124 0 Kommentare Resilient Revenue Reinforces the Importance of the Global Strategy in Unprecedented Times

Company Announcement

Copenhagen, 12 August 2020
No. 15/2020

INTERIM REPORT FOR 1 JANUARY – 30 JUNE 2020

Highlights

Organic growth of (2.9)% in H1 2020 and (9.9)% in Q2 2020, impacted especially by COVID-19 lockdowns, but underpinned by key accounts (2.2% organic growth in H1 2020) as well as strong demand for deep cleaning and disinfection. Organic growth in July was (7.8)%.
Operating margin (before other items) of (2.2)% in H1 2020 (H1 2019: 3.7%) or around 0% excluding restructuring costs and one-offs. Performance was impacted by the operating profit drop-through from revenue lost as a result of COVID-19 as well as other operational impacts including inefficiencies and delays in a number of key operational priorities as a result of the significant redirection of resources on the back of COVID-19 and the IT malware attack.
Free cash flow improved to DKK (1.7) billion in H1 2020 (H1 2019: DKK (2.6) billion). The free cash flow of DKK (1.7) billion was negatively impacted by seasonality, impact of COVID-19 and the IT malware attack on operating performance, while positively impacted by short-term benefits of DKK 1.6 billion from postponed payment of VAT and social charges offered under government support schemes. The utilisation of factoring reduced by DKK 0.7 billion.
Total readily available liquidity remained above DKK 11 billion at 30 June 2020 (30 April 2020: above DKK 11 billion) and around DKK 14 billion at 31 July 2020.
Net debt reduced from DKK 18.6 billion at 30 June 2019 to DKK 16.4 billion at 30 June 2020. However, as a result of weaker operating profit, leverage at 30 June 2020 increased to 5.9x pro forma adjusted EBITDA (30 June 2019: 3.4x). Excluding restructuring costs and one-offs impacting operating profit, leverage at 30 June 2020 was 4.3x. While leverage is expected to peak in 2020, we expect a significant reduction in 2021 as performance is expected to normalise and the divestment programme completes. ISS has no financial covenants and no material unaddressed debt until 2024.
Uncertainty remains high as we reinstate guidance for 2020. Organic growth in 2020 is expected to be (2)%-(10)% with a mid-range of (6)%-(8)%. The operating margin excluding restructurings and one-off costs (0% in H1 2020) is expected to be marginally positive in 2020. Free cash flow in 2020 is expected to be DKK (0.5)-(3.5) billion with a mid-range of around DKK (2) billion.