ANNUAL REPORT
PEOPLE MAKE PLACES
2022
ISS A/S
Buddingevej 197
DK-2860 Søborg
Denmark
CVR 28 50 47 99
Annual Report
1 January to 31 December 2022
Approved at the annual general meeting on 13 April 2023
Rikke Schiøtt Petersen
Chair of the annual general meeting

The 2022 Annual Report is our
primary report comprising detailed
annual disclosures related to finan cial
performance, our business, governance
structure and financial results. In addition,
the report provides highlights related to
sustainability, executive remuneration
and corporate governance. Detailed
information on these topics can be found
in our separate reports, which are also
presented on this page.
In our 2022 Sustainability Report you
will find detailed information on our social,
environmental and governance activities
and targets, and how we contribute to
society in those respects. Disclosures
required under sections 99a, 99b and 107d
of the Danish Financial Statements Act are
also included in this report.
In our 2022 Remuneration Report you
will find a comprehensive description
of the work of our Remuneration
Committee in 2022, a transparent and
detailed description of our executive
remuneration and remuneration policy
as well as a specification of remuneration
to the members of the Executive Group
Management and the Board of Directors.
In our 2022 Corporate Governance
Report you will find a transparent
description of our governance structure
and the main elements of our internal
controls related to financial reporting as
well as a detailed description of our position
on the Danish Corporate Governance
Recommendations.
Annual Report Corporate Governance ReportRemuneration ReportSustainability Report
2022 reports
ANNUAL REPORT
PEOPLE MAKE PLACES
2022
PEOPLE MAKE PLACES
ISS SUSTAINABILITY REPORT
2022
REMUNERATION REPORT
PEOPLE MAKE PLACES
2022
CORPORATE GOVERNANCE REPORT
PEOPLE MAKE PLACES
2022
ISS case stories

ISS at a glance
Letter to our stakeholders 4
Performance highlights 6
Our story 7
Strategic update 8
Our global footprint 9
The ISS investment case 10
Outlook 11
Five-year summary 12
Our performance
Group results 15
Cash generation and free cash flow 18
Capital structure 19
Commercial development 20
Northern Europe 21
Central & Southern Europe 22
Asia & Pacific 23
Americas 24
Our business
OneISS strategy 27
Sustainability 30
Company of Belonging 32
Our business risks 35
Our governance
Corporate governance 40
Our governance structure 43
Meet the Board of Directors 44
Meet the Executive Group Management 46
Financial statements
Consolidated financial statements 50
Parent company financial statements 107
Management statement 113
Independent auditor’s report 114
Forward-looking statements and ESEF 118
Country revenue 119
Content
13
Brilliant Operating Basics:
Managing rising inflation
25
Customer: How ISS helped a
customer adapt to the changing
global workplace
38
Partnership: Shaping the next
generation of Facility Management
48
Environmental sustainability:
Accelerating our food waste efforts
117
Technology: The right technology
foundation to support our customers
60 | © 2022 ISS
ISS Owned IP
3k users
6 customers
& 9 customer
sites (DK)
+ 120% in revenue
ISS Owned IP
Target:
20k work tasks
ISS + partner
8k users
Working to towards
360,000 users
ISS Owned IP
60k+ users on
Global Key
Accounts
Self-delivery makes a difference for ISS
TECHNOLOGY
Delivering technology that impacts people and places
in an agile and iterative approach
MyISS
Strengthening
connection and
collaboration
in a hybrid
workplace
ISS Takeaway
Balancing full
-time jobs with
maintaining
a household
Outdoor App
Supporting
placemakers to
evidence task
completion and
compliance
ISS Workplace
App
Promoting well-
being, engagement,
community and
productivity
60 | © 2022 ISS
ISS Owned IP
3k users
6 customers
& 9 customer
sites (DK)
+ 120% in revenue
ISS Owned IP
Target:
20k work tasks
ISS + partner
8k users
Working to towards
360,000 users
ISS Owned IP
60k+ users on
Global Key
Accounts
Self-delivery makes a difference for ISS
TECHNOLOGY
Delivering technology that impacts people and places
in an agile and iterative approach
MyISS
Strengthening
connection and
collaboration
in a hybrid
workplace
ISS Takeaway
Balancing full
-time jobs with
maintaining
a household
Outdoor App
Supporting
placemakers to
evidence task
completion and
compliance
ISS Workplace
App
Promoting well-
being, engagement,
community and
productivity
60 | © 2022 ISS
ISS Owned IP
3k users
6 customers
& 9 customer
sites (DK)
+ 120% in revenue
ISS Owned IP
Target:
20k work tasks
ISS + partner
8k users
Working to towards
360,000 users
ISS Owned IP
60k+ users on
Global Key
Accounts
Self-delivery makes a difference for ISS
TECHNOLOGY
Delivering technology that impacts people and places
in an agile and iterative approach
MyISS
Strengthening
connection and
collaboration
in a hybrid
workplace
ISS Takeaway
Balancing full
-time jobs with
maintaining
a household
Outdoor App
Supporting
placemakers to
evidence task
completion and
compliance
ISS Workplace
App
Promoting well-
being, engagement,
community and
productivity
60 | © 2022 ISS
ISS Owned IP
3k users
6 customers
& 9 customer
sites (DK)
+ 120% in revenue
ISS Owned IP
Target:
20k work tasks
ISS + partner
8k users
Working to towards
360,000 users
ISS Owned IP
60k+ users on
Global Key
Accounts
Self-delivery makes a difference for ISS
TECHNOLOGY
Delivering technology that impacts people and places
in an agile and iterative approach
MyISS
Strengthening
connection and
collaboration
in a hybrid
workplace
ISS Takeaway
Balancing full
-time jobs with
maintaining
a household
Outdoor App
Supporting
placemakers to
evidence task
completion and
compliance
ISS Workplace
App
Promoting well-
being, engagement,
community and
productivity
1)
1)
Management review comprises ISS at a glance, Our performance,
Our business and Our governance.
ISS AT A GLANCE
Jacob Aarup-Andersen
Group CEO
Niels Smedegaard
Chair
Letter to our stakeholders
As the world gradually emerged from the global
Covid-19 pandemic, 2022 provided the global
workplace with new and profound challenges.
The devastating war in Ukraine, strained supply
chains and soaring inflation were just a few of
many issues that business leaders around the
world had to address. In addition, new hybrid
ways of working required many companies to
rethink and redesign their physical workplaces.
For ISS, this bolstered global demand for
integrated workplace and facility services and
sharpened the focus further on delivering on
our purpose of connecting people and places
to make the world work better. Looking back at
2022, we can proudly say that once again our
more than 350,000 placemakers have gone
above and beyond in providing outstanding
services to our customers. We thank each and
every one of our colleagues for their dedicated
support and persistence.
While we have supported our customers in the
global workplace, we have also taken a huge step
forward on our own OneISS strategy execution. By
completing the financial turnaround that we em-
barked on in late 2020, we are now ready to move
into the next phase of our strategy execution and
have laid out a solid foundation for future growth
at sustainable and attractive margins.
Commercial momentum
and organic growth
Throughout the year, we have seen good com-
mercial momentum – both with existing and new
customers. Together with all the initiatives from our
financial turnaround and strategic execution, this
has resulted in improved financial performance.
Activity and revenue increased to above pre-Covid
levels on all service lines, except within food services.
Our organic growth was 7.8% compared to 2.0%
in 2021. The increase was mainly driven by the
continued strong return-to-office trends, scope
increases as customers increased investments in
upgrading workplaces and service offerings, and
price increases implemented across the group to
offset the higher cost inflation.
Operating margin before other items was 3.8%
(excluding the impact of hyperinflation) for 2022
(2021: 2.5%). The development was driven by the
improvement of the underperforming countries
and contracts.
In 2022, realised cost inflation was higher than
seen in many years. ISS has well-embedded
processes in place, and inflation was managed
tightly through price increases and operational
efficiencies. As a result, the operating margin was
generally unaffected by inflation.
While we have supported our customers in the
global workplace, we have also taken a huge step
forward on our own OneISS strategy execution.
By completing the financial turnaround that we
embarked on in late 2020, we are now ready to
move into the next phase of our strategy execution
and have laid out a solid foundation for future
growth at sustainable and attractive margins.
2022 marked the end of our financial turnaround and we entered a new chapter
of the OneISS strategy execution. With a completed divestment programme,
continued financial progress and a solid commercial momentum, ISS is ready to
deliver on the ambitious financial targets for the coming years. This will be built
on our strengthened operational excellence and our ambitions to champion
sustainable workplaces in partnership with our customers and placemakers.
ISS AT A GLANCE
Generally, our commercial momentum benefitted
from our strategic focus and initiatives, and we
succeeded in extending all global key account
contracts up for renewal.
We also extended and expanded several key
account contracts and as a result, customer
retention for 2022 was historical high reaching
94%, when excluding the planned exit of the
Danish Defence contract.
Delivering on our
financial turnaround
Since December 2020, we have focused on two
areas; delivering the financial turnaround while
at the same time investing in our operating
model to become a differentiated global leader
within Integrated Facility Services and main-
taining our position as global number one in
cleaning.
During 2022, we could officially mark the finan-
cial turnaround as completed. All turnaround
targets were achieved, as the operating run-rate
margin at the end of 2022 was above 4%, while
the net debt was reduced to below 3x pro-forma
adjusted EBITDA (LTM).
Furthermore, we completed the strategic divest-
ment programme which as expected yielded net
proceeds of approximately DKK 2 billion.
With the enhanced operating model and healthy
financial foundation in place, we can now turn to
the next phase of our OneISS strategy.
Unfolding the OneISS strategy
At our Capital Markets Day in November 2022,
we presented new financial targets and updated
capital allocation principles, as well as how we will
unfold the full potential of the OneISS strategy.
The growth agenda will be focused on providing
Integrated Facility Services to key accounts in
three segments (office-based, production-based
and healthcare) from a stronghold as global
leader in cleaning.
To support this, we have identified three key
areas in which we will invest further: operational
efficiency, technology and sustainability. These
areas will become differentiating factors for
performance at our customers’ workplaces and
will drive stronger commercial momentum.
Operational efficiency is delivered through our
enhanced operating model, which is enabling the
launch of a portfolio of scalable service products
to drive a step-change in global productivity.
The investments in technology are focused on
creating an ecosystem of scalable platforms with
data and innovation. The first key applications are
already launched for customers and placemakers
to improve the service across workplaces glob-
ally. Through our newly established dedicated
software development centre in Porto alongside
our Warsaw hub, we can develop differentiating
high-quality and scalable digital solutions for both
the ISS enterprise and customers globally.
Finally, ISS is determined to become the sustain-
ability leader in the industry.
Unfolding the OneISS strategy
At our Capital Markets Day in November 2022,
we presented new financial targets and updated
capital allocation principles, as well as how we will
unfold the full potential of the OneISS strategy.
The growth agenda will be focused on providing
Integrated Facility Services to key accounts in
three segments (office-based, production-based
and healthcare) from a stronghold as global
leader in cleaning.
To support this, we have identified three key
areas in which we will invest further: operational
efficiency, technology and sustainability. These
areas will become differentiating factors for
performance at our customers’ workplaces and
will drive stronger commercial momentum.
Operational efficiency is delivered through our
enhanced operating model, which is enabling the
launch of a portfolio of scalable service products
to drive a step-change in global productivity.
The investments in technology are focused on
creating an ecosystem of scalable platforms with
data and innovation. The first key applications are
already launched for customers and placemakers
to improve the service across workplaces glob-
ally. Through our newly established dedicated
software development centre in Porto alongside
our Warsaw hub, we can develop differentiating
high-quality and scalable digital solutions for both
the ISS enterprise and customers globally.
Finally, ISS is determined to become the sustain-
ability leader in the industry.
Championing sustainable
workplaces
ISS is a people company and throughout our
history, we have always wanted to contribute
positively to the societies we are part of. In 2022,
we strengthened our sustainability efforts further.
We launched the ambition of championing sus-
tainable workplaces, driving true change through
both social and environmental sustainability.
The dual focus ensures that we can continue to
strengthen our competitiveness and support
growth in the next phase of our strategy execu-
tion. During 2022, we progressed significantly
on our ambitious sustainability journey. Both
within our own enterprise and in the way we
support our customers in achieving their
sustainability efforts.
Within environmental sustainability, we
announced our commitment to reach full-scope
net zero greenhouse gas emissions by 2040.
This was followed by several supporting initia-
tives throughout the year. Among other things,
ISS signed the Cool Food Pledge, committing to
reducing greenhouse gas emissions associated
with the food we serve globally by 25 percent
by 2030, and halve our food waste by 2027.
We also committed to reach our fleet net zero
target by 2030 using electrification of our fleet
of 20,000+ vehicles as a key lever.
The Company of Belonging
Within social sustainability, we launched a new
Employee Value Proposition (EVP), developed
our Diversity, Inclusion & Belonging agenda
further and introduced an ambition to become
the Company of Belonging.
Shaping the right culture and creating a safe
and inclusive environment is not only important
from a social sustainability point of view. It is
absolutely crucial in order to deliver on our
strategy and our purpose. That was the main
reason behind launching our new ambition of
becoming the Company of Belonging during the
autumn of 2022.
Through building an environment where every
employee feels accepted, empowered and can
thrive as their authentic selves, we will create
better experiences and more sustainable out-
comes for our placemakers, customers, partners
and their communities. The ambition is backed
by three signature objectives focusing on living
wages, upskilling and recognition. Together, they
are a purposeful and intentional promise that
will accelerate our journey towards becoming
the Company of Belonging.
To underpin our commitment to our placemak-
ers, we also launched a new global employee
promise and value proposition (EVP): A Place To
Be You. It enables us to live up to our promise
that every one of our placemakers can achieve
their full potential as their authentic selves in an
inclusive environment.
Building on our achievements
Having delivered on the turnaround initiatives
and our strategic ambitions in the past couple of
years, ISS is now poised to enter the next phase
of our OneISS strategy. Both operationally, finan-
cially and strategically, we are well positioned to
deliver growth with attractive and sustainable
margins, and to enhance our competitive posi-
tion in the growing market for integrated facility
management services. We will do so while also
adding value to all our stakeholders, not least
our 350,000+ placemakers and the customers
they serve every day. That is our promise and
commitment.
(6)
(3)
0
3
6
202220212020
(4.5)
2.5
3.8
DKKbn %
Operating profit
& margin
Operating profit before other items (DKKbn)
Operating margin (%)
(6)
(3)
0
3
6
202220212020
(4.5)
2.5
3.8
DKKbn %
Operating profit
& margin
Operating profit before other items (DKKbn)
Operating margin (%)
(6)
(3)
0
3
6
202220212020
(4.5)
2.5
3.8
DKKbn %
Operating profit
& margin
Operating profit before other items (DKKbn)
Operating margin (%)
Free cash flow (DKKbn)
DKKbn
-2
-1
0
1
2
202220212020
(1.8)
1.7 1.7
40
50
60
70
80
202220212020
2.0
Revenue (DKKbn)
Organic growth (%)
(6.6)
ISS AT A GLANCE
 2.9
Continued return-to-office trend, customers’ investments
in the workplaces and price increases implemented glob-
ally led to strong organic growth in 2022.
Despite an increase from 30% in 2021 to 33% in 2022, our
employee turnover rates have proven resilient through the
cycle of Covid-19.
The improvement in 2022 was driven by the successful
execution of the financial turnaround, which improved
underperforming countries and contracts, predominately
the UK and the Deutsche Telekom contract.
Our strategic focus on strengthening customer retention
led to a record high retention rate of 93% (94% excluding
the exit of Danish Defence).
Free cash flow in 2022 was driven by improved operating
profit and tight management of working capital.
ISS’s divestment programme included business units with
lower LTIF than the Group. Combined with increased activ-
ity following Covid-19 recovery, this increased LTIF from 2.5
in 2020 to 2.9 in 2022. We continue our focus on training
and awareness to drive LTIF below our target of 2.5.
Number
DKKbn
Operating
profit before
other items


DKKbn
Free cash flow
DKKbn
Revenue

Organic growth Free cash flow
Performance highlights
Employee turnover Customer retention Lost Time Injury Frequency
Operating margin
1)
0
10
20
30
40
202220212020
%
(%)
33%
33%
30%
Employee
turnover
Customer
retention score
%
(%)
60
70
80
90
100
202220212020
92%
91%
93%
0
1
2
3
4
202220212020
Lost time injury
frequency
Frequency
Target 2021: ≤ 2.8
2.5
2.7
2.9
For definitions, see note 8.5, Definitions
1)
Excluding the impact of IAS 29.
ISS AT A GLANCE
Caring for people,
places and the planet
Making the world work better starts with
our belief in creating a fair and inclusive
society. We have a strong drive to act as
social incubators and make a true difference
for our placemakers, our customers and
the surrounding communities and societies,
we operate in. Our ambition is to create
a Company of Belonging and to ensure
that our placemakers can be who they are,
become what they want and be part of
something bigger.
At ISS, we believe it is our responsibility
to champion a sustainable workplace and
planet. ISS helps to protect and maintain
places – buildings and the assets inside
them. We help our customers minimise
their impact on the planet by reducing
their consumption of energy, carbon and
water, and cutting their production of waste,
including food.
We bring all of this to life through a unique
combination of data, insights and services.
Our purpose
Connecting
people and places
to make the world
work better
Our promise
A sustainable
business model
that supports the
world we live in
We are placemakers
From strategy through to operations, we partner
with customers to deliver places that work, think
and give. They choose us because we create,
manage and maintain environments that make
life easier, more productive and enjoyable.
Our people care about the people they support,
always adding a human touch to create places
that deliver and delight. Every ISS person at
every customer facility is one of us – trained,
equipped, motivated and working to high
standards.
Working with customers day by day, side by
side, we come to understand every aspect of
the user experience. We deploy data, insights
and knowledge to develop innovative strategies
and intelligent solutions to meet the intricate
realities of service delivery. This helps us man-
age risk, reduce cost and ensure consistency.
As a global company, built on a foundation of
equity, inclusion, fairness and respect for all
individuals, we empower all of our people to deal
with problems and opportunities when they arise
and to help our customers achieve their purpose.
Whether it is hospitals healing patients,
businesses boosting productivity, airports
transferring passengers or manufacturing sites
producing goods, we are there to help.
People make places and places make people.
We know that when we get things right, it
enhances lives and makes the world work better
– and that is what drives us.
Our story



Core
services
OneISS achievements 2021-2022
Turnaround completed
• The operating run-rate margin above 4%
• Revenue recovered to above pre-Covid-19 level
• Turnaround of UK & Ireland completed
• Danish Defence contract exited
• Continued progress on Deutsche Telekom contract
• Deleverage below 3x EBITDA achieved
Divestment programme completed
• Programme yielded target net proceeds of approximately DKK 2 billion
Global operating model
• Strengthened customer segment focus
• Improved cyber security to above industry benchmark
• Scaled service products globally and introduced new tech-solutions to make life
easier for customers and placemakers
• Committed to full-scope net zero by 2040 and progressed on our commitments to
reduce food waste, reduce emissions from food and electrify our fleet
• Launched our ambition of becoming the global Company of Belonging



71
DKKbn


Key Account
share

Customer
segments
ISS AT A GLANCE
Strategic update
OneISS
In 2022, we took significant steps in executing
the OneISS strategy. The financial turnaround
targets were delivered as planned as we ad-
dressed the issues in the four defined hot spots
and recovered revenue to pre-Covid-19 level.
We continued to strengthen our global operat-
ing model with clear customer segment focus,
significantly improved cyber security and intro-
duced new service products and tech solutions.
Full-scope net zero target by 2040, submission
of science-based targets and our ambition of
becoming the global Company of Belonging
progressed our commitment to environmental
and social sustainability.
Next phase of the OneISS journey
With a healthy financial and strategically focused
foundation in place, the OneISS journey evolves
into the next phase. We will enhance our
performance by strengthening our competitive-
ness in the facility management industry and
delivering above market growth at attractive and
sustainable margins combined with disciplined
acquisitive revenue growth. The growth agenda
will focus on providing IFS to key accounts in our
three prioritised segments from a stronghold as a
global leader in cleaning.
Four core services
Our strategic focus
Focus on IFS for key accounts
Cleaning
Technical
Food
Workplace,
incl. other
Office-based
Production-based
Healthcare
Other
Three prioritised segments
Key accounts
IFS
Other

Share of Group revenue, DKK 76.5bn
Southern &
Central Europe
32%
of group
revenue
Southern &
Central Europe
Northern
Europe
38%
of group
revenue
Asia &
Pacific
18%
of group
revenue
Americas
Partnership
countries
1%
of group
revenue
Americas
11%
of group
revenue
ISS AT A GLANCE
Our global
footprint
Our more than 350,000
placemakers operate in 30+
countries serving 40,000+
customers. Our geographic
footprint reflects markets that
offer an attractive local key
account opportunity or are
important for us in supporting
our global customers.
1)
See p. 119.
Partnership
countries
1)
Americas
30,154
Placemakers
Asia &
Pacific
137,220
Placemakers
Northern
Europe
67,675
Placemakers
Southern &
Central Europe
113,939
Placemakers

ISS’s share
Global FM
market
Global FM
market
800
USDbn
IFS

ISS AT A GLANCE
The ISS investment case
Our ambition is to become the global
leader in Integrated Facility Services
for key account customers and the
global leader in cleaning. Following the
successful execution of our financial
turnaround and return to healthy
profitability, we have built competitive
strength and are now poised to deliver
strong organic growth at attractive and
sustainable margins.
Attractive market
dynamics
The global FM market has an estimated value
of USD 800 billion, of which Integrated Facility
Services account for around 11%. The market is
highly fragmented, holds consolidation potential,
and growing outsourcing trends with the focus
on workplace experience, operational efficiency,
and sustainability to drive continued growth.
There is a convergence towards IFS solutions as
customers are consolidating their supply chains
and need a strategic partner to manage their
workplaces across geographies and service
lines. Post Covid-19, companies increasingly
focus on creating the workplace of the future,
to support the needs of their employees in a
hybrid working model.
Resilient business model
We serve customers across the world and our
current market position has been established over
more than a century. Our business model has
shown a high degree of resilience and stability and
the investments we have made with the OneISS
strategy have further enhanced and improved the
operating model. This creates a strong and focused
foundation for our future development, where
scale advantages and our self-delivery model gives
us both commercial and operational benefits.
Historically, increased outsourcing trends during
periods of recession tend to offset the impact of
reduced investments by current customers.
Strengthened
competitiveness
Our operating model is focused on three key
market segments: Office-based, Production-
based and Healthcare. In each of the segments,
we have strong capabilities with deep knowl-
edge of the specific needs and demands. This
enables us to act as a strategic partner to our
customers and it gives us distinct competitive
strength. As our customers work to establish
the workplace of the future, we see growing
demand for our competencies and support in
the design of workplace.
As part of executing on the OneISS strategy, we are
investing in three key commercial areas: operational
efficiency, technology and sustainability. These are
all key differentiating factors in the marketplace and
important growth enablers for ISS. The ambition
is clear: ISS aims to become the industry leader in
terms of both technology and sustainability.
Significant growth
opportunities and high
cash generation
The general FM market is expected to grow
steadily over the coming years, as economies
recover from the Covid-19 pandemic and the
imposed restrictions. IFS is expected to outgrow
the general market and ISS expects over the
coming years to deliver structurally higher
growth rates than seen historically.
At our Capital Markets Day in November 2022,
we announced new financial targets for organic
growth, operating margins and cash conversion.
From 2024 and beyond, ISS aims to deliver strong
growth at attractive and sustainable margins:
•  Historically, ISS
has generated around 3% organic growth
driven by net price and scope increases. The
enablers of our accelerated future growth are
increased customer retention and higher win
rates as a result of segment leadership includ-
ing benefits from investments in technology
and sustainability as well as a continued strict
focus on securing strong pricing discipline.
•  reflecting
continued improvements in the UK, France
and in the Deutsche Telekom contract, a
positive impact from OneISS efficiencies and
cost initiatives, including improvements across
the business and operating leverage from
revenue growth.
•  reflecting
underlying cash generation of the operating
profit to free cash flow.
Capital allocation
We will stringently allocate capital
by fulfilling four clear ambitions in
prioritised order:
1
Maintaining an investment grade rating
Adhere to financial leverage target of net
debt of 2.0-2.5x pro forma adjusted EBITDA
and maintain investment grade rating
2
Dividends
Pay dividend with commitment of an annual
payout ratio of 20-40% of adjusted net profit
for the financial year
3
Investments
Value-creating investments in the form of
M&A or enhancements of existing business
4
Share buyback
Distribute excess cash through share
buyback programmes
Global FM market
– with significant room to grow

2
)
Organic growth
4 - 6%
Operating margin 
1
)
4.25 - 4.75%
Free cash flow Around DKK 2.0bn
Delivery on 2022 outlook
Annual report
2021
Interim report
H1 2022
Trading update
Q3 2022
Actual
2022
Organic growth Above 2% Above 5% Around 6.5% 7.8%
Operating margin
 1)
Above 3.5% Above 3.75% Around 3.8% 3.8%
Free cash flow Above DKK
1.3bn
Above DKK
1.5bn
Around DKK
1.5bn
DKK 1.7bn
Financial targets 2024
Organic growth
4 - 6%
Operating margin 
1
)
Above 5%
Cash conversion Above 60%
ISS AT A GLANCE ISS AT A GLANCE
Outlook
Outlook 2023
In 2022, ISS took significant steps in executing the
OneISS strategy. The financial turnaround targets
were delivered as planned, the issues in the four
defined hotspots were addressed, and revenue
was recovered to above pre-Covid-19 level. The
operational and financial improvements achieved
in 2022 provide a solid foundation for continued
progress in 2023, and the financial targets are
confirmed.
The outlook for 2023 assumes that macroeco-
nomic and geopolitical uncertainties remain high.
ISS has robust operating processes and is well
positioned to operate in this environment. The
execution of the OneISS strategy will continue
and enhance the operating model, strengthen
competitiveness, and increase focus on growth
initiatives. The outlook is excluding any effects of
hyperinflation (IAS 29).
Organic growth
Organic growth is expected to be 4 - 6% for
2023 (2022: 7.8%). Growth will be driven by price
increases to offset cost inflation as the tight man
-
agement of inflation will be maintained. In addition,
underlying volume growth from annualisation of
the return-to-office trend and continued customer
investments in workplaces and services are expect
-
ed, as well as positive contribution from contract
wins and expansions. A negative impact is expected
from a lower level of projects and above-base work.
Operating margin
Operating margin is expected to be 4.25 - 4.75%
(2022: 3.8%). The main drivers of the year-on-year
increase are continued improvement in the
previous hotspots; UK, France and on the
Deutsche Telekom contract, positive impact from
OneISS efficiencies and cost initiatives, as well as
operating leverage from higher revenue.
Free cash flow
Free cash flow is expected to be around DKK
2.0 billion (2022: DKK 1.7 billion). The increase
will be driven by the expected higher operating
profit before other items and the absence of
payments related to restructuring projects
initiated in 2020. Changes in working capital
are expected to be negative driven by revenue
growth and customer prepayments made in
2022, while capital expenditures are expected in
line with depreciation and amortisation.
Expected revenue impact from
divestments, acquisitions and
foreign exchange rates in 2023
Acquisitions and divestments completed by 15
February 2023 (including in 2022) are expected to
have a positive impact on revenue growth in 2023
of around 0.5%-point.
Based on the current exchange rates, a negative
impact on revenue growth of 2 - 3%-points
1)
is expected in 2023 from the development of
foreign exchange rates, excluding any effects of
hyperinflation (IAS 29).
Delivery on 2022 outlook
As a result of the financial progress in 2022, ISS
updated the outlook three times and delivered
in line with revised outlook as shown in the
table below.
The outlook should be read in conjunction with
Forward-looking statements, p. 118 and Our
business risks, pp. 35-37. For Definitions, see
note 8.5, p. 106.
1)
Based on Operating profit before other items.
2)
Excluding any impact from acquisitions and divestments completed
subsequent to 15 February 2023 as well as currency translation effects.
1)
Based on Operating profit before other items.
1)
The forecasted average exchange rates for the financial year 2023
are calculated using the realised average exchange rates for the first
month of 2023 and the average forward exchange rates (as of 13
February 2023) for the remaining eleven months of 2023.
Financial targets
At the Capital Markets Day in 2022, new financial
targets from 2024 and beyond were announced.
Please find a summary of our new financial
targets in The ISS Investment case on p. 10.
Financials 2022
1)
2021 2020 2019 2018
Results
(
DKKm
)
Revenue
76,538 71,363 70,752 77,698 73,592
Operating profit before other items, excl. IAS 29 2,876 1,776
(
3,203
)
3,252 3,698
Operating profit before other items
2,847 1,776
(
3,203
)
3,252 3,698
Operating profit 2,835 1,701
(
4,707
)
2,522 2,386
EBITDA before other items 4,364 3,536
(
1,363
)
4,853 4,316
EBITDA 4,421 3,525
(
2,778
)
4,458 3,467
Pro forma adjusted EBITDA 4,375 3,568
(
1,349
)
4,838 4,539
Financial expenses, net
(
389
) (
656
) (
549
) (
703
) (
590
)
Net profit from continuing operations 2,005 536
(
5,220
)
1,153 1,223
Net profit from discontinued operations 131 101 25 218
(
932
)
Net profit 2,136 637
(
5,195
)
1,371 291
Net prot (adjusted) 1,940 611 (3,716) 1,883 2,535
Cash flow
(
DKKm
)
Cash flow from operating activities
3,333 3,221
(
361
)
2,064 3,347
Acquisition of intangible assets and property,
plant and equipment, net
(
779
) (
586
) (
681
) (
1,095
) (
968
)
Free cash flow, excl. IAS 29 1,726 1,735
(
1,794
)
366 2,359
Free cash flow 1,734 1,735
(
1,794
)
366 2,359
Financial position
(
DKKm
)
Total assets
47,005 43,655 43,605 50,061 49,811
Goodwill 20,450 19,753 19,662 21,257 20,911
Additions to property, plant and equipment 345 335 389 673 882
Equity 10,815 7,789 6,545 12,547 12,472
Net debt 11,540 13,451 15,802 14,730 10,757
Shares
(
‘000
)
Number of shares issued
185,668 185,668 185,668 185,668 185,668
Number of treasury shares 938 970 970 970 1,001
Average number of shares
(
basic
)
184,730 184,698 184,698 184,692 184,558
Average number of shares
(
diluted
)
187,243 186,003 185,136 186,000 185,420
 2)
Ratios 2022
1)
2021 2020 2019
2)
2018
Financial ratios
(
%, unless otherwise stated
)
Organic growth
7.8 2.0
(
6.6
)
7.1 3.9
Acquisitions and divestments, net
(
1.7
) (
0.5
) (
0.2
) (
2.2
) (
0.5
)
Currency adjustments 1.2
(
0.6
) (
2.1
)
0.7
(
3.4
)
Total revenue growth 7.3 0.9
(
8.9
)
5.6 0.0
Operating margin, excl. IAS 29
 
3.8 2.5
(
4.5
)
4.2 5.0
Operating margin
 
3.7 2.5
(
4.5
)
4.2 5.0
Cash conversion 60.9 97.7 56.0 11.3 63.8
Equity ratio 23.0 17.8 15.0 25.1 25.0
Net debt/Pro forma adjusted EBITDA 2.6x 3.8x
(
11.7
)
x 3.0x 2.4x
Share ratios
(
DKK
)
Basic earnings per share
(
EPS
)
11.1 3.3
(
28.2
)
7.3 1.5
Diluted EPS 11.0 3.3
(
28.2
)
7.3 1.5
Basic EPS
(
continuing operations
)
10.4 2.8
(
28.3
)
6.1 6.6
Diluted EPS
(
continuing operations
)
10.3 2.8
(
28.3
)
6.1 6.5
Proposed dividend per share 2.1 - - - 7.7
ESG 2022 2021 2020 2019 2018
Environmental (tonnes CO
2
eq.)
3)
Scope 1 emissions 69,581 71,726 70,084 88,722 91,199
Scope 2 emissions
(
market-based
)
7,084 - - 10,556 -
Scope 3 emissions 1,569,421 - - 1,688,550 -
Social (%, unless otherwise stated)
Full-time employees
77 76 75 77 76
Employees (end of period), number 351,053 354,636 378,946 471,056 485,908
Employee turnover 33 30 33 35 42
Customer retention 93 92 91 91 90
Lost Time Injury Frequency
(
LTIF
)
, number 2.9 2.7 2.5 2.8 2.9
Fatalities, number 1 5 3 3 1
Training and development, '000 hours 4,337 4,124 3,750 6,516 7,527
Governance
(
%
)
Gender diversity, Board
33 43 43 33 33
Board meeting attendance 90 95 96 94 n/a
Speak Up, number 366 337 285 299 234
ISS AT A GLANCE
Five-year summary
For definitions, see note 8.5, Definitions
1)
Effective 1 January 2022, ISS Turkey was restated for hyperinflation in accordance with IAS 29, cf. 7.2, Hyperinflation in Turkey.
2)
As of 1 January 2019, the Group implemented IFRS 16 using the retrospective approach. Comparative figures were not restated.
3)
As part of its science-based target submission in 2022 ISS has collected spend and activity data for Scopes 1, 2 and 3 emissions related to its
business activities and established a new 2019 baseline. Our 2022 emissions for Scope 1, 2 and 3 have been calculated in accordance with the
2019 baseline methodology. Comparative numbers for 2018, 2020 and 2021 for Scope 2 and 3 have not been recalculated and are not presented
in this report. For further information, please refer to the 2022 Sustainability Report.

In many parts of the world, households
and societies faced soaring energy prices
and generally increasing costs throughout
2022. As a global service provider, ISS has
also been challenged by higher cost levels.
At the same time, this challenge show-
cased what we can achieve when putting
our strategic ambitions of working togeth-
er as OneISS into play. As Head of Group
Supply Chain & Procurement, Emmanuel
Buyse was deeply involved in ensuring
that every part of the organisation worked
closely together to reduce the negative
effects of inflation, whether driven by
salary increases or supply chain cost hikes.
“We quickly realised that inflation would
be one of the biggest themes of 2022.
ISS merely absorbing cost increases is
not an option. We needed to act – and we
needed to do it together,” says Emmanuel
Buyse.
ISS has dealt with several periods of
high inflation throughout the company’s
121-years of history. Managing inflation
is a natural part of our operating basics.
But with more than 350,000 placemakers
and 50,000 suppliers across very different
markets, there is always more to do to
keep tight cost control.
“Managing inflation is key. We take no
chances, and we coordinate our response to
this high-inflation environment centrally. We
have developed a global inflation manage-
ment playbook, which not only defines what
good inflation management looks like, it
also ensures that we executed it in the same
way across geographies and accounts. It is
continuously updated based on learnings
and leading practices gathered from our
global network of colleagues. This means
that we have a standardised model for how
to respond if we are met with cost increases.
Throughout 2022, we have clearly been able
to harvest good results from this approach,”
says Emmanuel Buyse.
As an example, he points to ISS’s food
business where measures have been put in
place to ensure that ISS is not caught “in the
middle”:
“Food is an area where we have experienced
inflation to be especially tricky. Our experts
in Food Procurement have worked together
with our chefs to drive down costs. This
means changing portion sizes, reducing
food waste and replacing ingredients. We
have centralised our chefs’ food purchases
around several distributors, making it faster
and easier for us to adapt to changes in
pricing on certain food items.”
Managing
rising inflation
BRILLIANT OPERATING BASICS
CASE
“Another example is how we have
strategically worked on reducing
the number of suppliers. During
the past years, we have reduced
the number of suppliers by
around 40%. This helps to reduce
complexity and make it easier
to mitigate future supplier price
increases.”
Emmanuel Buyse
Head of Group Supply Chain & Procurement,
ISS Global Operations
Our
performance
Hyperinflation
in Turkey
Effective 1 January 2022, the Group
has implemented IAS 29, Financial
Reporting in Hyperinflationary
Economies for its subsidiary in Turkey,
as the cumulative three-year inflation
rate in the country exceeded the
threshold of 100% in February 2022.
The implementation of IAS 29 did not
have a material impact on the Group’s
statement of profit or loss and cash
flows, and consequently the impact
on our three key KPIs was immaterial,
i.e. organic growth (non-IFRS GAAP
measure) and free cash flow were
unchanged and operating margin
decreased slightly by 5 bps.
Throughout this Annual Report,
commentary on revenue and operating
profit before other items is provided
including and excluding the impact
from IAS 29. However, commentary on
items below Operating profit before
other items, are only provided including
the impact of IAS 29, unless otherwise
stated. Outlook continues to be
presented excluding the impact from
IAS 29.
Please refer to 7.2, Hyperinflation
in Turkey, for an overview of the
implementation of IAS 29 and the
impact on the consolidated financial
statements.
Revenue
(
DKKm
)
2022 2021
Organic
growth
Acq./
div.
Currency &
other adj.
Revenue
Growth
Northern Europe 28,694 27,675
4 %
(
0
)
% 0 % 4 %
Central & Southern Europe 24,692 23,585
8 %
(
0
)
%
(
3
)
% 5 %
Central & Southern Europe, excl. IAS 29 24,538 23,585
8 % (0)%
(
4
)
% 4 %
Asia & Pacific 14,012 12,381
6 %
(
1
)
% 8 % 13 %
Americas 8,585 7,141
27 %
(
14
)
% 7 % 20 %
Other countries 606 626
(
3
)
% -
(
0
)
%
(
3
)
%
Corporate / eliminations
(
51
)
(
45
)
- - - -
Group 76,538 71,363 
(
1.7
)
 
OUR PERFORMANCE
Group results
Despite a challenging
macroeconomic environment,
ISS improved its financial results
during 2022. The recovery from
Covid-19 continued and revenue
was above the pre-Covid-19 level
as the business benefited from
return-to-office trends, customer's
investments in upgrading
workplaces and service offerings,
and price increases implemented
across the portfolio. The financial
turnaround targets were achieved
with improvements in the
underperforming countries and
contracts, predominately in the
UK and on the Deutsche Telekom
contract.
Group revenue
Group revenue in 2022 was DKK 76.5 billion, an
increase of 7.3% compared with 2021. Organic
growth was 7.8% and the impact from acquisi-
tions and divestments, net was (1.7)%. Currency
effects increased revenue by 1.2%, including the
impact of hyperinflation in Turkey of 0.2%.
Organic growth accelerated throughout
2022 from 5% in Q1 to 9% in Q4, driven by
return-to-office trends as Covid-19 restrictions
were lifted, customers’ investments in upgrading
their workplaces and service offerings, and price
increases. As a result, portfolio revenue grew
organically by 10%.
Portfolio revenue development was positively
impacted by return-to-office trends, particularly
for the services that depend on workplace
occupancy and especially food services. These
service lines were also the ones being negatively
affected by the Covid-19 pandemic. Revenue
from food services increased by around 35%,
mainly driven by more than 70% growth in
the US where our food services offerings are
predominantly office-based. Food services
accounted for 13% of Group revenue in 2022
(2021: 11%). Furthermore, employees increas-
ingly demanded flexibility and opportunities
for remote working and customers responded
by investing in upgrading workplaces and
service offerings to create an environment
suitable for the post-Covid-19 ways of working.
In 2022, revenue was 3% higher than before
the pandemic in 2019, excluding the impact of
currency effects and acquisitions and divest-
ments despite customers not being fully back
to the offices.
Across the Group, price increases were imple-
mented to mitigate impact of increasing cost
inflation in line with the terms of contractual
agreements with our customers. This had a
positive contribution to organic growth of just
below 3%-points, of which around 1.5%-points
related to Turkey. This was partially offset by
slightly negative organic growth impact from
projects and above-base work of around
0.3%-points. The demand for projects and
above-base revenue changed during the year,
as declining revenue from Covid-19 related
deep cleaning and disinfection services was
almost offset by increased revenue related to
traditional above-base services and project
work.
All regions contributed positively to organic
growth in 2022. The Americas region reported
the highest organic growth at 27%, driven by
new contract wins and the combined impact of
return-to-office trends and the region’s relatively
higher exposure to office-based food services.
During the year, the organic growth in the
Asia-Pacific region improved due to higher activity
level and new contracts wins, while the European
regions reported solid organic growth.
Operating profit before other items
(
DKKm
)
2022 2021
Northern Europe 1,519 5.3% 1,290 4.7%
Central & Southern Europe 1,079 4.4% 584 2.5%
Central & Southern Europe, excl. IAS 29 1,108 4.5% 584 2.5%
Asia & Pacific 882 6.3% 735 5.9%
Americas 445 5.2% 393 5.5%
Other countries 27 4.5% 16 2.6%
Corporate / eliminations
(
1,105
)
-
(
1,242
)
-
Total 2,847  1,776 
Total, excl. hyperinflation (IAS 29) 2,876 3.8% 1,776 2.5%
OUR PERFORMANCE
Operating profit
before other items
Operating profit before other items excluding
the effect from hyperinflation amounted to DKK
2,876 million corresponding to an operating
margin of 3.8% (2021: 2.5%). Including hyperin-
flation, operating profit before other items was
DKK 2,847 million for an operating margin of
3.7%. The improvement of the operating margin
in 2022 was driven by the successful execution
of the financial turnaround, which improved
underperforming countries and contracts,
predominately the UK and the Deutsche
Telekom contract. Furthermore, leverage from
higher revenue impacted the operating margin
positively. This was, however, partly offset by
additional costs related to mobilisation of new
contract wins and commercial investments,
mainly in the US, and a higher-than-normal
sickness rate in the year.
The cost base was adversely impacted by
the increasing rates of inflation in 2022. ISS
has strong and well-embedded processes in
place, and inflation is managed tightly through
price increases and operational efficiencies.
As a result, the operating margin was gener-
ally unaffected by inflation. From a regional
perspective, the margin improvement was
most significant in the European regions. In
Northern Europe, the improvement was fuelled
by the turnaround in the UK, while the improve-
ment on the Deutsche Telekom contract was
the primary driver in the Central & Southern
European region. The Asia & Pacific region also
improved the operating margin, while the op-
erating margin decreased slightly in Americas.
Solid underlying operational improvements
and leverage from higher revenue drove the
development in Asia & Pacific, while additional
mobilisation costs related to new contract wins
and commercial investments were the main
reasons for the slight margin decline in the
Americas region.
As part of the OneISS strategy announcement
in December 2020, we identified operational
hotspots, i.e. the UK, France, and the contracts
with Deutsche Telekom and Danish Defence.
Together with general efficiencies, Covid-19
revenue recovery and execution of the financial
turnaround related to the operational hotspots
brought the run-rate operating margin above
4% at the end of 2022, as targeted.
In the UK, the strong strategic execution con-
tinued following country management changes
in 2021, and the country’s turnaround target
of a low single-digit run-rate operating margin
was achieved in Q1 2022. The simplification and
streamlining of the organisational structure in
line with the OneISS blueprint had a positive im-
pact on productivity and financial performance
at both contract and country levels.
In France, the implementation of the planned
restructuring programme was completed in
2022. However, the run-rate profitability was
lower than anticipated, in part due to exposure
to certain industry segments with slower than
expected Covid-19 recovery and muted com-
mercial momentum. In the second half of 2022,
the organisation was strengthened with a new
country manager who has recruited commercial
and operational resources to execute an
updated business improvement plan.
The execution of the comprehensive restructur-
ing and gap closing programme for the Deutsche
Telekom contract continued and the operational
and financial performance improved accordingly.
The operating margin improved throughout 2022
and reached the turnaround target of a breakev-
en level at the end of the year. The contract
continues to be structurally challenging. Follow-
ing an agreed dispute resolution mechanism,
certain contractual disagreements are subject to
arbitration proceedings initiated by ISS.
In Denmark, the contract with the Danish
Defence was successfully exited during the first
half of the year according to the agreement with
the Danish Ministry of Defence Estate Agency.
The transition was executed gradually with the
last part of the contract being exited in May 2022.
Corporate costs amounted to DKK 1,105 million
(2021: DKK 1,242 million), a decrease of 11%
relating to investments in our operating model,
including in technology, where certain invest-
ments were accelerated in 2021. We continued
to invest in commercial resources and centrali-
sation of functions.
QTR Revenue
& growth
5
6
7
8
9
%DKKbn
Revenue (DKKbn)
Organic growth (%)
Q4Q3Q2Q1
16
17
18
19
20
Q4Q3Q2Q1
(5)
0
5
10
15
Portfolio revenue, growth
Projects and above-base work, growth
Central & Southern Europe
Northern Europe
Asia & Pacific
Americas
Q4Q3Q2Q1
%
0
8
16
24
32
Central & Southern Europe
Northern Europe
Asia & Pacific
Americas
Q4Q3Q2Q1
%
0
8
16
24
32
Revenue and growth
Portfolio and above-base
Organic growth per region
Quarters 2022
OUR PERFORMANCE
Other income
and expenses, net
Other income and expenses, net was an income
of DKK 57 million (2021: income of DKK 439
million), mainly due to a gain on the divestment
of a waste management business in Hong Kong
and partly offset by recognition of a pension
withdrawal liability arising from the divestment
of Specialized Service in the US. In 2021, the
net income was mainly due to a gain on the
divestment of Kanal Services in Switzerland and
Specialized Service in the US.
Operating profit
Operating profit was DKK 2,835 million (2021:
DKK 1,701 million).
Financial income and
expenses, net
Financial income and expenses, net was in 2022
an expense of DKK 389 million (2021: DKK 656
million) including adjustments from hyperin-
flation of DKK 148 million. The decrease was
mainly a result of the hyperinflation adjustments
in Turkey, and the premium in 2021 of DKK 90
million related to the repurchase of EUR 200
million of the total of EUR 500 million outstand-
ing EMTN bonds maturing in 2024.
Income tax
Income tax was DKK 441 million (2021: DKK 509
million) for an effective tax rate of 18.0% (2021:
48.7%). The effective tax rate was impacted by
release of valuation allowances on deferred tax
assets and non-taxable gains on divestments.
Net profit from
discontinued operations
Net profit from discontinued operations was DKK
131 million (2021: DKK 101 million), including a
net gain of DKK 119 million mainly relating to the
three countries divested in 2022, most significant-
ly Taiwan and Portugal.
Net profit
Net profit was DKK 2,136 million (2021: DKK 637
million).
Subsequent events
On 6 February 2023, two earthquakes caused
large scale devastation and loss of thousands of
lives in Turkey and Syria. ISS is one of the largest
private employers in Turkey and approximately
4,500 of our placemakers service workplaces
for around 100 of our customers, including
two hospitals, in the impacted areas of Turkey.
Tragically, three of our placemakers were fatally
injured, several are in medical treatment and
even more suffered loss of immediate family
members and housing. Our teams on the
ground in Turkey have since the earthquakes
focused on ensuring the safety and welfare
of our people and customers who are facing
unimaginable challenges and devastation.
ISS has not suffered material damage to its
assets in Turkey. Furthermore, the impacted
areas account for less than 1% of ISS’s global
activities and the vast majority of our customers’
operations continue or will continue after
repairs. Consequently, it is management’s
assessment that the earthquakes will not have
a material impact on the results of the Group’s
operations and financial position in 2023.
Other than set out above or elsewhere in this
Annual Report, we are not aware of events
subsequent to 31 December 2022, which are
expected to have a material impact on the
Group’s financial position.
0
1.0
2.0
3.0
4.0
DKKbn
20222021
Operat-
ing
prot
1)
Working
capital
Provi-
sions
Other
exp.
1.7
Cash flow bridge (GP)
1.1
(0.6)
(0.1)
1.7
(0.2)
0
5
10.0
15.0
20.0
DKKbn
20222021
Free
cash
ow
Acq. Div.
Net debt waterfall
(
1.7
)
13.5
11.5
0.3
(
0.6
)
Free cash flow
Net debt
1)
Before other items
OUR PERFORMANCE
Cash generation
and free cash flow
Cash flow from
operating activities
Cash flow from operating activities was DKK
3,333 million (2021: DKK 3,221 million), an
increase of DKK 112 million driven by improve-
ments in operating profit before other items.
Changes in working capital were an inflow
of DKK 444 million (2021: DKK 1,056 million).
Despite the higher revenue, changes in working
capital were positive as the tight management
of working capital was maintained. Increases
in trade receivables were more than offset by
prepayments from customers relating to 2023
and higher levels of trade payables, mainly
related to the growth in food services where
suppliers typically have longer payment terms.
Utilisation of factoring increased slightly to DKK
1.3 billion (2021: DKK 1.1 billion) as a result of
the higher revenue from key account customers,
where invoices are eligible for factoring as per
group policy.
Depreciation and amortisation was DKK 1,517
million (2021: DKK 1,760 million). Due to the
pandemic, capital investments in 2021 and 2020
were lower reflecting the lower activity levels and
therefore, in combination with optimisation of
property needs, depreciation and amortisation
was lower in 2022.
Changes in provisions, pensions and similar
obligations were an outflow of DKK 665 million
(2021: DKK 435 million), mainly due to payments
related to restructuring projects initiated in
2020, defined benefit obligations and other
provisions.
Income tax paid was an outflow of DKK 422
million (2021: DKK 528 million) equal to a cash
tax rate of 17.3%.
Cash flow from
investing activities
Cash flow from investing activities was a net
outflow of DKK 546 million (2021: net inflow of
DKK 73 million).
The divestment programme was successfully com-
pleted in 2022 and generated an inflow of DKK 587
million (2021: DKK 1,191 million) primarily related
to divestment of the waste management business
in Hong Kong and operations in Portugal.
Acquisition of businesses was an outflow of DKK
325 million (2021: DKK 526 million), primarily
related to the acquisition of Livit FM Services AG
in Switzerland. The acquisition enables ISS to
expand and develop its service delivery to the
real estate segment. Investments in intangible
assets and property, plant and equipment, net,
of DKK 779 million (2021: DKK 586 million) was
equal to 1.0% (2021: 0.8%) of total revenue
(including discontinued operations) and mainly
reflected the increased activity level compared
to the period during Covid-19.
Cash flow from
financing activities
Cash flow from financing activities was a net
outflow of DKK 930 million (2021: net outflow of
DKK 2,832 million due to early redemption of
outstanding bonds).
The cash outflow was predominately related to
repayment of lease liabilities of DKK 865 million
which was a slight decline compared with last
year (2021: DKK 947 million).
Free cash flow
Free cash flow amounted to DKK 1,734 million
(2021: DKK 1,735 million). The operating profit
before other items improved, but the positive
effect was largely offset by lower working
capital inflow and additional outflow related to
other provisions. Furthermore, the net effect
of depreciation, amortisation and investments
in intangible assets and property, plant and
equipment and additions to right-of-use assets
was neutral compared to an inflow in 2021.
OUR PERFORMANCE
202220212020
0
2
4
6
8
3.8
2.6
7.1
202220212020
%
5
10
15
20
25
15.0
17.8
23.0
Financial leverage
Equity ratio
Capital structure
The primary priority for our capital structure is
to ensure a strong and efficient balance sheet
and liquidity position to support operational
needs and financial flexibility for execution
of our strategic objectives, while maintaining
investment grade rating.
In 2022, ISS achieved its financial turnaround
targets and the divestment programme was
completed. This led to an improvement of the
capital structure and liquidity reserves. The
Group’s liquidity reserves at 31 December 2022
of more than DKK 11 billion (2021: DKK 9.6
billion) are described in note 4.6 to the consoli-
dated financial statements.
ISS has no material debt maturities until 2024
onwards. As part of our capital allocation policy,
we are committed to maintaining an investment
grade profile and ISS currently holds corporate
credit ratings of BBB-/ Stable outlook assigned
by S&P and Baa3/ Stable outlook assigned by
Moody’s.
At 31 December 2022, net debt amounted
to DKK 11.5 billion (2021: DKK 13.5 billion), a
decrease of DKK 2.0 billion due to the strong
free cash flow generation and proceeds from
the divestment programme. Financial leverage
at the end of 2022 was 2.6x (2021: 3.8x).
The Board of Directors will at the annual general
meeting propose a dividend for 2022 of 20%
of adjusted net profit, corresponding to a total
dividend of DKK 390 million (DKK 2.1 per share).
The pay-out is in line with the capital allocation
policy of an annual dividend pay-out ratio of
20-40%.
Equity
At 31 December 2022, equity was DKK 10,815
million (2021: DKK 7,789 million), equivalent
to an equity ratio of 23.0% (2021: 17.8%). The
increase was mainly a result of net profit of DKK
2,136 million and hyperinflation restatement of
equity in Turkey at 1 January 2022 of DKK 814
million.
Target end 2022: below 3.0x
(net debt/pro forma adjusted EBITDA)
OUR PERFORMANCE
Commercial development
In 2022, the commercial momentum improved,
and we benefitted from our strategic focus on
engaging deeply with our customers. As such,
we successfully extended all global key account
contracts up for renewal, HPE, a large global
pharmaceutical customer, and Danske Bank.
We also extended and expanded several key
account contracts and as a result, customer
retention for 2022 was historical high reaching
94%, excluding the exit of the Danish Defence
contract (93% incl. exit).
The pipeline of new businesses within our
prioritised segments showed solid progress
in 2022, and our enhanced and strengthened
commercial process yielded results. This was
exemplified by the win of a 5-year IFS contract
with a major retailer in the US with revenue of
around 1% of Group revenue, and the award of
a new contract with a regional bank in Australia.
In the beginning of 2023, we extended the
contract with a major technology customer
in the US and signed new partnership with a
healthcare company. In 2022, commercial pro-
cesses were more complex than pre-Covid-19,
likely as the geopolitical and macroeconomic
uncertainties delayed customer’s long-term
decisions. In the commercial processes, we are
maintaining strong pricing discipline and are
not accepting any uncapped inflation risk.
An important driver of the revenue develop-
ment in 2022, was the gradual return-to-office
seen globally due to Covid-19 restrictions
being lifted. This mainly had a positive effect
on services that were most severely affected
by the pandemic, predominately food services.
In parallel, customers increased investments
in their workplaces to create an environment
suitable for the post-Covid-19 way of working.
In 2022, revenue from key account customers
comprised 71% of Group revenue (2021: 69%)
and grew organically by 8.4%, which was better
than the Group’s organic growth, and thereby
this segment contributed positively to the
overall development.
Contract maturity
The majority of our key account contracts have
initial terms of three to five years. A significant
share of revenue is therefore up for renewal
every year.
In 2022, revenue from large key accounts was
DKK 23.7 billion, or 31% of Group revenue.
Going into 2023, no large key accounts have
been lost, but contracts revenue of DKK 3.1
billion (4% of Group) are up for renewal in 2023
(excl. signed renewals up until February 2023).
Expiry 2023
Expiry 2024
Expiry 2025
Expiry 2026
Expiry 2027+
Maturity
23.7
DKKbn
Maturity
– large key accounts (> 200 DKKm)
Developments in 2022
1)
Countries Segment Term
Effective
Wins
Aviation Customer Austria Transportation & Infrastruct.
5.5 years
Q2 2022
Manufacturing Customer
Sweden/Belgium
Industry & Manufacturing 5 years Q2 2022
Retail and Wholesale Customer US & Canada Retail and Wholesale 5 years Q3 2022
PT Amman Mineral Nusa Tenggara Indonesia Energy & Resources 3 years Q4 2022
Banking Customer Australia Business Services & IT 5 years Q2 2023
Extensions/expansions
Technology Customer UK Business Services & IT 1 year Q1 2022
Pharmaceutical Customer Spain Pharmaceuticals 2 years Q1 2022
Salling Group Denmark Retail and Wholesale 3 years Q1 2022
Government Customer UK Public Administration 1.5 years Q2 2022
Pharmaceutical Customer Global Pharmaceuticals 5 years Q2 2022
Aviation Customer Australia Transportation & Infrastruct. 4 years Q2 2022
Pharmeceutical Customer Denmark Pharmaceuticals 4 years Q2 2022
Healthcare Customer Singapore Healthcare 5 years Q2 2022
South London and Maudsley NHS Fdn. Trust
UK Healthcare 2 years Q2 2022
SingHealth Cluster Singapore Healthcare 3 years Q2 2022
Victorian Dpt of Education and Training Australia Public Administration 1.5 years Q3 2022
Danske Bank
Northern Europe
Business Services & IT 5 years Q3 2022
Mining Service Customer Australia Energy & Resources 2 years Q3 2022
National University Hospital Singapore Healthcare 3 years Q3 2022
Banking Customer UK Business Services & IT 5 years Q3 2022
Professional Services Customer UK Business Services & IT 1 year Q4 2022
Public Administration Customer Finland Public Administration 5.5 years Q4 2022
TSB Bank PLC UK Business Services & IT 7.5 years Q4 2022
Energy Customer Germany Energy & Resources 5 years Q1 2023
Healthcare Customer UK Healthcare 2 years Q1 2023
Danish Crown A/S Denmark Food & Beverage 5 years Q1 2023
Virgin Media 02 UK Business Services & IT 5 years Q1 2023
Technology Customer US Business Services & IT 3 years Q1 2023
Pharmaceutical Customer US Pharmaceuticals 3 years Q1 2023
Industry & Manufacturing Customer APAC Industry & Manufacturing 4 years Q1 2023
Banking Customer Mexico Business Services & IT 3 years Q1 2023
Exits/losses
Aviation Customer US Transportation & Infrastruct. Q1 2022
Retail and Wholesale Customer
(
Partly lost
)
Chile Retail and Wholesale Q2 2022
Ministry of Defence Singapore Public Administration Q4 2022
1)
Annual revenue above DKK 100 million.



of Group revenue

Key accounts
Organic growth Organic growth by quarter Operating margin
20.0
22.5
25.0
27.5
30.0
202220212020
Revenue (DKKbn)
Organic growth (%)
(
10
)
(
5
)
0
5
10
Q4Q3Q2Q1
%
%
0
2
4
6
8
Nothern Europe
Operating profit
& margin
202220212020
Operating profit before other items (DKKbn)
Operating margin (%)
DKKbn %
(
2
)
(
1
)
0
1
2
(
6
)
(
3
)
0
3
6

Northern Europe
Cores services
OUR PERFORMANCE
The market
ISS holds a market-leading position across the
region where markets are generally mature,
competitive and with a relatively high outsourcing
rate. The largest country in the region is the
UK, contributing around 34% of revenue. Key
segments are Business Services & IT, Healthcare
and Public Administration.
Financial update
Revenue increased to DKK 28,694 million in 2022
(2021: DKK 27,675 million). Organic growth was
4.0% and the effect from currency was neutral.
In 2022, the region was positively impacted by in-
creased activity levels due to strong return-to-of-
fice trends, among others within food services
where the region has a relatively large exposure.
In addition, price increases implemented across
the portfolio to offset the increasing cost inflation
supported the growth, while the revenue from
projects and above-base work declined mainly
due to reduced demand for Covid-19 related
deep cleaning and disinfection services.
Northern
Europe
Commercially, our strategic focus on IFS and key
account customers secured both new sales and
extensions resulting in a continued improved
customer retention rate. The majority of the large
key accounts with expiry dates in 2022 were suc-
cessfully extended and expanded. In addition, ISS
was awarded and mobilised a new key account
contract with a large manufacturing customer in
Sweden. The commercial pipeline continues to be
solid across the region.
Operating profit before other items was DKK
1,519 million (2021: DKK 1,290 million), for an
operating margin of 5.3% (2021: 4.7%).
Across the region the leverage from higher
revenue and solid cost control impacted the
operating margin positively, while costs related
to a higher than-normal sickness rate in the
first half of the year and a lower level of projects
and above-base work partly offset the positive
margin development. The margin improvement
was primarily driven by the UK, where strong
execution of the financial turnaround improved
the operating margin, and the turnaround target
of a low-single digit run-rate margin was achieved
already by the end of Q1 2022.
Cleaning
Technical
Food
Workplace, incl. other
The majority of countries generated positive
growth, with several countries reporting
double digit organic growth. Norway contrib-
uted significantly to the organic growth due to
contract wins, customers returning to offices
and increasing activity levels, especially within
the Hotels segment. Belgium & Luxembourg
and The Netherlands both delivered double digit
organic growth, primarily driven by strong effects
from return-to-office, high customer retention
levels and a high level of project and above-base
work in Belgium & Luxembourg. Organic growth
was negative in Denmark due to the exit of the
contract with the Danish Defence in May 2022
and in the UK mainly as a result of reduced
above-base work.
Portfolio revenue grew organically by 6.7%, posi-
tively impacted by the continued return-to-office
trends, price increases and contract wins, how-
ever partly offset by exit of the Danish Defence
contract. Revenue from projects and above-base
work declined by 5.4% and accounted for 20%
(2021: 22%) of revenue for the region in 2022,
due to the above-mentioned lower demand for
Covid-19 services.
Core services
Organic growth Organic growth by quarter Operating margin (excl. IAS 29)
Continental Europe
Revenue & organic
growth
22
23
24
25
26
202220212020
Revenue (DKKbn)
Organic growth (%)
DKKbn
%
(3)
0
3
6
9
Continental Europe
Operating profit
& margin
202220212020
Operating profit before other items (DKKbn)
Operating margin (%)
DKKbn %
(3)
(2)
(1)
0
1
(
10
)
(
5
)
0
5
10
(
3.0
)
(
1.5
)
Continental Europe
Organic growth
quarterly
Q4Q3Q2Q1
%
%
4
6
8
10
12





of Group revenue

Key accounts
Continental Europe
Cores services
OUR PERFORMANCE
Core services
The market
Central and Southern Europe comprises a
number of key markets, where we hold leading
market positions, including Switzerland, Germany
and Spain. Most of the markets are developed,
but with significant differences in IFS market
maturity and macroeconomic environment. Key
customer segments are Business Services & IT,
Industry & Manufacturing, Public Administration,
Healthcare and Pharmaceuticals.
Financial update
Revenue increased to DKK 24,538 million in 2022
(2021: DKK 23,585 million). Organic growth was
7.9%, while currency effects impacted revenue
negatively by 3.8%. The net impact from hyperin-
flation was 0.5%. Including the impact of hyperin-
flation, revenue amounted to DKK 24,692 million.
Organic growth for the region was positive
throughout the year driven by price increases
and contract wins and, to a limited extent, effects
from return-to-office trends as the region has
relatively lower exposure to food services.
The organic growth in the region was mainly
driven by strong growth in Turkey both as result
Central &
Southern
Europe
Operating profit before other items excluding
the impact of hyperinflation was DKK 1,108 million
(2021: DKK 584 million) corresponding to an op-
erating margin before other items of 4.5% (2021:
2.5%). The main contribution to the improvement
came from the execution of the comprehensive
restructuring and gap closing programme for the
Deutsche Telekom contract in Germany. At the end
of 2022, the contract reached the turnaround tar-
get with a break-even run-rate margin. In France,
the implementation of the planned restructuring
programme was completed in 2022. However, the
run-rate profitability was lower than anticipated, in
part due to exposure to certain industry segments
with slower than expected Covid-19 recovery and
muted commercial momentum. In the second
half of 2022, the organisation was strengthened
with a new country manager who has recruited
commercial and operational resources to execute
an updated business improvement plan. Across
the region, focus remained on return-to-office and
the implementation of efficiency and cost reduc-
tion measures following Covid-19 which together
with continued strong demand for projects and
above-base work, impacted the operating margin
positively. Including the effect of hyperinflation,
operating profit before other items amounted to
DKK 1,079 million, corresponding to a margin of
4.4%.
Cleaning
Technical
Food
Workplace, incl. other
of price increases successfully implemented to
offset the effects from high cost inflation and
underlying growth in the healthcare segment.
Austria, which accounts for 9% of the regions’
revenue, reported double digit organic growth
driven by start-up of contracts, primarily with
Vienna Airport and additional key account
customers.
Portfolio revenue grew organically by 9.3% and
organic growth for projects and above-base
work was 2.1% and accounted for 18% of the
revenue in the region (2021: 24%). Demand for
Covid-19 related disinfection and deep cleaning
services declined throughout the year, but
this development was more than offset by an
increase in traditional project work.
Switzerland strengthened their market position
with the acquisition of Livit FM Services AG.
The acquisition will enable ISS to expand and
develop its service delivery to the real estate
industry segment, as Livit FM Services AG
provides services for a large portfolio of Swiss
Life properties in Switzerland. As part of the
transaction, ISS Switzerland took over 670
employees and key account contracts within
cleaning and technical services, representing
around 0.5% of ISS Group revenue.



of Group revenue

Key accounts
Organic growth Organic growth by quarter Operating margin
APAC
Operating profit
& margin
0.2
0.4
0.6
0.8
1.0
202220212020
Operating profit before other items (DKKbn)
Operating margin (%)
DKKbn
%
0
2
4
6
8
APAC
Organic growth
quarterly
Q4Q3Q2Q1
0
3
6
9
12
%
%
APAC
Revenue & organic
growth
10
11
12
13
14
202220212020
Revenue (DKKbn)
Organic growth (%)
DKKbn %
(
3
)
0
3
6
9

Asia & Pacific
Core services

OUR PERFORMANCE
Asia &
Pacific
Cleaning
Technical
Food
Workplace, incl. other
Core services
The market
The region comprises a mix of developed
markets such as Australia, Hong Kong and
Singapore and developing markets, such as
China, India and Indonesia. ISS has a strong
presence in the region and holds a market-lead-
ing position in several countries. Key customer
segments are Business Services & IT, Industry &
Manufacturing, Transportation & Infrastructure,
Healthcare, and Public Administration.
Financial update
Revenue increased to DKK 14,012 million in
2022 (2021: DKK 12,381 million). Organic growth
was 6.3% (2021: 0.0%) and the effect from ac-
quisitions and divestments, net was (1.0)%, while
currency effects contributed positively by 7.9%.
Across the region, Covid-19 impacted the
countries differently. Overall, organic growth
was driven by increased activity levels from
return-to-office trends as Covid-19 restrictions
were gradually lifted during the year. The
strongest growth was seen in India and in
saw robust and improving customer retention
rates, and we successfully retained and further
expanded a number of key account contracts.
Operating profit before other items
increased to DKK 882 million (2021: DKK
735 million), corresponding to an operating
margin of 6.3% (2021: 5.9%). The improvement
was driven by the general lifting of Covid-19
restrictions and solid underlying operational
improvements across the region. Australia in
particular benefitted from the higher activity
level and operating leverage. The positive impact
was partly offset by lower margin in Singapore
due to contract losses and reduced government
support schemes.
Australia due to customers returning to office
and start up of new contract wins. The growth
was particularly strong within the Transport and
Infrastructure segment as air traffic picked up.
In Hong Kong which saw much stricter Covid-19
restrictions, organic growth was driven by strong
demand for deep cleaning and disinfection ser-
vices and other above base projects. However,
the market for new business in these countries
was generally slow due to market uncertainties.
Price increases were implemented to offset
the effects of cost inflation and had a positive
impact across the region. Portfolio business
grew organically by 8.5% while organic growth
for projects and above-base work was negative
at (4.0)%, and accounted for 16% (2021: 18%) of
the revenue in the region.
During the year, the execution of the OneISS
strategy made solid progress with continuing
improvements in our commercial processes
and the operating model. Improved commercial
processes drove both contract wins and reten-
tion of contracts with existing customers. As
such, despite the delays in some new business,
we won a number of contracts in 2022. We also





of Group revenue

Key accounts
Organic growth Organic growth by quarter Operating margin
America
Revenue & organic
growth
Revenue (DKKbn)
Organic growth (%)
0
2.5
5.0
7.5
10
202220212020
DKKbn %
(
20
)
(
7.5
)
5
17.5
30
America
Organic growth
quarterly
Q4Q3Q2Q1
%
%
16
28
32
24
20
America
Operating profit
& margin
0.1
0.2
0.3
0.4
0.5
202220212020
Operating profit before other items (DKKbn)
Operating margin (%)
DKKbn
%
2
3
4
5
6
Americas
Core services
OUR PERFORMANCE
Americas
Food
Technical
Cleaning
Workplace, incl. other
Core services
The market
The Americas consists of the mature North
American market as well as Mexico and Chile.
North America is the world’s largest FM market,
accounting for around 30% of the global
outsourced FM market. Food services account
for a significantly larger share of revenue than
in other regions. Key customer segments are
Business Services & IT, Industry & Manufactur-
ing, Pharmaceuticals, Transportation & Infra-
structure and Food & Beverage.
Financial update
Revenue increased to DKK 8,585 million in
2022 (2021: DKK 7,141 million). Organic growth
was 26.5%, the effect from acquisitions and
divestments, net was (13.8)%, while currency
effects impacted growth positively by 7.0%.
In 2022, the organic growth was mainly driven
by food services as customers returned to the
offices. Revenue from food services increased
more than 70% and accounted for around 35%
of the region’s revenue (2021: 23%) compared to
awarded a new five-year IFS contract with a large
international retail customer, and the contract
was gradually ramped-up in second half of 2022.
In addition, several contract wins were recorded
across the countries in the region.
Operating profit before other items was
DKK 445 million (2021: 393 DKK million) for
an operating margin of 5.2% (2021: 5.5%).
The decrease in operating margin was mainly
driven by investments in the commercial model
to support the strong development, additional
costs related to start-up and mobilisation of
contract wins in the US and a lower revenue
from margin enhancing Covid-19 related deep
cleaning and disinfection services. The negative
effects were partly offset by employee tax
credits under the US Employee Retention Credit
scheme and timing effects in the second half of
the year. The strong revenue recovery in food
delivered broadly the same margin compared
to last year as most contracts were renegoti-
ated to cost plus commercial models during
Covid-19. Besides the US, Mexico and Chile
delivered solid operating margins supported by
contract wins and non-portfolio revenue.
13% for the Group (2021: 11%). In addition, the
mobilisation of contracts won during 2021 and
2022 contributed positively. Across the region,
price increases were implemented to offset
the effects of increasing cost inflation. Organic
growth was highly positive in all quarters but
slowed slightly down in Q4 reaching 21%, as
Q4 2021 also benefitted from accelerated
return-to-office activity.
The development across the region was strong
with all countries reporting solid positive organic
growth. Portfolio revenue increased organically
by 29.2% driven by return-to-office within food
services. Despite lower demand for deep clean-
ing and disinfection services, organic growth for
projects and above-base work was 9.2%, due to
generally higher levels of activity and was 12% of
total revenue in the region.
The strategic focus on IFS and key account
customers progressed and demand from
key accounts was more robust and resilient
compared to the rest of the customer base.
Furthermore, across the entire region, there was
a good commercial momentum. In June we were
CASE
When a partnership has been in place for
more than 15 years, change can come as a
surprise – but it can also be liberating. So,
when a customer requested a new type of
contract, the ISS account team tackled the
challenge with relish.
The result? A five-year contract extension
designed around a future-proof and
complex new commercial model.
“Currently, the customer has around 170
locations in 51 countries across the globe,
equalling some eight million square feet of
property,” explains Global Account Director
Mike Feeman, who is based in New York, US.
“Within that, we perform a broad spectrum of
facility management services – from cleaning,
engineering and food services to workplace
experience and security infrastructure.”
It was crucial for ISS to work closely with the
customer, overhauling its approach and pro-
cesses to match the new commercial model.
“It required a lot of IT work to create new
types of reporting and new dashboards, as
well as briefing our finance team in great
detail,” Mike says. “Now, the new system
relies on processing a large amount of data
very quickly – and getting that over to the
customer within strict timelines.”
Another key development in the contract
was an increased emphasis on Workplace
Experience – a timely response to global
post-pandemic changes. Many companies
are investing in reinforcing the physical
workplace to ensure a strong company
culture and sense of belonging.
“Effectively, we had two transformations
happening at once,” says Mike. “One was this
huge contractual change. But at the same
time, we’re all operating in a world where the
workplace is being radically transformed.”
To tackle this challenge, Mike sat down with
the customer's senior leaders to discuss
how the workplace would stay relevant to
their organisation.
Mike considers ISS’s insight into the global
industry a key strength in its partnership
with the customer. “The account really
turned a corner when the customer started
making new, experience-based spaces. In
fact, its new headquarters is now a flagship
service location for ISS in the US – so it’s
been a huge change.”
The results are already impressive. Work-
place Experience, as a service concept, is
now in place at 20 key sites, while 20 new
Workplace Experience managers have been
hired. Nearly 1,900 ISS employees have
completed placemaker training – and the
new financial model has been implemented
wherever the customer operates.
How ISS helped a customer adapt
to the changing global workplace
CUSTOMER
“As global workplace teams
evolve, we at ISS, have to become
the guardians of connection,
collaboration and culture for
our organisations. We have to
consider how we can evolve if
office spaces are not going away
but are being repurposed. How do
we make sure we can stay in front
of that curve? And how do we
figure out the next wave of value
for our customers?”
Mike Feeman
Global Account Director
Our
business
Focus on three
prioritised segments ...
… for which we will
focus on four core services
Office-Based
• Financial services
• Technology
• Professional services
Cleaning
• ISS’s heritage
• Global leader
Production-based
• Industry & Manufacturing
• Life sciences
• Food & Beverage
Technical
• Critical for key accounts
• Growth opportunities
Food
• Supports IFS experience
• Opportunity for new offerings
Workplace
• Increased demand
• Addressing core customer needs
Healthcare
Our ambition
Global leader
in IFS
#1#1
Globally in
cleaning
50,000+
Sites
30
Core countries
350,000+
Placemakers globally
40,000+
Customers
Our platformCustomers' needs
Account and site ownership,
flexibility and agility
Outcome-based
contracting models
Focus on experience,
efficiency and sustainability
Global consistency and
compliance
OneISS
operating model enables us
to drive customer outcomes
and create synergies by
scaling investments and
applications of service
products, technology and
sustainability
OUR BUSINESS
OneISS strategy
In 2022, we delivered on our
turnaround targets and our
strategic journey is progressing to
a new phase of strong growth at
sustainable and attractive margins.
Our strategic ambition is to become the global
leader in Integrated Facility Services (IFS) and to
drive our bespoke value propositions towards
key accounts in three prioritised segments, i.e.
Office-based, Production-based and Healthcare,
and to maintain our stronghold as #1 globally
in cleaning. Our IFS offering is focused on four
core services, i.e. Cleaning, Technical, Food and
Workplace, that are critical to IFS contracts.
We continue to see strong demand for IFS.
Key account customers are consolidating their
supply chains to focus on their core business
and they need a strategic partner to drive user
experience, efficiency and consistency with solu-
tions that are sustainable and compliant across
their portfolio of workplaces. Consequently, we
expect demand for integrated service contracts
will continue to outgrow the general FM market.
To address this growth opportunity and become
the global leader in IFS for key accounts, we are
building the best customer offering based on
our global and scalable operating model.
OneISS priorities Objectives Progress 2022
Commercial
momentum
and segment
leadership
• Focus on developing service products that meet
the needs of prioritised customer segments
• A global commercial operating model to leverage
our segment expertise across the enterprise
• Strong commercial governance
• Large inflow of commercial talent, globally
• Structured approach delivering record high retention rate of
94% (93% incl. the exit of the Danish Defence contract)
• Improved global collaboration, e.g., integrated Asia & Pacific
bid management team into the Group and launched training
programme enabling cross-country collaboration
Brilliant
operating
basics
• Focus on the processes and actions that deliver
strong performance – with high productivity,
quality and compliance
• Leverage technology-enabled and scalable
processes to drive efficiencies
• Sharp focus on ten operating fundamentals, including inflation
management
• Improved cybersecurity above-industry benchmark
Service products
built on leading
technology
platforms
• Innovate our service lines, sharing and scaling
best practices across places
• Embed technology in service products, i.e.
develop once and deploy widely
• Enable consistent, and efficient service delivery
• Scaled new daily office cleaning service product, “PureSpace –
Office”, to drive productivity improvements on 4,000+ sites globally
• Scaled food waste reduction service product to 290+ sites saving
more than 1.5 million meals in annualised values
• Piloted “ISS Takeaway” app at 11 sites across 8 customers showing
significant B2C sales uplift
• Launched pilot on Asset Management service product with two
global key accounts
Environmental
sustainability
• Become the global industry leader in
environmental sustainability
• Ambitious targets, tracked and embedded into
the business
• Advise and support our customers on their
journey to reduce carbon emissions
• Announced commitment to full-scope net-zero emissions
by 2040 and submitted science-based targets
• Entered vested partnership with LeasePlan with strong
incentives to rapidly reduce emissions through electrification
our global fleet
• Deployed technology to drive food waste reduction
Safe, diverse
and inclusive
workplaces
• Safety First, always
• Leading promoter of social value and mobility
• Build stronger teams on diversity, inclusion
and belonging
• Announced ambition to become the global Company of
Belonging, see p. 32
• Global recertification of our HSEQ Management system in line
with ISO Standards 9001, 14001 and 45001
OUR BUSINESS
Strengthening the
global operating model
Our global operating model gains strength
through the execution of five strategic priorities:
1
Commercial momentum
and segment leadership
2
Brilliant operating basics
3
Service products built on leading
technology platforms
4
Environmental sustainability
5
Safe, diverse and
inclusive workplaces
Our five strategic priorities will enable us to
operate efficiently and offer market leading
service products built on leading technology
platforms. Our service products are designed
to address key customer needs and build on
knowledge developed from years of serving
customers in our prioritised segments. We
understand the importance of providing our
customers with a market-leading workplace
experience at competitive cost while at the
same time contributing to an environmentally
and socially sustainable world.
As part of the commercial momentum priority,
and to further enhance our focus on customer
retention, ISS is launching the Customer for life
programme. The objective of the programme is to
increase value creation for all parties throughout
the lifetime of the contract and we will restructure
and strengthen our commercial mindset and meth
-
odology to drive continued retention in our chosen
customer segments, based on right terms and
behaviours. The programme is launched in 2023
in five countries and across our global key accounts.
To enable innovation and collaboration
To attract people to the office
To enhance sense of belonging
9/10
2-3

The office is here to stay…
…but the purpose is changing…
…and customers are upgrading…
A significant part of our business is outside the office-based segments
where the opportunity to reduce footprint is less pronounced
– What companies plan to do with the office

Increased spend on food services per m
2
:
employees want flexibility in where and when they work
days of expected weekly remote work
probability of employees choosing to find other employment
if they do not have the flexibility of working from home
are investing in their workplace offerings
OUR BUSINESS
Next phase of
the OneISS journey
As we turn to the next phase of the OneISS
strategy, we continue to execute on our strategic
priorities. We intend to further strengthen
our global platform through investments in
technology- enabled service products and
commercial capabilities and culture to support
the execution of our strategy. We will drive
performance and competitiveness and aim to
deliver strong orga nic growth at attractive and
sustainable margins combined with disciplined
acquisitive revenue.
Market development
In the wake of the Covid-19 pandemic,
workplace experience has become increasingly
important in the office-based segment. The
purpose of the office is changing in response
to employees’ increased demand and expec-
tation for flexibility and opportunities to work
remotely. While some companies choose to
reduce their real-estate footprint, we see that
the majority of companies are investing in
and upgrading their workplaces and service
offerings. They invest to attract people to the
office and foster a culture that enhances a
sense of belonging and enables innovation and
collaboration.
Operational efficiency remains a key sourcing
criteria of facility management across all
customer segments – especially in periods
of economic recession where pressure on
costs forces companies to focus on their core
activities. Furthermore, demand for sustainable
service solutions is increasing as customers
look to their service partners for support to
their journey to net zero.
To accommodate those needs, we are invest-
ing in three key commercial areas which will
become differentiating factors for performance
at our current customers’ workplaces and in
future customer bids, i.e.:
• operational efficiency
• technology
• sustainability
Operational efficiency is delivered through the
enhanced operating model, which enables the
launch of a portfolio of scalable service products
to drive a step-change in global productivity.
The investments in technology are focused on
creating value from an ecosystem of scalable
platforms with data and innovation. The first
key applications have already been launched
for customers and placemakers to improve the
service we provide across workplaces globally,
e.g. MyISS, ISS Takeaway, the Outdoor app and
the ISS Workplace app. See p. 117 for more
information.
Finally, ISS is determined to become an indus-
try-leader in championing sustainable work-
places. Through this agenda, ISS is launching
an ambition to become the global Company of
Belonging. At the same time, ISS is progressing
on its own environmental commitments while
supporting our customers’ journeys to reduce
carbon emissions, waste and the consumption
of energy and materials. For further details, see
Company of Belonging on p. 32 and Sustainability
on p. 30.
Workplace experience is increasingly important
Source: ISS pulse survey and EY Work Reimagined Survey
 Unchanged or undecided
 Expand
 Reduce
The office is here to stay
The office is here to stayNationalities EGM
OUR BUSINESS
Sustainability
Making the world work better starts with
our contribution to a fair and inclusive
society and a healthy planet. This has
always been a determining factor in
the way we operate our business and
it remains a critical part of our current
strategy execution. This is also why
we carry out our sustainability efforts
through two equally important lenses:
social and environmental sustainability.
In 2022, we launched the ambition of cham-
pioning sustainable workplaces, driving true
sustainable change through both social and
environmental sustainability. The dual focus
ensures that we can continue to strengthen
our competitiveness and support growth in our
next phase of strategy execution.
During the year, we progressed significantly on
our ambitious sustainability journey. Both within
our own enterprise and in the way we support our
customers in achieving their sustainability targets.
Within social sustainability, we launched a new Em-
ployee Value Proposition (EVP), further developed
our Diversity, Inclusion & Belonging agenda and
introduced an ambition to become the Company
of Belonging. For further details, see p. 32.
Within environmental sustainability, we an-
nounced our commitment to reach full-scope
net-zero greenhouse gas emissions by 2040.
Furthermore, we have been deploying moni-
toring and tracking technology and integrating
carbon management in our service products. We
have also committed to the science-based
Targets initiative (SBTi) and have launched
specific initiatives within food waste reductions
and electrification of our fleet globally.
Leveraging our enterprise and integrating
environmental sustainability initiatives into
everything we do, allows us to identify and drive
initiatives to reduce customer emissions through
our 350,000+ onsite placemakers across the
globe. Our operating model enables us to share
our best practices, ensuring that what works
somewhere, we will do everywhere. Enabling and
engaging our site teams is key for us in having an
impact today – we should not wait to have all our
future solutions finalised – we can make a real
difference for our customers today.
Materiality assessment
In 2022, we conducted a materiality assessment
across our various stakeholders. The purpose of
the assessment was to anchor the sustainability
topics that are most material to our business.
The findings confirmed the importance of
our people and governance and showed that
insights and data must be at the core of ISS and
integrated across the business. The priorities
include:
• environmental: carbon, energy, and waste
• social: occupational health, safety and
wellbeing, decent working conditions and a
diverse and inclusive workplace
• governance: ethical business practices and
anti-corruption, human rights and labour
standards in the supply chain and responsible
procurement practices and supplier conduct
We want to become
the sustainability
leader in our industry
Social
Environmental
– executed through social and
environmental sustainability
Improve belonging
• Diversity
• Social mobility
• Health & Safety
Reduce carbon
• Energy
• Waste
• Materials
Governance
Our commitment to sustainability is anchored
in the Board of Directors and the Executive
Group Management. See Our governance
structure on p. 43.
Our approach is based on the foundation of
our vision, core values, dynamic stakeholder
engagement, as well as existing and emerging
sustainability trends, risks and opportunities.
The Group’s Sustainability and Corporate Strategy
Departments are responsible for updating and
executing our sustainability efforts, with support
from in-country sustainability resources.
Corporate sustainability starts with our value
system and a principles-based approach to doing
business. This means operating in ways that, at a
minimum, meet fundamental responsibilities in
the areas of human rights, labour, environment
and anti-corruption. That is why ISS has been
a signatory to and an active member of the
UN Global Compact since 2001 and why we
have incorporated the Ten Principles of the UN
Global Compact into our strategies, policies and
procedures, and thereby establishing a culture
of integrity that not only upholds our basic
responsibilities to people and planet, but also
sets the stage for long-term success.
AA
14.1
56
67 (Silver)
C (2022)
2022 sustainability ratings
Emission impact Business activity
Scope 1 (direct)
69,581 tonnes CO
2
eq.
Arising from sources under our control, e.g., company
vehicles, gas emissions and refrigerants
Scope 2 (indirect)
7,084 tonnes CO
2
eq.
Arising from the consumption of purchased electrical energy,
heating and cooling and district heating
Scope 3 (indirect)
1,569,421 tonnes CO
2
eq.
Arising from business travel and our supply chain, including
purchased goods and services
OUR BUSINESS
Commitments Progress 2022
Science-based target
in line with the Paris
Agreement goals
• Submitted science-based targets in December 2022
that support an ambitious decarbonisation journey in
line with the Paris agreement and our own net zero
commitments
Net Zero targets
Scope 1 and 2
by 2030
Full Scope 3 by 2040
• Implemented technology solutions for monitoring
and tracking
• Integrated carbon management in our service products
• Engaged our account and site teams to take ownership of
net-zero journey
Electrify our fleet
~20,000 vehicles by
2030
• Entered a vested partnership with Lease Plan with joint
incentive to rapidly reduce emissions
• Progress towards 1,500+ vehicles by end 2022
Greenhouse gases
25% by 2030
Food waste
50% by 2027
The Cool Food Pledge and innovative menu planning helps
us commit to and achieve a science-based target to reduce
the climate impact of the food we serve:
• Reduced food waste by 527 tonnes, 1.3 million meals
and 2,269 tonnes CO
2
(annualised value), in partnership
with Winnow food waste reduction system
Environmental sustainability
At ISS, we recognise the full scope of the climate
and environmental crisis, and we are fully com-
mitted to operating our business and delivering
our services in a sustainable way. We believe
that it is our societal responsibility and inherent
our licence to operate.
Reducing our impact on the environment is fun-
damental to our success and future growth. We
aim to create long-term value for our business
and the world around us by addressing our
main environmental challenges and reporting
our performance regularly and transparently.
The world is changing rapidly. With the impacts
of climate change, energy crisis, resource scarcity
and waste overload affecting all of us, ISS wants to
become the sustainability leader of our industry.
Progress on commitments
ISS’s impact on the environment primarily comes
from our supply chain, including purchased goods
and services. Therefore, collaboration with our
suppliers is key to reducing our environmental
footprint. That is why we have committed to am-
bitious science-based and net-zero targets across
our full scopes 1, 2 and 3 emissions by 2040.
In 2022, ISS collected data regarding the level
of scopes 1, 2 and 3 emissions related to our
business activities. We used 2019 as the baseline
year, and data show that our scopes 1 and 2
emissions account for 5% while our biggest
opportunity lies in Scope 3, which represents
95% of our total emissions.
Our Pure Space Office product is an example of
how we systematically standardise the cleaning
methodology in office environments. The global
programme is based on best practices across
ISS and is designed to provide a workplace
environment free from microorganisms with
verified hygiene standards to minimise the
risk of infection. The methodology and choice
of chemicals delivers significant sustainability
outcomes in terms of water and chemical
reductions. In 2022, the programme reduced
water consumption by 11 million litres of water
and 450 thousand litres of chemicals. The effort
is supported by global training programmes and
dedicated product ownership.
Another example is the energy management ser-
vice we provide across customer portfolios. A team
of ISS energy managers working in collaboration
with key account stakeholders and local delivery
teams to carry out onsite optimisation to reduce
electricity and gas consumption across an estate.
With consumption data for the sites supplied,
ongoing savings are calculated to quantify the
benefits being delivered. This successful service
product has provided 10%+ evidenced savings in
total addressed energy consumption.
TCFD
We remain committed to implementing
the recommendations of the Task Force on
Climate-related Financial Disclosure (TCFD). In
2022, we strengthened governance by building
additional sustainability capabilities across the
organisation and sharpened our strategic offer-
ing and value proposition. Importantly, through
our intensive work on setting and submitting
our science-based targets for validation by the
SBTi, we gained significant insights into our
climate-related risks and opportunities that will
form part of the basis for further implementing
climate-related financial disclosures in 2023.
Our strategic
approach to
belonging creates
value for all
Partners
Fair and lasting
relationships built
on collaboration
and trust
Investors
Positive brand
impact attracting
talented and
diverse leaders,
leading to better
outcomes
Society
Sustainable growth
and social mobility
Placemakers
Living wage and
opportunities
to grow
Customers
More innovation,
better service
experiences and
aligned values
with ISS
OUR BUSINESS
Company of Belonging
Continuous training and develop-
ment as well as creating an environ-
ment where our placemakers can
feel safe and thrive as their authentic
selves are not only important from
a social sustainability point of view.
They are key to delivering on our
strategy and our purpose of connect-
ing people and places to make the
world work better.
For more than 121 years, we have been centered
around our employees. We call them our place-
makers. Every day they go above and beyond in
delivering outstanding services to our customers.
To ensure we continue to deliver on our strategic
ambitions and our purpose, we launched a new
and bold cultural ambition in 2022: to become
the global Company of Belonging.
As an employer of 350,000+ placemakers, with
more than 40,000 customers in more than
30 countries worldwide, ISS has an ever more
significant impact on people and societies.
Through building an environment where every
employee feels accepted, empowered and
able to thrive as their authentic selves, we will
create better experiences and more sustainable
outcomes for our placemakers, partners and
their communities.
Our cultural ambition is based on a set of funda-
mental commitments, which combine in service
of our ambition, including our three signature
objectives, our Diversity, Inclusion & Belonging
agenda and our Employee Value Proposition
(EVP) and People standards.
In addition, we have set out three core areas
to measure success in achieving our ambition,
which are employee engagement, employee
retention and customer retention.
Our signature objectives
Our three signature objectives will accelerate
us on the journey towards becoming the Global
Company of Belonging.
Together, our signature objectives are a purposeful
and intentional promise to deliver better outcomes
for our placemakers, their families, our partners
and the communities in which we operate.
1
We pledge, working together with policy
makers, our customers and suppliers, to
increase the implementation of living
wages across our industry
By paying a living wage, we ensure that our
placemakers earn a wage that meets their
everyday needs and enables them to afford a
decent standard of living for themselves and
their families. In addition to supporting the lives
of our placemakers, paying a living wage has
many benefits for our customers, as greater
financial recognition for the dedicated work
being performed by our placemakers improves
employee engagement and enhances retention,
leading to higher quality service outcomes.
2
We commit to giving 100,000+
placemakers or their family members a
recognised qualification by end 2025
We take pride in investing in our placemakers
and currently offer multiple qualifications from
courses in competencies for frontliners to aca-
demic qualifications for leaders. In addition to
the formal qualifications we currently offer, our
core development programmes serve to equip
all placemakers with opportunities to grow.
Offering 100,000+ placemakers or their families a
formal qualification by end 2025, is our pledge to
be even more intentional with the development op
-
portunities that are available to our placemakers.
Offering leading career development opportunities
will create happy and purpose-led placemakers
who feel motivated to provide better outcomes for
our customers and facilitate social mobility.
3
We partner with all stakeholders to
demonstrate the value that all
placemakers bring to our workplaces,
striving for continued recognition and
respect
We will play a leading role in combining the
efforts of all our stakeholders to ensure greater
recognition and respect for the work that our
placemakers perform every day. This is our
commitment to all our placemakers. Through
partnering with our stakeholders globally, we
can hugely impact the way we recognise and
show respect for those who make the world
work better.
Gender balance
– corporate leadership: target 40%
Women

Corporate leadership
Men

OUR BUSINESS
Our diversity, inclusion
& belonging agenda
ISS is built on a foundation of equity, fairness,
and respect for all individuals. Diversity, inclusion
and belonging are inherent to our DNA.
Only through intentionally nurturing a diverse
and inclusive workplace can we build and
strengthen this sense of belonging and a culture
where every placemaker feels that they can
bring their best selves to work.
Our strategic approach
Our global Diversity, Inclusion & Belonging
(DIB) strategy is driven through five dimensions
of diversity: pride, gender, generations & age,
abilities and cultures, race & ethnicity. Through
our strategy we commit to taking a proactive
responsibility towards our surrounding commu-
nities and local societies by reflecting diversity
and promoting inclusivity.
In 2022, we took significant steps to advance
this. We defined three DIB actions in all
countries, aiming to drive inclusion. In addition,
we finalised the launch of five global Employee
Resource Groups (ERG) – voluntary groups of
ISS employees for each strategic dimension who
work on concrete initiatives to promote inclusion
and belonging.
Status on gender balance
Ensuring the right gender balance will lead to
greater innovation, improved organisational
performance and better service to our custom-
ers. To progress sustainably in this area, we
focus on two wider goals: getting more women
into leadership roles and retaining our female
leaders, and building an inclusive environment
where they feel they belong.
We have defined a target to achieve 40% gender
balance across corporate leadership roles by the
end of 2025. As of 2022, the representation of
women in corporate leadership roles stood at
36% (2021: 35%). Progress in reaching gender
balance at ISS is driven by several key levers and
supported by our talent strategy to develop and
retain a strong pipeline of current and future
female leaders.
For a status on gender balance for the Board
of Directors and the Executive Group Manage-
ment, see p. 41.
2022
Employee value proposition
and people standards
To underpin our commitment to our placemakers,
we launched a global employee promise and value
proposition (EVP) in September 2022: A Place
To Be You. This is closely linked to our cultural
ambition of becoming the Company of Belonging.
A Place To Be You embodies our values and
culture and articulates our promise to our
placemakers, globally. We see you, we hear
you, we believe in you and we support you.
Our commitment to fostering a culture of
belonging is a great example of our values and
purpose going hand in hand with our business
needs leading us to become recognised as an
employer of choice.
Maintaining and ensuring compliance with
our Global People Standards is a cornerstone
in the way we operate as a business, but to
truly make people feel they can belong, entails
safeguarding people safety as well.
Diversity, inclusion
and belonging
activities in 2022
• Gender Balance Month, globally
• Cultures, Race & Ethnicity Month
• 2
nd
Year Pride webinar
• Partnership with Nestlé Youth
Foundation as Part of our Age
and Generations
• 1
st
global Diversity, Inclusion
& Belonging Award at Global
Leadership Conference
• International Day of People
with Disabilities
Lost Time Injury Frequency
Target: < 2.5
0
1
2
3
4
202220212020
2.5
2.7 2.9
Target: < 2.5
0
1
2
3
4
202220212020
2.5
2.7 2.9
Employee turnover
10
20
30
40
50
20222021202020192018
(
2,500
)
(
7,500
)
(
5,000
)
2,500
0
33%33%
30%
42%
35%
Lost Time Injury
Frequency - Blå
0
1
2
3
4
20222021202020192018
2.5
2.7
2.92.9
32%
2.8
OUR BUSINESS
improved labour conditions relative to market
norms in certain countries, and we sustained
the improved retention levels compared to the
pre-Covid 19 levels.
Health & Safety –
a key priority
In line with being a diverse and inclusive
workplace and as a vital part of living up to our
people promise, our entire health and safety
agenda is pivotal for us to make our placemak-
ers feel they belong to a company where respect
and protection of their mental and psychological
wellbeing is a key essential for everyone.
Health & Safety initiatives remain a key focus and
help us keep the wellbeing of all stakeholders,
from our placemakers to customers, suppliers,
and partners, top of minds. Safety is our highest
priority and collectively we work tirelessly to
ensure that our placemakers go home safe to
their families after a productive working day.
Tragically in 2022, we suffered one work-related
fatality, involving a placemaker working in an in-
dustrial environment. A working group of SMEs
from across our business has been working with
the management team involved in the incident
to ensure lessons learned from the tragedy are
captured in detail. The review has driven a global
action plan which will further strengthen our
safety framework.
We also have ambitious plans that will strength-
en our Health and Safety framework from 2023.
They focus on creating even safer working
environments for all placemakers and stakehold-
ers within our business.
Developing and improving
the people experience
We take pride in the way we train our place-
makers. Continuous upskilling and development
are absolutely key in ensuring that we meet the
expectations of our customers. Throughout
2022, we continued to strengthen the way we
train and develop both frontliners and leaders.
In 2022, our Country Leadership Teams com-
pleted leadership workshops in our leadership
model. Furthermore, our mid-level managers
started to participate in our flagship leadership
development programme – Leading OneISS –
which supports further embedding of the right
culture across the organisation. The programme
facilitates clear and structured feedback allowing
leaders to gain insights into their personal
leadership style, strengths, and development ar-
eas – in line with the core behaviours central to
delivering OneISS. We also continued to deploy
the Placemaker’s Path – our career-long learning
and development programme – towards all
global key accounts and more than 450 local key
accounts. The programme (beyond equipping
our people with the right capabilities) drives the
right leadership behaviours across our sites –
helping us to become a Company of Belonging.
We invested in strengthening our operational
capabilities with deployment of renewed Key
Account Manager Certification programme
and launching Site Manager Certification
programme through which we build capabilities
enabling cohesive application of our scalable
operating model.
To retain and engage our 350,000+ placemak-
ers, we focus on offering superior people jour-
neys and create an employee experience where
people feel respected, valued and empowered
to make positive changes to their working
environment. Our ability to listen and respond
Lost Time Injury Frequency
LTIF differ and reflect diverse maturity levels
towards safety across the various cultures and
geographies in which we operate. In 2020 and
2021, ISS have completed most of its divestment
programme, which included divestment of
business units that had an aggregated lower level
of LTIF compared to the Group. This increased
the Group’s underlying LTIF by approximately
0.2 %-points. As a consequence and also due
to increased Loss Time Incidents following the
higher activity levels linked to Covid-19 recovery,
our LTIF increased to 2.9 in 2022, a slight increase
over 2021. The most frequent cause of Loss Time
Incidents relates to slips, trips and falls, and we
are launching updated campaigns and training
for managers and placemakers in 2023 to drive
further awareness on these types on incidents.
We are committed to reinforcing safety behaviour
across all sites that we operate and drive LTIF
below 2.5.
to our placemakers is key and the use of leading
technology is a pre-requisite to achieve it.
Our global employee platform – MyISS – serves to
digitally connect all placemakers and provides a
unified access point and self-service functionalities
to make their working lives easier. The opportunity
for all placemakers to provide feedback will be
enabled and embedded into the platform.
Listening to our placemakers consistently
not only enables a culture whereby we can
proactively respond to our placemakers but can
measure the sense of belonging they feel within
ISS. We aim to baseline our engagement score
through a global listening survey.
Employee retention
We operate in a marketplace where levels of
employee churn are inherently high. To
measure success, we are targeting a structural
improvement in our employee retention. Higher
employee retention underpins a more consis-
tent, higher quality of service and reduces the
costs associated with attracting, recruiting and
onboarding new colleagues.
Despite an increase from 30% in 2021 to 33% in
2022, our employee turnover rates have proven
resilient through the cycle of Covid-19. We con-
tinued to focus on retention initiatives, including
OUR BUSINESS
Our business risks
In 2022, we continued to strengthen
our risk management organisation
and capabilities to further build
business resilience to both existing
operational risks and external events.
Our teams responded effectively
to mitigate the impacts of war in
Ukraine as well as step changes in
inflation rates.
Risk management in 2022
Our focus in 2021 was on strengthening gover-
nance, simplifying risk assessment processes, and
bringing the risk management community closer
together. Building on those foundations, the key
initiatives for 2022 were focused on developing
risk management maturity within the organisation.
Organisation
Having strengthened our risk management
foundation, we are revisiting the operational risk
management framework. In September 2022,
ISS established a new Operational Risk function
anchored in our Global Operations team to
further develop and manage workplace-related
risks for our customers. As a key business
partner to the majority of our customers,
we play a significant role in their overall risk
management framework. Thus, we believe
that through our services, we can continue to
proactively support our customers in enhancing
their risk management agenda and capabilities.
Technology
Our efforts to leverage technology in enhanc-
ing our risk management and compliance
capabilities continued in key areas such as
cybersecurity and data privacy. Our risk assess-
ment processes are now well anchored within
the organisation, and we take steps to transition
to a digital platform, which is a key step towards
realising our longer-term ambition of real-time
risk information tracking.
Business Continuity Management
Business Continuity Management (BCM) is an
important factor in supporting ISS’s organisa-
tional resilience (reducing legal and financial
exposure; protecting life, property, environment;
safeguarding reputation and credibility). This
was emphasised by recent significant events,
including a cybersecurity incident in 2020, the
impact of the Covid-19 pandemic, and most
recently the impact of the war in Ukraine. As
a result, we have sharpened our focus on a
transparent and standardised BCM approach
across ISS.
The solutions developed for business continuity
and recovery address several scenarios, including:
• Loss or unavailability of premises, including
the inability of people to commute to their
normal work location
• Mass people absence or the unavailability of
key people
• IT system incidents; and
• Loss of a critical vendor (e.g., incident at the
provider of an outsourced service/activity)
Group risk review
As part of our bi-annual process, we reviewed
the Group’s key risks to reflect the main
exposures in achieving our strategic objectives.
The key risks and mitigation measures identified
in 2022 are described on the following pages.
Compared to 2021, our assessment of the
Group Key Risks reflects that the turnaround
plan has been successfully executed. Further, we
have included Macroeconomics and Health and
Safety in our assessment of Group Key Risks,
reflecting in particular the need to manage the
step change in inflation and enhanced focus on
occupational safety.
Market developments 2022
The facility management industry experienced
unprecedented disruption in 2020 and 2021,
as the Covid-19 pandemic impacted ways of
working and workplace environments globally.
The impact on our business was material,
albeit with a high degree of stability in cleaning
services and a material impact on other services,
especially food services. In 2022, we saw contin-
ued recovery from the pandemic and increasing
levels of activity as customers returned to offices
in large markets. In certain markets, the recov-
ery resulted in increased demand for labour.
Following the outbreak of war in Ukraine in 2022,
we activated our crisis management processes
and established a Group Emergency Response
Organisation for real-time decision making. ISS
provided support to customers and colleagues in
countries affected by the war, both directly and
indirectly. These events fuelled a step change
in inflation and ISS stepped up its processes
to manage and mitigate price increases in our
supply chain, while also activating commercial
mechanisms in our customer contract portfolio in
response to increasing operating costs.
Group Key Risks 2022
• Macroeconomics
• People management
• Environmental sustainability
• Health and Safety
• Regulatory compliance
• Contract management
• Subcontractors
• IT transformation
• Information security and cyber risk
• Finance and reporting
Our exposure to financial risks is disclosed
in note 4.4 to the consolidated financial
statements.
Sustainability
The sustainability agenda, in particular when
it comes to climate change and the journey to
net-zero carbon emissions, is moving fast and is
increasingly linked to our license to operate in
the market.
ISS has integrated sustainability as a core stra-
tegic priority and committed to science-based
and net-zero targets. The ability to attract talent
to lead and deliver on ISS’s and our customers’
progression towards these targets is a top
priority and key to commercial success in the
short and medium term. For details on our
commitments to the science-based targets and
net zero, see p. 31.
Macroeconomics People management Environmental
sustainability
Health and Safety Regulatory compliance
Unstable and/or unfavourable
economic, financial and/or
currency conditions that might
have adverse impact on
achieving ISS business goals.
Risk that ISS will not be able to
attract and retain the right people
in order to maintain operations and
meet our customer obligations.
Risk that ISS will not be able to deliver
on own sustainability goals and tar-
gets and will not be able to support
customers’ net zero journey.
Failure to design and implement,
within our internal processes and
service delivery, sufficient health
and safety mechanisms, that would
prevent incidents from materialising
and affecting our placemakers and
customers.
Failure to comply with applicable laws
and regulations, including labour law
and required licenses and permits
which may lead to regulatory, opera-
tional, and reputational losses.
Risk drivers
Persistent geopolitical tensions,
supply chain disruptions, inflationary
pressures and economic slowdown
may directly or indirectly impact
service delivery and its profitability.
Risk drivers
Current labour market conditions
indicate increasing wage inflation
in certain geographies. Pressure
on the availability of labour and
“war for talent” is contributing to
increased employee expectations
towards employers.
Risk drivers
Ability to deliver on sustainability
goals and targets is key to maintain
the license to operate in our markets.
Approximately 95% of ISS’s carbon
emission footprint sits within Scope
3 and our ability to reduce indirect
emissions from our supply chain is
key to achieving net zero target.
Risk drivers
Our placemakers execute a range of
services in workplaces around the
globe, including high risk environ-
ments and services
Risk drivers
Growing complexity and volatility of
various regulatory regimes across the
multitude of geographies and services
in which ISS operates.
Mitigation actions
• Defined methodology for managing
inflationary pressure in our supply
chain and implementation of price
increases across the customer
contract portfolio
• Strengthened contract governance
for customer, supplier and subcon-
tractor agreements
• Adjustment mechanisms in our
customer contracts allowing for
inflationary impacts to be managed
through price adjustments, scope
adjustments or similar
Mitigation actions
• Focus on our cultural ambition to
become the global Company of
Belonging, incl. our new Employ-
ee Value Proposition and Diversity,
Inclusion & Belonging strategy
• Signature objectives to attract
and retain talent and drive sus-
tainable change in the communi-
ties where we operate
• Improvement and standardi-
sation of people processes to
enhance employee experience,
supported by dedicated tools and
internal platforms
Mitigation actions
• Sustainability governance
structure in place
• Integration of carbon manage-
ment into our service products
• Science-based targets with
near-term carbon goals
• Developing carbon management
tool for tracking, monitoring and
reporting
• Closer cooperation across
supply chain aiming to incentivise
emissions reduction
Mitigation actions
• ISO 45001, 14001 and 9001 certi-
fied Health and Safety framework
promotes strong processes and
procedures
• Robust training program for our
placemakers
• Active promotion of a strong,
positive safety culture
• Zero tolerance for serious injuries
Mitigation actions
• Strengthening of functional exper-
tise in countries and Group
• Cooperation between countries
and Group to build compliance
focused culture and further develop
regulatory compliance maturity
• Robust compliance frameworks
and standardised, global approach
towards monitoring and ensuring
compliance with laws and regula-
tions
OUR BUSINESS
Contract management Subcontractors IT transformation Information security
and cyber risk
Finance and reporting
Failure to fully identify, assess and
manage key risks and opportunities in
customer contracts thus adversely
impacting profitability, leading to oper-
ational or regulatory non-compliance
or suffering financial loss or reputa-
tional damage.
Risk that ISS will not be able to
properly service its customers as a
result of failure of its subcontractors,
including subcontractor vetting and
performance monitoring.
Failure to execute our IT strategy
envisioning a global IT approach
with more streamlined software and
globally managed infrastructure,
better data quality and products that
will address our customers’ expecta-
tions and needs.
ISS being target of cyberattacks
leading to business disruption
and/or disclosure of ISS’s and/or
our customer’s data.
Failure to execute the ongoing finance
transformation aiming for stronger,
more consistent finance processes,
improved data quality and controls.
Risk drivers
Diversity of ISS services portfolio trans-
lates to variety of contractual models
with customers. The complexity of
delivered services drives the complexity
of contractual obligations and inherent
risk of failure in contract management.
Risk drivers
Increasing complexity and scope
of contracted work require ISS to
subcontract where we do not have
capabilities to self-deliver. Fur-
thermore, policies of key account
customers place increasing de-
mands on supply chain compliance.
Risk drivers
Changing the key elements of ISS IT
landscape such as onboarding new
processes, teams, tools and modernis-
ing existing platforms bears inherent
transformation risk.
Risk drivers
Two most common scenarios include:
• state sponsored attacks due to
geopolitical tensions
• double extortion ransomware
attacks
Risk drivers
Scale of the transformation which
covers financial processes, IT systems,
frameworks and control environments
bears inherent risk of culture change
and adaptation to new ways of working.
Mitigation actions
• Standardised commercial bid
process, including governance
structure and procedures involving
subject matter experts
• Avoid uncapped inflation risk
• Standardised contract transition
model, including internal certifica-
tion program for transition experts
• Standardised service delivery
policies
• Further strengthening of
cross-country cooperation for
global key accounts
Mitigation actions
• Supplier Code of Conduct
• Risk-based supplier vetting and
verification procedures, support-
ed by governance structure and a
dedicated team
• Supplier assurance program
with customer flow-down terms,
management and performance
monitoring process
• On-site training for subcontrac-
tors
• Implementing Scope 3 – Environ-
mental sustainability initiatives
and supplier diversity focus
Mitigation actions
• Policy setting out key principles
for IT governance
• Communication and governance
structure
• Organisational change manage-
ment team
• Increased transparency by
redesigned reporting lines
• Projects funnel model includes IT
security by design, security vet-
ting embedded in the processes
• Management and constant
monitoring of risks within the
transformation journey
• Tech roadmap to support
transformation
Mitigation actions
• Improvement of overall security
posture
• Significant investments in
continuous improvements
• >50 cyber security experts
• Fully operational 24/7 SOC team
with detect and response
capabilities
• Dedicated cyber awareness
campaigns
• Involvement of IT security in
business processes
Mitigation actions
• Clear road map, milestones, and suc-
cess measures for implementation
of global standard processes with
adequate oversight and assigned
responsibilities
• Prioritisation of initiatives and
successful rollout to pilot countries
• Robust change management
process
OUR BUSINESS
CASE
Investing in education and the training of
our more than 350,000 placemakers is a
fundamental part of the ISS organisation. We
have an opportunity – and an obligation as
one of the world’s largest employers – to im-
prove the lives of our people and help them
achieve their full potential. The ISS employee
value proposition is one of the ways we live
our values: Be who you are. Become what
you want. Be part of something bigger.
In August 2022, in conjunction with ISS
Facilities India Private Limited, ISS an-
nounced a new partnership with Delhi Skill
and Entrepreneurship University (DSEU) to
train students enrolled in the Facilities &
Hygiene Management Program, the first
fully global graduate degree in Facilities
Management (FM).
It was a pleasure for Group CEO Jacob
Aarup-Andersen to officially open the FM
Lab at the DSEU campus, powered by ISS,
which will complement the skills develop-
ment process with tools and technology.
As part of the initiative, ISS has committed
to provide DSEU with curriculum advisory,
faculty & staff development workshops,
internships, and placement support along
with six scholarships to prepare the next
generation in FM.
At ISS, we have ambitious goals for
positively impacting as many people as
possible, and this commitment is visible
at every level of our customer service, en-
vironmental goals, community initiatives,
and dedication to diverse, inclusive, and
belonging workplaces.
Shaping
the next
generation
of Facility
Management
ISS trains students enrolled in
the first fully global graduate
degree in Facilities Management
PARTNERSHIP
Our company provides its employees with
the safety, recognition, and support neces-
sary to thrive, excel at their jobs, and make a
difference either by themselves or as part of
the greater ISS organisation. ISS never limits
its people to who or what they were in the
past; instead promoting exploration of what
they can be in — and give to — the future.
ISS is proud to provide targeted support to
the training of students who have chosen
a career in FM, and we look forward to
welcoming them as our future colleagues.
Our
governance
CORPORATE GOVERNANCE REPORT
PEOPLE MAKE PLACES
2022
Contract Maturity
(expiry)
Major share-
holders



KIRKBI Invest A/S
Longview Partners Limited
Other
OUR GOVERNANCE
Corporate governance
Transparency, constructive
stakeholder dialogue, sound
decision-making processes and
controls are key aspects of our
corporate governance for the
benefit of ISS and our
stakeholders.
Framework
The Board of Directors (the Board) regularly
reviews the Group’s corporate governance
framework and policies in relation to the
Group’s activities, business environment,
corporate governance recommendations and
statutory requirements; and continuously
assesses the need for adjustments.
The rules on the governance of ISS A/S,
including share capital, general meetings,
shareholder decisions, election of members to
the Board, etc., is described in the Articles of
Association which are available here
The Board reviews the Group’s share and capital
structure on an ongoing basis. The Board
believes the present share and capital structure
serves the best interests of both the share-
holders and ISS as it gives ISS the flexibility
to pursue strategic goals, thus supporting
long-term shareholder value combined with
short-term shareholder value by way of ISS’s
dividend policy.
Governance structure
Shareholders
The shareholders of ISS A/S exercise their rights
at the general meeting, which is the supreme
governing body of ISS.
Management
Management powers are distributed between
our Board and our Executive Group Manage-
ment Board (the EGMB). No person serves as a
member of both of these corporate bodies. Our
EGMB carries out the day-to-day management,
while our Board supervises the work of our
EGMB and is responsible for the overall manage-
ment and strategic direction.
The members of the EGMB are the Group CEO
and the Group CFO. Together, they form the man-
agement registered with the Danish Business
Authority. The Group has a wider Executive Group
Management (the EGM), whose members are
eleven Corporate Senior Officers in addition to
the EGMB. The EGM has a number of committees
including a Sustainability Committee addressing
ESG-related matters which are reported and
reviewed by the EGM and the Board as required.
In the review of our governance structure on p.
43, we have outlined the primary responsibilities
of the Board and the EGM as well as 2022
activity by Board committees.
Strengthening the EGM
In 2022, our EGM was further strengthened to
support our execution of the OneISS strategy.
EGM changes and bios are described on p. 46.
Composition of the Board
The Board currently consists of nine members,
six elected by the general meeting and three
elected by and among the employees. Board
members elected by the general meeting stand
for election each year. Changes to the Board
following the annual general meeting on 7 April
2022 are described on p. 44.
Employee representatives are elected on the
basis of a voluntary arrangement regarding
Group representation for employees of ISS World
Services A/S as further described in the Articles of
Association. Employee representatives serve for
terms of four years, and the current term expires
in April 2023. A new election was held early 2023,
and the elected candidates will join our Board
after the annual general meeting in April 2023.
Board evaluation
In 2022, the Board evaluation was conducted
as a self-assessment. The assessment included
input of nine board members and the EGMB
based on an questionnaire, evaluating the
strategy development and implementation; risk
awareness, monitoring and reporting; cooper-
ation with and evaluation process of CEO and
EGM; board composition and dynamics; on- and
off- boarding; meeting structure and operation;
meeting effectiveness; stakeholder relations;
committee and Deputy Chair value contribution;
and evaluation of the Chair.
Governance report
The report includes a transparent descrip-
tion of our governance structure, the main
elements of our internal controls related to
financial reporting and a detailed description
of our position on the Danish Corporate
Governance Recommendations.
Recommendations not fulfilled
• 1.1.3 Publication of quarterly reports
We publish full- and half-year financial results
and Q1 and Q3 trading updates in line with
international industry practice. This reporting
format is selected to balance focus between
short-term performance and long-term value
creation. Investor presentations are held quar-
terly via live webcast/telephone conference.
Major shareholders
Latest major shareholdings reported
by investors to ISS
Gender Balance
(head office(Board))
EGM

British

German
Gender Balance
(head office(Board))
Nationalities EGM
Special competencies
 Strategy and value creation

Leadership of large international
multicultural companies
 Corporate responsibility and sustainability
 Transformational change and
operational alignement
 Finance, accounting and tax
 IT, technology and digitalisation
 Investors and capital markets
 Risk management
 Sales and marketing, incl. complex,
large-scale sales processes
 People development, succession planning,
diversity and remuneration
 International service industry
1)
According to the Danish Business Authority’s guidelines on target
figures, policies and reporting on the gender composition of
management, a gender distribution of 40/60% or the closest
number under 40% is considered equal.
OUR GOVERNANCE
The result was reviewed by the Nomination
Committee and discussed at a Board meeting.
The individual member’s contribution was subse-
quently reviewed as part of individual meetings
held between the Chair and each member.
The outcome of the 2022 Board evaluation
was a continued high level of performance and
improvement across the areas covered by the
questionnaire. Especially, strategy development
and implementation and cooperation with man-
agement had improved. Overall, the Board was
found to achieve its mandate, fulfil its responsibil-
ities, and provide value.
The evaluation identified a few focus areas to
improve the Board’s value-add during 2023: i)
separate sessions on strategic and operational
risks, ii) reviewing onboarding procedure for em-
ployee elected board members and iii) continue
board visits to operations.
For further details, please see response to recom-
mendation 3.5.1 of the 2022 Statutory report on
Corporate Governance.
Competencies and diversity
The Board and the EGM recognise the impor-
tance of promoting diversity at management
levels and have implemented policies regarding
competencies and diversity in respect of Board
and EGMB nominations according to which we
are committed to selecting the best candidate.
Emphasis is placed on:
• experience and expertise;
• diversity of gender and in broader terms; and
• personal characteristics matching ISS’s values
and leadership principles.
As part of our Diversity & Inclusion strategy,
we have defined a target of achieving at least
40% gender balance at all corporate leadership
levels by 2025. The strategy and our initiatives
to improve gender balance is further described
on p. 33. Gender balance at all leadership levels
remains a focus area in 2023.
To meet the new reporting requirements on
gender representation for the Board and other
management levels according to Danish legisla-
tion as of 1 January 2023, the Group has updated
its “Competencies and diversity policy for the
Board of Directors and other management levels
of ISS A/S”. The policy is available here
Board gender balance
The current gender representation among
Board members (elected by the general
meeting) is 33% women and 67% men, which
is considered equal according to the Danish
Business Authority’s applicable guidelines
1)
.
With the inclusion of employee representatives,
56% of our Board is women. The Board aims
to maintain an equal gender representation
of 40/60% among elected board members in
accordance with the Danish Business Authority’s
applicable guidelines.
EGM gender balance
In our EGM, the female representation increased
to 31% in 2022 (2021: 25%) following changes to
the management team to support the execution
of our strategy.
Board diversity
– members elected at the annual general meeting
Gender balance
Nationalities

Women


Men
Danish
EGM
Corporate leadership
EGM diversity

Women (two)

Men (four)

British

US

Swedish

Danish
Gender balance
– target: 40%
Nationalities

Norwegian


Canadian
Australian
Corporate leadership
Nationalities EGM
OUR GOVERNANCE
Assurance
The Group’s external financial reporting is
audited by the independent auditors.
Group Internal Audit (GIA) is responsible for pro-
viding an objective and independent assessment
of the effectiveness and quality of the internal
controls in accordance with the internal audit
plan approved by the Audit and Risk Committee
(ARC). GIA operates under a charter approved by
the Board.
Following the limited travel ability of GIA in 2021
due to Covid-19 restrictions, for 2022 on-site
audits have been prioritised although in limited
circumstances assurance activities continue to
be performed through remote testing.
In 2022, focus has been on:
• Continued strengthening of the GIA team
through recruitment of new members;
• Implementation of a new cloud-based audit
management solution to monitor and reduce
the number of open audit recommendations;
• Execution of our 2022 audit plan providing
broad country level assurance through the
Baseline audit programme and contract level
assurance on our global key accounts through
our Key Account audit programme.
Speak Up (whistleblower)
The Speak Up Policy is supported by a reporting
system operated on a platform from EQS and
available in 21 languages via ISS’s website and
local ISS country websites. The system enables
employees of ISS, business partners and other
stakeholders to report concerns anonymously to
Group Internal Audit.
All business integrity and ethics issues identified
through Speak Up or other sources are handled
by the Business Integrity Committee (BIC) that is
composed of the Group CFO, the Group General
Counsel, the Group People and Culture Officer
and the Head of Group Internal Audit. The BIC
reports to the Audit and Risk Committee on all
matters that have been subject to investigation.
In 2022, the BIC charter was expanded to
cover compliance-related topics along with all
business integrity and ethics issues.
In 2022, the awareness of the Speak Up has
been strengthened through a global communi-
cation plan executed following an update of the
Speak Up policy to align with the requirements
of the EU whistleblower directive. In addition,
the accessibility of the Speak Up system has
been strengthened through the implementation
of a manned phone hotline providing local land
line and toll-free numbers across 35 countries
giving reporters the opportunity to report to an
independent third-party in their native language.
Data ethics
ISS executed a Group Data Ethics Policy (the
policy) in 2021, to ensure compliance with Danish
legislation and ISS’s commitment to secure and
proper management of data. The policy describes
ISS’s approach to data ethics and aims to
encourage our employees and partners, involved
in the use of data, to have a positive and active
involvement in data ethical questions and to raise
concerns ensuring continuous development of
the guiding principles for data ethics.
ISS process data for the purpose of providing
our services, managing our workforce and
properly documenting compliance and delivery
to customers and public authorities. In order
Purpose
The Board has a strong focus on the ISS’s
purpose and has worked continuously on
promoting a good culture and sound values
in 2022. To support an even stronger focus,
the Board has included ESG targets as sep-
arate objectives in the Short-Term-Incentive
Programme, cf. 2022 Remuneration Report.
For purpose and values see also p. 31.
2022 specific matters
• OneISS strategy execution
• Environmental sustainability
• Activating our cultural ambition
• Technology development
• Embedding brilliant operating basics
• Development of segments strategies
• Regional business development
• Turnaround of Deutsche Telekom and France
• Divestment programme execution
• New financial targets and new
capital allocation
• Inflation management
• Covid-19 impact on the business
Recurring matters
The Board transacted various recurring mat-
ters such as: Overall strategy plan Financial
projections, Financial and Dividend Policy,
Remuneration and Sustainability reports,
Group key risks, Internal controls, IT and
information security, Corporate governance,
Diversity, Sustainability, Speak Up Policy,
Remuneration policy, Recommendation of
auditors for election.
to protect the data, processes, and the persons
affected by these activities, the policy is based
on the Charter of Fundamental Rights of the
European Union, addressing self-determination,
human dignity, responsibility, equality and fair-
ness, progressiveness, diversity and inclusion,
and accountability. The policy is mandatory for
all ISS employees and ISS partners worldwide.
Throughout 2022, ISS worked towards integrat-
ing the principles of the policy in existing and
new processes. The focus has been within data
analytics and data science ensuring our use
cases are prepared and utilises our Data Ethics
frameworks. This ensures that use cases within
analytics, data science etc. are prepared in an
ethical, responsible manner reducing the risk of
bias and minimising potential negative impact.
Data ethics are considered in all relevant
initiatives and are included in applicable approval
processes. Awareness and training efforts will be
conducted to generate awareness. Finally, the
policy also establishes governing principles for
the application of data ethics when developing
and deploying data processing technologies
based on AI solutions. These principles are
implemented in order to ensure safe, account-
able, transparent and non-discriminative use of
AI technology in ISS.
The policy as per section 99d in the Danish
Financial Statements Act has been adopted by
the EGM and the Board and is subject to annual
review in line with ISS’s policy standards. The
policy is available here
Key matters transacted
by the Board
Board of Directors Executive Group Management Country leadership
Responsible for the overall management and
strategic direction of the Group, including:
• strategy plan and financial projections
• appointing EGMB members
• supervising the activities of the Group
• reviewing the financial position and capital
resources to ensure that these are adequate
The Board receives a monthly financial reporting
package and is briefed on important matters in between
board meetings.
The Board held 11 meetings in 2022.
Board bios, pp. 44-45
Responsible for the day-to-day management
of the Group, including:
• developing and implementing strategic
initiatives and Group policies
• designing and developing the organisa
-
tional structure
• monitoring Group performance
• evaluating and executing investments,
acquisitions, divestments and large
customer contracts
• assessing whether the Group has
adequate capital resources and liquidity
to meet its existing and future liabilities
• establishing procedures for accounting,
IT organisation, risk management and
internal controls
• EGM has established a number of
committees, including Sustainability,
Remuneration, IT & Digitalisation, Busi
-
ness Integrity, D&I, Disclosure, Product &
Platform and Transaction Committees.
EGM bios, pp. 46-47
Responsible for the implementa
-
tion of the OneISS strategy and
business model on country level
and managing the business in
accordance with Group policies
and procedures as well as local
legislation and practice of each
country, including managing
operations in their market.
Country leadership teams are set
out under each relevant country at
www.issworld.com
2022 committee activity
Audit and Risk Committee
Held 7 meetings in 2022 and continued its
focus on:
• Evaluating the external financial reporting,
significant accounting policies as well as
significant accounting estimates and judge
-
ments related to items such as impairment
tests, divestments, deferred tax as well as
revenue and related customer receivables
• Reviewing and monitoring the Group’s
risk management, internal controls, Speak
Up (whistleblower) system and business
integrity matters
• Monitoring the Group internal audit function
• Evaluating the Financial Policy, the Dividend
Policy and the Group Tax Policy
• Monitoring and considering the relationship
with the independent auditors, reviewing
the audit process and the auditors’ long-
form audit report, and recommending on
appointment of auditors
Remuneration Committee
Held 7 meetings in 2022 and continued its focus on:
• Assisting in reviewing the remuneration policy and
guidelines on incentive pay
• Recommending the remuneration of Board and EGMB
members and approving remuneration of EGM
Nomination Committee
Held 8 meetings in 2022 and continued its focus on:
• Assisting in ensuring that appropriate plans and
processes are in place for the nomination of
candidates to the Board and the EGMB
• Evaluating the composition of the Board and the EGMB
• Recommending nomination or appointment of Board,
EGMB and board committee members
Transaction Committee
Held 3 meetings in 2022 and continued its focus on:
• Reviewing new M&A strategy
• Reviewing and making recommendations on certain
large acquisitions, divestments and customer contracts
• Following and considering large transactions, includ
-
ing reviewing pipeline and ISS’s procedures
• Reviewing material new financing, refinancing or
material variation of existing financing and proposals
for equity or debt issuance
Board of Directors
Executive Group Management (EGM)
Country leadership
Audit and Risk
Committee
Remuneration
Committee
Nomination
Committee
Transaction
Committee
Executive Group Management Board (EGMB)
OUR GOVERNANCE
Our governance structure

MEET THE
GOVERNANCE
Niels Smedegaard (1962)
Chair
Gender: Male
First elected (until): April 2021 (2023)
ISS committees
• Nomination committee (C)
• Remuneration committee
• Transaction committee
Board and management positions
• Molslinjen A/S (C)
• Bikubenfonden (C)
• Abacus Medicine A/S (C, RCM, NCM)
• Falck A/S (C, NRCC)
• DSV Panalpina A/S (BM, ACM)
• TT Club Mutual Insurance Ltd. (BM)
• UK P&I Club (BM)
• Frederiksbergfonden (BM)
Special competencies
• International service industry
• Strategy and value creation
• Leadership of large international
multicultural companies
• Transformational change and
operational alignment
• IT, technology and digitisation
• Finance, accounting and tax
• Investors and capital markets
Lars Petersson (1969)
Deputy Chair
Gender: Male
First elected (until): April 2022 (2023)
ISS committees
• Transaction committee
Board and management positions
• CEO of VELUX Group
• Dovista A/S (BM)
Special competencies
• Strategy and value creation
• Leadership of large international
multicultural companies
• Transformational change and
operational alignment
• Risk management
• Corporate responsibility and
sustainability
Kelly Kuhn (1965)
Board member
Gender: Female
First elected (until): April 2021 (2023)
ISS committees
• Nomination committee
• Remuneration committee
Board and management positions
• CWT (Special advisor)
• McChrystal Group (Strategic advisor)
• SSP Group plc (BM, ACM, NCM)
Special competencies
• International service industry
• Strategy and value creation
• Leadership of large international
multicultural companies
• Transformational change and
operational alignment
• People development,
succession planning, diversity
and remuneration
• Sales and marketing, including
complex large-scale sales processes
• Corporate responsibility and
sustainability
Søren Thorup Sørensen (1965)
Board member
Gender: Male
First elected (until): April 2020 (2023)
ISS committees
• Audit and risk committee
Board and management positions
• KIRKBI A/S, (CEO, BM and/or
management in 6 subsidiaries)
• LEGO A/S (DC, ACC)
• Landis+Gyr AG (BM)
• Koldingvej 2, Billund A/S (BM)
• Merlin Entertainments Limited
(BM, ACC, RCM (and BM of 4
affiliated companies))
• Ole Kirk´s Foundation (BM)
• ATTA Foundation (BM)
Special competencies
• Strategy and value creation
• People development, succession
planning, diversity and remuneration
• Finance, accounting and tax
• Investors and capital markets
• Risk management
• Corporate responsibility and
sustainability
Board of Directors
Denmark
Sweden
Denmark
USA
Uruguay
C: Chair, Board of Directors
DC: Deputy Chair, Board of Directors
BM: Member, Board of Directors
SBM: Supervisory Board Member
ACC: Audit Committee Chair
ACM: Audit Committee Member
NCM: Nomination Committee Member
RCM: Remuneration Committee Member
NRCC: Nomination and Remuneration
Committee Chair
CCGCM:
Compensation and Corporate
Governance Committee Member
GCM: Governance Committee Member
Full bios are available here
Board changes
At the annual general meeting on
7 April 2022:
• Lars Petersson was appointed
as new Board member
• Previous Deputy Chair Henrik
Poulsen stepped down
• The Board constituted itself by
electing Niels Smedegaard as
Chair and Lars Petersson as
Deputy Chair
• As of end June 2022, Valerie
Beaulieu stepped down as
a member of the Board
Meeting attendance Board
Audit
and Risk
Remune-
ration
Trans-
action
Nomina-
tion
Niels Smedegaard, Chair 11/11 6/7 3/3 7/8
Lars Petersson, Deputy chair
1)
8/10 2/2
Cynthia Mary Trudell 11/11 7/7 8/8
Kelly Kuhn 11/11 7/7 8/8
Søren Thorup Sørensen 8/11 7/7
Ben Stevens 11/11 7/7 3/3
Elsie Yiu
(
E
)
9/11
Nada Elboayadi
(
E
)
11/11
Signe Adamsen
(
E
)
2)
6/6
Left the Board in 2022:
Joseph Nazareth
(
E
)
2)
3/5
Valerie Beaulieu
3)
4/5 2/3 1/1
Henrik Poulsen
1)
1/1 1/1
All board members are independent, except for the employee representatives
1)
Joined/left the Board of Directors/Committee on 7 April 2022
2)
Joined/Left the Board of Directors on 1 July 2022
3)
Left the Board of Directors/Committee on 30 June 2022
OUR GOVERNANCE
Ben Stevens (1959)
Board member
Gender: Male
First elected (until): April 2016 (2023)
ISS committees
• Audit and risk committee (C)
• Transaction committee (C)
Board and management positions
• PageGroup plc. (ACC, NCM, RCM)
Special competencies
• Strategy and value creation
• Leadership of large international
multicultural companies
• IT, technology and digitisation
• Finance, accounting and tax
• Investors and capital markets
• Risk management
Cynthia Mary Trudell (1953)
Board member
Gender: Female
First elected (until): April 2015 (2023)
ISS committees
• Nomination committee
• Remuneration committee (C)
Board and management positions
• Canadian Tire Corporation Limited
(BM and chair of the management
resources and compensation
Committee, GCM)
• RenaissanceRe Holdings Ltd.
(BM, CCGCM)
Special competencies
• Strategy and value creation
• Leadership of large international
multicultural companies
• Transformational change and
operational alignment
• People development, succession
planning, diversity and remuneration
• Sales and marketing, including
complex, large-scale sales processes
• IT, technology and digitisation
• Corporate responsibility and
sustainability
Nada Elboayadi (1982)
Employee representative
Gender: Female
First joined (until): April 2019 (2023)
Joined ISS: 2006
Head of Global Big Data, Global
Support Solutions since 2018
Special competencies
• International service industry
• IT, technology and digitisation
Signe Adamsen (1967)
Employee representative
Gender: Female
First joined (until): July 2022 (2023)
Joined ISS: 2011
Group Workplace Development
Director
Special competencies
• International service industry
• Sales & Marketing, including com-
plex, large-scale sales processes
Elsie Yiu (1975)
Employee representative
Gender: Female
First joined (until): April 2019 (2023)
Joined ISS: 2015
Group Vice President and APAC Head
of Legal since 2018
Special competencies
• International service industry
• Risk management
UK
USA
USA
Uruguay
Hong Kong
Hungary
Denmark
Denmark
OUR GOVERNANCE 
Executive Group Management
MEET THE
Jacob Aarup-Andersen
Group CEO
– since September 2020
Joined ISS: 2020
Member of the Executive Group Man-
agement Board of ISS A/S registered
with the Danish Business Authority.
Board positions
• Skandinaviska Enskilda Banken AB
(publ) (member)
Kasper Fangel
Group CFO
– since December 2020
Joined ISS: 2009
Member of the Executive Group Man-
agement Board of ISS A/S registered
with the Danish Business Authority.
Corinna Refsgaard
Group Chief People &
Culture Officer
– since December 2018
Joined ISS: 2017
Denmark
UK
USA
Denmark
Denmark
Germany Hong Kong
Hungary
UK
USA
Troels Bjerg
Group COO
– since March 2018
Joined ISS: 2009
Celia Liu
CEO Central & Southern Europe
– since January 2022
Joined ISS: 2019
Liz Benison
CEO UK&I
– since May 2021
Joined ISS: 2021
Strengthening
the EGM
We have a strong management team with
industry and ISS experience in place to
deliver the next phase of the OneISS journey.
In 2022, the following changes were made to
the EGM:
• On 1 January 2022, Celia Liu took up the
position as CEO Central & Southern Europe
• On 1 January 2022, Carl-Fredrik Langard-Bjor
took up the position as CEO Northern
Europe and joined the EGM
• On 1 June 2022, Sam Hockman took up the
position as CEO Global Key Accounts and
joined the EGM
• On 1 July 2022, Susanne Jørgensen
succeeded Dan Ryan as CEO Americas,
who left ISS end of July 2022, and joined
the EGM
• On 31 December 2022, Andrew Price
stepped down from the EGM
• On 1 January 2023, Agostino Renna took
up the position as Chief Commercial Officer
and joined the EGM
Full bios are available here
Norway
New Zealand
OUR GOVERNANCE
Denmark
Denmark
UK
USA
Canada
China
Australia
Germany Hong Kong
Hungary
Carl-Fredrik Langard-Bjor
CEO Northern Europe
– since January 2022
Joined ISS: 2011
Susanne Jørgensen
CEO Americas
– since July 2022
Joined ISS: 2017
Scott Davies
CEO Asia Pacific
– since January 2021
Joined ISS: 2012
Markus Sontheimer
Chief Information and Digital
Officer (CIDO)
– since June 2021
Joined ISS: 2021
Bjørn Raasteen
Group General Counsel
– since January 2005
Joined ISS: 1999
Sam Hockman
CEO Global Key Accounts
– since June 2022
Joined ISS: June 2022
Agostino Renna
Group CCO
– since January 2023
Joined ISS: January 2023
Full bios are available here
CASE
ISS serves over one million meals a day in
hospitals, schools, and business restaurants
around the world. With rising prices on many
food items, we believe that the current situa-
tion represents a watershed moment where
we can both handle inflationary pressure and
fast track sustainable change.
In the immediate term, ISS has taken a
range of measures to mitigate the impacts of
food cost inflation, avoid disruptions for our
customers, and ensure that we continue to
provide high quality and safe food services.
In ISS food operations, our on-site chefs and
teams are focused on re-engineering menus
and recipes by using fresh, local, and best value
items whilst guaranteeing that our dishes are
as delicious and nutritious as the originals.
We are also working with our supply partners to
conduct deep dive reviews of our supply chain,
eliminating costs and bottlenecks across sourc
-
ing, production, packaging, and logistics, whilst
maintaining our high food safety standards.
Circular micro-initiatives can play
an increasingly important role
A circular mindset should not only encom-
pass what we eat, but also how we produce.
In our conversations with customers around
their workspace, we always focus on the
benefits of sustainability initiatives.
ISS has sites around the world where
customers grow their own vegetables,
host beehives, grew mushrooms using
used coffee granules, or even keep sheep.
These may be micro-initiatives, but with
supply chains under pressure, along with
the increased market volatility, they can
play an increasingly important role towards
climate-smart food production.
Innovation as a game changer
In today’s world, digital innovation is key
to accelerating sustainability, and the food
service sector is certainly no exception.
Technology helps overcome challenges
linked to production, supply, waste, and cost
management. While our business is firmly
reliant on our exceptional people, digital
solutions have been – and will increasingly
be – a way to drive efficiency and quality.
Our food waste reduction ambitions are
supported by our global partnership with
Winnow, a commercial food waste solution
provider that uses AI technology to manage
food waste. ISS have deployed solutions
rolled out in over 290 of our locations,
globally and based on current run rate are
on track to save:
• 2,645 tonnes CO
2
• 1.5 million meals
• 615 tonnes food waste
Accelerating our
food waste efforts
ISS has invested in technology
to identify and display the CO
2
emissions of menu items
ENVIRONMENTAL SUSTAINABILITY
Financial
statements
Consolidated financial statements
Primary financial statements 51
Statement of profit or loss 51
Statement of comprehensive income 51
Statement of cash flows 52
Statement of financial position 52
Statement of changes in equity 53
Significant changes and events 54
Estimates and judgements 55
1 Operating profit 56
1.1 Segments 57
1.2 Revenue 59
1.3 Employee costs 61
1.4 Other income and expenses, net 61
2 Operating assets, liabilities
and free cash flow 62
2.1 Trade receivables and credit risk 63
2.2 Other receivables 64
2.3 Other liabilities 64
2.4 Changes in working capital 64
2.5 Provisions, contingent assets and liabilities, and guarantees 65
2.6 Right-of-use assets and property, plant and equipment 68
2.7 Free cash flow 69
3 Strategic investments and divestments 70
3.1 Intangible assets 71
3.2 Impairment tests 72
3.3 Acquisitions 76
3.4 Divestments, assets held for sale
and discontinued operations 77
4 Capital structure 79
4.1 Equity 80
4.2 Loans and borrowings 82
4.3 Financial income and expenses 83
4.4 Financial risk management 84
4.5 Interest rate risk 85
4.6 Liquidity risk 86
4.7 Currency risk 87
5 Tax 90
5.1 Income tax 91
5.2 Deferred tax 92
6 Remuneration 93
6.1 Management remuneration 94
6.2 Share-based payments 94
7 Other 97
7.1 Pensions and similar obligations 97
7.2 Hyperinflation in Turkey 100
7.3 Related parties 102
7.4 Fees to auditors 102
7.5 Subsequent events 102
8 Basis of
preparation 103
8.1 General accounting policies 103
8.2 Change in accounting policies 104
8.3 New accounting regulations 104
8.4 Group companies 105
8.5 Definitions 106
1 January – 31 December
(
DKKm
)
Note 2022 2021
Revenue 1.1, 1.2
76,538 71,363
Employee costs 1.3
(
48,329
)
(
46,369
)
Consumables
(
6,598
)
(
5,020
)
Other operating expenses
(
17,247
)
(
16,438
)
Depreciation and amortisation 2.6, 3.1
(
1,517
)
(
1,760
)
Operating profit before other items 2,847 1,776
Other income and expenses, net 1.4 57 439
Goodwill impairment 3.2 -
(
450
)
Amortisation/impairment of brands and customer contracts 3.1
(
69
)
(
64
)
Operating profit 1.1 2,835 1,701
Financial income 4.3 207 41
Financial expenses 4.3
(
596
)
(
697
)
Profit before tax 2,446 1,045
Income tax 5.1, 5.2
(
441
)
(
509
)
Net profit from continuing operations 2,005 536
Net profit from discontinued operations 3.4 131 101
Net profit 2,136 637
Attributable to:
Owners of ISS A/S
2,058 615
Non-controlling interests 78 22
Net profit 2,136 637
Earnings per share, DKK
Basic earnings per share
(
EPS
)
4.1
11.1 3.3
Diluted earnings per share 4.1 11.0 3.3
Earnings per share for continuing operations, DKK
Basic earnings per share
(
EPS
)
4.1
10.4 2.8
Diluted earnings per share 4.1 10.3 2.8
1 January – 31 December
(
DKKm
)
Note 2022 2021
Net profit
2,136 637
Items that will not be reclassified to profit or loss:
Remeasurement gain/
(
loss
)
, defined benefit plans 7.1 208 1,145
Asset ceiling, defined benefit plans 7.1
(
43
)
(
1,080
)
Tax 5.2
(
53
)
(
11
)
Items that may be reclassified to profit or loss:
Foreign exchange adjustments of foreign entities 4.1
(
102
)
297
Fair value adjustments of net investment hedges 4.1, 4.7
(
43
)
(
191
)
Recycling of accumulated foreign exchange adjustments on country exits
4.1
(
33
)
(
7
)
Hyperinflation restatement of equity at 1 January 7.2 814 -
Tax 4.1 10 42
Other comprehensive income 758 195
Comprehensive income 2,894 832
Attributable to:
Owners of ISS A/S
2,498 825
Non-controlling interests 396 7
Comprehensive income 2,894 832
FINANCIAL STATEMENTS
Statement of profit or loss Statement of comprehensive income
Primary financial
statements
At 31 December
(
DKKm
)
Note 2022 2021
Operating profit before other items
2,847 1,776
Operating profit before other items from discontinued operations 3.4 13 37
Depreciation and amortisation 2.6, 3.1 1,517 1,760
Non-cash items related to hyperinflation 7.2
(
51
)
-
Share-based payments 80 62
Changes in working capital 2.4 444 1,056
Changes in provisions, pensions and similar obligations
(
665
)
(
435
)
Other expenses paid
(
31
)
(
74
)
Interest received 87 40
Interest paid
(
486
)
(
473
)
Income tax paid 5.1
(
422
)
(
528
)
Cash flow from operating activities 3,333 3,221
Acquisition of businesses 3.3
(
325
)
(
526
)
Divestment of businesses 3.4 587 1,191
Acquisition of intangible assets and property, plant and equipment
(
809
)
(
628
)
Disposal of intangible assets and property, plant and equipment 30 42
Acquisition of financial assets, net
(
29
)
(
6
)
Cash flow from investing activities
(
546
)
73
Repayment of bonds 4.2 -
(
1,577
)
Repayment of lease liabilities 4.2
(
865
)
(
947
)
Other financial payments, net 4.2
(
58
)
(
472
)
Transactions with non-controlling interests
(
7
)
164
Cash flow from financing activities
(
930
)
(
2,832
)
Total cash flow 1,857 462
Cash and cash equivalents at 1 January 3,428 2,742
Total cash flow 1,857 462
Foreign exchange adjustments
(
71
)
224
Cash and cash equivalents at 31 December 4.6 5,214 3,428
Free cash flow 2.7 1,734 1,735
At 31 December
(
DKKm
)
Note 2022 2021
Assets
Intangible assets 3.1, 3.2 23,920 22,739
Right-of-use assets 2.6 2,403 2,445
Property, plant and equipment 2.6 917 931
Deferred tax assets 5.2 912 790
Other financial assets 512 457
Non-current assets 28,664 27,362
Inventories 231 177
Trade receivables 2.1 10,996 10,406
Tax receivables 173 185
Other receivables 2.2 1,695 1,582
Cash and cash equivalents 4.6 5,214 3,428
Assets held for sale 3.4 32 515
Current assets 18,341 16,293
Total assets 47,005 43,655
Equity and liability
Equity attributable to owners of ISS A/S 10,156 7,583
Non-controlling interests 659 206
Total equity 4.1 10,815 7,789
Loans and borrowings 4.2 15,945 16,094
Pensions and similar obligations 7.1 1,185 1,351
Deferred tax liabilities 5.2 1,178 976
Provisions 2.5 465 755
Non-current liabilities 18,773 19,176
Loans and borrowings 4.2 963 888
Trade and other payables 6,952 5,657
Tax payables 172 174
Other liabilities 2.3 8,714 8,730
Provisions 2.5 606 961
Liabilities held for sale 3.4 10 280
Current liabilities 17,417 16,690
Total liabilities 36,190 35,866
Total equity and liabilities 47,005 43,655
FINANCIAL STATEMENTS
Statement of cash flows Statement of financial position
1 January – 31 December
Attributable to owners of ISS A/S
(
DKKm
)
Note
Share
capital
Treasury
shares
Retained
earnings
Proposed
dividends
Translation
reserve Total
Non-
controlling
interests
Total
equity
2022
Equity at 1 January
185
(
191
)
9,035 -
(
1,446
)
7,583 206 7,789
Net profit - - 1,668 390 - 2,058 78 2,136
Other comprehensive income 4.1 - - 148 - 292 440 318 758
Comprehensive income - - 1,816 390 292 2,498 396 2,894
Share-based payments 6.2 - - 80 - - 80 - 80
Settlement of vested PSUs - 6
(
6
)
- - - - -
Non-controlling interests 4.1 - -
(
5
)
- -
(
5
)
57 52
Transactions with owners - 6 69 - - 75 57 132
Changes in equity - 6 1,885 390 292 2,573 453 3,026
Equity at 31 December 185
(
185
)
10,920 390
(
1,154
)
10,156 659 10,815
2021
Equity at 1 January
185
(
191
)
8,124 -
(
1,602
)
6,516 29 6,545
Net profit - - 615 - - 615 22 637
Other comprehensive income 4.1 - - 54 - 156 210
(
15
)
195
Comprehensive income - - 669 - 156 825 7 832
Share-based payments 6.2 - - 62 - - 62 - 62
Non-controlling interests 4.1 - - 180 - - 180 170 350
Transactions with owners - - 242 - - 242 170 412
Changes in equity - - 911 - 156 1,067 177 1,244
Equity at 31 December 185
(
191
)
9,035 -
(
1,446
)
7,583 206 7,789
1)
FINANCIAL STATEMENTS
Statement of changes in equity
1)
At 31 December 2022, DKK 17 million (2021: DKK 52 million) of accumulated foreign exchange gains related to discontinued operations.
Macroeconomic environment
In 2022, we saw significant macroeconomic
uncertainties (among others due to the
Russia-Ukraine war) leading to increased
interest and inflation rates. These develop-
ments have impacted certain accounting
estimates and judgements, including
assumptions made by management, most
significantly in relation to:
• Impairment tests, note 3.2
• Pensions and similar obligations,
note 7.1
• Onerous contracts, note 2.5
Russia-Ukraine war
In March 2022, we divested our busi-
ness in Russia as part of the strategic
divestment programme. In addition,
ISS has no material activities in Ukraine.
Consequently, the Russia-Ukraine war did
not have a material impact on the results
of the Group’s operations and financial
position in 2022. However, the impact
of the war led to increased operating
costs due to generally increased inflation
rates which were in all material respects
mitigated through price increases in our
customer contract portfolio.
Divestment programme Hyperinflation in Turkey
In 2022, the strategic divestment pro-
gramme was successfully completed as
we divested Taiwan, Russia and Portugal
as well as two business units in Hong
Kong and the UK. As a result, a net gain of
DKK 201 million was recognised in profit
or loss in 2022.
See 3.4, Divestments, assets held for sale
and discontinued operations for further
details.
Effective 1 January 2022, the Group
implemented IAS 29, Financial Reporting
in Hyperinflationary Economies as the
cumulative three-year inflation in Turkey
exceeded 100%.
As a result, the financial statements of ISS
Turkey for 2022 have been restated based
on changes in the general price index and
by applying end-of period exchange rates.
Comparative figures were not restated.
The implementation did not have a materi-
al impact on the Group’s key financial KPIs.
Impact and applied accounting policies are
disclosed in 7.2, Hyperinflation in Turkey.
FINANCIAL STATEMENTS
Significant changes
and events
In 2022, the Group's performance
and financial position was affected
by the significant changes and
events highlighted below. A detailed
review of the Group's performance is
provided in the Management's Review
on pp. 15-19.
Note Significant estimates and judgements Estimate/Judgement Impact
1.2 Revenue • Revenue recognition – impact from contract modifications and variable consideration Estimate/Judgement
• Gross or net presentation Judgement
2.2 Other receivables • Capitalisation of transition and mobilisation costs Judgement
2.5 Provisions • Onerous contracts – future profitability Estimate/Judgement
• Assumptions for claims, disputes and legal proceedings Judgements
2.6 Right-of-use assets • Lease term, including extension options mainly related to buildings Judgements
3.1 Intangible assets • Cloud-based arragements – assessment of control Judgements
• Capitalisation of configuration and customisation costs for software Judgements
3.2 Impairment tests • Key assumptions in impairment test of goodwill and other intangible assets Estimate
5.2 Deferred tax • Recognition of deferred tax assets – future taxable profit available Estimate
• Uncertain tax positions – estimate of the amount required to settle the obligation Estimate/Judgement
7.1 Pensions and
similar obligations
• Assumptions for actuarial gains and losses, e.g. inflation and discount rates,
future salary and pension increases
Estimate
Low
Medium
High
•
••
•••
FINANCIAL STATEMENTS
The preparation of the Group’s consolidated
financial statements required management to
make judgements, estimates and assumptions
that affected the reported amounts of assets,
liabilities, income and expenses, the accom-
panying disclosures, including contingent
liabilities. Uncertainty about these assumptions
and estimates could result in outcomes that
require a material adjustment to the carrying
amount of assets or liabilities in future periods.
Estimates and assumptions are reviewed on an
ongoing basis and have been prepared taking
macroeconomic developments into consid-
eration, but still ensuring that one-off effects
which are not expected to exist in the long
term do not affect estimation and determina-
tion of these key factors, including discount
rates and expectations for the future.
The table to the right provides an overview of
the Group's significant accounting estimates
and judgements and the significance of impact
on the consolidated financial statements.
Estimates and judgements
In this section:
1.1 Segments
1.2 Revenue
1.3 Employee costs
1.4 Other income and
expenses, net
Our cost base
Our revenue base
Employee costs
Portfolio
Projects and
above-base
51%
82%
66%
71
DKKbn
71%
18%
29%
Key Account
share
Key accounts
IFS
Other
76.5
DKKbn
1.2
Revenue
76.5
DKKbn
Self-delivery
model
73.7
DKKbn
1)
Group revenue
1)
Group revenue
1)
Total operating costs
FINANCIAL STATEMENTS
1 Operating profit
ISS is a leading, global provider of integrated
facility service (IFS) to key account customers
and the absolute leader in cleaning. With
operations in 60+ countries of which 30+ are
core self-delivery countries, we have a strong
global footprint.
In recent years, we have successfully trimmed
our business. Today, we have a global platform,
and the growth agenda will be focused on
providing IFS to key accounts in three prioritised
segments; office-based, production-based
and healthcare. Our core service offering to
customers consists of cleaning, food, technical
and workplace services.
In 2022, revenue was DKK 76,538 million. Reve-
nue from key accounts increased to 71% (2021:
69%) of Group revenue and generated higher
organic growth than non-key accounts. IFS share
of revenue has consistently increased over the
last decade and comprised 51% in 2022.
The majority of revenue comprises portfolio
revenue which is contractually committed at
the inception of the contract and recurring.
The remaining revenue is demanded on a
non-recurring basis and agreed as separate
transactions.
Portfolio revenue grew organically by 10%, pos-
itively impacted by price increases to offset the
rising cost inflation. Revenue from projects and
above-base work was in line with 2021 despite
a decline in deep-cleaning and disinfection
services.
Operating profit before other items was DKK
2,876 million for an operating margin of 3.8%
excluding impact from IAS 29 (2021: 2.5%).
Our business model is based on self-delivery of
our core services by our placemakers – our most
important resource. As a result, we incur a sig-
nificant amount of employee costs to generate
revenue. In 2022, employee costs comprised
66% of total operating costs, and remained at
the level of 2021.
Our strategic focus
– IFS for key accounts
– high level of recurring revenue
– self-delivery by our placemakers
1)
1)
1)
(
DKKm
)
Northern
Europe
Central &
Southern
Europe
Asia &
Pacific
Ameri-
cas
Other
coun-
tries
Total
seg-
ments
Unal-
located/
elimination
Total
Group
2022
1)
Revenue, excl. IAS 29
2)
28,694 24,538 14,012 8,585 606 76,435 (51) 76,384
Revenue 28,694 24,692 14,012 8,585 606 76,589 (51) 76,538
Depreciation and amortisation (557) (575)
(
147
)
(
97
)
(
4
)
(
1,380
)
(
137
)
(
1,517
)
Operating prot before other
items, excl. IAS 29
2)
1,519 1,108 882 445 27 3,981
(
1,105
)
2,876
Operating profit before
other items 1,519 1,079 882 445 27 3,952 (1,105) 2,847
Operating margin
5.3% 4.4% 6.3% 5.2% 4.5% 5.2% - 3.7%
Operating margin, excl. IAS 29 5.3% 4.5% 6.3% 5.2% 4.5% 5.2% - 3.8%
Other income and expenses, net 45
(
13
)
156
(
124
)
- 64
(
7
)
57
Amortisation/impairment of
brands and customer contracts
(
16
)
(
27
)
(
4
)
(
22
)
-
(
69
)
-
(
69
)
Operating profit 1,548 1,039 1,034 299 27 3,947 (1,112) 2,835
2021
Revenue 27,675 23,585 12,381 7,141 626 71,408
(
45
)
71,363
Depreciation and amortisation
(
659
)
(
581
)
(
212
)
(
109
)
(
3
)
(
1,564
)
(
196
)
(
1,760
)
Operating profit before
other items 1,290 584 735 393 16 3,018
(
1,242
)
1,776
Operating margin
4.7% 2.5% 5.9% 5.5% 2.6% 4.2% - 2.5%
Other income and expenses, net
(
2
)
431
(
2
)
78 - 505
(
66
)
439
Goodwill impairment -
(
450
)
- - -
(
450
)
-
(
450
)
Amortisation/impairment of
brands and customer contracts
(
21
)
(
11
)
(
6
)
(
26
)
-
(
64
)
-
(
64
)
Operating profit 1,267 554 727 445 16 3,009
(
1,308
)
1,701
Revenue
Operating profit
1)
1)
Effective 1 January 2022, the Group reorganised its European business into the regions Northern Europe and Central & Southern Europe
consistent with the Group’s internal management and reporting structure. As a result, the Netherlands, Belgium & Luxembourg, Poland and
Lithuania were moved from Central & Southern Europe (previously Continental Europe) to Northern Europe. Asia & Pacific and Americas
remained unchanged. Comparative figures for 2021 were restated accordingly.
2)
Effective 1 January 2022, ISS Turkey was restated for hyperinflation in accordance with IAS 29, cf. 7.2, Hyperinflation in Turkey.
1)
Based on total segments
FINANCIAL STATEMENTS
1.1.1 Operating segments
ISS is a leading, global provider of workplace
and facility service solutions operating in 30+
countries. Operations are generally managed
based on a geographical structure in which
countries are grouped into regions.
The regions have been identified based on a key
principle of grouping countries that share market
conditions and cultures. Countries where we do
not have a full country-based support structure,
which are managed by our Global Key Account
Organisation, are combined in a separate
segment “Other countries”.
An overview of the grouping of countries into
regions is presented in 8.4, Group companies.
Northern
Central & Southern
Asia & Pacific
Americas
Other
Northern
Central & Southern
Asia & Pacific
Americas
Other
38%
32%
18%
11%
1%
39%
26%
26%
08%
1%
1.1 Segments
Regional
Revenue
Operating
profit
76.5
DKKbn
3.9
DKKbn
Revenue
(
DKKm
)
2022 2021
UK & Ireland 10,396 10,634
US & Canada 6,387 5,298
Switzerland 5,729 5,212
Germany 5,556 5,429
Australia & New Zealand 4,868 4,349
Spain 4,122 4,420
Norway 4,016 3,181
Denmark (country of domicile) 3,169 3,661
Other countries
  1)
32,295 29,179
Total 76,538 71,363
Group revenue per country is disclosed on p. 119.
Revenue
Non-current assets
14%
8%
7%
7%
6%
5%
5%
4%
44%
11%
9%
8%
6%
5%
5%
4%
4%
48%
UK & Ireland
US & Canada
Switzerland
Germany
Australia & NZ
Spain
Norway
Denmark
Other countries
UK & Ireland
US & Canada
Switzerland
Denmark
Norway
Australia & NZ
Spain
Germany
Other countries
Revenue
Non-current assets
76.5
DKKbn
27.8
DKKbn
1)
Including unallocated items and eliminations.
1)
2)
Excluding deferred tax assets.
Non-current assets 
2)
(
DKKm
)
2022 2021
UK & Ireland 3,052 3,275
US & Canada 2,492 2,362
Switzerland 2,134 1,723
Denmark
(
country of domicile
)
1,737 1,804
Norway 1,434 1,501
Australia & New Zealand 1,396 1,411
Spain 1,196 1,178
Germany 997 989
Other countries
  1)
13,314 12,329
Total 27,752 26,572
FINANCIAL STATEMENTS
1.1.2 Geographical distribution
1.1 Segments (continued)
Accounting policy
The segmentation is consistent with the Group’s
strategic management and reporting structure
applied by the Executive Group Management, and
excludes discontinued operations. Segments are
managed primarily based on business perfor-
mance measured by Operating profit.
Segment revenue and costs comprise items that
are directly attributable to the individual seg-
ments. Unallocated items mainly consist of rev-
enue and cost relating to the Group’s corporate
functions. Decisions on financing (financial income
and expenses) as well as tax planning (income tax)
are managed at Group level and are therefore not
managed and allocated to segments.
Segment revenue is presented including internal
revenue which due to the nature of the business
is insignificant and therefore not disclosed. Trans-
actions between operating segments are made
on market terms.
The geographical distribution of segment revenue
and non-current assets is based on the geograph-
ical location of the individual subsidiary from
which the sales transaction originates. Significant
countries are defined as countries representing
more than 5% of Group revenue as well as the do-
micile country, Denmark. No customer comprise
more than 10% of Group revenue.
(
DKKm
)
2022 2021
Customer category
Key accounts 54,666 49,238
Large and medium 17,387 17,958
Small and route-based 4,485 4,167
Total 76,538 71,363
Customer segments
Office-based 30,647 n/a
Production-based 18,094 n/a
Healthcare 10,046 n/a
Other 17,751 n/a
Total 76,538 n/a
Core services
Cleaning 34,693 34,416
Technical 16,640 16,226
Food 10,170 7,535
Workplace, incl. Other 15,035 13,186
Total 76,538 71,363
Customer segments
Customer category
Core services
Core
segments
Customers
Core
services
76.5
DKKbn
76.5
DKKbn
76.5
DKKbn
(
DKKm
)
2022 2021
Portfolio revenue 62,872 57,479
Projects and above-base work 13,666 13,884
Total 76,538 71,363
FINANCIAL STATEMENTS
1.2.1 Performance obligations
Revenue is generated from rendering of
workplace and facility service solutions. Our
services are provided at the customer's site on
a daily basis continuously over the term of the
contract. The customer simultaneously receives
and consumes the benefits provided by the
Group. Thus, performance obligations are
satisfied over time.
Revenue is split between portfolio and projects
and above-base work, with the vast majority
stemming from portfolio revenue, approx. 82%
(2021: 81%).
1.2.3 Costs to fulfill a contract
The size and complexity of key account contracts
often requires ISS to incur significant transition
and mobilisation costs before service delivery
commences in order to be able to fulfill the
performance obligations under the con-
tracts.
Transition and mobilisation costs comprise
costs, directly related to launching certain large
long-term contracts such as transfer of employ-
ees from previous suppliers, site due diligence,
planning and developing service plans. The cost
includes internal direct costs and external costs,
e.g. to consultants.
At 31 December 2022, capitalised transition and
mobilisation costs amounted to DKK 36 million
(2021: DKK 62 million). No significant additional
costs were capitalised in 2022.
Capitalised transition and mobilisation costs are
presented in 2.2, Other receivables.
1.2 Revenue
1.2.2 Disaggregation of revenue
Aligned with our strategy to focus on key
accounts in three prioritised segments, where
we deliver our core services, we disaggregate
revenue based on:
• customer category;
• customer segment;
• services; and
• geographical region.
We believe that these best depict how the nature,
amount, timing and uncertainty of our revenue
and cash flows are affected by economic factors.
Portfolio revenue comprises revenue from
contracts with customers that is contractually
agreed (committed) at inception and relates
to services that we are obligated to render on
a recurring basis over the term of the con-
tract. Revenue from projects and above-base
work (e.g. capital projects) is demanded on a
non-recurring basis and agreed separately with
the customer.
Disaggregation of revenue based on geographical
region is disclosed in 1.1, Segments.
Key accounts
Large and medium
Small and
route-based
Office-based
Production-based
Healthcare
Other
Cleaning
Technical
Food
Workplace,
incl. Other
71%
23%
06%
40%
24%
13%
23%
45%
22%
13%
20%
(
DKKm
)
2022 2021
< 1 year 34% 21,413 33% 20,310
1-5 years 54% 34,407 50% 30,586
> 5 years 12% 7,352 17% 10,148
Total
100% 63,172 100% 61,044
FINANCIAL STATEMENTS
1.2 Revenue (continued)
1.2.4 Revenue backlog
Our revenue base consists of a mix of yearly con-
tracts, which are renewed tacitly, and thousands
of multi-year contracts, the majority of which have
an initial term of three to five years. Depending
on the size and complexity of the contract, the
transition and mobilisation period is normally
between six and twelve months for our key
accounts. Contracts regularly include options for
the customer to terminate for convenience within
three to nine months. However, we maintain a
high retention rate of 94% (excl. the planned
exit of the Danish Defence contract), both for
key accounts and overall, supporting that these
options are rarely exercised.
As described in 1.2.1, Performance obligations,
the vast majority of our revenue is portfolio
revenue and the remaining part is non-recurring
in the form of projects and above-base work.
Projects and above-base work is not committed
as part of the main customer contract and is
therefore excluded from the transaction price
to be allocated to the remaining performance
obligation (revenue backlog). In addition, the
Group has applied the exemptions of IFRS 15,
and excluded the following from the backlog:
• contracts with a term of less than
12 months; and
• contracts where the Group invoices a fixed
amount for each hour of service provided.
Accounting policy
Revenue from contracts with customers is recognised
when control of the services is transferred to the cus
-
tomer at an amount that reflects the expected con-
sideration for those services. Control is transferred
over time as the customer simultaneously receives
and consumes the benefits provided by the Group.
Services are typically invoiced on a monthly basis at
an amount corresponding to the value of the com
-
pleted performance obligation.
Revenue excludes amounts collected on behalf of
third parties, e.g. VAT and duties.
The input method is used to measure progress
towards complete satisfaction of the service due
to the direct relationship between labour hours
and costs incurred, and the transfer of services to
the customer. The Group recognises revenue on
the basis of the labour hours and costs expensed
relative to the total expected labour hours and costs
to complete the service.
Our customer contracts are based on three different
commercial models requiring varying levels of man-
agement estimates and judgement in determining
the transaction price:
1) Fixed price contracts;
2) Cost-plus contracts; and
3) Cost-plus variations (typically capped)
For fixed price contracts, revenue is recognised based
on the transaction price stated in the contract, and
thus require limited judgement from management.
For cost-plus contracts, including variations e.g. with
a cap, ISS’s transaction price is determined based on
costs incurred with the addition of an agreed mark-
up/management fee. Determining the transaction
price requires management to assess, which costs
may be included in the calculation basis and if rele-
vant, whether within the capped maximum.
For key accounts and other large contracts, the
transaction price may also include a variable
consideration based on achievement of certain key
performance indicators and gain share. Manage-
ment estimates variable consideration based on the
most likely amount to which it expects to be entitled
on a contract-by-contract basis. Management makes
a detailed assessment of the amount of revenue
expected to be received and the probability of suc-
cess in each case. Variable consideration is included
in revenue as services are performed to the extent
that it is highly probable that the amount will not be
subject to significant reversal.
Significant accounting estimates and judgements
Price adjustment mechanisms in our customer
contracts vary in terms of content and extent.
Judgement is required by management to determine
the amount of revenue expected to be received as a
result of inflationary pressure on costs of delivery.
Contract modifications regularly occur, particularly
for key account customers, in order to ensure that
service solutions reflect their current needs. Such
modifications are generally agreed with the cus-
tomer in advance as per the contract in accordance
with a specified change management procedure
and accounted for going forward with no impact on
recognised revenue up to the date of modification.
Management assess how quickly ISS would be able
to implement the scope changes of the service.
Gross or net presentation of revenue Management
uses judgement to determine whether the nature of
ISS’s promise is to provide the specified services (ISS
is the principal), or to arrange for another party to
provide the services (ISS is acting as an agent). This
assessment is based on an evaluation of whether ISS
controls the specified services before transfer to the
customer. The Group has concluded that as a main
rule it is the principal in its revenue arrangements,
because it typically controls the services before trans-
ferring them to the customer, and consequently as a
main rule recognises revenue on a gross basis.
As a result, the amounts disclosed in the matu-
rity table are significantly lower than reported
revenue and will likely not reflect the degree of
certainty in future revenue (and cash inflows)
to the Group. As a supplement, in the manage
-
ment review, p. 20, a maturity overview for our
largest key accounts (> DKK 200 million of annual
revenue) is presented.
(
DKKm
)
Note 2022 2021
Wages and salaries 38,803 37,214
Social security costs 5,950 5,581
Pensions 7.1 1,448 1,376
Share-based payments 6.2 80 62
Other 2,048 2,136
Total 48,329 46,369
Average number
of employees 352,792 362,789
(
DKKm
)
2022 2021
Gain on divestments 206 604
IT security incident - 7
Other income 206 611
Loss on divestments
(
124
)
(
34
)
Integration costs
(
7
)
-
Acquisition costs (4)
(
77
)
Ceased held for sale classification -
(
59
)
Other
(
14
)
(
2
)
Other expenses
(
149
)
(
172
)
Other income and expenses, net 57 439
FINANCIAL STATEMENTS
1.3 Employee costs
Government grants
In 2022, the Group recognised government
grants of DKK 159 million (2021: DKK 135 million)
in the form of wage subventions, which have
been recognised as a reduction of employee
costs. The grants compensate the Group primar-
ily for social security, wage increases as well as
employing certain categories of employees such
as trainees, disabled persons, long-term unem-
ployed and employees in certain age groups.
In addition, the Group received Covid-19 grants
during the pandemic to compensate costs relat-
ed to e.g. employees on furlough, social security
contribution and sick pay compensation. With
the cessation of the pandemic, the grants have
gradually lapsed. In 2022, the Group recognised
Covid-19 related grants of DKK 122 million
(2021: DKK 432 million), mainly in the US, Hong
Kong and Sweden.
Accounting policy
Other income and expenses, net consists of
recurring and non-recurring items that manage-
ment does not consider to be part of the Group’s
ordinary operating activities, i.e. gains and losses
on divestments, remeasurement of disposal
groups classified as held for sale, carrying amount
adjustments regarding ceased held for sale classi-
fication, the winding-up of operations, disposal of
property and acquisition and integration costs.
Other income and expenses, net are presented
separately from the Group's ordinary operating
activities as management believes that this best
reflects the Group's financial performance.
1.4 Other income and expenses, net
Gain on divestments mainly related to the
Waste Management business in Hong Kong and
the damage control business in the UK. In 2021,
gain on divestments mainly related to Kanal
Services in Switzerland and Specialized Services
in the US.
Loss on divestments mainly comprised to a
withdrawal liability on a multiemployer plan in the
US related to the divestment of the Specialized
Services business in December 2021. In 2021,
the loss mainly related to adjustments to prior
years’ divestments and the divestment of the Fruit
Baskets business in Sweden.
Acquisition costs mainly related to the acquisi-
tion of Livit FM Services AG in Switzerland (2021:
Rönesans Facility Management Company).
Our strategy is based on self-delivery of our
core services by our placemakers. Our business
model is asset light and therefore employee
costs is our single largest cost category.
In 2022, employee costs comprised 66% of
the total operating costs (2021: 67%) and were
positively impacted by a refund of collective
insurance premiums paid in prior years in Swe-
den of DKK 23 million (2021: DKK 78 million).
Integration costs related to the acquisition of
Livit FM Services AG in Switzerland.
Ceased held for sale classification comprised
depreciation and amortisation for the years
2019 to 2020 due to the ceased held for sale
classification of Chile in 2021.
Other comprised mainly costs related to wind-
ing-up of a minor business in Germany.
In this section:
2.1 Trade receivables and
credit risk
2.2 Other receivables
2.3 Other liabilities
2.4 Changes in working capital
2.5 Provisions, contingent assets
and liabilities, and guarantees
2.6 Right-of-use assets and
Property, plant and equipment
2.7 Free cash flow
2 Operating assets, liabilities
and free cash flow
Our ability to manage our working capital and
secure the liquidity required to operate, grow
and improve our business is paramount, and
driving strong cash flow remained a key priority
for ISS in 2022.
In 2022, we generated nominal free cash flow
(non-IFRS) of DKK 1.7 billion (2021: DKK 1.7
billion) driven by solid operating profit and
continued tight management of working capital.
Investments in property, plant and equipment
(including right-of-use assets) remained low and
comprised 1.5% of Group revenue (2021: 1.7%)
reflecting our asset-light business model.
Trade receivables
Free cash flow
Trade receivables
DKKbn
%
4
6
8
10
12
20222021202020192018
DKKbn
75
80
85
90
95
Trade receivables
Not past due, %
Free cash flow
Free cash flow (DKKbn)
DKKbn
-2
-1
0
1
2
3
20222021202020192018
DKKbn
Free cash flow (non-IFRS) (DKKbn)
2.4
0.4
(1.8)
1.7 1.7
To improve capital efficiency, we continued to focus
on the development in trade receivables, especially
overdue receivables and unbilled receivables. As a
result, the ageing profile of our trade receivables
remained strong with 89% of receivables in the not
past due category (2021: 90%).
Asset-light business model
Fixed assets,
incl. right-of-use
7%
Asset light
business
model
47.0
DKKbn
FINANCIAL STATEMENTS
1)
Total assets
1)
2022 2021
(
DKKm
)
Gross
Expected
credit losses
Carrying
amount Gross
Expected
credit losses
Carrying
amount
Central & Southern Europe 4,553
(
50
)
4,503 4,355
(
64
)
4,291
Northern Europe 3,218
(
24
)
3,194 3,303
(
37
)
3,266
Asia & Pacific 2,072
(
38
)
2,034 1,852
(
49
)
1,803
Americas 1,171
(
12
)
1,159 964
(
12
)
952
Other countries 106 - 106 94 - 94
Total 11,120
(
124
)
10,996 10,568
(
162
)
10,406
Not past due 9,762
(
6
)
9,756 9,418
(
4
)
9,414
Past due 1 to 60 days 1,073
(
4
)
1,069 866
(
6
)
860
Past due 61 to 180 days 179
(
14
)
165 138
(
12
)
126
Past due 181 to 360 days 22
(
20
)
2 37
(
34
)
3
More than 360 days 84
(
80
)
4 109
(
106
)
3
Total 11,120
(
124
)
10,996 10,568
(
162
)
10,406
Expected credit losses
(
DKKm
)
2022 2021
At 1 January
(
162
)
(
299
)
Foreign exchange adjustments 6 1
Divestments 2 0
Additions
(
59
)
(
45
)
Unused amounts reversed 74 120
Unrecoverable amounts written off 15 64
Reclassification to Assets held for sale -
(
3
)
At 31 December
(
124
)
(
162
)
Credit risk
– low exposure
The Group’s exposure to credit risk is
inherently relatively low due to its business
model and strategic choices leading to a
diversified customer port folio, both in terms
of geography, industry sector, customer size
and services. Also, the completion of our di-
vestment programme has contributed to the
low risk assessment as higher-risk countries
and business units have been divested.
Risk management
Exposure to credit risk and expected credit
losses are managed locally in the operating
entities.
We have a strong ongoing assessment and
monitoring of customers' creditworthiness
and the credit limits are set as deemed
appropriate taking into account the cus-
tomer’s financial position and the current
market conditions.
In 2022, the increased inflation rates were
managed tightly through price increases. The
vast majority of cost increases were passed
on to customers as per the agreed contractu-
al terms with no increase in credit losses.
Generally, the Group does not hold collater-
al as security for trade receivables.
FINANCIAL STATEMENTS
2.1 Trade receivables and credit risk
Development in 2022
In 2022, trade receivables increased to DKK
10,996 million (2021: DKK 10,406 million)
mainly as a result of organic growth driven by
return-to-office trends and food service recovery.
At 31 December 2022, commercial use of fac-
toring with certain large key account customers
and participation in certain customers' supply
chain finance arrangements was DKK 1.3 billion
(31 December 2021: DKK 1.1 billion).
At 31 December 2022, expected credit losses
were 1.1% (2021: 1.5%) of trade receivables
(gross) and trade receivables not past due was
89% of trade receivables, net (2021: 90%).
Accounting policy
Trade receivables comprise invoiced and unbilled
revenue. Unbilled revenue represents service deliv
-
eries where the performance obligation has been
fulfilled, but not yet invoiced.
Trade receivables are recognised initially at the
transaction price and subsequently measured at am
-
ortised cost. Due to its short-term nature, amortised
cost will equal the invoiced amount less expected
credit losses.
An impairment analysis is performed at each
reporting date using a provision matrix to measure
expected credit losses. The provision rates are based
on days past due for grouping of customer segments
with similar loss patterns, e.g. by geographical region,
customer type and rating. The calculation reflects
the probability-weighted outcome, the time value
of money, reasonable and supportable information
about past events, current conditions and forecasts
of future economic conditions.
Trade receivables are generally written off if they are
past due more than 180 days or when there is no
reasonable expectation of recovery. Write-offs are
presented in Other operating expenses. Subsequent
recovery of write-offs or reversal of expected credit
losses are credited against the same line item.
Factoring and participation in customers’ supply chain
finance arrangements (factoring) are mainly used
to optimise cash collection and to finance working
capital impacts related to growth with certain key
account customers, including from general pressure
for longer payment terms and necessary investments
in transition and mobilisation of such contracts.
Trade receivables subject to factoring agreements
are derecognised once the derecognition criteria
have been met and all substantial risks and rewards
have been transferred to the factor. Once the trade
receivables have been derecognised, the Group does
not carry any risk and has no continuing involvement
in these trade receivables.
FINANCIAL STATEMENTS
2.2 Other receivables
Supplier rebates and bonuses comprised volume
related discounts obtained from suppliers and re-
flects the Group’s efforts to consolidate the number
of suppliers and drive synergies and cost savings.
The increase in 2022 was due to the general pick-up
in activity, especially driven by the return-to-office
trends and recovery of food services.
Prepayments to suppliers comprised various
payments mainly related to IT licences, utilities
and insurance.
Receivable divestment proceeds mainly related
to the divestment of Specialized Services in the
US, where part of the consideration is subject to
customer consent.
Sign-on fees comprised upfront discounts to
certain large customers, most significantly in the
UK and on certain global key accounts.
Accounting policy
Other receivables comprise various items of
different nature and thus different measurement
methods are applied. As these items are consid-
ered individually immaterial they are presented
together as Other receivables.
Except for the items described below, other
receivables are recognised initially at cost and
subsequently at amortised cost. Due to the short-
term nature of other receivables, amortised cost
will equal the cost.
Transition and mobilisation costs (costs to fulfill
a contract) comprise costs directly related to start-
up of operations of certain large contracts, e.g.
transfer of employees from previous suppliers,
site due diligence, planning and developing ser-
vice plans. The costs include internal direct costs
and external costs e.g. to consultants.
Transition and mobilisation costs are capitalised
and amortised over the initially secured contract
term consistent with ISS’s transfer of the related
services to the customer. Bid-related costs, in-
cluding costs relating to sales work and securing
contracts, are expensed as incurred.
Sign-on fees comprise upfront discounts to
certain large customers incurred in the ordinary
course of business. Sign-on fees are capitalised
and amortised over the initial secured contract
term consistent with ISS’s transfer of the related
services to the customer.
Securities and derivatives are recognised at fair
value.
(
DKKm
)
2022 2021
Supplier rebates and bonuses 424 352
Prepayments to suppliers 392 359
Receivable divestment proceeds 114 155
Sign-on fees 110 134
Securities 104 103
Government grants 103 27
Derivatives 50 -
Transition and mobilisation costs 36 62
Other 362 390
Total 1,695 1,582
Capitalisation of transition and mobilisation
costs involves management’s judgement to
assess if the criteria for capitalisation are fulfilled.
Management uses judgement to determine if
the costs relate directly to the contract and are
incurred in order for ISS to be able to fulfill the
contract. In addition, management determines
if the costs generate resources that will be used
in satisfying the performance obligations and
are expected to be recovered, i.e. reflected in the
pricing of the contracts.
Significant accounting
judgements
2.3 Other liabilities
Savings plan related to a plan in the US which is
administered by ISS on behalf of certain senior
employees.
Other comprised customer discounts, accrued
interests, etc.
(
DKKm
)
2022 2021
Accrued wages, pensions
and holiday allowances 5,589 5,514
Tax withholdings, VAT etc. 1,671 1,503
Prepayments from customers 805 868
Savings plan 104 103
Contingent consideration
and deferred payments 12 31
Other 533 711
Total 8,714 8,730
2.4 Changes in
working capital
(
DKKm
)
2022 2021
Changes in inventories
(
61
)
4
Changes in receivables
(
882
)
(
110
)
Changes in payables 1,387 1,162
Total 444 1,056
Securities related to a savings plan in the US
administered by ISS on behalf of certain senior
employees.
Government grants related to various receiv-
ables, including Covid-19 related, mainly in the
US, Spain and Denmark.
Transition and mobilisation costs
comprised
directly related costs incurred to fulfill the perfor
-
mance obligations under certain large contracts,
cf. 1.2, Revenue. The decrease in 2022 was due to
ordinary amortisation, mainly in Denmark, Sweden
and the UK.
Other comprised refunds from customers,
accrued interest, VAT, employee-related taxes
and other recoverable amounts.
(
DKKm
)
Legal
claims and
disputes
Self-
insurance
Restruc-
turings
Onerous
contracts Other Total
2022
At 1 January 235 262 374 330 515 1,716
Foreign exchange adjustments
(
9
)
6 - 3 4 4
Additions 109 142 6 15 99 371
Used during the year
(
41
) (
149
)
(
263
)
(
191
)
(
90
) (
734
)
Unused amounts reversed
(
28
)
(
15
)
(
46
)
(
80
)
(
8
)
(
177
)
Reclass
(
to
)
/from other liabilities 2
(
1
)
- -
(
110
) (
109
)
At 31 December 268 245 71 77 410 1,071
Non-current 47 129 - 23 266 465
Current 221 116 71 54 144 606
2021
At 1 January 133 261 787 285 460 1,926
Foreign exchange adjustments
(
6
)
15 4 6 7 26
Additions 141 225 7 73 45 491
Used during the year
(
62
)
(
232
)
(
373
)
(
21
)
(
11
)
(
699
)
Unused amounts reversed
(
55
)
(
2
)
(
52
)
(
16
)
(
10
)
(
135
)
Reclass (to)/from other liabilities 84
(
5
)
1 3 24 107
At 31 December 235 262 374 330 515 1,716
Non-current 121 127 142 78 287 755
Current 114 135 232 252 228 961
ISS is exposed to various risks and uncertainties,
and party to certain disputes, claims, investiga-
tions and legal proceedings arising out of the
normal conduct of its business. These are mainly
within the following areas:
• Commercial/contractual matters
• Labour-related
• Divestments and M&A
• Tax/social regulations
Provisions have been recognised in relation
to such obligations for probable losses, that
management deems reasonable and appropriate
at 31 December 2022 as reflected in the table to
the right.
In addition, ISS is exposed to possible obligations
in relation hereto as described below under
2.5.2 Contingent assets and liabilities.
2.5.1 Provisions
Legal claims and disputes
The provision primarily relates to labour-related
claims and disputes regarding wages, overtime,
holiday, severance etc. as well as claims and dis-
putes in relation to contractual disagreements
with customers and suppliers. In addition, the
provision includes claims and disputes associ-
ated with our divestment activities. Such claims
and disputes arise out of the normal conduct
of business. At 31 December 2022, the majority
related to the UK, the US, France and Spain.
Self-insurance
The provision for self-insurance mainly relates to
employers’ liability and/or workers compensation
in certain countries and covers claims by employ-
ees for medical benefits and lost wages associated
with injuries/illness incurred in the course of their
employment. The relevant countries, including
self-insurance limits are listed below:
• Hong Kong: DKK 26.8m (2021: DKK 25.2m) yearly
• UK: DKK 25.2m (2021: DKK 26.6m) yearly aggregated
limit and DKK 4.2m (2021: DKK 4.4m) per claim
• Australia: DKK 4.7m (2021: DKK 3.6m) per claim
• US: DKK 3.5m (2021: DKK 3.3m) per claim
The provision also includes obligations not
covered by the global general business liability
insurance in relation to damage caused in the
ordinary course of service delivery, e.g. property
damage and bodily injury. The Group is self-in-
sured for claims below DKK 7.4 million (EUR 1
million per claim).
Restructuring projects
The provision mainly covers restructuring
projects initiated in 2020 in several countries.
The purpose was to adjust our cost base on
the back of Covid-19 and involved overhead
reductions, including termination of employees
and contract exits.
In 2022, execution of the projects continued,
which led to a decrease of DKK 303 million
mainly due to severance payments in Germany,
France and Spain.
Onerous contracts
The provision covers the unavoidable costs for
certain loss-making contracts. The increased in-
flation during 2022, and resulting cost increases,
was generally managed through price increases
and cost reductions. Consequenly, inflation did
not lead to identification of any significant new
onerous contracts or increased provision for
contracts already recognised as onerous.
In 2022, the decrease of DKK 253 million was
mainly related to the exit from the Danish
Defence contract, including payment of an
exit fee, termination of lease obligations and
disposal of equipment as well as utilisation
of the provision for a key account contract in
Hong Kong. Furthermore, in France and the
UK improvement initiatives on a few minor
loss-making contracts led to reversal of
amounts provided in prior years.
At 31 December 2022, the remaining provision
related to a key account contract in Hong Kong
and a few minor contracts in a few countries.
Other provisions
Other provisions comprise various other risks
and obligations incidental to our business, most
significantly related to divestments and customer
and contract-related risks and disputes and
decommissioning liabilities.
In 2022, the addition was mainly due to recogni-
tion of a withdrawal liability on a multiemployer
plan in the US related to the divestment of
Specialized Services in 2021.
At 31 December 2022, the provision mainly
related to Germany, the US, UK and France.
FINANCIAL STATEMENTS
2.5 Provisions, contingent assets and liabilities, and guarantees
FINANCIAL STATEMENTS
2.5 Provisions, contingent assets and liabilities, and guarantees (continued)
2.5.2 Contingent assets
and
liabilities
ISS is party to pending disputes, claims, investi-
gations and litigations arising out of the normal
conduct of its business and is therefore exposed
to possible obligations. Management believes
that these will not have a material impact on the
Group’s financial position beyond the assets and
liabilities recognised in the statement of financial
position at 31 December 2022. However, the
existence of such possible obligations will
only be confirmed by the occurrence of future
events, not entirely within ISS’s control. Due to
the inherent uncertainty, future events may lead
to material adverse effects on the Group’s profit
or loss and financial position from one or more
of these possible obligations.
Contractual disagreements
Contractual disagreements with customers arise
on a recurring basis in the ordinary course of
ISS’s business. While most are resolved as part
of the daily contract management procedures,
in some cases the contractual disagreements
will lead to legal proceedings.
The Group is currently party to certain disputes
and legal proceedings, including in relation to
the contract with Deutsche Telekom. The contract
continues to be structurally challenging. Follow-
ing an agreed dispute resolution mechanism,
certain contractual disagreements are subject to
arbitration proceedings initiated by ISS.
Labour-related risks
Being a people company operating across differ-
ent geographies and service areas exposes us
to varying and changing labour laws, especially
across Europe. Although we have policies and
procedures in place to ensure that we comply
with current regulations, interpretations and
procedures applied by ISS could be challenged
in certain jurisdictions and result in disputes and
possibly liabilities.
The Group is currently party to certain labour-
related claims, disputes and legal proceedings,
e.g. around wages, overtime, holiday and
severance. Management believes that these
would not have a material impact on the Group’s
financial position beyond the assets and liabili-
ties already recognised at 31 December 2022.
Divestments
The Group makes provisions for claims from
purchasers or other parties in connection
with divestments and the representations and
warranties given in relation to such divestments.
In addition, the Group’s divestment activities
can give rise to possible obligations, mainly
labour-related, including pension plans, and
related to disputes in relation to sales price.
(
DKKm
)
2022 2021
Bank-guaranteed
performance bonds
1,755 1,761
Other performance bonds 1,831 1,819
Performance guarantees
(
service contracts
)
3,586 3,580
Indemnity and guarantee
commitments 472 479
Performance guarantees
ISS regularly issues performance guarantees to
customers to guarantee satisfactory completion
of work in accordance with the service contract.
Such guarantees are issued in the ordinary
course of business, either in the form of bank
guarantees, parent guarantees or insurances.
Indemnity and guarantee commitments
Other guarantees are mainly issued to insurance
companies towards self-insurance liabilities as
well as to owners of rental property occupied by
ISS in certain countries. Furthermore, in a few
instances guarantees have been issued to public
authorities towards tax withholding liabilities.
2.5.3 Guarantees
ISS has issued certain guarantees in the normal
course of business. Guarantees do not repre-
sent legal or constructive obligations and are
not recognised in the statement of financial
position at 31 December 2022.
Restructuring projects
Restructuring projects are being undertaken on
an ongoing basis across different geographies
and service areas, currently mainly in Germany,
France and Spain. Labour laws especially in
Europe include restrictions on dismissals and
procedural rules to be followed. The procedures
applied by ISS could be challenged in certain
jurisdictions resulting in disputes and possibly lia-
bilities. Management believes that this would not
have a material impact on the Group’s financial
position beyond the assets and liabilities already
recognised at 31 December 2022.
FINANCIAL STATEMENTS
2.5 Provisions, contingent assets and liabilities, and guarantees (continued)
Our strategic choice to focus on key accounts
increasingly leads to a customer case comprising
large, more complex contracts in terms of perfor-
mance obligations towards our customers. Addition-
ally, the size and complexity of such contracts often
requires ISS to incur significant transition and mo-
bilisation costs before service delivery commences
to enable fulfillment of the performance obligations.
Furthermore, complex restructuring projects may
need to be initiated and recognised as a provision.
Onerous contracts Management assesses whether
contracts may be onerous by estimating the ex-
pected future profitability. This involves estimating
total contract revenue and the unavoidable costs of
meeting the performance obligations under the con-
tract, including any transition and mobilisation costs
incurred. In estimating the expected future profit-
ability, management makes judgements, including in
relation to termination and extension options.
Certain contracts are large, complex and longer term
facility service partnerships. In estimating unavoid-
able costs in relation to such contracts, management
makes assumptions around future realisation of
Significant accounting estimates and judgements
costs taking estimated optimisations and efficiency
gains from improvement initiatives into consider-
ation. While ISS has inherent risk in this respect, ISS
is by nature also dependent on aligning interest with
the customer within the framework of the agree-
ment for the benefit of both parties. The outcome
may vary significantly should the assumptions and
judgements applied not be realised as expected by
management and applied as basis for their assess-
ment of whether a contract is onerous.
Restructurings and other provisions Management
makes judgements related to various other matters
and obligations, primarily relating to planned/
initiated restructurings, and complex customer
and contract-related risks and disputes, including
ongoing lawsuits. Management’s assessment of
the likely outcome of lawsuits, tax disputes, etc., is
based on external legal assistance and established
precedents.
For large, complex contracts, the outcome may vary
significantly should the judgements and assump-
tions applied by management in their assessment
of the risks and disputes not be realised as expected.
Accounting policy
Provisions
Provisions are recognised when the Group, as a
result of a past event, has a present legal or con-
structive obligation, it is probable that an outflow
of economic benefits will be required to settle the
obligation and a reliable estimate can be made of
the amount of the obligation. The costs required to
settle the obligation are discounted using the entity’s
average borrowing rate, if this significantly impacts
the measurement of the liability.
Legal disputes and claims, e.g. lawsuits and other
disputes, based on external legal assistance and
established precedents.
Self-insurance on employers’ liability and/or workers
compensation based on valuations from external
actuaries.
Restructurings when a detailed, formal restructuring
plan is announced to the affected parties on or before
the reporting date. The plan must identify the busi-
ness concerned, the location and number of employ-
ees affected, and a detailed estimate of the associated
costs, as well as the timeline must be in place.
Onerous contracts, when the unavoidable costs,
including directly allocated overhead costs, of meet-
ing the obligations under the contract exceed the
economic benefits expected to be received under
it, corresponding to the lower of the costs to fulfil
the obligations under the contract and the costs of
exiting the contract.
Customer and contract-related disputes based on
an assessment of available facts and circumstances
in respect of the specific risks or disputes, when it
is deemed that a contractual, non-contractual or
constructive obligation exists, and it is probable that
this will lead to an outflow of economic resources
from the Group.
Decommissioning liabilities, if the Group has a
legal obligation to dismantle or remove an asset
or restore a site or leased facilities when vacated.
The provision corresponds to the present value of
expected costs to settle the obligation.
The present value of the obligation is included in the
cost of the relevant tangible or right-of-use asset
and depreciated accordingly. The estimated future
costs of decommissioning are reviewed annually and
adjusted as appropriate. Changes in the estimated
future costs, or in the discount rate applied, are
added to or deducted from the cost of the relevant
asset.
Contingent assets and liabilities
Contingent liabilities comprise:
1) possible obligations that arise from a past event
and whose existence will only be confirmed by the
occurrence or non-occurrence of future events; and
2) obligations that are not recognised as the amount
cannot be measured sufficiently reliable or it is not
probable that economic benefits will be required to
settle the obligation.
Contingent assets are possible assets whose
existence will be confirmed by the occurrence or
non-occurrence of uncertain future events that are not
wholly within the control of the entity.
Contingent assets and liabilities are not recognised,
but disclosed in the notes.
FINANCIAL STATEMENTS
2.6 Right-of-use assets and property, plant and equipment
2022
Right-of-use assets Property,
plant and
equipment
(
DKKm
)
Properties Vehicles Other Total
Cost at 1 January 2,582 1,307 577 4,466 3,455
Prior year adjustments - - - - -
Foreign exchange adjustments 4
(
9
)
(
35
)
(
40
)
(
39
)
Hyperinflation restatement - 20 57 77 183
Additions 264 312 189 765 345
Acquisitions 5 34 - 39 7
Divestments - - - -
(
16
)
Disposals
(
198
)
(
252
)
(
81
)
(
531
)
(
654
)
Reclass - - - -
(
6
)
Cost at 31 December 2,657 1,412 707 4,776 3,275
Depreciation at 1 January
(
1,071
)
(
669
)
(
281
)
(
2,021
)
(
2,524
)
Prior year adjustments - - - - -
Foreign exchange adjustments
(
1
)
7 19 25 30
Hyperinflation restatement - (7) (13) (20) (107)
Impairment - - - -
(
22
)
Depreciation
(
398
)
(
356
)
(
134
)
(
888
)
(
376
)
Divestments - - - - 15
Disposals 198 252 81 531 626
Reclass - - - - -
Depreciation at 31 December
(
1,272
)
(
773
)
(
328
)
(
2,373
)
(
2,358
)
Carrying amount at 31 December 1,385 639 379 2,403 917
2021
Right-of-use assets Property,
plant and
equipment Properties Vehicles Other Total
2,411 1,313 673 4,397 3,615
(
117
)
(
203
)
(
94
)
(
414
)
-
51 17
(
46
)
22 45
- - - - -
347 372 140 859 335
- - 6 6 27
- - - -
(
122
)
(
127
)
(
199
)
(
96
)
(
422
)
(
489
)
17 7
(
6
)
18 44
2,582 1,307 577 4,466 3,455
(
842
)
(
689
)
(
354
)
(
1,885
)
(
2,581
)
117 203 94 414 -
(
18
)
(
12
)
21
(
9
)
(
57
)
- - - - -
(32) - - (32) (5)
(
412
)
(
368
)
(
142
)
(
922
)
(
422
)
- - - - 109
126 199 95 420 456
(
10
) (
2
)
5
(
7
) (
24
)
(
1,071
)
(
669
)
(
281
)
(
2,021
)
(
2,524
)
1,511 638 296 2,445 931
Lease term Several of ISS’s lease contracts (office
buildings) have no contractual fixed lease term
or contains an extension option. Management
exercises judgement in determining whether these
extension options are reasonably certain to be
exercised. Management considers all relevant facts
and circumstances that create an economic incen-
tive for the Group to exercise the extension option.
The lease term for contracts without an end date
is set to ten years for head office and accessory
buildings, whereas all other leases with no definite
end date are set to five years.
Significant accounting
judgements
ISS is a people business operating based on an
asset light business model. Operating assets
(leased and owned) comprised only 7% of the
Group’s total assets at 31 December 2022. Our
model is based on leasing, rather than owning,
property, vehicles and equipment.
Right-of-use assets
At 31 December 2022, ISS was party to around
18,500 lease agreement of which the majority
related to vehicles, whereas in terms of asset
value, the main part related to property.
Additions amounted to DKK 765 million in 2022,
which was impacted by new country head office
leases in Austria and Singapore and extensions
in a few other countries. This was slightly lower
than 2021 where additions of DKK 859 million
included new head office leases in France and
Norway and additional new vehicle leases due
to contract wins in the UK, Germany, Norway,
Mexico and Finland.
Property plant and equipment
Additions of DKK 345 million in 2022 primarily
related to equipment for new and existing
contracts and was broadly in line with 2021.
FINANCIAL STATEMENTS
2.6 Right-of-use assets and property,
plant and equipment (continued)
Lease liability
The carrying amount of lease liabilities and the
movements in the year are disclosed in 4.2,
Loans and borrowings. The maturity profile is
disclosed in 4.6, Liquidity risk.
Lease-related costs in profit or loss
(
DKKm
)
2022 2021
Depreciation of right-of-use assets 888 922
Interest expenses on lease liabilities 82 69
Leases of low-value assets 203 168
Short-term leases 88 88
Variable lease payments 11 13
Recognised in profit or loss 1,272 1,260
Hereof cash outflow 384 338
Right-of-use assets are recognised at the com-
mencement date of the lease and measured at cost
less accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease
liabilities, including extension options.
Cost comprises the amount of lease liabilities
recognised, initial direct costs, dismantling and
restoration costs incurred and lease payments made
at or before the commencement date less any lease
incentives received.
Right-of-use assets are depreciated on a straight-
line basis over the shorter of the lease term and the
estimated useful life of the asset.
Certain leases have a term of 12 months or less
or are leases of low-value assets, such as minor
cleaning and IT equipment and office furniture.
The recognition exemptions are applied for these
leases and lease payments are recognised in Other
operating expenses on a straight-line basis over the
lease term.
Property, plant and equipment is measured at
cost, less accumulated depreciation and impairment
losses.
Cost comprises the purchase price and costs directly
attributable to the acquisition until the date when
the asset is ready for use. The net present value
of estimated liabilities related to dismantling and
removing the asset and restoring the site on which
the asset is located is added to the cost.
Subsequent costs, e.g. for replacing parts of an
item, are recognised in the cost of the asset if it is
probable that the future economic benefits embod-
ied by the item will flow to the Group. The carrying
amount of the item is derecognised when replaced
and transferred to profit or loss. All other costs for
common repairs and maintenance are recognised in
profit or loss when incurred.
Depreciation is based on the cost of an asset less its
residual value. When parts of an item of property,
plant and equipment have different useful lives, they
are accounted for separately. The estimated useful
life and residual value are determined at the acquisi-
tion date. If the residual value exceeds the carrying
amount depreciation is discontinued.
Depreciation is calculated on a straight-line basis
over the estimated useful lives of the assets.
Land is not depreciated.
Depreciation methods, useful lives and residual
values are reassessed at each reporting date and
adjusted prospectively, if appropriate.
Gains and losses arising on the disposal or
retirement of property, plant and equipment are
measured as the difference between the selling
price less direct sales costs and the carrying amount,
and are recognised in Other operating expenses in
the year of sale, except gains and losses arising on
disposal of property, which are recognised in Other
income and expenses, net.
Estimated useful life
Plant and equipment 3-10 years
Leasehold improvements (lease term)
3-10 years
Buildings 20-40 years
Accounting policy
2.7 Free cash flow
Free cash flow as defined by management, cf.
8.5, Definitions, is summarised below. Free cash
flow is not a financial performance measure
defined by IFRS. Accordingly, the measure
and its calculation is presented as it is used by
management as an alternative performance
measure in managing the business.
The free cash flow measure should not be
considered a substitute for those measures
required by IFRS and may not be calculated
by other companies in the same manner. As
such, reference is made to the IFRS measures
included in the consolidated statement of cash
flows of the consolidated financial statements.
(
DKKm
)
2022 2021
Cash flow from operating activities 3,333 3,221
Acquisition of intangible assets and
property, plant and equipment
(
809
)
(
628
)
Disposal of intangible assets and
property, plant and equipment 30 42
Acquisition of financial assets, net
 1)
(
51
)
(
30
)
Addition of right-of-use assets, net
 2)
(
769
)
(
870
)
Free cash flow 1,734 1,735
1)
Excluding investments in equity-accounted investees which in 2022
was DKK (22) million (2021: DKK (24) million).
2)
Including DKK 4 million (2021: DKK 13 million) related to
discontinued operations, cf. 2.6, Right-of-use assets and property,
plant and equipment.
Estimated useful life
Properties 5-10 years
Cars
3-5 years
Other equipment 2-5 years
In this section:
3.1 Intangible assets
3.2 Impairment tests
3.3 Acquisitions
3.4 Divestments, assets held
for sale and discontinued
operations
3 Strategic investments
and divestments
Acquisition agenda
Our asset base is the result of our expansion
strategy in the 00s, where acquisitions were used
to scale and rapidly expand the business across
services and geographies.
Learning from history – and a decade of
divestments of non-strategic businesses – we will
over the next years initiate selective acquisition
assessments to scale our OneISS platform in a
disciplined and controlled manner.
With that in mind, we acquired the facility manage
-
ment company Livit FM in Switzerland in October
2022. The acquisition supports the OneISS strategy
by expanding and developing our services to the
prioritised real estate industry segment.
Divestment programme completed
In 2022, we divested our businesses in Taiwan,
Russia and Portugal as well as two business units
in the UK and Hong Kong. Furthermore, the busi
-
ness in Brunei was divested in February 2023. Our
strategic divestment programme was therefore
completed and the targeted proceeds of DKK 2.0
billion were secured. The total impact on profit or
loss from divestments in 2022 was a net gain of
DKK 201 million (2021: DKK 591 million).
Investing in technology
Acquisition agenda initiated
Livit FMacquired in Switzerland
– software additions
Software additions
DKKbn %
100
200
300
400
500
20222021202020192018
DKKbn
Software additions
Intangible assets
Intangibles
Investing in technology
We have a strategic ambition of becoming
technology leader in our industry by focusing on
three strategic pillars:
1) the right digital applications for our customers
and placemakers;
2) scalable and cybersecure “cloud-first” infra
-
structure; and
3) managed by inhouse global technology teams.
In recent year, we have therefore invested more
in IT, and will continue to do so in the coming
years. Our newly established software develop
-
ment centre in Portugal will play an important
role in supporting our strategy by developing
and operating apps, platforms and data analytics
among others.
Divestment programme
completed
5 businesses divested
201 DKKm net gain realised
51%
1)
Total assets
– our largest asset category
1)
Intangible
assets
47.0
DKKbn
FINANCIAL STATEMENTS
1)
2022
(
DKKm
)
Goodwill Brands
Customer
contracts
Software
and other Total
Cost at 1 January 23,178 1,666 9,098 2,589 36,531
Foreign exchange adjustments
(
112
)
5
(
107
) (
9
)
(
223
)
Hyperinflation restatement 644 - 235 5 884
Additions - - - 454 454
Acquisitions 203 - 161 - 364
Divestments
(
46
)
-
(
1
)
(
2
)
(
49
)
Disposals - -
(
93
)
(
118
)
(
211
)
Reclass
(
to
)
/from Property, plant and equipment - - - 6 6
Reclass to Assets held for sale - - - - -
Cost at 31 December 23,867 1,671 9,293 2,925 37,756
Amortisation and impairment losses at 1 January
(
3,425
)
(
74
)
(
8,501
)
(
1,792
)
(
13,792
)
Foreign exchange adjustments 8
(
4
)
38 8 50
Hyperinflation restatement - -
(
2
)
(
3
)
(
5
)
Amortisation -
(
4
)
(
65
)
(
207
)
(
276
)
Impairment - - -
(
24
)
(
24
)
Divestments - - 1 2 3
Disposals - - 93 115 208
Reclass to Assets held for sale - - - - -
Amortisation and impairment losses
at 31 December
(
3,417
)
(
82
)
(
8,436
)
(
1,901
)
(
13,836
)
Carrying amount at 31 December 20,450 1,589 857 1,024 23,920
1)
2021
Goodwill
2)
Brands
Customer
contracts
Software
and other Total
22,643 1,663 8,626 2,505 35,437
402 3 112 19 536
- - - - -
- - - 248 248
97 - 428 7 532
(
20
)
-
(
106
)
(
1
)
(
127
)
- -
(
12
)
(
174
)
(
186
)
- - - - -
56 - 50
(
15
)
91
23,178 1,666 9,098 2,589 36,531
(
2,981
)
(
61
)
(
8,302
)
(
1,575
)
(
12,919
)
6
(
3
)
(
218
)
(
15
)
(
230
)
- - - - -
-
(
10
)
(
54
)
(
289
)
(
353
)
(
450
)
- -
(
92
)
(
542
)
- - 101 1 102
- - 12 169 181
- -
(
40
)
9
(
31
)
(
3,425
)
(
74
)
(
8,501
)
(
1,792
)
(
13,792
)
19,753 1,592 597 797 22,739
1)
1)
Of which DKK 133 million related to software under development at Group level (2021: DKK 93 million).
2)
The impairment loss in 2021 of DKK 450 million related to France.
FINANCIAL STATEMENTS
3.1 Intangible assets
Hyperinflation restatement Implementation of
IAS 29 in Turkey led to a significant increase of
the Group’s intangible assets, in total DKK 879
million, net. The increase related to goodwill (DKK
644 million), customer contracts (DKK 233 million)
and software (DKK 2 million). Further details are
provided in 7.2, Hyperinflation in Turkey.
Cloud-based arrangement At the commencement
date, management assesses whether the Group ac
-
quires an intangible asset, a leased asset or receives
a service over the term of the contract. If the Group
receives a right to access the cloud provider's appli
-
cation without further rights or control it is neither
a lease nor an intangible asset. However, the Group
may acquire an intangible asset if the Group has the
contractual right to take possession of the software
during the contract period without significant penal
-
ty and it is feasible for the Group to run the software
on its own hardware or with another cloud provider.
In SaaS arrangements, where the provider controls
the application software, the assessment of whether
configuration or customisation of the software
results in an intangible asset for the Group depends
on the output of the configuration or customisation
activities performed. Part of the activities undertaken
may entail the development of software code that
enhances or modifies, or creates additional capability
to the existing on-premise software to enable it to
connect with the cloud-based software applications.
If activities are performed on the Group’s infrastruc
-
ture and applications, they likely represent assets
that the Group controls because they enhance,
improve or customise existing software assets.
Significant accounting
judgements
Livit FM, Switzerland The acquisition in
October 2022 added DKK 347 million to the
Group’s intangibles relating to goodwill (DKK
191 million) and customer contracts (DKK 156
million). Further details are provided in 3.3,
Acquisitions.
Software and other In line with the Group’s stra-
tegic ambition of becoming the technology leader
in the industry, we are investing more in software,
e.g. digital applications for our customers and
employees as well as cybersecure infrastructure.
In 2022, additions amounted to DKK 454 million
(2021: DKK 248 million), the majority related to
Group-wide systems and applications.
1)
Comprise goodwill, customer contracts and brands.
2)
Internal assessment of likelihood of incurring a material
impairment loss.
FINANCIAL STATEMENTS
3.1 Intangible assets (continued)
Goodwill is initially recognised at cost and subse-
quently at cost less accumulated impairment losses.
Goodwill is not amortised. Goodwill relates mainly
to assembled workforce, technical expertise and
technological knowhow.
Acquisition-related brands and customer contracts
are recognised at fair value at the acquisition date.
Subsequently, brands with indefinite useful lives
are measured at cost less accumulated impairment
losses. Brands with finite useful lives and customer
contracts are measured at cost less accumulated
amortisation and impairment losses.
Acquired software and other intangible assets are
measured at cost less accumulated amortisation and
impairment losses. The cost of software developed
for internal use includes external costs to consul-
tants and software as well as internal direct and
indirect costs related to the development. Other
development costs for which it cannot be demon-
strated that future economic benefits will flow to the
Group are recognised in profit or loss as and when
incurred.
Amortisation of intangible assets with finite useful
lives is calculated on a straight-line basis over the
estimated useful lives except for certain customer
contracts where the unit of production method bet-
ter reflects the expected pattern of consumption.
Estimated useful life
Brands (finite useful life) 2-5 years
Customer contracts 10-24 years
Software and other 5-10 years
Amortisation methods and useful lives are reas-
sessed at the reporting date and adjusted prospec-
tively, if appropriate.
Cloud-based arrangements Software within a
cloud-based arrangement is recognised as either
an intangible asset, a leased asset or as a service
received (Software as a Service) based on the contact
and facts and circumstances of the software.
Software as a Service (SaaS) arrangements are ser-
vice contracts providing the Group with the right to
access a cloud provider's application software over
the contract period.
Costs incurred to configure or customise, and the
ongoing fees to obtain access to the cloud provi-
der’s application software are recognised as Other
operating expenses when the services are received.
Also, internal costs such as costs related to selection
of cloud provider, data conversion, training and
testing are expensed as incurred in Other operating
expenses.
In some arrangements, certain configuration and
customisation activities undertaken in implement-
ing SaaS arrangements may give rise to a separate
asset, i.e. the development of a software code that
enhances, modifies or creates additional capability
to the Group’s existing on-premise systems. Costs
incurred for these activities are recognised as
intangible assets if they are identifiable and meet the
recognition criteria and amortised over the useful
life of the software similar to other intangible assets.
Accounting policy
3.2 Impairment tests
3.2.1 Impairment test results 2022
The impairment tests of goodwill, customer con-
tracts and brands performed at 31 December
2022 did not result in recognition of impairment
losses (2021: DKK 450 million in France).
Except for France, it is management’s opinion
that excess values in the Group’s CGUs are fairly
resilient to any likely and reasonable deteriora-
tions in the key assumptions applied.
France is further described on p. 74.
3.2.2 Goodwill and customer
contracts
The carrying amounts of intangibles for CGUs
representing more than 5% of intangibles, or
CGUs considered to be at high risk of impair-
ment are disclosed below.
2022 2021
(
DKKm
)
Goodwill
Customer
contracts Total Goodwill
Customer
contracts Total
UK & Ireland 2,562 99 2,661 2,748 121 2,869
US & Canada 2,197 155 2,352 2,068 161 2,229
Finland 2,098 - 2,098 2,098 - 2,098
Switzerland 1,598 157 1,755 1,334 - 1,334
Denmark 1,620 - 1,620 1,652 - 1,652
Australia & NZ 1,327 2 1,329 1,336 4 1,340
Belgium & Lux. 1,319 - 1,319 1,319 - 1,319
Turkey 848 434 1,282 260 295 555
Norway 1,228 - 1,228 1,295 - 1,295
France 936 - 936 936 - 936
Other 4,717 10 4,727 4,707 16 4,723
Total 20,450 857 21,307 19,753 597 20,350
Acquisition-related intangibles
– by risk category
2)
1.2
Revenue
22.9
DKKbn
Low risk
High risk
96%
04%
1)
FINANCIAL STATEMENTS
3.2 Impairment tests (continued)
priorities, especially around continued key account
focus, investments in technology and the global
operating model. Where relevant, initiated restruc
-
turings and other improvement initiatives, have also
been taken into consideration when estimating the
expected future performance and cash flows.
In 2022, the Group reached its turnaround target fol-
lowing improved financial performance in the UK, on
the Deutsche Telekom contract and with the exit from
the Danish Defence contract. Management carefully
considered the expected continued improvement to
ensure that it is properly reflected in determining the
key assumptions for the specific CGUs.
Management also ensured that financial forecasts
and assumptions applied reflect the expected
macroeconomic developments, which in 2022
primarily related to the impact from increased
interest and inflation rates. During the year, the
Group demonstrated its ability to manage and
mitigate price increases in the supply chain,
including activating indexation mechanisms in the
contract portfolio to pass on price increases to our
customers. Furthermore, the impact from Covid-19
recovery in 2022 has been considered.
Assumptions applied in the terminal period gener-
ally reflect management’s long-term expectations
for the individual country. Revenue growth reflects
inflation and GDP growth and is determined based
on input from external sources like IMF’s “World
Economic Outlook”. Operating margin reflects the
expected normalised earnings level in the long term.
Corporate costs for the services performed by
the Group’s head office functions for the benefit
of the CGUs are allocated to the individual CGUs
and taken into account in the calculation of the
recoverable amount.
Cash-generating units (CGUs)
Consistent with the Group's management and
reporting structure, the lowest level of CGUs
is the individual countries, as cash inflows are
generated largely independent of cash inflows in
other ISS countries (the majority of our contract
portfolio is locally based with no cross-border ac-
tivities). Accordingly, impairment tests are carried
out per country, and intangibles (i.e. goodwill and
customer contracts) are allocated to these.
Management of certain countries has been
combined to take advantage of similarities in
terms of markets, shared customers and cost
synergies. In such exceptional cases, the coun-
tries are regarded as one CGU when performing
the impairment test.
Calculating recoverable amounts
The recoverable amount of each CGU is calculat-
ed on the basis of its value-in-use using certain
key assumptions per CGU, i.e. revenue growth,
operating margin and discount rate as shown in
the table to the right.
Value-in-use cash flow projections for the
individual CGUs are based on financial forecasts
for the following year as approved by man-
agement. Assumptions applied in the short to
medium term (forecasting period of five years)
generally reflect management’s expectations
considering all relevant factors, including the
Group’s strategic initiatives, local initiatives, past
experience and external sources of information,
where possible and relevant. This also includes
expected development in local markets in terms
of competition, inflation and growth.
More specifically, management has considered
the expected impacts from the OneISS strategic
1)
The key assumptions applied are used for accounting purposes and should not be considered a forward-looking statement within the meaning
of the US Private Securities Litigation Act of 1995 and similar laws in other countries regarding expectations to the future development.
Key
assumptions
1)
Basis for assumption
Revenue
growth
Year 1
• Financial forecasts as approved by management
Forecasting period (year 2-5)
• Based on expected market development, including maturity and inflation
• Impact from local and Group initiatives are considered, including key
account focus
Terminal period
• Long term expectations based on IMF “World Economic Outlook”
• Not exceeding expected long-term average for the country, including inflation
Operating
margin
Year 1
• Financial forecasts as approved by management
Forecasting period (year 2-5)
• Impact from local and Group initiatives are considered, including key ac-
count focus and investments in technology and the global operating model
• Restructurings and other local improvement initiatives are considered
Terminal period
• Reflects the expected normalised earnings level in the long term
Discount rates
(net of tax)
• Risk-free interest rate based on 10-year government bonds (country-specific)
• Premium added to adjust for the inconsistency of applying government
bonds with a short-term maturity when discounting cash flows with
infinite maturity
• Country specific estimation risk premium added (to reflect possible
variations in amounts/timing of the projected cash flows)
• Equity risk premium: 6.0% (2021: 6.5%)
• Debt/equity target ratio (market values): 25/75 (2021: 25/75)
1)
Excluding allocated corporate costs.
2)
Risk is assessed based on the estimated excess value for the specific CGU.
FINANCIAL STATEMENTS
Growth Margin
1)
Growth Margin
1)
Discount rate,
net of tax
(DKKm)
Carrying
amount Risk Avg.
Allowed
decrease Avg.
Allowed
decrease Rate
Allowed
decrease Rate
Allowed
decrease Rate
Allowed
increase
Pre-
tax
2022
UK & Ireland 2,661 Low 4.8 % >4.8 % 5.1 % >5.1 % 3.0 % >3.0 % 6.0 % 4.1 % 10.2 % 8.7 % 12.9 %
US & Canada 2,352 Low 6.1 % >6.1 % 5.8 % >5.8 % 3.0 % >3.0 % 6.0 % 2.7 % 10.7 % 4.8 % 13.9 %
Finland 2,098 Low 1.9 % >1.9 % 6.2 % 5.3 % 2.5 % 2.5 % 6.2 % 1.8 % 8.6 % 1.9 % 10.5 %
Switzerland 1,755 Low 2.3 % >2.3 % 7.5 % >7.5 % 2.0 % >2.0 % 7.5 % 6.9 % 7.0 % >7.0 % 8.3 %
Denmark 1,620 Low 1.6 % >1.6 % 6.0 % >6.0 % 2.5 % >2.5 % 6.5 % 2.3 % 8.7 % 2.6 % 10.8 %
Australia & NZ 1,329 Low 2.8 % >2.8 % 5.6 % >5.6 % 2.5 % >2.5 % 5.6 % 3.7 % 9.9 % 9.6 % 14.1 %
Belgium & Lux. 1,319 Low 2.5 % >2.5 % 6.2 % >6.2 % 2.5 % >2.5 % 6.2 % 2.5 % 9.0 % 3.3 % 11.6 %
Turkey 1,282 Low 36.0 % 17.6 % 8.4 % >8.4 % 10.0 % >10.0 % 8.0 % 5.4 % 21.9 % 10.7 % 27.3 %
Norway 1,228 Low 2.8 % >2.8 % 7.8 % >7.8 % 3.0 % >3.0 % 7.8 % >7.8 % 9.6 % >9.6 % 11.8 %
France 936 High 1.8 % 1.8 % 0.2 % 1.2 % 2.5 % 0.7 % 5.0 % 0.4 % 9.4 % 0.6 % 11.4 %
Forecasting period Terminal period
2021
UK & Ireland 2,869
Low 3.9 % >3.9 % 4.6 % >4.6 % 2.5 % >2.5 % 6.0 % 3.8 % 8.7 % 7.9 % 11.3 %
US & Canada 2,229
Low 13.1 % >13.1 % 6.8 % >6.8 % 3.0 % >3.0 % 6.8 % 4.6 % 9.0 % 8.7 % 11.6 %
Finland 2,098 Low 1.7 % >1.7 % 6.4 % 5.3 % 2.0 % 1.8 % 6.5 % 1.5 % 7.3 % 1.4 % 9.1 %
Denmark 1,652 Low
(
1.8
)
% 3.0 % 6.2 % 3.0 % 2.0 % 1.3 % 6.5 % 1.1 % 7.7 % 1.0 % 9.8 %
Australia & NZ 1,340 Low 2.2 % >2.2 % 6.1 % >6.1 % 2.5 % >2.5 % 6.1 % 4.1 % 8.7 % 8.7 % 12.3 %
Switzerland 1,334
Low 1.5 % >1.5 % 7.1 % >7.1 % 1.5 % >1.5 % 7.1 % 5.9 % 6.3 % >6.3 % 7.6 %
Belgium & Lux. 1,319 Low 3.6 % >3.6 % 5.7 % >5.7 % 2.0 % >2.0 % 6.0 % 1.7 % 7.3 % 1.9 % 9.8 %
Norway 1,295 Low 6.0 % >6.0 % 7.9 % >7.9 % 2.5 % >2.5 % 8.0 % 7.2 % 8.7 % >8.7 % 11.0 %
Sweden 1,010 Low 3.3 % >3.3 % 5.5 % >5.5 % 2.0 % >2.0 % 6.2 % 4.8 % 8.0 % >8.0 % 10.0 %
France 936 High 1.4 % 0.2 % 3.3 % 0.2 % 2.0 % 0.1 % 5.0 % 0.1 % 8.9 % 0.1 % 13.7 %
Sensitivity analysis
A sensitivity analysis on the key assumptions
in the impairment testing is presented to the
right. The allowed change represents the
percentage points by which the specific key
assumption can change, all other things being
equal, before the CGU’s recoverable amount
equals its carrying amount.
Management's assessment of risk of incurring
an impairment loss is based on the estimated
excess value for the specific CGU.
France During 2022, the original restructuring and
cost optimisation programme was finalised, though
with a lower impact than initially anticipated, in part
due to exposure to certain industry segments with
slow Covid-19 recovery and muted commercial
momentum. At the same time, interest rates and
inflation rates increased significantly during the
year. Thus, organic growth and operating margin
for the year were realised below target.
In the late part of 2022, the country leadership
team was strengthened with a new country
manager and enhanced commercial and opera-
tional resources to execute an updated business
improvement plan. In addition, in December
2022 the French parliament announced a
gradual abolition of the CVAE (value-added tax
of 1.5% of revenue) with partial effect in 2023
and full effect from 2024.
As a result of these significant internal and external
circumstances and developments in 2022, manage
-
ment updated the business plan, which in general
reflects a slower pace in reaching a sustainable
operating margin of 5.0%.
3.2 Impairment tests (continued)
2)
The impairment test at 31 December 2022 based
on the updated business plan did not result in
recognition of an impairment loss. The excess value
continues to be limited though slightly improved as
a result of the gradual abolition of the CVAE tax.
Turkey The implementation of IAS 29 resulted
in an increase in the carrying amount of goodwill
and customer contracts of DKK 0.9 billion. The
impairment test at 31 December 2022 based
on the updated business plan reflecting the
current inflationary environment, did not result
in recognition of an impairment loss.
FINANCIAL STATEMENTS
3.2 Impairment test (continued)
3.2.3 Brands
The carrying amount of brands relates mainly
to the ISS brand and amounted to DKK 1,589
million at 31 December 2022 (2021: DKK 1,592
million). Management believes that the value
of the ISS brand supports the ISS Group in its
entirety rather than any individual CGU. Accord-
ingly, the ISS brand is tested for impairment at
Group level. The impairment test is based on
group-wide cash flows adjusted for the Group’s
total goodwill and other non-current assets. In
2022, no impairment of the ISS brand has been
identified.
Sensitivity analysis
No sensitivity is shown for the ISS brand, as the
group-wide cash flows adjusted for the Group’s
total goodwill and other non-current assets
significantly exceed the carrying amount.
This is additionally supported by ISS's market
capitalisation at 31 December 2022 of approx-
imately DKK 27 billion exceeding the carrying
amount of equity, which amounted to DKK
10,815 million.
Accounting policy
Intangible assets with an indefinite useful life,
i.e. goodwill and the ISS brand, are subject to
impairment testing annually or when circumstanc-
es indicate that the carrying amount may not be
recoverable. Other non-current assets are tested
annually for indications of impairment.
If an indication of impairment exists, the recover-
able amount of the asset is determined, i.e. the
higher of the fair value of the asset less antici-
pated costs of disposal and its value-in-use. The
value-in-use is calculated as the present value of
expected future cash flows from the asset or the
CGU to which the asset belongs.
The carrying amount of goodwill is tested for
impairment together with the other non-current
assets in the CGU to which goodwill is allocated.
Management believes that the value of the ISS
brand supports the ISS Group in its entirety
rather than any individual CGU. Accordingly, the
ISS brand is tested for impairment at Group level.
The impairment test is based on group-wide cash
flows adjusted for the Group’s total goodwill and
other non-current assets.
An impairment loss is recognised in the statement
of profit or loss in a separate line if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount.
Impairment of goodwill is not reversed. Impair-
ment of other assets is reversed if estimates used
to calculate the recoverable amount have been
changed. An impairment loss is reversed to the
extent that the carrying amount does not exceed
the carrying amount that would have been deter-
mined, net of depreciation and amortisation, if no
impairment loss had been recognised.
In performing the impairment test, manage-
ment assesses whether the CGU to which the
intangibles relate will be able to generate positive
net cash flows sufficient to support the value of
intangibles and other net assets. The assessment
is based on estimates of expected future cash
flows (value-in-use) for the individual GCU, which
by nature are uncertain.
Estimates are made using financial forecasts for
the following year as approved by management,
and estimated discount rates, growth and market
developments. Assumptions applied in the
short to medium term (forecasting period of five
years) generally reflect management’s expecta-
tions considering all relevant factors, including
estimated optimisations and efficiency gains from
improvement initiatives, past experience and
external sources of information, where possible
and relevant.
Terminal growth rates and margins applied
reflects management’s long-term expectations for
revenue growth for the individual CGUs, including
inflation, and normalised earnings, respectively.
The outcome of the impairment test may vary
significantly should the assumptions, estimates
and judgements not be realised as expected and
applied as basis for management’s conclusion of
whether impairment of a CGU has occurred.
Significant accounting
estimates
FINANCIAL STATEMENTS
3.3 Acquisitions
(
DKKm
)
Livit FM
Prior
year adj. 2022 2021
Customer contracts 156 5 161 428
Other non-current assets 48 - 48 26
Trade receivables 10
(
13
)
(3) 184
Other current assets 50 - 50 105
Non-current liabilities
(
76
)
8 (68)
(
112
)
Current liabilities
(
42
)
(
6
)
(48)
(
194
)
Fair value of net assets 146
(
6
)
140 437
Goodwill 191 12 203 97
Consideration transferred 337 6 343 534
Cash in acquired business
(
33
)
- (33)
(
97
)
Consideration transferred, net 304 6 310 437
Contingent and deferred consideration - 15 15 89
Acquisition of businesses
(
cash flow
)
304 21 325 526
3.3.2 Pro forma revenue
and operating profit
Assuming acquisitions and divestments in the
year were included/excluded in profit or loss
from 1 January 2022, revenue on a pro forma
basis would have been DKK 76,825 million
compared to reported revenue of DKK 76,538
million. Likewise, operating profit before other
items on a pro forma basis would have been
DKK 2,858 million compared to reported
operating profit before other items of DKK 2,847
million.
Pro forma revenue and operating profit before
other items include adjustments relating to
acquisitions and divestments estimated by local
ISS management at the time of acquisition and
divestment or actual results where available.
The estimates are based on unaudited financial
information.
Accounting policy
Business combinations are accounted for using
the acquisition method. The cost of an acquisition
is measured as the aggregate of the consideration
transferred, which is measured at acquisition date
fair value, and the amount of any non-controlling
interests in the acquiree. For each business com-
bination, the Group elects whether to measure
the non- controlling interests in the acquiree at fair
value or at the proportionate share of the acquiree’s
identifiable net assets. Acquisition-related costs
are expensed as incurred and presented in Other
income and expenses, net.
Any contingent consideration to be transferred by
the acquirer is recognised at fair value at the acqui-
sition date.
If uncertainties exist at the acquisition date re-
garding identification or measurement of assets,
liabilities and contingent liabilities, initial recognition
is based on provisionally determined fair values.
Changes to fair values are adjusted against goodwill
up until 12 months after the acquisition date and
comparative figures are restated accordingly.
Thereafter no adjustments are made to goodwill,
and changes in fair values are recognised in Other
income and expenses, net.
Goodwill is initially measured at cost (being the excess
of the aggregate of the consideration transferred and
the amount recognised for non-controlling interests)
and any previous interest held over the net identifiable
assets acquired and liabilities assumed.
After initial recognition, goodwill is measured at
cost less accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in
a business combination is allocated to each of the
Group’s cash-generating units (CGUs) that are ex-
pected to benefit from the combination, irrespective
of whether other assets or liabilities of the acquiree
are assigned to those units.
3.3.1 Acquisition impact
Livit FM, Switzerland
On 27 October 2022, ISS acquired 100% of the
shares in Livit FM Services AG (Livit FM), a Swiss
facility management company. The acquisition
will enable us to expand and develop our service
delivery to the real estate industry segment in the
Swiss market, as Livit FM services a large part of
Swiss Life's properties in Switzerland.
The acquisition will add annual revenue of DKK
402 million and 670 employees (estimated
based on unaudited financial information).
During the period 27 October to 31 December
2022, Livit FM contributed revenue of DKK 66
million to the ISS Group.
The purchase consideration amounted to DKK
337 million. Based on provisionally determined
fair values of net assets, goodwill amounted to
DKK 191 million. Goodwill is attributable mainly
to: 1) expertise and know-how in the real estate
industry segment, 2) synergies, 3) platform for
growth, and 4) assembled work force, and is not
deductible for tax purposes.
Prior years adjustments
The adjustments related to the acquisition of
Rönesans Facility Management Company in
Turkey in 2021. The purchase price allocation of
the identified assets, liabilities and contingent
liabilities was completed within 12 months of the
acquisition date.
Subsequent acquisitions
The Group completed no acquisitions from
1 January to 15 February 2023.
3.4.1 Divestments
In 2022, the strategic divestment programme was
successfully completed as we divested our activ-
ities in three countries in the first half of the year,
i.e. Taiwan, Russia and Portugal, as well as two
non-core business units, i.e. Waste Management
in Hong Kong and Damage Control in the UK.
In November 2022, we also signed an agree-
ment to divest our activities in Brunei – the
last country included in the programme. At 31
December 2022, Brunei was therefore the only
remaining country classified as held for sale and
discontinued operations. The divestment was
subsequently completed on 9 February 2023.
Going forward, we will assess the strategic
rationale and fit of our business activities on an
ongoing basis as part of the Group’s ordinary
performance reviews. As a result, we may
identify new non-core activities to be divested
from time to time.
Profit or loss impact
In 2022, our divestment programme resulted in
recognition of a net gain in the profit or loss of
DKK 201 million (2021: DKK 591 million) of which
DKK 82 million were presented in Other income
and expenses (see note 1.4) and DKK 119 million
were recognised in Net profit from discontinued
operations.
Divestment impact
(
DKKm
)
2022 2021
Goodwill 190 377
Customer contracts - 5
Other non-current assets 165 337
Current assets 325 504
Non-current liabilities
(
24
)
(
43
)
Loans and borrowings
(
24
)
(
134
)
Current liabilities
(
251
)
(
239
)
Net assets disposed 381 807
Gain/
(
loss
)
on divestment, net
1)
168 666
Divestment costs 128 175
Consideration received 677 1,648
Cash in divested businesses
(
87
)
(
130
)
Consideration received, net 590 1,518
Contingent and deferred
consideration 49
(
130
)
Divestment costs paid
(
52
)
(
197
)
Divestment of businesses
(
cash flow
)
587 1,191
Company/activity Country
Service
type
Excluded
from P/L Interest
Annual
revenue
(
DKKm
)
Employees
(
number
)
Waste Management Hong Kong Technical February 100% 134 232
ISS Russia Russia Country exit April 100% 112 864
ISS Taiwan Taiwan Country exit April 100% 441 3,092
Damage Control UK Technical May 100% 84 91
ISS Portugal Portugal Country exit July 100% 386 3,843
Total 1,157 8,122
1)
1)
1)
Unaudited
2)
Presented as discontinued operations
 2)
1)
In addition, DKK 33 million was recognised in Other comprehensive
income related to recycling of accumulated foreign exchange
adjustments on country exits
 2)
3.4.2 Assets held for sale
(
DKKm
)
2022
1)
2021
2)
Goodwill 11 148
Other non-current assets 12 165
Current assets 9 202
Assets held for sale 32 515
Non-current liabilities - 36
Current liabilities 10 244
Liabilities held for sale 10 280
FINANCIAL STATEMENTS
3.4 Divestments, assets held for sale and discontinued operations
Subsequent divestments
On 9 February 2023, the Group completed
the divestment of our activities in Brunei
(presented as assets held for sale and
discontinued operations) with an annual
revenue of approximately DKK 44 million and
548 employees.
Apart from the divestment described above,
the Group signed or completed no divestments
from 1 January to 15 February 2023.
 2)
1)
Includes Brunei.
2)
Includes Brunei, Portugal, Russia and Taiwan.
3.4.3 Discontinued operations
Profit or loss
(
DKKm
)
2022 2021
Revenue 385 1,231
Expenses
(
372
)
(
1,194
)
Operating profit
before other items 13 37
Other income and
expenses, net 119 116
Goodwill impairment -
(
36
)
Operating profit 132 117
Financial income/
(
expenses
)
, net - 1
Net profit before tax 132 118
Income tax
(
1
)
(
17
)
Net profit from
discontinued operations 131 101
Earnings per share, DKK
Basic earnings per share 0.7 0.6
Diluted earnings per share 0.7 0.5
Cash flows
(
DKKm
)
2022 2021
Operating activities 23 86
Investing activities
(
70
)
(
156
)
Financing activities 8
(
16
)
The total net divestment gain of DKK 119 million
was mainly related to Taiwan and Portugal.
Recycling of accumulated foreign exchange
adjustments previously recognised in equity
had a positive impact on the net gain of DKK 33
million (2021: DKK 7 million).
FINANCIAL STATEMENTS
3.4 Divestments, assets held for sale and discontinued operations (continued)
Accounting policy
Divestments Gain or loss on disposal of an opera-
tion that is part of a CGU includes a portion of the
related goodwill allocated to that CGU. Goodwill
related to the disposed operation is measured based
on the fair value of the disposed operation relative to
the fair value of the entire CGU.
Assets held for sale comprise non-current assets
and disposal groups held for sale. Liabilities held for
sale are those directly associated with the assets held
for sale and disposal groups. Immediately before
classification as held for sale, they are remeasured
in accordance with the Group’s accounting policies.
Thereafter, they are measured at the lower of their
carrying amount and fair value less costs to sell. Any
impairment loss is first allocated to goodwill, and then
pro rata to remaining assets, except that no loss is
allocated to inventories, financial assets, deferred tax
assets or employee benefit assets, which continue to
be measured in accordance with the Group’s account-
ing policies. Once classified as held for sale, assets are
not amortised or depreciated.
Impairment losses on initial classification as held
for sale, and subsequent gains and losses on
remeasurement are recognised in profit or loss and
disclosed in the notes.
Assets held for sale are presented in separate lines of
the statement of financial position and specified in the
notes. Comparatives are not restated.
A disposal group is presented as discontinued
operations if it is a geographical area, i.e. a CGU
(country), that either has been disposed of, or is
classified as held for sale.
Discontinued operations are presented separately as
Net profit from discontinued operations and specified
in the notes. Comparatives are restated.
Cash flows from discontinued operations are included
in cash flow from operating, investing and financing
activities together with cash flows from continuing
operations, but separately specified in this note.
Discontinued operations
– presented in separate profit or loss line
2022
Brunei
Brazil
Brunei
Portugal
Portugal
Russia
Russia
Taiwan
Thailand
Taiwan
2021
Brunei
Brazil
Brunei
Portugal
Portugal
Russia
Russia
Taiwan
Thailand
Taiwan
Czech Republic
Chile
Czech Republic
Hungary
Hungary
Philippines
Portugal
Philippines
Romania
Romania
Sweden
Slovenia
Slovenia
Slovakia
Slovakia
Debt maturity profile
Proposed dividends 2022
In this section:
4.1 Equity
4.2 Loans and borrowings
4.3 Financial income and
expenses
4.4 Financial risk management
4.5 Interest rate risk
4.6 Liquidity risk
4.7 Currency risk
Financial risk exposure
20%of adjusted net profit
Low
3
6
9
12
15
20222021202020192018
DKKbn
(12)
(6)
0
12
6
3.8
2.6
2.4
3.0
Net debt
Financial leverage
(11.7)
Net debt and financial leverage
4 Capital structure
In 2022, we achieved our financial turnaround
target, completed our strategic divestment
programme and secured strong free cash flow
and cash generation. Our financial foundation
was strengthened and financial leverage ended
at 2.6x – well below the target of below 3x by the
end of 2022.
At our Capital Markets Day in November 2022,
updated capital allocation priorities were an-
nounced. ISS will stringently allocate capital by
fulfilling four clear ambitions in prioritised order:
1
Maintaining investment grade rating and
financial leverage target of 2.0-2.5x pro
forma EBITDA
2
Annual dividend pay-out ratio of 20-40% of
adjusted net profit
3
Value-creating investments in the form of
acquisitions
4
Distributing excess cash through share
buyback programmes
The Board of Directors will at the annual general
meeting propose a dividend for 2022 of 20% of
adjusted net profit corresponding to a total of
DKK 390 million or DKK 2.1 per share.
Financial risks
We are exposed to financial risks, mainly liquidity
and currency risk. Risk is a natural part of our
business activities and a condition for being able
to create value. However, through effective risk
management, risks are monitored and mitigated
to an acceptable level with a remaining low
impact on the consolidated financial statements.
Debt maturities
We have no unaddressed material debt maturities
until 2024 onwards and no financial covenants in
our capital structure (except for certain covenants
applying to the local Turkish loan facility).
0,0
2,5
5,0
7,5
10,0
20272026202520242023
Revolving Credit Facility (undrawn)
EMTNs
4.5
3.6
9.7
3.7
9.7
DKKbn
1)
See 8.5, Definitions, p. 106
Net debt and financial leverage
1)
1)
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
4.1 Equity
4.1.1 Share capital
At 31 December 2022, ISS’s share capital
comprised a total of DKK 185,668,226 shares
(2021: 185,668,226) with a nominal value of
DKK 1 each. All shares were fully paid and freely
transferable.
ISS has one class of shares, and no shares carry
special rights. Each share gives the holder the
right to one vote at our general meetings.
4.1.2 Translation reserve
(
DKKm
)
Hedging Subsidiaries Total
At 1 January 2022
(
152
)
(
1,294
)
(
1,446
)
Foreign exchange adjustments of subsidiaries
(
ISS's share
)
-
(
45
)
(
45
)
Recycling of accumulated foreign exchange adj.
on country exits -
(
33
)
(
33
)
Hyperinflation in Turkey - 403 403
Fair value adjustments of net investment hedges, net of tax
(
33
)
-
(
33
)
At 31 December 2022
(
185
)
(
969
)
(
1,154
)
2022 2021
Purchase
price
(
DKKm
)
Number Number
At 1 January 191 970,082 970,082
Settlement of
vested PSUs
(
6
) (
31,739
)
-
At 31 December 185 938,343 970,082
Average number of shares
(
'000
)
2022 2021
Average number of shares 185,668 185,668
Average number of treasury
shares
(
938
)
(
970
)
Average number of shares
(
basic
)
184,730 184,698
Average number of PSUs
and RSUs expected to vest 2,513 1,305
Average number of shares
(
diluted
)
187,243 186,003
Average number of shares is calculated for
the purpose of the calculation of EPSs. The
calculation of average number of diluted shares
excludes a total of 1,244,928 (2021: 1,714,684)
PSUs and RSUs which are not expected to vest.
Definitions, cf. 8.5, Definitions.
Accounting policy
Retained earnings is the Group’s free reserves,
which includes share premium. Share premium
comprises amounts above the nominal share
capital paid by shareholders when shares are
issued by ISS A/S.
Translation reserve comprises foreign exchange
differences arising from the translation of financial
statements of foreign entities with a functional
currency other than DKK as well as from the trans-
lation of non-current balances which are consid-
ered part of the investment in foreign entities and
fair value adjustments of net investment hedges.
On full realisation of a foreign entity where control
is lost the accumulated foreign exchange adjust-
ments are transferred to profit or loss in the same
line item as the gain or loss.
Treasury shares The cost of acquisition and pro-
ceeds from sale of treasury shares are recognised
in reserve for treasury shares. Dividends received
in relation to treasury shares are recognised in
retained earnings.
Proposed dividends are recognised as a liability
at the date when they are adopted at the annual
general meeting (declaration date). Dividends
proposed for the year are shown in a separate
reserve under Equity.
4.1.4 Proposed dividends
In 2022, we reached our financial leverage
target of below 3x, which was the prerequisite
for reinstating dividend payments. At our
Capital Markets Day in November 2022, we
announced our intention to pay stable and
increasing dividends to shareholders over time.
Our new dividend policy targets a pay-out ratio
of approximately 20-40% of adjusted net profit
(cf. 8.5, Definitions).
At the annual general meeting to be held on 13
April 2023, the Board of Directors will propose
a dividend for 2022 of 2.1 per share of DKK 1
(2021: DKK 0.0 per share), equivalent to DKK 390
million (2021: none) and a pay-out ratio of 20%.
4.1.3 Treasury shares
ISS holds treasury shares for the purpose of
covering obligations under existing share-
based incentive programmes. At 31 December
2022, treasury shares equaled 0.5% of the
share capital.
FINANCIAL STATEMENTS
4.1 Equity (continued)
Development in 2022
In 2022, other comprehensive income in-
creased by DKK 563 million mainly as a result
of hyperinflation restatement in Turkey and
remeasurement gain/losses on defined benefit
plans. This was partly offset by foreign exchange
adjustments of foreign entities.
4.1.5 Other comprehensive income
Attributable to owners of ISS A/S
(
DKKm
)
Note
Retained
earnings
Translation
reserve Total
Non-
controlling
interest
Total
equity
2022
Defined benefit plans
Remeasurement gain/
(
loss
)
, defined benefit plans 7.1 253 - 253
(
45
)
208
Asset ceiling 7.1
(
43
)
-
(
43
)
-
(
43
)
Foreign exchange adjustments
Foreign exchange adjustments of foreign entities -
(
45
)
(
45
) (
57
)
(
102
)
Recycling of accumulated foreign exchange adj. on country exits -
(
33
)
(
33
)
-
(
33
)
Hyperinflation restatement of equity at 1 January - 403 403 411 814
Hedging
Fair value adjustments of net investment hedges 4.7 -
(
43
)
(
43
)
-
(
43
)
Tax
Tax related to the items above
(
62
)
10
(
52
)
9
(
43
)
Total 148 292 440 318 758
2021
Defined benefit plans
Remeasurement gain/
(
loss
)
, defined benefit plans 7.1 1,145 - 1,145 - 1,145
Asset ceiling 7.1
(
1,080
)
-
(
1,080
)
-
(
1,080
)
Foreign exchange adjustments
Foreign exchange adjustments of foreign entities - 312 312
(
15
)
297
Recycling of accumulated foreign exchange adj. on country exits -
(
7
)
(
7
)
-
(
7
)
Hedging
Fair value adjustments of net investment hedges 4.7 -
(
191
)
(
191
)
-
(
191
)
Tax
Tax related to the items above
(
11
)
42 31 - 31
Total 54 156 210
(
15
)
195
FINANCIAL STATEMENTS
4.2 Loans and borrowings
(
DKKm
)
2022 2021
Issued bonds 13,973 14,064
Lease liabilities 2,464 2,539
Bank loans 363 340
Derivatives 108 39
Total 16,908 16,982
Non-current liabilities 15,945 16,094
Current liabilities 963 888
Loans and borrowings 16,908 16,982
Cash and cash equivalents and other financial items
1)
(
5,368
)
(
3,531
)
Net debt 11,540 13,451
1)
Includes securities of DKK 104 million (2021: DKK 103 million) and the net positive fair value of derivatives of DKK 50 million.
Financing fees
At 31 December 2022, accumulated financing
fees amounted to DKK 57 million (2021: DKK
79 million). The decrease compared to last year
was due to ordinary amortisation, which was
recognised in financial expenses, amounting to
DKK 22 million (2021: DKK 28 million). No new
financing fees were capitalised in 2022.
Fair value
At 31 December 2022, the fair value of loans and
borrowings was DKK 15,751 million (2021: DKK
17,441 million). The fair value of bonds was based
on the quoted market price on the Luxembourg
Stock Exchange and measurement is categorised
as Level 1 in the fair value hierarchy. For the
remaining loans and borrowings, fair value is in
all material respects equal to the nominal value
as illustrated in 4.5, Interest rate risk.
Changes in loans and borrowings
(
DKKm
)
Issued
bonds
Lease
liabilities
Bank
loans
Deri va-
tives Other Total
2022
At 1 January 14,064 2,539 340 39 - 16,982
Foreign exchange adjustments -
(
14
)
(
86
)
- -
(
100
)
Cash flows -
(
865
)
(
58
)
- -
(
923
)
Acquisitions - 40 - - - 40
Lease additions - 765 - - - 765
Fair value adjustments
(
108
)
- 43 69 - 4
Other 17
(
1
)
124 - - 140
At 31 December 13,973 2,464 363 108 - 16,908
2021
At 1 January 15,537 2,565 535 6 61 18,643
Foreign exchange adjustments
(
6
)
27
(
131
)
- -
(
110
)
Cash flows
(
1,577
)
(
947
)
(
472
)
-
(
61
)
(
2,996
)
Lease additions - 859 - - - 859
Fair value adjustments - - 169 33 - 202
Other 110 35 239 - - 384
At 31 December 14,064 2,539 340 39 - 16,982
Accounting policy
Issued bonds and bank loans are recognised
initially at fair value net of directly attributable
transaction costs and subsequently at amortised
cost using the effective interest method. Any
difference between the proceeds initially received
and the nominal value is recognised in Financial
expenses over the term of the loan.
At the date of borrowing, financing fees are
recognised as part of loans and borrowings and
subsequently amortised over the term of the loan
and recognised in Financial expenses.
Lease liabilities At the commencement date, the
Group recognises lease liabilities at the present val-
ue of the lease payments to be made over the lease
term. Lease payments include fixed payments less
any incentive payments, variable lease payments
that depend on an index or rate, e.g. when a mini-
mum indexation is applied, and amounts expected
to be paid under residual value guarantees. Lease
payments also include the exercise price of a pur-
chase option reasonably certain to be exercised by
the Group and payment of penalties for terminating
a lease, if the lease term reflects the Group exer-
cising the option to terminate. The present value is
calculated using the Group’s incremental borrowing
rate if the interest rate implicit in the lease is not
readily determinable.
Subsequently, the lease liability is measured at
amortised cost using the effective interest meth-
od. The liability is remeasured due to a modifica-
tion, a change in lease term or a change in the
assessment to purchase the underlying asset.
Also, the liability is remeasured due to a change
in future lease payments (e.g. a change in an
index or rate) or due to a change in the Group’s
estimate of the amount expected to be payable
under a residual guarantee.
(
DKKm
)
2022 2021
Interest income on cash and cash equivalents 69 41
Monetary gain on hyperinflation restatement 138 -
Financial income 207 41
Interest expenses on loans and borrowings
1)
(
301
)
(
299
)
Interest expenses on lease liabilities
1)
(
82
)
(
69
)
Bank fees
(
50
)
(
52
)
Commitment fee
(
43
)
(
61
)
Amortisation of financing fees
(
non-cash
)
1)
(
22
)
(
28
)
Net interest on defined benefit obligations
(
17
)
(
17
)
Other
(
32
)
(
30
)
Foreign exchange losses
(
49
)
(
51
)
Redemption premium, bonds -
(
90
)
Financial expenses
(
596
)
(
697
)
FINANCIAL STATEMENTS
4.3 Financial income and expenses
Monetary gain on hyperinflation restatement
related to the implementation of IAS 29 "Finan-
cial Reporting in Hyperinflationary Economies",
cf. 7.2, Hyperinflation in Turkey.
Interest expenses on loans and borrowings
comprised mainly interest on issued bonds and
was in line with 2021. Repurchase of EMTNs in
December 2021 and lower interest expenses
due to an interest rate swap entered into in May
2022, cf. 4.5, Interest rate risk, were offset by
increased interest expenses related to a local
Turkish facility following the acquisition in 2021.
Redemption premium, bonds in 2021 related
to the repurchase of EUR 200 million of the total
outstanding EUR 500 million EMTNs maturing
2024.
1)
Measurement basis amortised cost.
FINANCIAL STATEMENTS
4.4 Financial risk management
The Group is exposed to a number of financial
risks arising from its operating and financing activi-
ties, mainly interest rate risk, liquidity risk, currency
risk and credit risk. It is management’s assessment
that the Group’s exposure to these risks is low. The
Group has not identified additional financial risk
exposures in 2022 compared to 2021.
Financial risks are managed centrally by Group
Treasury based on the Financial Policy, which is
reviewed and approved annually by the Board
of Directors. Exposure to credit risk on trade
receivables and expected credit losses is however
managed locally in the operating entities, cf. 2.1,
Trade receivables and credit risk. It is the Group’s
policy to mitigate risk exposure derived from its
business activities. Group policy does not allow tak
-
ing speculative positions in the financial markets.
On an ongoing basis the Group considers
whether the financial risk management approach
appropriately addresses the risk exposures.
Through our risk management procedures,
financial risks are monitored and reduced to an
acceptable level.
An overview of financial risks and impact
assessment at 31 December 2022 is provided
to the right. The Group’s objectives and policies
for measuring and managing risk exposure are
explained in the respective notes.
Type Risk Basis for assessment at 31 December Note
Credit risk Low • Not past due on trade receivables is around 90%
(aging analysis)
• Expected credit losses on trade receivables are less
than 2% of gross receivables (credit ratings)
• The Group transacts only with financial institutions
with a credit rating of at least A- (cash and cash
equivalents)
2.1
Interest rate risk Low • 82% of the Group's bank loans and bonds carried
fixed rates (2021: 98%)
• Duration of gross debt (fixed-rate period) 2.9
years (2021: 4.3)
4.5
Liquidity risk Low • No short-term maturities of debt
• Diversified funding portfolio of debt (bonds and
bank loans)
• No financial covenants in our main Group facilities (cer-
tain covenants apply to the local loan facility in Turkey)
4.6
Currency risk Low • The Group benefits from a natural hedge in
having income, costs and investments in the same
functional currency, country-by-country
• 97.6% of the Group's loans and borrowings
(external) denominated in EUR (2021: 97.7%)
• 78.4% (2021: 78.8%) of the Group’s external
borrowings were denominated in EUR, including net
investment hedges
4.7
Interest rate risk
– low exposure
Interest rate risk arises from the possibility
that changes in interest rates will affect
future cash flows or the fair value of finan-
cial instruments. Exposure relates to bank
loans, bonds or interest rate swaps with
floating interest rates.
Risk management policy
• At least 50% of the Group’s bank loans
and issued bonds must carry fixed interest
rates directly or through derivatives
• Duration of gross debt (fixed-rate period)
shall be 2-6 years
Mitigation
• The fixed/floating ratio and gross debt
duration (fixed-rate period) are measured
on a monthly basis
• Interest rate swaps (fair value hedge) are
used to manage the fixed/floating ratio
on gross debt
FINANCIAL STATEMENTS
4.5 Interest rate risk
Loans and borrowings
2022 2021
(
DKKm
)
Nominal
interest rate Currency Maturity
Nominal
value
Carrying
amount
Carrying
amount
Issued bonds
(
fixed interest rate
)
EMTNs
(
EUR 300 million
)
2.125% EUR 2024 2,231 2,229 2,226
EMTNs
(
EUR 500 million
)
1.250% EUR 2025 3,718 3,594 3,695
EMTNs
(
EUR 500 million
)
0.875% EUR 2026 3,718 3,700 3,695
EMTNs
(
EUR 600 million
)
1.500% EUR 2027 4,462 4,450 4,448
14,129 13,973 14,064
Bank loans
(
floating interest rate
)
Loan facility Turkey TLFREF TRY 2026 192 201 300
Bank loans and overdrafts - Multi - 180 162 40
372 363 340
Loan portfolio
– fixed vs. floating interest rates
Fixed vs.
floating
interest rates
2022
Accounting policy
The interest rate swap qualifies as a fair value
hedge as the risk being hedged is the possible
change in the fair value of a recognised liability.
The carrying amount of the hedged item is
adjusted for fair value changes attributable to the
risk being hedged and changes are recognised in
profit or loss.
In May 2022, ISS entered into an interest rate
swap in order to reduce the fixed/floating ratio
on our gross debt. A principal amount of EUR
300 million has been swapped from a fixed
interest rate to a floating rate. The fair value
adjustments recognised in profit or loss at 31
December is disclosed above.
Interest rate sensitivity
An increase in relevant interest rates of
1%-point, with all other variables held constant,
would have decreased net profit by DKK 26
million (2021: decreased by DKK 4 million). The
increase in interest rate sensitivity is a result of
the interest rate swap entered into in May 2022.
The estimate was based on the Group’s floating
rate loans and borrowings, i.e. disregarding cash
and cash equivalents, as the level at 31 December
is typically the highest in the year and thus not a
representative for the purpose of this analysis.
(DKKm)
Negative
fair value
Fair
value,
net
Recognised
in profit
or loss
Maturity
Fair value hedge
Interest rate swap (108) (108) 7 2025
(98%) Fixed
(2%) Floating
82%
18%
Liquidity risk
– low exposure
Liquidity risk results from the Group’s
potential inability or difficulty in meeting the
contractual obligations associated with its
financial liabilities due to insufficient liquidity.
Risk management policy
• Maintain an appropriate level of short-
and long-term liquidity reserves (liquid
funds and committed credit facilities)
• Maintain a smooth maturity profile in
terms of different maturities
• Maintain access to diversified funding
sources
Mitigation
• Raising capital is managed centrally
in Group Treasury to ensure efficient
liquidity management
• Group Treasury monitors the risk of
insufficient liquidity on a daily basis
• Liquidity is transferred to/from ISS
Global A/S, which operates as the Group’s
internal bank
• For day-to-day liquidity management
cash pools have been established in the
majority of the local entities
FINANCIAL STATEMENTS
4.6 Liquidity risk
Financial liabilities
(
DKKm
)
Carrying
amount
Contractual
cash flows
< 1
year
1–2
years
2–3
years
3–4
years
4–5
years
> 5
years
2022
Loans and borrowings, excl. lease 14,444 15,332 539 2,512 3,914 3,861 4,506 -
Lease liabilities 2,464 2,600 765 578 436 271 180 370
Trade payables and other 3,746 3,746 3,746 - - - - -
Total financial liabilities 20,654 21,678 5,050 3,090 4,350 4,132 4,686 370
2021
Loans and borrowings, excl. lease 14,443 15,489 326 311 2,537 3,930 3,879 4,506
Lease liabilities 2,539 2,658 786 561 418 289 197 407
Trade payables and other 2,402 2,402 2,402 - - - - -
Total financial liabilities 19,384 20,549 3,514 872 2,955 4,219 4,076 4,913
(
DKKm
)
2022 2021
Cash and cash equivalents 5,214 3,428
Restricted cash
(
35
)
(
31
)
Unused revolving credit facilities 7,276 7,312
Liquidity reserves 12,455 10,709
Not readily available 1,078 1,061
Readily available liquidity 11,377 9,648
4.6.1 Contractual maturities 4.6.2 Liquidity reserve
Cash and cash equivalent of DKK 5,214
million reflects the strong liquidity position of
the Group. The level is typically highest at 31
December and not a representative level for the
rest of the year.
Restricted cash DKK 35 million of the total cash
and cash equivalents at 31 December 2022 was
placed on blocked or restricted bank accounts
due to legal cases and tax-related circumstances.
Unused revolving credit facilities The Group
has a EUR 1 billion revolving credit facility
maturing in November 2024. In addition to the
unused revolving credit facilities at Group level,
local uncommitted credit facilities are available
in countries, which are not considered part of
the readily available liquidity. At 31 December
2022, these amounted to DKK 0.9 billion of
which DKK 0.2 billion was drawn (2021: DKK 1.1
billion of which all were unused).
Not readily available Cash is considered readily
available for upstreaming to the parent company
(ISS A/S) within five days. In a number of countries,
transfer to ISS A/S is assessed to take more than
five days due to local administrative processes,
and thus is not deemed readily available.
The contractual maturities of financial liabilities,
based on undiscounted contractual cash flows,
are shown in the table. The undiscounted
contractual cash flows include expected interest
payments, estimated based on market expecta-
tions at 31 December.
The risk implied from the values reflects the
one-sided scenario of cash outflows only. Trade
payables and other financial liabilities are mainly
used to finance assets such as trade receivables
and property, plant and equipment.
Current financing
The maturity profile of the Group’s current
financing, i.e. issued bonds and bank loans,
based on nominal values including any undrawn
amounts and excluding interest payments, is
illustrated in the chart to the right.
20272026202520242023
Revolving Credit Facility (undrawn)
EMTNs
4.5
3.6
3.7
9.7
Debt maturity profile
(DKKbn)
FINANCIAL STATEMENTS
Currency risk
– low exposure
4.7 Currency risk
Foreign currency sensitivity
(loans and borrowings)
A change in relevant currencies, with all other
variables held constant, would have impacted
profit or loss with the amounts above. The
analysis is based on the Group’s internal
monitoring of currency exposure on loans
and borrowings, intercompany loans, external
long-term receivables, cash and cash equivalents
as well as accrued royalties (Group internal).
Sensitivity
(
DKKm
)
Currency
exposure
(
nominal
)
Currency
swaps
(
contractual
)
Exposure,
net
Increase
in FX
Profit
or loss
2022
EUR/DKK
(
17,212
)
7,333
(
9,879
)
1%
(
99
)
USD/DKK 1,431
(
1,575
)
(
144
)
10%
(
14
)
Other/DKK
(
1,176
)
1,774 598 10% 60
Total
(
16,957
)
7,532
(
9,425
)
2021
EUR/DKK
(
17,375
)
6,864
(
10,511
)
1%
(
105
)
USD/DKK 1,505
(
1,639
) (
134
)
10%
(
13
)
Other/DKK
(
1,173
)
1,365 192 10% 19
Total
(
17,043
)
6,590
(
10,453
)
4.7.1 Loans and borrowings
Currency risk is the risk that arises from
changes in exchange rates, and affects
the Group’s result, investments or value of
financial instruments.
The Group generally benefits from a natural
hedge in having income, costs and invest-
ments in the same functional currency
country by country. Currency risk therefore
predominantly arises from funding and
investments in subsidiaries.
Risk management policy
• It is Group policy to pool funding activities
centrally and fund investments in subsidiar-
ies through a combination of intercompany
loans and equity
• Currency risk on intercompany loans is as
a main policy hedged against DKK or EUR
when exposure exceeds DKK 5 million.
Some currencies cannot be hedged within
a reasonable price range in which case cor-
relation to a proxy currency is considered
and, if deemed appropriate, proxy hedging
is applied
• Currency risk on net investments are as a
main policy hedged against DKK or EUR
when annual EBITDA of the relevant func-
tional currency corresponds to 5% or more
of Group EBITDA up to an amount of 3-5x
EBITDA in the relevant functional currency
and adjusted as appropriate to relevant
market entry and exit risk
• Exposure to EUR is monitored but not
hedged due to the fixed rate exchange
policy between DKK/EUR
Mitigation
• Currency swaps are used to hedge currency
risk on loans and borrowings (external),
intercompany balances and long-term
receivables (external)
• Currency exposure on loans and borrowings,
intercompany balances and cash and cash
equivalents is measured at least on a weekly
basis
• Currency swaps (net investment hedges)
or debt are used to hedge the currency
exposure to investments in subsidiaries
(other than EUR).
FINANCIAL STATEMENTS
4.7 Currency risk (continued)
Foreign currency sensitivity
(net investments)
A 10% change in the mentioned currencies,
with all other variables held constant, would
have changed the fair value recognised in Other
comprehensive income by DKK 48 million for
GBP, by DKK 38 million for USD and by DKK 92
million for CHF.
4.7.2 Net investment hedges
(
DKKm
)
Net
investment
Hedging of
investment
Exposure,
net
Average
price
Change
in fair value
Fair
value Maturity
2022
GBP 1,699 1,216 483 9 53 24 March 2023
USD 1,146 767 379 7
(
57
)
27 March 2023
CHF 1,673 755 918 8
(
39
)
19 March 2023
Total 4,518 2,738 1,780 -
(
43
)
70
2021
GBP 1,492 1,285 207 9
(
100
)
(
18
)
March 2022
USD 1,093 722 371 7
(
60
)
3 March 2022
CHF 1,847 718 1,129 7
(
31
)
(
4
)
March 2022
Total 4,432 2,725 1,707 -
(
191
)
(
19
)
Accounting policy
Derivative financial intruments are initially
recognised at fair value at the trade date and sub-
sequently remeasured at fair value at the reporting
date. The fair value of derivatives is presented in
Other receivables when the fair value is positive and
in Other liabilities when the fair value is negative.
Fair value measurement takes current market
data into account. The Group uses valuation tech-
niques that are appropriate in the circumstances
and for which sufficient data are available to
measure fair value. Measurement is categorised
as Level 2 in the fair value hierarchy as it is not
based on observable market data.
Currency swaps are used to hedge the expo-
sure to currency risk on loans and borrowings
(external) and intercompany balances. As changes
in the fair value of both the hedged item and the
currency swap are recognised in profit or loss,
hedge accounting is not applied.
Currency swaps (net investment hedges) or debt
is used to hedge the currency exposure to invest-
ments in subsidiaries (other than for EUR).
Net investment hedges Changes in the fair value
of the hedging instrument relating to the effective
portion of the hedge are recognised in other
comprehensive income while fair value changes
relating to the ineffective portion are recognised
in financial income or financial expenses. On
disposal of the foreign operation, the cumulative
fair value recognised in equity is recognised in the
statement of profit or loss when the gain or loss
on disposal is recognised.
Impact on equity
The effect of translation of net assets in foreign
subsidiaries before the effect of net investment
hedges decreased equity by DKK 102 million
(2021: an increase of DKK 297 million) primarily
related to Turkey, Switzerland and the UK.
Revenue by
currency
76.5
DKKbn
FINANCIAL STATEMENTS
4.7 Currency risk (continued)
(
DKKm
)
Revenue
Operating profit
before other items
GBP 984 40
USD 625 31
CHF 573 42
AUD 462 33
NOK 402 31
TRY 319 24
SEK 298 16
EUR 240 9
Other 1,264 60
Total 5,167 286
Change in
avg. FX rates)
2021 to
2022
2020 to
2021
GBP 0.8% 3.2%
CHF 7.7%
(
1.2
)
%
USD 12.6%
(
3.8
)
%
AUD 3.9% 4.8%
NOK 0.7% 5.1%
SEK
(
4.5
)
% 3.1%
TRY
(
40.8
)
%
(
22.9
)
%
EUR 0.0%
(
0.2
)
%
4.7.3 Translation risk
The Group’s exposure to currency risk on
transaction level is low since income, costs and
investments are in the same functional currency
country by country.
Impact on profit or loss
In 2022, changes in weighted average exchange
rates resulted in an increase in Group revenue
of DKK 689 million or 0.9% (2021: decrease of
0.6%) and a decrease of the Group’s operating
profit before other items of DKK 16 million or
1.0% (2021: decrease of 1.2%).
31%
13%
8%
8%
6%
5%
4%
4%
4%
17%
EUR
GBP
USD
CHF
AUD
DKK
NOK
TRY
SEK
Other
% of Group revenue
Revenue by currency
( ) = Weakened against DKK.
Foreign currency sensitivity
A 10% change (EUR: 1% change) in relevant
currencies, with all other variables held constant,
would have impacted revenue and operating profit
before other items with the amounts below.
In this section:
5.1 Income tax
5.2 Deferred tax
5 Tax
Our commitment
ISS is committed to comply with applicable rules
and regulations in the countries where we op-
erate and to paying applicable taxes accurately
and in a timely manner. We take a compliant and
transparent approach to tax and tax planning,
and we do not tolerate evasion of income taxes,
payroll taxes, social charges etc.
For the benefit of society, our placemakers
and customers, we support governmental and
industry specific initiatives that introduce tighter
controls and sanctions to ensure that compa-
nies in our industry play by the rules.
The right balance
We acknowledge that we have an obligation to
protect the interests of our shareholders. By
managing and planning tax payments effec-
tively, we ensure a consolidated competitive
effective tax rate and strive to limit double
taxation to the extent possible.
Our approach to tax risks
ISS has a very low tolerance for tax risks. We
continuously monitor and mitigate tax risks to
the extent possible. No aggressive tax models
are, or will be, used to optimise our tax position.
Tax payments
Tax policy
The ISS tax policy can be found here
Transfer pricing
Transactions between Group companies are
conducted on market terms (arms’ length
principles) and in accordance with current OECD
guidelines for setting internal transfer prices.
Cross-border transactions mainly comprise roy-
alty payments, management fees and financing.
In general, transfer pricing is assessed to be the
tax area with highest exposure to the ISS Group
and transfer pricing may be subject to very
complex tax audits.
Tax payments in 2022
In 2022, tax paid amounted to DKK 422 million
(2021: DKK 528 million) equal to a cash tax rate
of 17.2%. Payments were positively impacted by
timing of prepayments.
Tax payments included corporate income tax
payments due in 2022 including CVAE (France),
state taxes, and withholding taxes. Withholding
taxes are reported as paid tax in the country
bearing the cost.
In addition to payment of corporate income tax-
es, ISS contributes with payroll taxes (including
social charges) and VAT in the countries where
we operate.
DECEMBER 2022
ISS Group Tax Policy
PEOPLE MAKE PLACES
FINANCIAL STATEMENTS
Tax
payments
422
DKKm
15%
12%
8%
8%
8%
7%
6%
6%
5%
25%
Australia
Switzerland
US
Norway
Belgium
Mexico
Chile
Sweden
Denmark
Other
FINANCIAL STATEMENTS
5.1 Income tax
Income tax in profit or loss
(
DKKm
)
2022 2021
Current tax 538 486
Deferred tax
(
89
)
46
Prior year adjustments, net
(
8
)
(
23
)
Income tax 441 509
Effective tax rate (ETR)
Group 2022 2021
Statutory income tax rate, Denmark 22.0 % 22.0 %
Foreign tax rate differential, net
(
0.3
)
%
(
14.4
)
%
Total
21.7 % 7.6 %
Non-tax-deductible expenses less
non-taxable income
(
2.1
)
% 8.5 %
Non-tax-deductible impairment
(
0.0
)
% 12.1 %
Prior year adjustments, net
(
0.3
)
%
(
2.2
)
%
Change in valuation of tax assets, net
(
2.2
)
% 17.4 %
Changes in tax rates 0.4 %
(
0.7
)
%
Hyperinflation
(
1.6
)
% 0.0 %
Other taxes 2.1 % 6.0 %
Effective tax rate
18.0 % 48.7 %
Main countries
Statutory
income
tax 2022 2021
Australia 30.0% 30.3 % 30.2 %
Denmark
(
incl. HQ
)
2)
22.0% 27.0 %
(
7.1
)
%
Finland 20.0% 24.5 % 25.9 %
France
1) 2)
25.0%
(
46.0
)
%
(
10.9
)
%
Germany
1) 2)
30.3% 40.4 % 0.0 %
Norway 22.0% 20.2 % 22.6 %
Spain 25.0%
(
18.9
)
% 21.9 %
Switzerland 18.0% 18.1 % 7.5 %
UK 19.0% 17.1 % 122.7 %
US
3)
21.0%
(
104.2
)
% 21.4 %
1)
Profit before tax was negative in 2022.
2)
Profit before tax was negative in 2021.
3)
Based on low profit before tax in 2022.
Development in effective tax rate
In 2022, the Group’s effective tax rate decreased
to 18.0% from 48.7% in 2021. Compared to the
statutory income tax rate of 22% in Denmark, the
effective tax rate was mainly reduced by the follow-
ing three factors; release of valuation allowance
on deferred tax assets, divestment gains (non-tax-
able) and hyperinflation restatement in Turkey.
In 2021, the effective tax rate was negatively
impacted by recognised valuation allowances
on deferred tax assets, goodwill impairment in
France (non-tax deductible) and other non-tax-
deductible costs, mainly interest limitation.
Accounting policy
Income tax comprises current tax and changes in
deferred tax, including effects from changes in tax
rate, and is recognised in profit or loss or other
comprehensive income.
Tax receivables and payables are recognised in
the statement of financial position as tax comput-
ed on taxable income for the year, adjusted for
tax on taxable income prior years and tax paid on
account.
Foreign tax rate differential, net was negligible
in 2022, whereas 2021 was impacted by tax losses
in countries with a higher corporate income tax
rate than in Denmark, most significantly France
and Germany.
Non-tax deductible expenses less not-tax-
able income comprised various income and
expenses across the Group. In 2022, non-tax-
able divestment gains in Hong Kong and the UK
impacted positively, partly offset by the recurring
negative impacts from Denmark due to interest
limitation and withholding taxes without credit
relief as well as the tax credit CICE in France.
Non-tax-deductible impairment in 2021 related
to goodwill impairment in France.
Prior year adjustments, net related to adjust-
ment in the final tax returns and were insignif-
icant in 2022. In 2021, the adjustment mainly
related to the UK.
Change in valuation of tax assets, net in 2022
related to release of valuation allowances on tax
losses in Spain, the Netherlands and Germany
partly offset by an increase in France. In 2021,
the change mainly related to Germany and
France.
Changes in tax rates in 2022 was driven by
changed income tax rates in Turkey from 23%
to 20% (effective from 2023) and in the UK from
19% to 25% (effective from April 2023). In 2021,
the change was mainly driven by a reduction
of the corporate tax rate in France from 33% to
25% over the period 2018-2022.
Hyperinflation related to implementation of
IAS 29 “Financial Reporting in Hyperinflationary
Economies”, cf. 7.2, Hyperinflation in Turkey,
including the positive impact from change in local
tax rules leading to step-up in tax bases of assets
due to hyperinflation.
Other taxes mainly comprised withholding tax,
e.g. in Denmark, and Cotisation sur la Valeur
Ajoutée des Entreprises (CVAE) in France.
FINANCIAL STATEMENTS
5.2 Deferred tax
Development in deferred tax
(
DKKm
)
2022 2021
Liabilities, net at 1 January 186 204
Prior year adjustments, net 32
(96)
Foreign exchange adjustments (22) (24)
Hyperinflation restatement 62
-
Acquisitions and divestments, net 20 72
Other comprehensive income 53 11
Reclassification to Assets/
(Liabilities) held for sale 24
(27)
Tax on profit before tax (89) 46
Liabilities, net at 31 December 266 186
Deferred
tax assets
Deferred
tax liabilities
(
DKKm
)
2022 2021 2022 2021
Tax losses carried forward 482 336 - -
Goodwill 4 4 387 413
Brands - - 350 350
Customer contracts 7 8 150 141
Property, plant and equipment 220 139 425 381
Provisions and other liabilities 977 1,062 685 563
Pensions 126 158 62 22
Tax losses in foreign subsidiaries under Danish joint taxation - - 23 23
Set-off within legal tax units and jurisdictions
(
904
)
(
917
) (
904
)
(
917
)
Total 912 790 1,178 976
Deferred tax assets relating to tax losses carried
forward are recognised, when management
assesses that these can be offset against positive
taxable income in the foreseeable future. The
assessment is made at the reporting date taking
into account the impact from limitation in interest
deductibility and local tax restrictions in utilisation
of tax losses. The assessment of future taxable in-
come is based on financial forecasts approved by
management and expectations on the operational
development, mainly in terms of organic growth
and operating margin.
Management made a reassessment of the probabili-
ty that future taxable profit will be available in the
foreseeable future against which the Group can uti-
lise tax losses (i.e for current year and those carried
forward from prior years (valuation allowances). The
assessment is based on the cash flow projections
made for the purpose of the Group’s impairment
tests, see 3.2, Impairment tests, and represents
management’s best estimate, but is by nature asso-
ciated with significant uncertainty.
Uncertain tax positions As part of operating a
global business, disputes with tax authorities
around the world may occur. Management peri-
odically evaluates positions taken in tax returns
with respect to situations in which applicable tax
regulation is subject to interpretation and consid-
ers whether it is probable that a tax authority will
accept an uncertain tax treatment. The possible
outcome of uncertain tax positions are measured
based on management’s best estimate of the
amount required to settle the obligation and rec-
ognised in deferred tax or income tax depending
on the tax position.
Significant accounting
estimates and judgements
Accounting policy
Deferred tax is provided using the liability
method on temporary differences between tax
bases of assets and liabilities and their carrying
amounts. Deferred tax is not recognised on
temporary differences relating to goodwill which
is not deductible for tax purposes and other
items where temporary differences, apart from
in business combinations, arose at the time of
acquisition without affecting either Net profit
or taxable income. Where alternative taxation
rules can be applied to determine the tax base,
deferred tax is measured according to manage-
ment’s intended use of the asset or settlement of
the liability. Deferred tax is measured according to
the taxation rules and tax rates in the respective
countries applicable at the reporting date when
the deferred tax becomes current tax.
Deferred tax assets, including the tax base of tax
loss carryforwards, are recognised in non-current
assets at the expected value of their utilisation,
either as a set-off against tax on future income,
or as a set-off against deferred tax liabilities in the
same legal tax entity and jurisdiction.
Deferred tax assets and liabilities are offset if the
Group has a legal right to offset these, intends to
settle these on a net basis or to realise the assets
and settle the liabilities, simultaneously.
Prior year adjustments, net mainly related
to adjustment of tax deductions (temporary
differences) in the final tax returns.
Acquisitions and divestments, net in 2022
related to the acquisition of Livit FM Services AG
in Switzerland (2021: Rönesans Facility Manage-
ment Company in Turkey).
Other comprehensive income comprised tax on
actuarial gains on pensions.
Unrecognised deferred
tax assets
At 31 December 2022, the Group had unrec-
ognised deferred tax assets which comprised
tax losses carried forward and other deductible
temporary differences of DKK 1,814 million
(2021: DKK 1,871 million) primarily relating
to Germany, France and the Netherlands.
Unrecognised tax losses can be carried forward
indefinitely in the individual countries, except for
China, where tax losses can be carried forward
for 5 years.
Uncertain tax positions
Uncertain tax positions include ongoing
disputes with tax authorities in certain jurisdic-
tions and have been provided for in accordance
with the accounting policies. Management
believes that the provisions made are adequate.
However, the actual obligations may deviate as
they depend on the result of litigations and set-
tlements with the relevant tax authorities. The
final outcome of some of the ongoing disputes
is expected to be determined in 2023-2024.
1)
Will vest in March 2023
1)
1)
FINANCIAL STATEMENTS
6 Remuneration
Executive remuneration objective
At ISS, remuneration is based on responsibilities,
competencies and performance and is designed
to be competitive, affordable and in line with
market practice of comparable listed companies.
Remuneration elements
Remuneration of the members of the EGM consists
of a fixed element and certain variable elements.
The annual base salary (fixed element) shall be
in line with market practice of comparable listed
companies and is based on the individual mem-
bers experience, qualifications, responsibilities
and performance.
In addition to the annual base salary, the mem-
bers of the EGM receive variable remuneration,
which is based on performance and accountabili-
ty in relation to established objectives, both short
and long-term, as well as the overall performance
of ISS in alignment with the shareholders.
In addition, the members of the EGM are
granted customary non-monetary benefits such
as a company car, insurances, communication
and IT equipment, etc., and certain members
participate in pension plans.
Share-based payments
To drive delivery of short- and long-term financial
results, retention of leaders and alignment to share
-
holder value creation, the Group has implemented
two types of share-based incentive programmes:
• a long-term incentive programme (LTIP)
• a special incentive programme (SIP)
Under the LTIP, which has been in place since
2014, performance share units (PSUs) are
granted annually to plan participants consisting
of around 120-150 senior leaders. Each PSU
entitles the holder to receive one share at no
cost after three years, subject to achievement
of certain performance criteria (EPS and TSR)
and service objectives. Performance criteria of
the latest two vested programmes, LTIP 2018
and LTIP 2019, were not achieved and they
vested at 0%. In March 2023, the LTIP 2020 will
vest at 32% following the achievement of the
turnaround targets in 2022.
Under the SIP, restricted share units (RSUs)
are granted to the participants consisting of 43
senior leaders. Each RSU entitles the holder to
receive one share at no cost, subject to achieve-
ment of individual service or performance criteria
upon vesting in either 2022 or 2023. In 2022,
based on achievement of individual performance
criteria, the SIP 2020-2022 vested at 83%. In
March 2023, the SIP 2020-2023 will vest at
100%. After these vestings, no further RSUs are
outstanding, and the programmes will lapse.
45%
53%
71
DKKbn
71
DKKbn
34%
31%
21%
16%
EGMB
EGMB
EGMB
Remuneration elements 2022
Incentive programmes
Remuneration report
EGMB Corporate senior officers
Vesting of SIP
0
25
50
75
100
2020-2023
2020-2022
%
EPS
TSR Industry
TSR Danish
83%
100%
0
25
50
75
100
2020-2023
2020-2022
%
EPS
TSR Industry
TSR Danish
83%
100%
Base salary
Bonus
Share-based payments
(
LTIP and SIP
)
Vesting of LTIP
0
25
50
75
100
LTIP
2020
LTIP
2019
LTIP
2018
LTIP
2017
LTIP
2016
%
EPS
TSR Industry
TSR Danish
32%
0%0%
6%
0%
Our 2022 Remuneration Report is prepared
pursuant to the Shareholder Rights Directive and
includes a description of our remuneration policy and
remuneration to the Board and the EGMB.
REMUNERATION REPORT
PEOPLE MAKE PLACES
2022
In this section:
6.1 Management remuneration
6.2 Share-based payments
Accounting policy
The value of services received in exchange for
granted performance-based share units (PSUs)
and restricted share units (RSUs) are measured
at fair value at the grant date and recognised in
employee costs over the vesting period with a
corresponding increase in equity, as both of the
schemes are equity-settled.
The fair value of granted PSUs under the long-
term incentive programme is measured using a
generally accepted valuation model taking into
consideration the terms and conditions upon
which the PSUs were granted including mar-
ket-based vesting conditions (Total Shareholder
Return (TSR) condition).
On initial recognition, an estimate is made of
the number of PSUs and RSUs expected to vest.
The estimated number is subsequently revised
for changes in the number of PSUs and RSUs
expected to vest due to non-market based vesting
conditions.
FINANCIAL STATEMENTS
6.1 Management remuneration 6.2 Share-based payments
The Executive Group Management (EGM) com-
prises the Executive Group Management Board
(EGMB) and Corporate Senior Officers of the
Group. Members of the EGM have authority and
2022 2021
EGM EGM
(
DKK '000
)
Board EGMB
Corporate
Senior
Officers Board EGMB
Corporate
Senior
Officers
Base salary and non-monetary benefits 8,587 15,269 49,073 8,724 21,842 39,172
Bonus programmes - 11,572 28,885 - 12,007 18,739
Share-based payments
 1)
- 7,310 14,381 -
(
3,794
)
11,695
Severance pay - - - - 14,280 -
Total remuneration 8,587 34,151 92,339 8,724 44,335 69,606
1)
In 2021, share-based payments to the EGMB included an income of DKK 8 million due to forfeited PSUs and RSUs under the incentive
programmes as the CEO Europe left ISS.
To drive delivery of short- and long-term financial
results, retention of leaders and alignment
to shareholder value creation, the Group has
implemented two types of equity-settled share-
based incentive programmes:
• a long-term incentive programme (LTIP); and
• a special incentive programme (SIP)
6.2.1 Long-term incentive
programme
Members of the EGM and other senior officers
of the Group, are granted a number of perfor-
mance share units (PSUs) under the annual LTIP.
Upon vesting, each PSU entitles the holder
to receive one share at no cost. Participants
are compensated for any dividend distributed
between time of grant and time of vesting.
Subject to certain criteria, the PSUs will vest after
three years. The vesting criteria are total share-
holder return (TSR), measured relative to peer
group performance, and earnings per share
(EPS). For LTIP 2021 and LTIP 2022, TSR and EPS
weighted 40%, respectively, and the remaining
20% related to service-based objectives. For LTIP
2020 and LTIP 2019, TSR and EPS were equally
weighted. TSR peers are the Nasdaq Copenha-
gen OMX C25 and a peer group of comparable
international service companies.
TSR performance criteria
Threshold Vesting TSR
Below
threshold
0 % Below median
of peers
Threshold 25 % At median of peers
Maximum 100 % At upper quartile of
peers or better
responsibility for planning, implementing and
controlling the Group’s activities and are together
with the Board of Directors (Board) considered as
the Group’s key management personnel.
Remuneration policy is described in the Remuneration report which is available here.
FINANCIAL STATEMENTS
6.2 Share-based payments (continued)
Fair value and profit or loss impact LTIP 2019 LTIP 2020 LTIP 2021 LTIP 2022
PSUs and participants
(
number
)
Maximum PSUs at initial grant date 928,367 1,785,896 1,349,527 1,509,951
Total PSUs granted 813,090 1,473,659 1,316,818 1,353,855
Participants 142 120 145 161
Fair value (DKKm)
PSUs expected to vest at initial grant date 101 74 94 98
PSUs expected to vest at 31 December - 53 77 75
Profit or loss impact (DKKm)
Recognised in the year 1 22 25 24
Not yet recognised
(
PSUs expected to vest
)
- 4 30 57
Assumptions at the time of grant
Share price, DKK
1)
207 98 111 117
Expected volatility
2)
26.6% 29.1% 47.2% 47.5%
Expected life of grant, years 3 3 3 3
Risk-free interest rate
2)
(
0.3
)
%-2.7%
(
0.4
)
%-1.9% (0.6)%-0.9% (0.1%)-1.5%
1)
Based on five-day average.
2)
Based on observable market data for peer groups.
Vested programmes
In March 2022, the LTIP 2019 programme vested.
Based on the annual EPS and TSR performances
for 2019, 2020 and 2021, 0% of the granted
PSUs vested. After this vesting, no further PSUs
are outstanding under the LTIP 2019 and the
programme has lapsed.
Furthermore, in March 2023, the PSUs granted
under LTIP 2020 will vest with 32% based on the
annual EPS and TSR performances for 2020, 2021
and 2022.
LTIP 2020
(
vesting in 2023
)
Outstanding at 1 January 2021 132,633 177,999 1,129,354 1,439,986
Cancelled
(
72,864
)
-
(
104,144
)
(
177,008
)
Outstanding at 31 December 2021 59,769 177,999 1,025,210 1,262,978
Transferred -
(
10,382
)
10,382 -
Cancelled - -
(
31,586
)
(
31,586
)
Outstanding at 31 December 2022 59,769 167,617 1,004,006 1,231,392
LTIP 2021
(
vesting in 2024
)
Granted 201,828 176,746 862,373 1,240,947
Cancelled
(
53,531
)
-
(
89,652
)
(
143,183
)
Outstanding at 31 December 2021 148,297 176,746 772,721 1,097,764
Granted - 11,015 64,856 75,871
Transferred - 9,107
(
9,107
)
-
Cancelled - (8,583) (71,403) (79,986)
Outstanding at 31 December 2022 148,297 188,285 757,067 1,093,649
LTIP 2022
(
vesting in 2025
)
Granted 139,713 265,208 948,934 1,353,855
Transferred - 8,710
(
8,710
)
-
Cancelled -
(
18,233
)
(
115,516
)
(
133,749
)
Outstanding at 31 December 2022 139,713 255,685 824,708 1,220,106
Outstanding PSUs
EGM
LTIP 2019
(
vested in 2022
)
EGMB
Corporate
Senior Officers
Other
Senior
Officers Total
Outstanding at 1 January 2021 42,583 83,015 560,451 686,049
Cancelled
(
35,686
)
(
6,370
)
(
23,034
)
(
65,090
)
Outstanding at 31 December 2021 6,897 76,645 537,417 620,959
Transferred - 6,643
(
6,643
)
-
Forfeited
(
6,897
)
(
83,288
)
(
530,774
)
(
620,959
)
Outstanding at 31 December 2022 - - - -
FINANCIAL STATEMENTS
6.2 Share-based payments (continued)
6.2.2 Special incentive
programmes
The Group has currently one Special Incentive
Programme (SIP). Corporate Senior Officers
(EMG members) and other senior officers of the
Group are granted a number of Restricted Share
Units (RSUs).
Fair value and profit or loss impact
SIP 2020-2022 SIP 2020-2023
RSU and participants
(
number
)
Maximum RSUs at initial grant date 64,159 246,767
Total RSUs granted 55,263 238,489
Participants 9 37
Fair value
(
DKKm
)
RSUs expected to vest at initial grant date 6 24
RSUs expected to vest at 31 December - 23
Profit or loss impact
(
DKKm
)
Recognised in the year 0 8
Not yet recognised
(
RSUs expected to vest
)
- 2
Assumptions at the time of grant
Share price, DKK 101 101
Expected life of grant, years 2 3
SIP 2020-2023
(
vesting in 2023
)
Outstanding at 1 January 2021 - 204,223 204,223
Granted 26,619 1,888 28,507
Cancelled -
(
12,853
)
(
12,853
)
Outstanding at 31 December 2021 26,619 193,258 219,877
Granted - 5,759 5,759
Transferred 10,432
(
10,432
)
-
Cancelled -
(
1,462
)
(
1,462
)
Outstanding at 31 December 2022 37,051 187,123 224,174
Outstanding RSUs
SIP 2020-2022
(
vested in 2022
)
Corporate
Senior
Officers
(
EGM
)
Other
Senior
Officers Total
Outstanding at 1 January 2021 - 22,296 22,296
Granted 26,619 1,783 28,402
Cancelled -
(
6,513
)
(
6,513
)
Outstanding at 31 December 2021 26,619 17,566 44,185
Granted - 4,565 4,565
Forfeited -
(
2,696
)
(
2,696
)
Cancelled
(
26,619
)
(
19,435
)
(
46,054
)
Outstanding at 31 December 2022 - - -
Upon vesting, each RSU entitles the holder to
receive one share at no cost.
Subject to individual service criteria, the RSUs
will vest after three years.
Vested programmes
In March 2022, the SIP 2020-2022 programme
vested. Based on individual service criteria, 83%
of the granted RSUs vested. After this vesting,
no further RSUs are outstanding under the SIP
2020-2022 and the programme has lapsed.
Furthermore, in March 2023, the RSUs granted
under the SIP 2020-2023 programme will vest
100% subject to achievement of individual service
criteria.
FINANCIAL STATEMENTS
7.1 Pensions and similar obligations
7.1.1 Pension schemes
Defined contribution plans
The majority of the Group’s pension schemes are
defined contribution plans where contributions
are paid to publicly or privately administered
pension plans. The Group has no further
payment obligations once the contributions have
been paid. In 2022, contributions amounted
to DKK 1,223 million (2021: DKK 1,140 million),
corresponding to 84% of the Group’s pension
costs (2021: 83%).
Defined benefit plans
The Group has a number of defined benefit
plans where the responsibility for the obligation
towards the employees rests with the Group.
The largest plans are in Switzerland and the UK
accounting for 86% (2021: 86%) of the Group’s
obligation (gross) and 97% (2021: 97%) of its
plan assets.
The plans are primarily based on years of
service, and benefits are determined on the
basis of salary and position. The Group assumes
the risk associated with future developments
in salary, interest rates, inflation, mortality and
disability, etc.
The majority of the obligations are funded with
assets placed in independent pension funds.
In some countries, primarily Sweden, France,
Turkey, Hong Kong and Mexico, the obligation is
unfunded. For these unfunded plans, obligation
amounted to DKK 633 million or 8% of the
present value of the gross obligation (2021: DKK
788 million or 9%).
Switzerland Participants are insured against the
financial consequences of retirement, disabil-
ity and death. The pension plans guarantee a
minimum interest credit and fixed conversion
rates at retirement and include a risk-sharing
element between ISS and the plan participants.
Contributions are paid by both the employee and
the employer. The plans must be fully funded. In
case of underfunding, recovery measures must
be taken, such as additional financing from the
employer or from the employer and employees,
reduction of benefits or a combination of both.
The UK Participants are insured against the
financial consequences of retirement and
death, and do not provide any insured disability
benefits. The pension plans guarantee a defined
benefit pension at retirement on a final salary
basis. The majority of the plans does not include
a risk-sharing element between ISS and the plan
participants.
Multiemployer pension plans
The Group participates in multiemployer pension
schemes that by nature are defined benefit plans
in a few countries. Some funds are not able to
provide the necessary information in order for
the Group to account for the schemes as defined
benefit plans and these schemes are therefore
accounted for as defined contribution plans.
Actuarial calculations and valuations are performed
annually for all major plans. The present value of
defined benefit obligations is determined on the
basis of assumptions about the future develop-
ment in variables such as salary levels, interest
rates, inflation and mortality. Applied actuarial
assumptions vary from country to country due to
local conditions. All assumptions are assessed at
the reporting date. Changes in these assumptions
may significantly affect the liabilities and pension
costs under defined benefit plans. The range and
weighted average of these assumptions as well as
sensitivities on key assumptions are disclosed in
this note.
The discount rates used for calculating the present
value of expected future cash flows are based on
the market yield of high-quality corporate bonds or
government bonds with a maturity approximating
to the terms of the defined benefit obligations.
When the Group participates in multi-employer
pension plans being accounted for as defined con-
tribution plans due to unavailability of information,
there is a risk that the plans are not sufficiently
funded. However, information on surplus or deficit
in the schemes is not available.
Significant accounting
estimates
In this section:
7.1 Pensions and similar obligations
7.2 Hyperinflation in Turkey
7.3 Related parties
7.4 Fees to auditors
7.5 Subsequent events
7 Other
Pension costs
84%
16%
Defined contribution
Defined benefit
Pension
costs
1.4
DKKbn
Recognised in the statement of financial position
(DKKm) 2022 2021
Carrying amount of defined benefit plans
(
710
) (
372
)
Accumulated impact from asset ceiling
1)
1,352 1,253
Defined benefit obligation, net
2)
642 881
Other long-term employee benefits 543 470
Pensions and similar obligations 1,185 1,351
FINANCIAL STATEMENTS
7.1 Pensions and similar obligations (continued)
2022 2021
(DKKm)
Present
value of
obligation
Fair value
of plan
assets
Carrying
amount
Present
value of
obligation
Fair value
of plan
assets
Carrying
amount
At 1 January 8,625 8,997
(
372
)
8,684 7,796 888
Current service costs 197 - 197 219 - 219
Interest on obligation/plan assets 72 55 17 45 28 17
Past service costs 11 - 11 - - -
Recognised in profit or loss 280 55 225 264 28 236
Actuarial
(
gain
)
/loss:
Demographic assumptions 7 - 7
(
256
)
-
(
256
)
Financial assumptions
(
1,702
)
-
(
1,702
)
(
209
)
-
(
209
)
Experience adjustments 490 - 490 67 - 67
Return on plan assets -
(
997
)
997 - 747
(
747
)
Asset ceiling -
(
43
)
43 -
(
1,080
)
1,080
Recognised in other
comprehensive income
(
1,205
)
(
1,040
)
(
165
)
(
398
)
(
333
)
(
65
)
Foreign exchange adjustments 214 295
(
81
)
386 414
(
28
)
Acquisitions and divestments, net 227 219 8 - 0
(
0
)
Employee contributions 154 154 - 141 141 -
Employer contributions - 207
(
207
)
- 199
(
199
)
Benefits paid
(
342
)
(
267
)
(
75
)
(
266
)
(
174
)
(
92
)
Asset ceiling - 43
(
43
)
- 1,080
(
1,080
)
Reclass. to Liabilities held for sale - - -
(
186
)
(
154
)
(
32
)
Other changes 253 651
(
398
)
75 1,506
(
1,431
)
At 31 December 7,953 8,663
(
710
)
8,625 8,997
(
372
)
1)
Including a foreign exchange adjustment on the opening balance of DKK 56 million.
2)
Including an asset of DKK 247 million (2021: DKK 86 million) related to defined benefit plans in the UK.
Developments in 2022
Actuarial calculations for 2022 have been ob-
tained for all major plans. The actuarial calcula-
tions led to recognition of actuarial gains due to
increased discount rates (financial assumptions)
of DKK 1,702 million, mainly in Switzerland and
the UK. This was largely offset by actuarial losses
of DKK 490 million due to increased salary and
inflation expectations (experience adjustments)
and loss on plan assets of DKK 997 million, both
primarily related to Switzerland and the UK. The
net impact on the pension obligation was a gain
of DKK 165 million recognised in other compre-
hensive income.
In 2021, we saw strong asset returns and an
actuarial gain, which led to a significant increase
in the surplus on the major plans in Switzerland.
Due to surplus restrictions (ISS does not have
access to the overfunding), an increase in the
asset ceiling was recognised. In 2022, market
conditions for listed shares and real estate de-
teriorated resulting in significant losses on plan
assets in Switzerland and the UK. However, due
to a larger decrease in the pension obligation
the asset ceiling has further increased. As such,
by the end of 2022, the accumulated impact
from the asset ceiling was DKK 1,352 million
(2021: DKK 1,253 million).
Contributions in 2023
The Group expects to contribute DKK 322
million in 2023 (2022: DKK 261 million).
Plan assets
– major categories
Pension obligation, gross
– funded vs. unfunded
Pension obligation, gross
– by country
34%
19%
18%
6%
2%
21%
92%
8%
75%
11%
14%
Listed shares
Property
Corporate bonds
Cash and cash
equivalents
Government bonds
Other
Funded
Unfunded
Switzerland
UK
Other
% of total plan assets
Major
categories of
plan assets
Pension
obligation,
ross
Pension
obligation,
ross
8.0
DKKbn
8.7
DKKbn
8.0
DKKbn
7.1.2 Defined benefit obligation
2022 2021
CHF GBP EUR
Other
currencies CHF GBP EUR
Other
currencies
Discount rates 2.3% 4.8 % 3.70-3.75% 1.0-10.7% 0.3% 2.0% 0.35-1.0% 0.2-19.3%
Salary increase 1.3% 0.0-2.65% 2.56-3.2% 0.0-12.0% 1.0% 0.0-2.65% 0.0-3.5% 0.0-15.0%
Pension increase 0.0% 2.65-3.15% 0.0-2.15% 0.0-2.2% 0.0% 2.65-3.20% 0.0-0.64% 0.0-2.0%
2022 2021
(
DKKm
)
+0.5%
(
0.5
)
% +0.5%
(
0.5
)
%
Discount rate
(
334
)
363
(
490
)
545
Price inflation 74
(
65
)
165
(
51
)
Salary increase 93
(
74
)
132
(
4
)
Pension increase 248
(
248
)
302
(
85
)
+1 year -1 year +1 year -1 year
Life expectancy 136
(
133
)
212
(
182
)
(
Years
)
2022 2021
Active employees 6 8
Retired employees 11 15
Deferred vested
 1)
7 6
Total employees 9 12
7.1.3 Actuarial assumptions
Duration
The estimated weighted average duration of the
defined benefit obligation was 9 years (2021: 12
years) and is split into:
Sensitivity analysis
Below the sensitivities related to significant
actuarial assumptions used in the calculation of
the defined benefit obligation are illustrated in
terms of estimated increase/(decrease) in the
obligation.
The analysis is based on changes in assump-
tions, with all other variables held constant, that
the Group considered to be reasonably possible
at the reporting date.
FINANCIAL STATEMENTS
7.1 Pensions and similar obligations (continued)
1)
The impact from deferred vested on total estimated weighted
average duration is minor due to the fact that deferred vested
make up less than 2% of the participants, and do not exist in many
of the shorter duration plans.
Accounting policy
Contributions to defined contribution plans are
recognised in Employee costs when the related
service is provided. Any contributions outstanding
are recognised in Other liabilities.
Defined benefit plans The Group’s net obligation
is calculated by a qualified actuary using the pro-
jected unit credit method, separately for each plan
by estimating the amount of future benefits that
employees have earned in return for their service
in the current and prior periods. The present value
less the fair value of any plan assets is recognised in
Pensions and similar obligations.
When the calculation results in a potential asset, rec-
ognition is limited to the present value of economic
benefits available in the form of future refunds from
or reductions in future contributions to the plan. To
calculate the present value, consideration is given to
applicable minimum funding requirements.
Pension costs are calculated based on actuarial es-
timates and financial expectations at the beginning
of the year. Service costs are recognised in Employee
costs and net interest is recognised in Financial
expenses.
Differences between the expected development
in pension assets and liabilities and the realised
amounts at the reporting date are designated
actuarial gains or losses and recognised in other
comprehensive income.
When the benefits are changed or a plan is curtailed,
the resulting change in benefits that relates to
past service or the gain or loss on curtailment is
recognised in Employee costs. Gains and losses on
settlement is recognised when incurred.
The aggregated value of unfunded plans is pre-
sented as a net liability and the aggregated value of
funded plans are presented as a net asset.
Other long-term employee benefits are recognised
as defined pension plans, except that actuarial gains
and losses are recognised in Employee costs.
Other long-term employee benefits comprise jubilee
benefits, long-service or sabbatical leave, etc.
Effective 1 January 2022, the Group has
implemented IAS 29 “Financial Reporting in
Hyperinflationary Economies” for its subsidiary
in Turkey, as the cumulative three-year inflation
rate in the country exceeded the threshold of
100% in February.
The aim of IAS 29 is to ensure that consolidated
financial statements reflect the current purchasing
power by:
• restating reported numbers based on changes
in the general price index; and
• applying end-of-period exchange rates.
The translation method as well as recognition and
measurement are described under accounting
policies below.
Impact on the consolidated
financial statements
The implementation of IAS 29 did not have a
material impact on the Group’s profit or loss
and cash flow statements and consequently
the effect on our three KPIs was immaterial, i.e.
organic growth (non-IFRS), operating margin
(non-IFRS) and free cash flow (non-IFRS). How-
ever, the restatement for inflation significantly
impacted the Group’s statement of financial
position, mainly by increasing the value of
goodwill and customer contracts.
Profit or loss
The restatement of revenue had a net positive
impact of DKK 154 million of which DKK 580
million related to the increase in the price index
of 21% in 2022. This was partly offset by the
impact from retranslation to exchange rates at
31 December of DKK 426 million.
Operating profit before other items was nega-
tively impacted by DKK 29 million, as the inflation
restatement of right-of-use assets and property,
plant and equipment led to higher depreciation
and amortisation of DKK 42 million. This more
than offset the net positive impact from inflation
restatement and retranslation.
Financial expenses, net was positively impacted
by DKK 148 million reflecting the restatement of
non-monetary items for the inflation develop-
ment in 2022 and the offset of inflation restate-
ment of profit or loss items in the same period.
Based on the above, and the resulting negative
impact on Income tax of DKK 42 million, Net
profit increased DKK 66 million for 2022.
Cash flows
The impact on consolidated statement of cash
flows was insignificant.
FINANCIAL STATEMENTS
7.2 Hyperinflation in Turkey
Cash flows
Operating profit before other items 2,889
(
48
)
51
(
32
)
(
29
)
2,860
Depreciation and amortisation 1,475 48 -
(
6
)
42 1,517
Non-cash items related to hyperinflation - -
(
51
)
-
(
51
)
(
51
)
Other cash flow items
(
1,024
)
- - 31 31
(
993
)
Cash flow from operating activities 3,340 - -
(
7
)
(
7
)
3,333
Cash flow from investing activities
(
553
)
- - 7 7
(
546
)
Cash flow from financing activities
(
928
)
- -
(
2
)
(
2
)
(
930
)
Free cash flow
(
non-IFRS
)
1,726 - - 8 8 1,734
Financial ratios
Organic growth (non-IFRS)
7.78% - - - - 7.78%
Operating margin 3.77%
(
0.07
)
% 0.07%
(
0.05
)
%
(
0.05
)
% 3.72%
Inflation restatement
(DKKm)
YTD
(
excl.
IAS 29)
Non-
monetary
items
Profit
or loss
Retrans-
lation
(
YE FX
)
Total
adjust-
ments
YTD
(reported)
Profit or loss
Revenue 76,384 - 580
(
426
)
154 76,538
Depreciation and amortisation
(
1,475
)
(
48
)
- 6
(
42
)
(
1,517
)
Other costs
(
72,033
)
-
(
529
)
388
(
141
)
(
72,174
)
Operating profit before other items 2,876
(
48
)
51
(
32
) (
29
)
2,847
Other income and expenses, net 58 -
(
1
)
-
(
1
)
57
Amortisation of customer contracts
(
59
)
(
12
)
- 2
(
10
)
(
69
)
Operating profit 2,875
(
60
)
50
(
30
)
(
40
)
2,835
Financial income 68 180
(
40
)
(
1
)
139 207
Financial expenses
(
605
)
-
(
18
)
27 9
(
596
)
Operating profit before tax 2,338 120
(
8
)
(
4
)
108 2,446
Income tax
(
399
)
(
43
)
8
(
7
)
(42)
(
441
)
Net profit from continuing operations 1,939 77 -
(
11
)
66 2,005
Net profit from discontinued operations 131 - - - - 131
Net profit 2,070 77 -
(
11
)
66 2,136
Financial position
The restatement for inflation increased goodwill by
DKK 644 million and Other intangible assets (cus-
tomer contracts) by DKK 224 million mainly due
to restatement of the fair values carried from the
acquisition of Rönesans in 2021 and the original
acquisition when entering Turkey in 2005.
Right-of-use assets and property, plant and
equipment increased (DKK 85 million) based on
assumed average useful lives of 3-5 years. As a
result, depreciation and amortisation were recalcu-
lated, which led to higher costs in profit or loss.
Equity increased by DKK 891 million mainly as a
result of the opening restatement of non-mone-
tary items of DKK 814 million and the restatement
effect from changes in the price index in 2022.
FINANCIAL STATEMENTS
7.2 Hyperinflation in Turkey (continued)
Inflation restatement
(DKKm)
YTD
(
excl.
IAS 29)
Non-
monetary
items
Profit
or loss
Retrans-
lation
(
YE FX
)
Total
adjust-
ments
YTD
(reported)
Financial position
Goodwill 19,806 644 - - 644 20,450
Other intangible assets 3,246 224 - - 224 3,470
Right-of-use assets and Property,
plant and equipment 3,235 85 - - 85 3,320
Other assets 19,765 - - - - 19,765
Total assets 46,052 953 - - 953 47,005
Other comprehensive income
(
56
)
814 - - 814 758
Other equity elements 9,980 77 - - 77 10,057
Total equity 9,924 891 - - 891 10,815
Deferred tax liabilities 1,116 62 - - 62 1,178
Other liabilities 35,012 - - - - 35,012
Total equity and liabilities 46,052 953 - - 953 47,005
Accounting policy
Inflation restatement
Non-monetary items, which are carried at historical
cost, such as goodwill, customer contracts, right-of-
use assets, property, plant and equipment and de-
ferred tax, have been restated for the effect of inflation
based on changes in the price index for the period
from initial recognition to 31 December 2022 or to the
date of disposal, where relevant. The restatement was
made effective from the time, the items were initially
recognised, which was no earlier than 2005, when ISS
first entered Turkey through an acquisition.
The restating gain or loss relating to the change in
the price index for the reporting period has been
recognised in profit or loss under financial income or
expenses, except for the tax effect, which has been
recognised under income tax. The gain or loss relating
to the prior periods has been recognised in other
comprehensive income.
Management has assessed whether the restatement
of non-monetary items represents an indication of
impairment to ensure that the restated amounts do
not exceed the recoverable amounts of the assets, see
3.2, Impairment tests.
Monetary items such as receivables, payables, loans
and borrowings are not subject to restatement for the
effects of inflation as these items already reflect the
purchasing power at the reporting date.
Equity includes the opening effect of restating
non-monetary items. Further, the restatement effects
of inflation based on changes in the price index for
the reporting period have been recognised in other
comprehensive income with set-off within financial
income or expenses in profit or loss.
Profit or loss transactions in the period have been
restated to reflect changes in the price index from the
time of transaction to the end of the reporting period,
with the exception of depreciation and amortisation.
The latter have been recalculated based on the
inflation-adjusted costs of intangible assets and right-
of-use assets and property, plant and equipment. The
recalculation has been based on the useful lives of
the relevant assets based on the Group’s accounting
policy, cf. 2.6, Right-of-use assets and property, plant
and equipment.
Cash flow statement Operating profit before other
items includes a non-cash effect from the inflation
restatement, which has been eliminated in the line
Non-cash items related to hyperinflation.
Price index
Restatement for hyperinflation of the financial state-
ments of the Turkish subsidiary was based on the
development in the consumer price index provided by
the Turkish Statistical Institute. For 2022, the inflation
rate in Turkey was 64%.
Retranslation from TRY to DKK
The financial statements of the Turkish subsidiary,
including effects of inflation restatement, have been
translated into DKK applying the TRY/DKK exchange
rate at the reporting date as opposed to the Group’s
normal practice of translating the profit or loss
using the exchange rate at the transaction date or
an average exchange rate for the month. The TRY/
DKK exchange rate decreased from 50.53 at the
beginning of 2022 to 37.25 at 31 December 2022.
The average TRY/DKK exchange for the reporting
period was 43.00.
Parent and ultimate
controlling party
The Group’s parent ISS A/S is the ultimate con-
trolling party. At 31 December 2022, ISS had no
related parties with either control of the Group
or significant influence in the Group.
Key management personnel
The Board of Directors (Board) and the Executive
Group Management (EGM) are considered the
Group’s key management personnel as defined
in 6.1, Management remuneration.
Apart from remuneration, including share-based
incentive programmes, there were no significant
transactions with members of the Board and the
EGM in 2022.
(
DKKm
)
2022 2021
Statutory audit 73 71
Other assurance services 2 1
Tax and VAT advisory
services 7 6
Other services 4 9
Total 86 87
Other assurance services comprised work
related to the interim financial statements and
other assurance services.
Tax and VAT advisory services mainly related to
tax compliance services.
Other services comprised among other things
work related to acquisitions and divestments,
such as financial and tax due diligence.
On 6 February 2023, two earthquakes caused
large scale devastation and loss of thousands of
lives in Turkey and Syria. ISS is one of the largest
private employers in Turkey and approximately
4,500 of our placemakers service workplaces
for around 100 of our customers, including
two hospitals, in the impacted areas of Turkey.
Tragically, three of our placemakers were fatally
injured, several are in medical treatment and
even more suffered loss of immediate family
members and housing. Our teams on the
ground in Turkey have since the earthquakes
focused on ensuring the safety and welfare
of our people and customers who are facing
unimaginable challenges and devastation.
ISS has not suffered material damage to its
assets in Turkey. Furthermore, the impacted
areas account for less than 1% of ISS’s global
activities and the vast majority of our customers’
operations continue or will continue after
repairs. Consequently, it is management’s
assessment that the earthquakes will not have
a material impact on the results of the Group’s
operations and financial position in 2023.
Other than set out above or elsewhere in these
consolidated financial statements, we are not
aware of events subsequent to 31 December
2022, which are expected to have a material
impact on the Group’s financial position.
FINANCIAL STATEMENTS
7.3 Related
parties
7.4 Fees to
auditors
7.5 Subsequent
events
ISS A/S is listed on Nasdaq Copenhagen. The
consolidated financial statements of ISS A/S for the
year ended 31 December 2022 comprise ISS A/S
and its subsidiaries (collectively, the Group). Signifi
-
cant subsidiaries are listed in 8.4, Group companies.
The 2022 Annual Report for ISS A/S was
discussed and approved by the Executive Group
Management Board (the EGMB) and the Board
of Directors (the Board) on 23 February 2023
and issued for approval at the subsequent
annual general meeting on 13 April 2023.
Basis of preparation
The consolidated financial statements of the
Group have been prepared in accordance
with IFRS as adopted by the EU and additional
requirements of the Danish Financial Statements
Act. In addition, the consolidated financial
statements have been prepared in compliance
with the IFRSs issued by the IASB.
The consolidated financial statements have been
prepared on the basis that the Group will
continue to operate as a going concern.
The Group’s significant accounting policies and
accounting policies related to IAS 1 minimum
presentation items are described in the relevant
notes to the consolidated financial statements. A
list of the notes is shown on p. 50.
All amounts have been rounded to nearest DKK
million (DKKm), unless otherwise stated.
Fair value measurement and disclosure
Items are measured at historical cost, except
for assets and liabilities held for sale, derivative
financial instruments and contingent consider-
ation that have been measured at fair value.
Assets and liabilities measured at fair value are
categorised within the fair value hierarchy and
disclosed in the relevant notes.
For the purpose of fair value disclosures,
management has assessed that the fair values
of cash and cash equivalents, trade receivables,
contingent consideration, trade payables and
other current and non-current financial assets
and liabilities approximates their carrying
amount largely due to the short-term matur-
ities of these instruments. The fair value of
loans and borrowings, including methods and
assumptions used to estimate the fair value, are
disclosed in 4.2, Loans and borrowings.
Climate-related risks
Management has considered the impact of cli-
mate-related risks which did not have a material
impact on the estimates and judgements in
these consolidated financial statements, includ-
ing impairment. In addition, it is management's
assessment that climate change is not expected
to have a significant impact on the Group’s
going concern assessment, or in the long-term
(next five years).
Defining materiality
The consolidated financial statements separately
present items that are considered individually
significant, or are required under the minimum
presentation requirements of IAS 1. In addi-
tion, information that is considered material,
either individually or in combination with other
information, is disclosed.
In determining whether an item is individually
significant, or information is material, ISS consid-
ers both quantitative and qualitative factors. If
the presentation or disclosure could reasonably
be expected to influence economic decisions
made by primary users, the information is
considered material.
Explanatory disclosure notes related to the
consolidated financial statements are presented
for individually significant items. Where separate
presentation of a line item is made solely due to
the minimum presentation requirements in IAS
1, no further disclosures are provided in respect
of that line item.
Basis of consolidation
The consolidated financial statements comprise
ISS A/S and entities controlled by ISS A/S. The
financial statements of subsidiaries are included
in the consolidated financial statements from
the date on which control commences until the
date on which control ceases.
Intra-group balances, income, expenses and
cash flow relating to transactions between
members of the Group are eliminated. Unre-
alised losses are eliminated in the same way
as unrealised gains, but only to the extent that
there is no evidence of impairment.
The non-controlling interest’s share of net profit
and equity of subsidiaries, which are not whol
-
ly-owned, are included in the Group’s net profit
and equity, respectively, but disclosed separately.
By virtue of agreement certain non-controlling
shareholders are only eligible of receiving benefits
from their non-controlling interest when ISS as
controlling shareholder has received their initial
investment and compound interest on such. In
such instances the subsidiaries’ result and equity
are fully allocated to ISS until the point in time
where ISS has recognised amounts exceeding their
investment including compound interest on such.
FINANCIAL STATEMENTS
8.1 General accounting policies
In this section:
8.1 General accounting policies
8.2 Change in accounting policies
8.3 New accounting regulations
8.4 Group companies
8.5 Definitions
8 Basis of
preparation
A change in ownership interest of a subsidiary,
without loss of control, is accounted for as an
equity transaction.
If the Group loses control over a subsidiary,
it derecognises the related assets (including
goodwill), liabilities, non-controlling interest and
other components of equity, while any resultant
gain or loss is recognised in Other income
and expenses, net. Any investment retained is
recognised at fair value on initial recognition.
Foreign currency
The consolidated financial statements are
presented in Danish kroner (DKK), which is
ISS A/S’s functional currency. Transactions in
currencies other than the functional currency of
the respective Group companies are considered
transactions denominated in foreign currencies.
On initial recognition, except for companies
operating in hyperinflationary environments,
these are translated to the respective functional
currencies of the Group companies at the
exchange rates at the transaction date. Foreign
exchange adjustments arising between the
exchange rates at the transaction date and at
the date of payment are recognised in Financial
income or Financial expenses.
Receivables, payables and other monetary
items denominated in foreign currencies are
translated at the exchange rates at the report-
ing date. The difference between the exchange
rates at the reporting date and at the date of
transaction or the exchange rate in the latest
financial statements is recognised in Financial
income or Financial expenses.
On recognition in the consolidated financial
statements of Group companies with a func-
tional currency other than DKK, the statements
of profit or loss and statements of cash flows
are translated at the exchange rates at the
transaction date and the statements of financial
position are translated at the exchange rates
at the reporting date. An average exchange
rate for the month is used as the exchange
rate at the transaction date to the extent that
this does not significantly deviate from the
exchange rate at the transaction date. Foreign
exchange adjustments arising on translation of
the opening balance of equity of foreign entities
at the exchange rates at the reporting date and
on translation of the profit or loss statements
from the exchange rates at the transaction date
to the exchange rates at the reporting date are
recognised in other comprehensive income
and presented in equity under a separate
translation reserve. However, if the foreign entity
is a non-wholly owned subsidiary, the relevant
proportion of the translation difference is
allocated to the non-controlling interest.
Foreign exchange adjustments of balances with
foreign entities which are considered part of the
investment in the entity are recognised in other
comprehensive income and presented in equity
under a separate translation reserve.
IASB issued amended standards and interpre-
tations, which are not yet mandatory for the
consolidated financial statements of the Group
at 31 December 2022.
The Group expects to adopt the new standards
and interpretations when they become mandatory.
Based on the current business setup and level of
activities, none of these standards and interpre-
tations are expected to have a material impact
on the recognition and measurement in the
consolidated financial statements.
FINANCIAL STATEMENTS
8.1
General accounting
policies (continued)
From 1 January 2022, the Group has adopted the
below standards and interpretations with no sig-
nificant impact on recognition and measurement:
• Amendments to IAS 37 Provisions, Contingent
Liabilities and Contingent Assets: Onerous
Contracts – Costs of Fulfilling a Contract.
• Amendments to IFRS 3 Business Combinations
– Reference to the Conceptual Framework
IAS 29 Financial Reporting in
Hyperinflation Economies
Effective 1 January 2022, the Group implement-
ed IAS 29, Financial Reporting in Hyperinfla-
tionary Economies, as management considered
Turkey as a hyperinflationary environment.
Management based its assessment on the
cumulative three-year inflation, which exceeded
the threshold of 100% in February 2022. As a
result, the financial statements of ISS Turkey for
2022 were restated for hyperinflation before
the reported amounts were translated to the
Group's functional currency, DKK, applying the
exchange rate at the reporting date.
Since the Group’s functional currency, DKK, is
a non-hyperinflationary currency, IAS 29 does
not require restatement of comparative figures
in the year of implementation. Consequently,
comparative figures have not been restated.
The implementation impact and the applied
accounting policies are disclosed in 7.2,
Hyperinflation in Turkey.
8.2 Change in
accounting
policies
8.3 New
accounting
regulations
Northern Europe
Denmark (ISS A/S's country of domicile)
ISS Facility Services A/S 100%
ISS Finance B.V. 100%
ISS World Services A/S 100%
ISS Global A/S 100%
ISS Global Management A/S 100%
ISS Holding France A/S 100%
ISS Lending A/S 100%
Belgium & Luxembourg
ISS Catering N.V. 100%
ISS Facility Services N.V. 100%
ISS Facility Services S.A. 100%
Finland
ISS Palvelut Holding Oy 100%
ISS Palvelut Oy 100%
Suomen Laatutakuu Palvelut Oy 100%
Netherlands
ISS Building Maintenance Services B.V. 100%
ISS Catering Services B.V. 100%
ISS Holding Nederland B.V. 100%
ISS Integrated Facility Services B.V. 100%
ISS Nederland B.V. 100%
Talentgroep Montaigne Facility Management B.V.
100%
Norway
ISS Holding AS 100%
ISS Management AS 100%
ISS Facility Services AS 100%
ISS Serveringspartner AS 100%
ISS Service Management AS 100%
Poland
ISS Facility Services Sp. Z o.o. 100%
ISS World Services Poland Sp. Z.o.o 100%
Sweden
ISS Facility Services Holding AB 100%
ISS Facility Services AB 100%
ISS Palvelut Holding AB 100%
UK & Ireland
ISS UK Holding Limited 100%
ISS UK Limited 100%
ISS Facility Services Ltd. 100%
ISS Mediclean Limited 100%
Pegasus Security Holdings Limited 100%
ISS Ireland Ltd. 100%
Central & Southern Europe
Austria
ISS Austria Holding GmbH 100%
ISS Facility Services GmbH 100%
ISS Ground Services GmbH 51%
France
GIE ISS Services 100%
ISS Facility Management SAS 100%
ISS Holding Paris SAS 100%
ISS Logistique et Production SAS 100%
Germany
ISS Automotive Services GmbH 100%
ISS Facility Services Holding GmbH 100%
ISS Integrated Facility Services GmbH 100%
ISS Energy Services GmbH 100%
ISS Communication Services GmbH 100%
Italy
ISS Facility Services S.r.l. 100%
Portugal
ISS Tech Portugal, Unipessoal Lda. 100%
Spain
Integrated Service Solutions, S.L. 100%
ISS Facility Services, S.A. 100%
ISS Soluciones De Seguridad, S.L. 100%
UTE-HOSPITALES S.A.S 65%
Switzerland
ISS Facility Services AG 100%
ISS Schweiz AG 100%
Livit FM Services AG 100%
Turkey
ISS Hazir Yemek Üretim ve Hizmet A.Ş. 50.1%
ISS Proser Koruma ve Güvenlik Hizmetleri A.Ş. 50.1%
ISS Tesis Yönetim Hizmetleri A.Ş. 50.1%
ISS İşletme Hizmetleri A.Ş
(
Rönesans
)
50.1%
ISS Bitki Bakim ve Hasere Kontrol Hizmetleeri A.Ş.
50.1%
1)
4)
4)
4)
4)
4)
1)
Joint venture
2)
By virtue of the governance structure, the Group has the power
to govern the financial and operating policies of the company.
Consequently, the company is consolidated as a subsidiary.
3)
Divested on 9 February 2023.
4)
Under certain circumstances or events, ISS may be obliged to
choose to purchase other shareholders’ shareholdings or dispose
of its own shareholdings.
Hong Kong
Hung Fat Cleaning Transportation Co., Ltd. 100%
ISS Adams Secuforce Ltd. 100%
ISS China Holdings Ltd. 100%
ISS China Holdings I Ltd. 100%
ISS EastPoint Properties Ltd. 100%
ISS EastPoint Property Management Ltd. 100%
ISS Facility Services Ltd. 100%
ISS Greater China Ltd. 100%
ISS Hygiene Services
(
HK
)
Ltd. 100%
ISS Mediclean
(
HK
)
Ltd. 100%
ISS Pan Asia Security Services Ltd. 100%
JSL Ltd. 100%
Silvertech E&M Engineering Co., Ltd. 100%
India
Innovative and Payroll Advisory
Services Pvt. Ltd.
46%
ISS Facility Services India Pvt. Ltd. 100%
ISS SDB Security Services Pvt. Ltd. 46%
Modern Protection & Investigations Pvt. Ltd. 46%
ISS Support Services Pvt. Ltd. 100%
Indonesia
PT ISS Facility Services 99%
PT ISS Indonesia 100%
PT ISS Jasa Fasilitas 0%
Singapore
ISS Asia Pacific Pte. Ltd. 100%
ISS Catering Services Pte. Ltd. 100%
ISS Facility Services Pte. Ltd. 100%
ISS Hydroculture Pte. Ltd. 100%
ISS M&E Pte. Ltd. 100%
2)
2)
2)
2)
3)
Americas
Chile
Apunto Servicios de Alimentacion S.A. 100%
ISS Chile S.A. 100%
ISS Facility Services S.A. 100%
ISS Servicios de Limpieza Mecanizada S.A. 100%
ISS Servicios Generales Ltda. 100%
ISS Servicios Integrales Ltda. 100%
Mexico
ISS Centro América, S. de R.L. de C.V. 100%
ISS Facility Services, S.A. de C.V. 100%
US & Canada
ISS Facility Services Holding, Inc 100%
ISS Management and Finance Co, Inc 100%
ISS Facility Services, Inc
(
US
)
100%
Guckenheimer Enterprises Inc 100%
ISS C&S Building Maintenance Corporation 100%
ISS Facility Services California, Inc 100%
ISS Holding Inc 100%
ISS TMC Services, Inc 100%
ISS Facility Services Inc.
(
CA
)
100%
Asia & Pacific
Australia & New Zealand
ISS Facility Management Pty Limited 100%
ISS Facility Services Australia Limited 100%
ISS Facility Services Pty Ltd. 100%
ISS Health Services Pty Ltd. 100%
ISS Holdings Pty Ltd. 100%
ISS Integrated Services Pty Ltd 100%
ISS Property Services Pty Ltd 100%
ISS Security Pty Ltd 100%
Pacific Invest December 2004 Pty Ltd. 100%
Pacific Service Solutions Pty Ltd. 100%
ISS Facility Services Ltd. 100%
ISS Holdings NZ Ltd. 100%
China
ISS Facility Services
(
Shanghai
)
Ltd. 100%
ISS Hongrun (Shanghai) Cleaning Services Limited
100%
ISS Property Management (Beijing) Co.,Ltd
100%
Shanghai B&A Property Management Co., Ltd. 100%
Shanghai B&A Security Co., Ltd. 100%
Shanghai ISS Catering Management Ltd. 100%
Discontinued operations
Brunei
ISS Facility Services Sdn. Bhd. 50%
FINANCIAL STATEMENTS
8.4 Group companies
ESG ratios
CO
2
emissions
Scope 1, 2 and 3 emissions calculated in accordance
with the Greenhouse Gas Protocol. For further infor-
mation see the 2022 Sustainability Report pp. 42-43.
Employee turnover, %
Number of employees who left in the year × 100
Average number of employees for the year
Customer retention, %
Portfolio revenue (annual value) retained
at 31 December of the portfolio at 1 January
Portfolio revenue (annual value) at 1 January
Lost Time Injury Frequency (LTIF)
LTI is a work-related injury preventing a person from
working, i.e. being unfit for at least a full working day
or shift. LTIF is based on 1 million exposure hours
including contractors under ISS’s operational control
Fatalities
Measures the number of work-related fatalities
Training hours
Hours spent by participants while preparing and partic-
ipating. All training sponsored by ISS, paid or unpaid as
a result of employment within ISS
Gender diversity, Board, %
Female board members (AGM
5)
elected) × 100
Board members (AGM
5)
elected)
Board meeting attendance, %
Accumulated number of attended board
meetings for all board members x 100
Number of board meetings possible to attend
for all board members
Speak Up, number
Number of reports received through Speak Up system
or alternative channels
Alternative performance measures
Net profit (adjusted)
Net profit excluding Other income and expenses, net,
Goodwill impairment, Amortisation/impairment of
brands and customer contracts, impact from hyperinfla-
tion (IAS 29) and Net profit from discontinued operations
EBITDA
Operating profit + Depreciation and amortisation +
Amortisation/impairment of brands and customer
contracts
EBITDA before other items (adjusted EBITDA)
Operating profit before other items +
Depreciation and amortisation
Pro forma adjusted EBITDA
EBITDA before other items, including EBITDA before
other items in discontinued operations, and adjusted
as if all acquisitions and divestments had occurred on 1
January of the respective year
Free cash flow
Cash flow from operating activities – Acq. of intangible
assets and property, plant and equipment, net – Acq. of
financial assets, net (excl. equity-accounted investees) –
Addition of right-of-use assets, net
Organic growth, %
(Revenue current year excl. hyperinflation
– Comparable revenue
1)
prior year) x 100
Comparable revenue
1)
prior year
Acquisitions are treated as having been integrated
with ISS at the acquisition date. Consequently, organic
growth includes changes in revenue of such acquisitions
compared with expectations at the acquisition date.
Operating margin, %
Operating profit before other items x 100
Revenue
Total revenue growth, %
(Revenue current year – Revenue prior year) x 100
Revenue prior year
ISS uses various key figures, financial ratios
and non-financial ratios, all of which provide
our stakeholders with useful and necessary
information about the Group’s financial position,
performance, cash flows and development in
a consistent way. In relation to managing the
business, achieving our strategic goals and
ultimately creating value for our shareholders,
these measures are considered essential.
In addition, the Group uses alternative perfor-
mance measures (APMs) to provide stakeholders
with additional measures to evaluate and
analyse the Group's performance. The APMs
are non-IFRS financial measures defined by the
Group and thus may not be comparable with
measures provided by peers or other compa-
nies' measures.
Financial ratios
Acquisitions, %
Revenue from acquisitions
2)
x 100
Revenue prior year
Cash conversion, %
Free cash flow x 100
Operating profit before other items
Currency adjustments
Total revenue growth – Organic growth
– Acquisition/divestment growth, net
3)
Divestments, %
Revenue from divestments
4)
× 100
Revenue prior year
Equity ratio, %
Total equity × 100
Total assets
Net debt
Loans and borrowings – Securities – Cash and cash
equivalents – Positive fair value of derivatives
Share ratios
Basic earnings per share (EPS)
Net profit attributable to owners of ISS A/S
Average number of shares (basic)
Diluted earnings per share (EPS)
Net profit attributable to owners of ISS A/S
Average number of shares (diluted)
Average number of shares (basic)
Average number of issued shares, excluding treasury
shares, for the year
Average number of shares (diluted)
Average number of shares (basic) + Average number of
outstanding PSUs and RSUs expected to vest
FINANCIAL STATEMENTS
8.5 Definitions
1)
Comparable revenue prior year excludes impacts from changes in
exchange rates and acquisitions/divestments, net as well as impact
from hyperinflation restatement. To arrive at comparable revenue,
prior year’s revenue is retranslated by applying current year’s exchange
rates, divestments and impacts from hyperinflation restatements are
excluded and estimated impacts from acquisitions are added.
2)
Management’s expectations at the acquisition date.
3)
Incl. the effect from exclusion of currency effects from the calcula-
tion of organic growth and acq./div., net.
4)
Estimated or actual revenue where available at the divestment date.
5)
AGM = Annual General Meeting
Parent company financial statements
Primary financial statements 108
Statement of profit or loss 108
Statement of comprehensive income 108
Statement of cash flows 108
Statement of financial position 109
Statement of changes in equity 109
Accounting policies 110
1 Accounting policies 110
2 Significant accounting estimates and judgements 110
Statement of profit or loss 110
3 Fees to auditors 110
4 Financial expenses 110
5 Income tax 111
Statement of financial position 111
6 Investment in subsidiary 111
7 Deferred tax 111
Other 111
8 Management remuneration 111
9 Contingent liabilities 111
10 Financial risk management 111
11 Currency risk 111
12 Liquidity risk 112
13 Credit risk 112
14 Related parties 112
15 New accounting regulations 112
PARENT COMPANY FINANCIAL STATEMENTS
Statement of profit or loss
Statement of comprehensive income
1 January – 31 December
(
DKKm
)
Note 2022 2021
Employee costs
(
35
)
(
41
)
Other operating expenses 3
(
76
)
(
91
)
Operating profit
(
111
)
(
132
)
Financial expenses 4
(
82
)
(
63
)
Profit before tax
(
193
)
(
195
)
Income tax 5 41 57
Net profit
(
152
)
(
138
)
1 January – 31 December
(
DKKm
)
2022 2021
Net profit
(
152
)
(
138
)
Comprehensive income
(
152
)
(
138
)
Statement of cash flows
1 January – 31 December
(
DKKm
)
2022 2021
Operating profit
(
111
)
(
132
)
Share-based payments 9 2
Changes in working capital
(
1
)
(
5
)
Interest
(
paid
)
/received to/from companies within the ISS Group
(
82
)
(
62
)
Income tax
(
paid
)
/received 27
(
70
)
Joint taxation contribution
(
paid
)
/received, net
(
84
)
165
Cash flow from operating activities
(
242
)
(
102
)
Cash flow from investing activities - -
Other financial payments, net
(
1
)
(
1
)
Payments
(
to
)
/from companies within the ISS Group, net 291 103
Cash flow from financing activities 290 102
Total cash flow 48 0
Cash and cash equivalents at 1 January 0 0
Total cash flow 48 0
Cash and cash equivalents at 31 December 48 0
PARENT COMPANY FINANCIAL STATEMENTS
Statement of financial position
At 31 December
(
DKKm
)
Note 2022 2021
Assets
Investment in subsidiary 6 27,674 27,674
Non-current assets 27,674 27,674
Receivables from companies within the ISS Group 114 3
Tax receivables 28 31
Cash and cash equivalents 48 0
Current assets 190 34
Total assets 27,864 27,708
Equity and liability
Total equity 24,168 24,240
Debt to companies within the ISS Group 3,386 3,164
Deferred tax liabilities 7 291 237
Non-current liabilities 3,677 3,401
Debt to companies within the ISS Group 3 52
Trade payables and other liabilities 16 15
Current liabilities 19 67
Total liabilities 3,696 3,468
Total equity and liabilities 27,864 27,708
Statement of changes in equity
1 January – 31 December
(
DKKm
)
Share
capital
Treasury
shares
Retained
earnings
Proposed
dividends Total
2022
Equity at 1 January 185
(
191
)
24,246 - 24,240
Net profit - -
(
542
)
390
(
152
)
Comprehensive income - -
(
542
)
390
(
152
)
Share-based payments - - 80 - 80
Settlement of vested PSUs - 6
(
6
)
- -
Transactions with owners - 6 74 - 80
Changes in equity - 6
(
468
)
390
(
72
)
Equity at 31 December 185
(
185
)
23,778 390 24,168
2021
Equity at 1 January 185
(
191
)
24,322 - 24,316
Net profit - -
(
138
)
-
(
138
)
Comprehensive income - -
(
138
)
-
(
138
)
Share-based payments - - 62 - 62
Transactions with owners - - 62 - 62
Changes in equity - -
(
76
)
-
(
76
)
Equity at 31 December 185
(
191
)
24,246 - 24,240
FINANCIAL STATEMENTS
1 Accounting policies
Basis of preparation
The financial statements of ISS A/S have been
prepared in accordance with IFRS as adopted
by the EU and additional requirements of the
Danish Financial Statements Act. In addition,
the financial statements have been prepared in
compliance with the IFRSs issued by the IASB.
Changes in accounting policies
Changes in accounting policies are described in
8.2 to the consolidated financial statements.
Accounting policies
With the exception of the items described below,
the accounting policies for ISS A/S are identical
to the Group's accounting policies, which are
described in the notes to the consolidated
financial statements.
Statement of financial position
Investment in subsidiary is measured at cost,
which comprises consideration transferred mea-
sured at fair value and directly attributable trans-
action costs. If there is indication of impairment,
an impairment test is performed as described in
the accounting policies in 3.2 to the consolidated
financial statements. Where the recoverable
amount is lower than the cost, the investment is
written down to this lower value. An impairment
loss is reversed if there has been a change in the
estimates used to determine the recoverable
amount, but only to the extent that the recoverable
amount does not exceed the original cost.
Tax As required by Danish legislation, ISS A/S is
jointly taxed with all Danish resident subsidiaries.
ISS A/S acts as administration company for
the joint taxation and consequently settles all
payments of corporation tax with the tax author-
ities. Joint taxation contributions to/from jointly
taxed companies are recognised in profit or loss
and in Income tax and in the statement of financial
position in Receivables from or Debt to companies
within the ISS Group.
Companies which utilise tax losses in other com-
panies pay joint taxation contribution to ISS A/S
equivalent to the tax base of the tax losses utilised.
Companies whose tax losses are utilised by other
companies receive joint taxation contributions
from ISS A/S equivalent to the tax base of the tax
losses utilised (full absorption).
2 Significant accounting
estimates and
judgements
Significant accounting estimates and judge-
ments relating to the applied accounting policies
for ISS A/S are the same as for the Group to the
extent of similar accounting items, cf. Estimates
and judgements on p. 55 for a description. The
specific risks for ISS A/S are described in the
notes to the financial statements of the parent
company.
Investment in subsidiary is tested for im-
pairment when there is an indication that the
investment may be impaired. The assessment of
whether there is an indication of impairment is
based on both external and internal sources of
information such as performance of the subsidi-
ary, significant decline in market values etc.
3 Fees to auditors
4 Financial expenses
(
DKKm
)
2022 2021
Statutory audit 1 1
Other assurance services 0 0
Total 1 1
(
DKKm
)
2022 2021
Interest expenses to companies
within the ISS Group
(
81
)
(
62
)
Bank fees
(
1
)
(
1
)
Financial expenses
(
82
)
(
63
)
FINANCIAL STATEMENTSPARENT COMPANY FINANCIAL STATEMENTS
5 Income tax
Effective tax rate (ETR)
(
DKKm
)
2022 2021
Current tax 96 39
Deferred tax
(
54
)
-
Prior year adjustments, net
(
1
)
18
Income tax 41 57
2022 2021
Statutory income tax rate,
Denmark 22.0 % 22.0 %
Non-tax-deductible expenses
less non-taxable income
(
0.2
)
%
(
1.8
)
%
Prior year adjustments, net
(
0.5
)
% 9.1 %
Effective tax rate
21.3 % 29.3 %
6 Investment in
subsidiary
Subsidiary
ISS World Services A/S, Søborg, Denmark, 100%.
7 Deferred tax
Deferred tax liability at 31 December 2022 and at
31 December 2021 related to deferred taxation of
foreign exchange gains/losses.
ISS A/S has no unrecognised deferred tax assets
regarding tax losses carried forward (2021: None).
(
DKKm
)
2022 2021
Cost at 1 January 27,674 27,674
Cost at 31 December 27,674 27,674
Carrying amount
at 31 December 27,674 27,674
(
DKKm
)
2022 2021
Deferred tax liability at 1 January 237 203
Prior year adjustments, net
(
1
)
34
Tax on profit before tax 55 -
Deferred tax liability
at 31 December 291 237
8 Management
remuneration
Key management personnel of the Group as
defined in 6.1 to the consolidated financial
statements are also considered key manage-
ment personnel of the parent. Remuneration to
the Board of Directors and the Executive Group
Management is specified in 6.1 to the consoli-
dated financial statements.
9 Contingent liabilities
Withholding taxes
ISS A/S is jointly taxed with all Danish resident
subsidiaries. As administration company ISS A/S
and companies within the joint taxation have a
joint and unlimited liability of Danish corporate
and withholding taxes related to dividends, in-
terests and royalties. As per 31 December 2022,
Danish corporate tax and Danish withholding
taxes amounted to DKK 0 million (2021: DKK 0
million). Any subsequent adjustments to Danish
withholding taxes may change this joint and
unlimited liability.
VAT
ISS A/S and certain Danish Group companies are
jointly registered for VAT and are jointly liable for
the payment hereof.
10 Financial risk
management
ISS A/S's financial risks are managed centrally by
Group Treasury based on the Financial Policy ap-
proved by the Board of Directors. The objectives,
policies and processes for measuring and manag-
ing the exposure to financial risks is described in
4.4 to the consolidated financial statements. The
risks specific to ISS A/S are described below.
11 Currency risk
At 31 December 2022 and at 31 December
2021, ISS A/S was not exposed to currency risk
as no assets or liabilities were denominated in
currencies other than DKK.
FINANCIAL STATEMENTSPARENT COMPANY FINANCIAL STATEMENTS
12 Liquidity risk
Liquidity risk results from ISS A/S's potential
inability or difficulty in meeting the contractual
obligations associated with its financial liabilities
due to insufficient liquidity. ISS A/S is a holding
company and its primary assets consist of
shares in ISS World Services A/S and receivables
from companies within the ISS Group. ISS A/S
has no revenue generating activities of its own,
and therefore ISS A/S's cash flows and ability to
service its indebtedness and other obligations,
will depend primarily on the operating per-
formance and financial condition of ISS World
Services A/S and its operating subsidiaries, and
the receipt by ISS A/S of funds from ISS World
Services A/S and its subsidiaries in the form of
dividends or otherwise.
At 31 December 2022, ISS A/S carried no signifi-
cant financial liablities. Thus the liquidity risk was
primarily related to ISS A/S's obligations under
the Danish joint taxation where ISS A/S acts as
the administration company.
13 Credit risk
ISS A/S has no revenue generating activities and
therefore no trade receivables. Consequently,
credit risk is limited to an insignificant amount of
cash and cash equivalents and an insignificant
intercompany receivable with various indirectly
owned subsidiaries in relation to joint taxation.
14 Related parties
In addition to the description in 7.3 to the con-
solidated financial statements of related parties
and transactions with these, related parties of
ISS A/S comprise ISS World Services A/S and its
subsidiaries, associates and joint ventures, see
8.4 to the consolidated financial statements.
In 2022, ISS A/S had the following transactions
with other related parties, which were all made
on market terms:
• ISS A/S had a debt against ISS Global A/S of
DKK 3,386 million (2021: DKK 3,164 million)
• ISS A/S paid interests to ISS Global A/S, see
note 4, Financial expenses
• ISS A/S received/paid joint taxation contribu-
tion equal to 22% of taxable income from/to
jointly taxed Danish resident subsidiaries
15 New accounting
regulations
New accounting regulations are described in 8.3
to the consolidated financial statements.
PARENT COMPANY FINANCIAL STATEMENTS
Management statement
Copenhagen, 23 February 2023
The Board of Directors and the Executive Group
Management Board have today discussed and
approved the annual report of ISS A/S for the
financial year 2022.
The annual report has been prepared in accordance
with International Financial Reporting Standards as
adopted by the EU and additional requirements of
the Danish Financial Statements Act.
It is our opinion that the consolidated financial
statements and the Parent company financial
statements give a true and fair view of the
Group’s and the Parent company’s financial po-
sition at 31 December 2022 and of the results of
the Group’s and the Parent company’s operations
and cash flows for the financial year 1 January –
31 December 2022.
In our opinion, the Management review includes
a fair review of the development in the Group’s
and the Parent company’s operations and finan-
cial conditions, the results for the year, cash flows
and financial position as well as a description of
the most significant risks and uncertainty factors
that the Group and the Parent company face.
In our opinion, the annual report of ISS A/S for
the financial year 2022 identified as ISS-2022-
12-31-en.zip has been prepared, in all material
respects, in compliance with the ESEF-regulation.
We recommend that the annual report be
approved at the annual general meeting.
E = Employee representative
Executive Group Management Board
Board of Directors
Signe Adamsen (E) Elsie Yiu (E)
Ben Stevens Cynthia Mary Trudell
Nada Elboayadi (E)
Kelly Kuhn
Kasper Fangel
Group CFO
Lars Petersson
Deputy Chair
Søren Thorup Sørensen
Niels Smedegaard
Chair
Jacob Aarup-Andersen
Group CEO
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Independent auditor’s report
To the shareholders of ISS A/S
Opinion
We have audited the consolidated financial
statements and the parent company financial
statements of ISS A/S for the financial year 1
January – 31 December 2022, pp. 49-112, which
comprise statement of profit or loss, statement
of comprehensive income, statement of cash
flows, statement of financial position, statement
of changes in equity and notes, including ac-
counting policies for the Group and the Parent
Company. The consolidated financial statements
and the parent company financial statements
are prepared in accordance with International
Financial Reporting Standards as adopted by the
EU and additional requirements of the Danish
Financial Statements Act.
In our opinion, the consolidated financial
statements and the parent company financial
statements give a true and fair view of the
financial position of the Group and the Parent
Company at 31 December 2022 and of the
results of the Group’s and the Parent Company’s
operations and cash flows for the financial year
1 January – 31 December 2022 in accordance
with International Financial Reporting Standards
as adopted by the EU and additional require-
ments of the Danish Financial Statements Act.
Our opinion is consistent with our long-form
audit report to the Audit and Risk Committee
and the Board of Directors.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (ISAs) and
additional requirements applicable in Denmark.
Our responsibilities under those standards
and requirements are further described in the
“Auditor’s responsibilities for the audit of the
consolidated financial statements and the parent
company financial statements” (hereinafter col-
lectively referred to as “the financial statements”)
section of our report. We believe that the audit
evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance
with the International Ethics Standards Board
for Accountants' International Code of Ethics
for Professional Accountants (IESBA Code) and
the additional ethical requirements applicable
in Denmark, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements and the IESBA Code.
To the best of our knowledge, we have not provid-
ed any prohibited non-audit services as described
in article 5(1) of Regulation (EU) no. 537/2014.
Appointment of auditor
We were initially appointed as auditor of ISS
A/S on 15 April 2015 for the financial year
2015. We have been reappointed annually by
resolution of the general meeting for a total
consecutive period of eight years up until the
financial year 2022.
Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most signifi-
cance in our audit of the financial statements
for the financial year 2022. These matters were
addressed during our audit of the financial
statements as a whole, and in forming our
opinion thereon. We do not provide a separate
opinion on these matters. For each matter be-
low, our description of how our audit addressed
the matter is provided in that context.
We have fulfilled our responsibilities described in
the “Auditor’s responsibilities for the audit of the
financial statements” section, including in rela-
tion to the key audit matters below. Accordingly,
our audit included the design and performance
of procedures to respond to our assessment of
the risks of material misstatement of the financial
statements. The results of our audit procedures,
including the procedures performed to address
the matters below, provide the basis for our
audit opinion on the financial statements.
Revenue from contracts with customers,
including cut-off and accrual of revenue
and onerous contracts
Revenue from contracts is recognised as the
services are rendered to the customers. Some
contracts require the Group to incur significant
transition and mobilisation costs at contract
inception which are capitalised and amortised
over a multi-annual contract term. Accordingly,
appropriate cut-off and accrual of revenue and
capitalisation and amortisation of transition
and mobilisation costs is critical and involve
management judgement, especially in relation
to the more integrated and complex facility
service contracts. Further, the assessment of
whether a contract may be considered onerous
involves management judgement in making
accounting estimates about future contract
profitability, including the determination of the
total contract revenue, contract period and the
unavoidable costs of meeting the obligations
under the contract.
Due to the inherent uncertainty involved in the
cut off and accrual of revenue, the assessment
of whether transition and mobilisation costs
meet the criteria to be capitalised and the deter-
mination of the contract period and the future
contract profitability, including the uncertainty
relating to estimating the impact from Covid-19,
we considered the accounting for revenue from
contracts with customers, including cut-off and
accrual of revenue and onerous contracts, to be
a key audit matter.
For details on revenue from contracts with
customers, transition and mobilisation costs
and provisions for onerous contracts, reference
is made to notes 1.2, 2.1, 2.2 and 2.5 in the
consolidated financial statements.
In response to the identified risks, our audit
procedures included, among others:
• Test on a sample basis of accrued revenue (un-
billed receivables) to supporting documenta-
tion, including procedures such as: Inspection
of proof of work done, review of contracts with
customers, comparison of amounts accrued to
subsequent invoices and cash receipts.
• Test on a sample basis of capitalised transition
and mobilisation costs, including procedures
such as: Inspection of proof of costs incurred,
review of contracts with customers, evalua-
tion of management’s assessment of costs
meeting the criteria to be recognised.
• Evaluation of management’s process to
identify and quantify onerous contracts.
Our evaluation included inquiries to local
management responsible for carrying out the
identification process at country level, review
of documentation of management’s analysis
as well as our own analytical procedures over
contract margins.
• Test on a sample of provisions for onerous con-
tracts, including procedures such as: Review
FINANCIAL STATEMENTS
Valuation of intangible assets
The carrying amounts of goodwill and customer
contracts related to prior years’ business
combinations comprise a significant part of the
consolidated statement of financial position.
The cash-generating units in which goodwill and
customer contracts are included are impairment
tested by Management on an annual basis. The
impairment tests are based on Management’s
estimates of among others future profitability,
long-term growth and discount rate. Due to the
inherent uncertainty involved in determining the
net present value of future cash flows, including
the uncertainty relating to estimating the impact
from Covid-19, we considered these impairment
tests to be a key audit matter.
For details on the impairment tests performed by
Management reference is made to notes 3.1 and
3.2 in the consolidated financial statements.
In response to the identified risks, our audit
procedures included, among others, testing the
mathematical accuracy of the discounted cash
flow model and comparing forecasted profitabili-
ty to board approved financial forecasts. We eval-
uated the assumptions and methodologies used
in the discounted cash flow model, in particular
those relating to the forecasted revenue growth
and operating margin, including comparing with
historical growth rates and assessed impact of
Covid-19. We compared the assumptions applied
to externally derived data as well as our own
assessments in relation to key inputs such as
projected economic growth and discount rates.
Further, we evaluated the sensitivity analysis on
the key assumptions applied. Our audit proce-
dures primarily focused on cash generating units
where likely changes in key assumptions could
result in impairment. We further evaluated the
adequacy of disclosures provided by Manage-
ment in the financial statements compared to
applicable accounting standards.
Income tax and deferred tax balances
The Group’s operations are subject to income
taxes in various jurisdictions having different
tax legislation. Management makes judgements
and estimates in determining the recognition
of income taxes and deferred taxes. Given the
inherent uncertainty involved in assessing and
estimating the income tax and deferred tax bal-
ances, including tax exposures and write-down
of deferred tax assets and given the uncertainty
estimating the impact from Covid-19 on future
taxable income, we considered these balances
as a key audit matter.
For details on the income tax and deferred tax
balances reference is made to notes 5.1 and
5.2 in the consolidated financial statements and
notes 5 and 7 in the Parent company financial
statements.
In response to the identified risks, our audit
procedures included review of tax computa-
tions in order to assess the completeness and
accuracy of the amounts recognised as income
taxes and deferred taxes, as well as assessment
of correspondence with tax authorities and eval-
uation of tax exposures as well as write-down of
deferred tax assets. In respect of the deferred
tax assets recognised in the statement of
financial position, we assessed Management’s
assumptions as to the probability of recovering
the assets through taxable income in future
years and available tax planning strategies. We
further evaluated the adequacy of disclosures
provided by Management compared to applica-
ble accounting standards.
Statement on the
Management’s review
Management is responsible for the Manage-
ment’s review, pp. 1-48.
Our opinion on the financial statements does not
cover the Management’s review, and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial
statements, our responsibility is to read the
Management’s review and, in doing so, consider
whether the Management’s review is materially
inconsistent with the financial statements or
our knowledge obtained during the audit, or
otherwise appears to be materially misstated.
Moreover, it is our responsibility to consider
whether the Management’s review provides the
information required under the Danish Financial
Statements Act.
Based on the work we have performed, we
conclude that the Management’s review is in
accordance with the financial statements and
has been prepared in accordance with the
requirements of the Danish Financial Statements
Act. We did not identify any material misstate-
ment of the Management’s review.
Management’s responsibilities
for the financial statements
Management is responsible for the preparation of
consolidated financial statements and parent compa
-
ny financial statements that give a true and fair view
in accordance with International Financial Reporting
Standards as adopted by the EU and additional
requirements of the Danish Financial Statements
Act and for such internal control as Management
determines is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, Manage-
ment is responsible for assessing the Group’s
and the Parent Company’s ability to continue
as a going concern, disclosing, as applicable,
matters related to going concern and using the
going concern basis of accounting in preparing
the financial statements unless Management
either intends to liquidate the Group or the
Parent Company or to cease operations, or has
no realistic alternative but to do so.
Auditor’s responsibilities for the
audit of the financial statements
Our objectives are to obtain reasonable assur-
ance as to whether the financial statements as
a whole are free from material misstatement,
whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Rea-
sonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted
in accordance with ISAs and additional
requirements applicable in Denmark will always
detect a material misstatement when it exists.
Misstatements can arise from fraud or error
and are considered material if, individually or
in the aggregate, they could reasonably be
expected to influence the economic decisions
of users taken on the basis of the financial
statements.
of the relevant contract and management’s
estimate of the future contract revenue and
unavoidable cost, assessment of the assump-
tions applied by management to estimate the
future contract revenue including the expected
Covid-19 impact, contract term including termi-
nation and extension options and unavoidable
cost, comparison of the revenue assumptions
used to the services and fees specified in the
contract, comparison of unavoidable cost as-
sumptions used to underlying cost projections
and actual costs incurred historically as well as
testing the completeness and accuracy of the
underlying cost projections.
FINANCIAL STATEMENTS
Torben Bender
State Authorised
Public Accountant
mne21332
Claus Kronbak
State Authorised
Public Accountant
mne28675
As part of an audit conducted in accordance
with ISAs and additional requirements appli-
cable in Denmark, we exercise professional
judgement and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material mis-
statement of the financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks and obtain
audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting
from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations or
the override of internal control.
• Obtain an understanding of internal control
relevant to the audit in order to design audit
procedures that are appropriate in the circum-
stances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s
and the Parent Company’s internal control.
• Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by Management.
• Conclude on the appropriateness of Manage-
ment’s use of the going concern basis of ac-
counting in preparing the financial statements
and, based on the audit evidence obtained,
whether a material uncertainty exists related to
events or conditions that may cast significant
doubt on the Group’s and the Parent Com-
pany’s ability to continue as a going concern.
If we conclude that a material uncertainty
exists, we are required to draw attention in our
auditor’s report to the related disclosures in
the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence
obtained up to the date of our auditor’s report.
However, future events or conditions may
cause the Group and the Parent Company to
cease to continue as a going concern.
• Evaluate the overall presentation, structure
and contents of the financial statements, in-
cluding the note disclosures, and whether the
financial statements represent the underlying
transactions and events in a manner that
gives a true and fair view.
• Obtain sufficient appropriate audit evidence
regarding the financial information of the
entities or business activities within the Group
to express an opinion on the consolidated
financial statements. We are responsible for
the direction, supervision and performance of
the group audit. We remain solely responsible
for our audit opinion.
We communicate with those charged with gover-
nance regarding, among other matters, the planned
scope and timing of the audit and significant audit
findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with gover-
nance with a statement that we have complied
with relevant ethical requirements regarding
independence, and to communicate with them
all relationships and other matters that may
reasonably be thought to bear on our indepen-
dence, and where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with those
charged with governance, we determine those
matters that were of most significance in the
audit of the consolidated financial statements and
the parent company financial statements of the
current period and are therefore the key audit
matters. We describe these matters in our audi-
tor's report unless law or regulation precludes
public disclosure about the matter.
Report on compliance
with the ESEF Regulation
As part of our audit of the Consolidated Finan-
cial Statements and Parent Company Financial
Statements of ISS A/S, we performed proce-
dures to express an opinion on whether the
annual report of ISS A/S for the financial year 1
January – 31 December 2022 with the file name
ISS-2022-12-31-en.zip is prepared, in all material
respects, in compliance with the Commission
Delegated Regulation (EU) 2019/815 on the
European Single Electronic Format (ESEF Regu-
lation) which includes requirements related to
the preparation of the annual report in XHTML
format and iXBRL tagging of the Consolidated
Financial Statements including notes.
Management is responsible for preparing an
annual report that complies with the ESEF
Regulation. This responsibility includes:
• The preparing of the annual report in XHTML
format;
• The selection and application of appropriate
iXBRL tags, including extensions to the ESEF
taxonomy and the anchoring thereof to
elements in the taxonomy, for all financial
information required to be tagged using
judgement where necessary;
• Ensuring consistency between iXBRL tagged
data and the Consolidated Financial State-
ments presented in human readable format;
and
• For such internal control as Management
determines necessary to enable the prepara-
tion of an annual report that is compliant with
the ESEF Regulation.
Our responsibility is to obtain reasonable assur-
ance on whether the annual report is prepared,
in all material respects, in compliance with the
ESEF Regulation based on the evidence we have
obtained, and to issue a report that includes
our opinion. The nature, timing and extent of
procedures selected depend on the auditor’s
judgement, including the assessment of the
risks of material departures from the require-
ments set out in the ESEF Regulation, whether
due to fraud or error. The procedures include:
• Testing whether the annual report is prepared
in XHTML format;
• Obtaining an understanding of the company’s
iXBRL tagging process and of internal control
over the tagging process;
• Evaluating the completeness of the iXBRL tag-
ging of the Consolidated Financial Statements,
including notes;
• Evaluating the appropriateness of the compa-
ny’s use of iXBRL elements selected from the
ESEF taxonomy and the creation of extension
elements where no suitable element in the
ESEF taxonomy has been identified;
• Evaluating the use of anchoring of extension
elements to elements in the ESEF taxonomy; and
• Reconciling the iXBRL tagged data with the
audited Consolidated Financial Statements.
In our opinion, the annual report of ISS A/S
for the financial year 1 January – 31 December
2022 with the file name ISS-2022-12-31-en.zip
is prepared, in all material respects, in compli-
ance with the ESEF Regulation.
Copenhagen, 23 February 2023
EY Godkendt Revisionspartnerselskab
CVR no. 30 70 02 28
MyISS
Strengthening connection and
collaboration in a hybrid workplace
ISS + partner
8,000 users
Ambition to connect to all our more than
350,000 placemakers
ISS Takeaway
Balancing full-time jobs with maintaining
a household
ISS Owned IP
3,000 users
6 customers across 9 customer workplaces
(DK) + 120% in revenue
Outdoor App
Supporting placemakers to evidence
task completion and compliance
ISS Owned IP
Target:
20,000 work tasks
ISS Workplace
App Promoting wellbeing, engagement,
community and productivity
ISS Owned IP
60,000+ users on Global Key Accounts
CASE
The right technology
foundation to support
our customers
TECHNOLOGY
ISS builds on a solid IT strategy and executes
it through our in-house tech teams which
design the right digital applications and plat-
forms for our customers and placemakers.
These efforts are founded on a scalable and
cybersecure ”Cloud First” infrastructure, all
developed and managed by integrated and
experienced ISS global technology teams.
Creating customised and powerful software re-
quires an agile and fully integrated approach.
At ISS, we rely on our experienced placemak
-
ers and the power of cross-functional teams to
develop innovative in-house solutions for our
customers’ changing needs and the challeng
-
es of today’s modern workplaces.
A dedicated software
development centre
As a mark of our commitment to innova-
tion in this area, this year ISS opened a
dedicated software development centre
in Porto, Portugal. This marks yet another
major milestone in ISS’s digital business
transformation journey towards becom-
ing the technology leader of the facility
management industry. The new “ISS Tech
Portugal” centre complements ISS’s already
established technology headquarters in two
major locations – Copenhagen and Warsaw.
The key focus of the centre is to create and
harness in house capabilities to develop
high-quality and scalable digital solutions
both for the ISS enterprise and for our
customers, globally. The location in Portugal
was chosen due to its thriving technology
scene and access to a growing talent
pool. ISS welcomed its first employees in
September 2022.
The power of technology
self-delivery
Self-delivery remains a differentiator and
key to success for ISS, and this includes
technology. By acquiring and capitalising
on intellectual property rights of our
customer-facing applications for food and
workplace experience, we are able to take
full control of our IoT Platform and apps.
We create value for ISS and for our
customers by being flexible and adaptable,
offering standalone products for each of
our services – food, technical, cleaning, and
workplace. They are integrated through an
ISS-managed global data and integration
layer, providing customers with a full line of
sight at site, country, or global level.
60 | © 2022 ISS
ISS Owned IP
3k users
6 customers
& 9 customer
sites (DK)
+ 120% in revenue
ISS Owned IP
Target:
20k work tasks
ISS + partner
8k users
Working to towards
360,000 users
ISS Owned IP
60k+ users on
Global Key
Accounts
Self-delivery makes a difference for ISS
TECHNOLOGY
Delivering technology that impacts people and places
in an agile and iterative approach
MyISS
Strengthening
connection and
collaboration
in a hybrid
workplace
ISS Takeaway
Balancing full
-time jobs with
maintaining
a household
Outdoor App
Supporting
placemakers to
evidence task
completion and
compliance
ISS Workplace
App
Promoting well-
being, engagement,
community and
productivity
60 | © 2022 ISS
ISS Owned IP
3k users
6 customers
& 9 customer
sites (DK)
+ 120% in revenue
ISS Owned IP
Target:
20k work tasks
ISS + partner
8k users
Working to towards
360,000 users
ISS Owned IP
60k+ users on
Global Key
Accounts
Self-delivery makes a difference for ISS
TECHNOLOGY
Delivering technology that impacts people and places
in an agile and iterative approach
MyISS
Strengthening
connection and
collaboration
in a hybrid
workplace
ISS Takeaway
Balancing full
-time jobs with
maintaining
a household
Outdoor App
Supporting
placemakers to
evidence task
completion and
compliance
ISS Workplace
App
Promoting well-
being, engagement,
community and
productivity
60 | © 2022 ISS
ISS Owned IP
3k users
6 customers
& 9 customer
sites (DK)
+ 120% in revenue
ISS Owned IP
Target:
20k work tasks
ISS + partner
8k users
Working to towards
360,000 users
ISS Owned IP
60k+ users on
Global Key
Accounts
Self-delivery makes a difference for ISS
TECHNOLOGY
Delivering technology that impacts people and places
in an agile and iterative approach
MyISS
Strengthening
connection and
collaboration
in a hybrid
workplace
ISS Takeaway
Balancing full
-time jobs with
maintaining
a household
Outdoor App
Supporting
placemakers to
evidence task
completion and
compliance
ISS Workplace
App
Promoting well-
being, engagement,
community and
productivity
60 | © 2022 ISS
ISS Owned IP
3k users
6 customers
& 9 customer
sites (DK)
+ 120% in revenue
ISS Owned IP
Target:
20k work tasks
ISS + partner
8k users
Working to towards
360,000 users
ISS Owned IP
60k+ users on
Global Key
Accounts
Self-delivery makes a difference for ISS
TECHNOLOGY
Delivering technology that impacts people and places
in an agile and iterative approach
MyISS
Strengthening
connection and
collaboration
in a hybrid
workplace
ISS Takeaway
Balancing full
-time jobs with
maintaining
a household
Outdoor App
Supporting
placemakers to
evidence task
completion and
compliance
ISS Workplace
App
Promoting well-
being, engagement,
community and
productivity
Forward-looking statements
This Annual Report contains forward-looking
statements, including, but not limited to,
the guidance and expectations provided in
Outlook on p. 11. Statements herein, other
than statements of historical fact, regarding
future events or prospects, are forward-look-
ing statements.
The words may, will, should, expect, antici-
pate, believe, estimate, plan, predict, intend
or variations of such words, and other
statements on matters that are not historical
fact or regarding future events or prospects,
are forward-looking statements. ISS has
based these statements on its current views
with respect to future events and financial
performance. These views involve risks and
uncertainties that may cause actual results
to differ materially from those predicted in
the forward-looking statements and from the
past performance of ISS.
Although ISS believes that the estimates
and projections reflected in the for-
ward-looking statements are reasonable,
they may prove materially incorrect. Actual
results may differ materially. for example as
a result of risks related to the facility service
industry in general or to ISS in particular,
including those described in this report and
other information made available by ISS.
As a result, you should not rely on these
forward-looking statements.
ISS undertakes no obligation to update
or revise any forward-looking statements,
whether as a result of new information,
future events or otherwise, except to the
extent required by law.
The Group is required to file the Annual Re-
port in the European Single Electronic Format
(ESEF) using a combination of the XHTML
format and to tag the primary consolidated
financial statements using iXBRL (Inline
eXtensible Business Language).
The Group’s iXBRL tags comply with the ESEF
taxonomy, which has been developed on the
basis of IFRS taxonomy published by the IFRS
Foundation. The line items in the consoli-
dated financial statements are tagged to
elements in the ESEF taxonomy. For financial
line items that are not directly defined in the
ESEF taxonomy, an extension to the taxono-
my has been created.
ISS has considered the accounting meaning
of a taxonomy element when selecting the
appropriate block tag for marking up such
disclosure, particularly where multiple block
tags match a disclosure. As a minimum, ISS
has marked-up disclosures included in the
consolidated financial statements (including
headers) with the elements required (Annex
II of the Regulatory Technical Standard on
ESEF). If disclosures or information corre-
sponds to more than one element of differ-
ent levels of details, ISS has used each of
them and multi-tagged the disclosure to the
extent that corresponds with the underlying
accounting meaning of the disclosures.
The Annual Report submitted to the Danish
Financial Supervisory Authority (the Officially
Appointed Mechanism) is included in the zip
file ISS-2022-12-31-en.zip.
Name of reporting entity:
Domicile of entity:
Legal form of entity:
Country of incorporation:
Address:
Principal place of business:
Principal activities:
Name of the parent entity:
Name of ultimate parent og Group:
ISS A/S
Denmark
A/S
Denmark
Buddingevej 197, DK-2860 Søborg
Global
Workplace and facility service solutions
ISS A/S
ISS A/S
Reporting under the ESEF Regulation
ESEF data
FINANCIAL STATEMENTS
Forward-looking
statements and ESEF
Discontinued operations
(DKKm) 2022 2021
Brunei 44 40
Czech Republic 0 64
Hungary 0 18
Philippines 0 127
Romania 0 23
Slovakia 0 26
Slovenia 0 65
Portugal 201 350
Russia 22 87
Taiwan 118 431
Total 385 1,231
(DKKm)
of
Group 2022 2021
Switzerland 8% 5,729 5,212
Germany 7% 5,556 5,429
Spain 5% 4,122 4,420
Turkey 4% 3,341 2,719
France 4% 2,900 3,075
Austria 3% 2,285 2,031
Italy 1% 759 699
Total  24,692 23,585
(DKKm)
of
Group 2022 2021
UK & Ireland 14% 10,396 10,634
Norway 5% 4,016 3,181
Finland 4% 3,292 3,151
Denmark 4% 3,169 3,661
Belgium & Lux. 4% 3,044 2,695
Sweden 4% 2,984 2,787
Netherlands 2% 1,400 1,216
Poland 1% 315 286
Lithuania 0% 78 62
Latvia 0% 0 2
Total  28,694 27,675
(DKKm)
of
Group 2022 2021
US & Canada 8% 6,387 5,298
Chile 2% 1,177 1,003
Mexico 1% 990 810
Other 0% 31 30
Total  8,585 7,141
(DKKm)
of
Group 2022 2021
Australia & New
Zealand 6% 4,868 4,349
Hong Kong 4% 2,652 2,403
Singapore 3% 2,240 2,035
Indonesia 2% 1,830 1,635
India 2% 1,422 1,076
China 1% 1,000 880
Other 0% 0 3
Total  14,012 12,381
FINANCIAL STATEMENTS
Country revenue
Partnership countries
Central & Southern Europe
Northern Europe
Americas
Asia & Pacific
Revenue in countries where we render services to global
key accounts but do not have a full country support
structure comprises 1% of Group revenue or DKK 606
million (2021: DKK 626 million).
Partnership countries comprise: Argentina, Bangladesh,
Brazil, Bulgaria, Czech Republic, Colombia, Costa Rica,
Croatia, Cyprus, Greece, Hungary, Israel, Japan, Jordan,
Kazakhstan, Malaysia, Pakistan, Philippines, Portugal,
Puerto Rico, Romania, Serbia, Senegal, Slovakia, Sri
Lanka, South Africa, South Korea, Taiwan, Thailand,
United Arab Emirates and Vietnam.
Contact information
ISS A/S
Buddingevej 197
DK-2860 Søborg
Denmark
Tel.: +45 38 17 00 00
Fax: +45 38 17 00 11
www.issworld.com
CVR 28 50 47 99
Investor relations
Jacob Johansen
Head of Group Investor Relations
Tel. +45 38 17 00 00
Edited by
Group Controlling
ISS A/S
Design & production
KIRK & HOLM
Stibo Complete
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