ISS (ISS) Q2 2026 earnings summary

Executive summary

• Achieved 8.9% organic growth in Q2 2026 and 8.2% in H1, with a 4.6% operating margin and robust free cash flow, reflecting operational improvements, strategic execution, and a one-off DTAG settlement.

• Commercial momentum remained strong, with a 95% retention rate, 13 contract announcements, and a healthy pipeline for the remainder of 2026.

• Deutsche Telekom contract extended to 2035 with improved terms, including a one-off payment and annual profitability uplift.

• Integration of Tomagruppen progressing as planned, strengthening the Nordic region presence; acquisitions in Norway, Denmark, New Zealand, and increased stake in Türkiye.

• Strategic execution included new large contracts, key account extensions, and industry awards for ISS Singapore and ISS UK.

Financial highlights

• Revenue for H1 2026 was DKK 44.7 billion, up 7.4% year-over-year; organic growth reached 8.2% in H1 and 8.9% in Q2.

• Operating margin for H1 2026 was 4.6%, up from 4.2% in H1 2025, benefiting from the DTAG settlement.

• Free cash flow improved to DKK 600 million in H1 2026, including a one-time DTAG payment, and is expected above DKK 3.1 billion for the year.

• Diluted EPS rose to DKK 7.5, up 29% year-over-year.

• Dividend payout of DKK 500 million and share buyback program increased to DKK 3.1 billion, reducing share count by over 8%.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: organic growth above 6%, operating margin around 5.25%, and free cash flow above DKK 3.1 billion.

• Growth composition is more balanced, with contributions from volume, net new wins, and above-base activity.

• Cash conversion expected above 60%; leverage target maintained at 2.0–2.5x net debt/EBITDA.

• Retention rate expected to remain at 95% for the rest of the year.

• Guidance includes timing effects from the DTAG settlement.