Copenhagen, 2013-03-07 08:14 CET (GLOBE NEWSWIRE) --
Today, ISS A/S announced full year financial results for 2012 and published its annual report:
Jeff Gravenhorst, ISS Group CEO, said:
“In light of the current global macroeconomic climate, the progress we made in 2012 with our ongoing strategic transformation was satisfactory. We secured a number of new global and regional contracts, including two of the largest global contracts in the history of ISS, and we welcomed two new investors, resulting in a significantly stronger capital structure of ISS. Given the market situation in many of our developed markets, we are particularly proud of the continued profitable overall growth and our ability to continue to generate strong cash flows. We are currently well on track implementing new sizeable global and regional contracts.”
Group revenue amounted to DKK 79,454 million in 2012, an increase of 2.3% compared with 2011, driven by organic growth of 1.7% and a positive effect from exchange rate movements of 2%, which was partly offset by the divestment of non-core activities of 2%.
Western Europe, Latin America and Asia delivered positive organic growth rates in 2012, with Asia once again reporting double-digit organic growth. The organic growth was negatively affected by the challenging macroeconomic conditions, a decline in non-portfolio services and by ISS deliberately exiting contracts with unsatisfactory conditions.
Operating profit before other items increased to DKK 4,411 million in 2012. Despite the challenging macroeconomic conditions ISS maintained an operating profit in line with 2011. The operating margin (operating profit before other items as a percentage of revenue) was 5.6% in 2012, compared with 5.7% in 2011. The margin was negatively impacted by the introduction of austerity measures in several of our mature markets and some operational challenges in a few countries.
In 2012, ISS maintained the focus on strategic alignment, increasingly streamlining the business platform to further strengthen focus on core activities and accelerate the continued deleveraging of the group. ISS divested a number of activities in 2012 and has a number of non-core activities held for sale.
ISS continues to have a strong cash generation leading to a cash conversion of 103% for 2012 compared with 93% in 2011. The strong cash conversion is a result of a positive cash flow performance in all regions reflecting continued focus on securing payments for work performed.
On 4 March 2013 ISS announced that it is seeking consent of its lenders under the Senior Facilities Agreement to amend and extend its debt maturities with additional three years, including a refinancing of the Second Lien Facility.
The outlook for 2013 is based on a mixed global macroeconomic outlook on the ISS world map with continued strong growth in emerging markets combined with weak growth and difficult macroeconomic conditions in large parts of Europe, including the uncertainty surrounding current and future austerity measures. The recent launch of several large Integrated Facility Services (IFS) contracts will positively impact organic growth in 2013 and we will continue to focus on developing the increasingly larger part of the business based in emerging markets.
In 2013, we have a solid starting point following the wins of several large IFS contracts in 2012. Combined with the underlying business development, we therefore expect to deliver around 3% organic growth in 2013.
Despite the expected difficult macroeconomic conditions the operating margin for 2013 is expected to be maintained at the level realised in 2012.
Continuing the deleveraging of ISS in accordance with The ISS Way strategy, cash flows will remain a priority in 2013, and we expect our cash conversion for 2013 to be above 90%.
Ole Andersen Jeff Gravenhorst
Chairman of the Board Group CEO
A presentation of the Annual Results for 2012 will be held on Thursday, 7 March 2013 at 13:00 CET (12:00 UK time).
+45 35 44 55 80 (Denmark)
+44 (0) 2033 645 374 (UK)
The conference call will also be available on live webcast. In order to listen to the conference call and view the presentation simultaneously, please visit http://inv.issworld.com/events.cfm
The full annual report can be downloaded from: http://inv.issworld.com/annuals.cfm
For media enquiries
Kenth Kærhøg, Head of Group Communications, +45 38 17 62 05
For investor enquiries
Barbara Plucnar Jensen, Head of Group Treasury, +45 38 17 62 60
About the ISS Group
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 almost DKK 80 billion in 2012 and ISS has more than 530,000 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 XS0253470644
ISS Global A/S, ISIN XS0206714247