Business review resulting in restructuring actions including reduction of up to 700 employees and lowered EBITDA guidance for 2016


Caverion Corporation Stock exchange release June 20, 2016 at 3:00 p.m. EEST
Business review resulting in restructuring actions including reduction of up to
700 employees and lowered EBITDA guidance for 2016

As a consequence of the previous CEO’s departure the Board of Directors of
Caverion initiated a thorough review of operations in all divisions with
operative challenges. The interim management with the support of external
consultants has performed the review and the findings are focused on these main
areas:

 1. Caverion has experienced profitability problems in 2016 due to resource
overcapacity and challenges in executing and managing projects mainly in
divisions Sweden and Denmark-Norway. In Norway the overcapacity has been mostly
market-driven due to the slowdown in the oil industry, while in Sweden weak
resource management is the main factor behind the development.
 2. The profitability of some bigger projects in Germany and Norway has also
been weaker than forecasted.
 3. Over the past two years the Group has invested heavily in many corporate
development projects at too fast a pace with the aim of building one Caverion.
This has resulted in too high fixed costs.
 4. Working capital and cash flow have deteriorated in 2016 due to low
profitability and weak development in Germany and Sweden driven by delayed final
payments in projects and low invoicing.

Having evaluated the situation more thoroughly the interim management now
launches the following restructuring actions in order to improve the Group
profitability:

  · In addition to the previously announced 300 temporary layoffs and the
restructuring costs of EUR 2 million in the first quarter Caverion is planning
to initiate further cost reductions through temporary layoffs and personnel
reductions in order to secure operational efficiency. Caverion estimates that
the total restructuring costs for 2016 will be in the region of EUR 20-30
million. The personnel reductions are estimated to affect up to 700 employees.
The main focus will be in divisions Sweden and Denmark-Norway and also in Group
Services, with the negotiations affecting around 10 percent of employees in the
concerned units.
  · Caverion will reduce fixed costs through prioritisation of its internal
development programmes, which will allow more focus on client work and
achievement of organic growth targets.
  · The Group organisation will be changed through reorganisation of the Group
functions. New Projects and Services functions will be established to respond to
the challenges in executing and managing projects and help to secure the
targeted utilisation rate in the service business. This will also result in some
changes in management team. It has been agreed that Carina Qvarngård
discontinues her duties as SVP, Group Business Development & Marketing and will
leave the company as of June 23.

“Our current strategy is good and we continue to proceed with its
implementation. In the short term we need to keep our focus on improving
profitability and cash flow. We also need to prioritise the ongoing development
projects and focus on the most important ones. It is important to stress that we
are performing according to plan in several divisions,” Interim President and
CEO Sakari Toikkanen says.

Caverion keeps its strategic financial targets intact. However, reaching the
said targets will take more time due to needed restructuring and other ongoing
strategic changes. New timeline for the reaching the financial targets will be
given later this year.

Due to the above mentioned challenges Caverion lowers its EBITDA guidance for
2016. The revised guidance takes into account the impact of the restructuring
costs. Caverion now estimates that the Group’s revenue for 2016 will remain at
the previous year's level (2015: EUR 2,443 million) and the Group’s EBITDA
excluding restructuring costs for 2016 will decrease clearly from the previous
year's EBITDA level (2015: EUR 91.5 million).

Due to the restructuring actions and the underlying reasons thereof the
performance is expected to be weak also during the second quarter in 2016.

New guidance for 2016:

Caverion estimates that the Group’s revenue for 2016 will remain at the previous
year's level (2015: EUR 2,443 million) and the Group’s EBITDA excluding
restructuring costs for 2016 will decrease clearly from the previous year's
EBITDA level (2015: EUR 91.5 million).

Previous guidance for 2016 announced on April 27:

Caverion estimates that the Group’s revenue for 2016 will remain at the previous
year's level  (2015: EUR 2,443 million) and the Group’s EBITDA for 2016 will
grow from the previous year (2015: EUR 91.5 million).

CONFERENCE CALL

Caverion will arrange a conference call for analysts, investors and media on
June 20, 2016, at 17:00 p.m. (Finnish Time, EEST). The call can be accessed by
calling +44 (0)20 3427 1908. Participant code for the conference call is
“5416805/ Caverion”.

Caverion will postpone its Capital Markets Day earlier announced for September 8
until further notice.

CAVERION CORPORATION

Distribution: Nasdaq Helsinki, principal media, www.caverion.com
For additional information, please contact:

Sakari Toikkanen, Interim President and CEO, Caverion Corporation; please
contact Päivi Alakuijala, VP, Marketing and Communications, tel. +358 40 8400
251

Antti Heinola, Chief Financial Officer, Caverion Corporation, tel. +358 40 352
1033, antti.heinola@caverion.com
Milena Hæggström, Head of Investor Relations, Caverion Corporation, tel. +358 40
5581 328, milena.haeggstrom@caverion.com
Caverion designs, builds, operates and maintains user-friendly and energy
-efficient technical solutions for buildings, industries and infrastructure. Our
services and solutions are used in commercial and residential buildings and on
industrial and public sector properties, as well as in processes, ensuring
business continuity, safety, healthy and pleasant surroundings, optimal
performance and cost management. Our vision is to be a leading European provider
of advanced and sustainable life cycle solutions for buildings and industries.
Our strengths include technological expertise and comprehensive services,
covering all technical disciplines throughout the entire life cycles of
properties and industrial plants. Our revenue in 2015 was approximately EUR 2.4
billion. Caverion has over 17,000 employees in 12 countries in Northern, Central
and Eastern Europe. Caverion’s shares are listed on Nasdaq
Helsinki. www.caverion.com (http://www.caverion.fi/), @CaverionGroup
Join our story: www.caverion.fi/Csaga #Csaga

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