‘Solid delivery’ for ISS in 2023

Global workplace experience and facilities management firm, ISS, has reported a “solid delivery” in its full year results for 2023.

Business momentum was maintained during the last part of 2023, with organic growth of 7.1% in Q4 2023 (Q4 2022: 10.1%) and 9.7% for the full-year 2023 (2022: 8.4%), which ISS states was primarily driven by price increases and underlying volume growth. Total revenue for the quarter amounted to DKK 20.4 billion (£2.34 billion).

The underlying operating margin (excl. impact of hyperinflation in Turkey) improved to 4.6% for the full-year 2023 (2022: 4.0%) and 5.5% in H2 2023 (H2 2022: 4.8%). One-off costs of DKK 233 million (£26.7 million) related to the review of OneISS initiatives were recognised in H2 2023, resulting in a reported operating margin of 4.3% for 2023.

ISS secured a new key account IFS contract with the Danish Building and Property Agency as well as several smaller and mid-sized IFS key account contracts across the Group. In the beginning of 2024, the global contracts with Nordea and an Industry & Manufacturing customer were extended, supporting a continued strong customer retention rate of 95%.

ISS reports it has signed an agreement to divest the French business, which is progressing as planned with expected completion in H1 2024. The company has also said that the integration of Grupo Fissa in Spain is now complete.

Based on the financial results for 2023, the Board of Directors will at the annual general meeting propose a dividend of 20% of adjusted net profit for 2023, corresponding to a dividend per share of DKK 2.3. In addition, ISS will today initiate a share buyback programme of DKK 1 billion (£114.9 million) to be executed over a 12-month period.

For 2024, ISS expects organic growth to be 4 – 6%, with operating margin expected to be above 5%.

Kasper Fangel Group CEO, ISS A/S, commented: “In 2023, we continued the positive development from previous years, reflected in solid performance, on strategic, operational, and financial levels. We took several steps to enhance the potential of the OneISS strategy, including a review and prioritisation of our strategic initiatives to further build a stronger and value-creating enterprise. We also made good progress on our ambition to become the Company of Belonging and reduce our environmental impact. We are in a favourable position, and it gives us the ability to reward shareholders with both an increasing dividend payment and the initiation of a share buyback programme. This has been achieved thanks to the efforts of our more than 350,000 dedicated and passionate placemakers, and I firmly believe that we are well underway in realising the full potential of ISS.”