While its full year 2014 revenue declined due to non-core divestments, ISS A/S has boosted its profitability and enhanced its operating margin. The Danish-based facility services company’s fourth quarter and full year results were released 12 March.
Looking ahead, ISS expects a 2015 organic revenue growth rate of 2 to 4%, an operating margin more than the 5.6% achieved in 2014, and cash conversion more than 90%.
According to ISS, its financial highlights included an organic revenue growth of 2.5% for the year (2013: 4.3%); 2.7% in Q4 2014 (Q3 2014: 2.4%); improved operating margin of 5.6% for the year (2013: 5.5%); 6.5% in Q4 (Q4 2013: 6.2%); and a net profit increased to AUD$188 million or DKK 1,014 million (2013: loss of AUD$73 million or DKK 397 million).
Revenue from integrated facility services (IFS) contracts increased 10% (currency adjusted) for the year to AUD$4.2 billion or DKK 22.7 billion, representing 31% of overall revenue (2013: 26%). Revenue from global corporate clients increased by 5% (currency adjusted) and now represents 9% of Group revenue (2013: 8%). Emerging markets represent 24% of total revenue for the Group (2013: 23%) and delivered 9% organic growth (2013: 11%).
“We generated resilient organic growth, while improving our operating margin and ensuring strong cash conversion, in spite of difficult macroeconomic conditions. The performance was underpinned by strong growth in IFS and improving margins across several regions,” stated ISS Group CEO Jeff Gravenhorst.
“Our successful IPO in March combined with debt refinancing and a number of strategic divestments have significantly improved our capital position. We have a strong foundation for future growth and have seen a solid start to 2015 with new contract wins including Huawei in China and UBS in the UK.”