Dive Brief:
- The reorganization of ISS’ North American operations hasn’t yet led to increased revenue in the region, but the global facility management company is on track to see gains next year, ISS executives said on the company’s third-quarter earnings call last week.
- The company expanded contracts with two North American organizations worth roughly $15 million each, the results of which will start showing up in next year’s numbers. It also is talking with other organizations that could lead to more announcements next year, executives said.
- “We have progressed further in the negotiations and the conversations that we are having with customers in our pipeline,” CEO Kasper Fangel said on the call. “We expect a positive growth contribution in 2027 to us as an enterprise from the Americas region, and in particular from the U.S. market.”
Dive Insight:
Denmark-based ISS brought in a new management team as part of the reorganization of its North American operations in 2025.
Under the reorganization, the company rolled up its services — facilities management, food, custodial, workplace services and others — into three regions to give the heads of the regions better control over the bundle of services they offer clients.
“The reorganization allows us to get hyperlocal and client-centric,” Joe Stolarski, president of the eastern division of ISS North America, said at the time.
Fangel said revenue from ISS’ North American operations remains flat as the company works through investments it’s made to boost its operations in the region. However, “we are beginning to see encouraging signs of commercial progress following our investments,” he said.
Revenue from the company’s operations in the Americas, which includes parts of South and Central America as well as North America, was roughly $283 million in the third quarter, up 3% year over year, the company’s earnings update shows. Organically, revenues were down 1%. The company reports its revenues in Danish kroner, which trade at roughly 15 cents to the dollar.
“Hopefully, we will see that we have more wins coming from the positive conversations that we are having with potential new customers,” said Fangel.
Globally, ISS reported quarterly revenue of roughly $3.4 billion, up 7.7% year over year, according to the update. Its Northern Europe and Central and Southern Europe regions together represent roughly three-quarters of its revenue. It reported growth of 6% in Northern Europe and 10% in Central and Southern Europe.
On the call, executives touted the company’s role as a facilities manager in helping its clients attract employees back to the workplace.
“Simply introducing return-to-office policies is not necessarily enough,” Fangel said. “Companies increasingly recognize that they need to create workplaces where employees actually want to spend their time, and that is where ISS has a strong role to play.”
Fengal said the company’s integrated service offerings and its understanding of workplace needs are helping clients transform their workplaces into places employees want to go to.
“We help customers create environments that support employee engagement, collaboration and productivity,” said Fangel, who also touted the company’s 95% customer retention rate.
One area of uncertainty is the company’s exposure to a fire at the end of 2025 at a residential tower complex in Hong Kong that left almost 160 people dead. An affiliate of the company, ISS EastPoint Properties Ltd., was providing property management services to the complex at the time. Fangel said the company is covered against any claims that arise from the incident but that it’s unlikely it’ll have to draw on the coverage because the affiliate was providing only administrative support to the complex, which was undergoing renovation at the time of the fire.
“Our thoughts remain with everyone affected,” said Fengal, but “ISS EastPoint was neither involved in the major renovation works nor responsible for maintaining fire service installations.”
