ISS A/S
Financial Report
For the period 01.02.2002 - 31.12.2002
To The Copenhagen Stock Exchange and The London Stock Exchange
Stock Exchange Release No. 02/03
13 March 2003
ISS A/S
Financial Report 2002
Highlights
* Turnover increased by 9%
* Operating profit increased by 23%, equivalent to an operating
margin of 5.3%, up from 4.7%
* Earnings per share before goodwill amortisation increased by 19%
* Free cash flow increased by 64%, resulting in a cash conversion
of 167%
* Dividends of DKK 2 per share proposed
The Annual Report 2002 can be viewed and downloaded from the Group's
website:http://www.issworld.com
For further information:
Arne Madsen, Chairman
Telephone: +45 33 47 88 00
Eric S. Rylberg, Group Chief Executive Officer
Telephone: +45 38 17 00 00
Karsten Poulsen, Group Chief Financial Officer
Telephone: +45 38 17 00 00
Key Figures
Amounts in DKKm, 2002 2001 2000 1999 1998
except per share
data
Turnover 37,984 34,852 28,719 19,802 13,801
Operating profit 1) 2,010 1,633 1,454 1,021 735
Financial income and (361) (310) (244) (128) (80)
expenses, net
Ordinary profit
before goodwill 1,115 898 830 622 487
amortisation
Extraordinary items,
net of tax and - - - 4 (42)
minorities
Discontinued - (5) - - (23)
business, net of tax
Net profit for the 246 222 210 237 211
year
Investments in
tangible assets, 579 615 439 420 769
gross
Cash flow from 2,264 1,510 1,265 732 695
operating activities
Free cash flow 2) 1,739 1,058 874 795 460
Total assets 22,412 22,419 17,164 13,696 7,139
Goodwill 12,669 12,022 9,522 7,576 2,995
Interest-bearing 5,604 6,317 4,357 3,050 1,898
debt, net 2)
Total equity 7,331 6,621 5,678 4,415 1,408
Market 11,202 17,351 21,730 18,773 12,437
capitalisation
Operating margin, 5.3 4.7 5.1 5.2 5.3
% 2)
Interest coverage2) 7.2 7.0 7.9 10.7 12.4
Earnings per share
before 25.8 21.6 21.1 18.6 16.4
goodwill
amortisation 2)
Cash conversion, % 167 118 105 128 94
2), 3)
Free cash flow per 40.2 25.5 22.3 23.7 15.5
share 2)
Equity ratio, % 2) 32.7 29.5 33.1 32.2 19.7
Debt to book equity 76.4 95.4 76.7 69.1 134.9
ratio, % 2)
Debt to total
enterprise value 33.3 26.7 16.7 14.0 13.2
ratio, % 2)
Share of employees 53% 53% 53% 53% 55%
on full-time
Number of employees 248,500 259,800 253,200 216,700 137,800
Growth
Organic growth 4) 1% 4% 7% 7% 6%
Acquisitions, net 8% 18% 35% 37% 12%
Currency adjustments 0% (1%) 3% (1%) (1%)
Total turnover 9% 21% 45% 43% 17%
Operating profit 1) 23% 12% 42% 39% 15%
1) Before other income and expenses.
2) Please see last page in this report for a list of definitions.
3) Excluding the after-tax gain on the sale of Sophus Berendsen
shares.
4) Gross organic growth in 2001 and 2002 was approximately 6% and 5%,
respectively, before extraordinary contract trimming o f
approximately 2% and 4%, respectively.
ISS reached the goals set for 2002. Turnover growth of 9% and an
increase in the operating profit before other income and expenses of
23% meant that the operating margin increased to 5.3%, up from 4.7%.
The free cash flow increased 64% resulting in a cash conversion of
167%.
FOCUS OF THE YEAR
ISS achieved the planned improvement of its operating margin.
Profitability enhancement of the contract portfolio received special
attention. Contracts were reviewed and the extraordinary contract
trimming process initiated in 2001 continued in five countries. With
the exception of ISS Brazil, where trimming was initiated at the end
of the year, 2002 marked the completion of the extraordinary contract
trimming process.
The Group's overhead cost structure was scrutinised. Costs were
reduced concurrently with contract trimming and savings were
accomplished through efficiency gains. In the autumn of 2002, a
project to downscale the head office was finalised. The aim of the
project was to lower head office costs to less than 0.4% of Group
turnover.
The efforts to improve effective utilisation of working capital were
intensified and the working capital optimisation project was extended
to encompass eight of ISS' largest countries. This resulted in cash
conversion of 167% at Group level.
Strategically, ISS' main priority in 2002 was to further develop the
facility services concept as defined in the strategy plan create2005.
Management remains confident that integrated service solutions is the
right route for ISS. The acquisitions made in 2002, aiming at
establishing the right service offering in each country, supported
this strategy. The efforts to develop and deliver facility services
solutions continued, particularly in Northern Europe. This led to new
facility services contracts, which included a range of integrated
service solutions. Almost all of the Group's large facility services
organisations improved their performance. The countries with the most
advanced facility services concepts generated operating margins above
the Group average, best illustrated by Facility Services in ISS
Norway and ISS Finland, which posted operating margins of 7.0% and
7.8%, respectively.
DIVESTMENTS
In 2002, the restructuring of the Group initiated in 2001 was
completed. This mainly involved the two Business Builds, Aviation and
CarePartner. The unsatisfactory profitability of these areas was
flagged at the end of 2001.
Aviation
Believing that the outlook for the aviation industry remains bleak,
management resolved to finalise the restructuring of ISS' aviation
business as soon as possible. This led to a decision to discontinue
airside aviation activities performing below Group standards.
The operations of Nordic Aero in Denmark, Finland, Norway and Sweden,
which had an annual turnover of approximately DKK 130 million, were
divested in July 2002. In the Netherlands, the airside business with
an annual turnover of approximately DKK 170 million was discontinued
when ISS terminated the activities by the end of 2002. With effect
from 1 December 2002, 51% of the airside activities in the UK with an
annual turnover of approximately DKK 210 million were sold to local
management.
This completed the restructuring of the aviation business. During the
course of 2002, the remaining aviation-related activities were
transferred to the respective Facility Services country
organisations. As a consequence, the Aviation Business Build was
discontinued as from 1 January 2003.
CarePartner
The first step to improve the profitability of CarePartner was taken
at the end of 2001 with the sale of the kindergarten activities in
Denmark. During 2002, efforts were made to divest or close the
elderly care activities with low profitability. The discontinuation
of the segment was completed when an agreement to sell 51% of the
elderly care activities in CarePartner to local management became
effective 1 November 2002. The sale comprised all activities within
elderly care in Denmark, Finland, Norway and Sweden with an annual
turnover of approximately DKK 860 million.
The sale completed the restructuring of ISS CarePartner. ISS'
remaining care activities (treatment of abuse and psychiatric care)
were merged with ISS' health care activities (clinical physiology,
MR-scanning, X-ray, eye surgery etc.) in a new legal business unit,
ISS Health Care. The new business unit generates annual turnover of
approximately DKK 600 million and an operating margin above the Group
average.
Financial impact
In addition to the aforementioned two segments, ISS divested some
noncore businesses with a total annual turnover of approximately DKK
300 million. An updated list of divestments is available at the
Group's website: www.investor.issworld.com.
The non-recurring costs associated with the divestments and
discontinuation of businesses are included in Other income and
expenses, net under Divestments and closures at a total amount of DKK
110 million. In addition, the disposals led to a goodwill write-down
of DKK 102 million.
With the exception of ISS Brazil, the planned restructuring of the
Group is now implemented. In Brazil, a streamlining process was
initiated in the fourth quarter of 2002 with the aim of bringing the
operating margin in line with that of the rest of the Group. These
efforts are set to continue in 2003.
FINANCIALS
Turnover increased by 9% to DKK 38.0 billion, mainly due to net
growth from acquisitions of 8%. Negative currency impact was with DKK
136 million less than 1% while organic growth amounted to 1%. Gross
organic growth was approximately 5%, but extraordinary trimming of
the contract portfolio in 2001 and 2002 in five countries (Belgium,
Denmark, France, Germany and the Netherlands) reduced growth by
approximately 4%.
Disregarding the five countries, where contract trimming was a tool
in profitability enhancement, the Group's other 33 countries achieved
a total organic growth of more than 6%.
Operating profit before other income and expenses increased by 23% to
DKK 2,010 million, equivalent to an operating margin of 5.3%, up from
4.7% in 2001. This was in line with the expectations announced in the
third quarter report released in November 2002.
Cash flow from operating activities increased by 50% to DKK 2,264
million, and the free cash flow grew 64% to DKK 1,739 million. Thus,
cash conversion was 167% and thereby exceeded 100% for the fourth
consecutive year. Net debt was reduced from DKK 6,317 million to DKK
5,604 million.
REGIONAL DEVELOPMENT
Turnover in Northern Europe, comprising the UK, Sweden, Denmark,
Norway, Finland, Ireland, Iceland and Greenland, increased 13% to DKK
18,243 million. Organic growth in the region was 5%. Excluding
Denmark, which was impacted by contract trimming in relation to the
public sector customers, organic growth was 7%. The operating margin
was 6.1% compared with 6.0% in 2001. The increase was due to
improvements in all countries, particularly in Facility Services. An
exception was Sweden where the operating margin was diluted due to
the acquisition of two low-margin companies at the end of 2001.
Continental Europe includes France, the Netherlands, Germany,
Belgium, Switzerland, Austria, Spain, the Czech Republic, Portugal,
Greece, Italy, Slovenia, Hungary, Poland, Slovakia, Romania,
Luxembourg and Croatia. Turnover in the region increased 7% to DKK
17,794 million and the operating profit was up 42% to DKK 1,024
million. This led to an increase in the operating margin of 1.5
percentage points to 5.8%. All large country organisations achieved
increasing operating margins. Organic growth in Continental Europe
was negative as the continued focus on profitability impacted on
growth in Belgium, France, Germany and the Netherlands.
Overseas, consisting of Asia, South America, Australia and Israel,
represents approximately 5% of Group turnover. Negative currency
adjustments of 14% together with difficult market conditions caused
turnover to decline by 2% compared with 2001. The operating margin
fell from 5.5% to 4.4%, primarily due to the performance in South
America and charges of approximately DKK 12 million incurred in
relation to the restructuring initiated in Brazil in the fourth
quarter of 2002.
+-----------------------------------------------------------------------+
|Operating results by region |
|-----------------------------------------------------------------------|
| |Turnover |Operating profit1) |Operating |
| |DKKm |DKKm |margin |
|-----------+-----------------------+---------------------+-------------|
| | 2002 | 2001 |Change | 2002 | 2001 |Change | 2002 | 2001 |
|-----------+-------+-------+-------+------+------+-------+------+------|
|Northern |18,243 |16,204 | 13% |1,109 | 976 | 14% | 6.1% | 6.0% |
|Europe | | | | | | | | |
|-----------+-------+-------+-------+------+------+-------+------+------|
|Continental|17,794 |16,656 | 7% |1,024 | 719 | 42% | 5.8% | 4.3% |
|Europe | | | | | | | | |
|-----------+-------+-------+-------+------+------+-------+------+------|
|Overseas | 1,947 | 1,992 | (2%)| 85 | 109 | (22%)| 4.4% | 5.5% |
|-----------+-------+-------+-------+------+------+-------+------+------|
|Corporate | - | - | - | (208)| (171)| (22%)|(0.5%)|(0.5%)|
|-----------+-------+-------+-------+------+------+-------+------+------|
| | | | | | | | | |
|-----------+-------+-------+-------+------+------+-------+------+------|
|Group |37,984 |34,852 | 9% |2,010 |1,633 | 23% | 5.3% | 4.7% |
|-----------------------------------------------------------------------|
|1) Before other income and expenses. |
+-----------------------------------------------------------------------+
COMPETENCE ENHANCEMENT
In line with the Group's strategy to advance the facility services
concept by entering and developing certain complementary services,
ISS announced a holding of 9.59% of the Berendsen shares and proposed
a merger with Sophus Berendsen in January 2002. The aim was to enable
the Group to gain a foothold in washroom services. As the merger
proposition was superseded by a public purchase offer from Davis
Service Group Plc., ISS sold its Berendsen shares in April 2002. The
sale resulted in a net gain of DKK 106 million, included in Other
income and expenses, net.
Following the sale of the Berendsen shares, ISS initiated a project
aiming at developing washroom services organically. The project
includes the establishment of a complete range of quality hygiene
solutions to both new and existing customers, fully leveraging the
strength of the ISS organisation. The initiative started up in the UK
and will be launched in other pilot locations during 2003.
To provide the Group with a strategic platform in the pest control
business, ISS acquired the Eurogestion group in April 2002.
Eurogestion is a market leader within pest control with operations in
Australia and eight countries in Europe and Asia. The group had
annual turnover of approximately DKK 900 million and an operating
margin above the Group average. In addition to pest control,
Eurogestion's service offering includes hygiene and washroom
services, pipe draining services and maintenance of ventilation
systems. ISS plans to expand pest control to other parts of the Group
using the current country organisations and customer base. Since the
takeover, a dedicated team has worked on integrating Eurogestion and
is progressing ahead of plan. The financial results are included
under Facility Services in the respective countries.
ACQUISITIONS
The acquisition speed was reduced compared with previous years, both
in terms of turnover and the number of companies acquired. This
reflects that geographical platforms have been established in almost
all European countries and that the operations focused on
integrations and performance improvement. In 2002, a total of 31
acquisitions contributed annual turnover of approximately DKK 1,930
million, equivalent to approximately 6% of the Group's 2001 turnover.
An updated list of acquisitions is available at the Group's website:
www.investor.issworld.com . Acquisition efforts focused on candidates
that strengthen ISS' competences and enhance its service offering.
Acquisitions within Facility Services accounted for the majority of
the acquired turnover in 2002. Five acquisitions within Damage
Control accounted for approximately 3% of total acquired turnover.
Excluding the strategic acquisition of Eurogestion, the remaining 30
companies were acquired at an average price/EBITA (earnings before
interest, tax and goodwill amortisation) multiple of 7.5 before
anticipated synergies. The 30 acquisitions contributed an initial
average return on invested capital of 13.3% before tax and synergies.
With the exception of one minor strategically important acquisition,
all acquisitions are expected to be EVA� (Economic Value Added)
accretive within one year of acquisition.
ISS intends to continue to make bolt-on acquisitions to the extent
that they add value to the business. The primary targets will be
companies that help building the right service offering in each
country and Business Build.
CREDIT RATING
In April 2002, ISS A/S received a long-term credit rating of BBB+
with Stable Outlook from Standard & Poor's.
CHANGES IN MANAGEMENT
During the year, three members of Group Management were promoted to
the Executive Management Board. Thorbj�rn Graarud was appointed COO,
Northern Europe and Business Builds, Flemming Schandorff was
appointed COO, Continental Europe and Overseas, and Karsten Poulsen
was appointed CFO. Stuart W. Graham (COO) and Carsten N. Knudsen
(CFO) resigned during the year.
FINANCIAL REVIEW
The financial information provided in this report has been prepared
in accordance with the same accounting principles as were applied in
2001 except for recognition of derivatives and measurement of Other
securities and investments made pursuant to implementation of the
Danish Financial Statements Act 2001 which took effect on 1 January
2002. Comparative figures are restated accordingly. A full
description of the ISS accounting policies is available on page 77-83
in the Annual Report 2002.
PROFIT AND LOSS ACCOUNT
Turnover increased by 9% to DKK 37,984 million The increase comprised
organic growth of 1%, net growth from acquisitions of 8% and slightly
negative currency adjustments. The currency adjustments were
primarily attributable to developments of the Brazilian Real and
currencies in Asia related to the US dollar. As a result of the
contract portfolio review, a number of contracts that did not meet
profitability requirements were terminated, primarily in Belgium,
Denmark, France, Germany and the Netherlands. The contract trimming
carried out in 2001 and in 2002 reduced organic growth by
approximately 4% to 1% in 2002. Disregarding the five countries where
extraordinary contract trimming has been a tool in profitability
enhancement, aggregate organic growth for the rest of the Group was
more than 6%.
+--------------------------------------------------------------+
| Turover growth |
|--------------------------------------------------------------|
| % | Organic | Acqusitions | Currency | Total | |
| | | (net) | | | |
|---------------+---------+-------------+----------+-------| |
| Group | 1 | 8 | 0 | 9 | |
|---------------+---------+-------------+----------+-------| |
| | | | | | |
|---------------+---------+-------------+----------+-------| |
| Business Area | | | | | |
|---------------+---------+-------------+----------+-------| |
| Facility | | | | | |
| Services | 1 | 9 | (1) | 9 | |
|---------------+---------+-------------+----------+-------| |
| Damage | | | | | |
| Control | 12 | 18 | 2 | 32 | |
|---------------+---------+-------------+----------+-------| |
| Health Care | 7 | 3 | 1 | 11 | |
|---------------+---------+-------------+----------+-------| |
| Food | | | | | |
| Services | (3) | 0 | 0 | (3) | |
|---------------+---------+-------------+----------+-------| |
| Aviation | (3) | (14) | 0 | (17) | |
|---------------+---------+-------------+----------+-------| |
| | | | | | |
|---------------+---------+-------------+----------+-------| |
| Regions | | | | | |
|---------------+---------+-------------+----------+-------| |
| Northern | | | | | |
| Europe | 5 | 7 | 1 | 13 | |
|---------------+---------+-------------+----------+-------| |
| Continental | | | | | |
| Europe | (3) | 10 | 0 | 7 | |
|---------------+---------+-------------+----------+-------| |
| Overseas | 2 | 10 | (14) | (2) | |
+--------------------------------------------------------------+
Facility Services contributed 87% of turnover, while the Business
Builds, including Innovation, contributed 13%. Organic growth in
Facility Services was 1% as contract trimming had a significant
impact on this part of the business. Damage Control saw double-digit
organic growth and did acquisitions while divestments and the wind up
of aviation and elderly care activities reduced overall Business
Builds growth.
Geographically, turnover increased by 13% in Northern Europe and 7%
in Continental Europe, while Overseas posted a 2% decline relative to
last year due to currency adjustments. Ireland, Norway and Sweden
reported the steepest growth rates, ranging from 24% to 26%.
Operating profit before other income and expenses was up by 23% to
DKK 2,010 million, equivalent to an operating margin of 5.3%. This
was an enhancement relative to 2001 when the operating margin was
4.7%.
Facility Services: The operating margin in Facility Services
increased from 5.2% to 5.9%, comprising 6.0% in Northern Europe and
Continental Europe and 4.4% in Overseas.
Facility Services in Northern Europe enhanced its performance
relative to last year due to progress by all country organisations in
the region, bar Sweden. The operating margin in Sweden was, as
expected, affected by lower margins in two companies, Ecuro and
TraffiCare, which were both acquired in 2001. Facility Services in
Finland maintained momentum, posting the highest operating margin of
the Group's larger Facility Services organisations at 7.8%.
In Continental Europe, all large Facility Services organisations
reported improved operating margins relative to 2001. Thus, the
consolidated operating margin was lifted from 4.6% to 6.0%.
Throughout the region profitability was the focus area of the year.
The best progress performance was seen in Belgium and the Netherlands
where profitability enhancing measures caused operating margins to
more than double.
The Overseas region was marked by difficult market conditions in some
countries. Together with the impact of a restructuring process
initiated in the fourth quarter in Brazil, which included
non-recurring charges of approximately DKK 12 million, the operating
margin decreased from 5.5% in 2001 to 4.4%.
Business Builds: Damage Control and Food Services performed as
expected, posting operating margins of 6.8% and 6.9%, respectively.
Health Care enhanced its operating margin to 7.7%, but failed to meet
expectations because of low profitability in the elderly care
activities, which were divested in November 2002. Aviation reported a
negative operating margin of 1.7%. Following the restructuring that
took place during the course of the year, this Business Build has
been discontinued.
Staff costs of DKK 25,705 million was an increase of 5% on last year.
Relative to turnover, staff costs decreased from 69.9% to 67.7%. The
opposite development was reflected in Costs of goods sold of DKK
2,825 million which was equal to 7.4% of turnover, an increase from
6.9% in 2001. Relative to turnover Other operating expenses of DKK
6,841 million increased from 16.9% to 18.0%. This reflected a change
in ISS' service delivery, since services such as pest control and
landscaping are less staff-intensive relative to turnover than other
facility services. Similarly, more subcontractors are used in the
Damage Control business relative to the facility services part of
ISS.
Other income and expenses, net amounted to a net income of DKK 5
million. The gross amount of other income was DKK 138 million, of
which DKK 106 million related to the gain on the sale of the shares
in Sophus Berendsen, net of expenses. As the transaction was of a
strategic nature and not a financial investment, ISS has included the
gain in Other income and expenses, net. ISS believes that recognising
this amount under Financial income and expenses, net, would not
provide a true and fair view, as doing so would impact relevant
ratios and key figures, such as interest coverage. Income of DKK 15
million relating to the restructuring of a PFI-project and a gain on
sale of properties of DKK 17 million were also included.
Other expenses related primarily to losses on divestments and
closures of activities and segments. The most significant item was
the loss on the discontinuation of aviation businesses amounting to a
total of DKK 75 million. This comprised losses relating to the sale
of Nordic Aero and the airside activities in the UK as well as the
closure of airside activities in the Netherlands. The loss on sale of
the elderly care segment amounted to DKK 25 million. The majority of
the remaining other expenses incurred in 2002 related to a
downscaling project at head office amounting to DKK 13 million.
Income from associates reflected ISS' share of the results, primarily
in the partly disposed elderly care and aviation businesses.
Net financial expenses increased to DKK 361 million from DKK 310
million in 2001, primarily because of higher interest-bearing debt in
the beginning of the year due to acquisitions as well as the holding
of the Sophus Berendsen shares. The gross amount of debt was mostly
at floating interest rates, enabling the Group to take advantage of
the falling interest rates in 2002. Interest income, which amounted
to DKK 142 million against DKK 152 million in 2001, primarily
reflected the return on listed, Danish mortgage bonds. The Group
realised net exchange losses of DKK 1 million compared with a gain of
DKK 15 million the year before. The interest coverage was 7.2
compared with 7.0 in 2001.
Tax on ordinary profit before goodwill amortisation was DKK 528
million, an increase of DKK 126 million over 2001. The effective tax
rate was 32.1% against 30.9% in 2001. The increase was primarily
attributable to two tax issues in France and Greece which arose in
the fourth quarter of 2002.
Ordinary profit before goodwill amortisation was up by 24% to DKK
1,115 million.
Goodwill amortisation was DKK 890 million against DKK 695 million in
2001. Goodwill amortisation was impacted by a write-down of goodwill
related to discontinued businesses of DKK 102 million.
Net profit was DKK 246 million against DKK 222 million in 2001.
Earnings per share (before goodwill amortisation) increased by 19% to
DKK 25.8.
+----------------------------------------------------------------------+
|Operating results by business area 1) |
|----------------------------------------------------------------------|
| |Turnover |Operating profit 2) |Operating |
| |DKKm |DKKm |margin |
|----------+-----------------------+---------------------+-------------|
| | 2002 | 2001 |Change | 2002 | 2001 |Change | 2002 | 2001 |
|----------+-------+-------+-------+------+------+-------+------+------|
|Facility |32,871 |30,097 | 9% |1,933 |1,576 | 23% | 5.9% | 5.2% |
|Services | | | | | | | | |
|----------+-------+-------+-------+------+------+-------+------+------|
|Damage | 1,731 | 1,307 | 32% | 118 | 104 | 13% | 6.8% | 8.0% |
|Control | | | | | | | | |
|----------+-------+-------+-------+------+------+-------+------+------|
|Health | 1,288 | 1,156 | 11% | 100 | 45 | 122% | 7.7% | 3.8% |
|Care | | | | | | | | |
|----------+-------+-------+-------+------+------+-------+------+------|
|Food | 1,058 | 1,088 | (3%)| 73 | 68 | 7% | 6.9% | 6.3% |
|Services | | | | | | | | |
|----------+-------+-------+-------+------+------+-------+------+------|
|Aviation | 856 | 1,030 | (17%)| (15)| (8)| (88%)|(1.7%)|(0.9%)|
|----------+-------+-------+-------+------+------+-------+------+------|
|Innovation| 180 | 174 | 3% | 9 | 19 | (53%)| 5.0% |10.9% |
|----------+-------+-------+-------+------+------+-------+------+------|
|Corporate | - | - | - | (208)| (171)| (22%)|(0.5%)|(0.5%)|
|----------+-------+-------+-------+------+------+-------+------+------|
| | | | | | | | | |
|----------+-------+-------+-------+------+------+-------+------+------|
|Group |37,984 |34,852 | 9% |2,010 |1,633 | 23% | 5.3% | 4.7% |
+----------------------------------------------------------------------+
1) A reclassification between segments has been made compared with
2001. Comparative figures have been restated. Please see last page of
this report for more details.
2) Before other income and expenses.
CASH FLOW STATEMENT
The free cash flow increased 64% to DKK 1,739 million from DKK 1,058
million in 2001. The cash flow from operating activities of DKK 2,264
million against DKK 1,510 million last year was negatively impacted
by approximately DKK 60 million due to a change in the payment terms
relating to withheld taxes (P.A.Y.E.) in Denmark. However, this was
more than offset by a positive working capital development, including
a decrease of two debtor days compared with 2001.
Cash conversion is an important element of the bonus schemes
contained in the people model of create2005. In essence, cash
conversion is a measure of each individual business areas' ability to
convert profit into cash by focusing on working capital. In 2002, the
Group ran a number of country-based projects in order to optimise the
working capital with particular emphasis on outstanding debtors. The
purpose was to create a faster and more effective process from the
time the initial contact with the customer is established until the
customer's payment is registered in the Group's bank account. This
has improved internal paper-flows, the use of information technology
and the procedure for following up on outstanding debtors. The
projects will continue.
To provide the basis for the constant monitoring of the cash flow,
ISS has also developed a cash flow forecast system. Each month, the
operating companies report a forecast of their liquidity position for
the coming month to Corporate Treasury. Forecasts are continuously
held against actual cash flows. The aim is to reduce the reaction
time, if the actual cash flow deviates from the forecast, and to stay
abreast of the liquidity netting between companies.
In 2002, cash conversion was 167%. Thus, it became the fourth
consecutive year with cash conversion above 100%.
Acquisition of businesses, net primarily included the acquisitions
made in 2002 and secondarily deferred payments from acquisitions
carried out in previous years. The most significant acquisition of
the year was that of Eurogestion.
Investments in intangible and tangible assets, net (excluding
goodwill) relative to turnover amounted to 1.4%, while depreciation
amounted to 1.6%.
Proceeds from the issuance of share capital of DKK 569 million
primarily related to the share issue in connection with the
acquisition of Eurogestion. In addition, gross proceeds of DKK 53
million from the issuance of employee shares in the spring of 2002
are included.
BALANCE SHEET
Total assets amounted to DKK 22,412 million as at 31 December 2002
compared with DKK 22,419 million at the end of 2001. Goodwill
increased to DKK 12,669 million due to acquisitions. ISS carries out
impairment tests of capitalised goodwill on a quarterly basis. The
value is written down if the carrying value of goodwill exceeds the
higher of estimated net selling price and estimated value in use. The
impairment tests as at 31 December 2002 did not result in write-downs
apart from what was related to discontinued activities as described
above.
Investments in associates stood at DKK 35 million as at 31 December
2002, of which more than half related to the 49% stakes in
CarePartner AB and Fernley Airport Services Ltd. They represent the
minority positions ISS kept after the sale of the elderly care
business and the airside aviation activities in the UK.
Other receivables include a contractual claim on the Group's former
auditors, Arthur Andersen LLP, based on the settlement agreement
described in the Annual Report 1997. The claim is the last instalment
of the settlement. The instalment, which falls due for payment on 30
April 2003, was taken to income in 1998 at a discounted value of DKK
12 million (included in Other income and expenses, net). Neither
Arthur Andersen LLP nor Arthur Andersen in Denmark, who may be
co-liable for the claim, has initiated insolvency proceedings.
Accordingly, no provision has been made.
Shareholders' equity increased by DKK 710 million to DKK 7,331
million at 31 December 2002, equivalent to 33% of total assets
against 30% at the end of 2001. The increase was attributable to the
retained profit for the year and the proceeds received from the two
share issues in the spring of 2002. Currency adjustments, relating to
investments in foreign subsidiaries net of hedges, reduced equity by
DKK 106 million as at 31 December 2002.
Total provisions amounted to DKK 1,097 million. Of this amount, DKK
216 million related to Pensions and similar obligations.
The majority of the Group's pension plans are defined contribution
plans. Contributions to such plans are accrued and expensed.
In some countries, mainly in the Netherlands, Norway, Sweden and the
UK, ISS has defined benefit plans. ISS uses the accounting principle
known as the corridor approach in the recognition of actuarial gains
and losses to ensure that random, positive as well as negative
changes in the obligations are levelled out over a number of years.
This implies that any actuarial gain or loss of each individual plan
exceeding 10% of the higher of plan assets and plan liabilities at
the beginning of the year is amortised on a straight line over the
expected average remaining working lives of the employees in the
schemes. ISS' time horizon in this respect is 10-15 years.
The net liability for the defined benefit plans amounted to DKK 189
million, an increase from DKK 82 million in 2001. DKK 96 million of
the increase was attributable to a reclassification of provisions
related to pension plans in France, Hong Kong, Italy, Japan, the UK
and one scheme in Norway, previously included in Other pensions and
obligations.
Pension costs related to defined benefit plans amounted to DKK 85
million in 2002, an increase over 2001 of DKK 1 million. Based on the
current discount rates ranging between 2.5% and 6%, pension costs are
expected to amount to approximately DKK 97 million in 2003. A change
in the discount rate of half a percentage point is estimated to
increase or decrease, as the case may be, the cost in 2003 to
approximately DKK 112 million or approximately DKK 96 million, all
other things being equal.
Other provisions were DKK 573 million as at 31 December 2002.
Provisions associated with the integration of acquired companies
amounted to DKK 77 million, a decrease of DKK 75 million over 2001.
The remaining provisions comprise various costs incurred in the
ordinary course of business, e.g. labour related costs, provisions
for operational issues, contract closures etc.
Net interest-bearing debt was DKK 5,604 million against DKK 6,317
million in 2001.
Return on equity before tax amounted to 23.6%, an improvement over
2001 of 2.5 percentage points due to an increase in operating profit.
Return on equity before tax is measured as ordinary profit before tax
and goodwill amortisation relative to average total equity.
Return on operating capital employed before tax was 319%, up from
233% in 2001. As at 31 December 2002, the Group posted operating
capital employed of DKK 420 million compared with DKK 870 million in
2001. Return on operating capital employed before tax is measured on
the basis of operating profit as a percentage of average operating
capital employed. Operating capital employed is derived from
non-interest bearing assets less non-interest bearing provisions and
non-interest-bearing current liabilities (excluding goodwill,
associates and assets and liabilities related to deferred tax and
corporation tax).
FUNDING
The primary aim of the Group's funding strategy is to ensure
sufficient financial flexibility to support the strategy plan,
create2005. Thus, ISS strives to secure access to various sources of
financing and to have a sufficiently long commitment period on
long-term borrowing facilities.
The Group's funding is primarily made through its core bank group,
which comprises 12 international banks. The borrowing facilities are
based on bilateral agreements with individual core banks using
uniform standard documentation. The Group aims to renegotiate and
extend the loan agreements on an annual basis in order to ensure
sufficient borrowing power. At 31 December 2002, ISS had total
long-term credit facilities of DKK 11.1 billion and had drawn DKK 5.5
billion. The comparative figures for 2001 were DKK 11.4 billion and
DKK 5.7 billion, respectively.
Financing structure
In January 2002, three 100%-owned regional holding companies (ISS
Europe A/S, ISS Nordic A/S and ISS Overseas A/S) were merged into one
company, ISS Global A/S, which owns - directly or indirectly - the
Group's operating companies. The majority of the Group's external
borrowing is centralised in ISS Global A/S, which functions as an
intra-group bank for the operating companies.
To ensure that surplus liquidity and debt is netted on a country
basis, country-based cashpools with overdraft facilities are
established in countries where the Group has more than one operating
company. Countries place their liquidity surpluses on deposits with
ISS Global A/S, which uses it to repay debt. Thus, excess liquidity
is netted against loans and the external funding requirements are
kept at a minimum.
Capital planning
Capital planning aims at minimising the cost of capital subject to
maintaining financial flexibility. To ensure the right mix of equity
and debt in the intermediate term, ISS applies a number of financial
planning tools based on five-year plans for the use and generation of
capital under different growth scenarios.
The Group evaluates its credit-worthiness on an ongoing basis. In
this assessment, the financial position is measured against the
following key figures:
* Debt to book equity
* Net debt/EBITDA
* Interest coverage
As at 31 December 2002, net debt to equity was 76% compared with 95%
at the end of 2001. Interest coverage was 7.2%, up from 7.0% in 2001.
Net debt relative to EBITDA was 214%.
Credit rating
In April 2002, ISS A/S received a long-term credit rating of BBB+
with Stable Outlook from Standard & Poor's.
Financial risk management
The Group's financial risk management is based on policies approved
by the Board of Directors, specifying guidelines and risk limits for
the Group's financial transactions. ISS uses derivatives to hedge
financial risks and can invest free liquidity in securities. Hedging
of financial risks are managed at corporate level.
Interest rate risk
Duration reflects the effect of a simultaneous increase or decrease
in the general level of interest rates for the currencies included in
the debt portfolio. As at 31 December 2002, the duration of net debt
was approximately 0.1 year. Thus, all other things being equal, an
increase (decrease) of one percentage point in the relevant interest
rates would reduce (increase) the market value of net debt by
approximately DKK 6 million.
The Group's loan portfolio primarily consists of loans with floating
interest rates. To manage the duration on the net debt, ISS uses
interest rate swaps, futures and options. ISS has hedged the interest
rate on a part of the loan portfolio for 2003 by using interest rate
options. The deferred gain or loss on the interest rate instruments
will in accordance with the matching principle be charged as a
financial item at the time the hedged interest expense is recognised
in the profit and loss account. In addition to the deferred loss on
interest rate futures as at 31 December 2002 of DKK 5 million, a gain
of DKK 3 million realised in 2002 relating to fixing of interest
rates for 2003 will be recognised in the profit and loss account for
2003.
Currency risk can be classified in three categories: economic,
transactions and translation.
In practical terms the economic currency risk is somewhat limited for
ISS, as all of ISS' competitors face a similar currency cost
structure to that of ISS.
The service industry is characterised by a relatively low level of
transaction risk, since the core product is produced and delivered in
the same local currency without exposure from imported components.
ISS' transaction risk primarily relates to payment of royalties to
ISS A/S, which are made in local currency. Thus, a currency risk
exists in relation to the exchange of these payments into DKK.
The main currency exposure relates to the risk involved in
translating the profit and loss accounts of foreign subsidiaries into
Danish kroner based on average exchange rates for the year and
translating the investment in foreign subsidiaries into DKK based on
year-end exchange rates.
Corporate Treasury may choose to hedge the currency exposure on
foreign investments by funding such assets in local currencies or
entering into foreign exchange transactions.
In 2002, the currencies in which the Group's turnover was denominated
depreciated by an average of 0.4% relative to Danish kroner, reducing
the Group's turnover by DKK 136 million. Currency movements affected
the operating profit by less than DKK 1 million. In 2002, the effect
of the translation of investments in foreign subsidiaries, including
the effect of hedge transactions, reduced equity by DKK 106 million.
Credit risk represents the accounting loss that would be recognised
if counterparties failed to perform as contracted. Losses on bad debt
relating to an individual customer or counterparty have historically
been relatively low. To reduce exposure to credit risk, ongoing
credit evaluations of the financial condition of the Group's
counterparties are performed.
SUBSEQUENT EVENTS
Apart from the events described in the Annual Report 2002, Group
Management is not aware of events subsequent to 31 December 2002,
which are expected to have a material impact on the ISS Group's
financial position or outlook.
PROPOSALS FOR THE ANNUAL GENERAL MEETING
At the annual general meeting to be held on 9 April 2003, the Board
of Directors will propose to the shareholders that ISS resumes
dividend payment and appropriate the net profit for 2002 of DKK 246
million to the effect that DKK 88 million is paid out as dividends
and DKK 158 million is allocated to reserves. Please refer to
"Dividend for 2002" below.
In line with the objective of create2005 of increased employee
ownership, the Board of Directors will seek shareholder authorisation
to implement a new warrant programme for managers, comprising 400,000
warrants, equivalent to DKK 8 million nominal value. The
authorisation would be valid for five years.
Arne Madsen, Chairman of the Board for 12 years and a member since
1977, has informed the Board of Directors that he will not seek
re-election to the Board as he will reach the age of 70 before the
expiry of a new election period. The Board of Directors will propose
to the shareholders at the annual general meeting that Claus H�eg
Madsen be elected as new member of the Board of Directors. Erik
S�rensen and Peter Lorange stand for election and both are
recommended for re-election.
DIVIDEND FOR 2002
ISS continuously monitors its capital structure. The aim is to strike
a balance between optimising the cost of capital and ensuring a
credit-worthiness that allows flexible access to a range of debt
instruments.
ISS still sees value enhancing growth opportunities. Given its
current financial situation ISS also sees the opportunity to resume
dividend payment. The Board of Directors proposes that a dividend of
DKK 2 per share (36% of net profit) be paid in respect of the 2002
financial year.
FUTURE DIVIDEND POLICY
Accounting rules concerning goodwill amortisation affect ISS' ability
to consolidate equity through retained earnings. The International
Accounting Standards Board (IASB) is currently considering a change
of these rules as set out in the exposure draft (ED3: Business
Combinations). If it had been in effect for 2002 in its current form,
it would have meant increased net profit for ISS.
Provided ED3 is adopted by the IASB in its current form and the
financial situation of ISS develops as planned, the Board of
Directors will seek to increase the dividend in the years ahead.
The Board will generally determine payout ratios as a percentage of
the company's net profit. Decisions on the payout ratio will, among
other factors, take into consideration the following long-term
targets: An equity ratio of 35-40%, satisfactory interest coverage
and a debt to equity ratio not exceeding one. Should ISS at any given
time find it appropriate to adjust its capital structure further, a
share buy-back would likely be the preferred method.
OUTLOOK
The outlook set out below should be read in conjunction with
"Forward-looking statements" and the description of risk factors set
out on pages 34-39 in the Annual Report 2002.
Turnover in the continuing business is expected to grow by 2-4% from
approximately DKK 35.7 billion (see box). The full-year effect of
acquisitions in 2002 and the carry-over effect of contract trimming
approximately cancel out.
Operating profit before other income and expenses is expected to grow
by 2-6% from DKK 2,010 million in 2002. Ordinary profit before tax
and goodwill amortisation is expected to increase by 9-11% from DKK
1,643 million in 2002.
Goodwill amortisation, including the effect of acquisitions and
divestments announced up to 13 March 2003, is expected to be
approximately DKK 880 million.
+------------------------------------------------+
| Turnover, continuing business | | |
| Approximate numbers, DKKbn | | |
|--------------------------------+-------+-------|
|--------------------------------+-------+-------|
| Turnover 2002 | | 38.0 |
|--------------------------------+-------+-------|
| Divested activities | | (1.5) |
|--------------------------------+-------+-------|
| Estimated currency adjustments | | (0.8) |
|--------------------------------+-------+-------|
|--------------------------------+-------+-------|
| Adjusted turnover, | | |
| continuing business | | 35.7 |
+------------------------------------------------+
APPENDICES
ISS' consolidated profit and loss account, consolidated cash flow
statement, consolidated balance sheet and consolidated statement of
movements in equity are attached.
CONFERENCE CALL
A combined webcast and telephone conference hosted by Eric S.
Rylberg, CEO, and Karsten Poulsen, CFO, will be held on Thursday 13
March 2002 at 14:00 CET (13:00 UK time). The webcast is available
from the Group's website, www.issworld.com.
The telephone numbers for the conference are:
+45 70 26 50 40 (Denmark)
+44 207 769 64 32 (UK)
+353 1240 54 32 (Ireland)
+1 847 413 3430 (USA).
FORWARD-LOOKING STATEMENTS
This Financial Report contains forward-looking statements within the
meaning of the US Private Securities Litigation Act of 1995 and
similar laws in other countries regarding expectations to the future
development, in particular future sales, operating efficiencies and
business expansion. Such statements are subject to risks and
uncertainties as various factors, many of which are beyond ISS'
control, may cause the actual development and results to differ
materially from the expectations contained in the Financial Report.
Factors that might affect such expectations include, among others,
overall economic and business conditions, fluctuations in currencies,
the demand for ISS' services, competitive factors in the service
industry, operational problems in one or more of the Group's business
units and uncertainties concerning possible acquisitions and
divestments. Reference is also made to the description of risk
factors on pages 34-39 in the Annual Report 2002.
GOVERNING TEXT
The Annual Report has been translated from Danish into English. The
Danish text shall be the governing text for all purposes and in case
of any discrepancy the Danish version shall be applicable.
In accordance with the Listing Rules on the London Stock Exchange,
please be informed that copies of the Annual Report 2002 are
available to the public in the United Kingdom from World Investor ink
Ltd., Hook Rise South, Surbiton, Surrey KT67LD, Tel. +44 20 8974
0200.
Consolidated Profit and Loss Account
1 January - 31 December. Amounts in DKKm
2002 2001 2000
Turnover 37,984 34,852 28,719
Staff costs (25,705) (24,365) (20,457)
Cost of goods sold (2,825) (2,422) (1,670)
Other operating expenses (6,841) (5,881) (4,670)
Depreciation and amortisation (603) (551) (468)
Operating profit before other income 2,010 1,633 1,454
and expenses
Other income and expenses, net 5 (24) (3)
Operating profit 2,015 1,609 1,451
Income from associates (11) 1 0
Financial income and expenses, net (361) (310) (244)
Ordinary profit before tax and 1,643 1,300 1,207
goodwill amortisation
Tax on ordinary profit before goodwill (528) (402) (377)
amortisation
Ordinary profit before goodwill 1,115 898 830
amortisation
Goodwill amortisation (890) (695) (614)
Tax effect of goodwill amortisation 39 39 18
Minority interests (18) (15) (24)
Net profit from ordinary activities 246 227 210
Discontinued business, net of tax - (5) -
Net profit for the year 246 222 210
Earnings per share before goodwill 25.8 21.6 21.1
amortisation (DKK)
Consolidated Statement of Cash Flows
1 January - 31 December. Amounts in DKKm
2002 2001 2000
Operating profit before other income and 2,010 1,633 1,454
expenses
Depreciation and amortisation 603 551 468
Changes in working capital 1) 412 52 (125)
Changes in other provisions 1) (98) 4 (10)
Interest paid 1) (333) (328) (225)
Corporation tax paid 1) (263) (377) (294)
Payments related to other income and (67) (25) (3)
expenses
Cash flow from operating activities 2,264 1,510 1,265
Acquisition of businesses, net (1,898) (3,098) (3,003)
Divestment of businesses, net 16 13 (1)
Investments in intangible and tangible (525) (452) (391)
assets, net 1)
Investments in financial assets, net 1) 269 (180) (21)
Cash flow from investing activities (2,138) (3,717) (3,416)
Financial payments, net 2) (782) 2,131 916
Proceeds from issuance of share capital 569 789 1,042
3)
Purchase/disposal of own shares, net (5) - 12
Minority interests (5) (15) (16)
Cash flow from financing activities (223) 2,905 1,954
Total cash flow (97) 698 (197)
Cash and cash equivalents at beginning of 1,023 324 515
year
Total cash flow (97) 698 (197)
Foreign exchange adjustments (35) 1 6
Cash and cash equivalents at end of year 891 1,023 324
1) Net of effects of acquisitions and divestments
2) Proceeds from bank debt less repayment of bank debt
3) Including shares issued as payment for the acquisitions of Klinos
SA and Jydsk Reng�ring a/s in 2000
Consolidated Balance Sheet
At 31 December. Amounts in DKKm
Assets 2002 2001 2000
Goodwill 12,669 12,022 9,522
Software and other intangible assets 194 108 57
Total intangible assets 12,863 12,130 9,579
Land and buildings 168 162 200
Vehicles, fixtures, service and IT 1,341 1,501 1,162
equipment
Total tangible assets 1,509 1,663 1,362
Investments in associates 35 9 15
Receivables from associates 25 - -
Other securities and investements 45 233 34
Other receivables 160 163 118
Deferred tax assets 360 299 216
Total financial assets 625 704 383
Total fixed assets 14,997 14,497 11,324
Inventories 170 147 127
Accounts receivable 5,517 5,970 4,741
Contract work in progress 113 91 66
Other receivables 229 360 260
Prepayments and accrued income 389 330 322
Corporation tax 106 1 -
Securities 618 643 -
Liquid funds 273 380 324
Total current assets 7,415 7,922 5,840
Total assets 22,412 22,419 17,164
Equity and liabilities 2002 2001 2000
Share capital 878 844 803
Share premium account 583 48 1,003
Reserves 5,870 5,729 3,872
Total equity 7,331 6,621 5,678
Minority interests 88 57 47
Pensions and similar obligations 216 213 210
Deferred tax liabilities 308 206 122
Other provisions 573 547 404
Total provisions 1,097 966 736
Long-term debt 5,642 5,853 3,809
Current portion of long-term debt 1 6 3
Interest-bearing loans and borrowings 852 1,481 869
Prepayments from customers 104 60 53
Trade creditors 1,290 1,328 883
Corporation tax 259 - 59
Tax withholdings, VAT etc. 1,977 2,110 1,851
Accrued wages and holiday allowances 2,520 2,604 2,251
Other payables and accrued expenses 1,251 1,333 925
Total current liabilities 8,254 8,922 6,894
Total long-term debt and current 13,896 14,775 10,703
liabilities
Total equity and liabilities 22,412 22,419 17,164
Consolidated Statement of Equity
At 31 December. Amounts in DKKm
Share Share Retained Own Foreign Total
capital Premium earnings shares exch. equity
Equity adj.
2000
Equity at 1 764 2,568 1,161 (78) - 4,415
January 2000
before
restatement
Effect of change - - 0 - - 0
in accounting
policy
Foreign exch.
adj. of foreign
subsidiaries etc.
in the years
1997-1999 - - (44) - 44 -
Equity at 1 764 2,568 1,117 (78) 44 4,415
January 2000
Transfer - (2,568) 2,568 - - -
Foreign exch. - - - - 4 4
adj. of foreign
subsidiaries etc.
Deferred - - (5) - - (5)
gains/losses on
hedging
derivatives
Share issue 39 1,003 - - - 1,042
Purchase/disposal - - - 12 - 12
of own shares,
net
Net profit for - - 210 - - 210
the year
Equity at 31 803 1,003 3,890 (66) 48 5,678
December 2000
2001
Equity at 1 803 1,003 3,895 (66) 48 5,683
January 2001
before
restatement
Effect of change - - (5) - - (5)
in accounting
policy
Equity at 1 803 1,003 3,890 (66) 48 5,678
January 2001
Transfer - (1,703) 1,699 4 - -
Foreign exch. - - - - (52) (52)
adj. of foreign
subsidiaries etc.
Deferred - - (16) - - (16)
gains/losses on
hedging
derivatives
Share issue 34 700 - - - 734
Employee shares 7 48 - - - 55
Net profit for - - 222 - - 222
the year
Equity at 31 844 48 5,795 (62) (4) 6,621
December 2001
2002
Equity at 1 844 48 5,816 (62) (4) 6,642
January 2002
before
restatement
Effect of change - - (21) - - (21)
in accounting
policy
Equity at 1 844 48 5,795 (62) (4) 6,621
January 2002
Foreign exch. - - - - (106) (106)
adj. of foreign
subsidiaries etc.
Deferred - - 6 - - 6
gains/losses on
hedging
derivatives
Share issue 26 492 - - - 518
Employee shares 8 43 - - - 51
Purchase/disposal - - (39) 34 - (5)
of own shares,
net 1)
Net profit for - - 246 - - 246
the year 2)
Equity at 31 878 583 6,008 (28) (110) 7,331
December 2002
1) Including options settled.
2) At 31 December 2002, retained earnings included DKK 88m in proposed
dividends (2001: nil).
Definitions
Cash conversion, % = (Free cash flow x 100) / Ordinary profit
before goodwill amortisation
Debt to total enterprise = (Interest-bearing debt, net x 100) /
value ratio, % Enterprise value
Debt to book equity ratio, = (Interest-bearing debt, net x 100) /
% Total equity
Dividends per share = Dividends declared / Average number of
shares
Earnings per share before = Ordinary profit before goodwill
goodwill amortisation amortisation /Average number of shares
Earnings per share = Net profit from ordinary activities /
Average number of shares
Enterprise value = Interest-bearing debt, net + Market
capitalisation
Equity ratio, % = (Total equity x 100) / Total assets
Cash flow from operating activities
Free cash flow = - Investments in intangible and tangible
assets, net
Free cash flow per share = Free cash flow / Average number of
shares
Long-term debt + Current portion of
Interest-bearing debt, net = long-term debt
+ Interest-bearing loans and borrowings
- Liquid funds - Securities
(Operating profit before other income
and expenses
Interest coverage = + Depreciation and
amortisation)/Financial income and
expenses, net
Operating margin, % = (Operating profit before other income
and expenses x 100) / Turnover
Non-interest-bearing assets (excluding
Goodwill, Investments in associates,
Receivables from associates, Deferred
Operating capital employed = tax assets and Corporation tax)
- non-interest-bearing provisions
(excluding Deferred tax liabilities)
- non-interest-bearing current
liabilities (excluding Corporation tax)
Return on equity before (Ordinary profit before tax and goodwill
tax, % = amortisation x 100) / Average Total
equity
Return on operating (Operating profit x 100) / Average
capital employed before = Operating capital employed
tax, %
Compared with 2001, the following reclassifications have been made:
* ISS Data transferred from Facility Services to ISS Innovation
* Food Services in Belgium and the UK carved out from Facility
Services to ISS Food Services
* Food Services in Germany transferred from ISS Food Services to
Facility Services
* Damage Control in Belgium carved out from Facility Services to
ISS Damage Control
Comparative figures are restated accordingly.
- ---END OF MESSAGE---
Copyright � Hugin ASA 2003. All rights reserved.