Road Show Presentation February, 2015 - Caverion Group · Road Show Presentation February, 2015 . ... SPIE. Royal Imtech: Bilfinger SE* Vinci Energies GDF Suez Energy. Services*

Road Show Presentation February, 2015

Antti Heinola, CFO Milena Hæggström, Head of Investor Relations

° Business and strategy

° Market overview

° Financials

° Appendix

Contents

Business and strategy

Caverion

Caverion in brief

4

Key figures in 2014

Revenue

2,407 EUR million

EBITDA 67.5 EUR million

(2.8% of revenue)

EBIT 44.2 EUR million (1.8% of revenue)

Personnel 17,074 at year’s end

EBIT

61 EUR million

2.2% of revenue

Sweden 25%

Finland 22%

Norway 19%

Germany 21%

Austria 6%

Denmark 5%

Other countries 3%

Revenue by country

Revenue based on the Group company location

EBIT

61 EUR million

2.2% of revenue

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

Sweden 23%

Finland 28%

Norway 16%

Germany 14%

Austria 4%

Denmark 6%

Other countries 9%

Personnel by country

Company Presentation February 2015

Caverion

Megatrends in the market support our long-term strategy

5

Increasing technology Technology in buildings currently account for 40−60% of building costs Integrated technologies require multi-discipline expertise Maintenance is increasingly based on preventive measures as well as on actual needs and conditions.

Improving energy efficiency Tightening legislation relating to energy efficiency In 2020, all new buildings are required to be on a passive house level (almost self-sufficient energy-wise) Increasing demand for energy-efficient solutions also for existing buildings

Fragmented market A lot of small companies in the market

Extensive services a competitive advantage especially in large projects

Growth potential especially in German-speaking areas

Growing digitalisation

All technologies in buildings have an IP address.

Demand for remote monitoring is increasing.

10,000 buildings currently under Caverion’s remote control.

Caverion

Life cycle view is included in everything we do

6

° We understand the

complexity of building technologies and industrial processes.

° We have technical and management skills in all disciplines throughout the life cycle.

° We manage the life cycle - from individual technologies to advanced total solutions - and decrease the costs related to the property.

EnergyMaintenanceInvestment

Client benefits o Functionality and safety o Sustainability o Energy and cost efficiency o Process efficiency

Advisory Services

Design & Engineering

Project Management

Project Execution

Technical Maintenance

Managed Operations

Managed Life Cycle


The life cycle model decreases the costs related to the property and related processes

Caverion

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

Strong 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 2016

Strategic focus areas

Mission

Values

Operational excellence

Strong company image

Excellent leadership

Caverion

Clear implementation plan to reach 2016 targets

8

Market Offer Enables profitable growth

Strong company image

Operational excellence

° Advisory Services ° Design & Engineering Services ° Project Management ° Project Execution ° Managed Life Cycle ° Managed Operations ° Technical Maintenance

Excellent Leadership


Caverion

Delivering on growth and profitability

9

Fix Increasing profits – Demerger and restructuring

01

Build Operational excellence – Developing internal processes and harmonization Excellent leadership – Lean organization and winning team

02

Create Innovative and advanced solutions – Developing business mix Strong growth – Back on track

03

Reach Operational excellence – Most efficient service company Innovative and advanced solutions – Strong own concepts and capabilities in both projects and services Strong company image

04


Caverion

Our integrated offering for life cycle solutions

10 Company Presentation February 2015

Advisory Services

Design & Engineering

Services

Project Manage-

ment

Project Execution

Technical Maintenance

Managed Operations

Managed Life Cycle

Public

Industry

Real estate owners and developers

Real estate users

General contractors

Value proposition for each client

segment

Commercial view for

each service

area

Disciplines

Caverion

Delivering on growth and profitability improvement

11

1. Megatrends in the market support our long-term strategy

2. Our competitive edge is built on life cycle solutions

3. Clear implementation plan to reach 2016 targets


Market overview

Caverion

Caverion has strong growth potential in fragmented European markets

13

836

955

1,211

2,489

2,407

4,563

4,945

6,309

9,248

14,700

Alpiq Intec

Strabag Property andFacility Services

Bravida

MITIE

Caverion****

SPIE

Royal Imtech

Bilfinger SE***

Vinci Energies **

GDF Suez EnergyServices*

Company revenues in 2013 (EUR million)

*) 51% of 2013 revenue comes from France **) 59% of 2013 revenue comes from France ***) Includes Industrial and Building & Facility segments ****) 2014 figure

Size of the European building systems market in Caverion’s operating countries (EUR billion) 5.2

5.9

8.9 28.7

3.8 2.0 (Baltics)

5.5

38.4 8.5

Source: Company information, Caverion.

3.6

8.8

Source: Market size calculations based on Euroconstruct (June, 2014) market volumes.

Caverion

Market outlook for Caverion’s business in 2015


Large projects

o Large tenders for buildings and industry expected to increase during the year.

o Low interest rates and availability of financing are expected to support investments.

o Demand for design & build of total technical solutions is expected to develop favourably.

Technical installation and maintenance

o Expected to be stable. o Requirements for increased

energy efficiency and better indoor conditions and tightening environmental legislation support positive market development.

Managed services

o Need for new services and the demand for life cycle solutions are expected to increase.

o Customers’ focus on their core operations opens opportunities in outsourced operation and maintenance mainly for public authorities, industries and utilities.

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 start-ups and service demand.

Financials

Caverion

Targeting average annual growth in revenue of > 10% by the end of 2016

16

1-6/12: X,XXX 673 718

665 748

608 653

595 688

591 588 567 660

Group revenue (reported) EUR million 1–12/12: 2,803 1−12/13: 2,544

666 547

458 516

148 140 68

597 521 496 458

136 127 71

Sweden Finland Germany Norway Austria Denmark Othercountries

1−12/13 1−12/14

Service and maintenance 54% (1−12/2013: 55%)

Projects46% (45%)

Revenue breakdown by country (reported) EUR million

° Group’s revenue with comparable

exchange rates was in line with the previous year.

° Changes in foreign exchange rates decreased Group revenue by EUR 68.8 million in January−December mainly caused by changes in SEK and NOK.

Revenue by business area 1−12/2014

(-10%) (-5%) (8%) (-11%)

(-8%) (-9%)


(4%)

1−12/14: 2,407

Caverion

Positive order backlog development in each quarter in 2014

17

° Order backlog increased by 7% from the end of December 2013.

° Changes in foreign exchange rates decreased the order backlog at the end of December by EUR 31.6 million compared to the end of December 2013

1,335 1,350 1,380 1,324

3/12 3/13 3/14 6/12 6/13 6/14 9/12 9/13 9/14 12/12 12/13 12/14

Order backlog EUR million


Q1 Q2 Q3 Q4

+6% +7% +2% +6%

Caverion

Profitability in Q4 on track to reach financial target

18

23.6 25.6 26.3

9.8 9.4 12.9

23.3 25.3

9.6

21.5

34.3

3.5% 3.6% 4.0%

1.3% 1.5%

2.0%

3.9% 3.7%

1.6%

3.8%

5.2%

EBITDA, EUR million (reported)EBITDA margin, % (reported)

1−12/12: 85.3 (3.0%) 1−12/13: 70.9 (2.8%)

o EBITDA margin excl. non-

recurring items was 6.0% in Q4

o EBITDA excluding non-recurring items for 2014 amounted to EUR 80.7 (81.7) million, in line with the previous year.

o The turnaround of the project operations progressed well during the second half of the year.

o The effect of non-recurring items impacting EBITDA was EUR 13.2 million in 2014.

0.4%


1−12/14: 67.5 (2.8%)

2.1

Caverion

New guidance for 2015

19

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

Working capital supporting our 2016 targets

20

100

120

46

64

48 49

-19

4%

5%

2%

3%

2% 2%

-1%

Working capital,EUR million

Working capital to sales,% (LTM)

Working capital

o More than EUR 100 million of

working capital released in the past 18 months through:

° Increased focus on managing working capital

° Cultural change ° Improved processes and

tools for invoicing

° Decrease by EUR 65 million compared to 12/2013 and by EUR 119 million compared to 6/2013.

° Efficient working capital management enables us to develop our strategic business mix.


4−6/13 7−9/13 10−12/13 1−3/14 4−6/14 7−9/14 10−12/14

Caverion

Strong rolling 12-month cash flow

21

7.2

-11.2

11.1

101.3

-11.1

4.1

20.5

100.0

108.5

90.1 105.4

114.8 113.5

1−3/13 4−6/13 7−9/13 10−12/13 1−3/14 4−6/14 7−9/14 10−12/14

Rolling 12 months

o Strong rolling 12-month cash

flow supported by efficient management of working capital

o Target to reduce seasonality


Operating cash flow before financial and tax items EUR million

Caverion

Low level of capital expenditure

*) Capital expenditures consist of investments in tangible (property, plant and equipment) and intangible assets, excluding acquisitions.


Continuous development and investment in technologies, processes and competences Capex in 2014 ° Capex investments in

2014 totalled EUR 23.4 million, mainly relating to IT and the development of common business processes.

1.5

6.1 6.6

27.8 23.4

0.06% 0.21% 0.24%

1.09%

0.97%

2010 2011 2012 2013 2014

Capital expenditure (EUR million)* % of sales

Caverion

Debt structure

23

o Loan portfolio total:

EUR 149.0 million

o Average interest rate after hedges: 2.1%

Loan portfolio

Interest rate type (after hedges)

Debt maturity EUR million

Interim Report 1-6/2014

Banks 93%

Insurancecompanies 5%

Others 2%

Fixedinterest21%

Floatinginterest79%

53

92

2 2

2015 2016 2017 2018

Caverion

Net debt reduced to EUR 50 million

24

Gross debt to net debt EUR million

Liquidity reserve EUR 178 million EUR million

Development of net debt EUR million

Interim Report 1-6/2014

96

53 99

50

Long-term borrowings Short-termborrowings

Cash and cashequivalents

Net debt99

79

Unused creditfacilities

Cash and cashequivalents

194 190

87 104

143 132

50

6/13 9/13 12/13 3/14 6/14 9/14 12/14

o Gross debt decreased by

EUR 71 million in 2014

o Dividend of EUR 27.6 million was paid in April 2014.

Caverion

Dividend policy intact

Dividend pay-out at least 50 per cent of the net profit for the period.

25

o The Board of Directors proposes a dividend of EUR 0.22 per share.


Appendix

Caverion

Key figures

EUR million 10−12/14 10−12/13 Change 1−12/14 1−12/13 Change

Order backlog, end of period 1,323.6 1,240.7 7% 1,323.6 1,240.7 7%

Revenue 660.2 688.1 -4% 2,406.6 2,543.6 -5%

EBITDA excluding non-recurring items 39.3 26.7 47% 80.7 81.7 -1%

EBITDA margin excluding non-recurring items, % 6.0 3.9 3.4 3.2

EBITDA 34.3 25.3 36% 67.5 70.9 -5%

EBITDA margin, % 5.2 3.7 2.8 2.8

Earnings per share, basic, EUR 0.16 0.14 17% 0.22 0.28 -22%

Working capital -19.3 46.0 -19.3 46.0 Operating cash flow before financial and tax items 100.0 101.3 -1% 113.5 108.5 5%

Interest-bearing net debt, end of period 50.2 86.5 -42% 50.2 86.5 -42%

Personnel, average 17,161 17,753 -3% 17,300 18,071 -4%

27

Comparative figures for 2013 are carve-out figures for the periods before the effective date of the partial demerger (June 30, 2013).


Caverion

Several large orders received in October−December

Deutsche Rentenversicherung Bund (DRV), Berlin, Germany Renovation of building systems and related project management for German statutory pension insurance scheme’s administrative building. The delivery will include a vast range of fire protection systems and sustainable technology such as cooling ceilings, heat recovery systems and rainwater recycling, among others. ° Service areas: Project

Management, Project Execution ° Disciplines: Heating &

Sanitation, Ventilation, Cooling, Security & Safety

° Contract value: ~EUR 15.6 million

° Lifespan: Q4/2014−early 2016

28

DRV

Financial Statements Bulletin 2014

Baxter, Krems, Austria Delivery of building systems, including cleanroom technology, for the industry client Baxter’s production plant. The building will be supplied with energy-efficient heating, cooling and compressed air systems, and it will be connected to remote management for optimised energy use. ° Service areas: Project

Management, Project Execution ° Disciplines: Heating &

Sanitation, Ventilation & Air Conditioning, Security & Safety

° Contract value: Consortium with Molin, Caverion part: EUR 6 million

° Size: 15,000 m² ° Lifespan:Q4/2014–6/2015

Caverion


29

Fingrid, Finland Caverion provides technical maintenance for Fingrid’s electricity substations in Lapland. The technical maintenance agreement covers the basic maintenance of substations such as equipment service and substation inspections. ° Service areas: Technical

Maintenance ° Disciplines: Electricity ° Contract value: not disclosed ° Size: All Fingrid’s substation’s in

Lapland ° Lifespan: 2015–2017

DRV


Sør-Trøndelag College, Norway A total delivery of building systems for the new Technology Building. The building is being constructed as a passive house and includes energy-efficient technology such as heat recovery systems and Caverion’s own ClimaCeil solution. ° Service areas: Design &

Engineering, Project Management, Project Execution

° Disciplines: Heating & Sanitation, Ventilation & Air Conditioning, Electricity, Security & Safety, Automation

° Contract value: EUR 9 million ° Size: 16,000 m2 ° Lifespan: Q4/2014-end of 2016

Sør-Trøndelag College

Slyngstad Aamlid Arkitekter

Caverion


Huddinge hospital, Sweden Caverion provides building systems and related project management and advisory services to the new medical education center, which will be used by the Royal Institute of Technology, Karolinska Institute and the Red Cross. The project utilises 3D modelling for virtual design and construction. ° Service areas: Advisory

Services, Project Management, Project Execution

° Disciplines: Heating & Sanitation, Ventilation & Air Conditioning, Electricity

° Contract value: EUR 6.8 million ° Size: ~20,000 m² ° Lifespan: Q4/2014-Q2/2016

30

Holstebro police station, Denmark The life cycle project realised with a public-private partnership model includes the total delivery of all building systems for the new property, followed by responsibility for operation, service and maintenance for 25 years. The property will be connected to remote management, which ensures agreed conditions and optimal energy use in the building. ° Service areas: Advisory

Services, Design & Engineering, Project Management, Project Execution, Technical Maintenance, Managed Operations and Managed Life Cycle

° Disciplines: Heating & Sanitation, Ventilation & Air Conditioning, Electricity, Security & Safety, Automation

° Contract value: EUR 18.8 million

° Size: 12,000 m2 ° Lifespan: 2014−2041

HOLSTEBRO


Caverion

Acquisitions have contributed to revenue growth through the cycle

31

2002-2009 figures based on official segment reporting, i.e. sum of building systems and industrial services related revenue figures of YIT, including also internal sales. 2010-2012 figures are external revenue figures based on Caverion’s carve-out segment reporting. 2013 figures: 1-6/2013 carve-out + 7-12/2013 actual.

Revenue, EUR million

678 1,021

1,680 1,797 1,892 2,140

2,396 2,125

2,353

2,876 2,803 2,544 2,407

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Calor AB ABB Building Systems MCE AG

caverion GmbH

Acquisition period

Integration and development

Integration and development

Acquisition period

Group revenue EUR million


Caverion 32

M&A as a growth driver 50% of revenue growth over cycle from acquisitions

M&A criteria o Good strategic fit

• Geographical coverage

• Business portfolio

• Customer sectors

o Complementary skills & resources

o Business culture

o Value creation potential

o Profitability turn-around

o Strong local market position

Valuation criteria o Internal valuation always

prepared

o Key multiples analysed:

o EV/Sales

o EV/EBITDA

o EV/EBIT

o P/E

o Payback time

o Multiple levels vary depending on the target as well as market situation


Caverion

17,074 employees at the end of December

33

Employees by country at the end of December 2014

° In 2014, we continued to develop a lean organisation and a winning team:

° Talent management ° Organisational development ° Heads of divisions Sweden,

Germany and Eastern Europe and Group CIO hired

° Over 1,200 trainees and apprentices

° In November 2014, the employee

engagement survey results with a high response rate and improving engagement were communicated group wide as a basis for further development.

° Continuous improvement for occupational health and safety of employees as a key target

° The accident frequency rate (number of accidents per one million work hours) was on the stable level 10.1 in 2014 (2013: 9.2).


Finland 28%

Sweden 23%

Norway 16%

Germany 14%

Austria 4%

Denmark 6%

Other countries 9%

Caverion

Nominee registered and non-Finnishholders 33.8% (Dec 31, 2014: 33.0%)

Households20.4% (20.7%)

General government9.2% (10.1%)

Financial and insurance corporations14.3% (13.7%)

Non-profit institutions5.9% (5.9%)

Non-financial corporations and housingcorporations16.5% (16.6%)

32,508 shareholders on January 30, 2015

34

Owners by category by shares owned

A total of shareholders

32,508 (Dec 31,2014:

32,837)


Major shareholders on June 28,2013

Largest shareholders

Shares, pcs

% of share

Capital

Change after December,

pcs

Change after December,

%

1. Structor S.A. 17,840,000 14.20 0 0.00

2. Funds held by Antti Herlin, incl. directly held shares 13,150,180 10.47 0 0.00

3. Fondita funds 3,820,000 3.04 -30,000 -0.78

4. Ilmarinen Mutual Pension Insurance Company 3,648,591 2.91 -1,060,853 -22.53

5. Nordea funds 3,162,892 2.52 -101,678 -3.11

6. OP funds 2,978,616 2.37 10,000 0.34

7. Varma Mutual Pension Insurance Company 2,864,393 2.28 0 0.00

8. Aktia funds 2,378,887 1.89 0 0.00

9. The State Pension Fund 1,850,000 1.47 0 0.00

10. Elo Pension Company 1,344,468 1.07 0 0.00

11. Danske Invest funds 1,347,685 1.07 473,000 54.08

12. Brotherus Ilkka 1,304,740 1.04 0 0.00

13. Evli funds 1,143,705 0.91 40,000 3.62

14. SEB Investment funds 1,080,600 0.86 143,000 15.25

15. Etera Mutual Pension Insurance Company 757,446 0.60 0 0.00

16. Säästöpankki funds 586,052 0.47 0 0.00

17. Odin funds 537,068 0.43 0 0.00

18. Caverion Oyj 509,257 0.41 0 0.00

19. FIM funds 459,511 0.37 21,000 4.79

20. Föreningen Konstsamfundet rf 423,002 0.34 0 0

20 largest, total 61,187,093 48.72 All shares 125,596,092 100

Caverion

Caverion’s Board of Directors Re-elected by the AGM on March 17, 2014

Henrik Ehrnrooth (b. 1954) M.Sc. (Forest economics), B.Sc. (Econ.) Chairman of the Board Share ownership: 17,840,000* Independent of company: Yes Independent of owners: No

Michael Rosenlew (b. 1959) M.Sc. (Econ.) Managing Director of Mikaros AB Share ownership: 0 Independent of company: Yes Independent of owners: Yes

Ari Lehtoranta (b. 1963) M.Sc. (Eng.) Vice Chairman of the Board President and Chief Executive Officer of Nokian Tyres plc Share ownership: 0 Independent of company: Yes Independent of owners: Yes

Eva Lindqvist (b. 1958) M.Sc. (Eng.), MBA Professional board member Share ownership: 1,500 Independent of company: Yes Independent of owners: Yes

Anna Hyvönen (b. 1968) Lic. Tech. Executive Vice President, Finland & Baltics, Ramirent Plc Share ownership: 0 Independent of company: Yes Independent of owners: Yes

*) Henrik Ehrnrooth holds indirectly with his brothers Georg Ehrnrooth and Carl-Gustaf Ehrnrooth a controlling interest in Structor S.A., the largest shareholder of Caverion Corporation.


Caverion

Caverion Group Management

36

Matti Malmberg Service efficiency

Antti Heinola CFO

Karl-Walter Schuster Project excellence

Sakari Toikkanen Group Development & Support

Merja Eskola Human Resources

Fredrik Strand President and CEO

Jarno Hacklin Finland

Erkki Huusko Industrial Services

Thomas Lundin Sweden

Peter Rafn Denmark

Knut Gaaserud Norway

Manfred Simmet Austria

Päivi Alakuijala Marketing & Communications

Group key executives

Business area executives Division executives

Juhani Pitkäkoski Mergers & Acquisitions

Werner Kühn Germany


Juhani Pitkäkoski (acting Head of Division Eastern Europe) Eastern Europe

Road Show Presentation February, 2015 - Caverion Group · Road Show Presentation February, 2015 . ... SPIE. Royal Imtech: Bilfinger SE*** Vinci Energies ** GDF Suez Energy. Services*

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Road Show Presentation February, 2015 - Caverion Group · Road Show Presentation February, 2015 . ... SPIE. Royal Imtech: Bilfinger SE* Vinci Energies GDF Suez Energy. Services*