I. Table of Contents - ISS
I. Table of Contents - ISS
I. Table of Contents - ISS
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tatiana\Bank Book\Public Bank Book\FINAL <strong>ISS</strong> PUBLIC Bank IM - Press Release to EMTN_1.doc 9 Nov 2005 10:32 54/91<br />
54<br />
Company Overview<br />
<strong>ISS</strong> made 95 bolt-on acquisitions during 2004, <strong>of</strong> which two had particular strategic importance: the<br />
acquisitions <strong>of</strong> Grupo Unica in Spain and Engel Group in Finland. Through Grupo Unica, <strong>ISS</strong><br />
established a presence in Madrid and in southern Spain, where the Company previously had a weak<br />
or limited presence. With the acquisition <strong>of</strong> Engel, which provides cleaning, property services and<br />
security services, <strong>ISS</strong> strengthened the Finnish operations. A total <strong>of</strong> 74 acquisitions were made<br />
during the period January 1 – September 30, 2005, adding revenue <strong>of</strong> approximately DKK 3.2 billion<br />
on an annualised basis.<br />
Divestments in the last three years have been limited and have focused on under-performing and noncore<br />
businesses. Most <strong>of</strong> these divestments have been relatively small. However, in 2002 <strong>ISS</strong><br />
divested most <strong>of</strong> its aviation service operations in the United Kingdom, The Netherlands and the<br />
Nordic countries. The aviation services business had revenues <strong>of</strong> DKK 714 million in 2001. In<br />
November 2002, <strong>ISS</strong> sold 51% <strong>of</strong> CarePartner AB, its elderly care business which operated a number<br />
<strong>of</strong> old age homes in the Nordic region, to a group made up <strong>of</strong> this business’s local management. In<br />
February 2005, <strong>ISS</strong> sold its 49% interest in the elderly care business and 100% <strong>of</strong> its Swedish Health<br />
Care business, which provided diagnostic and certain other medical services in Sweden, to a newly<br />
formed joint venture entity between EQT and <strong>ISS</strong>. At the end <strong>of</strong> June 2005, <strong>ISS</strong> sold its 49% interest<br />
in the joint venture entity to EQT.<br />
The table below provides unaudited information concerning <strong>ISS</strong>’s acquisitions and divestments for the<br />
periods presented. Revenue presented in the table represents the prior year revenue <strong>of</strong> the acquired<br />
companies.<br />
<strong>Table</strong> 25: <strong>ISS</strong> Acquisition History 2002- present<br />
Acquisitions<br />
For the Year Ended 31-Dec<br />
2002 2003 2004<br />
2005<br />
(through September 30)<br />
Number <strong>of</strong> acquisitions 31 51 95 74<br />
Average annual Revenue <strong>of</strong> acquired companies (DKK<br />
62 25 64 43<br />
million) (1)<br />
Smallest acquisition (DKK million) 1 1 1 1<br />
Largest acquisition (DKK million) 902 217 1,443 242<br />
Sum <strong>of</strong> acquired revenue (DKK million) 1,930 1,280 6,095 3,150<br />
Acquired employees 9,871 5,255 37,057 29,493<br />
Divestments<br />
Number <strong>of</strong> divestments 15 7 8 7<br />
Revenue attributable to divestments<br />
(DKK million) (2)<br />
1,652 221 192 380<br />
Note:<br />
(1) Based on estimated revenue <strong>of</strong> the acquired companies made at the time <strong>of</strong> acquisition.<br />
(2) On an annualized basis according to revenue for the prior year<br />
Source: <strong>ISS</strong><br />
F. Customers and Contracts<br />
As <strong>of</strong> September 30, 2005, <strong>ISS</strong> had more than 100,000 public and private sector customers, and in<br />
2004, revenue derived from its ten largest customers was less than 5% <strong>of</strong> its total revenue. In 2004,<br />
no more than 19% <strong>of</strong> <strong>ISS</strong>’s revenue was generated in any one country, with France being the largest<br />
contributor to revenue. <strong>ISS</strong>’s customers operate in a number <strong>of</strong> industries, and <strong>ISS</strong> does not believe<br />
that its business is dependent on any particular industry segment in the private sector or particular<br />
authority in the public sector.<br />
<strong>ISS</strong>’s commercial customers range in size from small firms requiring a single cleaner to large,<br />
multinational organisations seeking integrated facility services. <strong>ISS</strong> is focused on developing larger<br />
accounts, particularly European multinational companies, with the goal <strong>of</strong> becoming their sole provider<br />
<strong>of</strong> integrated facility services. In addition, <strong>ISS</strong> believes that these customers may be more likely to<br />
require integrated facility services.