ISS has reported that revenue for the first nine months of 2012 was up by 2% to DKK 58.9 billion (AUD$9.7 billion) while organic growth was 1.7% in the same period. Operating profit before other items amounted to DKK 3,176 million (AUD$521 million) for the first nine months of 2012 compared with DKK 3,201 million (AUD$525 million) for the same period in 2011
Operating margin increased in Q3 to 6.4% bringing the operating margin for the first nine months of 2012 to 5.4%. Net Profit for Q3 was DKK 206 million compared with a loss of DKK 159 million for the same period in 2011.
For the first nine months of 2012 net result was a loss of DKK 88 million (AUD$14.4 million) compared with a loss of DKK 597 million (AUD$98 million) for the same period in 2011.
The LTM (last twelve months) cash conversion for September 2012 was 98%.
“This has been a very important quarter for ISS. We secured two of the largest global contracts in the history of ISS and we welcomed two new long term investors resulting in a significant deleverage of ISS,” noted ISS Group CEO Jeff Gravenhorst.
“We still see challenging macro-economic conditions. Therefore we remain focused on driving profitable growth with acceptable payment conditions, and in some areas we have deliberately withdrawn from certain business relationships.
“For Q3 our efforts helped improve the margin and secure strong cash conversion. More than half of the new Barclays contract is now operational and together with a strong pipeline of new customer contracts, we expect a solid finish to 2012.”
Group performance
Group revenue amounted to DKK 58.9 billion (AUD$9.7 billion) in the first nine months of 2012, an increase of 2% compared with the same period in 2011, driven by organic growth of 1.7% and a positive effect from exchange rate movements of 2%, which was partly offset by the successful divestment of non-core activities of 2%.
All regions except North America and Pacific delivered a positive organic growth rate including Asia with a double-digit organic growth rate. The organic growth was influenced by challenging business conditions in certain European countries where the main focus of ISS remains on ensuring a profitable customer base with satisfactory payment conditions.
This has led to the identification of contracts which have been exited in 2012, resulting in a reduced organic growth. Furthermore, a decline in non-portfolio services in 2012 and the timing of contract start-ups have negatively impacted the organic growth.