Daily Archives: 18/02/2014

Euralarm presents PEARS-Alert4All concept at Archimedes Round Table

Euralarm recently participated in the Archimedes Round Table discussion on Crisis Management and Civil Protection. The association of European manufacturers, installers and service providers of the electronic fire safety and security industry presented its PEARS project and outlined ways in which the project supports data sharing during emergency management procedures.

The focus of the recent Archimedes Round Table discussions in Warsaw was to identify gaps for the efficient and effective operation of crisis management and civil protection procedures.

In addition to several project reports, experiences from a simulation game were used to stimulate intensive discussions between the R&D community (eg the Industrial Research Institute for Automation and Measurement, the Université Catholique de Louvain and the Scientific and Research Centre for Fire Protection) and end users (among them firefighters from Dortmund and members of the Spanish National Police as well as representatives from Crisis Information Centres).

Warsaw: venue for the recent Archimedes Round Table discussions

Warsaw: venue for the recent round table discussions

These discussions showed that sharing data/information in the emergency management process is of vital importance for efficient operations. This is in line with the results of the PEARS project, and the first ideas about a ‘European Emergency Communication’ emerging from the fire section of Euralarm.

Presentation of the PEARS-Alert4All concept

Thorsten Ziercke, Euralarm’s project leader for PEARS, took the opportunity to present the PEARS-Alert4All concept.

The project has learned that fire and security products not only can be, but also should be integrated with public alert systems. The extensive installed base could be easily upgraded to receive alert signals which may then be used to activate audible and/or visual warnings.

More sophisticated systems can convert public alert messages into intelligible voice messages or display the same message on PCs.

Integrating existing safety and security systems into a public alert scenario could be a cost-effective and rapid alternative for reaching large parts of the population.

Since the first presentation of the concept back in October 2013, PEARS-Alert4All has received much positive feedback.

End users including firefighters, members of police organisations and representatives from Crisis Information Centres were invited by Thorsten Ziercke to contribute to the standardisation groups CEN TC 391 and ISO TC 223 that are currently looking for experts from the civil protection sector to help make their standards even better.

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Sharper focus yields solid financial results for ISS

ISS, one of the world’s leading facility services companies, has announced its preliminary results for 2013 after “a year of solid organic growth”.

• Organic growth reached 4.3% for FY 2013 (2012: 1.7%)
• Operating margin was 5.5% for FY 2013 (2012: 5.6%)
• Profit before goodwill impairment/amortisation, etc increased to DKK 1,026 million for FY 2013 (2012: DKK 421 million)
• Cash conversion was 102% (2012: 103%)
• Net debt reduced by DKK 3,304 million in 2013
• Intention to launch an Initial Public Offering (IPO) announced

Jeff Gravenhorst, group CEO at ISS A/S, said: “We further focused our business in 2013, which supported our delivery of solid financial results. Despite challenging economic conditions we delivered higher organic growth. This was mainly driven by the commencement of some of our strategically important IFS contracts with major international customers, and we have recently extended our large global IFS contract with HP until 2018.”

Gravenhorst continued: “During 2013 and in early 2014, we have successfully divested a number of non-core activities which has further focused our business platform. In combination with our strong cash conversion, the divestment proceeds have significantly reduced our debt. We are well positioned and ready for continued and accelerated execution of our strategy in 2014.”

Jeff Gravenhorst: CEO at the ISS Group

Jeff Gravenhorst: CEO at the ISS Group

Group revenues and organic growth

Group revenue amounted to DKK 78.5 billion and organic growth was a robust 4.3% compared with 1.7% in 2012. Organic growth was driven by both developed and emerging markets. All regions but one delivered positive organic growth rates.

Western Europe, which is ISS’ largest region, delivered strong organic growth of 5% while Asia delivered double-digit organic growth rates for the 34th consecutive quarter. Organic growth for Q4 2013 was 5.0% compared with 1.9% for the same period in 2012.

Total Group revenue was down 1.3% compared with 2012 as the organic growth was more than offset by the successful strategic divestment of non-core activities and a negative effect from exchange rate movements (which decreased revenue by 2% and 3% respectively).

Operating profit before other items decreased by 2.2% to DKK 4,315 million (2012: DKK 4,411 million), and was negatively affected by both the successful divestments of non-core activities and currency effects.

The operating profit before other items as a percentage of revenue (ie the operating margin) decreased to 5.5% from 5.6% in 2012.

Operating margin for Q4 2013 was 6.2% compared with 6.0% for the same period in 2012. The operating margin was in line with expectations.

The divestment of the large and margin accretive pest control business in May 2013 negatively affected the operating profit margin. Adjusted for the divestment of the pest control activities, the operating margin was slightly improved from 2012 to 2013.

Operating profit increased by 3% to DKK 4,215 million in 2013 from DKK 4,103 million in 2012.
Profit before goodwill impairment/amortisation and impairment of brands and customer contracts increased to DKK 1,026 million (2012: DKK 421 million) driven by an increase in operating profit and a decrease in financial expenses, net.

The net loss decreased to DKK 397 million (2012: DKK 450 million), positively impacted by a decrease in other income and expenses, net, and lower financial expenses, net which were partly offset by higher non-cash expenses related to goodwill impairment.

The cash conversion for 2013 was 102% (2012:103%) as a result of a strong cash flow performance across the Group.

Focus on encouraging timely payment by customers and on exiting customer contracts with unsatisfactory payment conditions led to a decrease in debtor days of more than one day.

Focus on emerging markets

Emerging markets (comprising Asia, Eastern Europe, Latin America, Israel, South Africa and Turkey) now represent 23% of total ISS Group revenues, 55% of total organic growth in 2013 and 56% of ISS’ employee base.

The emerging markets delivered organic growth of 11% and, in addition to significantly increasing the Group’s organic growth, these markets delivered an operating margin of 6.3% in 2013 (2012: 5.8%).

New major contracts

In 2012, ISS won some of the largest contracts in its history, including Barclays, Novartis and Citi APAC. By the end of 2013, all three contracts were fully operational in all key geographies.

In 2013, ISS signed major IFS contracts with H.J. Heinz and Nordea Bank.

In addition to these new global corporate clients contracts, several other important contracts were secured in 2013 – new contracts as well as expansion of existing contracts.

In 2014, ISS has extended the global IFS contract with HP until 2018.

Continued deleveraging

With the proceeds from divestments and improved conditions for repaying debt, in 2013 ISS completed two excess proceeds offers and conditional partial redemptions in aggregate of EUR 325.2 million of its EUR 581.5 million 8.875% Senior Subordinated Notes due 2016.

At the end of 2013, this leaves an aggregate principal amount of approximately EUR 256.3 million of Notes outstanding.

In 2013, ISS has repaid more than half of the most expensive element of the debt which will lead to significant interest cost savings going forward. Currently, ISS has no significant short-term financing maturities. In 2013, net debt was reduced by DKK 3,304 million to DKK 22,651 million (2012: DKK 25,955 million) and financial income and expenses, net was reduced by DKK 450 million.

Launch of an IPO and the general outlook

In connection with the release of the 2013 preliminary results, ISS has also announced today its intention to launch an Initial Public Offering (IPO) of its shares and to list on NASDAQ OMX Copenhagen.

ISS expects revenue growth in 2014 to be 3%-4% assuming constant foreign exchange rates1 and before the impact of any acquisitions or divestments completed in 2013 and 2014.

Changes in foreign exchange rates are expected to negatively impact revenue growth in 2014 by approximately 3 percentage points2.

Divestments and acquisitions completed in 2013 and divestments completed in 2014 are expected to negatively impact revenue growth in 2014 by 2 to 3 percentage points3.

ISS expects total revenue growth in 2014 to be negative by approximately 2%.

Operating margin in 2014 is expected to be above the 5.5% realised in 2013. Cash conversion in 2014 is expected to be above 90%.

References

1For the purpose of the outlook for the year ending 31 December 2014, constant foreign exchange rates are the realised average exchange rates for the financial year 2013
2Calculated revenue for 2014 at exchange rates at 31 December 2013, less the same revenue calculated at the average exchange rates for the financial year 2013 relative to revenue realised in 2013 less estimated revenue from divestments completed in 2013 and 2014
3At 31 December 2013, ISS had certain businesses held for sale. The outlook for the year ending 31 December 2014 includes only divestments completed in 2014 as of and including 14 February 2014, comprising the pest control activities in India and the security activities in Israel

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Thomas Berglund elected deputy chairman of the ISS Board

ISS’ Board of Directors has elected Board member Thomas Berglund as deputy chairman of the Board.

Thomas Berglund is president and CEO of Capio, one of the leading healthcare and medical companies in Sweden and Europe.

Prior to this position, Berglund served as chairman of the Board of Capio.

Berglund has been a member of the Board of ISS since March 2013 and has extensive experience in leading and growing international service companies, including serving as CEO of Securitas from 1993 to 2007.

Thomas Berglund: elected deputy chairman of the ISS Board

Thomas Berglund: elected deputy chairman of the ISS Board

Thomas Berglund holds a BSc in Economics and Business and is a former consultant with the Swedish Management Group and adviser to the Swedish Government administration.

He’s also a Board member of the Swedish Association of Private Care Providers.

Extensive international experience

Lord Allen, the chairman of ISS, said: “I’m delighted that Thomas Berglund has accepted the additional role as deputy chairman of the Board of ISS. Thomas has an extensive international experience and is a highly experienced service sector industrialist. Few people understand the service industry better than Thomas.”

Lord Allen continued: “ISS has taken great strides in recent years. It has a global leading position in the industry, and we have ambitious plans for the future. I’m convinced that Thomas will be of significant value to our endeavors in his new expanded role.”

Speaking about his new role, Thomas Berglund explained: “It is an honour to take up the role as deputy chairman of ISS. Since I joined the ISS Board of Directors, I’ve been sincerely impressed with the strength of the company, its governance structure and the strong focus on customer value at all levels.”

Berglund concluded: “In this new role, I’m thrilled to have the opportunity to support ISS in its exciting journey to become the world’s greatest service organisation.”

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