Danish cleaning group ISS to sell operations in 13 countries and cut 100,000 jobs
A two-year programme of expedited investment, encompassing services and platform, will materially enhance ISS’s delivery capabilities. Investment will include project-related operating expenditure, capital expenditure and selected M&A.
It will strengthen ISS’s ability to protect and care for customers’ property, people and environment. Capital will be reallocated from areas that are not core to the Key Account strategy to help fund this transformation.
Operations in 13 countries will be divested – Thailand, Philippines, Malaysia, Brunei, Brazil, Chile, Israel, Estonia, Czech Republic, Hungary, Slovakia, Slovenia and Romania. The exit from non-core services will be concluded by divesting a number of business units across the group – entirely consistent with ISS’s strategy of recent years.
In 2017, these planned country and business unit divestments generated a revenue of DKK 9,685 million (12% of Group) and Operating Profit before other items of DKK 373 million (8% of Group). The process of divesting countries and business units is expected to conclude during 2020.
These divestments will significantly simplify the business, reducing complexity and risk. Upon completion, the number of customers is expected to reduce by 50% (from 125,300 to around 62,700) and the number of employees is expected to reduce by 20% (from 490,000 to around 390,000).
The two-year programme of expedited investment will strengthen ISS’s delivery capability to Key Accounts (including global and regional) and is expected to yield attractive financial returns.
Within 2019 and 2020, ISS remains committed to paying an ordinary dividend at least equal to the DKK 7.70 per share paid in 2018.
ISS intends to return at least 25% of net divestment proceeds to shareholders by way of a share buy-back or extraordinary dividend. ■