Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
1 of 34
Interim report for 1 January – 30 June 2024
Robust financial development. Second tranche of the share buyback programme
increased by DKK 250 million to DKK 750 million
Highlights
Financial performance update
• Organic growth was 5.8% in Q2 2024 (Q2 2023: 10.9%), and 5.9% in H1 2024 (H1 2023: 11.4%), mainly driven
by price increases implemented across the Group and positive volume growth.
• Operating margin before other items (excl. IAS 29) improved to 4.0% in H1 2024 from 3.6% in H1 2023 as a
result of continued operational improvements across the Group.
• Free cash flow was DKK (1.1) billion in H1 2024 (H1 2023: DKK (1.1) billion) reflecting normal seasonality with
negative effect from changes in working capital, including Deutsche Telekom withholding certain payments.
Business update
• As announced on 8 August 2024, ISS has been awarded a 7-year contract, subject to signing, with the UK
Department of Work and Pensions (DWP) with an expected annual revenue of around DKK 1.2 billion.
• ISS extended several key account contracts including the longstanding global IFS partnership with Barclays.
• The contracts with DEFRA in the UK and the Danish Building and Property Agency are now fully operational
and performing according to expectations.
• In April 2024, ISS acquired gammaRenax in Switzerland and completed the divestment of ISS France.
• The arbitration process with Deutsche Telekom progressed according to plan.
Capital distribution and outlook
• Credit rating upgraded to BBB from BBB- by S&P Global and financial leverage at 2.6x at 30 June 2024.
• On 9 August 2024, ISS concluded the first DKK 500 million tranche of its share buyback programme. The
second tranche has been increased by DKK 250 million to DKK 750 million due to the strong liquidity position
and cash flow outlook. The total share buyback programme will thereby amount to DKK 1.25 billion.
• 2024 outlook for organic growth is narrowed to 5 – 6% (previously 4 – 6%) on the back of the performance in
H1 2024. Outlook for operating margin above 5% and free cash flow above DKK 1.8 billion are maintained.
Kasper Fangel Group CEO, ISS A/S, says:
“I’m pleased that we continued to meet our financial and operational targets in the first half of 2024. I am especially
pleased that our operating margin is improving in line with our expectations. Our growth and robust financial
performance are the results of our steadfast focus on managing inflationary pressure, as well as the outstanding,
dedicated efforts of our placemakers, who deliver value to our customers every day. We have successfully mobilised
new large customer contracts, such as DEFRA and the Danish Building and Property Agency, and we are well on track
to deliver on our targets for the full year. Due to the strong liquidity position and cash flow outlook, we are today able
to increase our share buyback programme with DKK 250 million for the next six months.”
Financial overview
Q1 2024 Q2 2024 H1 2024 H1 2023
DKK million (unless otherwise stated)
Revenue 20,090 20,591 40,681 38,336
Organic growth, % 6.0 5.8 5.9 11.4
Operating profit before other items 1,580 1,347
Operating profit before other items, excl. IAS 29
1,600 1,403
Operating margin (before other items), % 3.9 3.5
Operating margin (before other items), %, excl. IAS 29 4.0 3.6
Free cash flow (1,095) (1,074)
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
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Key figures and financial ratios
Financials H1 2024 H1 2023 2023
Results (DKK million)
Revenue 40,681 38,336 78,681
Operating profit before other items 1,580 1,347 3,300
Operating profit before other items, excl. IAS 29 1,600 1,403 3,348
Operating profit 1,517 1,319 3,138
EBITDA before other items 2,314 2,017 4,717
EBITDA 2,291 2,021 4,624
Pro forma adjusted EBITDA, LTM 5,118 4,503 4,789
Financial expenses, net (288) (312) (607)
Net profit from continuing operations 940 798 1,977
Net profit from discontinued operations (71) (1,353) (1,652)
Net profit 869 (555) 325
Net profit adjusted 990 713 2,120
Cash flow (DKK million)
Cash flow from operating activities (333) (322) 3,392
Acquisition of intangible assets and property, plant
and equipment, net
(289) (355) (703)
Free cash flow (1,095) (1,074) 1,775
Free cash flow, excl. IAS 29 (1,100) (1,072) 1,791
Financial position (DKK million)
Total assets 50,139 45,132 47,693
Goodwill 20,102 19,205 19,696
Additions to property, plant and equipment and right-of-use
assets
637 608 1,302
Equity 10,793 9,456 10,522
Net debt 13,230 12,971 10,548
Shares ('000)
Number of shares issued 185,668 185,668 185,668
Number of treasury shares 2,545 332 332
Average number of shares (basic) 183,135 185,333 185,334
Average number of shares (diluted) 185,864 188,258 187,954
Ratios H1 2024 H1 2023 2023
Financial ratios (%, unless otherwise stated)
Organic growth 5.9 11.4 9.7
Acquisitions and divestments, net 1.0 0.4 0.5
Currency and other adjustment (0.8) (4.0) (3.6)
Total revenue growth 6.1 7.8 6.6
Operating margin 3.9 3.5 4.2
Operating margin, excl. IAS 29 4.0 3.6 4.3
Cash conversion (69.3) (79.7) 53.8
Equity ratio 21.5 21.0 22.1
Net debt / Pro forma adjusted EBITDA 2.6x 2.9x 2.2x
Share ratios (DKK)
Basic earnings per share (EPS) 4.7 (3.1) 1.5
Diluted EPS 4.6 (3.1) 1.5
Basic EPS (continuing operations) 5.1 4.2 10.4
Diluted EPS (continuing operations) 5.0 4.1 10.3
Non-financials H1 2024 H1 2023 2023
Social data
Full-time employees 79% 77% 77%
Employees end of period, number 327,704 345,303 352,749
Definitions, see Annual Report 2023.
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
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Business update
In the first half of 2024, execution of the OneISS
strategy continued. With enhanced focus on fewer
strategic initiatives, execution power to drive value
creation has been strengthened.
From a commercial perspective, ISS secured a 5-year
extension of the longstanding partnership with
Barclays under which ISS provides integrated facility
services and great workplace experiences to more
than 80,000 Barclays employees across the world.
Furthermore, ISS leveraged its strength within focus
segments to extend other large key account
contracts with several banking customers in Europe
and in other industries across the world. As a result,
the customer retention rate was above 94%.
On 8 August 2024, ISS announced that ISS
Mediclean Limited (a subsidiary of ISS UK Ltd.) was
awarded a 7-year contract with the UK Department
of Work and Pensions (DWP) subject to final contract
with anticipated signing by the end of August 2024.
Under the contract ISS will be delivering integrated
facility services across more than 800 sites in the UK.
Annual revenue of the contract is expected to be
around DKK 1.2 billion. Mobilisation is expected to
begin in October 2024 with an anticipated go-live
date in October 2025.
With the self-delivery model, ISS is actively driving
the social sustainability agenda which is becoming
an increasingly important element of commercial
discussions.
In the US, a contract with a key account customer in
the industry and manufacturing segment has been
exited. The contract has been margin-dilutive from
inception in 2020, from a Group as well as a regional
perspective. Dialogue with the customer did not lead
to satisfactory terms. As a result, the contract was
terminated by mutual agreement effective 30 June
2024. Annual revenue from the contract amounted
to around 1% of Group revenue.
Mobilisation of the significant key account contracts
with DEFRA in the UK and the Danish Building and
Property Agency in Denmark was completed
according to plan in Q2 2024, and the contracts are
now fully operational. Significant resources and
resulting costs have been invested in the
mobilisation processes to ensure a quick and safe
ramp up of the contracts.
Acquisitions and divestments
In April 2024, ISS completed the bolt-on acquisition
of gammaRenax in Switzerland adding around 0.6%
to Group annual revenue. The integration process is
progressing according to plan and is expected to
conclude by the end of 2024.
The divestment of ISS France was completed in April
2024 and financial leverage was broadly unchanged.
Net profit generated in the business up until the
completion of the divestment was a loss of DKK 71
million and continued to be reported in “Net profit
from discontinued operations”.
Deutsche Telekom
In December 2022, ISS initiated arbitration
proceedings under the German Arbitration Institute
(DIS) to decide on certain contractual disagreements
on the Deutsche Telekom contract. The arbitration
process is progressing according to plan and is
expected to complete with a final and binding ruling
by mid-2025.
As previously described, Deutsche Telekom is
withholding certain payments to ISS related to
services delivered. This impacted free cash flow in
the first half of 2024 negatively in line with
expectations.
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
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Group Performance
Operating results
Group revenue in the first six months of 2024 was
DKK 40.7 billion, an increase of 6.1% compared with
the same period last year. Organic growth was 5.9%
as the development from Q1 was sustained.
Acquisitions and divestments, net contributed 1.0%
which was more than offset by adverse currency
effects of 2.4%. The net impact from hyperinflation
restatement in Türkiye (IAS 29) was positive 1.6%.
Organic growth was 5.9% in the first half of 2024 (H1
2023: 11.4%), primarily driven by implementation of
price increases and volume growth as a result of
increased activity levels at customer sites and
contract expansions across the Group. Portfolio
revenue benefitted positively from this development
and grew by 8.1% organically.
ISS continued to implement price increases in line
with contractual agreements to mitigate the effects
of wage increases and general cost inflation. This
had a positive effect on organic growth of around
6.5%-points of which around half related to Türkiye.
Volume growth contributed around 1%-point to
organic growth. This was driven by a combination of
increased activity levels at customer sites and
expansion of contracts with existing customers
mainly in Northern Europe and Asia & Pacific.
Net contract wins were negative by around 1%-
point, primarily driven by contracts lost and exited
during 2023. This was partially offset by the start-up
of the contracts with DEFRA in the UK and the Danish
Building and Property Agency during Q2 2024.
Revenue from projects and above-base work
showed negative organic growth of 5%, and thereby
had a negative contribution of just below 1%-point
to organic growth for the Group. The decline was
driven by lower demand for deep cleaning and
disinfection work, projects related to customers’
refurbishment programmes and a negative
contribution from exits and losses of certain
contracts. Projects and above-base work accounted
for 15% of Group revenue and remained well above
the pre-pandemic revenue level.
Revenue from key account customers continued its
solid development and organic growth was 5%,
driven by price increases, increased activity levels
and investments in the workplace. Key accounts’
share of Group revenue was 71% (H1 2023: 72%).
From a regional perspective, organic growth was
mainly driven by Central & Southern Europe and
Northern Europe, due to price increases and volume
growth. This was partly offset by negative organic
growth in Americas, where contracts lost and exited
during 2023 had full revenue impact in the first six
months of 2024. Organic growth in Asia & Pacific was
3%, as the positive effect from price increases and
volume was partly offset mainly by lower demand for
projects and above-base work.
Operating profit before other items was DKK 1,580
million (H1 2023: DKK 1,347 million) and operating
margin was 3.9% (H1 2023: 3.5%). Excluding the
effect from IAS 29 (Türkiye hyperinflation) operating
profit before other items amounted to DKK 1,600
million (H1 2023: DKK 1,403 million) corresponding
to an operating margin of 4.0% (H1 2023: 3.6%).
The increase in operating margin in the first half of
2024 was mainly a result of continued operational
improvements and efficiencies realised across the
Group. Margin on the Deutsche Telekom contract
improved due to continued operational
Revenue and growth
DKK million
H1 2024 H1 2023
Organic
growth
Acq./
div .
Currency &
other adj.
Reve nue
Growth
Northern Europe 15,376 14,428 6% (0)% 1% 7%
Central & Southern Europe 13,397 11,721 12% 4% (2)% 14%
Central & Southern Europe, excl. IAS 29 13,212 12,171 12% 4% (7)% 9%
Asia & Pacific 7,049 7,037 3% (1)% (2)% 0%
Americas 4,535 4,773 (3)% - (2)% (5)%
Other countries 349 400 (15)% - 2% (13)%
Corporate / eliminations (25) (23) - - - -
-
-
Group
1)
40,681 38, 336 5.9% 1.0% (0.8)% 6.1%
1)
The net impact from hyperinflation restatement in Türkiye (IAS 29) was 1.6% on Group- level, that has been included in Currency & other adj.
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
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improvements, the run rate margin in the UK
improved as expected and cost savings from last
year’s review of the OneISS initiatives were realised.
In addition, the margin benefitted from certain one-
off income in Asia & Pacific, partly offset by non-
recurring costs at corporate level.
ISS has established a shared services centre in
Gdansk, Poland, which focuses on driving cost
efficiency in transactional services. The transition of
services from primarily European country
organisations to the shared services centre was
initiated in 2023 and continued in 2024 driving
additional costs in H1.
All regions contributed to the margin improvement.
In Northern Europe, operational improvements
were partly offset by mobilisation costs incurred
leading to a margin improvement. In Central &
Southern Europe, the margin increase was primarily
a result of continued improvements on the Deutsche
Telekom contract. In Americas, margin improved
due to a combination of operational improvements
and exit of less profitable contracts. In Asia & Pacific,
margin was positively impacted by margin
improvements across the region and non-recurring
income which, however, on a Group level was offset
by non-recurring costs.
Corporate costs amounted to DKK 481 million (H1
2023: DKK 471 million) corresponding to 1.2% of
Group revenue (H1 2023: 1.2%). Benefits from last
years’ review of the OneISS initiatives reduced
corporate costs, although the majority of savings is
expected in the second half of the year. The positive
effect in H1 2024 was, however, offset by non-
recurring costs, leaving reported corporate costs
broadly unchanged.
Financial expenses, net was DKK 288 million (H1
2023: DKK 312 million) including a monetary gain of
DKK 63 million relating to hyperinflation restatement
in Türkiye (IAS 29). Excluding the impact from IAS 29,
financial expenses, net was DKK 351 million (H1
2023: DKK 352 million), as the negative effect from
higher interest expenses was offset by increased
interest income and a lower contribution from
foreign exchange losses.
The effective tax rate in H1 2024 was 23.5% (H1
2023: 20.8%) and 21.8% (H1 2023: 21.1 %) when
adjusted for the impact of IAS 29. The effective tax
rate was positively impacted by the release of
valuation allowances on deferred tax assets in
Germany similar to last year, whereas the impact
from hyperinflation adjustments in Türkiye impacted
negatively.
Net profit from discontinued operations in H1 2024
was a loss of DKK 71 million (H1 2023: loss of DKK
1,353 million) related to the loss generated in ISS
France up until the divestment on 9 April 2024. In H1
2023, the net profit was negatively impacted by
impairment of goodwill and other non-monetary
items of DKK 1,257 million as a result of the decision
to divest ISS France.
Net profit was DKK 869 million (H1 2023: DKK (555)
million).
Operating profit before other items
DKK million
H1 2024 H1 2023
Northern Europe 680 4.4% 626 4.3%
Central & Southern Europe 677 5.1% 564 4.8%
Central & Southern Europe, excl. IAS 29 697 5.3% 620 5.1%
Asia & Pacific 481 6.8% 414 5.9%
Americas 209 4.6% 189 4.0%
Other countries 14 4.0% 25 6.3%
Corporate / eliminations (481) - (471) -
Total 1,580 3.9 % 1,347 3.5%
3.5 %
Total, e xcl. IAS 29 1,600 4.0 % 1,403 3.6%
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
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Q2 2024
Group revenue in Q2 2024 was DKK 20.6 billion, an
increase of 8.1% compared with the same period last
year. Organic growth was 5.8% (Q2 2023: 10.9%),
acquisitions and divestments, net increased revenue
by 1.2% and currency effects were negative 2.1%,
while the net impact from hyperinflation
restatement in Türkiye (IAS 29) was positive with
3.2%.
The organic growth development from Q1 2024 was
sustained driven by price increases implemented
across the Group and volume growth. Price
increases contributed around 6.5%-points, of which
around half came from Türkiye, both unchanged
from Q1.
Volume growth was driven by a combination of
increased activity levels at customer sites and
expansion of contracts with existing customers and
contributed around 0.5%-points to organic growth.
Portfolio revenue benefitted from this development
and grew organically by 7.6% in the quarter.
In the second quarter, the contribution from net new
contract wins was negative, around 0.5%-point, as
the positive effect from the startup of the contracts
with Defra in the UK and the Danish Building and
Property Agency was offset by contracts lost and
exited during 2023.
Revenue from projects and above-base work
showed negative organic growth of 3% and thereby
contributed negatively with around 0.5%-points to
organic growth mainly as a result of a negative
contribution from exits and losses of certain
contracts.
From a regional perspective, organic growth was
driven by the European regions. In Northern Europe
organic growth improved to 7% driven by startup of
new contracts and robust development across the
region. Central & Southern Europe reported 12%
organic growth mainly as a result of implementation
of price increases in Türkiye. Organic growth in
Americas was negative 5% due to contracts lost and
exited during 2023 which had full revenue impact in
the quarter, while Asia & Pacific reported 1% organic
growth, as the positive effect from price increases
and volume growth was partly offset by contract
exits and negative organic growth from projects and
above-base services.
Revenue and growth
DKK million
Q2 2024 Q2 2023
Organic
growth
Acq./
div .
Curr ency &
other adj.
Reve nue
Growth
Northern Europe 7,848 7,278 7% (0)% 1% 8%
Central & Southern Europe 6,755 5,594 12% 4% 5% 21%
Central & Southern Europe, excl IAS 29 6,657 6,065 12% 4% (6)% 10%
Asia & Pacific 3,528 3,548 1% (1)% (1)% (1)%
Americas 2,293 2,438 (5)% - (1)% (6)%
Other countries 181 208 (15)% - 2% (13)%
Corporate / eliminations (14) (14) - - - -
-
-
Group
1)
20,591 19,052 5.8% 1.2% 1.1% 8.1%
1)
The net impact from hyperinflation restatement in Türkiye (IAS 29) was 3.2% on Group- level, that has been included in Currency & other adj.
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
7 of 34
Commercial development
In the first six months of 2024, ISS successfully
extended the long-standing partnership with
Barclays for an additional 5 years as well as a
number of other significant key accounts across the
Group.
Furthermore, ISS won a new 7-year contract with
North London Mental Health Hospital in the UK and
secured several smaller and mid-sized local IFS
contracts in the first half of 2024. ISS also ended a
few large key account contracts in the first six
months of 2024.
In addition, as announced on 8 August 2024, ISS has
been awarded a 7-year contract (subject to signing)
with the UK Department of Work and Pensions
(DWP) with an expected annual revenue of around
DKK 1.2 billion. Under the contract, ISS will be
delivering integrated facility services across more
than 800 sites in the UK with expected go-live in
October 2025.
The commercial pipeline within our prioritised
customer segments remains attractive,
predominately in relation to local and regional
opportunities, where the activity level has been high.
In general, the commercial landscape is beginning
to open up, with commercial processes stabilising
after longer cycles post-pandemic when customers’
future real estate needs were more uncertain.
ISS has a legacy of driving social mobility in local
markets and with our signature objectives on living
wages, recognised qualifications and recognition
and respect, ISS offers strong support to customers
on driving their social sustainability agenda. These
commitments are integrated in our partnership with
Barclays and social sustainability is generally
becoming an increasingly important parameter for
customers and with our self-delivery operating
model, ISS is strongly positioned.
Free cash flow
Free cash flow in H1 2024 was DKK (1,095) million
(H1 2023: DKK (1,074) million), a decrease of DKK 21
million compared to the same period last year. Free
cash flow in H1 2024 was negatively impacted by
changes in working capital including Deutsche
Telekom withholding payments to ISS. This was
partly offset by improved operating profit before
other items.
Cash flow from operating activities in H1 2024
amounted to DKK (333) million (H1 2023: DKK (322)
million), a decrease of DKK 11 million due to negative
contribution from changes in working capital and
Major key account developments
1)
Countries Segment Term
Effective
Wins
Healthcare customer UK Healthcare 5 years Q2 2024
North London Mental Health Hospital UK Healthcare 7 years Q3 2024
Aviation customer Finland Transportation & Infrastructure 4 years Q4 2024
Extensions/expansions
Professional Services Customer UK Business Services & IT 1 year Q1 2024
Industry & Manufacturing Customer Global Industry & Manufacturing 2 years Q1 2024
Energy & Resources Customer Sweden Energy & Ressources 2 years Q1 2024
Nordea Nordics Business Services & IT 5 years Q1 2024
Healthcare Customer Singapore Healthcare 5 years Q1 2024
Banking Customer Spain Business Services & IT 3 years Q1 2024
Healthcare Customer Türkiye Healthcare 3 years Q1 2024
Banking Customer Switzerland Business Services & IT 5 years Q2 2024
Barclays Global Business Services & IT 5 years Q2 2024
Nestlé Australia Food & Beverage 2 years Q2 2024
Tan Tock Seng Hospital Pte Ltd Singapore Healthcare 1 year Q3 2024
Healthcare Customer UK Healthcare 5 years Q3 2024
Energy & Resources Customer Australia Energy & Ressources 5 years Q3 2024
Swisscom AG Switzerland Information and Communication 7 years Q2 2025
Exits/losses
Healthcare Customer Türkiye Healthcare Q1 2024
Professional Services Customer UK Business Services & IT Q2 2024
Industry & Manufacturing Customer US & Canada Industry & Manufacturing Q2 2024
Banking Customer Mexico Business Services & IT Q4 2024
1)
Annual revenue above DKK 100 million.
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
8 of 34
increased interest and tax payments partly offset by
improved operating profit before other items.
Changes in working capital in H1 2024 was DKK
(1,854) million (H1 2023: DKK (1,620) million) mainly
due to an increase in receivables of DKK 1,453
million reflecting normal seasonality and including
withholding of payments from Deutsche Telekom
and reduction in payables of DKK 389 million (H1
2023: increase of DKK 183 million). Utilisation of
factoring increased by DKK 157 million to DKK 1.6
billion on 30 June 2024. The development was in line
with higher revenue from key account customers,
where invoices are eligible for factoring, as per the
factoring policy.
Cash flow from investing activities in H1 2024
amounted to DKK (1,669) million (H1 2023: DKK (277)
million), an increased outflow of DKK 1,392 million,
primarily due to acquisitions and divestments.
Acquisitions amounted to DKK 302 million (H1 2023:
DKK 0m) related to gammaRenax in Switzerland and
divestments was an outflow of DKK 330 million (H1
2023: inflow of DKK 59 million) driven by France.
Fixed-term deposit investments of DKK 745 million
related to placement of excess liquidity until bond
repayment in December 2024.
Investments in intangible assets and property, plant
and equipment, net, was DKK 297 million (H1 2023:
DKK 364 million), which represented 0.7% of Group
revenue (H1 2023: 0.9%) and reflected continued
strict investment discipline.
Cash flow from financing activities in H1 2024
amounted to DKK 2,066 million (H1 2023: DKK (688)
million), an increase of DKK 2,754 million, related to
issue of EUR 500 million bond, partly offset by
dividends paid and purchase of treasury shares.
Capital structure
On 9 August 2024, ISS completed the first tranche of
the DKK 1 billion share buyback programme.
3,973,248 ISS shares have been acquired with a total
value of DKK 500 million. On the back of the capital
position on 30 June 2024 and the outlook for the rest
of the year, the next tranche of the programme has
been increased by DKK 250 million to DKK 750
million taking the total value of the programme to
DKK 1.25 billion.
In line with ISS’s capital allocation policy, a key
objective is to maintain an investment grade rating
as it is important from both a financial and
commercial perspective. To adhere to the
investment grade rating, ISS targets a net debt to
pro-forma adjusted EBITDA (LTM) of 2.0x-2.5x. The
robust capital structure and the Group’s financial
strength were recognised by S&P Global resulting in
an upgraded credit rating of ISS A/S to BBB from
BBB-.
On 30 June 2024, net debt was DKK 13.2 billion, an
increase of DKK 2.7 billion compared to 31
December 2023. The increase was driven by
negative free cash flow in H1 2024, dividends paid to
shareholders and the execution of the share
buyback programme. Despite EBITDA growth, the
higher net debt resulted in an increase in financial
leverage to 2.6x as of 30 June 2024 based on pro
forma EBITDA (LTM) compared to 2.2x at year-end
2023. Due to seasonality, financial level was
temporarily above the targeted range.
In June 2024, ISS successfully issued a EUR 500
million bond with a coupon of 3.875%. The bond has
maturity in June 2029 and the net proceeds will be
used for general corporate purposes.
Equity
On 30 June 2024, equity was DKK 10,793 million (31
December 2023: DKK 10,522 million), equivalent to
an equity ratio of 21.5% (31 December 2023: 22.1%).
The increase in equity from year-end 2023 was
mainly a result of Net profit of DKK 869 million being
partly offset by dividends paid to shareholders of
DKK 425 million and purchase of treasury shares of
DKK 378 million. Hyperinflation (IAS 29) restatement
of equity in Türkiye as of 1 January 2024 was DKK 242
million (1 January 2023: DKK 164 million).
Management changes
On 11 April 2024 at the Annual General Meeting,
Henriette Hallberg Thygesen was elected as new
member of the Board of Directors.
On 3 June 2024, Mads Holm took up the position as
Group CFO and member of the Executive Group
Management Board of ISS A/S registered with the
Danish Business Authority, which now consists of
Group CEO Kasper Fangel and Group CFO Mads
Holm.
On 12 August 2024, Nada Elboayadi stepped down
as an employee-elected member of the Board of
Directors.
Events after the reporting period
No events have occurred subsequent to 30 June
2024, which are expected to have a material impact
on the Group's financial position.
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
9 of 34
Regional Performance
Northern Europe
Revenue amounted
to DKK 15,376
million in the first six
months of 2024,
which was an
increase of 7%
compared with the
same period last
year. Organic
growth was 6% (H1
2023: 6%). The effect
from acquisitions and divestments, net was neutral,
while currency effects impacted growth positively by
1%.
Organic growth was mainly driven by price increases
implemented across the region and volume growth
from increased activity levels at customer sites.
Portfolio revenue and revenue from projects and
above-base work both grew by around 6%
organically. The positive organic growth was mainly
driven by the UK and Denmark supported by startup
of large contracts in both countries. All countries in
the region reported positive organic growth with the
Netherlands showing the highest growth rates
driven by contract start-ups, continued growth in
food services and strong demand for above-base
services.
Operating profit before other items amounted to
DKK 680 million in H1 2024 (H1 2023: DKK 626
million) corresponding to an operating margin of
4.4% (H1 2023: 4.3%). During the first half of the
year, strong operational execution and efficiencies
drove margin improvement across the region, and
in the UK, the run rate margin improved in line with
expectations. The margin improvements were,
however, partly diluted by mobilisation costs related
to startup of larger contracts.
Q2 2024 revenue amounted to DKK 7,848 million
driven by organic growth of 7% (Q2 2023: 5%). The
effect from acquisitions and divestments, net, was
neutral and currency effects increased revenue by
1%. Organic growth was driven by a combination of
price increases, positive contribution from startup of
new contracts predominately in the UK and
Denmark and continued volume growth. The
positive development benefitted both portfolio
revenue and revenue from projects and above-base
work which grew organically by 7% and 9%,
respectively. All countries in the region reported
positive organic growth, with the UK, Denmark and
the Netherlands all growing double digit.
Central & Southern Europe
Revenue amounted
to DKK 13,397
million in the first
six months of 2024,
which was an
increase of 14%
compared with the
same period last
year. Organic
growth was 12%
(H1 2023: 19%) and
the effect from acquisitions and divestments, net
increased revenue of 4% related to the acquisition of
Grupo Fissa in Spain and gammaRenax in
Switzerland. Currency effects impacted growth
negatively by 7%, while the net impact from
hyperinflation restatement in Türkiye (IAS 29) was
positive with 5%.
The organic growth was primarily driven by Türkiye
where price increases were successfully passed on
to customers to offset the continued high cost
inflation, and in the beginning of 2024 another
round of price increases was successfully
implemented. Across the region, the development
was robust, and as a result portfolio revenue grew
by 16% organically, while revenue from projects and
above-base work showed negative organic growth
driven by reduced demand for refurbishment
projects as well as deep cleaning and disinfection
services.
Operating profit before other items excluding IAS 29
amounted to DKK 697 million in H1 2024 (H1 2023:
DKK 620 million) corresponding to an operating
margin of 5.3% (H1 2023: 5.1%). The positive margin
development was primarily driven by continued
operational improvement and efficiencies on the
Deutsche Telekom contract. Across the region, the
strong operational performance was maintained,
which also supported the margin development.
Including the effect of IAS 29, operating profit before
other items amounted to DKK 677 million,
corresponding to a margin of 5.1% (H1 2023: 4.8%).
Q2 2024 revenue amounted to DKK 6,755 million
driven by organic growth of 12% (Q2 2023: 17%), and
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
10 of 34
acquisitions and divestments, net which increased
revenue by 4%. Currency effects reduced revenue
with 6%, while the net impact from hyperinflation
restatement in Türkiye (IAS 29) was positive with
11%. Organic growth was predominately driven by
implemented price increases in Türkiye and a robust
development across the regions. Organic growth for
portfolio revenue was 16%, while revenue from
projects and above-base work was negative.
Ownership of ISS Türkiye
ISS Türkiye is jointly owned by private equity fund
Actera (39.9%), management of ISS Türkiye (10%)
and ISS (50.1%) being the controlling shareholder.
The shareholders’ agreement between ISS, Actera
and management establishes the rights and
obligations of the parties, including rights and
restrictions on transferring shares, such as right of
first refusal, drag along rights from Q4 2024 and
right to explore a potential Initial Public Offering
(IPO). In line with the terms of the shareholders’
agreement, Actera has initiated a dialogue to
explore their potential exit options. Please refer to
page 23 in the Annual Report 2023.
Asia & Pacific
Revenue amounted
to DKK 7,049 million
in the first six
months of 2024,
which was flat
compared to the
same period last
year. Organic
growth was 3% (H1
2023: 7%). The
effect from
acquisitions and divestments, net was negative 1%,
and currency effects impacted revenue negatively by
2%.
The positive organic growth was driven by price
increases implemented across the region and
volume growth as a result of increased activity level
at customer sites. This development was, however,
partly offset by exits of contracts and resulted in 7%
organic growth in portfolio revenue. Revenue from
projects and above base work showed negative
organic growth due to lower demand for deep
cleaning and disinfection services, especially in Hong
Kong, Singapore and Australia and negative effects
from contract exits. All countries in the region
reported positive organic growth, except for Hong
Kong due to the negative development for projects
and above-base services.
Operating profit before other items amounted to
DKK 481 million in H1 2024 (H1 2023: DKK 414
million) corresponding to an operating margin of
6.8% (H1 2023: 5.9%). The development reflected
operational improvements and efficiencies being
executed across the region. In addition, the margin
benefitted from certain one-off income related to
employee tax refunds in Australia and government
grants in Singapore. All countries in the region
reported improved margins compared to the same
period last year.
Q2 2024 revenue amounted to DKK 3,528 million
driven by organic growth of 1% (Q2 2023: 8%), while
acquisitions and divestments, net and currency
effects both reduced revenue by 1%, respectively.
Organic growth was driven by price increases
implemented across the region and volume growth
from higher activity level at customer sites. This
development was, however, partly offset by a
number of smaller contracts exits across the region
and negative organic growth for projects and above-
base work.
Americas
Revenue amounted
to DKK 4,535
million in the first
six months of 2024,
which was a
decrease of 5%
compared to the
same period last
year. Organic
growth was
negative 3% (H1
2023: 20%). The
effect from
acquisitions and
divestments, net
was neutral, while currency effects impacted
revenue negatively by 2%.
The negative organic growth was primarily driven by
contracts exits and losses from 2023, including
deliberate exits, having a full effect in the period and
a volume reduction with existing customers. This
was only partly offset by price increases
implemented across the region to offset cost
inflation. This had a negative effect on portfolio
revenue which declined by 3% organically. The US
was the main driver behind the development, as
both Mexico and Chile reported positive organic
growth. Revenue from projects and above-base
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
11 of 34
work declined organically by 7%, negatively
impacted by the mentioned contract exits and
losses.
Operating profit before other items amounted to
DKK 209 million in H1 2024 (H1 2023: DKK 189
million) corresponding to an operating margin of
4.6% (H1 2023: 4.0%). The positive development was
a result of operational improvements and
efficiencies across the region. In addition, the
margin benefitted from deliberate contract exits in
the US.
Q2 2024 revenue amounted to DKK 2,293 million
driven by negative organic growth of 5% (Q2 2023:
18%). The effect from acquisitions and divestments,
net was neutral and currency effects reduced
revenue by 1%. The negative organic growth was
driven by contract exits and losses from 2023,
including deliberate exists and negative volume
growth with existing customers. The development
was only partly offset by implementation of price
increases leading to negative 5% organic growth for
portfolio revenue. The contract losses and exits also
had a negative effect on revenue from projects and
above-base work, which reported negative organic
growth of 8%.
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
12 of 34
Outlook
Outlook 2024
This section should be read in conjunction with
“Forward-looking statements” as shown in the table
on page 13.
In the first half of 2024, the organic growth was
robust, driven by price increases and volume
growth, while the contribution from net contract
wins and project and above-base work was negative.
The operating margin developed in line with plan.
Free cash flow was, as expected, negatively impacted
by changes in working capital, including Deutsche
Telekom withholding certain payments to ISS.
The outlook assumes that macroeconomic 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 is narrowed to the higher end of the
previous range and is now expected to be 5 – 6%
(previously “4 – 6”%) (2023: 9.7%) as a result of
successful implementation of price increases across
the Group and solid customer activity levels. Net
contract wins are now expected to be slightly
negative, compared to previously slightly positive
due to contract exits. Revenue from projects and
above-base work is inherently subject to high
uncertainty, particularly towards the end of the year
and is expected to contribute slightly negative to
organic growth for the full year.
Operating margin is still expected to be above 5%
(2023: 4.3%). Compared to the 2023 underlying
margin of 4.6%, the main drivers of the increase are
continuing operational improvements and
efficiencies across the Group as well as operational
benefits and cost savings generated from the review
of the OneISS initiatives.
The expectation for free cash flow is still based on an
underlying free cash flow of above DKK 2.4 billion,
equalling a cash conversion of above 60%. However,
in 2024 free cash flow is expected to be above DKK
1.8 billion (2023: DKK 1.8 billion), adversely impacted
by timing effects including certain payments being
withheld by Deutsche Telekom.
Financial targets
At the Capital Markets Day in November 2022, new
financial targets were announced for organic
growth, operating margin and cash conversion.
From 2024 and beyond, ISS targets to deliver strong
growth at attractive and sustainable margins:
• Organic growth of 4 – 6%
• Operating margin above 5%
• Cash conversion above 60%
Outlook 2024
Annual Report 2023
Interim Report H1
2024
Organic growth 4 - 6% 5 - 6%
Operating margin
1)
Above 5% Above 5%
Free cash flow
Above DKK 1.8 bn
2)
Above DKK 1.8 bn
2)
1) Based on operating profit before other items
2) Underlying free cash flow: Above DKK 2.4bn
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
13 of 34
Expected revenue impact from
divestments, acquisitions and foreign
exchange rates in 2024
Acquisitions and divestments completed by 31 July
2024 (including in 2023) are expected to have a
positive impact on revenue growth in 2024 of
around 1%-point.
Based on the current exchange rates, a negative
impact on revenue growth of around 2%-points
1)
is
expected in 2024 from the development of foreign
exchange rates, excluding any effects of
hyperinflation (IAS 29).
1)
The forecasted average exchange rates for the financial year 2024
are calculated using the realised average exchange rates for the
first seven month of 2024 and the average forward exchange rates
(as of 1 August 2024) for the remaining five months of 2024.
Forw ard-looking statements
This report contains forward-looking statements, including, but not limited to,
the guidance and expectations in Outlook. Statements herein, other than
statements of historical fact, regarding future event or prospects, are forward-
looking statements. The words may, will, should, expect, anticipate, 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 could 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
forward-looking statements are reasonable, they may prove materially
incorrect, and actual results may materially differ, e.g. as the result of risks
related to the facility service industry in general or 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, expect to
the extent required by law.
The Annual Report of 2023 of ISS A/S is available at the Group's website,
www.issworld.com.
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
14 of 34
Management statement
Board of Directors
E = Employee representative
Company announcement no. 38/2024
Copenhagen, 13 August 2024
Primary financial statements
Statement of profit or loss 16
Statement of comprehensive income 17
Statement of cash flows 18
Statement of financial position 19
Statement of changes in equity 20
Basis of preparation
1 Basis of preparation 21
2 Significant accounting estimates and judgements 21
Statement of profit or loss
3 Segments 22
4 Revenue 23
5 Share-based payments 23
6 Other income and expenses, net 24
7 Financial income and expenses 25
8 Discontinued operations and assets held for sale 26
Statement of cash flows
9 Changes in working capital 26
10 Acquisitions 27
11 Divestments 28
12 Free cash flow 29
Statement of financial position
13 Impairment tests 29
14 Loans and borrowings 30
15 Pensions and similar obligations 30
16 Provisions 31
Other
17 Hyperinflation in Türkiye 32
18 Events after the reporting period 32
Condensed
consolidated
interim financial
statements
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
15 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
Statement of profit or loss
1 January – 30 June
(DKKm)
YTD 2024
YTD 2023
Revenue
3, 4, 17
Employee costs
5
(26,365 ) (24,589 )
Consumables (3,799 ) (3,514 )
Other operating expenses (8,203 ) (8,216 )
Depreciation and amortisation (734 ) (670 )
Operating profit before other items
17
Other income and expenses, net
6
(23 ) 4
Amortisation/impairment of customer contracts (40 ) (32 )
Operating profit
3, 17
Financial income
7
Financial expenses
7
(432 ) (391 )
Profit before tax
Income tax
(289 )
(209 )
Net profit from continuing operations 940 798
Net profit from discontinued operations
8
(71 ) (1,353 )
Net profit
17
(555 )
Attributable to:
Owners of ISS A/S 864 (582 )
Non-controlling interests 5 27
Net profit 869 (555 )
Earnings per share, DKK
Basic earnings per share (EPS) 4.7 (3.1 )
Diluted earnings per share 4.6 (3.1 )
Earnings per share for continuing operations, DKK
Basic earnings per share (EPS) 5.1 4.2
Diluted earnings per share 5.0 4.1
Note
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
16 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
1 January – 30 June
(DKKm)
Note
YTD 2024
YTD 2023
1
Net profit
(555 )
Items that will not be reclassified to profit or loss:
Remeasurement gain/(loss), defined benefit plans
15
Asset ceiling, defined benefit plans
15
(332 ) (18 )
Tax 21 22
Items that may be reclassified to profit or loss:
Foreign exchange adjustments of foreign entities (11 ) (439 )
Recycling of accumulated foreign exchange adjustments on country exits 0 (18 )
Hyperinflation restatement of equity at 1 January
17
Fair value adjustments of net investment hedges - (22 )
Tax - 5
Other comprehensive income
(392 )
Comprehensive income
(947 )
Attributable to:
Owners of ISS A/S 960 (867 )
Non-controlling interests 69 (80 )
Comprehensive income
(947 )
Statement of comprehensive income
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
17 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
Statement of cash flows
1 January – 30 June
(DKKm) Note YTD 2024 YTD 2023
Operating profit before other items
Operating profit before other items from discontinued operations
8
(42 )
(96 )
Depreciation and amortisation
Non-cash items related to hyperinflation
17
(20 )
(12 )
Share-based payments
Changes in working capital
9
(1,854 )
(1,620 )
Changes in provisions, pensions and similar obligations
(204 )
(251 )
Other expenses paid, net
(15 )
(9 )
Interest received
Interest paid
(296 )
(204 )
Income tax paid
(329 )
(269 )
Cash flow from operating activities
17
(333 )
(322 )
Acquisitions
10
(302 )
Divestments
11
(330 )
Acquisition of intangible assets and property, plant and equipment
(297 )
(364 )
Disposal of intangible assets and property, plant and equipment 8 9
Changes in financial assets
(3 ) 19
Fixed-term deposit investments
14
(745 )
Cash flow from investing activities
17
(1,669 )
(277 )
Proceeds from issued bonds 14 3,696 -
Repayment of lease liabilities (531 ) (423 )
Other financial payments, net (290 ) 125
Transactions with non-controlling interests (6 ) -
Dividends paid to shareholders (425 ) (390 )
Purchase of treasury shares (378 ) -
Cash flow from financing activities
17
(688 )
Total cash flow
(1,287 )
Cash and cash equivalents at 1 January
Total cash flow 64 (1,287 )
Foreign exchange adjustments (32 ) (227 )
Cash and cash equivalents at 30 June
Free cash flow
12, 17
(1,095 )
(1,074 )
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
18 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
Statement of financial position
30 June 30 June 31 December
(DKKm) Note 2024 2023 2023
Assets
Intangible assets
17
Right-of-use assets
17
Property, plant and equipment
17
Deferred tax assets 1,084 895 962
Financial assets 197 412 195
Non-current assets 28,318 26,870 27,555
Inventories 251 244 239
Trade receivables 12,488 12,142 11,354
Tax receivables 151 161 126
Other receivables 2,061 2,015 1,628
Fixed-term deposit investments
14
Cash and cash equivalents
14
Assets held for sale
8
13
Current assets
Total assets 50,139 45,132 47,693
Equity and liabilities
Equity attributable to owners of ISS A/S
Non-controlling interests
Total equity 17 10,793 9,456 10,522
Loans and borrowings
14
Pensions and similar obligations
15
Deferred tax liabilities
17
Provisions
16
Non-current liabilities 20,045 18,704 16,269
Loans and borrowings
14
Trade and other payables 6,830 6,711 7,259
Tax payables 131 102 155
Other liabilities 9,018 8,812 8,482
Provisions
16
Liabilities held for sale
8
Current liabilities 19,301 16,972 20,902
Total liabilities 39,346 35,676 37,171
Total equity and liabilities 50,139 45,132 47,693
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
19 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
Statement of changes in equity
1 January – 30 June
(DKKm)
Note
Share
capital
Treasury
shares
Retained
earnings
Proposed
dividends
Trans-
lation
reserve
Total
Non-con-
trolling
interests
Total
equity
2024
Equity at 1 January
(66 )
(1,277 )
Net profit - - 864 - - 864 5 869
Other comprehensive income - - (71 ) - 167 96 64 160
Comprehensive income - - 793 - 167 960 69 1,029
Dividends paid to shareholders - - - (425 ) - (425 ) - (425 )
Dividends, treasury shares - - 2 (2 ) - - - -
Share-based payments 5 - - 45 - - 45 - 45
Settlement of vested PSUs/RSUs - 79 (79 ) - - - - -
Purchase of treasury shares - (378 ) - - - (378 ) - (378 )
?
Transactions with owners - (299 ) (32 ) (427 ) - (758 ) - (758 )
Changes in equity - (299 ) 761 (427 ) 167 202 69 271
Equity at 30 June 185 (365 ) 11,385 - (1,110 ) 10,095 698 10,793
2023
Equity at 1 January
Net profit - - (582 ) - - (582 ) 27 (555 )
Other comprehensive income - - (2 ) - (283 ) (285 ) (107 ) (392 )
Comprehensive income - - (584 ) - (283 ) (867 ) (80 ) (947 )
Dividends paid to shareholders - - -
(390 )
Share-based payments - - 35 - - 35 - 35
Settlement of vested PSUs/RSUs - 119 (119 ) - - - - -
Transactions with non-controlling interests - - - - - - (57 ) (57 )
-
Transactions with owners - 119 (84 ) (390 ) - (355 ) (57 ) (412 )
Changes in equity - 119 (668 ) (390 ) (283 ) (1,222 ) (137 ) (1,359 )
Equity at 30 June 185 (66 ) 10,252 - (1,437 ) 8,934 522 9,456
Attributable to owners of ISS A/S
____________________________________________________________________________________________________________
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Company announcement no. 38/2024
Copenhagen, 13 August 2024
1 Basis of preparation
New regulation not yet mandatory
2 Significant accounting estimates and judgements
The condensed consolidated interim financial statements of ISS A/S for the period 1 January - 30 June 2024 comprise ISS A/S and
its subsidiaries (collectively, the Group) and have been prepared in accordance with IAS 34 "Interim Financial Reporting" as
adopted by the EU and additional requirements of the Danish Financial Statements Act.
The accounting policies applied are consistent with those applied in the preparation of the Group’s consolidated financial
statements for the year ended 31 December 2023, except for the adoption of a number of new and amended standards, which
became applicable for the current reporting period. None of these amendments have had a material impact on the Group's
financial statements, including notes.
The preparation of condensed consolidated interim financial statements required management to make judgements, estimates
and assumptions that affected the application of policies and reported amounts of assets and liabilities, income and expenses as
well as the accompanying disclosures. 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.
Except for the judgements and estimates commented upon in the notes of these condensed consolidated interim financial
statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended
31 December 2023, cf. Estimates and judgements on p. 56 in the consolidated financial statements for 2023.
The report does not include all the information and note disclosures required in the annual consolidated financial statements, and
should be read in conjunction with the Group’s consolidated financial statements as at 31 December 2023.
IASB
issued
amended
standards
and
interpretations,
which
are
not
yet
mandatory
for
the
condensed
consolidated
interim
financial
statements.
Based on the current business setup and level of activities, except for IFRS 18, none of these standards and interpretations are
expected to have a material impact on the recognition and measurement in the condensed consolidated interim financial
statements.
IFRS 18 “Primary financial statements”, effective on or after 1 January 2027, sets out requirements for presentation and disclosure
of financial statement aiming to improve the structure and content of the primary financial statements. IFRS 18 will not impact the
recognition or measurement of items in the financial statements, but might change the presentation of certain items, including
definitions of certain required subtotals.
ISS has not yet analysed the impact of the new standard, but will do so in due course.
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
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Company announcement no. 38/2024
Copenhagen, 13 August 2024
3 Segments
(DKKm)
Northern
Europe
Central &
Southern
Europe
Asia &
Pacific Americas
Other
countries
Total
segments
YTD 2024
Revenue, excl. IAS 29 15,376 13,212 7,049 4,535 349 40,521
Revenue
15,376 13,397 7,049 4,535 349 40,706
Depreciation and amortisation 272 255 67 56 2 652
Operating profit before other items, excl. IAS 29 680 697 481 209 14 2,081
Operating profit before other items
680 677 481 209 14 2,061
Operating profit 679 632 478 200 14 2,003
YTD 2023
Revenue, excl. IAS 29 14,428 12,171 7,037 4,773 400 38,809
Revenue 14,428 11,721 7,037 4,773 400 38,359
Depreciation and amortisation 252 237 65 57 2 613
Operating profit before other items, excl. IAS 29 626 620 414 189 25 1,874
Operating profit before other items
626 564 414 189 25 1,818
Operating profit 619 539 427 180 25 1,790
Reconciliation of operating profit
(DKKm)
YTD 2024
YTD 2023
Operating profit for reportable segments 2,003 1,790
Unallocated corporate costs (486) (471)
Operating profit 1,517 1,319
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”.
____________________________________________________________________________________________________________
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22 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
4 Revenue
(DKKm)
YTD 2024
YTD 2023
Customer category
Key accounts
28,773
27,519
Large and medium
9,854
8,917
Small and route-based
2,054
1,900
Total
40,681
38,336
Customer segments
Office-based
15,902
15,243
Production-based
9,481
9,155
Healthcare
6,012
5,081
Other
9,286
8,857
Total
40,681
38,336
Core services
Cleaning
17,204
16,245
Technical
8,926
8,935
Food
6,386
5,761
Workplace and Other
8,165
7,395
Total
40,681
38,336
5 Share-based payments
Long-Term Incentive Programme (LTIP)
LTIP 2024
Fair value
(DKKm)
At grant date 104
PSUs and participants
(number)
Participants 130
PSUs granted 1,059,044
Maximum PSUs at initial grant date 1,185,302
Vested programmes
In March 2024, the LTIP 2021 programme vested. Based on the annual EPS and TSR performance for 2021, 2022 and 2023, 64% of
the granted PSUs vested. After this vesting, no further PSUs are outstanding under the LTIP 2021, and the programme has lapsed.
In
March
2024,
a
new
annual
LTIP
programme
(LTIP
2024)
was
established,
and
a
total
of
1,059,044
performance-based
share
units
(PSUs) were granted to members of the EGM and other senior officers of the Group. Upon vesting, each PSU entitles the holder to
receive one share at no cost. Subject to certain criteria, the PSUs will vest after three years. The programme and vesting criteria are
further described in note 6.2 in the consolidated financial statements for 2023.
____________________________________________________________________________________________________________
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Company announcement no. 38/2024
Copenhagen, 13 August 2024
6 Other income and expenses, net
(DKKm)
YTD 2024
YTD 2023
Gain on divestments 6 14
Other income
6
14
Loss on divestments (3) (5)
Integration costs (9) (5)
Acquisition costs (7) -
Other (10) -
-
Other expenses (29) (10)
Other income and expenses, net (23) 4
Loss on divestments in 2024 related to the divestment of the Ground Service business in Austria. In 2023 mainly related to the
divestment of the security business in Spain.
Integration costs mainly related to Grupo Fissa in Spain (acquired in 2023).
Gain
on
divestments
r
elated
to
the
divestment
of
the
travel
management
business
in
Sweden.
In
2023,
the
gain
related
to
the
divestment of the Landscaping business and Sanitation Services in Singapore.
Acquisition costs mainly related to the acquisition of gammaRenax in Switzerland in 2024.
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
24 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
7 Financial income and expenses
(DKKm) YTD 2024 YTD 2023
Interest income on cash and cash equivalents 81 39
Monetary gain on hyperinflation restatement in Türkiye (IAS 29) 63 40
Financial income 144 79
Interest expenses on loans and borrowings
1)
(228) (150)
Interest expenses on lease liabilities
1)
(72) (52)
Interest expenses on factoring
1)
(41) (29)
Bank fees
(31) (31)
Amortisation of financing fees (non-cash)
1)
(12) (18)
Net interest on defined benefit obligations (19) (9)
Commitment fees (2) (10)
Other (12) (6)
Foreign exchange losses (15) (86)
Financial expenses (432) (391)
1)
Measurement basis amortised cost.
Interest income on cash and cash equivalents increased due to higher interest levels in 2024 as well as higher cash positions.
Foreign
exchange
losses
were
mainly
related
to
the
unhedged
TRY
and
EUR
positions.
The
highest
contributor
was
TRY,
which
remained unhedged due to high costs. TRY depreciated 7% against DKK in the first half of 2024 (2023: depreciated 29%).
Interest
expenses
on
loans
and
borrowings
comprised
mainly
interests
on
issued
bonds.
The
increase
compared
to
H1
2023
was
driven by higher interest rates throughout 2024 of which DKK 32 million related to the interest rate swap on part of the bonds.
Interest expenses on factoring increased due to higher interest rates throughout 2024.
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
25 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
8 Discontinued operations and assets held for sale
Profit or loss
(DKKm) YTD 2024 YTD 2023
Revenue 662 1,328
Expenses (704) (1,424)
Operating profit before other items (42) (96)
Other income and expenses, net (25) (289)
Goodwill impairment - (937)
Operating profit (67) (1,322)
Financial income/(expenses), net (3) (6)
-
Net profit before tax (70) (1,328)
Income tax (1) (25)
Net profit from discontinued operations (71) (1,353)
Earnings per share, DKK
Basic earnings per share (EPS) (0.4) (7.3)
Diluted earnings per share (0.4) (7.2)
Cash flows
(DKKm) YTD 2024 YTD 2023
Operating activities (92) (105)
Investing activities (259) (30)
Financing activities (48) (39)
9 Changes in working capital
(DKKm) YTD 2024 YTD 2023
0
0
Changes in inventories (12) (25)
Changes in receivables (1,453) (1,778)
Changes in payables (389) 183
Total (1,854) (1,620)
In 2024, net profit from discontinued operations related to France (2023: France and Brunei) and comprised net profit generated in
the business up until the completion of the divestment on 9 April 2024. In addition, the preliminary divestment loss recognised in
2023 was reassessed on the basis of the final closing balance in the business. This led to a negative adjustment of DKK 25 million,
which was recognised in H1 2024 as presented in the table above in Other income and expenses, net.
On 22 December 2023, ISS signed an agreement to divest ISS France to Onet SA, a French facility services company. The
divestment was completed on 9 April 2024 and consequently, at 30 June 2024 no businesses were classified as held for sale.
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
26 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
10 Acquisitions
gammaRenax
Med-Serv
Net assets and cash flow impact
(DKKm)
gamma-
Renax
Med-
Serv
Prior
year adj.
YTD 2024
YTD 2023
Customer contracts
125
-
-
125
-
Other non-current assets
20
-
-
20
(7)
Trade receivables
87
10
-
97
-
Other current assets
77
11
-
88
-
Non-current liabilities
(44)
(2)
-
(46)
4
Current liabilities
(91)
(21)
(4)
(116)
(1)
Fair value of net assets
174
(2)
(4)
168
(4)
Goodwill
190
13
4
207
4
Consideration transferred
364
11
-
375
-
Cash in acquired business
(48)
(11)
-
(59)
-
Consideration transferred, net
316
-
-
316
-
Deferred consideration
(15)
-
1
(14)
-
Acquisitions (cash flow)
301
-
1
302
-
Acquisitions after the reporting period
The Group completed two acquisitions in the period 1 January - 30 June 2024:
On 25 April 2024, ISS acquired 100% of the shares in gammaRenax AG in Switzerland. The acquisition will strengthen our market
position in Switzerland even further by adding scale within our existing core service offerings (IFS, cleaning, technical and
janitorial), as well as creating better density across the country and growth in our prioritised customer segments.
The acquisition adds annual revenue of approximately DKK 510 million and more than 2,000 employees (estimated based on
unaudited financial information). Since completion of the acquisition, gammaRenax contributed revenue of DKK 102 million to the
ISS Group.
No acquisitions were completed in the period 1 July - 31 July 2024.
The purchase consideration amounted to DKK 364 million.
Goodwill amounted to DKK 190 million (preliminary assessment) and is attributable mainly to: 1) strengthened platform for growth,
2) synergies and scale benefits and 3) assembled workforce. Goodwill is not deductible for tax purposes.
Due to the short time between completion of the acquisition and finalisation of these condensed consolidated interim financial
statements, the Group has not yet completed the acquisition accounting. Consequently, the fair value of certain assets and
liabilities, such as customer contracts, has been determined based on management’s best estimates as the necessary analyses and
calculations could not be completed.
On 29 February 2024, ISS acquired 100% of the shares in Med-Serv in Austria. The acquisition will strengthen our market position
in Austria, enhancing our cleaning and technical services, increasing our presence in the province of Lower Austria, and supports
growth in the healthcare segment.
The acquisition adds annual revenue of approximately DKK 97 million, and more than 226 employees (estimated based on
unaudited financial information). Since completion of the acquisition, Med-Serv contributed revenue of DKK 21 million to the ISS
Group.
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
27 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
11 Divestments
Divestments completed in H1 2024
Company/activity Country
Service
type
Excluded
from P/L Interest
Annual
revenue
(DKKm)
Employees
(number)
ISS France France Country exit April 100% 2,658 15,000
Travel Management Sweden Technical April 100% 46 5
Ground Service Austria Technical April 100% 35 78
Total 2,739 15,083
Net assets and cash flow impact
(DKKm) YTD 2024 YTD 2023
Goodwill 2 17
Other non-current assets 11 18
Current assets 862 59
Non-current liabilities (110) -
Loans and borrowings (260) (5)
Current liabilities (846) (27)
Net assets disposed (341) 62
Gain/(loss) on divestment, net 3 23
Divestment costs 165 15
Consideration received/(paid) (173) 100
Cash in divested businesses (255) (23)
Consideration received, net (428) 77
Deferred consideration 183 (4)
Divestment costs paid (85) (14)
Divestment (cash flow) (330) 59
Divestments after the reporting period
The Group completed three divestments in the period 1 January – 30 June 2024, most significantly the divestment of ISS France,
which was completed on 9 April 2024.
Deferred consideration related to the divestment of ISS France, where part of the consideration is deferred up to three years from
the date of divestment.
No divestments were completed in the period 1 July - 31 July 2024.
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
28 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
12 Free cash flow
(DKKm) YTD 2024 YTD 2023
0
0
Cash flow from operating activities (333) (322)
Acquisition of intangible assets and property, plant and equipment (297) (364)
Disposal of intangible assets and property, plant and equipment 8 9
Changes in financial assets
1)
6 9
Addition of right-of-use assets, net (479) (406)
Total (1,095) (1,074)
13 Impairment tests
At 30 June 2024, the review performed did not indicate impairment of the carrying amount of intangibles. Based on the review
performed, it is management’s opinion, that excess values are fairly resilient to any likely and reasonable deteriorations in the key
assumptions applied and presented in note 3.2 in the consolidated financial statements for 2023.
Free cash flow as defined by management 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. Thus, reference is also made to the IFRS measures included in the Group's consolidated
statement of cash flows.
1)
Excluding changes in equity-accounted investments of DKK (9) million (2023: DKK 10 million).
The Group performs impairment tests on intangibles, i.e. goodwill, brands and customer contracts, annually and whenever there is
an indication that intangibles may be impaired. The annual impairment test is performed as per 31 December based on financial
forecasts approved by management covering the following financial year.
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
29 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
14 Loans and borrowings
Refinancing of bonds
New interest rate swaps
15 Pensions and similar obligations
On 29 May 2024, ISS issued a 5-year bond with a principal amount of EUR 500 million and a coupon of 3.875%. The bond was
issued under the Group’s EUR 3 billion European Medium Term Note (EMTN) programme, which is listed on the Luxembourg Stock
Exchange. The net proceeds will be used for refinancing the Group’s EUR 300 million EMTNs maturing in December 2024 as well as
for general corporate purposes.
As part of the Group’s ordinary liquidity management, excess liquidity from the bond issue of DKK 2,533 million (EUR 340 million)
has been placed as fixed-term deposits maturing in Q4 2024 in alignment with the bonds maturing. Deposits amounting to DKK
745 million have been classified as Securities and reported within Fixed-term deposit investments, whereas the remaining deposits
of DKK 1,788 million have been classified as Cash and cash equivalents.
To partially hedge the exposure to changes in fair value of the new bond, the Group entered into interest rate swap agreements
with a nominal amount of EUR 250 million in June 2024, whereby the Group receives a fixed rate interest and pays a variable
interest rate on the nominal amount. Changes in the fair value of the interest rate swaps (the hedging instruments) are recognised
in profit or loss under Financial income or Financial expenses. Changes in the fair value of the hedged items (the bonds)
attributable to the risk being hedged are recognised as part of the carrying amount of the bonds and recognised in profit or loss
under Financial income or Financial expenses. In H1 2024, no ineffectiveness was recognised in profit or loss (2023: no
ineffectiveness).
For
interim
periods,
the
Group’s
defined
benefit
obligations
are
based
on
valuations
from
external
actuaries
carried
out
at
the
end
of the prior financial year taking into account any subsequent movements in the obligation due to pension costs, contributions etc.
up until the reporting date. Actuarial calculations are only updated to the extent that significant changes in applied assumptions
have occurred since 1 January. Based on an overall analysis carried out by management, it is determined whether updated
actuarial calculations should be obtained for interim periods.
At
30
June
2024,
the
overall
evaluation
carried
out
by
management
resulted
in
updated
actuarial
calculations
being
obtained
for
Switzerland, the UK and Türkiye due to market fluctuations, which had impacted interest rates, inflation rates and asset values. The
updated calculations led to recognition of actuarial losses of DKK 25 million and gain on plan assets of DKK 265 million, which was
more than offset by impairment from asset ceiling of DKK 332 million due to surplus restrictions. The net loss of DKK 92 million was
recognised in other comprehensive income with a resulting increase in the Group's defined benefit obligations.
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
30 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
16 Provisions
(DKKm)
Legal
claims and
disputes
Self-
insurance
Restruc-
turings
Onerous
contracts Other YTD 2024 YTD 2023
At 1 January
162
263
76
26
225
752
1,071
Foreign exchange adjustments
(0)
9
-
-
6
15
(5)
Additions
22
133
-
-
10
165
139
Used during the year
(35)
(136)
(63)
(3)
(39)
(276)
(275)
Unused amounts reversed
(26)
(4)
-
(4)
-
(34)
(77)
Reclass (to)/from other liabilities
-
-
-
-
77
77
58
-
-
At 30 June
123
265
13
19
279
699
911
Non-current
29
155
1
3
217
405
471
Current
94
110
12
16
62
294
440
At 30 June 2024, provisions amounted to DKK 699 million, a decrease of DKK 53 million compared to 31 December 2023. The
decrease was mainly due to utilisation of restructuring provisions established as part of the OneISS review in 2023, most
significantly related to Germany.
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
31 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
17 Hyperinflation in Türkiye
(DKKm)
YTD 2024
(excl.
IAS 29)
Non-
monetary
items
Profit
or loss
Retrans-
lation
(end rates)
Total
adjust-
ments
YTD 2024
(reported)
Profit or loss
Revenue
40,496
-
264
(79)
185
40,681
Operating profit before other items
1,600
(35)
20
(5)
(20)
1,580
Operating profit
1,546
(44)
20
(5)
(29)
1,517
Net profit
865
4
-
-
4
869
Financial ratios (%)
Organic growth (non-IFRS)
5.9%
-
-
-
-
5.9%
Operating margin (non-IFRS)
4.0%
(0.1%)
0.0%
0.0%
(0.1%)
3.9%
Cash flows
Cash flow from operating activities
(337)
-
-
4
4
(333)
Cash flow from investing activities
(1,669)
-
-
-
-
(1,669)
Cash flow from financing activities
2,066
-
-
-
-
2,066
Free cash flow (non-IFRS)
(1,100)
-
-
5
5
(1,095)
YTD 2024
(excl.
IAS 29)
Inflation re-
statement,
accumu-
lated
YTD 2024
(reported)
Financial position
Goodwill
19,223
879
20,102
Other intangible assets
3,390
360
3,750
Right-of-use assets and property,
plant and equipment
3,058 127 3,185
Total assets
48,773
1,366
50,139
Other comprehensive income
1)
(980) 1,140 160
Other equity elements
10,530
103
10,633
Total equity
9,550
1,243
10,793
Deferred tax liabilities
1,323
123
1,446
Total equity and liabilities
48,773
1,366
50,139
1)
In year impact of restatement amounted to DKK 242 million (2023: DKK 164 million).
18 Events after the reporting period
No
events
have
occurred
subsequent
to
30
June
2024,
which
are
expected
to
have
a
material
impact
on
the
Group's
financial
position.
The table below shows the accounting impact of the hyperinflation restatements for the period 1 January - 30 June 2024:
Inflation restatement,
in year effect
____________________________________________________________________________________________________________
ISS A/S – Interim report for the period 1 January - 30 June 2024
32 of 34
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
33 of 34
Other
Conference Call
A conference call will be held on 13 August 2024 at
10:00 am CEST. Presentation material will be
available online prior to the conference call.
Dial-in details
DK: +45 7876 8490
SE: +46 4 0682 0620
UK: +44 203 7696 819
US: +1 646 787 0157
PIN Code for all countries: 283234
Link: https://issworld.eventcdn.net/events/interim-
report-h1-2024
For investor enquiries
Michael Vitfell-Rasmussen, Head of Group Investor
Relations
Phone: +45 53 53 87 25
E-mail: michael.vitfell@group.issworld.com
For media enquiries
Charlotte Holm, Head of External Communications
Phone: +45 41 76 19 89
E-mail: charlotte.holm@group.issworld.com
Contact information
Tel.: +45 38 17 00 00
Fax.: +45 38 17 00 11
CVR 28 50 47 99
ESEF data
Name of reporting entity: ISS A/S
Domicile of entity: Denmark
Legal form of entity: A/S
Country of incorporation: Denmark
Address: Buddingevej 197, DK-2860 Søborg
Principal place of business: Global
Principal activities: Workplace and facility service
Name of the parent entity: ISS A/S
Name of the ultimate parent and Group: ISS A/S
Company announcement no. 38/2024
Copenhagen, 13 August 2024
ISS A/S – Interim Report for 1 January – 30 June 2024
34 of 34
Our global footprint
ISS is a leading, global provider of workplace and facility service solutions. In
partnership with customers, ISS drives the engagement and well-being of people,
minimises the impact on the environment, and protects and maintains property.
ISS brings all of this to life through a unique combination of data, insight and
service excellence at offices, factories, airports, hospitals and other locations
across the globe. In 2023, Group revenue was DKK 78.7 billion.