Iss A/s · OMXCOP:ISS
Iss A/s — Q1 2009 Earnings Presentation
28 slides from Iss A/s's earnings presentation, May 27, 2009
Slide 1: Investor Presentation - Q1 2009 Results
Investor Presentation - Q1 2009 Results - 27 May 2009
Slide 2: Forward-looking Statements
Forward-looking Statements Forward-looking statements This presentation may contain forward-looking statements. Statements herein, other than statements of historical fact, regarding future events or prospects, are forward-looking statements. The words ‘‘may’’, “will”, “should”, ‘‘expect’’, ‘‘antici
Slide 3: Agenda
Agenda Key Events Interim Report Capital Structure Outlook 3
Slide 4: Key Events
Key Events
Slide 5: Key Events Q1 2009
Key Events Q1 2009 Satisfactory performance in bleak macro economic environment Focus on operational priorities sustained 1. Cash Flow 2. Operating Margin 3. Organic Growth LTM cash conversion of 101% Nordics, Americas and APAC – Contract portfolio growth continues, stable margins new international
Slide 6: Key Events Q1 2009 (cont.)
Key Events Q1 2009 (cont.) Major new international IFS contracts with global provider of IT services and with Shell Adjustment of cost base Restructuring projects to adapt capacity in Western Europe to current demand Project to reduce fixed cost structure initiated globally 6
Slide 7: Key Events Q1 2009 (cont.)
Key Events Q1 2009 (cont.) Implementation of The ISS Way strategy continues Deep deployment of the ISS Value Chain in the current regional/country strategy process Strategic approach to portfolio decisions Acquisitions, divestments, organic growth targets Restructurings in key Western European count
Slide 8: The Key Operational Priorities - Sustained
The Key Operational Priorities - Sustained Priority 1: Cash Conversion (EBITA) Priority 2: Operating Margin (EBITA) 120 6.2% 6.0% 100 5.9% 102 103 101 6.0% 5.8% 5.8% 80 99 60 5.8% 40 5.6% 20 0 5.4% 2006 2007 2008 LTM Q1 2006 2007 2008 LTM Q1 2009 2009 Priority 3: Organic Growth Priority 4: Deleverag
Slide 9: Interim Report
Interim Report January – March 2009
Slide 10: Key Figures YTD March
Key Figures YTD March Financials Operational performance: 7% top line growth at constant exchange rates Organic growth of 1.5% Operating margin at 4.3% De-leveraging March LTM - Net Debt to Pro forma EBITDA approaches 6x Organic Growth YTD March Operating margin YTD March Net Debt/PF EBITDA March LT
Slide 11: Key Figures YTD March (cont.)
Key Figures YTD March (cont.) DKKm 2009 2008 Δ FX C*) Revenue 16,674 16,367 +2% -5% +7% Operating profit before other items 715 772 -7% -5% -2% Operating margin before other items 4.3% 4.7% Operating profit 660 741 -11% -5% -6% Organic growth 1.5% 6.0% *) C: Growth at constant exchange rates 11
Slide 12: YTD March 2009 Revenue Growth - By Region
YTD March 2009 Revenue Growth - By Region 60% 59% Organic Acquisition, net 50% Total incl. FX 41% 40% 37% 30% 20% 19% 18% 15% 15% 13% 11% 10% 8% 4% 5% 4% 1% 2% 2% 2% 2% 0% -1% -1% -1% -3% -3% -6% -10% Nordic Western Eastern Asia Latin North Pacific Group Europe Europe America America FX: -8% -4% -6%
Slide 13: Organic Growth in Emerging Markets
Organic Growth in Emerging Markets Organic Growth Revenue Contribution YTD March 2009 YTD March 2009 3% 6% 21% Rest of Group 33% Asia Latin America 46% 91% 13
Slide 14: YTD March Operating Margin - by Region
YTD March Operating Margin - by Region Operating Profit before Other Items 10% 2009 2008 8% 6.3% 6.2% 5.8% 5.9% 6% 5.2% 5.3% 5.6% 5.6% 5.3% 5.5% 5.6% 5.0% 4.8% 4.7% 4.1% 4.3% 4% 2% 0% Nordic Western Eastern Asia Latin North Pacific Group Europe Europe America America 24% 56% 2% 6% 3% 4% 5% % of Marc
Slide 15: Portfolio Share %
Portfolio Share % Positive trend in portfolio share - underpins degree of stability in business profile 100% 90% 80% 78.9 70% 76.0 72.3 71.6 71.6 73.6 60% 50% 40% 30% 20% 10% 0% 2004 2005 2006 2007 2008 Q1 2009 15
Slide 16: Acquisitions
Acquisitions Acquisitions Average EV/EBITA acquisition multples Strategic decision to slow-down acquisitions 9,000 14 19 acquisitions completed until 30 8,000 12 April 2009 7,000 9.7x 9.5x 9.9x 10 6,000 8.0x 8.3x 7.9x 7.8x (DKK million) Average multiple: 5.8x EBITA 7.6x 7.2x 8 5,000 8.6x 8.3x 5.8x A
Slide 17: Acquisitions 2009 - To 30 April
Acquisitions 2009 - To 30 April Revenue, DKKm(1) Platform Developers Mettek Hizmet (Cleaning, Security) Turkey 137 Central Property Services (Cleaning) USA 182 Sunparking (Security) Indonesia 109 Karmak (Cleaning) Italy 100 Chubb Security (Security) Ireland 134 Others, incl. small and medium Total o
Slide 18: Capital Structure
Capital Structure
Slide 19: Acquisition Facilities
Acquisition Facilities Availability period for the undrawn part of the Acquisition Facility commitment expired on 11 May 2009 Acquisition Facility A On 26 May 2009, ISS repaid DKK 366 million under Acquisition Facility A representing 50% of Excess Cash Flow relating to the financial year 2008 Acquis
Slide 20: Capital Structure - Pro Forma Adjusted EBITDA
Capital Structure Pro Forma Adjusted EBITDA Pro Forma calculation(1) DKKm 12 months ended 31 March, 2009 Adjusted EBITDA 4,887 Estimated PF adjusted EBITDA of acquired and divested businesses 115 Estimated PF Adjusted EBITDA 5,002 Note: (1) The calculations of pro forma adjusted EBITDA are based in
Slide 21: Capital Structure (cont.)
Capital Structure (cont.) Pro Forma Capital Structure – 31 March, 2009 Capitalisation (1) DKKm (2) % of Total Cash and securities (2,082) (7%) Other Indebtedness 384 1% Senior Facilities 18,411 58% EMTNs 7,153 23% Total Net Senior Debt 23,866 75% Second Lien 4,469 14% Senior Subordinated Notes 3,381
Slide 22: Pro Forma Credit Ratio
Pro Forma Credit Ratio CAPITALISATION (DKKm) Q1 2009 Total Net Cash Pay Debt 31,716 U Working Capital YTD 2009 (1,122) U Working Capital LTM (54) = Seasonality Adj. Pro Forma Net Debt 30,540 PF Adjusted EBITDA 5,002 Seasonality Adjusted PF Net Cash Pay Debt / PF EBITDA 6.11x 22
Slide 23: Deleveraging - on a Multiple Basis
Deleveraging - on a Multiple Basis Net Debt / Pro Forma Adj. EBITDA 8.00x 7.75x 7.50x 7.28x 7.42x 7.26x 7.25x 7.28x 7.28x 7.09x 7.00x 7.10x 6.74x 6.75x 6.68x 6.88x 6.57x 6.50x 6.59x 6.31x 6.54x 6.34x 6.34x 6.25x 6.40x 6.21x 6.27x 6.11x 6.00x 6.16x 6.14x 6.06x 6.09x 5.92x 5.75x 5.50x 5.25x 5.00x Q4 '
Slide 24: Deleveraging - Debt is Under Control
Deleveraging - Debt is Under Control 32,000 5,500 5,064 5,038 5,064 31,000 5,002 4,929 5,000 4,866 30,702 30,676 4,752 30,540 (DKK million) 30,250 30,000 4,593 29,981 29,978 29,812 4,500 29,398 29,000 4,000 28,000 27,000 3,500 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Seasonali
Slide 25: Pro Forma Credit Ratios
Pro Forma Credit Ratios Pro Forma Credit Ratios Q1 2009 PF Net Cash Pay Debt / PF EBITDA 6.34 Seasonality adj. PF Net Cash Pay Debt/ PF EBITDA 6.11 PF Net Senior Debt (incl. EMTNs) / PF EBITDA 4.77 PF Net Senior Debt (excl. EMTNs) / PF EBITDA 3.34 25
Slide 26: Outlook
Outlook
Slide 27: Outlook
Outlook The outlook set out below should be read in conjunction with ”Forward-looking statements” on page 2 of this presentation The Group will continue focusing on Broadening facility services and strengthening single service excellence Key operational objectives Cash flow Operating margin Profitab
Slide 28: Investor Presentation - Q1 2009 Results
Investor Presentation - Q1 2009 Results - 27 May 2009