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ISS unlikely to extend Novartis contract

ISS has announced that its current integrated facility services contract with Swiss pharmaceutical company, Novartis, is unlikely to be extended.

Revenue generated from Basel-based Novartis amounted to DKK 2.0 billion (£236 million) in 2018 (2.8% of Group revenue) with an operating margin above Group average. The annualised first year net negative margin impact, including exit related costs, is expected to be 0.1-0.2 percentage points.

In a statement, ISS said it expects “no material impact in 2019”, with its outlook for 2019 as well as medium term targets remaining unchanged.

To date ISS has successfully extended all other large Key Accounts otherwise maturing during 2018 and 2019, adding its “commercial momentum continues to be strong”.

ISS has been working with Novartis since 2013, initially delivering integrated facility services at 22 sites, including production plants and other facilities in Switzerland, Germany, Austria and Slovenia. In 2016 the contract was extended covering Novartis’ sites located across 24 European countries.

The Novartis contract matures on 31 December 2019.

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