ISS Reports Strong 2024 Results, Launching Major Buyback Plan
Financial Performance and Outlook for ISS in 2024
Company Announcement
ISS Financial Results Overview
ISS has reported a commendable financial performance for 2024, aligning closely with its expectations. The company’s organic growth reached 6.3% for the year and 6.6% in the second half, driven by strategic price increases and notable revenue boosts from above-base work in the US.
Operational Efficiency Drives Improvement
ISS's operating margin enhanced significantly to 5.0% for the entire year, compared to 4.3% in the previous year. The second half of 2024 saw an even greater margin of 6.0%, signaling broad operational improvements across all levels.
Positive Cash Flow Generation
The company generated a free cash flow of DKK 2.0 billion for the year, up from DKK 1.8 billion in 2023. This steady cash generation was crucially maintained despite challenges such as the DKK 600 million impact from ongoing disputes with Deutsche Telekom.
Strategic Developments within ISS
2024 was also a pivotal year for ISS as it thoroughly reviewed its OneISS strategy, validating its direction while refining its operational priorities. The alignment process in January 2025 led to a streamlined Executive Group Management team consisting of five members, further enhancing focus and execution.
Key Contract Wins and Extensions
ISS was awarded a significant 7-year contract with a governmental department in the UK estimated to generate around DKK 1.2 billion annually. The company also secured extensions for key accounts, including high-profile relationships with Barclays and Nordea.
Ongoing Legal Matters and Acquisitions
As part of its growth strategy, ISS has been engaged in arbitration proceedings with Deutsche Telekom, with a key hearing set for mid-2025. In 2024, ISS completed five notable acquisitions, strengthening its market position with companies like gammaRenax in Switzerland and Grupo BN in Spain.
Successful Divestment Strategy
The divestment of ISS France was finalized in April 2024, marking a major accomplishment in the company’s strategic divestment program, which aimed to streamline operations and focus on lucrative segments.
Capital Distribution and Future Projections
As part of its commitment to shareholders, ISS concluded a share buyback program of DKK 1.5 billion and has now initiated a new program totaling DKK 2.5 billion. The financial leverage at the end of the 2024 stood at a manageable 2.0x.
Expectations for 2025
Looking ahead, ISS forecasts organic growth of 4-6% in 2025, with an operating margin anticipated to remain above 5%. The free cash flow target is set above DKK 2.4 billion, assuming resolution of the payment disputes.
Executive Insights
Kasper Fangel, Group CEO of ISS A/S, expressed enthusiasm about the year, stating, “2024 was an exciting year for ISS. We delivered on our financial targets, and our financial position is robust.” His commitment to driving strong, profitable growth emphasizes the refreshed strategic priorities and a focused leadership team, positioning ISS for success in upcoming years.
Contact Information for Stakeholders
For investor inquiries:
Michael Vitfell-Rasmussen, Head of Group Investor Relations, +45 53 53 87 25
Anne Sophie Riis, Senior Investor Relations Manager, +45 30 52 94 68
For media inquiries:
Charlotte Holm, Head of External Communication, +45 41 76 19 89
About ISS
ISS is a premier global provider of workplace and facility service solutions. Through its partnership with clients, ISS prioritizes engagement, well-being, and environmental sustainability across various sectors, employing over 350,000 dedicated professionals worldwide. In 2023 alone, the company reported a revenue of DKK 78.7 billion.
Frequently Asked Questions
What are the key financial figures for ISS in 2024?
ISS achieved an organic growth of 6.3% and a free cash flow of DKK 2.0 billion, indicating strong financial health.
What contracts did ISS secure recently?
ISS was awarded a significant 7-year contract with the UK Department of Work and Pensions, expected to generate DKK 1.2 billion annually.
How does ISS's leadership plan to ensure growth?
The streamlined leadership team at ISS is focused on executing refined strategic priorities to accelerate growth in key market segments.
What is ISS's share buyback plan for 2025?
ISS has initiated a new share buyback program totaling DKK 2.5 billion following the conclusion of a DKK 1.5 billion program.
How many employees does ISS have globally?
ISS employs over 350,000 people worldwide, referred to as “placemakers,” who are dedicated to delivering exceptional service.
About The Author
Contact Addison Perry privately here. Or send an email with ATTN: Addison Perry as the subject to contact@investorshangout.com.
About Investors Hangout
Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/
The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.