Iss A/S · OMXCOP:ISS
Iss A/S — FS Funding — Debt Investor Presentation (April 2007)
35 slides from Iss A/S's debt investor presentation, Apr 10, 2007
Slide 1: FS Funding A/S Investor Presentation - Full Year 2006
FS Funding A/S Investor Presentation - Full Year 2006 10 April 2007
Slide 2: Forward-looking Statements
Forward-looking Statements Forward-looking statements This presentation may contain forward-looking statements. Statements herein, other than statements of historical fact, regarding future events or prospects, are forward-looking statements. The words ‘‘may’’, “will”, “should”, ‘‘expect’’, ‘‘antici
Slide 3: Agenda
Agenda Key Events 2006 The Strategy Financial Results 2006 Acquisitions Other Financial Measures 3 Lead Facility Services Globally
Slide 4: Key Events 2006
Key Events 2006 Achieved 2006 objectives Strengthened service offerings Strengthened geographical footprint Changes in management team Issued HY notes in May Implemented management incentive program 4 Lead Facility Services Globally
Slide 5: The Strategy
The Strategy
Slide 6: The Strategy - IFS House
The Strategy - IFS House Access Contract Building Control Reception Catering Cleaning Maintenance Services Guarding & Technical Washroom Office Services Services Logistics Landscaping Pest Control 6 Lead Facility Services Globally
Slide 7: The Strategy - Continued Execution
The Strategy - Continued Execution Operational Cash flow efficiency Operating margin Profitable growth Reduce financial leverage on a multiple basis Increase Transforming into a Facility Services company IFS Added Security as a new pillar capabilities Focus on Single Service Excellence Strengthen cu
Slide 8: Full Year 2006 Financial Results
Full Year 2006 Financial Results
Slide 9: Key Figures 2006
Key Figures 2006 DKKm 2006 Growth (ISS) Revenue 55,772 Organic 5.5% Operating profit before other items 3,234 Acquisitions, net 15% Operating margin before other items 5.8% FX adjustments 0% Total 20% Pro Forma Net Cash Pay Debt 27,714 Estimated Pro Forma Adj. EBITDA 4,203 PF Net Debt / PF EBITDA 6.
Slide 10: ISS A/S - Key Figures
ISS A/S - Key Figures DKKm 2006 2005 Δ Revenue 55,772 46,440 +20% Operating profit before other items 3,244 2,260 +22% Operating margin before other items 5.8% 5.7% Operating profit 3,029 2,296 Net result 911 948 Organic growth 5.5% 3.0% Acquisition growth 15% 11% Δ working capital 62 -234 10 Lead F
Slide 11: Key Priorities
Key Priorities Priority 1: Cash Conversion Priority 2: Operating Margin 200 6.0% 167 5.9% 5.8% 150 5.7% 150 5.8% 111 103 5.7% 5.6% 5.6% 100 87 5.6% 5.5% 50 5.4% 5.3% 5.3% 0 5.2% 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Priority 3: Organic Growth Acquisitive Growth 7.0% 10,000 20% 5.5% 5.0%
Slide 12: Revenue Growth 2006
Revenue Growth 2006 155% 138% 25% 20% 20% 15% 17% 15% 13% 13% 10% 10% 9% 5% 6% 6% 4% 0% Northern Europe Continental Overseas Total ISS Europe Organic Acquisition Total For comparison reasons, figures for ISS A/S are used 12 Lead Facility Services Globally
Slide 13: Operating Margin before other items 2006, %
Operating Margin before other items 2006, % 6.5% 6.4% 6.4% 6.4% 6.0% 6.2% 6.0% 5.9% 5.5% 5.7% 5.8% 5.0% 4.5% 4.0% Northern Europe Continental Overseas Total ISS Europe 2005 2006 For comparison reasons, figures for ISS A/S are used 13 Lead Facility Services Globally
Slide 14: Revenue by Service
Revenue by Service +38% 2004 2006 2% 3% 7% 5% IFS 8% Office support 6% 23% Catering Property 67% 22% 57% Cleaning DKK 40.4 bn (1) All percentages exclude Healthcare Cleaning Services includes Food Hygiene DKK 55.8 bn Property Services includes Damage Control For comparison reasons, figures for ISS A
Slide 15: Revenue by Region
Revenue by Region +38% 2004 2006 2% 3% 1% 5% 1% 42% 45% 3% 1% 1% Rest LatAm Aus / NZ Asia 49% Cont. Europe Northern Europe 47% DKK 40.4 bn DKK 55.8 bn For comparison reasons, figures for ISS A/S are used 15 Lead Facility Services Globally
Slide 16: Employees by Region
Employees by Region +43% 2004 2006 1% 2% 0%6% 8% 24% 31% 5% 12% Rest LatAm Aus / NZ 19% Asia Cont. Europe 50% Northern Europe 42% 273,500 391,400 For comparison reasons, figures for ISS A/S are used 16 Lead Facility Services Globally
Slide 17: Tax Proposal, Denmark
Tax Proposal, Denmark Ministry of Taxation published draft bill for public hearing in February 2007, revised in April 2007 Proposed amendments include Reduction of corporate tax rate Reduction of deduction of interest expenses Amendments to Controlled Foreign Company (CFC) taxation Final outcome and
Slide 18: 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 19: Acquisitions
Acquisitions
Slide 20: Acquisition Strategy - Priorities
Acquisition Strategy - Priorities Strategic fit Build IFS house Growth potential Corporate values Value creation Manageable 20 Lead Facility Services Globally
Slide 21: Service mix driven by acquisitions
Service mix driven by acquisitions 2006 7% 6% Acquisitions in 2006: 17% 22% 10% 57% 7% 35% 8% 2005 16% 6% 6% 32% 23% Cleaning 61% Office support 4% Property Catering IFS For comparison reasons, figures for ISS A/S are used 21 Lead Facility Services Globally
Slide 22: Northern Europe - Service mix driven by acquisitions
Northern E - Service mix driven by acquisitions 2006 12% Acquisitions in 2006: 9% 12% 51% 7% 1% 8% 16% 2005 24% 9% 12% 60% 12% 57% Cleaning 16% Pegasus Office support Property Office Support, 3% Catering Norway IFS For comparison reasons, figures for ISS A/S are used 22 Lead Facility Services Global
Slide 23: Continental Europe - Service mix driven by acquisitions
Cont. E - Service mix driven by acquisitions 2006 3% 1% Acquisitions in 2006: 26% 10% 19% 64% 23% 6% 2005 1% 1% 1% 26% 25% 31% Cleaning 4% Debeos Office support 69% Edelweiss Property Catering Puissance Air IFS For comparison reasons, figures for ISS A/S are used 23 Lead Facility Services Globally
Slide 24: Overseas - Service mix driven by acquisitions
Overseas - Service mix driven by acquisitions 2006 11% Acquisitions in 2006: 10% 138% 6% 4% 56% 11% 17% 3% 2005 53% 14% 29% 3% 12% Cleaning 3% Tempo Office support 68% Property Norfolk Catering San Rafael IFS For comparison reasons, figures for ISS A/S are used 24 Lead Facility Services Globally
Slide 25: Acquisitions 2006
Acquisitions 2006 Services Revenue, DKKm *) Tempo, Australia Facility Services 2,923 Edelweiss, Switzerland Facility Services 732 Debeos, Germany Facility Services 525 Pegasus, UK Security 427 Norfolk, Israel Catering 374 San Rafael, Mexico Cleaning 276 Puissance Air, France Property Services 212 6
Slide 26: Other Financial Measures
Other Financial Measures
Slide 27: Other Financial Measures - Pro Forma Adjusted EBITDA
Other Financial Measures Pro Forma Adjusted EBITDA Pro Forma calculation(1) DKKm 12 months ended 31 December 2006 Adjusted EBITDA 3,979 Estimated Pro Forma adjusted EBITDA of acquired and divested businesses 224 Estimated Pro Forma Adjusted EBITDA 4,203 (1) The calculations of pro forma adjusted EBI
Slide 28: Other Financial Measures (cont.) - Pro Forma Capital Structure
Other Financial Measures (cont.) Pro Forma Capital Structure – December 31, 2006 Capitalization (1) DKKm (2) % of Total Cash (3) (2,275) (7%) Other Indebtedness 942 3% Senior Facilities 9,258 27% EMTNs 10,066 30% Total Net Senior Debt 17,991 53% Senior Subordinated Notes 9,723 29% Total Net Cash Pay
Slide 29: Pro Forma Credit Ratios - December 31, 2006
Other Financial Measures (cont.) Pro Forma Credit Ratios - December 31, 2006 Pro Forma Net Cash Pay Debt / Pro Forma EBITDA 6.59x Pro Forma Net Senior Debt (incl. EMTNs) / Pro Forma EBITDA 4.28x Pro Forma Net Senior Debt (excl. EMTNs) / Pro Forma EBITDA 1.89x 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 7.09x 7.00x 7.10x 6.88x 6.75x 6.59x 6.50x OM (end '05) Q1 '06 Q2 '06 Q3 '06 Q4 '06 Net Debt / PF Adj. EBITDA Seasonality Adj. Net Debt / PF Adj. EBITDA 30 Lead Facility Services Globally
Slide 31: Funding
Funding Capital structure is continuously assessed Amendments are subject to existing documentary requirements and market conditions Additional financing during 2007 is considered to support growth Acquisitions Organic growth initiatives The objective is to deleverage on a multiple basis 31 Lead Fac
Slide 32: Appendices
Appendices
Slide 33: ISS Today
ISS Today Argentina More than 390,000 employees in 49 countries Lithuania Australia Austria (among Europe’s 10 largest private employers) Luxembourg Malaysia Belgium Mexico Brazil Netherlands Brunei New Zealand Chile Norway China & Hong Kong Philippines More than 100,000 b2b customers Croatia Poland
Slide 34: Executive Group Management
Executive Group Management Jorgen Lindegaard (57), Group CEO Previously with SAS, GN, TDC Board member of ISS since Spring 2006 Jeff Gravenhorst (44), Group CFO With ISS since 2002 Flemming Schandorff (58), Group COO With ISS from 1973-1994 and since 2000 34 Lead Facility Services Globally
Slide 35: ISS Management Team
Management of ISS ISS Management Team Operational Board Executive Group Management Jørgen Jeff Olsen Flemming Lindegaard Gravenhorst Schandorff (1948) (1962) (1948) Group CEO Group CFO Group COO Allan Martin Gaarn Jacob Stig Jens Ebbe Aebischer Thomsen Götzsche Pastwa Olesen (1954) (1970) (1967) (19