ISS Turnaround 'Progressing as Planned'
ISS has issued a positive trading update for the first Quarter of 2021, reporting organic growth of 5.6 per cent under its new OneISS recovery strategy, and the acceleration of its divestment programme.
- Organic growth was (5.6)% in Q1 2021 (Q4 2020: (11.0)%), representing a notable improvement compared to previous quarters supported by continued solid demand for above-base work, especially deep-cleaning and disinfection.
- Execution of the OneISS strategy announced at the end of 2020 has progressed as planned in Q1 2021 with good momentum on the divestment programme and early enhancement initiatives of the operating model.
- The turnaround initiatives driving the recovery of underperforming contracts and countries are progressing as planned.
- The overall financial results in Q1 2021 were in line with expectations. The underlying operating margin has continued to improve since Q2 2020, and total readily available liquidity increased compared to 31 December 2020. Based on the stabilised financial performance and available liquidity, ISS has decided to cancel a EUR 700 million revolving credit facility, which was established in 2020 as backup liquidity.
- Seven divestments were signed or completed in 2021 up until 30 April. Total net proceeds amount to approximately DKK 1 billion (Euro 134.7 million), entailing a solid reduction in net debt upon expected completion in Q2 2021. The divestment programme targets approximately DKK 2 billion in total net proceeds in 2021 and 2022.
- The Outlook for 2021 and the Turnaround targets are confirmed. The Outlook assumes a gradual easing of restrictions and lockdowns in key markets starting from Q2 2021.
Commenting on the results, Jacob Aarup-Andersen, Group CEO, said:
"I am pleased with the continued successful execution of the OneISS strategy and how we are gradually improving the underlying business. The global workplace continues to be heavily impacted by Covid-19 restrictions and lockdowns, but the ISS organisation and our frontline employees show impressive resilience by supporting our customers with passion and pride in these challenging times.
The financial performance is developing as planned. We are seeing the impact of our restructuring efforts in the improved profitability at lower volumes in our food business, while we are leveraging the increased demand for deep-cleaning and disinfection. Our OneISS investments are continuing in the commercial, operational and technology areas, creating a strong platform to leverage the business opportunities when markets re-open."