ISS Group issues Interim Report noting “steady performance” for January-September

Jeff Gravenhorst: Group CEO at ISS

Jeff Gravenhorst: Group CEO at ISS

Security solutions and general FM specialist ISS Group has published its Interim Report for the first nine months of 2016, noting a “steady performance” and “extraordinary dividend” (at DKK 4.00 per share). Organic revenue growth stands at 3.6% from January through until September, with 3.3% growth recorded in Q3 (Q2 2016: 3.8%).

Total revenue decreased by 1% in the first nine months of the year, and decreased by 1% in Q3 (Q2 2016: decrease of 2%), driven by currency effects which reduced revenues by 4% in the first nine months and by 3% in Q3. Operating margin stands at 5.5% (2015: 5.4%) and at 6.5% in Q3 (Q3 2015: 6.5%).

Cash conversion over the last 12 months is 95% (Q2 2016: 97%). Profit before amortisation/impairment of acquisition-related intangibles increased to DKK 1,944 million in the first nine months (2015: DKK 1,764 million), while net profit increased to DKK 1,569 million (2015: DKK 1,392 million).

Leverage as at 30 September 2016 was 2.4x (30 September 2015: 2.7x). The ISS Group’s capital allocation and leverage objectives remain unchanged.

on Friday 11 November, the Group distributed an extraordinary dividend of DKK 4.00 per share or DKK 743 million, which is in addition to the DKK 1,358 million ordinary dividend paid in April this year.

Integrated Facility Services

Revenue generated from Integrated Facility Services increased by 15% in local currency in Q3 (Q2 2016: 15%), leading to a total share of 37% of Group revenue (Q2 2016: 37%). Revenue from global corporate clients increased by 18% in local currency in Q3 (Q2 2016: 16%) and represents 11% of overall Group revenue (Q2 2016: 11%).

Strategic initiatives (including a sharper focus on key customers, business process outsourcing and the procurement programme) continue to be implemented according to plan and support margin development.

The 2016 outlook for organic revenue growth is narrowed to around 3% (from a previous forecast of 2.5%-4.0%). Expectations for operating margin (above 5.7%) and cash conversion (above 90%) remain unchanged.

Jeff Gravenhorst, Group CEO at ISS, commented: “We continued our steady performance, delivering robust organic growth, an improved margin and strong cash conversion. Strong demand for Integrated Facility Services continues to drive both organic growth and margin improvements.”

Gravenhorst added: “During the quarter, we signed multiple new contracts and extensions including that agreed with Hitachi Rail in the UK. Since our 2014 IPO, we have steadily reduced our leverage to 2.4x at the end of Q3. Given our continued steady performance, we distributed an extraordinary dividend of DKK 4.00 per share, which is consistent with our stated capital allocation policy. We’re confident that we will continue our steady performance, delivering organic growth for 2016 of around 3% and a margin higher than that realised in 2015.”

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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