I. Table of Contents - ISS

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tatiana\Bank Book\Public Bank Book\FINAL ISS PUBLIC Bank IM - Press Release to EMTN_1.doc 9 Nov 2005 10:32 26/91 Figure 6: Overview of ISS’s Market Positions (2004) Source: Internationally recognised consulting firm ISS’s European Contract Cleaning Market Position C. Cash Generative Business 26 Country Austria Belgium & Luxembourg Denmark Finland France Germany Italy The Netherlands Norway Spain Sweden Switzerland Company Characteristics ISS’s Market Position During the last six years, ISS’s cash conversion ratio, which ISS defines as Free Operating Cash Flow as a percentage of profit before goodwill amortisation under Danish GAAP, or of profit before goodwill impairment and write-down and amortisation of customer contracts under IFRS, has been above 100%. ISS achieved this result primarily through a company-wide focus on reducing working capital and capital investment requirements, with particular emphasis on reducing debtor days and increasing the use of operating leases and rental arrangements rather than purchasing assets. In addition ISS’s business has relatively low capital expenditure requirements. For example, net investments in intangible assets and property, plant and equipment have averaged approximately 1.3% of revenue over the last five years. ISS expects to continue to generate positive Free Operating Cash Flow and aims to achieve a target cash conversion ratio of between 90% and 95%. UK 1 1 1 1 3+ 3 3+ 1 1 1 1 1 2
tatiana\Bank Book\Public Bank Book\FINAL ISS PUBLIC Bank IM - Press Release to EMTN_1.doc 9 Nov 2005 10:32 27/91 Figure 7: Historical Free Operating Cash Flow 2000 - 2004 Free Operating Cash Flow (DKK million) 2,500 2,000 1,500 1,000 500 0 874 FOCF Cash Conversion 105% 118% 1,058 1,739 27 167% 150% 1,942 Company Characteristics 107% 1,396 2000 2001 2002 2003 2004 Note: (1) The cash conversion ratio, as calculated by ISS, represents Free Operating Cash Flow as a percentage of profit before goodwill amortisation under Danish GAAP, or profit before goodwill impairment and write-down and amortisation of customer contracts under IFRS. In 2002, the cash conversion ratio was adjusted to remove the effect of a one-time gain of DKK 74 million (EUR 10 million) related to the sale of a minority interest in another entity. In 2003, the cash conversion ratio was adjusted to remove the effect of a tax repayment of DKK 168 million (EUR 23 million) related to the issuance of shares to employees. (2) Free Operating Cash Flow, as calculated by ISS, represents cash flow from operating activities less investments in intangible assets and property, plant and equipment. Intangible assets do not include goodwill and customer contracts and related customer relationships and primarily relate to computer software. Source: ISS 200% 160% 120% 80% 40% 0% Cash Conversion
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I. Table of Contents - ISS

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