Iss A/s · OMXCOP:ISS

Iss A/s — Investor Day (November 2022)

119 slides from Iss A/s's investor day presentation, Nov 7, 2022

Slide 3: Today our equity story evolves
SETTING THE SCENE Today our equity story evolves From delivering a financial turnaround… …to superior growth at attractive margins Attractive market Resilient business Strengthened Significant profit Disciplined capital with significant potential and powerful operating competitiveness and growth and
Slide 4: Agenda
SETTING THE SCENE 12:30 OUR JOURNEY Our Journey Jacob Aarup-Andersen Agenda Executing OneISS globally – UK and Ireland Liz Benison Accelerating our growth journey Jacob Aarup-Andersen 13:15 Q&A 13:30 BREAK 13:45 ENABLING GROWTH Scalable operating model Troels Bjerg Technology Markus Sontheimer Susta
Slide 5: Presenting for you today
SETTING THE SCENE Presenting for you today Jacob Aarup-Andersen Kasper Fangel Liz Benison Group CEO Group CFO CEO UK&I Troels Bjerg Markus Sontheimer Margot Slattery Group COO Group CIDO Global Head of Diversity & Inclusion 5 | © 2022 ISS
Slide 7: Connecting people and places to make the world work better
OUR JOURNEY Connecting people and places to make the world work better Making the world work better starts with our belief in creating a fair and inclusive society. We take care of, and provide opportunities for people, helping them to develop themselves and be the best they can be. We do this becau
Slide 8: Impacting millions of people every day
Impacting millions of people EVERY DAY 40,000+ 30+ Core countries Customers 100,000 360,000+ Placemakers People are moved out of poverty every year because of a job in ISS 130+ Languages spoken 8 | © 2022 ISS
Slide 9: Our global business platform
OUR JOURNEY Our global business platform GLOBAL FOOTPRINT AND DELIVERY SELF DELIVERY OF KEY FACILITY FOCUS ON INTEGRATED CONTRACTS CAPABILITIES SERVICES FOR KEY ACCOUNTS IN FOCUS SEGMENTS Cleaning Key accounts 18% Technical services IFS Food Other 11% DKK 71bn DKK 71bn 48% Other revenue in revenue i
Slide 10: 20 years of stable performance
OUR JOURNEY 20 years of stable performance 8 Operating margin, % 6.1 5.8 6.0 5.9 5.8 6 5.6 5.6 5.6 5.7 5.7 5.6 5.5 5.6 5.7 5.4 5.1 5.3 5.0 4.7 5.9 5.5 5.6 5.4 5.6 5.6 5.4 5.4 5.4 5.6 5.4 4.2 5.0 5.3 5.2 4.9 5.1 5.0 4 4.6 4.5 4.2 2.5 Excl. restructuring 2 Incl. restructuring 5.2% average incl. restru
Slide 11: Our journey since launch of OneISS in December 2020
OUR JOURNEY Our journey since launch of OneISS in December 2020 OneISS achievements 2020-2022 Next phase of OneISS journey Strategically focused the Simplified and streamlined Build on structurally business on key segments the business by divesting attractive business and services non-strategic coun
Slide 12: Strong delivery of all financial commitments under new management team
OUR JOURNEY Strong delivery of all financial commitments under new management team Financial outlook Turnaround targets YEAR DELIVERED TARGET DELIVERED Operating margin1 above Run-rate margin 2020 Delivered on outlook 4% when entering 2023 at 4% 2021 Upgraded and delivered Deleveraging to below Leve
Slide 13: Strong management team in place to deliver the next phase
OUR JOURNEY Strong management team with industry and ISS experience in place to deliver the next phase of the OneISS journey Jacob Aarup-Andersen Group CEO Since September 2020 Joined ISS: 2020 Functional Regional Kasper Fangel Troels Bjerg Markus Sontheimer Agostino Renna Liz Benison Celia Liu Sam
Slide 14: Positioned to fuel our five strategic priorities
OUR JOURNEY Positioned to fuel our five (unchanged) strategic priorities 1. Commercial momentum and segment leadership 2. Brilliant operating basics 3. Service products built on leading technology platforms 4. Environmental sustainability 5. Safe, diverse, and inclusive workplaces 14 | © 2022 ISS
Slide 15: Executing OneISS globally: UK & Ireland case study
EXECUTING ONEISS GLOBALLY: UK & IRELAND CASE STUDY Liz Benison CEO UK & Ireland 15 | © 2022 ISS
Slide 16: UK & Ireland developed into an underperforming country in 2019/2020
EXECUTING ONEISS GLOBALLY UK & Ireland developed into an underperforming country in 2019/2020 BUSINESS DRIVERS Operating margin development 1 Loss of large profitable contracts Rushed short-term focused cost measures Margin-accretive for the group Significant negative impact from Covid-19 FINANCIAL
Slide 17: The OneISS transformation – Founded on cultural change
EXECUTING ONEISS GLOBALLY The OneISS transformation – Founded on cultural change STRONGER SIMPLER CLOSER New Country Leadership Team Functional Focus on Data Build trust to Creating effective Manage as expertise/ Improvement drive behaviour leadership a Program centralisation and control change Prov
Slide 18: OneISS performance initiatives
EXECUTING ONEISS GLOBALLY OneISS Margin improvement drivers performance initiatives OneISS reorganisation supported by the group Portfolio Management Contract Performance Improvement Standard Supply Chain Improvements Operations Performance Leverage Standardised reporting and analysis 18 | © 2022 IS
Slide 19: The next stage of the journey for UK&I
EXECUTING ONEISS GLOBALLY The next stage of the journey for UK&I – Regain position as lighthouse for the ISS Group Group strategic priority Local execution initiatives • Exploit exceptional market presence in banking and healthcare segments Commercial momentum • Exploit government outsourcing cycle
Slide 20: Key takeaways
EXECUTING ONEISS GLOBALLY Key takeaways UK achieved its The new management The organization and Commercial success is a turnaround target of 3% team started with operating model is now key factor in fully run-rate margin in Q1 culture – creating the in place to achieve regaining lighthouse 2022 – 3
Slide 22: What we want you to take away from this session
ACCELERATING OUR GROWTH JOURNEY What we want you to take away from this session Demand for IFS will We are investing in service Investments are starting to continue to outgrow products and technology, materialize in improved general FM market improving our value commercial performance proposition to
Slide 23: Our strategic focus
ACCELERATING OUR GROWTH JOURNEY Our strategic focus Focusing on 3 core … for which we will focus on 4 segments … core services Cleaning Office-Based • ISS’ heritage • Financial Services • Global leader position • Technology • Professional Services Technical Services Global leader in IFS for • Critic
Slide 24: Demand for integrated contracts continues to be a key growth driver
ACCELERATING OUR GROWTH JOURNEY Demand for integrated contracts continues to be a key growth driver ISS revenue development for integrated Market for integrated contracts development contracts 2014-2021, bnDKK 2021-2026, bnDKK ISS +6% 36 33 33 5% +7% 965 29 29 30 27 23 679 DKK 679bn market for integ
Slide 25: Three key customer needs we see across focus segments
ACCELERATING OUR GROWTH JOURNEY Three key customer needs Workplace 62% of companies are investing in their workplace in wake of Covid-19 to enable experience we see across innovation and collaboration, attract people to the office and enhance sense of belonging focus segments Operational Operational
Slide 26: Investing to improve our value proposition
ACCELERATING OUR GROWTH JOURNEY Investing to improve our value proposition Today we will showcase some of our service products and technology solutions that are addressing key customer needs and improving our value proposition in focus segments Workplace experience Operational efficiency Sustainabil
Slide 27: Workplace experience is becoming increasingly important to customers
ACCELERATING OUR GROWTH JOURNEY In the wake of Covid-19, workplace experience is becoming increasingly important to customers which plays to the advantage of ISS Our pulse survey confirmed that …but the purpose of the office is …and companies are upgrading the office is here to stay… changing… their
Slide 28: Case study: Significant improvement of workplace experience through a repurposed office
ACCELERATING OUR GROWTH JOURNEY Case study: Significant improvement of workplace experience through a repurposed office to cater for changing needs Changing customer needs Our response Customer benefits ISS managed the process of redesigning, Support hybrid work changing and running the office: 33%
Slide 29: ISS will deliver structurally higher growth rates
ACCELERATING OUR GROWTH JOURNEY ISS will deliver structurally higher growth rates Better at winning Investments in Commercial operating new customers model and value propositions are starting to materialize in improved Commercial performance Better at retaining customers Better at selling to existin
Slide 30: New sales is trending positive from reinforced enterprise approach
ACCELERATING OUR GROWTH JOURNEY New sales is trending positive as a result of our reinforced enterprise approach to new wins Hit rate development for new sales, LTM Reinforced enterprise approach Revamped our Commercial organization and Hit rate in focus segments Hit rate for deals > 75 mDKK improve
Slide 31: New bid process has sharpened our focus on profitable growth
ACCELERATING OUR GROWTH JOURNEY New bid process has sharpened our focus on profitable growth and strengthened our risk management Unified global governance Aligned ways of working Strengthened and formalised bid/no- Early engagement of subject matter bid decision to stop unprioritised bids experts a
Slide 32: Strong portfolio growth driven by improved retention rate
ACCELERATING OUR GROWTH JOURNEY Strong portfolio growth driven by improved retention rate with 95% as mid-term ambition Retention rate development Structured approach to drive retention Group retention, %¹ Key account share of revenue, % Successfully retained all global contracts up for renewal in l
Slide 33: Covid-19 above base work phasing out but refurbishments picking up
ACCELERATING OUR GROWTH JOURNEY Covid-19 above base work is phasing out but workplace refurbishments are picking up and driving growth Non-portfolio development Business impact Total revenue, DKKbn Share above-base, % of total revenue Actively pursuing above base work as 80 20 20 customers are looki
Slide 34: Key takeaways: ISS to deliver structurally higher growth rates
ACCELERATING OUR GROWTH JOURNEY Key takeaways Focused segment Increased demand ISS to deliver strategies across the enterprise for workplace- and experience design structurally Stronger risk Investments in higher management and organizational technology and sustainability growth alignment Dedicated
Slide 37: Video #2: Net Zero for Scope 1, 2 and 3 by 2040
Net Zero for Scope 1, Scope 2 and Scope 3 by 2040
Slide 38: Agenda
ENABLING GROWTH 12:30 OUR JOURNEY Our Journey Jacob Aarup-Andersen Agenda Executing OneISS globally – UK and Ireland Liz Benison Accelerating our growth journey Jacob Aarup-Andersen 13:15 Q&A 13:30 BREAK 13:45 ENABLING GROWTH Scalable operating model Troels Bjerg Technology Markus Sontheimer Sustain
Slide 40: What we want you to take away from this session
SCALABLE OPERATING MODEL What we want you to take away from this session We are transforming to a We are investing significantly We are implementing global operating model to in group competencies to scalable service products address a professionalizing support our growth and across countries with v
Slide 41: OneISS – transformation towards one global operating model
SCALABLE OPERATING MODEL OneISS – transformation towards one global operating model… Enabling ISS to fulfill customers’ developing needs and gain scale advantages Customers needs ISS platform Key Account customers are consolidating Global platform for self-delivering their supply chains to focus on
Slide 42: Fundamentally different from competition
SCALABLE OPERATING MODEL …which is fundamentally different from competition Traditional Facility Management operating model OneISS operating model Account management Account management Site 1 Site 2 Site 1 Site 2 Subcontractor 1 Subcontractor 2 Subcontractor 3 Subcontractor 4 Subcontractor 5 Subcont
Slide 43: Four implemented accelerators for the OneISS operating model
SCALABLE OPERATING MODEL Changes Benefits Four implemented accelerators for the Strengthened … improving ability to win in prioritised segments while commercial capabilities OneISS operating and bid process…. effectively managing risks and future profitability model Centralized Finance … driving fun
Slide 44: Country blueprint organizations enabling acceleration of OneISS scale effects
SCALABLE OPERATING MODEL Country blueprint organizations enabling an acceleration of OneISS scale effects Standardized country blueprint Country Management organizations with Operations Performance functions are key to scale service products delivering Office-based Production-based Healthcare indust
Slide 45: Building and scaling industry leading service products
SCALABLE OPERATING MODEL Building and scaling industry leading service products 45 | © 2022 ISS
Slide 46: Introducing service products as an effective standardization tool
SCALABLE OPERATING MODEL Introducing service products as an effective standardization tool DELIVERING PRODUCT CUSTOMER OUTCOMES AND QUALITY ꞏ PRODUCTIVITY ENTERPRISE SUSTAINABILITY ꞏ COMPLIANCE SYNERGIES 46 | © 2022 ISS
Slide 47: Service Product Management model established
SCALABLE OPERATING MODEL Service Product Management model established to drive customer and enterprise outcomes Our service product lifecycle Office-based Customer Product Product Production- needs development performance based Healthcare SiteUp! Scale Pilot 47 | © 2022 ISS
Slide 48: Service product case study: Pure Space - Office
SCALABLE OPERATING MODEL Service product case study: Pure Space - Office 48 | © 2022 ISS
Slide 49: Significant potential in increasing productivity in daily office cleaning
SCALABLE OPERATING MODEL Significant potential in increasing productivity in daily office cleaning Daily office cleaning is a strong-hold for ISS and a key driver for overall workplace experience and wellbeing Productivity potential Workplace experience Daily office cleaning Other services DKK 25bn
Slide 50: Shift from input based to outcome based cleaning
SCALABLE OPERATING MODEL The market for daily office cleaning sees an accelerating shift from input based to outcome based... ...a key opportunity for our Pure Space – Office service product including the Portfolio Book to drive productivity Standardized ways of working Portfolio Book  Method Bookl
Slide 51: Pure Space - Office is already delivering strong business outcomes
SCALABLE OPERATING MODEL Pure Space - Office is already delivering strong business outcomes Pure Space - Office is being scaled… …and the results so far look promising 1,100+ sites across the ~10% average Significantly improved productivity uplift cleanliness Sites globe 22 ~90% reduced water Improv
Slide 52: Launching a portfolio of other attractive service products and tools
SCALABLE OPERATING MODEL Launching a portfolio of other attractive service products and tools Examples of products developed and being rolled-out - Addressing a material share of our volume and customer needs ISS Workplace Space Food waste The Food Place Asset Pure Space – Office App Optimization re
Slide 54: What we want you to take away from this session
TECHNOLOGY What we want you to take away from this session Our technology strategy How we have created How we aim to become and how it makes a difference a cybersecure core with technology leaders through for customers and ISS infrastructure moving data, in-house software, and placemakers to cloud p
Slide 55: Our technology strategy
TECHNOLOGY Our technology strategy Strategic ambition Framework – The Strategy Wheel Technology Leader in the industry Generating competitive advantage for our customers and ISS Stable, agile & cybersecure IT operations Strategic pillars and services The right digital applications for our customers
Slide 56: Strong progress in Info & Cyber Security
TECHNOLOGY Strong progress in Info Growing team from 5 to 50+ security specialists in & Cyber Security 2022 and a 24/7 In-house Security Operations Centre (SoC) Info & Cyber security has been first Handling 4,000 security alerts/month and providing priority in creating the foundation for global endp
Slide 57: Strengthening of our IT cyber-security
TECHNOLOGY KEY COMMENTS Strengthening of our IT cyber-security Significant improvement in cyber-security assessment score from 2.3 in 2020 to 2.9 Our factual assessment indicates that we have surpassed in 2022 benchmark for large-scale and complex companies ISS is now above benchmark (2.7) for compa
Slide 58: Moving infrastructure to cloud
TECHNOLOGY Moving infrastructure to cloud A unified secure set-up enabling enterprise-wide transparency, agility, and scalability STATUS 2023 TARGET 2021 2022 PLANNED 2024-2025 Multi-local data Multi-hybrid centres and global cloud set- Singapore Poland Netherlands Hong Kong outsourcers up Italy Ind
Slide 59: Establishing an in-house tech powerhouse
TECHNOLOGY GROWING THE ISS TECH POWERHOUSE Establishing an ~ 800+ technologists globally in-house tech ~ 150 new colleagues with complementary technology powerhouse capabilities in 2022 From solely relying on DELIVERING APPS, PLATFORMS, & DATA ANALYTICS consultants to combining Growth of ISS Hub War
Slide 60: Self-delivery makes a difference for ISS
TECHNOLOGY Self-delivery makes a difference for ISS Delivering technology that impacts people and places in an agile and iterative approach MyISS ISS Takeaway Outdoor App ISS Workplace Strengthening Balancing full Supporting App connection and -time jobs with placemakers to Promoting well- collabora
Slide 61: ISS' digital ecosystem creates value with scalable platforms, data and innovation
TECHNOLOGY ISS’ digital ecosystem creates value with Flexible and adaptable scalable platforms, data and innovation Offering standalone products and integrated digital services to drive profitability and Digital components ecosystem – Inside the workplace efficiency Workplace Experience Facility Man
Slide 62: Using data to improve decision-making
TECHNOLOGY Using data to improve decision-making – Creating value with ISS owned IP data Lowering carbon footprint through waste management Supporting corporate real estate strategy IoT : Workplace + Washroom Occupancy + Space Management Address 1 Address 2 Address 3 ISS Address 4 ISS Owned IP Addre
Slide 63: Key takeaways
TECHNOLOGY Key takeaways Our technology and data We are on a journey… … with clear guidelines insights will support growth Move to Cloud and maintain Deliver what we promise and workplace experiences solid Information & Cybersecurity trajectory globally Focus on customer needs Grow and develop ISS t
Slide 65: What we want you to take away from this session
SUSTAINABILITY What we want you to take away from this session We are bold and proud about We execute through two Our journey makes a real our sustainability journey lenses and we have difference for our customers – – we will be championing progressed significantly on strengthening our sustainable w
Slide 66: Championing sustainable workplaces
SUSTAINABILITY We want to become the sustainability leader in our industry We execute through two lenses, Environmental sustainability and Social sustainability Deep dive next Our ambition Championing Environmental Social sustainable Reduce Carbon Improve Belonging • Energy • Diversity workplaces •
Slide 67: Making progress on our own environmental commitments
SUSTAINABILITY Making progress on our own environmental commitments… Commitments Progress Progressing on submission of science-based targets in December 2022 Net Zero for Scope 1 and 2 Technology solutions for monitoring and tracking being deployed by 2030, and full Scope 3 by Integrating carbon man
Slide 68: Helping our customers on their net zero journey
SUSTAINABILITY … while helping our customers on their net zero journey Contributors to a customers’ workplace emissions Global emissions Scope 1-2 Scope 3 Our focus addresses some of the largest sources W ork-related of emissions globally travel Buildings Goods & services ~10% of global GHG emission
Slide 69: ISS is uniquely placed to support customers on their net zero journey
SUSTAINABILITY ISS is uniquely Service integration Large key account customers are looking for their placed to support partners to drive sustainability outcomes supporting customers on their their overall net zero journey – our Integrated Facility net zero journey (IFS) model is a powerful enabler S
Slide 70: Customer case – Large global bank
SUSTAINABILITY Customer case – Large global bank 65 Sites 11 Countries 5-year Programme 4,000,000 kWh Energy saved1 770 tonnes CO 2e GHG reduction1 GBP 487,000 Savings1 1: Results since launch Jan 2022 70 | © 2022 ISS
Slide 71: Examples of energy & carbon reducing initiatives
SUSTAINABILITY Examples of energy & carbon reducing initiatives - A holistic approach to energy optimization addressing behaviours, space and technical assets – every day GLOBAL TECH EUROPEAN EDUCATION CUSTOMER EUROPEAN TELECO PROFESSIONAL SERVICES COMPANY COMPANY Reduction of beef in our menus and
Slide 72: Service product – Food Waste reduction
SUSTAINABILITY Service product – Food Waste reduction 290+ Sites 12 Countries 527+ tonnes Food waste avoided1 1.3+ million Meals saved1 [Food waste film goes here] 2,269+ tonnes CO 2 GHG reduction1 USD 2.2+ million Savings1 Additional massive potential for further reductions as we have just started
Slide 73: Championing sustainable workplaces
SUSTAINABILITY We want to become the sustainability leader in our industry We execute through two lenses, Environmental sustainability and Social sustainability Deep dive next Our ambition Championing Environmental Social sustainable Reduce Carbon Improve Belonging • Energy • Diversity workplaces •
Slide 75: We will become the global 'Company of Belonging'
GLOBAL COMPANY OF BELONGING IT’S BEEN OUR HERITAGE FOR 120 YEARS We will become the global ‘Company of Belonging’ Over 5 million ISS employees have found an organisation Our Promise: A Place to be You who give Respect to the disrespected Be who you are Skills to the unskilled Opportunity to the disa
Slide 76: Our strategic approach to Diversity & Inclusion
GENERATIONS & AGE GLOBAL COMPANY OF BELONGING There are currently 5 generations in the workplace. We will focus on Our strategic approach generational inclusion and challenge age biases and stereotypes. to Diversity & Inclusion CULTURES, RACE & ETHNICITY Covering all imaginable differences among cul
Slide 77: Our culture ambition will be impactful
GLOBAL COMPANY OF BELONGING Our culture ambition 1. We pledge, working together with policy makers, will be impactful our customers and suppliers, to implement living wages across our industry We will launch 3 bold signature objectives leading to better outcomes for 2. We commit to giving 100,000+ p
Slide 78: Our strategic approach to Belonging creates value for all
GLOBAL COMPANY OF BELONGING Our strategic approach to Belonging creates value for all Living wage and Fair and lasting This translates into supporting opportunities to grow relationships built on leading industry growth as collaboration and trust EMPLOYEES PARTNERS we will keep customers for longer
Slide 79: Impactful results from paying living wages in India
GLOBAL COMPANY OF BELONGING Impactful results from paying living wages in India Case study: KEY STATISTICS IN INDIA EMPLOYMENT MARKET Approximately 90% of all Placemakers are still earning the Outcomes from key account minimum wage in ISS India Average minimum wage across India is 9,500 rupees per m
Slide 80: How will we know when we get there?
GLOBAL COMPANY OF BELONGING How will we know when we get there? We have 3 core areas to measure our progress DIVERSITY AND STAFF RETENTION GROWTH INCLUSION METRICS METRICS METRIC Engagement Staff retention Customer score rate retention rate ISS – A Place to Be You 80 | © 2022 ISS
Slide 84: Agenda
FINANCIALS 12:30 OUR JOURNEY Our Journey Jacob Aarup-Andersen Agenda Executing OneISS globally – UK and Ireland Liz Benison Accelerating our growth journey Jacob Aarup-Andersen 13:15 Q&A 13:30 BREAK 13:45 ENABLING GROWTH Scalable operating model Troels Bjerg Technology Markus Sontheimer Sustainabili
Slide 86: What we set out to achieve in 2020
CURRENT FINANCIAL PERFORMANCE What we set out to achieve in 2020 Challenging financial performance FINANCIAL TURNAROUND triggered focus on short-term turnaround PERFORMANCE IN 2020 TARGETS Operating margin above 4% Organic growth -6.6% when entering 2023 Deleveraging to below 3x Operating margin 0.5
Slide 87: Recap of drivers of the financial turnaround
CURRENT FINANCIAL PERFORMANCE Recap of drivers of the financial turnaround Initiatives to recover Investments into new Simplification Recovery to mid- financial performance operating model funded of portfolio and regain single digit by cost savings healthy debt level operating margin Improvement wit
Slide 88: Financial commitments since 2020 – Delivery on all financial targets
CURRENT FINANCIAL PERFORMANCE Financial commitments since 2020 – Delivery on all financial targets under OneISS Financial outlook Turnaround targets TARGET DELIVERED 2020 Delivered Operating margin1 above 4% Run-rate margin when entering 2023 at 4% 2021 Upgraded and delivered Deleveraging to below L
Slide 89: Q3 2022 financial performance
CURRENT FINANCIAL PERFORMANCE KEY COMMENTS Q3 2022 financial performance Continued strong growth as price increases and scope Entering next phase of the OneISS journey with increases with current solid growth momentum customers accelerate Q3 2022 Return-to-office growth is still (excl. IAS 29) contr
Slide 90: Outlook 2022 updated for all financial KPIs
CURRENT FINANCIAL PERFORMANCE Outlook1 2022 updated for all financial KPIs Organic growth Operating margin2 Free cash flow Outlook updated reflecting continued ~ 6.5% ~ 3.8% ~ DKK 1.5 bn (Before above 5%) (Before above 3.75%) (Before above DKK 1.5 bn) solid performance in Q3 2022 • Driven by return-
Slide 91: Financial leverage development
CURRENT FINANCIAL PERFORMANCE KEY COMMENTS Financial leverage development ISS balance sheet has returned to a healthy position Turnaround target of financial leverage below 3.0x is achieved NET DEBT AND FINANCIAL LEVERAGE Reduction in leverage is driven by 15.8 lower debt and increased financial 14.
Slide 92: An enhanced financial operating model
CURRENT FINANCIAL PERFORMANCE An enhanced financial operating model – the platform for the future growth journey Enhanced free cash Improved Strong business Simpler and efficient Closer collaboration flow management transparency and partner for the infrastructure between countries oversight of the o
Slide 94: Key considerations
CAPITAL ALLOCATION AND M&A CREDIT RATING M&A ACTIVITY Key considerations ISS has been investment grade OneISS has created an operating rated for more than 5 years model where scale has become a competitive advantage Investment grade rating is supporting ISS commercially and “Closer, Simpler and Stro
Slide 95: New financial leverage target
CAPITAL ALLOCATION AND M&A New financial leverage target Stable business model and predictable cash flows provide capacity to manage financial leverage New financial leverage target The financial leverage target Provide sufficient financial strives to optimise shareholder flexibility to fulfill our
Slide 96: New capital allocation policy
CAPITAL ALLOCATION AND M&A PRIORITIES New capital allocation 1. Maintain investment grade rating policy Adhere to financial leverage target (2.0-2.5x) and maintain investment grade rating 2. Dividends ISS will stringently allocate capital by Pay dividends with commitment of an annual dividend pay-ou
Slide 97: Our enhanced operating model enables value creating M&A activity
CAPITAL ALLOCATION AND M&A Historically M&A was used in ISS to scale and rapidly expand the business across services and Our enhanced operating model geographies, however with limited focus on strategic enables value creating M&A fit and integration activity Learning from history and a decade of div
Slide 98: A new strategic approach learning from the past
CAPITAL ALLOCATION AND M&A A new strategic approach learning from the past ANNUAL NUMBER OF M&A TRANSACTIONS IN ISS 1999-2021 BUY AND BUILD IPO FOCUS DIVESTMENT FOCUS From ‘04 – ‘08 the avg. acquired +40 divestments completed from revenue was less than DKK 75m ’18 – ’21 (countries and BUs) 120 105 1
Slide 99: Our M&A approach: 3 non-negotiable requirements
CAPITAL ALLOCATION AND M&A Bolt-on M&A will only be THE STRATEGIC FIT DICTATES THAT WE ONLY CONSIDER TARGETS THAT activated in selected countries Our M&A approach with: Support IFS and Key Accounts principles Have an attractive exposure to our priority • Stable outlook segments 3 non-negotiable • We
Slide 100: Our M&A approach: 3 non-negotiable requirements
CAPITAL ALLOCATION AND M&A We will be disciplined and KEY FINANCIAL SELECTION CRITERIA conservative regarding Robust company Our M&A approach valuation levels to ensure Healthy customer portfolio accretion to our shareholders 3 non-negotiable Positive organic growth requirements In a standalone scen
Slide 101: Our M&A approach: 3 non-negotiable requirements
CAPITAL ALLOCATION AND M&A Acquisitions to be integrated STRINGENT INTEGRATION AND SYNERGY REALIZATION into our OneISS platform with Our M&A approach a standardized approach Tracking and control anchored in Group tailored to the specific Finance 3 non-negotiable transaction type Focus on People and
Slide 102: Acquisition of Livit FM in Switzerland
ADDING SCALE AND MARGIN TO SWITZERLAND CAPITAL ALLOCATION AND M&A +0.5% Acquisition of Livit FM in Switzerland addition to Group revenue - Proof-of-concept of our M&A approach +640 Type Strategic Financial Experience Integration new placemakers to the ISS family fit fit +1,600 Scale (cleaning Priori
Slide 104: ISS has proven resilient over time
FINANCIAL TARGETS OPERATING MARGIN, % ISS has proven 5.0 5.3 5.5 5.6 5.2 5.4 5.9 5.6 4.9 5.6 5.4 5.1 5.4 5.4 5.6 5.4 5.0 resilient over time… 4.6 4.5 4.2 2.5 0.5 20 years of stable performance through various macroeconomic 5.2% average incl. restructuring pre-Covid 19 environments…. ORGANIC GROWTH,
Slide 105: Supported by strong cash conversion
FINANCIAL TARGETS … supported by strong cash conversion 87 96 89 98 Using the simplest 78 definition of cash 3.6 70 72 67 69 63 64 68 65 65 64 60 60 3.0 59 3.0 2.7 2.9 2.7 conversion: 2.6 3.0 2.8 2.8 40 39 2.4 2.2 1.9 1.7 1.6 1.7 1.4 11 1.1 1.0 Free cash flow / 0.9 0.4 Operating profit1 -1.8 2000 20
Slide 106: The next journey for ISS – grow strongly at sustainable margins
FINANCIAL TARGETS The next journey for ISS – grow strongly at sustainable margins Our 5 strategic priorities create a Leading to our 4 financial commitments competitive edge in the market in the updated equity story Commercial momentum and segment leadership ISS will grow strongly at an attractive m
Slide 107: Financial targets – growing strongly at sustainable margins
FINANCIAL TARGETS Financial targets – growing strongly at sustainable margins 2024 AND BEYOND Organic growth 4 - 6% Operating margin > 5% Cash conversion1 > 60% 107 | © 2022 ISS 1: Cash conversion, % = Free cash flow/Operating profit before other items
Slide 108: Organic growth drivers
FINANCIAL TARGETS Organic growth drivers – enhanced competitive advantage will lead to consistently higher growth Growth enablers • Segment • Commercial investments • Operating model leadership • Segment leadership improving pass-on rate ORGANIC GROWTH MAIN BUILDING BLOCKS • Technology • Technology
Slide 109: Our path to above 5% margin
FINANCIAL TARGETS KEY COMMENTS Our path to above 5% margin Underperforming areas (mainly Driven by margin improvements supported by revenue growth DTAG and France) will continue to improve after 2022 and Key margin drivers contribute positively to group • Run-rate effect and • Operating model and sc
Slide 110: Operating margin development
FINANCIAL TARGETS Operating margin development A clear bridge to above 5% operating margin 2023 preliminary OPERATING MARGIN DEVELOPMENT margin outlook: >5% 4.25 – 4.75% 4.25 – 4.75% ~ 3.8% 2.5% 0.5% 20201 2021 2022 2023 2024 and beyond 110 | © 2022 ISS 1: Excluding one-offs and restructurings
Slide 111: Structural cash conversion
FINANCIAL TARGETS KEY COMMENTS Structural cash conversion Working capital is expected to be slightly negative as ISS grows A strong cash generative business model every year Net interests are expected to be roughly CASH CONVERSION BRIDGE stable as we adhere to our capital structure policy, subject t
Slide 112: Agenda
SUMMARY 12:30 OUR JOURNEY Our Journey Jacob Aarup-Andersen Agenda Executing OneISS globally – UK and Ireland Liz Benison Accelerating our growth journey Jacob Aarup-Andersen 13:15 Q&A 13:30 BREAK 13:45 ENABLING GROWTH Scalable operating model Troels Bjerg Technology Markus Sontheimer Sustainability
Slide 114: Today our equity story evolves
SUMMARY OF THE DAY Today our equity story evolves From delivering a financial turnaround… …to superior growth at attractive margins Attractive market Resilient business Strengthened Significant profit Value-creating capital with significant potential and powerful operating competitiveness and growth
Slide 117: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements, including, but not limited to, the statements and expectations contained in the “Outlook” section of this presentation. Statements herein, other than statements of historical fact, regarding future events or prospects,
Slide 118: Participation in the ISS Capital Markets Day 2022
Participation in the ISS Capital Markets Day 2022 As a part of your participation in the event, ISS may collect and process your personal data as you may appear in the recording and hereto related images. ISS will process your personal data for the purpose of recording and virtually sharing the ISS

ISS — Investor Day (November 2022) on 6ix

Iss A/s — Investor Day (November 2022)

Slide 1: ISS Capital Markets Day 2022

Slide 2: Video #1

Slide 3: Today our equity story evolves

Slide 4: Agenda

Slide 5: Presenting for you today

Slide 6: Our Journey

Slide 7: Connecting people and places to make the world work better

Slide 8: Impacting millions of people every day

Slide 9: Our global business platform

Slide 10: 20 years of stable performance

Slide 11: Our journey since launch of OneISS in December 2020

Slide 12: Strong delivery of all financial commitments under new management team

Slide 13: Strong management team in place to deliver the next phase

Slide 14: Positioned to fuel our five strategic priorities

Slide 15: Executing OneISS globally: UK & Ireland case study

Slide 16: UK & Ireland developed into an underperforming country in 2019/2020

Slide 17: The OneISS transformation – Founded on cultural change

Slide 18: OneISS performance initiatives

Slide 19: The next stage of the journey for UK&I

Slide 20: Key takeaways

Slide 21: Accelerating our growth journey

Slide 22: What we want you to take away from this session

Slide 23: Our strategic focus

Slide 24: Demand for integrated contracts continues to be a key growth driver

Slide 25: Three key customer needs we see across focus segments

Slide 26: Investing to improve our value proposition

Slide 27: Workplace experience is becoming increasingly important to customers

Slide 28: Case study: Significant improvement of workplace experience through a repurposed office

Slide 29: ISS will deliver structurally higher growth rates

Slide 30: New sales is trending positive from reinforced enterprise approach

Slide 31: New bid process has sharpened our focus on profitable growth

Slide 32: Strong portfolio growth driven by improved retention rate

Slide 33: Covid-19 above base work phasing out but refurbishments picking up

Slide 34: Key takeaways: ISS to deliver structurally higher growth rates

Slide 35: Our Journey

Slide 36: Coffee break

Slide 37: Video #2: Net Zero for Scope 1, 2 and 3 by 2040

Slide 38: Agenda

Slide 39: Scalable Operating Model

Slide 40: What we want you to take away from this session

Slide 41: OneISS – transformation towards one global operating model

Slide 42: Fundamentally different from competition

Slide 43: Four implemented accelerators for the OneISS operating model

Slide 44: Country blueprint organizations enabling acceleration of OneISS scale effects

Slide 45: Building and scaling industry leading service products

Slide 46: Introducing service products as an effective standardization tool

Slide 47: Service Product Management model established

Slide 48: Service product case study: Pure Space - Office

Slide 49: Significant potential in increasing productivity in daily office cleaning

Slide 50: Shift from input based to outcome based cleaning

Slide 51: Pure Space - Office is already delivering strong business outcomes

Slide 52: Launching a portfolio of other attractive service products and tools

Slide 53: Technology

Slide 54: What we want you to take away from this session

Slide 55: Our technology strategy

Slide 56: Strong progress in Info & Cyber Security

Slide 57: Strengthening of our IT cyber-security

Slide 58: Moving infrastructure to cloud

Slide 59: Establishing an in-house tech powerhouse

Slide 60: Self-delivery makes a difference for ISS

Slide 61: ISS' digital ecosystem creates value with scalable platforms, data and innovation

Slide 62: Using data to improve decision-making

Slide 63: Key takeaways

Slide 64: Environmental Sustainability

Slide 65: What we want you to take away from this session

Slide 66: Championing sustainable workplaces

Slide 67: Making progress on our own environmental commitments

Slide 68: Helping our customers on their net zero journey

Slide 69: ISS is uniquely placed to support customers on their net zero journey

Slide 70: Customer case – Large global bank

Slide 71: Examples of energy & carbon reducing initiatives

Slide 72: Service product – Food Waste reduction

Slide 73: Championing sustainable workplaces

Slide 74: Social Sustainability

Slide 75: We will become the global 'Company of Belonging'

Slide 76: Our strategic approach to Diversity & Inclusion

Slide 77: Our culture ambition will be impactful

Slide 78: Our strategic approach to Belonging creates value for all

Slide 79: Impactful results from paying living wages in India