Organic growth and increasing demand for its integrated solutions have helped ISS deliver strong first quarter 2015 financial result. Organic revenue was up 3.1% (Q4 2014, 2.7%) while operating margin edged upwards to 4.4% (Q4 2014, 4.3%).
Profit before goodwill impairment and amortisation/impairment of brands and customer contracts increased to AUD$80 million (DKK 426 million) compared with AUD$14 million in Q1 2014.
Financial expenses, net, decreased to AUD$41 million (DKK 216 million) against AUD$105 million in Q1 2014 and included a AUD$10 million (DKK 54 million), non-cash, net loss on foreign exchange.
Net profit increased to AUD$56 million (DKK 297 million) compared to a loss of AUD$6 million (DKK 33 million) in Q1 2014.
‘Revenue generated from IFS (integrated facility services) increased 9% in local currency, and represent 32% of Group revenue (FY 2014: 31%). Significant IFS contract wins in Q1 included UBS in the United Kingdom, Huawei in China and a retender and expansion with RWE in the Czech Republic.
‘Revenue from global corporate clients represented 10% of group revenue (FY 2014: 9%), an increase of 6% in local currencies,’ noted the ISS report.
The company’s strategic initiatives, which include customer segmentation, organisational structure and excellence projects such as its procurement program, are said to be progressing according to plan and supporting margin improvement.
ISS’ 2015 outlook for organic growth, operating margin and cash conversion remains unchanged.
“We have had a good start to the year with continued positive momentum on all key parameters. Organic growth increased, driven in particular by strong customer demand for our integrated solutions,” commented Jeff Gravenhorst, group CEO.
“New integrated contract wins include UBS (the United Kingdom), Huawei (China), and an expansion with RWE (the Czech Republic). Thanks to our strategic initiatives, our operating margins continue to improve, and cash conversion remains high. We maintain our outlook for the full year result.”