ISS (ISS) Q2 2025 earnings summary

Executive summary

• H1 2025 performance met expectations, with 4.1% organic growth driven by price increases and project work, and operational discipline.

• Operating margin improved to 4.2% in H1 2025 from 4.0% in H1 2024, reflecting operational improvements.

• Share buyback programme increased by DKK 500 million, totaling DKK 3.0 billion, with DKK 1,250 million completed in the first tranche.

• 15 contracts announced year-to-date, including 6 new large key account wins and 8 expansions, with continued progress in commercial initiatives.

• U.S. and North American platforms strengthened with upscaled management and infrastructure, focusing on pipeline development.

Financial highlights

• H1 2025 revenue was DKK 41,613 million, up 2.3% year-over-year; organic growth was 4.1%, mainly from price increases and above-base activity.

• Operating margin improved to 4.2%, up 20 bps year-over-year.

• Free cash flow for H1 was -DKK 600 million, an improvement of DKK 500-553 million from last year.

• Net profit rose to DKK 995 million in H1 2025 from DKK 869 million in H1 2024.

• Dividend payout of DKK 575 million for 2025, with total payout yield at 11%.

Outlook and guidance

• Full-year 2025 guidance reconfirmed: organic growth of 4%-6%, margin above 5%, and free cash flow above DKK 2.4 billion.

• Price increases, especially in Turkey, expected to remain the main growth driver.

• Net new wins contribution adjusted due to timing, with many contracts starting late 2025 or early 2026.

• Free cash flow could exceed DKK 3.0 billion if Deutsche Telekom payment is received in 2025.