Strategic focus areas
We continue to focus on improving our profitability and targeting strong growth. Innovative and advanced solutions, strong company image, excellent leadership and operational excellence are prerequisites for achieving profitability and growth. Together, these form our six strategic focus areas.
We aim to increase the Group’s EBITDA to more than 6% of revenue by the end of 2016. We seek profitability improvement, above all, by improving the efficiency our own operations: we are aiming for a lean, efficient organisation by introducing a coherent operating model as well as common processes and tools throughout the company, in all divisions.Our target is to reach negative working capital by the end of 2016, particularly through more efficient invoicing.
In project business, we will complete any low performing projects. In order to avoid such projects in the future, we will be more selective in choosing projects in terms of their profitability and risks, as well as the required competencies and resources. We follow a strictly defined process in project selection with and clearly defined approval right limits and authorities for project approvals. We will also enhance the follow-up of projects.
In service business, we will adopt a harmonised, more efficient service process in all divisions. The common ERP system and mobile applications will improve the efficiency of tasks such as receiving job requests, reporting working hours and tracking the progress of service process.
Once we have succeeded in improving our profitability, we can move on to the actual growth phase in 2015.
Once we have succeeded in improving profitability, we can move on to pursue growth. Caverion targets the average annual growth in revenue of more than 10% until the end of 2016.
Caverion is seeking organic growth particularly in service and maintenance, which in 2014 accounted for approximately 54% of our business. We aim to increase the share of long-term maintenance agreements in particular, to be able to offer more comprehensive services, in which Caverion manages the entire life cycle of the client’s property or processes.
In project business, Caverion aims to increase the share of Design & Build projects. In these projects, Caverion is involved in the project from the very beginning with responsibility for the design and delivery of the systems, and also for subcontractors.
Approximately half of the targeted revenue growth across the cycle can be achieved through organic growth, which means that acquisitions are necessary in order to achieve the revenue growth target. They are considered in situations when expertise regarding a certain technical discipline or service area is required in a certain geographic area. Caverion has good opportunities to strengthen its position through acquisitions in the fragmented Central and Northern European markets, where most of the competitors are small companies, typically offering single technical systems.
Innovative and advanced solutions
Caverion has special tecnical expertise especially in solutions for demanding properties, such as hospitals, laboratories and cleanrooms, as well as in disciplines such as cooling, automation, and security and fire safety systems. This distinguishes us from our competitors, and we aim to strengthen our expertise and offering in these fields.
We aim to increase the share of our own products and solutions in our offering. We are continuously developing our products, solutions, and service concepts so that they meet the specific requirements in each client segment. Our research and development centre in Aachen, Germany, supports our product development. Product development is also carried out in divisions.
We aim to utilise all the potential related to megatrends in the market such as digitalisation of services and the tightening requirements for energy efficiency in legislation. Providing comprehensive services requires increasingly advanced building automation, which is also a key factor in terms of improving energy efficiency. Our aim is to further develop our property remote management services and create a common business model for its. We have vast experience and expertise scattered across the company, which we should turn into company-wide best practices.
We aim to provide even more comprehensive services that cover the entire life cycle of our clients' properties, industrial facilities and processes.
Strong company image
We are building a company image that makes Caverion attractive among clients, investors, employees, and other stakeholders and increases the value of our company.
Life cycle solutions and values (step ahead, cooperation, responsibility and high performance) are at the core of the Caverion brand. We want to build an identity of a leading European service company in our industry.
Our people are our most valuable assets – having competent people is decisive in meeting the needs of our clients. We aim to be the most attractive employer in our field of business.
We are placing a particular focus on performance management, continuous career-long learning, fair and motivating rewarding, and occupational safety and wellbeing at work. We ensure the right people in the right place and offer them opportunities to advance in their careers. We want to be identified as a genuine European service company. In order to succeed in this, we need a harmonised service culture.
We are currently making a transition from a financial holding model into one, coherent company. In order to achieve operational excellence and meet our strategic goals, we need to have a common operational model and core and support business processes in all divisions.
The main purpose of having a common operational model is to enable us to offer our clients services that cover the entire life cycle of the property or industrial plant. We are developing our processes, organisation, competencies and service offering in order to achieve this objective. Organisations will be adjusted according to the common operating model in all divisions, however, taking into account the local markets and the specific needs of the individual division.
Special expertise related to demanding projects and service agreements will be concentrated in offices set up specifically for this purpose within divisions. These offices will be responsible for major Design & Build projects and other projects involving design and engineering, and also for the development and execution of service agreements that include the life cycle view. Their purpose is to support our core business, i.e. the projects and service agreements implemented locally through our 280 offices.
We aim to expand the use of our common ERP system in all of our biggest divisions, in order to improve the efficiency of our processes and facilitate the sharing of information between different functions. Common IT platforms and applications facilitate work planning, scheduling, follow-up, invoicing and reporting, among other things.