After achieving solid organic growth in the first half of 2016, global facility services provider ISS has narrowed the span for expected full year organic growth from 2 to 4 per cent to 2.5 to 4.0 per cent.
“We continued to deliver a good performance in Q2 both in terms of solid organic growth, driven by growing demand for Integrated Facility Services and an improved operating margin, underpinned by our strategic initiatives,” stated ISS group CEO Jeff Gravenhorst.
The company released its interim financial report for the period 1 January to 30 June 2016 on 16 August 2016 which showed organic revenue growth of 3.8 per cent in H1 and 3.8 per cent in Q2.
The company had a total revenue growth of negative 1 per cent in H1 and negative 2 per cent in Q2, driven by currency effects which reduced revenue by 4 per cent in H1 and 5 per cent in Q2.
“We have signed new contracts and extensions as well as commenced delivery with numerous clients across the world,” shared Mr Gravenhorst. “These include a major logistics company and a number of public institutions in the United Kingdom, SKANSKA and SEB in Sweden, a major international bank in Mexico and Jakarta Airport in Indonesia.”
ISS reported an operating margin of 4.9 per cent in H1 and 5.4 per cent in Q2. Its net profit increased to DKK 897 million (AUD $176 million) in H1 and its profit before amortisation/impairment of acquisition-related intangibles to DKK 1,155 million (AUD $227 million) in H1.
ISS strategic initiatives, including sharper focus on key customers, business process outsourcing and the procurement program, continue to be implemented according to plan and support margin development.
“We expect the global macroeconomic conditions to remain challenging for the rest of the year,” added Mr Gravenhorst. “However, we are confident that we will continue to grow and deliver on our strategic objectives.”
The company will also maintain its 2016 outlook for operating margin (above 5.7 per cent) and cash conversion (above 90 per cent).