3Q 2010: Improved numbers across the business
Three new, global contract wins fuel future growth
November 11th 2010. Today ISS releases its financial statement for the period January 1st - September 30th 2010. The financials show that ISS continues to pursue a growth track and has delivered improved numbers across the business. Three new, global customer contract wins reflect the success of our implementation of The ISS Way, where we have invested in creating a comprehensive global platform and a strong and uniform commercial culture.
8.6% growth for the quarter
- Growth continued to accelerate with Q3 revenues of DKK 18.6 billion an increase by 8.6% compared with Q3 2009.
7% growth for the first nine months - organic growth is 3.3%
- Revenue for the first nine months of 2010 amounted to DKK 54.8 billion, an increase of 7% compared with the same period in 2009, mainly driven by double-digit growth rates in the emerging markets, including Latin America and Asia, which delivered growth rates of 48% and 30%, respectively. The emerging markets now comprise 18% of the total revenue.
- Organic growth for the period was 3.3% compared with 0.5% for the first nine months of 2009. Six out of seven regions are now contributing positively to ISS’s organic growth, with overall growth supported by solid organic growth of 3.9% in the quarter compared with a negative growth of 0.2% in the same period last year.
Operating margin increased by 9.3% in the first 9 months
- Operating profit before other items for the first nine months increased by more than 9% to DKK 3.1 billion compared to the same period last year and operating margin before other items, i.e. the operating margin, amounted to 5.6%.
- The turnaround initiatives implemented in France continue to progress according to plan. Excluding France, ISS’s operating profit before other items improved by 10% in the first nine months compared to the same period last year, the operating margin was 5.9% and the organic growth amounted to 4.3%.
Outlook: Pick-up in organic growth considered sustainable
- The pick-up in organic growth experienced in the first nine months of 2010 is considered sustainable and hence the full year organic growth is expected to be in line with the organic growth for the first nine months. ISS expects its operating margin for full year 2010 to be slightly above the level realised in 2009.
ISS wins three major, global contracts
- Hewlett-Packard (HP), United Kingdom Foreign & Commonwealth Offices (FCO) and one of the world’s largest banks, Citi, choose ISS for international integrated facility services (IFS) contracts.
- The HP Americas contract includes multi-service delivery and integrated facility management to more than 330 HP sites in 13 countries in Americas and a 3.5 year extension of the existing contract with HP in EMEA and APAC.
- FCO is an IFS contract comprising 28 sites in 14 APAC countries.
- The Citi contract includes over 800 sites in 26 countries in EMEA.
Commenting on the results, Group CEO, ISS A/S, Jeff Gravenhorst said:
“I’m delighted to report such strong growth across the business. Our growth rates are among the best in our industry. This has been driven by an increase in portfolio business. We see increased demand for IFS and multi-service contracts, which now comprises more than a third of our revenue. Furthermore it is satisfying that prominent clients such as Citi, FCO and HP have chosen ISS as their global, strategic partner for their facility services needs.”
“Our global customer portfolio amounts to revenue near to the revenue of a top 10 country. These contracts confirm our investment in the The ISS Way which has created a comprehensive global platform and reinforced the priority of achieving a strong and uniform commercial culture throughout the company. Our focus on specific segments leads to more new sales and cross sales and improved customer retention.
“The global economy is recovering and we are seeing encouraging signals that give us confidence in the outlook for our business. We expect the long-term impact of public sector budget cuts to be positive for ISS as a result of increased outsourcing. To date, in many cases our dialogue with our customers in the renegotiating of contracts has successfully resulted in reassessing the customers’ needs and cross selling new services.”
Key figures and ratios for ISS Holding A/S for first nine months 2010:
| Amounts in DKKm* |
YTD 2010 |
|
YTD 2009 |
|
Change |
| Revenue |
54,777 |
|
51,134 |
|
7% |
| Operating income** |
3,069 |
|
2,807 |
|
9% |
| Operating margin |
5.6% |
|
5.5% |
|
|
| Organic growth |
3.3% |
|
0.5% |
|
|
| |
|
|
|
|
|
* Except percentages
** Before other items
Enquiries:
Jeff Gravenhorst
Group CEO
Jakob Stausholm
Group CFO