ISS A/S
Interim report for the period 1 January – 30 June 2014

DGAP-News: ISS A/S

21.08.2014 / 07:51

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Profitable growth and improved margin

Copenhagen, 2014-08-21 07:51 CEST (GLOBE NEWSWIRE) -- 
                                                                     No. 18/2014

ISS (ISS.CO, ISS DC), one of the world's leading facility services companies,
announces its Interim Results for H1 2014: 

Highlights

  -- Resilient profitable organic revenue growth of 2.4% in H1 (2013: 3.6%) and
     2.0% in Q2 (2013: 4.4%).
  -- Strong operating margin of 4.8% in H1 (2013: 4.8%) and 5.2% in Q2 (2013:
     5.1%). Adjusted for the impact of the divested pest control activities in
     2013 the operating margin increased from 4.6% in H1 2013 to 4.8% in H1
     2014.
  -- Strong cash conversion over the last twelve months of 98% (2013: 98%) as a
     result of continued cash focus across the Group.
  -- Profit before goodwill impairment and amortisation/impairment of brands and
     customer contracts increased to DKK 559 million in H1 (2013: DKK 400
     million).
  -- The strategic initiatives within customer segmentation and central
     procurement are progressing according to plans and are supporting margin
     progression.
  -- Emerging markets now represent 23% of total revenue for the Group (2013:
     22%) and delivered 10% organic growth (2013: 10%) and 6.0% operating margin
     in H1 (2013: 6.0%). Western Europe delivered flat organic growth against a
     backdrop of difficult market conditions in H1 (2013:4%).
  -- Revenue generated from Integrated Facility Services contracts amounted to
     DKK 10.8 billion representing 29% of overall revenue (2013: 26%).
     Significant contract wins included BASF, Swisscom and a European based
     international bank.
  -- ISS Global Corporate Clients extended the global contract with HP until the
     end of 2018 and won a new contract with a large international food
     producer.
  -- Net debt reduced to DKK 15,278 million during H1 as a result of the IPO
     proceeds, an improved capital structure and proceeds from divestments.
  -- We now expect organic revenue growth in 2014 to be around the level
     realised for the first six months of 2014 (from 3%-4% previously). Our
     operating margin (above 5.5%) and cash conversion (above 90%) expectations
     are unchanged.

Jeff Gravenhorst, Group CEO, ISS A/S, said:

'Our first half results show we continue to build a strong global platform in
the USD 1 trillion facility services market, enabling our worldwide clients to
focus on their core businesses. We expect that ISS will continue to benefit
from the increased outsourcing trends by global clients, especially in emerging
markets where we saw double digit growth in the first half of the year. Our
recent strategic initiatives such as customer segmentation and central
procurement are progressing well and have had a positive impact on our margin.
Together, this gives us confidence in the continued delivery of resilient
organic growth, strong and improving operating margins with excellent cash
conversion. 

'While organic growth for Q2 was impacted by weaker economic conditions in
Europe, we continue to grow in both emerging and developed markets. We are
satisfied with our increasing margin in Q2, our strong cash conversion and our
significantly improved net result for the first half of 2014. We have further
optimised our business through successful divestments of non-core activities
allowing us to focus on the activities we are best at. 

'When we set guidance for 2014, we did so against a backdrop of an improving
macroeconomic outlook in Europe. The recent economic data has shown significant
weakening in Europe. This has had an effect on some of our customers'
decision-making and leads us to change our organic growth expectations for the
full year to be around the level of the first half of 2014. Our operating
margin and cash conversion targets are unchanged.' 



Lord Allen of Kensington CBE                        Jeff Gravenhorst
Chairman                                                        Group CEO



Conference call details
A conference call will be held on 21 August 2014 at 10:00 CET. Presentation
material will be available online prior to the conference call. 

Link: http://inv.issworld.com/events.cfm

Dial-in details:

DK: +45 35 44 55 79

UK: +44 203 364 5373

US: +1 855 753 2237



For media enquiries
Manuel Vigilius, Global Media Relations Manager, +45 38 17 64 04

For investor enquiries
Martin Kjær Hansen, Investor Relations Manager, +45 38 17 64 31



About ISS                                                                       
The ISS Group was founded in Copenhagen in 1901 and has grown to become one of  
 the world's leading Facility Services companies. ISS offers a wide range of    
 services such as: Cleaning, Catering, Security, Property and Support Services  
 as well as Facility Management. Global revenue amounted to DKK 78.5 billion in 
 2013 and ISS has more than 520,000 employees and local operations in more than 
 50 countries across Europe, Asia, North America, Latin America and Pacific,    
 serving thousands of both public and private sector customers. For more        
 information on the ISS Group, visit www.issworld.com.                          



ISS A/S, CVR 28 50 47 99,ISIN DK 0060542181
ISS Global A/S, ISIN XS0206714247
News Source: NASDAQ OMX



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21.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language:    English       
Company:     ISS A/S       
 
 
             Denmark       
ISIN:        DK0060294858  
 
 
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