 Ari Lehtoranta Michael Rosenlew Chairman Vice Chairman Born 1963, M.Sc. (Eng.) Born 1959, M.Sc. (Econ.) President and Chief Executive Officer of Managing Director of Mikaros AB. Nokian Tyres plc. Finnish citizen. Finnish citizen. Markus Ehrnrooth Anna Hyvönen Born 1985, M.Sc. (Tech.), B.Sc. Political Born 1968, Lic.Tech. Science (Econ.) Executive Vice President, North Europe CoFounder of Knomi Oy. Central of Ramirent Plc. Finnish and Swedish citizen Finnish citizen. Ari Puheloinen Eva Lindqvist Born 1951, General Staff Officer. Born 1958, M.Sc. (Eng.), MBA. General (ret.) Swedish citizen. Finnish citizen Caverion 38 Company Presentation August 2015Group Management Board as of May 1, 2015 Fredrik Strand President and CEO Sakari Toikkanen Antti Heinola Merja Eskola Strategy Development Finance and Governance Human Resources People KarlWalter Schuster Thomas Lundin Knut Gaaserud Sweden Norway Project excellence, Sales Development Jarno Hacklin Werner Kühn Matti Malmberg Finland Service efficiency, Germany Client Relation Management Manfred Simmet Peter Rafn Austria Denmark Juhani Pitkäkoski Niclas Sacklén Industrial Solutions Eastern Europe Caverion 39Caverion Organisation as of May 1, 2015 Caverion Group President and CEO Fredrik Strand Sweden Norway Germany Finland Austria Denmark Eastern Industrial Europe Solutions Group Finance Governance Thomas Knut Werner Jarno Manfred Peter Niclas Juhani Antti Heinola Lundin Gaaserud Kühn Hacklin Simmet Rafn Sacklén Pitkäkoski Group HR People Merja Eskola Group Strategy Development Sakari Toikkanen Sales Development KarlWalter Schuster Client Relations Management Matti Malmberg Project Excellence KarlWalter Schuster Service Efficiency Matti Malmberg = member of the Group Management Board Caverion 40
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