ISS (ISS) Q1 2026 TU earnings summary

Executive summary

• Achieved 7.4% organic growth in Q1 2026, with revenue up DKK 1 billion year-over-year and strong like-for-like performance, driven by contract wins, volume growth, and price increases.

• Commercial momentum continued with seven contract announcements and a 94% customer retention rate, supported by positive contract extensions and new wins.

• Strategic buy-out of Actera's minority stake in Türkiye increased ownership to 90%, boosting EPS, margins, and control.

• Q1 financial performance met or exceeded expectations across all key indicators, with strong above-base contributions, especially in Europe.

• Ongoing arbitration and settlement discussions with Deutsche Telekom, with a final outcome expected in H1 2026.

Financial highlights

• Organic growth of 7.4% in Q1 2026, with balanced contributions from pricing, volume, net new, and above-base revenue.

• Like-for-like growth at 2% for the second consecutive quarter.

• Above-base/project work contributed 1.5 percentage points to organic growth, mainly from Europe and DWP project work.

• Regional performance: Central & Southern Europe 10%, Northern Europe 7%, Asia-Pacific 6%, Americas -2% organic growth year-over-year.

• Dividend of DKK 500 million paid and DKK 500 million in share buybacks executed, with an 8% payout yield.

Outlook and guidance

• Full-year 2026 guidance reconfirmed: organic growth above 5%, operating margin above 5%, and free cash flow above DKK 2.5 billion.

• Free cash flow could exceed DKK 3.1 billion if Deutsche Telekom payments are received.

• Acquisitions and divestments expected to add 0.5 percentage points to revenue growth in 2026; currency expected to have a negative 1.5 percentage point impact.

• No current plans to upgrade guidance due to early stage in the year and limited visibility on above-base work.

• Pricing, especially from Türkiye, remains a key growth driver, but a more balanced contribution from other levers is expected.