ISS drops on Q4 results, concerns over free cash flow risks

Iss A/S

22/02/2024 09:16

** Shares in ISS  ISS.CO  drop 9% as the Danish services
provider Q4 print and 2024 free cash flow guidance fall short of
market expectations, overshadowing the announcement of a one
billion Danish crowns billion share buyback 
    ** "Free cash flow of more than DKK 1.8 billion is 26 per
cent below consensus," says Kepler Cheuvreux analyst Johan
Eliason via Swedbank Aktiellt equity research service
    ** "Second half operating profit of DKK 1,953m including
restructuring of DKK 233m was 4 per cent below consensus," he
adds
    ** Jefferies notes APAC and Americas regions were sightly
weaker than expected, and flags adverse timing effects including
payments being withheld on the Deutsche Telekom contract as a
potential free cash flow risk for 2024
    ** The co expects underlying free cash flow of above DKK 2.4
billion for 2024
    ** The company has started a DKK 1 billion ($145.60 million)
share buyback program from Feb 2024 to Feb 2025 to redistribute
excess cash and reduce share capital 
    **  Shares are on track for a worst day since August 2023

($1 = 6.8682 Danish crowns)

 (Reporting by Jesus Calero)
 ((Jesus.calero@thomsonreuters.com))