The acquisitive Danish service provider ISS increased both turnover and operating profit by more than 40% last year. Operations in the UK contributed the second highest sales figure. To support the Group's strategy of acquisition-driven growth, the ISS board is proposing that the net profit
for 2000 of DKK214m (£18m) is allocated to reserves.

Group turnover was up 45% at DKK28,719m (£2,428m) and operating profit rose 42% to DKK1,021m (£86m). Organic growth at 7% exceeded the 6% target set by the new corporate strategy, create 2005 (see News story).

The increased pace of growth is clear from the fact that ISS acquired 53 companies in 22 countries last year and has made a total of 117 acquisitions between 1998 and 2000. Four of these enhanced ISS's offering and strengthened its market position in France, the UK, Denmark and the Netherlands.

Most of the acquisitions were within the Facility Services division, and in addition to adding to the contract volume, the purchases strengthened ISS’ service offering and competencies. Acquisitions in 2000 included eight Nordic Property Services providers with total annual turnover of approximately DKK 370m (£31m), which enhanced ISS’ competencies in the areas of technical property services and management of apartment blocks, commercial properties and public buildings.

It has not all been progress however. The create 2005 strategy also calls for a minimum 6% margin. In fact, ISS's operating margin (operating profit as a percentage of turnover) actually fell slightly, from 5.2% in 1999 to 5.1%.

The group has also found it difficult to increase the proportion of its staff employed full-time, an aim of the earlier five year plan. Of its 253,200 workers, 53% are full-time, the same as in 1999 which was 2% down on the year before. Including its most recent acquisitions, ISS is now one of the ten largest private employers in Europe.

The Group has more than 70,000 B2B customers in its portfolio. Some of these take only one or a few services, while the group provides large, integrated service solutions to others. Similarly, ISS does not currently provide services in all the countries in which its multi-national customers operate. Not surprisingly the company sees potential for providing a wider range of services and for expanding existing contracts both on a national and an international level. New customers and major contract extensions in 2000 included Nokia, Citibank, Ericsson, Deutsche Telekom Immobilien, Peugeot, KLM, Unilever, ABB, Siemens, SAS, Finnair and IBM.

In the UK, ISS increased turnover by 58% to DKK3,817m (£323m) and operating profit was up 35% at DKK220.9m (£18.7m). ISS UK's operating margins came down 1% to 5.8%, the result, says the company, of acquiring companies with lower margins.Read i-FM's interview with ISS UK MD Simon Cox

ISS UK acquired six companies in 2000, including 96.4% of the share capital of RCO Holdings (see News story). The acquisitions of RCO and Southdown Cleaning and Maintenance, in particular, improved ISS UK’s Facility Services capabilities. Together, the two companies added a full service package, including cleaning, logistics, laundry, distribution, switchboard, landscaping and waste management.

Richard Byatt