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ISS continues momentum from 2nd half 2009
ISS experiences a pick-up in organic growth and continues to improve profitability.
ISS continues in the first quarter the positive momentum from the second half of 2009. The growth rate was above 5% in the first three months of 2010, of which the organic growth rate represented 2.1%. This is an early sign of successful implementation of the ISS Way Strategy and demonstrates ISS’ competitive position when it comes to winning in the global facility services market. Furthermore, during the first three months of 2010, ISS continued to harvest on the corrective actions taken during 2009 leading to a notable increase in profitability.
This appears from ISS’ first quarter interim report published today.
In aggregate, ISS’ revenue for the first three months grew to DKK 17,574 million. The total growth rate of the Group was above 5% in the first three months of 2010. Of the total growth, organic growth represented 2.1% while currency effects contributed 3%. Five out of ISS’ seven regions delivered positive organic growth. Asia and Latin America both achieved double-digit organic growth rates.
Operating profit before other items grew to DKK 806 million, an increase of 13% compared to the first three months of 2009 and the operating margin increased to 4.6% - an improvement of 0.3%-point compared with the same period in 2009. Six of ISS’ seven regions achieved higher operating margins in the first three months of 2010 compared to 2009. This includes Western Europe, despite the challenges experienced in several countries in the region.
“I am pleased with our performance. Despite a market which is still challenging, we have been able to grow and improve our business across the board. Our strategy The ISS Way is being tested and is proving effective,” says Jeff Gravenhorst, Group CEO of ISS A/S.
“Group-wide cost reductions, turn around plans and other corrective actions have also proved effective. We have been able to manoeuvre through the economic slowdown. The first quarter results underline our ability to focus our operation and cultivate new business opportunities. Our relentless focus on profitable organic growth is gaining momentum and our targeted efforts on large multinational corporate clients is paying back with among others a contract win of a global agreement with Sony Ericsson covering the Americas, EMEA and APAC. We continue to concentrate on customer needs, including Integrated Facility Services, within targeted segments, services and geographies.”
ISS continues to have a strong and stable cash generation. Our continued efforts on optimising cash flow resulted in a reduction of two debtor days compared with the same period in 2009 and a strong cash conversion of 106% for the last twelve months.
ISS expects revenue to grow organically at an increasing pace throughout 2010. The operating margin for 2010 is expected to be slightly above the 5.6% achieved in 2009.
“The ISS Way is proving to be the right course of action. In April the strategy was praised when the International Association of Outsourcing Professionals named ISS the sixth best outsourcing company in the world across all business sectors – a step up of one place from last year. Furthermore, our first quarter results show we are performing competitively in our industry. We will continue to build on this momentum and we expect to see gradually improving results over the course of the year,” says Jeff Gravenhorst.
Financial highlights and key ratios of ISS Holding A/S for the first three months 2010:
Amounts in DKK million* Revenue Operating profit** Net profit/(loss) for the period Operating margin Organic growth |
Q1 2010 17,574 806 (197) 4.6% 2.1% |
Q1 2009 16,674 715 (175) 4.3% 1.5% |
Change 5% 13% (13%) |
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* Except percentages
** Before other items. Forward-looking statements
This press release may contain forward-looking statements. Statements, other than statements of historical fact, regarding future events or prospects are forward-looking statements. The words ‘‘may’’, “will”, “should”, ‘‘expect’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘estimate’’, ‘‘plan’’, "predict," ‘‘intend’ or variations of these words, as well as other statements regarding matters that are not historical fact or regarding future events or prospects, constitute forward-looking statements. ISS has based these forward-looking statements on its current views with respect to future events and financial performance. These views involve a number of risks and uncertainties, which could cause actual results to differ materially from those predicted in the forward-looking statements and from the past performance of ISS. Although ISS believes that the estimates and projections reflected in the forward-looking statements are reasonable, they may prove materially incorrect, and actual results may materially differ as a result of the risks relating to the facility service industry in general or ISS specifically, including the matters described in the annual report for 2009 or other information published by ISS.
As a result, you should not rely on these forward-looking statements. ISS undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.
The annual report for 2009 for ISS Holding A/S is available at the group website, www.issworld.com.
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