ISS outlines growth strategy, financial targets

ISS to invest in three key areas: operational efficiency, technology, and sustainability.

ISS has presented the next phase of the OneISS strategy and new financial targets at its Capital Markets Day in London.

According to the facility management company, ISS’s journey is evolving from “a period of turnaround to a new phase of strong growth at sustainable and attractive margins”.

The growth agenda will be focused on providing integrated facility services to key accounts in three segments (office-based, production-based, and healthcare).

ISS is focusing and investing in three key commercial areas that are enabling growth – operational efficiency, technology and sustainability.

According to the company, these areas will become differentiating factors for performance at current customers’ workplaces and in future customer bids.

Operational efficiency is delivered through the enhanced operating model, which is enabling the launch of a portfolio of scalable service products to drive a step-change in global productivity.

The investments in technology are focused on creating value throughout an ecosystem of scalable platforms with data and innovation.

Finally, ISS stated  it “is determined to become the sustainability leader in the industry by championing sustainable workplaces”.

Through this agenda, ISS is launching an ambition to become the Global Company of Belonging through three bold signature objectives.

At the same time, the company stated it is progressing on its own environmental commitments while supporting its customers’ journey to reduce carbon, energy, waste and materials.

Financial targets 

Following the delivery of the financial turnaround targets, ISS said it has now re-established a healthy financial platform and is consequently announcing new financial targets and a new capital allocation strategy.

The new financial targets are focusing on the delivery of strong growth over time through strengthened competitiveness and a scalable operating model.

ISS is targeting 4 per cent – 6 per cent organic growth annually from 2024 and will additionally add volume to the operating model through selective acquisitive growth.

The new target for the operating margin is to be sustainably above 5 per cent from 2024 and thereafter. ISS expects that consistent annual revenue growth creates further margin improvement potential over time.

ISS also expects to continue to be highly cash generative by converting more than 60 per cent of the operating profit before other items into free cash flow. The preliminary 2023 outlook for the operating margin is 4.25 per cent-4.75 per cent.

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