ISS Holding A/S
17.02.2011 11:38
---------------------------------------------------------------------------
ISS A/S - 2016 Senior Subordinated Notes
ISS Global A/S - 2014 Medium Term Notes
ISS Financing Plc - 2014 Senior Notes
Company announcement
Copenhagen, 17 February 2011
NOT FOR RELEASE OR DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN
This announcement is not a prospectus but an advertisement and nothing herein
contains an offering of securities. No one should purchase or subscribe for any
securities in ISS A/S ('ISS') except on the basis of information in any
prospectus published by ISS in connection with the potential admission of such
securities to trading and official listing on NASDAQ OMX Copenhagen A/S ('NASDAQ
OMX Copenhagen').
ISS A/S contemplates launching an IPO and listing its shares on NASDAQ OMX
Copenhagen
ISS announces today that it contemplates launching an Initial Public Offering
('IPO') of its shares and listing its shares on NASDAQ OMX Copenhagen
The contemplated IPO is expected to consist primarily of a sale of new shares
to raise gross proceeds of approximately DKK 13.3 billion. Proceeds are
proposed, together with amounts drawn under a new facilities agreement which is
intended to be put in place prior to the receipt of IPO proceeds, to repay all
amounts under our current senior secured facilities and our second lien
facility. A partial secondary sell-down of shares by our existing shareholder,
FS Invest II S.?r.l. (the 'Selling Shareholder'), which is indirectly
controlled by certain funds advised by EQT Partners ('EQT') and funds
affiliated with Goldman, Sachs & Co. ('Goldman Sachs'), is also expected to
cover the obligations under our management participation programme.
The contemplated IPO is expected to support ISS' future growth and operational
strategy, advance the company's public and commercial profile, and provide
improved access to public capital markets along with a diversified base of new
Danish and international shareholders.
Jeff Gravenhorst, ISS' Group CEO, commented:
'Since the acquisition of ISS by EQT and Goldman Sachs, we have undergone a
remarkable transformation. We have built a unique global service platform
across our six core services, enabling us to deliver bespoke site-based
solutions to our customers. We are proud of our robust financial performance,
as evidenced most recently by our strong results in 2010. We look forward to
offering potential new shareholders in ISS the opportunity to be part of our
growth and development going forward.'
Information on ISS
ISS is a leading global facility services provider, headquartered in
Copenhagen, with operations in established and emerging markets across the
world. ISS has local management teams in 50 countries and operations in an
additional 13 countries. Based on number of employees, ISS is one of the
largest private employers in the world with more than 522,000 employees, of
whom over half are in emerging markets.
ISS has been transformed since being taken private in 2005, expanding its
services, geographical reach and customer base, and building a global
multi-service platform. Since 2004, revenue has grown from DKK 40 billion to
DKK 74.1 billion in 2010 and operating profit before other items has grown from
DKK 2.3 billion to DKK 4.3 billion, while the number of employees has grown
from more than 270,000 to more than 522,000, of which those in emerging markets
have grown from approximately 65,000 to 267,000.
ISS offers its customers a range of facility services, including:
? Cleaning services, such as daily office and facility cleaning, dust control,
washroom and specialised cleaning services;
? Property services, such as landscaping, damage control, building maintenance
and technical services and pest control services;
? Catering services, such as in-house restaurants, hospital canteens, catering
services to remote sites, executive dining, corporate catering and office
catering solutions such as coffee points;
? Support services, such as call centres, manpower supply, outplacement
services, reception and switchboard services and office logistics;
? Security services, such as guarding, access control and patrolling of
customer facilities and installation of alarms and access control systems; and
? Facility management services, such as on-site management of facility
services, change management, space management and consulting.
ISS delivers these services to customers as single services, multi services or
integrated facility services. ISS has in recent years increasingly developed
its business to enable it to provide integrated facility services solutions. By
offering integrated facility services solutions, ISS provides customers not
only the benefits of specific services, such as labour and human resources
management, and the transfer of operational risk and our procurement expertise,
but also the integration of these services. This allows customers to reduce
administration costs and increase operational flexibility.
ISS' global footprint includes operations in Western Europe; the Nordic region;
Asia; the Pacific region; Latin America; North America and Eastern Europe.
Although ISS is a global facility services provider, a strategic cornerstone of
its operations is its decentralised business model whereby management teams
work independently with local initiative and control and knowledge of local
labour market conditions. This leads to the development of local business
strategies to reflect local demand. ISS calls this its 'multi-local' approach.
ISS' large and diverse customer base operates in a wide range of industries and
in the public sector, and ranges in size from large, multi-national customers
seeking integrated facility services to smaller customers requiring a single
service.
Key strengths
ISS believes its key strengths and advantages include the following:
Global leader with unique service offering
ISS is a leading global facility services provider, with a top three position
globally in four of the six service types in which ISS operates (as measured by
revenue for the year ended 31 December 2009). This global leadership position
enables delivery of a unique and scalable platform of service capabilities to
blue-chip and international customers, and provides ISS with significant
cross-selling opportunities.
Positioned to capture high-growth opportunities
ISS believes that it is in a position to capture high-growth opportunities,
which ISS believes will result from an increase in service integration, more
international contracts and further emerging markets exposure, combined with
attractive underlying market growth. ISS has a target of reaching an organic
growth rate of at least 6% per year over the medium term. Organic growth rate
represents revenue growth rate assuming no effect from acquisitions and
divestments and assuming constant foreign exchange rates.
Further opportunities to improve operating margins
ISS believes that there are significant opportunities to continue to enhance
its operating margins as a result of further implementation of The ISS Way
strategy (a framework for aligning and optimising its business), tight cost
control, and the positive impact from its growing exposure to emerging markets.
In addition, benefits will come from the recovery in its business in France and
in its non-portfolio business, both of which were adversely affected by the
recent economic downturn. ISS has a target of reaching an operating margin of
6.5% over the medium term.
Resilient business model
ISS believes that it has a resilient business model due largely to the breadth
of its geographic operations, the range of services it provides and its focus
on growing and maintaining its portfolio business, which has represented
approximately 75% to 80% of ISS' annual revenue during each of the last three
years. The ISS business is highly diversified, with no more than 6% of its
revenue in 2009 coming from its ten largest customers. Despite the recent
economic downturn, ISS also achieved positive organic growth from 2007 to 2010
with an average annual organic growth in this period of 4.0%. Our strong
organic growth rate, together with the stability of ISS' operating margin over
the period, illustrates the resilience of ISS' business. ISS also benefits from
a highly flexible cost base and relatively high employee turnover, which is a
characteristic of the facility services industry in general. This provides
operational and cost base flexibility.
Robust cash generation and low capital requirements
ISS believes it has an attractive financial model and a platform in place that
supports strong organic growth at attractive operating margins that will lead
to value creation. ISS has experienced consistent strong cash conversion,
reflecting a continuous focus on working capital. ISS has low and predictable
working capital requirements as well as a limited and steady need for capital
expenditure to grow its business. Net capital expenditure, not related to
acquisitions, amounted to between 1.0% and 1.3% of revenue in each year from
2007 to 2010. ISS' average cash conversion for the years 2007 to 2010 was 99%.
ISS targets a continued consistent and robust cash conversion. ISS believes
that this strong cash generation, combined with a disciplined acquisition
strategy and the limited investments needed to support future growth, will
allow it to service debt and reduce financial leverage, measured as net
debt/adjusted EBITDA, while at the same time enabling the payment of dividends
to shareholders.
Experienced management team with a solid track-record and in-depth sector
expertise
The members of the ISS group management team, which consists of the executive
group management and key employees (Regional CEOs, Head of Group Human
Resources, Head of Group Treasury, COO-Projects, Head of Group Strategy &
Corporate Development, Group General Counsel, Group CCO, Head of Group
Controlling and Head of Group IT ) have a solid track-record in the facility
services industry over numerous years, which includes in-depth sector
knowledge, management expertise and significant international experience.
2010 Financial Highlights and Outlook
In 2010, Group revenue amounted to DKK 74.1 billion, an increase of 7.3%
compared with 2009, driven mainly by double-digit growth rates in emerging
markets, including Latin America and Asia, with growth rates of 48% and 31%,
respectively, together with growth at lower rates in other developed markets.
The emerging markets comprising Asia, Eastern Europe, Latin America, Israel,
South Africa and Turkey now represent 18% of total Group revenue, 66% of total
organic growth in 2010 for the Group and more than 50% of ISS' employee base.
Organic growth for the year was 3.5% compared with 0.6% in 2009. Five out of
the seven regions contributed positively to ISS' organic growth, with Asia and
Latin America once again delivering double-digit organic growth rates. The
organic growth in Q4 2010 amounted to 4.0%.
Operating profit before other items increased by 10% to DKK 4.3 billion in 2010
compared with 2009, and operating profit before other items as a percentage of
revenue, i.e. the operating margin, increased to 5.8% from 5.6% in 2009.
Operating profit increased by 27% to DKK 4,149 million in 2010 from DKK 3,277
million in 2009. The increase was a result of a decrease in expenses recognised
as other income and expenses, net following the material investments in
restructuring projects in 2009 as well as the increase in operating profit
before other items as described above.
ISS expects revenue growth in 2011 to be approximately 4%, assuming constant
foreign exchange rates and before the impact of any acquisition or divestment
in 2011. This expected revenue growth is negatively impacted by approximately 1
percentage point related to the net effect of the acquisition and divestments
completed in 2010. Operating margin in 2011 is expected to be slightly above
the level realised in 2010, and cash conversion for 2011 is expected to be
similar to the level realised in 2010.
Goldman Sachs International and Morgan Stanley & Co. International plc have
been appointed to act as Joint Global Coordinators for the proposed IPO, and as
Joint Bookrunners along with Citigroup Global Markets Limited, Deutsche Bank
AG, London Branch, HSBC Bank plc and Nordea Markets (division of Nordea Bank
Danmark A/S) (Nordea Markets is also acting as Nordic and Retail Coordinator),
while Carnegie Bank A/S, Danske Bank A/S, Skandinaviska Enskilda Banken,
Danmark, branch of Skandinaviska Enskilda Banken AB (publ), Sweden, and UBS
Limited have been appointed as Co-lead Managers. Rothschild is acting as
financial advisor to ISS and the Selling Shareholder.
For further information, please contact:
Ole Andersen, Chairman Tel:
+45 38 17 00 00
Jeff Gravenhorst, ISS Group CEO Tel: +45 38
17 00 00
Per Bech Thomsen, ISS Press Relations Manager Tel: +45 38 17 62 39
Jon Coles / Jennifer Renwick, Brunswick Tel: +44 20 7404
5959
Disclaimer:
This announcement and the information contained herein are not for distribution
in or into the United States of America (including its territories and
possessions, any state of the United States of America and the District of
Columbia) (the'United States'), Australia, Canada or Japan. This announcement
does not constitute, or form part of, an offer to sell, or a solicitation of an
offer to purchase, any securities in the United States, Australia, Canada or
Japan or in any jurisdiction in which any offer or solicitation could be
unlawful. The securities of ISS A/S have not been and will not be registered
under the U.S. Securities Act of 1933, as amended (the 'Securities Act'), and
may not be offered or sold within the United States absent registration or an
applicable exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. An offering of securities will be made by
means of a prospectus that may be obtained from ISS.
This announcement is an advertisement and not a prospectus for the purpose of
Directive 2003/71/EC (together with any applicable implementing measures in any
Member State, the 'Prospectus Directive'). A prospectus prepared pursuant to
the Prospectus Directive is intended to be published, which, when published,
can be obtained from ISS. Investors should not subscribe for any securities
referred to in this announcement except on the basis of information contained
in the prospectus.
In any EEA Member State, other than the Kingdom of Denmark, that has
implemented the Prospectus Directive 2003/71/EC (and amendments thereto,
including Directive 2010/73/EU, to the extent implemented in each EEA Member
State), this announcement is only addressed to and is only directed at
qualified investors in that EEA Member State within the meaning of the
Prospectus Directive.
This announcement is only directed at (i) persons who are outside the United
Kingdom, (ii) investment professionals falling within Article 19(5) of the U.K.
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the
'Order') or (iii) high net worth entities falling within Article 49(2)(a) - (d)
of the Order (the persons described in (i) through (iii) above together being
referred to as 'Relevant Persons'). The securities are only available to, and
any invitation, offer or agreement to subscribe, purchase or otherwise acquire
such securities will be engaged in only with, Relevant Persons. Any person who
is not a Relevant Person should not act or rely on this announcement or any of
its contents.
Stabilisation/FSA
The Joint Bookrunners and Co-lead Managers and their affiliates are acting
exclusively for ISS and the Selling Shareholder and no-one else in connection
with the contemplated IPO. They will not regard any other person as their
respective clients in relation to the contemplated IPO and will not be
responsible to anyone other than ISS and the Selling Shareholder for providing
the protections afforded to their respective clients, nor for providing advice
in relation to the contemplated IPO, the contents of this announcement or any
transaction, arrangement or other matter referred to herein.
In connection with the contemplated IPO, the Joint Bookrunners and Co-lead
Managers and any of their affiliates, acting as investors for their own
accounts, may subscribe for or purchase shares and in that capacity may retain,
purchase, sell, offer to sell or otherwise deal for their own accounts in such
shares and other securities of ISS or related investments in connection with
the contemplated IPO or otherwise. Accordingly, references in any prospectus,
if published, to the shares being issued, offered, subscribed, acquired, placed
or otherwise dealt in should be read as including any issue or offer to, or
subscription, acquisition, placing or dealing by, such Joint Bookrunners and
Co-lead Managers and any of their affiliates acting as investors for their own
accounts. The Joint Bookrunners and Co-lead Managers do not intend to disclose
the extent of any such investment or transactions otherwise than in accordance
with any legal or regulatory obligations to do so.
Matters discussed in this release may constitute forward-looking statements.
Forward-looking statements are statements that are not historical facts and be
identified by words such as 'believe', 'expect', 'anticipate', 'intends',
'estimate', 'will', 'may', 'continue', 'should', and similar expressions. The
forward-looking statements in this press release are based upon various
assumptions, many of which are based, in turn, upon further assumptions.
Although ISS believes that these assumptions were reasonable when made, these
assumptions are inherently subject to significant known and unknown risks,
uncertainties, contingencies and other important factors which are difficult or
impossible to predict and are beyond its control. Such risks, uncertainties,
contingencies and other important factors could cause actual events to differ
materially from the expectations expressed or implied in this release by such
forward-looking statements.
The information, opinions and forward-looking statements contained in this
announcement speak only as at its date, and are subject to change without
notice.
News Source: NASDAQ OMX
17.02.2011 Dissemination of a Corporate News, transmitted by DGAP -
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
---------------------------------------------------------------------------
Language: English
Company: ISS Holding A/S
DK
Phone:
Fax:
E-mail:
Internet:
WKN:
End of Announcement DGAP News-Service
---------------------------------------------------------------------------
DGAP-News: ISS A/S contemplates launching an IPO and listing its shares on NASDAQ OMX Copenhagen
| Source: EQS Group AG