ISS (ISS) Q3 2025 TU earnings summary

Executive summary

• Q3 2025 organic growth reached 4.9%, with performance fully in line with expectations and strong commercial momentum, supported by price increases, volume growth, and project work.

• Numerous contract wins and extensions were secured, including 21 contract announcements year-to-date, with most new contracts back-end loaded, setting a strong foundation for 2026.

• Operations for major contracts, such as DWP in the UK, are running as planned, and the arbitration process with Deutsche Telekom is progressing as expected.

• Credit rating was upgraded to Baa2 stable by Moody’s, reflecting a strong financial position and consistent execution.

• Strategic initiatives advanced, including acquisitions in Spain and Austria, and a new Group Commercial and Revenue function to drive customer-centric growth.

Financial highlights

• Organic growth reached 4.9% in Q3, mainly driven by price increases (about 4.5 percentage points) and volume growth, with projects and above-base work contributing to revenue.

• Q3 2025 revenue was DKK 20.7 billion, up 2.1% year-over-year; YTD revenue was DKK 62.3 billion, up 2.2%.

• Retention rate improved to 94% in Q3, up from 93% in H1.

• All regions except Americas delivered positive organic growth; Central & Southern Europe led with 10%, APAC with 9%, Northern Europe with 1%, and Americas at -4% due to contract exits.

• Projects and above-base work accounted for 16% of revenue, growing 3% in Q3 and 6% YTD.

Outlook and guidance

• Organic growth guidance for 2025 narrowed to 4–5% (previously 4–6%) due to timing of contract startups and losses; operating margin expected above 5%; free cash flow above DKK 2.4 billion.

• Margin guidance reconfirmed at above 5% for the full year, with 5% as the floor.

• Cash flow guidance maintained at above DKK 2.4 billion, with potential to exceed DKK 3 billion if DTAC payments are received.

• Acquisitions and divestments expected to add about 1 percentage point to 2025 revenue growth; currency expected to have a negative 3 percentage point impact.

• Strong exit rate expected for 2025, positioning for robust growth in 2026.