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To The Copenhagen Stock Exchange and The London Stock Exchange
Stock Exchange Release No. 10/03
22 May 2003
Turnover -4% (currency effect -2%, discont. business
-5%)
Operating profit +3% (+5% at unchanged exchange rates)
Operating margin 4.6% (up 0.3%)
Free cash flow DKK 17m (up DKK 254m)
Profit before (excluding Other income, for 2002
goodwillamort. +10% containing
gain on Sophus Berendsen-shares)
Further information
Eric S. Rylberg
Chief Executive Officer
Karsten Poulsen
Chief Financial Officer
Telephone: +45 38 17 00 00
Amounts in DKKm (unless otherwise Q1 Q1 Year
stated) 2003 2002 2002
Key figures
Turnover 8,917 9,300 37,984
Operating profit 2) 406 396 2,010
Financial income and (72) (90) (361)
expenses, net
Ordinary profit before other
income/expenses
and goodwill amortisation 3) 227 207 1,112
Ordinary profit before goodwill 227 277 1,115
amortisation 3)
Net profit3) 14 90 246
Cash flow from operating 127 (136) 2,264
activities
Free cash flow 17 (237) 1,739
Total assets 23,495 23,431 22,412
Goodwill 12,435 11,970 12,669
Interest-bearing debt, net 5,742 7,044 5,604
Total equity 7,297 6,740 7,331
Share information
Number of shares end of 43,928 42,217 43,928
period, thousands
Average number of shares, 43,772 42,067 43,279
thousands
Share price end of period, 220 432.5 255
DKK
Market capitalisation end of period, 9,664 18,259 11,202
DKKm
Financial ratios
Operating margin, % 4.6 4.3 5.3
Interest coverage 4) 7.6 6.0 7.2
EPS before other income/expenses and 5.2 4.9 25.9
goodwill amortisation, DKK 3)
EPS before goodwill amortisation, DKK 5.2 6.6 25.8
3)
Free cash flow per share, 0.4 (5.6) 40.2
DKK
Equity ratio, % 31.1 28.8 32.7
Debt to book equity ratio, 78.7 104.5 76.4
%
Debt to total enterprise 37.3 27.8 33.3
value ratio, %
1) The financial statements for the first quarter are unaudited and
have been prepared in accordance with the same accounting policies as
were applied in the 2002 financial statements. For definitions of key
figures and financial ratios, please see the Annual Report 2002.
2) Before other income and expenses.
3) Q1 2002 included other income and expenses of DKK 100 million (DKK
70 million after tax), primarily consisting of a gain on the Sophus
Berendsen-shares.
4) EBITDA/Net financial expenses.
Operational improvement and solid cash conversion were at the top of
ISS' agenda for 2002. For 2003, the Group's goal is to sustain this
trend while at the same time making investments in order to
accelerate organic growth in the years ahead. In this process, ISS
devotes special attention to expanding integrated facility services
solutions.
Turnover was DKK 8,917 million, representing 3% growth in the
continuing business in local currencies (see table below). However,
unfavourable currency adjustments of more than DKK 200 million kept
overall growth in the continuing business at 1%.
Turnover development DKKbn %
Turnover Q1 2002 9.3 107%
Divested activities (0.5) (5%)
Currency adjustments (0.2) (2%)
Turnover in cont. business at current exchange rates 8.6 100%
Acquisitions 0.5 5%
Contract trimming in 2002 (0.2) (2%)
Organic growth 0.0 0%
Turnover Q1 2003 8.9 103%
Total growth (0.4) (4%)
The Q1 2003 operating profit was DKK 406 million, a 5% increase over
Q1 2002 at unchanged exchange rates. Including currency adjustments,
the operating profit increased by 3%. Increasing from 4.3% to 4.6%,
the quarterly operating margin improved year-on-year for the fifth
consecutive time, reaching the highest Q1-level in seven years. The
margin improvement was primarily the result of progress in Facility
Services in Northern Europe, particularly in Denmark, Finland, Norway
and the UK.
The efforts to sustain solid cash conversion resulted in a cash
inflow from operating activities of DKK 127 million compared with an
outflow of DKK 136 million in Q1 2002. The free cash flow was DKK 17
million as against DKK (237) million in Q1 2002. Net debt was DKK
5,742 million at 31 March 2003 compared with DKK 5,604 million at 31
December 2002 (DKK 7,044 million at 31 March 2002).
ISS remained focused on developing the facility services concept and
a number of integrated facility services contracts were won or
expanded. However, the effects of the deterioration in the economic
environment became more profound as corporate clients reduced their
floor space requirements in response to contractions in their
businesses. This impacted the contract portfolio.
Gross organic growth was approximately nil in Q1 2003. Including the
carry-over effect from contract trimming in 2002 in Belgium, Denmark,
France, Germany and the Netherlands, net organic growth was as
expected approximately (2)%.
COMPETENCE ENHANCEMENT
In 2002, ISS initiated a project aiming at developing washroom
services organically. The project included the establishment of a
range of hygiene solutions for both new and existing customers,
leveraging the strength of the ISS organisation. Originally, the
initiative started up in the UK. In Q1 2003, the concept was
introduced in Denmark, Norway and Sweden. The initial response from
customers has been positive and the first contracts in the Nordic
region were won in the first quarter.
To further develop the facility services concept, the Group
established a Facility Services Development Centre in the UK in Q1
2003. The purpose is to develop best practices and document
experience in applying the concept.
Acquisition activity remained at a relatively low level. From 1
January to 20 May 2003, a total of 13 bolt-on acquisitions
contributed annual turnover of approximately DKK 237 million. ISS
continues to focus on bolt-on acquisitions in order to strengthen the
Group's competencies, enhance its service offering or establish
critical mass. An updated list of acquisitions is available at the
Group's website: www.investor.issworld.com.
FINANCIAL REVIEW
Turnover was DKK 8,917 million, an increase of 3% in the continuing
business at unchanged exchange rates. Including currency adjustments
and the effect of divestments, turnover decreased 4% over Q1 2002.
The currency adjustments were primarily attributable to developments
of the Pound Sterling, the Brazilian Real and currencies in Asia
related to the US dollar. Acquisitions contributed 5% while gross
organic growth was approximately nil. The carry-over effect from the
extraordinary contract trimming in 2002 was approximately (2)%.
Disregarding the five countries where extraordinary contract trimming
was used as a profitability enhancement tool, aggregate organic
growth for the rest of the Group was 2%.
Operating profit before other income and expenses was up 5% to DKK
406 million at unchanged exchange rates (up 3% after currency
adjustments). This was equivalent to an operating margin of 4.6%, a
0.3% improvement from 4.3% in Q1 2002.
Net financial expenses decreased to DKK 72 million from DKK 90
million in Q1 2002. This was due to a combination of the effects of a
lower level of interest rates and lower net debt than in the same
period of 2002. The interest coverage was 7.6 compared with 6.0 in Q1
2002.
Tax on ordinary profit before goodwill amortisation was DKK 107
million. The effective tax rate of 32% was on a level with the Q1
2002 rate.
Ordinary profit before goodwill amortisation was DKK 227 million,
equivalent to a 10% year-on-year increase, when adjusted for other
income and expenses of DKK 70 million after tax in Q1 2002 (primarily
consisting of the gain on the Sophus Berendsen-shares). Goodwill
amortisation was DKK 217 million against DKK 186 million in Q1 2002.
Net profit was DKK 14 million. Earnings per share (before goodwill
amortisation) were DKK 5.2 compared with DKK 6.6 in Q1 2002. Adjusted
for other income and expenses, earnings per share before goodwill
amortisation increased 6%.
The cash flow from operating activities showed an inflow of DKK 127
million against an outflow of DKK 136 million in the same period of
last year. This reflected primarily an improvement in working
capital, which reduced the average number of debtor days by 3. After
investments in intangible and tangible fixed assets, net (excluding
goodwill) of DKK 110 million the free cash flow increased from DKK
(237) million in Q1 2002 to DKK 17 million. Investments in intangible
and tangible assets equalled 1.2% of turnover, while depreciation
amounted to 1.6% of turnover.
Total assets were DKK 23,495 million as at 31 March 2003 compared
with DKK 22,412 million at the end of 2002. Goodwill decreased to DKK
12,435 million due to amortisation.
Shareholders' equity stood at DKK 7,297 million at 31 March 2003,
equivalent to 31% of total assets against 29% at 31 March 2002.
Currency adjustments relating to investments in foreign subsidiaries
net of hedges reduced equity by DKK 46 million as at 31 March 2003.
At the Annual General Meeting on 9 April 2003, the shareholders
resolved to pay out dividends of DKK 88 million in respect of the
financial year 2002. The dividend payment is not included in the
balance sheet as at 31 March 2003. Provisions stood at DKK 1,097
million, on a level with that of 31 December 2002. Net
interest-bearing debt was DKK 5,742 million against DKK 5,604 million
at the end of 2002.
REVIEW OF OPERATIONS
The operating margin in Facility Services progressed from 4.7% in Q1
2002 to 5.0%. This was primarily the result of higher operating
margins in Northern Europe, more specifically in Denmark, Finland,
Norway and the UK. The increase in Northern Europe was partly offset
by a decrease in Continental Europe, particularly caused by France,
Germany and Switzerland. The development of facility services
solutions continued in a number of countries, particularly in the
Nordic region and resulted in new integrated facility services
contracts. Following the discontinuation of airside aviation
activities in 2002, the remaining aviation activities were
transferred to Facility Services from 1 January 2003 and comparative
figures have been restated. Accordingly, the restated Q1 2002
turnover includes airside aviation activities of DKK 170 million.
Adjusted for this, Q1 2003 turnover was at the same level as the year
before.
Operating results by business area 1)
Turnover Operating profit 2) Operating
DKKm DKKm margin
Q1 Q1 Change Q1 Q1 Change Q1 2003 Q1
2003 2002 2003 2002 2002
Facility 8,046 8,252 (2%) 402 389 3% 5.0% 4.7%
Services
Damage 430 366 17% 7 17 (57%) 1.7% 4.6%
Control
Food 262 258 2% 17 16 8% 6.6% 6.2%
Hygiene
Health 141 371 (62%) 26 19 36% 18.3% 5.2%
Care
Innovation 38 53 (28%) (7) 4 (285%) (19.5%) 7.5%
Corporate - - - (39) (49) 20% (0.4%) (0.5%)
Group 8,917 9,300 (4%) 406 396 3% 4.6% 4.3%
1) A reclassification between segments has been made compared with Q1
2002. Comparative figures have been restated. Plese refer to the last
page of this report for further details.
2) Before other income and expenses.
Organic growth of 12% and growth from acquisitions of 5% increased
ISS Damage Control's turnover to DKK 430 million. As in 2002, Damage
Control continued to enter into framework agreements with insurance
companies in which the Group acts as the insurance companies'
preferred supplier. In the industrial sector, the macroeconomic
environment impacted the activity level. Additionally, Norway and the
UK reported lower than expected activity due to unusually dry weather
conditions in Northern Europe. The lower level of activity and a
reorganisation of Damage Control in Norway reduced the operating
margin to 1.7% from 4.6% in Q1 2002.
To enhance the branding, ISS' Business Build serving the food
industry was renamed Food Hygiene in the beginning of 2003. Backed by
the continuing focus on costs, the operating margin increased from
6.2% in Q1 2002 to 6.6% on a 2% increase in turnover to DKK 262
million. The development of a mobile kitchen-cleaning unit in Denmark
was completed and the first vehicle put into service.
The level of activity in Health Care decreased compared with Q1 2002
due to the divestment of the elderly care activities. Turnover in the
continuing business which focuses on care activities (treatment of
abuse and psychiatric care) and diagnostic competences and medical
treatment (clinical physiology, MR scanning, X-ray, eye surgery and
fitting of hearing aids) was on a level with that of Q1 2002. The
operating margin increased to 18.3% as a result of the divestment of
the low-margin activities and focus on cost reductions and
efficiency.
In Innovation the results primarily reflected the costs related to
developing washroom services.
OPERATIONS BY GEOGRAPHY
Northern Europe
Turnover in Northern Europe, comprising the UK, Sweden, Denmark,
Norway, Finland, Ireland, Iceland and Greenland, was DKK 4,182
million. This marked a decrease of 7% from Q1 2002, resulting
primarily from the divestments made in 2002, which reduced turnover
by approximately DKK 400 million. Organic growth in the region was
nil. Excluding Denmark, which was impacted by the carry-over effect
from contract trimming in 2002, mainly in the public sector, organic
growth was 2%. The operating margin was 5.6% compared with 5.0% in Q1
2002.
Operating results by geography
Turnover Operating profit 1) Operating
DKKm DKKm margin
Q1 Q1 Change Q1 Q1 Change Q1 Q1
2003 2002 2003 2002 2003 2002
Northern 4,182 4,493 (7%) 235 223 5% 5.6% 5.0%
Europe
Continental 4,297 4,313 (0%) 183 197 (7%) 4.3% 4.6%
Europe
Overseas 438 494 (11%) 27 25 6% 6.1% 5.1%
Corporate - - - (39) (49) 20% (0.4%) (0.5%)
Group 8,917 9,300 (4%) 406 396 3% 4.6% 4.3%
1) Before other income and expenses.
The 2002 operational measures initiated by ISS UK in its Facility
Services helped to increase the operating margin relative to Q1 2002.
Damage Control and Food Hygiene also reporting improving operating
margins. Organic growth in ISS UK was 3%, positively affected by
contracts won in 2002. In the beginning of 2003, further steps were
taken to support the ongoing development of ISS' facility services
concept in the commercial sector. These included a facility services
competence team and a development programme for potential facility
services managers. In addition, a number of legal entities were
merged into a single legal unit, ISS Facility Services Ltd.
Following the divestments made in 2002, particularly the elderly care
activities, the operating margin of ISS Sweden increased
year-on-year. Facility Services continued the restructuring of Ecuro,
the low-margin company acquired at the end of 2001, and this had a
negative impact on both turnover and the operating margin.
The revised strategic approach towards customers in the public sector
and focus on operational improvements provided a year-on-year
increase in the Facility Services operating margin of ISS Denmark.
Turnover was DKK 920 million, marking an expected fall from the same
period of last year due to divestments and contract trimming in 2002.
The initial contracts within washroom services were secured during
the quarter, after the concept was implemented in January 2003.
ISS Norway continued to develop its Facility Services and expanded
the cleaning and catering contract with Siemens in four Norwegian
cities to include various services such as waste management,
reception and switchboard, mail room and delivery services,
photocopying, handling of goods, landscaping and snow removal.
Turnover increased 3% to DKK 782 million. Cost cutting programmes and
contract reviews contributed to an increase in the operating margin
in Facility Services compared with the same period of 2002 but lower
activity and a reorganisation of the Damage Control business caused
an overall margin decrease.
In ISS Finland, turnover grew 9% to DKK 368 million relative to Q1
2002. Organic growth accounted for 5% as a result of new facility
services contracts for a range of services. The concept was expanded
to include services within catering and project management. The
operating margin increased in the Facility Services business as well
as in Damage Control.
ISS Ireland's turnover increased 11% to DKK 59 million, driven by
organic growth of 7%. The operating margin decreased slightly
compared with Q1 2002.
Continental Europe
Continental Europe includes France, the Netherlands, Germany,
Belgium, Switzerland, Austria, Spain, the Czech Republic, Portugal,
Greece, Slovenia, Italy, Poland, Hungary, Slovakia, Romania,
Luxembourg and Croatia. The turnover in this region of DKK 4,297
million was on a level with Q1 2002. The operating margin was 4.3%
compared with 4.6% in Q1 2002, mainly due to the difficult market
situation in Germany and France and the lower level of activity in
landscaping in France.
ISS France increased turnover to DKK 1,664 million. The difficult
competitive situation in France continued in Q1 2003 and customers,
particularly in the public sector, remained highly focused on price.
Together with the carry-over effect of contract trimming from 2002,
this had a negative impact on turnover growth since profitability
remained management's top priority. The operating margin declined
compared with the same period of 2002 in part due to the difficult
market situation in general and in part due to low activity in the
landscaping business owing to weather conditions at the beginning of
the year. The development in ISS Hygiene Services (Eurogestion, the
pest control company acquired in April 2002), was as planned.
The operational improvement recorded by ISS Netherlands in 2002
continued in Q1 2003 and the operating margin increased compared with
the same period of 2002. Turnover amounted to DKK 778 million, a 12%
decrease relative to Q1 2002. This was attributable to the
discontinuation of aviation activities and the contract trimming
carried out in 2002.
Also in ISS Belgium, the progress of 2002 was sustained. The
operating margin improved relative to Q1 2002 as a result of the
continued focus on contracts with low profitability. Turnover was DKK
449 million, down from the same period last year, as the contract
trimming carried out in 2002 led to negative organic growth.
With a further deterioration in the economic climate, fierce price
competition and continuing wage increases, the German market remained
difficult and visibility is low. Consequently, ISS Germany's
operating margin was down on the same period of 2002 due to a margin
decrease in Facility Services, despite a sustained focus on
profitability and efficiency measures. Turnover was DKK 438 million,
a decrease from Q1 2002 due to contract trimming in 2002. After an
internal promotion, Rob Alsema from ISS Netherlands took over as
Country Manager in Germany in March 2003.
In Central Europe, turnover increased 12% to DKK 394 million with 5%
organic growth. The overall operating margin for the region decreased
slightly year-on-year. In the Central European countries, wages are
approaching the same level as in the EU and in some cases this could
not be fully compensated for through price increases. ISS Austria
signed an important contract for facility services with Austria's
largest company, oil and gas group OMV. In March, ISS Austria
acquired Steinbauer, thus including landscaping activities in the
service delivery.
In ISS Switzerland, turnover grew 9% from the same period of 2002,
primarily due to the acquisition of the landscaping company E. Fritz
AG in 2002. The landscaping business is subject to more seasonal
fluctuations than the rest of the activities in Switzerland,
particularly after this year's unusually long winter. This had an
adverse effect on the operating margin.
Q1 2003 sales by business area and country
Turnover Growth in percentage
DKKm % of total Total Organic
Business area 1)
Facility Services 8,046 90% (2%) (2%)
Damage Control 430 5% 17% 12%
Food Hygiene 262 3% 2% 1%
Health Care 141 2% (62%) 0%
Innovation 38 0% (28%) (28%)
Total Group 8,917 100% (4%) (2%)
Country
UK 1,128 13% (5%) 3%
Sweden 925 10% (18%) (1%)
Denmark 920 10% (10%) (5%)
Norway 782 9% 3% 2%
Finland 368 4% 9% 5%
Ireland 59 1% 11% 7%
Northern Europe 4,182 47% (7%) 0%
France 1,664 19% 1% (3%)
The Netherlands 778 9% (12%) (8%)
Belgium 449 5% (3%) (5%)
Germany 438 5% (10%) (10%)
Central Europe 394 4% 12% 5%
Switzerland 282 3% 9% (5%)
Spain 210 2% 17% 4%
Portugal 44 1% 8% 8%
Italy 38 0% 208% -
Continental Europe 4,297 48% (0%) (4%)
Overseas 438 5% (11%) 3%
Total Group 8,917 100% (4%) (2%)
1) A reclassification between segments has been made compared with Q1
2002. Comparative figures have been restated. Plese refer to the last
page of this report for further details.
ISS Spain continued the progress from 2002, reporting a year-on-year
increase in its operating margin. Turnover increased 18% to DKK 210
million with organic growth accounting for 4%.
In Portugal, turnover was DKK 44 million, an increase of 8% over Q1
2002, attributable exclusively to organic growth. The operating
margin increased, lifted by one-off contracts with higher operating
margins.
The business in ISS Italy was expanded with the acquisition of ISS
Hygiene Services (Eurogestion) in April 2002 and turnover grew to DKK
38 million from DKK 12 million.
Overseas
Overseas, consisting of Asia, South America, Australia and Israel,
represents approximately 5% of the Group's turnover. Negative
currency adjustments of 25% caused turnover to decline to DKK 438
million. Organic growth was 3% while the operating margin increased
from 5.1% to 6.1%.
In Asia, turnover decreased 10% to DKK 262 million after a negative
currency impact of 16%. The operating margin was 5.2% and the
operations generally performed as planned. The impact on ISS'
business of the outbreak of SARS is difficult to assess, but so far
ISS has not felt any significant effects from the disease on its
operations.
Together with the negative currency impact of DKK 64 million, the
restructuring of the business in Brazil reduced turnover to DKK 75
million from DKK 141 million. The contract portfolio and organisation
is now stabilised and only minor adjustments are expected later in
the year.
The business in Australia, which was added with the takeover of ISS
Hygiene Services (Eurogestion), continued to develop as planned both
in terms of turnover and operating margin. The depreciation of the
Israeli currency impacted on turnover, which was down year-on-year.
The operating margin was retained at the Q1 2002-level.
BOARD OF DIRECTORS
At the Annual General Meeting on 9 April 2003, the Chairman of ISS of
the last 12 years, Arne Madsen, retired from the Board of Directors.
Claus H�eg Madsen was elected new Board member. Following the Annual
General Meeting, Erik S�rensen and Sven Risk�r were elected chairman
and vice-chairman of the Board, respectively.
OUTLOOK
The outlook should be read in conjunction with "Forward-looking
statements" below.
The economic climate has not shown signs of recovery since the
release of the Annual Report 2002. Visibility is considered low and
factors such as the weak macroeconomic environment, potential further
contractions of customers' businesses, the SARS-virus, and the
development in exchange rates all add to this uncertainty. In
addition, the Damage Control order book is currently shorter than
usual due to the very dry weather conditions in Q1 and part of April.
Since the circumstances mentioned above could affect ISS' business
activities negatively, the outlook is subject to a higher degree of
uncertainty than usual.
Highlighting these uncertainties, ISS maintains the outlook announced
in the Annual Report 2002, with the exception that the declining
exchange rates have made a further DKK 100 million currency
adjustment of the turnover base necessary.
Turnover, continuing business Approximate numbers, DKKbn
Turnover 2002 38.0
Divested activities (1.5)
Estimated currency adjustments (0.9)
Adjusted turnover, continuing business 35.6
Accordingly, ISS forecasts an increase in turnover of 2-4% from
approximately DKK 35.6 billion (see table above). Operating profit
before other income and expenses is expected to grow 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 is expected to be approximately DKK
885 million.
APPENDICES
ISS' consolidated profit and loss account, consolidated cash flow
statement, consolidated balance sheet, consolidated statement of
movements in equity and specification of minorities are appended to
this report.
CONFERENCE CALL AND WEBCAST
A combined webcast and telephone conference hosted by Eric S.
Rylberg, CEO, and Karsten Poulsen, CFO, will be held on Thursday 22
May 2003 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 6432 (UK)
+353 1 439 0432 (Ireland)
+1 847 619 6546 (USA).
A replay of the webcast will subsequently be available from the
Group's website. The conference will also be available in digital
audio replay. To access the recording, please dial:
+353 1 2400 041 (Ireland),
Access code: 231930#.
+-------------------------------------------------------------------+
| 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 expressed 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 of |
| the Annual Report 2002. |
| GOVERNING TEXT |
| This Financial 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 First Quarter |
| Financial Report 2003 are available to the public in the United |
| Kingdom from World Investor Link Ltd., Hook Rise South, Surbiton, |
| Surrey KT67LD, Tel. +44 20 8974 0200. |
+-------------------------------------------------------------------+
Consolidated Profit and Loss Account
The first quarter profit and loss accounts are unaudited. Amounts in
DKKm
Q1 Q1 2002 Year 2002
2003
Turnover 8,917 9,300 37,984
Operating expenses (8,369) (8,756) (35,371)
Depreciation and amortisation (142) (148) (603)
Operating profit before other 406 396 2,010
income and expenses
Other income and expenses, net 0 100 5
Operating profit 406 496 2,015
Income from associates 0 0 (11)
Financial income and expenses, (72) (90) (361)
net
Ordinary profit before tax and 334 406 1,643
goodwill amortisation
Tax on ordinary profit before (107) (129) (528)
goodwill amortisation
Ordinary profit before goodwill 227 277 1,115
amortisation
Goodwill amortisation (217) (186) (890)
Tax effect of goodwill 6 2 39
amortisation
Minority interests (2) (3) (18)
Net profit for the period 14 90 246
Earnings per share before 5.2 6.6 25.8
goodwill amortisation (DKK)
Consolidated Statement of Cash Flows
The first quarter statements of cash flows are unaudited. Amounts in
DKKm
Q1 Q1 Year
2003 2002 2002
Operating profit before other income and 406 396 2,010
expenses
Depreciation and amortisation 142 148 603
Changes in working capital 1) (292) (480) 412
Changes in other provisions 1) (9) (4) (98)
Interest paid 1) (35) (72) (333)
Corporation tax paid 1) (78) (100) (263)
Payments related to other income and (7) (24) (67)
expenses
Cash flow from operating activities 127 (136) 2,264
Acquisition of businesses, net (189) (142) (1,898)
Divestment of businesses, net (2) 1 16
Investments in intangible and tangible (110) (101) (525)
assets, net 1)
Investments in financial assets, net 1) 1 (289) 269
Cash flow from investing activities (300) (531) (2,138)
Financial payments, net 2) 1,295 619 (782)
Proceeds from issuance of share capital - - 569
Purchase/disposal of own shares, net - - (5)
Minority interests (3) 3 (5)
Cash flow from financing activities 1,292 622 (223)
Total cash flow 1,119 (45) (97)
Cash and cash equivalents at beginning of 891 1,023 1,023
period
Total cash flow 1,119 (45) (97)
Foreign exchange adjustments (29) 17 (35)
Cash and cash equivalents at end of period 1,981 995 891
1) Net of effects of acquisitions and divestments.
2) Proceeds from bank debt less repayment of bank debt.
Consolidated Balance Sheet
The first quarter balance sheets are unadited. Amounts in DKKm
Assets 31.3. 31.3. 31.12.
2003 2002 2002
Goodwill 12,435 11,970 12,669
Software and other intangible assets 209 172 194
Total tangible assets 1,440 1,576 1,509
Total financial assets 739 1,287 625
Accounts receivable and other current 6,691 7,431 6,524
assets
Liquid funds and securities 1,981 995 891
Total assets 23,495 23,431 22,412
Equity and liabilities 31.3. 31.3. 31.12.
2003 2002 2002
Total equity 7,297 6,740 7,331
Minority interests 85 63 88
Total provisions 1,097 1,040 1,097
Long-term debt 6,820 6,405 5,642
Short-term interest-bearing loans and 903 1,634 853
borrowings
Other current liabilities 7,293 7,549 7,401
Total equity and liabilities 23,495 23,431 22,412
Consolidated Statement of Equity
The first quarter statements of equity are unaudited. Amounts in DKKm
Share Share Retained Own Foreign Total
capital Premium earnings1) shares exch. equity
Equity adj.
Equity at 1 878 583 6,008 (28) (110) 7,331
January 2003
Foreign exch.
adj. of foreign
subsidiaries etc. - - - - (46) (46)
Deferred - - (2) - - (2)
gains/losses on
hedging
derivatives
Net profit for - - 14 - - 14
the period
Equity at 31 878 583 6,020 (28) (156) 7,297
March 2003
Equity at 1 844 48 5,795 (62) (4) 6,621
January 2002
Foreign exch. - - - - 12 12
adj. of foreign
subsidiaries etc.
Deferred - - 17 - - 17
gains/losses on
hedging
derivatives
Net profit for - - 90 - - 90
the period
Equity at 31 844 48 5,902 (62) 8 6,740
March 2002
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 2)
Net profit for - - 246 - - 246
the year
Equity at 31 878 583 6,008 (28) (110) 7,331
December 2002
1) Equity 31 December 2002 and 31 March 2003 includes DKK 88 million in
proposed dividends.
2) Including options settled.
Specification of minorities
31.3 31.3 31.12
2003 2002 2002
Minorities beginning of period 88 57 57
Exchange rate adjustment of foreign subsidiaries (3) 1 1
etc.
Dividends (2) - (5)
Additions from acquired companies - 2 17
Net profit for the period 2 3 18
Minorities end of period 85 63 88
Reclassifications from Q1 2002
Compared with Q1 2002, certain reclassifications have been made:
* ISS Aviation closed as a Business Build and the remaining
activities transferred to Facility Services
* ISS Data etc. transferred from Facility Services to Innovation
* Food Hygiene in the UK carved out from Facility Services
* Food Hygiene in Germany transferred to Facility Services (due to
lack of critical mass)
* Damage Control in Belgium carved out from Facility Services
Comparative figures have been restated accordingly.
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