ISS (ISS) Investor Update summary

Strategic and operational highlights

• Four new contracts signed for 2025, each exceeding DKK 100 million, reflecting strong commercial momentum.

• Streamlined executive management team and implemented measures to accelerate new business wins.

• Focus on customer-centric growth, technology-driven efficiency, and sustainability initiatives.

• Significant growth potential identified in integrated facility services and single service cleaning, supported by market trends like outsourcing and hybrid work.

• Global initiatives include digital recruiting, onboarding, and enhanced workforce management.

Financial performance and outlook

• Organic growth reached 6.3% in 2024, with operating margin above 5% and free cash flow of DKK 2.0bn.

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

• 2025 outlook targets 4-6% organic growth, operating margin above 5%, and free cash flow above DKK 2.4bn (potentially above DKK 3.0bn with specific payments).

• Margin guidance allows flexibility for growth investments, with continued focus on efficiency and commercial segmentation.

• Underlying profitability improved despite ongoing investments, and cash conversion is expected above 60%.

Capital allocation and shareholder returns

• Financial leverage reduced to 2.0x, at the lower end of the 2.0-2.5x target range.

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

• New share buyback program of DKK 2.5bn to be executed over 12 months.

• Capital allocation policy remains unchanged, prioritizing deleveraging and shareholder returns.