ISS A/S
Interim report (Q1 and Q3)

INTERIM REPORT FOR THE PERIOD 1 JANUARY – 30 SEPTEMBER 2017

Copenhagen, 2017-11-08 08:00 CET (GLOBE NEWSWIRE) -- 
                                                                     No. 20/2017

Continued stable performance for the first nine months of 2017

ISS (ISS.CO, ISS DC, ISSDY), a leading global provider of facility services,
announces its interim financial report for the first nine months of 2017: 



Highlights

  -- Organic revenue growth of 2.0% in the first nine months and 2.3% in Q3 (Q2
     2017: 1.0%).

  -- Total revenue increased by 2% in the first nine months as well as in Q3 (Q2
     2017: 2%), driven by organic growth and a positive net impact from
     acquisitions and divestments, partly offset by a negative impact from
     foreign exchange effects.
  -- Operating margin of 5.4% in the first nine months (2016: 5.5%) and 6.3% in
     Q3 (Q3 2016: 6.5%). The net impact of acquisitions and divestments as well
     as currency translation effects on margin was negative by 0.1%-point both
     for the first nine months and Q3. The operating profit before other items
     increased to DKK 3,203 million in the first nine months (2016: DKK 3,177
     million) and decreased to DKK 1,249 million in Q3 (Q3 2016: 1,270 million).
  -- Cash conversion over the last twelve months of 99% (Q2 2017: 92%).
  -- Net profit (adjusted) decreased to DKK 1,820 million in the first nine
     months (2016: DKK 1,944 million), due to a DKK 212 million loss related to
     remeasurement of a business classified as held for sale in Northern Europe.
  -- Net profit decreased to DKK 1,501 million in the first nine months (2016:
     DKK 1,569 million).
  -- Leverage at 30 September 2017 was 2.7x (30 September 2016: 2.4x), impacted
     by the acquisition of Guckenheimer. Capital allocation and leverage
     objectives remain unchanged.
  -- As announced 18 October, ISS will deliver Integrated Facility Services to
     Deutsche Telekom at approximately 9,000 sites across Germany with more than
     6,000 employees starting 2019 until 2029. Once fully operational the
     contract will amount to approximately 4% of 2016 Group revenue.
  -- Revenue generated from IFS increased by 4% in local currency in the first
     nine months (H1 2017: 4%), leading to a total share
of 37% of Group revenue (H1 2017: 36%).
  -- Revenue from Global Corporate Clients increased by 12% in local currency in
     the first nine months (H1 2017: 10%) and represents 12% of Group revenue
     (H1 2017: 11%).
  -- Strategic initiatives, including sharper focus on key customers, the
     procurement programme and our global concepts and tools, continue to be
     implemented according to plan and support the margin. In addition, our
     restructuring of certain operations continues.
  -- The Group is committed to maintain a nominal ordinary dividend in 2018 at
     least equal to 2017.
  -- The 2017 outlook for organic revenue growth is narrowed from 1.5%-2.5% to
     be around 2%. The Group’s expectation for operating margin has been reduced
     from being above the 5.78% realised in 2016 to being in line with the level
     realised in 2016, excluding the impact from acquisitions and divestments as
     well as currency translation effects. Our expectation for cash conversion
     remains unchanged (above 90%).

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

“As expected, our organic revenue growth improved in Q3, driven by contract
wins and expansions with key account customers and within IFS. Our margin
performance has been impacted by acquisitions, divestments and currency
effects, together with short-term challenges in certain markets. This has led
to an adjustment of our 2017 operating margin expectation. However, the
underlying business performance has been positive. Our recent contract wins
with Deutsche Telekom and the Danish Defence are highly encouraging. The IFS
contract with Deutsche Telekom will start in July 2019, becoming the single
largest contract in ISS’s history. The new 6-year contract with the Danish
Defence starts in February 2018 and will become the largest outsourced facility
services contract in Denmark. These developments add to our conviction in the
ISS Way strategy and our key account focus.” 



Lord Allen of Kensington Kt CBE                              Jeff Gravenhorst

Chairman                                                                       
Group CEO 



Conference call details
A conference call will be held on 8 November at 10:00 CET.

Presentation material will be available online prior to the conference call.

Dial-in details:

Denmark: +4535445580
UK: +442033645374
USA: +1 8557532230

Link: https://edge.media-server.com/m6/p/yrufu643


For investor enquiries
Nicholas Ward, Head of Group Investor Relations, +45 3817 6251
Martin Kjær Hansen, Senior Investor Relations Manager, +45 3817 6431

For media enquiries
Lena Stennicke, Head of Media Relations, +45 38 17 65 03

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 79 billion in   
 2016 and ISS has more than 490,000 employees and activities in more than 70    
 countries across Europe, Asia, North America, Latin America and Pacific,       
 serving thousands of both public and private sector customers. For more        
 information, visit www.issworld.com.                                           


ISS A/S, ISIN DK0060542181, ISIN US4651472056
ISS Global A/S, ISIN XS1145526585, ISIN XS1330300341, ISIN XS1145526825,
XS1673102734