Annual Report 2006 ISS Global A/S

2,706 million at 31 December 2006, from DKK 1,786
million at 31 December 2005. Additions of DKK
1,271 million from acquisitions were partly offset by
DKK 18 million of foreign exchange adjustments
and amortisation of DKK 333 million.
Investment in associates
Investment in associates decreased from DKK 132
million at 31 December 2005, to DKK 66 million at
31 December 2006, primarily a result of the acquisition
of the remaining shares in Tempo taking ISS
Global’s stake from 49% in 2005 to 100% in 2006.
Trade receivables
Trade receivables increased 23% from DKK 7,564
million at 31 December 2005 to DKK 9,281 million at
31 December 2006. The increase was primarily due
to organic growth and acquisitions in 2006.
Securities
Securities were unchanged at DKK 59 million at 31
December 2006 compared to 31 December 2005.
Cash and cash equivalents
Cash and cash equivalents increased from DKK
1,231 million at 31 December 2005, to DKK 2,006
million at 31 December 2006, of which DKK 1,120
million resided at Group level and the remainder resided
at country level. The cash position was positively
impacted by the working capital inflow in Q4
2006. The cash position during the month may fluctuate
significantly as a result of frequency and timing
of cash collection and salary payments.
Total equity
Total equity decreased from DKK 2,192 million at
December 31 2005, to DKK 1,678 million at December
31 2006. Equity attributable to the equity
holders of ISS Global amounted to DKK 1,620 million
at 31 December 2006, a decrease of DKK 517
million from DKK 2,137 million at 31 December
2005. The decrease was part of a planned increase
of financial leverage, which was implemented
through dividend payments of DKK 1,260 million in
2006.
Net income and expenses recognised directly in equity
increased equity by DKK 23 million. This included
negative currency adjustments relating to investments
in foreign subsidiaries of DKK 104 million
and realised and unrealised net gains on hedges of
DKK 117 million. Actuarial gains, net on defined
benefit pension schemes amounted to DKK 46 million.
The gains were primarily related to the Group’s
pension schemes in the Netherlands, Norway, Sweden,
Switzerland and the United Kingdom. As described
in note 1 to the consolidated financial
statements, such gains are taken directly to equity.
Reversal of fair value adjustments related to the
sale of a PFI equity stake in the United Kingdom reduced
equity by DKK 18 million, and share-based
payments expensed in the income statement were
ANNUAL REPORT 2006 / Financial Review
offset by an increase in equity of DKK 14 million.
The tax effect of entries recognised directly in equity
was a decrease of DKK 32 million.
Net profit for the year attributable to the equity holders
of ISS Global was DKK 717 million.
The equity ratio, defined as total equity relative to
total assets, decreased from 6.9% at 31 December
2005, to 4.3% at 31 December 2006, which was
primarily due to capital structure adjustments
through the payment of dividends of DKK 1,260 million.
Pensions and similar obligations
Pensions and similar obligations amounted to DKK
885 million at 31 December 2006, against DKK 833
million at 31 December 2005. The majority of the
Group’s pension plans are defined contribution
plans. ISS Global’s contributions to such plans are
accrued and expensed on an ongoing basis. In certain
countries, mainly in France, Germany, the
Netherlands, Norway, Sweden, Switzerland and the
United Kingdom, ISS Global has defined benefit
plans. As mentioned above, actuarial gains, net, of
DKK 46 million were taken directly to equity. The net
liability for the defined benefit plans amounted to
DKK 844 million at 31 December 2006, representing
an increase from DKK 801 million at 31 December
2005, primarily due to additions from acquired companies,
partly offset by actuarial gains. Based on the
current discount rates ranging between 2.9% and
6.5%, pension costs related to defined benefit plans
are expected to amount to approximately DKK 168
million in 2007. A simultaneous change in the discount
rates of 0.5 percentage point is estimated to
increase or decrease, as the case may be, these
costs in 2007 to approximately DKK 169 million or
approximately DKK 156 million, all other things being
equal. For detailed information on pension obligations,
please see note 26 to the consolidated financial
statements.
Other provisions
Other provisions were DKK 745 million at 31 December
2006, of which DKK 414 million had an estimated
maturity of less than one year. Comparative
figures at 31 December 2005, were DKK 715 million
and DKK 476 million, respectively. Provisions related
to acquisitions, mainly redundancy payments
and termination of rental of properties, amounted to
DKK 64 million against DKK 56 million at 31 December
2005. The remaining provisions comprise
various obligations incurred in the ordinary course of
business, e.g. labour related obligations, legal obligations,
contract closures etc.
Interest-bearing debt, net
Interest-bearing debt amounted to DKK 20,011 million,
an increase of DKK 4,326 million from DKK
15,685 million at 31 December 2005. Long- and
short-term debt amounted to DKK 22,328 million,
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