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

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

by Brian Sims
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.”

You may also like