ISS (ISS) Investor Update summary

2024 financial performance

• FY 2024 organic growth was 6.3% vs 9.7% in 2023; H2 growth was 6.6% vs 8.1%, driven mainly by pricing, positive volume and higher-than-expected US above-base work revenue.

• Regional growth: Northern Europe 6%, Central & Southern Europe 11%, APAC 2% and Americas flat.

• Operating margin before other items, excl. IAS 29, rose to 5.0% from 4.3%; H2 reached 6.0% vs 4.9%, reflecting broad-based operational improvements.

• Revenue was DKK 83.8bn; free cash flow was DKK 2.0bn vs DKK 1.8bn in 2023, including a DKK 600m adverse impact from Deutsche Telekom withholding payments.

Strategy and commercial execution

• OneISS strategy review confirmed its overall direction and updated priorities, sharpening commercial focus on segmentation and execution to accelerate growth.

• Executive Group Management was aligned with updated priorities in January 2025 and streamlined to five members; measures were implemented to accelerate new business wins.

• Four new contracts were signed for 2025, each exceeding DKK 100m.

• Won a seven-year UK Department for Work and Pensions contract in August 2024, with expected annual revenue of DKK 1.2bn; extended key accounts including Barclays and Nordea.

• Growth opportunities identified in integrated facility services and single-service cleaning; global initiatives include digital recruiting, onboarding and enhanced workforce management, alongside technology and sustainability priorities.

Capital allocation and 2025 outlook

• 2025 guidance: organic growth of 4–6%, operating margin above 5%, and free cash flow above DKK 2.4bn excluding withheld Deutsche Telekom payments, or above DKK 3.0bn if received in 2025.

• Financial leverage was 2.0x at year-end, at the low end of the 2.0x–2.5x target range; capital allocation policy remains unchanged, prioritising deleveraging and shareholder returns.

• Proposed dividend of DKK 3.1 per share, representing 20% of adjusted net profit.

• Completed the DKK 1.5bn buyback announced in February 2024 and initiated a new DKK 2.5bn programme to run over 12 months.

• Margin guidance allows flexibility for growth investments; continued efficiency focus and expected cash conversion above 60%.