Iss A/s · OMXCOP:ISS
Iss A/s — Debt Investor Presentation (December 2007)
34 slides from Iss A/s's debt investor presentation, Dec 4, 2007
Slide 1: ISS Holding A/S Investor Presentation
ISS Holding A/S Investor Presentation High Yield Investor Conference 4 December 2007 - London
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 ISS Group 2007 Key Events Strategic Update Interim Report Acquisitions Other Financial Measures Appendix 3 Lead Facility Services Globally
Slide 4: ISS Group 2007
ISS Group 2007 One of the world’s leading providers of facility services More than 430,000 employees in 50 countries (among Europe's 5 largest private employers) Revenue 2006: DKK 55.7 bn Services Regions Employees 5% 5% 5% 5% 3%2% 12% 6% 11% 4% 26% 4% 23% 55% 20% 48% 6% 60% Cleaning Catering N. Eur
Slide 5: Key Events
Key Events
Slide 6: Key Events YTD
Key Events YTD Operational performance still strong Organic growth at 6% Margin increase of 0.2 pp Entry into the US Partial refinancing completed successfully 63 acquisitions IPO review initiated Subsequent events Contemplated change of company name to ISS Holding A/S to be resolved at a general me
Slide 7: Strategic Update
Strategic Update
Slide 8: Our Chosen Vision
Our Chosen Vision “Lead Facilities Services Globally” … by leading Facility Services locally 8 Lead Facility Services Globally
Slide 9: Rationale for Outsourcing
Rationale for Outsourcing Integrated Facility Services Management D D Cleaning Office Property Catering Security Support Services A B B C C A Improvement in each service area Synergies between customers A B Efficiency and service excellence Know-how and best practice Synergies between service areas
Slide 10: Key Market Trends
Key Market Trends Market growth continues to be supported by continued outsourcing trends Large customers are centralizing purchasing decision Moving towards both international and national contracts Customers are gradually turning towards integrated facility services 10 Lead Facility Services Globa
Slide 11: Key Market Trends (cont.)
Key Market Trends (cont.) EUROPE AMERICAs ASIA Continued above GDP Continued outsourcing High growth driven by growth growth in both US and Economic growth LatAm Increasing outsourcing pace Increasing outsourcing Higher growth in LatAm Fast growth in CEE Increasing presence of Higher customer MNCs O
Slide 12: Strategic Rationale
Strategic Rationale Integrate service Improve efficiency of Optimise working offerings to drive single services through capital longer and more economies of scale and complex contracts best practice Control fixed asset investment and Cross-sell services to Harvest synergies from utilisation single s
Slide 13: Service Transformation
Service Transformation Climbing up the value chain to deliver sustainable growth 13 Lead Facility Services Globally
Slide 14: Delivery Transformation
Delivery Transformation Outsourcing Level IFS Strategic Partnership Delivering Integrated Facility Multi Service solutions Service together with the client Supplier The service supplier is Single capable in delivering a range Service of services Supplier Partnership Level Climbing up the value chain
Slide 15: Interim Report
Interim Report January – September 2007
Slide 16: Key Figures YTD
Key Figures YTD DKKm YTD 2006 YTD 2007 Δ Revenue 40,655 46,991 +16% Operating profit before other items 2,334 2,796 +20% Operating margin before other items 5.7% 5.9% Operating profit 2,212 2,643 +20% Organic growth 5% 6% Acquisition growth, net 14% 10% 16 Lead Facility Services Globally
Slide 17: YTD 2007 Revenue Growth - by Geography
YTD 2007 Revenue Growth - by Geography 131% 120% 40% 33% 31% 30% 28% 22% 19% 20% 18% 16% 16% 14% 13% 9% 10% 10% 7% 8% 7% 5% 6% 6% 2% 0% Nordic Western Central & Asia Americas Pacific Group Europe Eastern Europe Organic Acquisition, net Total Effect of currency movements are not shown, but included i
Slide 18: YTD '06 – YTD '07 Operating Margin - by Geography
YTD ’06 – YTD ‘07 Operating Margin - by Geography Operating Margin before Other Items 10% YTD '06 YTD '07 8% 7.6% 6.8% 7.1% 6.4% 6.2% 6.2% 6.5% 6.1% 6.2% 6.0% 5.7% 5.9% 6% 5.5% 4.4% 4% 2% 0% Nordic Western Central & Asia Americas Pacific Group Europe Eastern Europe % of Q3 ‘07 26% 59% 2% 4% 4% 5% Re
Slide 19: Organic Growth in Emerging Markets
Organic Growth in Emerging Markets Revenue Organic Growth September 2007 YTD September 2007 YTD 2.3% 3.6% 4.4% 3.8% 1.9% 9.4% Rest of Group Asia Latin America Central & East Europe 82.6% 92.0% 19 Lead Facility Services Globally
Slide 20: YTD '05 - '07 Revenue & Employees - by Geography
YTD ’05 - ‘07 Revenue & Employees - by Geography YTD 2005 – DKK 34.2bn YTD 2007 – DKK 47.0bn 1% 2% 2% 1% 5% 4% 1% 4% 26% 30% +37% Revenue 65% Northern Europe West Europe 59% Asia Pacific YTD 2005 – 305,000 YTD 2007 – 430,000 Americas 4% Central & East Europe 5% 11% 6% 15% 1% 11% Employees 4% 15% +41
Slide 21: Acquisitions
Acquisitions
Slide 22: Acquisitions 1 January to 31 October 2007
Acquisitions 1 January to 31 October 2007 Services Revenue, DKKm (1) Topman, Taiwan Facility Services 147 Aircon, Norway Cleaning 107 Caterhouse, UK Catering 102 Adviance, UK Property Services 207 Sanitors, US Facility Services 1,822 BD Food Invest, Belgium Catering 103 Subtotal 2,488 57 Acquisition
Slide 23: Acquired Revenue by Service and Geography
Acquisitions 1 January to 31 October 2007 Acquired Revenue By Service (1) 5%3% Cleaning 8% Office support 42% Property Catering 33% IFS 9% Security Acquired Revenue By Geography (1) 4% 6% Nordic 32% West Europe Asia 49% Pacific 9% Americas Central & East Europe Note: (1) Unaudited approximate figure
Slide 24: Acquisition Track Record - Pricing Discipline
Acquisition Track Record - Pricing Discipline 9,000 14 8,000 12 7,000 9.7x 9.5x 9.9x 10 6,000 8.0x 8.3x 7.8x 7.9x (DKK million) 7.2x 8 5,000 8.6x 8.3x 4,000 7.5x 7.2x 7.3x 6 6.5x 6.9x 3,000 6.2x 4 2,000 1,000 2 0 0 2000 2001 2002 2003 2004 2005 2006 YTD OCT '07 Revenue acquired All acquisitions Pric
Slide 25: Other Financial Measures
Other Financial Measures
Slide 26: Pro Forma Adjusted EBITDA
Other Financial Measures Pro Forma Adjusted EBITDA Pro Forma calculation(1) DKKm 12 months ended 30 September 2007 Adjusted EBITDA 4,525 Estimated PF adjusted EBITDA of acquired and divested businesses 227 Estimated PF Adjusted EBITDA 4,752 Note: (1) The calculations of pro forma adjusted EBITDA are
Slide 27: Pro Forma Capital Structure – September 30, 2007
Other Financial Measures (cont.) Pro Forma Capital Structure – September 30, 2007 Capitalization (1) DKKm (2) % of Total Cash and securities (1,475) (4%) Other Indebtedness 362 1% Senior Facilities 17,327 47% EMTNs 7,159 19% Total Net Senior Debt 23,373 63% Senior Subordinated Notes 3,384 9% Second
Slide 28: Seasonality adj. Pro Forma Net Debt
Other Financial Measures (cont.) Seasonality adj. Pro Forma Net Debt – September 30, 2007 Capitalization DKKm Total Net Cash Pay Debt 31,230 Changes in Working Capital, January 1 – September 30, 2007 (1,324) Changes in Working Capital, October 1, 2006 – September 30, 20071) (94) Seasonality Adjusted
Slide 29: Pro Forma Credit Ratios
Pro Forma Credit Ratios Pro Forma Credit Ratios Q3 2007 PF Net Cash Pay Debt / PF EBITDA 6.57x Seasonality adj. PF Net Cash Pay Debt/ PF EBITDA 6.27x PF Net Senior Debt (incl. EMTNs) / PF EBITDA 4.92x PF Net Senior Debt (excl. EMTNs) / PF EBITDA 3.41x 29 Lead Facility Services Globally
Slide 30: Deleveraging on a Multiple Basis
Deleveraging on a Multiple Basis Net Debt / Pro Forma Adj. EBITDA 7.50x 7.42x 7.28x 7.26x 7.25x 7.28x 7.28x 7.09x 7.00x 7.10x 6.88x 6.74x 6.75x 6.68x 6.59x 6.57x 6.50x 6.54x 6.40x 6.27x 6.25x 6.00x OM Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 (end '05) Net Debt / PF Adj. EBITDA Seasonality Ad
Slide 31: Maturity of Credit Facilities
Maturity of Credit Facilities 18,000 16,000 14,000 12,000 DKK millions 10,000 8,000 6,000 4,000 2,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Senior EMTNs Second Lien High Yield 31 Lead Facility Services Globally
Slide 32: Appendix
Appendix
Slide 33: 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 34: Refinancing July 2007 - Sources & Uses
Refinancing July 2007 - Sources & Uses SOURCES EURm USES EURm ISS Global A/S Repayment of Acq. Facilities 450 - Senior Term Loan – B9 1,000 Repayment of FRNs 850 FS Funding A/S - acc. Interest and Call Premium 26 - Senior Term Loan – B10 140 Repayment of 2014 EMTNs 362 (77.9% repaid at rate 93) - Se
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