Considering the current global macroeconomic climate, ISS A/S believes 2012 progress with its ongoing strategic transformation was satisfactory. Full year revenue was up 2.3 percent to AUD$13,602 million (DKK 79, 454 million), operating profit before other items increased 1 percent to AUD$755 million and operating margin came in at 5.6 percent.
“We secured a number of new global and regional contracts, including two of the largest global contracts in the history of ISS, and we welcomed two new investors, resulting in a significantly stronger capital structure of ISS,” noted Jeff Gravenhorst, ISS Group CEO.
“Given the market situation in many of our developed markets, we are particularly proud of the continued profitable overall growth and our ability to continue to generate strong cash flows. We are currently well on track implementing new sizeable global and regional contracts.”
Western Europe, Latin America and Asia delivered positive organic growth rates in 2012, with Asia once again reporting double-digit organic growth. The organic growth was negatively affected by the challenging macroeconomic conditions, a decline in non-portfolio services and by ISS deliberately exiting contracts with unsatisfactory conditions.
During 2012 ISS maintained the focus on strategic alignment, increasingly streamlining the business platform to further strengthen focus on core activities and accelerate the continued deleveraging of the group. ISS divested a number of activities in 2012 and has a number of non-core activities held for sale.
ISS said it continues to have a strong cash generation leading to a cash conversion of 103% for 2012 compared with 93% in 2011. The strong cash conversion is a result of a positive cash flow performance in all regions reflecting continued focus on securing payments for work performed.
The organisation’s outlook for 2013 is based on a mixed global macroeconomic outlook on the ISS world map with continued strong growth in emerging markets combined with weak growth and difficult macro-economic conditions in large parts of Europe, including the uncertainty surrounding current and future austerity measures.
The recent launch of several large integrated facility services (IFS) contracts will positively impact organic growth in 2013 and ISS will continue to focus on developing the increasingly larger part of the business based in emerging markets.
Combined with the underlying business development, the company expects to deliver around 3 percent organic growth in 2013.