Q2 2026 ISS A/S Earnings Call

August 11, 2026

Operator: Ladies and gentlemen, welcome to the ISS H1 2026 interim report. I am Sergen, the conference call operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded, publicationed or broadcast. At this time, it is my pleasure to hand over to Michael Vitfell-Rasmussen, Group Head of Investor Relations. Please go ahead, sir.

Speaker #1: Ladies and gentlemen, welcome to the ISS H1 2026 Interim Report. I'm Sergeant, the host call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded.

Speaker #1: The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone.

Speaker #1: For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Michael Vitfell Rasmussen, Group Head of Investor Relations.

Speaker #1: Please go ahead, sir.

Speaker #2: Thank you, and good morning, everyone, and welcome to this conference call. We appreciate you joining us here today to discuss our H1 2026 interim report, which we released earlier this morning.

Michael Vitfell-Rasmussen: Thank you, and good morning, everyone, and welcome to this conference call. We appreciate you joining us here today to discuss our H1 2026 interim report, which we released earlier this morning. As said, I am Michael Vitfell-Rasmussen, heading up investor relations here at ISS. Joining me today in the room is our CEO, Kasper Fangel, our CFO, Mads Holm, and Anne-Sophie Riis from the IR team. Before we begin, please take a quick view at the disclaimer in the back, and then I will hand over to Kasper to start the presentation. Please move to slide number 4.

Michael Vitfell-Rasmussen: Thank you, and good morning, everyone, and welcome to this conference call. We appreciate you joining us here today to discuss our H1 2026 interim report, which we released earlier this morning. As said, I am Michael Vitfell-Rasmussen, heading up investor relations here at ISS. Joining me today in the room is our CEO, Kasper Fangel, our CFO, Mads Holm, and Anne Sophie Riis from the IR team. Before we begin, please take a quick view at the disclaimer in the back, and then I will hand over to Kasper to start the presentation. Please move to slide number 4.

Speaker #2: As said, I'm Michael Vitfell Rasmussen, heading up Investor Relations here at ISS. Joining me today in the room are our CEO, Kasper Fangel; our CFO, Mads Holm; and Anne-Sophie Ries from the IR team.

Speaker #2: Before we begin, please take a quick look at the disclaimer in the back, and then I will hand it over to Kasper to start the presentation.

Speaker #2: Please move to slide number 4.

Speaker #3: Thank you, Michael. And good morning, everyone. Thank you for joining us today as we review our first-half results. I'm pleased with the progress we delivered in the first half of the year.

Kasper Fangel: Thank you, Michael, and good morning, everyone. Thank you for joining us today as we review our first half results. I am pleased with the progress we delivered in the first half of the year. Importantly, the underlying business continues to strengthen. Organic growth remained healthy, supported by new wins, higher customer activity, and continued project work. At the same time, we improved both margins and cash flow compared with the first half of last year, reflecting the operational improvements we have been driving across the business. In Q2, we delivered organic growth of 8.9%, including a like-for-like contribution of 2% for the third consecutive quarter in a row. Above-base growth remained strong, particularly across our European markets. This reflects the continued progress we are making in embedding a stronger commercial culture throughout the organization, from our frontline operations to group leadership, in line with our strategic priorities.

Speaker #3: Importantly, the underlying business continues to strengthen. Organic growth remained healthy, supported by new wins, higher customer activity, and continued project work. At the same time, we improved both margins and cash flow compared with the first half of last year.

Speaker #3: Reflecting the operational improvements we've been driving across the business, in the second quarter we delivered organic growth of 8.9%, including a like-for-like contribution of 2%.

Speaker #3: For the third consecutive quarter in a row, above-base growth remained strong, particularly across our European markets. This reflects the continued progress we are making in embedding a stronger commercial culture throughout the organization, from our frontline operations to group leadership, in line with our strategic priorities.

Speaker #3: Across the business, we continued to execute well against our strategic priorities, strengthening both our commercial performance and operational discipline. For the first half of 2026, our operating margin was 4.6%.

Kasper Fangel: Across the business, we continue to execute well against our strategic priorities, strengthening both our commercial performance and operational discipline. For H1 2026, our operating margin was 4.6%. This reflects both the continued improvement in the underlying business and the contribution from a better run rate of the Deutsche Telekom contract post the settlement agreement. Mads will walk you through the individual drivers in more detail shortly. Free cash flow for H1 2026 was DKK 600 million, benefiting from the improved underlying business, lower seasonal working capital movements, and the one-time cash payment of DKK 600 million received from Deutsche Telekom as expected. Commercial momentum also remained encouraging. Year to date, we have announced 13 contract changes, of which 10 were positive. This supports our ambition to improve the quality of our revenue growth while maintaining healthy commercial discipline.

Speaker #3: This reflects both the continued improvement in the underlying business and the contribution from a better run rate of the Deutsche Telekom contract, post the settlement agreement.

Speaker #3: Mads will walk you through the individual drivers in more detail shortly. Free cash flow for the first half of 2026 was €600 million, benefiting from the improved underlying business, lower seasonal working capital movements, and the one-time cash payment of €600 million received from Deutsche Telekom as expected.

Speaker #3: Commercial momentum also remained encouraging. Year to date, we have announced 13 contract changes, of which 10 were positive. This supports our ambition to improve the quality of our revenue growth while maintaining healthy commercial discipline.

Speaker #3: We also continue to improve key commercial metrics, with our retention rate increasing to 95%. While there's still work to do, I'm encouraged by the progress we're making.

Kasper Fangel: We also continue to improve key commercial metrics, with our retention rate increasing to 95%. While there is still work to do, I am encouraged by the progress we are making. The business continues to move in the right direction. Our commercial momentum remains positive, and our pipeline provides confidence as we move through the remainder of 2026. I also want to touch on the important milestone we reached with Deutsche Telekom during Q2. As you recall, on 19 May, we reached a settlement agreement with DTAG. The agreement marks an important step forward in our long-standing partnership and establishes a stronger foundation for our future collaboration. In addition to agreeing updated commercial terms, we successfully extended the contract by 6 years. The agreement now runs until the end of 2035, providing greater visibility and supporting a more sustainable commercial relationship going forward. Finally, a brief update on Tomagruppen.

Speaker #3: The business continues to move in the right direction, our commercial momentum remains positive, and our pipeline provides confidence as we move through the remainder of 2026.

Speaker #3: I also want to touch on the important milestone we reached with Deutsche Telekom during the second quarter. As you recall, on 19 May, we reached a settlement agreement with Deutsche Telekom.

Speaker #3: The agreement marks an important step forward in our long-standing partnership and establishes a stronger foundation for our future collaboration. In addition to agreeing on updated commercial terms, we successfully extended the contract by six years.

Speaker #3: The agreement now runs until the end of 2035, providing greater visibility and supporting a more sustainable commercial relationship going forward. Finally, a brief update on Toma.

Speaker #3: Following the acquisition on 7 May, the competition authority granted final approval in June. I'm very pleased to welcome more than 4,000 employees from Toma, and I'm happy to see that the first phase of the integration is progressing according to plan.

Kasper Fangel: Following the acquisition on 7 May, the Competition Authority granted final approval in June, and I am very pleased to welcome more than 4,000 employees from Tomagruppen, and I am happy to see the first phase of the integration is progressing according to plan. As we close Q2, I can confidently reconfirm our outlook for 2026, and I look forward to seeing you at our Capital Markets Day on 14 September, where we will share more about the next phase of our journey and take a deeper dive into our business, our strategy, and the opportunities ahead. Next slide, please. Looking back, 2025 was a good year for ISS, and I am pleased to see that the strong momentum in executing our strategy has continued into H1 2026.

Speaker #3: As we close the second quarter, I can confidently reconfirm our outlook for 2026. I look forward to seeing you at our Capital Markets Day on the 14th of September, where we'll share more about the next phase of our journey and take a deeper dive into our business, our strategy, and the opportunities ahead.

Speaker #3: Next slide, please. Looking back, 2025 was a good year for ISS, and I'm pleased to see that the strong momentum in executing our strategy has continued into the first half of 2026.

Speaker #3: As I said, we will, of course, take a deeper dive into our strategy at our Capital Markets Day on September 14th. But for now, let me highlight a few key takeaways from the second quarter.

Kasper Fangel: As I said, we will of course take a deeper dive into our strategy at our Capital Markets Day on 14 September. For now, let me highlight a few key takeaways from Q2. During the quarter, we made targeted commercial investments in selected growth opportunities in the US. These investments support our long-term growth ambition and position us well to capture attractive opportunities going forward. I am also very pleased with the closeness and the transparency we have in the business today, which is underpinned by a H1 financial performance that is almost exactly in line with what we expected. I believe this level of closeness and transparency is key to continuing and accelerating the journey we are on. Finally, let me touch on our third priority, ensuring high engagement across the organization. ISS is first and foremost a people business.

Speaker #3: During the quarter, we made targeted commercial investments in selected growth opportunities in the US. These investments support our long-term growth ambition and position us well to capture attractive opportunities going forward.

Speaker #3: I'm also very pleased with the closeness and the transparency we have in the business today, which is underpinned by a first-half financial performance that is almost exactly in line with what we expected.

Speaker #3: I believe this level of closeness and transparency is key to continuing and accelerating the journey we're on. Finally, let me touch on our third priority: ensuring high engagement across the organization.

Speaker #3: ISS is, first and foremost, a people business. The engagement of our colleagues is fundamental to delivering great service for our customers and creating sustainable value for our shareholders.

Kasper Fangel: The engagement of our colleagues is fundamental to delivering great service for our customers and creating sustainable value for our shareholders. I am particularly proud to see our people recognized externally for their achievements. During the quarter, ISS Singapore was honored with the Best FM Partner Award at the Facilities Management Experts Summit, recognizing the strong partnerships and high-quality service delivered by our local team. In the UK, ISS was ranked number 1 in 5 categories in 2026 IFM Brand Survey, including most focused on customer needs and the brand FM professionals most aspire to work for. We were also shortlisted for 5 nominations across 4 categories at the IWFM Impact Awards, recognizing our work in areas such as social value, inclusion, and community impact.

Speaker #3: I'm particularly proud to see our people recognized externally for their achievements. During the quarter, ISS Singapore was honored with the Best FM Partner Award at the Facility Management Experts Summit, recognizing the strong partnerships and high-quality service delivered by our local team.

Speaker #3: In the UK, ISS was ranked number one in five categories in the 2026 IFM Brand Survey, including 'Most Focused on Customer Needs' and 'The Brand FM Professionals Most Aspire to Work For.'

Speaker #3: We were also shortlisted for five nominations across four categories at the IWFM Impact Awards, recognizing our work in areas such as social value, inclusion, and community impact.

Speaker #3: These recognitions are a testament to the dedication of our people and reinforce that our focus on customers, service excellence, and engagement is making a tangible difference across our markets.

Kasper Fangel: These recognitions are testament to the dedication of our people and reinforce that our focus on customers, service excellence, and engagement is making a tangible difference across our markets. Overall, the H1 confirms that our strategy is delivering as planned. We continue to execute our strategy to deliver profitable growth and strengthen engagement across the organization. With these priorities firmly in place, we are well-positioned to continue creating long-term value for our customers and our shareholders. Let me now turn to our contract announcements. Since our last update, we have continued doing what we do best, helping our customers create exceptional workplace experiences. Our focus remains clear, delivering outstanding service every day through our self-delivery model and our people-first approach. You have seen this slide before, but we continue to include it because it demonstrates that our strategy is delivering tangible results.

Speaker #3: Overall, the first half confirms that our strategy is delivering as planned. We continue to execute our strategy to deliver profitable growth and strengthen engagement across the organization.

Speaker #3: With these priorities firmly in place, we're well positioned to continue creating long-term value for our customers and our shareholders. Let me now turn to our contract announcements.

Speaker #3: Since our last update, we have continued doing what we do best: helping our customers create exceptional workplace experiences. Our focus remains clear—delivering outstanding service every day through our self-delivery model and our people-first approach.

Speaker #3: You've seen this slide before, but we continue to include it because it demonstrates that our strategy is delivering tangible results. A significant share of our growth continues to come from existing customers, where we are expanding relationships through additional services and broader geographical reach.

Kasper Fangel: A significant share of our growth continues to come from existing customers, where we are expanding relationships through additional services and broader geographical reach. This is attractive growth as it builds on established partnerships, deep customer knowledge, and a proven ability to deliver. At the same time, we remain focused on winning new business in our four core segments and chosen local segments where we see the strongest long-term opportunities. We also remain disciplined, pursuing opportunities where our value proposition is strongest and where we can create sustainable, profitable growth. Demand for integrated workplace experiences continues to be strong across our markets, and ISS is well-positioned to capture that demand. The commercial momentum we delivered in Q2, together with the contract announcements we have made and the pipeline we see today, are very encouraging. Taken together, our contract announcements over the past 18 months demonstrate a clear trend.

Speaker #3: This is attractive growth, as it builds on established partnerships, deep customer knowledge, and a proven ability to deliver. At the same time, we remain focused on winning new business in our four core segments.

Speaker #3: And chosen local segments where we see the strongest long-term opportunities. We also remain disciplined, pursuing opportunities where our value proposition is strongest and where we can create sustainable, profitable growth.

Speaker #3: Demand for integrated workplace experiences continues to be strong across our markets, and ISS is well positioned to capture that demand. The commercial momentum we delivered in the second quarter, together with the contract announcements we have made and the pipeline we see today, are very encouraging.

Speaker #3: Taken together, our contract announcements over the past 18 months demonstrate a clear trend. We continue to improve the quality of our growth by building deeper customer relationships, winning attractive new business, and executing with greater commercial discipline.

Kasper Fangel: We continue to improve the quality of our growth by building deeper customer relationships, winning attractive new business, and executing with greater commercial discipline. With that, let us move to the next slide. Let me now turn to the composition of our organic growth and what it tells us about the improving quality of our performance. As discussed on the previous slide, our commercial strategy is focused not only on growing, but on delivering more sustainable and profitable growth. In recent years, organic growth has primarily been driven by pricing, with a significant contribution from our exposure to Türkiye. At the same time, net new wins were affected by contract trimmings and exits, reflecting the deliberate decisions we made to improve the quality and profitability of our portfolio. Over the past year, that picture has gradually changed.

Speaker #3: With that, let's move to the next slide. Let me now turn to the composition of our organic growth and what it tells us about the improving quality of our performance.

Speaker #3: As discussed on the previous slide, our commercial strategy is focused not only on growing, but on delivering more sustainable and profitable growth. In recent years, organic growth has primarily been driven by pricing, with a significant contribution from our exposure to Turkey.

Speaker #3: At the same time, net new wins were affected by contract treatments and exits, reflecting the deliberate decisions we made to improve the quality and profitability of our portfolio.

Speaker #3: Over the past year, that picture has gradually changed. We continue to see the progress in the first half of 2026, which reinforces that the improvements are becoming more firmly established.

Kasper Fangel: We continue to see the progress in H1 2026, which reinforces that the improvements are becoming more firmly established. As you can see on the slide, both net new wins and volume growth have improved meaningfully. It also reflects the broader progress we are making in executing our strategy, clear accountability, stronger commercial ownership, closer to our customers and operations, and continued momentum in the rollout of our scalable initiatives. Going forward, our focus remains on deepening relationships with existing customers while adding new customers to the portfolio. This will be supported by targeted commercial investments, but always with a clear focus on returns, pricing discipline, and profitable growth. With that, let us turn to the next slide. Before I conclude the business update, I would like to briefly address our contract maturity profile.

Speaker #3: As you can see on the slide, both net new wins and volume growth have improved meaningfully. It also reflects the broader progress we are making in executing our strategy: clear accountability, stronger commercial ownership, being closer to our customers and operations, and continued momentum in the rollout of our scalable initiatives.

Speaker #3: Going forward, our focus remains on deepening relationships with existing customers, while adding new customers to the portfolio. This will be supported by targeted commercial investments, but always with a clear focus on returns, pricing discipline, and profitable growth.

Speaker #3: With that, let's turn to the next slide. Before I conclude the business update, I would like to briefly address our contract maturity profile. During the first half of the year, we have made very good progress in extending our contracts up for renewal.

Kasper Fangel: During the H1 of the year, we have made very good progress in extending our contracts up for renewal. Our maturity profile for 2026 remains at 1%, while our retention rate has improved to 95%. This outcome reflects a stronger commercial discipline, earlier engagement with customers, and a more proactive approach to managing expirations. Importantly, this ties directly back to the strategy and execution of stronger commercial ownership, clear accountability, and a more focused organization. With that, I will now hand over to Mads for an update on our financials.

Speaker #3: Our maturity profile for 2026 remains at 1%, while our retention rate has improved to 95%. This outcome reflects stronger commercial discipline, earlier engagement with customers, and a more proactive approach to managing expirations.

Speaker #3: Importantly, this ties directly back to the strategy and execution of stronger commercial ownership, clear accountability, and a more focused organization. With that, I will now hand over to Mads for an update on our financials.

Speaker #1: Thank you, Kasper. Let me take you through the financial performance for the second quarter and first half. As Kasper highlighted, the business continued to strengthen during the period.

Mads Holm: Thank you, Kasper. Let me take you through the financial performance for Q2 and H1. As Kasper highlighted, the business continued to strengthen during the period. Compared with the H1 of 2025, revenue increased by DKK 3 billion, while EPS improved by 29%. This reflects the continued improvement in the underlying business, including structural run rate improvements made on the DTAG contract post-settlement. Organic growth was 8.9% in Q2, with positive contribution for all main growth drivers. Above base was particularly strong and included the one-off impact from the DTAG settlement. Turning to profitability, the operating margin for the H1 was 4.6%. The underlying margin continued to improve compared with the same period last year. Free cash flow for the H1 was +DKK 600 million.

Speaker #1: Compared with the first half of 2025, revenue increased by $3 billion, while earnings per share improved by 29%. This reflects the continued improvement in the underlying business, including structural run-rate improvements made on the DTAC contract post-desettlement.

Speaker #1: Organic growth was 8.9% in the second quarter, with positive contributions from all main growth drivers. Above-base was particularly strong and included the one-off impact from the DTAC settlement.

Speaker #1: Turning to profitability, the operating margin for the first half was 4.6%. The underlying margin continued to improve compared with the same period last year.

Speaker #1: Free cash flow for the first half was positive €600 million. This includes the timing effect of the €600 million payment received from DTAC, as well as improved underlying cash generation and lower seasonal working capital movements compared with last year.

Mads Holm: This includes the timing effect of the DKK 600 million payment received from DTAG, as well as improved underlying cash generation and lower seasonal working capital movements compared with last year. Overall, the H1 results demonstrate continued progress across revenue, profitability, and cash flow, and we remain well on track to deliver our full-year outlook. Let us now turn to the regional performance. Overall, all regions delivered positive organic growth in the quarter, broadly in line with our expectations. Starting with Northern Europe, the region delivered organic growth of 4% in Q2. Growth was supported by the mobilization of contract awarded in 2025 and 2026, including COWI, VELUX, and DWP. This was partly offset by two previously announced contract losses and two scope reductions. Above base was positive across the region, although slightly lower than Q1, reflecting improved commercial execution and continued demand from existing customers.

Speaker #1: Overall, the first-half result demonstrates continued progress across revenue, profitability, and cash flow, and we remain well on track to deliver our full-year outlook.

Speaker #1: Let us now turn to the regional performance. Overall, all regions delivered positive organic growth in the quarter, broadly in line with our expectations. Starting with Northern Europe, the region delivered organic growth of 4% in the second quarter.

Speaker #1: Growth was supported by the mobilization of contracts awarded in 2025 and 2026, including COVID, Velux, and DWP. This was partly offset by two previously announced contract losses and two scope reductions.

Speaker #1: Above-base was positive across the region, although slightly lower than in the first quarter, reflecting improved commercial execution and continued demand from existing customers. The underlying margin improved in the first half compared with the same period last year.

Mads Holm: The underlying margin improved in the H1 compared with the same period last year. This improvement was, however, partly offset by mobilization costs related to new contract startups. Turning to Central and Southern Europe, the region continued to deliver strong growth of 18% in Q2. Growth was primarily driven by price increases, particularly in Türkiye. We also saw a solid above-base contribution and a positive impact from net new wins, confirming the continued commercial momentum across the region. Organic growth also included a one-off contribution from DTAG. The margin improved across all countries compared with the H1 of last year. In Asia Pacific, organic growth was 6% in the quarter. Performance was particularly strong in Pacific and India, supported by the Australian Department of Defence contract and continued volume growth with existing customers.

Speaker #1: This improvement was, however, partly offset by mobilization costs related to new contract startups. Turning to Central and Southern Europe, the region continued to deliver strong growth of 18% in the second quarter.

Speaker #1: Growth was primarily driven by price increases, particularly in Turkey. We also saw a solid above-base contribution and a positive impact from net new wins, confirming the continued commercial momentum across the region.

Speaker #1: Organic growth also included a one-off contribution from DTAC. The margin improved across all countries compared with the first half of last year. In Asia-Pacific, organic growth was 6% in the quarter.

Speaker #1: Performance was particularly strong in the Pacific and India, supported by the Australian defense contract and continued volume growth with existing customers. The margin was impacted by legal costs in Hong Kong relating to the devastating Wangfu Court fire at the end of '25.

Mads Holm: The margin was impacted by legal costs in Hong Kong relating to the devastating Wang Fuk Court fire at the end of 2025. Finally, turning to the Americas, performance developed broadly as expected. Organic growth was negatively impacted by net new wins, primarily due to a number of smaller contract exits in Chile. This was partly offset by supportive volume growth during the quarter. In the US, organic growth was flat, while Mexico delivered solid growth. The regional margin was impacted by targeted commercial investments in the US and restructuring costs in Chile following the exit of a few contracts. As mentioned earlier, these investments are intended to strengthen our long-term commercial position. At our Capital Markets Day, we will provide a deeper review of the US business and share further detail on our strategy and priorities going forward.

Speaker #1: Finally, turning to the Americas, performance developed broadly as expected. Organic growth was negatively impacted by net new wins, primarily due to a number of smaller contract exits in Chile.

Speaker #1: This was partly offset by supportive volume growth during the quarter. In the US, organic growth was flat, while Mexico delivered solid growth. The regional margin was impacted by targeted commercial investments in the US and restructuring costs in Chile following the exit of a few contracts.

Speaker #1: As mentioned earlier, these investments are intended to strengthen our long-term commercial position. At our Capital Markets Day, we will provide a deeper review of the US business and share further detail on our strategy and priorities going forward.

Speaker #1: Overall, the regional performance reinforced the broader message you have heard today: growth is becoming more broad-based, commercial execution is improving, and the quality of the underlying business continues to strengthen.

Mads Holm: Overall, the regional performance reinforced the broader message you have heard today. Growth is becoming more broad-based, commercial execution is improving, and the quality of the underlying business continues to strengthen. This is consistent with the progress we are making in executing our strategy to deliver profitable growth and improved financial performance. Next slide, please. In Q2, we delivered organic growth of 8.9% with contribution from all four growth levers: pricing, volume, net new, and above base. While we expected both volume and net new to be solid, we saw stronger than anticipated contribution from above base, primarily DTAG one-off benefit. This is an important proof point and ties directly back to the strategy update from Kasper. The performance reflects a stronger commercial mindset at site level, clear accountability, and better execution closer to the customer, all of which are key elements of our strategy.

Speaker #1: This is consistent with the progress we are making in executing our strategy to deliver profitable growth and improved financial performance. Next slide, please. In the second quarter, we delivered organic growth of 8.9%, with contribution from all four growth levers: pricing, volume, net new, and above base.

Speaker #1: While we expected both volume and net new to be solid, we saw a stronger-than-anticipated contribution from above base, primarily the DTAC one-off benefit.

Speaker #1: This is an important proof point and ties directly back to the strategy update from Kasper. The performance reflects a stronger commercial mindset at site level, clearer accountability, and better execution closer to the customer—all of which are key elements of our strategy.

Speaker #1: The above base was supported by the positive one-off impact from DTAC in the quarter. As you know, we cannot share the exact amount, but as we have said before, the impact is meaningful in the quarter but immaterial to the full-year growth outlook.

Mads Holm: Above base was supported by the positive one-off impact from DTAG in the quarter. As you know, we cannot share the exact amount, but as we have said before, the impact is meaningful in the quarter, but immaterial to the full year growth outlook. Turning to net new, performance in the quarter was positively impacted by DWP, COWI, VELUX, Australian Department of Defence, and Foreign, Commonwealth & Development Office, as well as contract startup across Central and Southern Europe. These wins reflect both our focused approach to targeting group segments and our ability to convert opportunity into high-quality contracts. Net new was also negatively impacted by two contract losses in Northern Europe. On to volume, this was negatively impacted by two contract reductions in Northern Europe, one announced at the beginning of 2025 and one in Q3 2025.

Speaker #1: Turning to net new, performance in the quarter was positively impacted by DWP, COVID, Velux, Australian Defence, and FCDO, as well as contract start-up across Central and Southern Europe.

Speaker #1: These wins reflect both our focused approach to targeting group segments and our ability to convert opportunities into high-quality contracts. Net new was also negatively impacted by two contract losses in Northern Europe.

Speaker #1: On to volume, this was negatively impacted by two contract reductions in Northern Europe—one announced at the beginning of 2025 and one in the third quarter of 2025.

Speaker #1: However, this was more than offset by the full-quarter effect of the expansion in Brisbane in Australia, Virgin in Northern Europe, and the new defense customer in Europe.

Mads Holm: However, this was more than offset by the full quarter effect of the expansion in Brisbane in Australia, Virgin in Northern Europe, and a new defense customer in Europe, as well as other contract expansions from 2025. As a result, when combining net new and volume, we are pleased to report another quarter with solid like-for-like growth of 2%. This marks the third quarter in a row with strong underlying growth quality. Finally, above base revenue for the quarter ended at 3%, driven by a broad-based strong performance across the European regions, a contribution from DWP, and one-off from DTAG. Overall, Q2 confirms that our organic growth is becoming more balanced, more diversified, and increasingly driven by the right underlying factors, consistent with the strategy and commercial priorities we have outlined. Next slide, please. Let me now turn to margins.

Speaker #1: As well as other contract expansions from 2025. As a result, when combining net new and volume, we are pleased to report another quarter with solid like-for-like growth of 2%.

Speaker #1: This marks the third quarter in a row with strong underlying growth quality. Finally, above-base revenue for the quarter ended at 3%, driven by a broad-based strong performance across the European regions, a contribution from DWP, and a one-off from DTAC.

Speaker #1: Overall, the second quarter confirms that our organic growth is becoming more balanced, more diversified, and increasingly driven by the right underlying factors, consistent with the strategy and commercial priorities we have outlined.

Speaker #1: Next slide, please. Let me now turn to margins. For the first half of 2026, we delivered a margin of 4.6%. As mentioned before, the underlying business continued to improve across all regions.

Mads Holm: For the H1 2026, we delivered a margin of 4.6%. As mentioned before, the underlying business continued to improve across all regions. Combined with the improved run rate on Deutsche Telekom, this supported the guidance upgrade we announced in May to a margin of around 5.25% for the full year. As previously mentioned, the H1 margin also benefited from the Deutsche Telekom settlement. The improvements are being implemented throughout the year, with the timing resulting in a greater benefit in the H1. For the full year, these improvements to the contractual profitability are expected to contribute to a run rate uplift of 10 to 15 bps annually to the group. What I believe is the most important is that the underlying margin trajectory continues to improve.

Speaker #1: Combined with the improved run rate on DTAC, this supported the guidance upgrade we announced in May to a margin of around 5.25% for the full year.

Speaker #1: As previously mentioned, the first-half margin also benefited from the DTAC settlement. The improvements are being implemented throughout the year, with the timing resulting in a greater benefit in the first half.

Speaker #1: For the full year, these improvements to the contractual profitability are expected to contribute to a run-rate uplift of 10 to 15 basis points annually to the group.

Speaker #1: What I believe is most important is that the underlying margin trajectory continues to improve. At the same time, we are investing in contract mobilization, commercial initiatives, and future growth opportunities, while continuing to deliver on our profitability commitments and focus on growing absolute earnings.

Mads Holm: At the same time, we are investing in contract mobilization, commercial initiatives, and future growth opportunities while continuing to deliver on our profitability commitments and focus on growing absolute earnings. This demonstrates that we are improving the quality of the business while maintaining financial discipline. With that, let me turn to free cash flow. Free cash flow for the H1 ended at +DKK 600 million. The free cash flow was positively impacted by the timing effect of the DKK 600 million from the settlement with Deutsche Telekom and improvements in operating profit. Working capital benefited from tight receivables management. This was partly offset by higher tax payments and higher interest expenses. The underlying discipline around collections and working capital remains critical, and cash generation continues to be a top management priority across all countries. Let's go to the next slide for a brief update on capital allocation policy.

Speaker #1: This demonstrates that we are improving the quality of the business while maintaining financial discipline. With that, let me turn to free cash flow. Free cash flow for the first half ended at a positive 600 million.

Speaker #1: The free cash flow was positively impacted by the timing effect of the 600 million from the settlement with DTAC, and by improvements in operating profit.

Speaker #1: Working capital benefited from tight receivables management. This was partly offset by higher tax payments and higher interest expenses. The underlying discipline around collections and working capital remains critical, and cash generation continues to be a top management priority across all countries.

Speaker #1: Let's go to the next slide for a brief update on capital allocation policy. Finally, let me provide an update on capital allocation and shareholder returns.

Mads Holm: Finally, let me provide an update on capital allocation and shareholder returns. In April, we paid the proposed dividend of approximately DKK 500 million, corresponding to DKK 3.2 per share. Our share buyback program is also progressing as planned, and last week we concluded the first tranche of the share buyback program. Following the Deutsche Telekom settlement, we increased the program by additional DKK 600 million, bringing the total program to DKK 3.1 billion. In May, we canceled 14.2 million shares following the authorization received at the annual general meeting in April. This reduced our total share count to 160 million, representing a deduction of more than 8% this year. Combined, the dividends and the ongoing share buyback represent a payout yield of 8%. This reflects our disciplined approach to capital allocation.

Speaker #1: In April, we paid the proposed dividend of approximately 500 million, corresponding to 3.2 kroner per share. Our share buyback program is also progressing as planned, and last week we concluded the first tranche of the share buyback program.

Speaker #1: Following the Deutsche Telekom settlement, we increased the program by an additional €600 million, bringing the total program to €3.1 billion. In May, we canceled 14.2 million shares, following the authorization received at the Annual General Meeting in April.

Speaker #1: This reduced our total share count to 160 million, representing a deduction of more than 8% this year. Combined, the dividend and the ongoing share buyback represent a payout yield of 8%.

Speaker #1: This reflects our disciplined approach to capital allocation. We remain focused on maintaining a strong balance sheet, investing in the business, and returning excess capital to shareholders when that represents the most attractive use of funds.

Mads Holm: We remain focused on maintaining a strong balance sheet, investing in the business, and returning excess capital to shareholders when that represents the most attractive use of funds. Our capital allocation priorities remain unchanged. We pursue acquisitions only where they meet our strict strategic and financial criteria. Tomagruppen AS is a good example of this approach. The acquisition was announced early in the quarter, and final competition approval was received in June. As Kasper mentioned earlier, the integration is progressing according to plan, and we remain confident that Tomagruppen AS will strengthen our position in the Nordic region and create long-term value. Let me finish with a brief update on Turkey post the Actera transaction. Following Actera's exit, we have now completed the planned recapitalization of the business, reducing the debt level and lowered the financing costs.

Speaker #1: Our capital allocation priorities remain unchanged. We pursue acquisitions only where they meet our strict strategic and financial criteria. Toma is a good example of this approach.

Speaker #1: The acquisition was announced early in the quarter, and final competition approval was received in June. As Kasper mentioned earlier, the integration is progressing according to plan, and we remain confident that Toma will strengthen our position in the Nordic region and create long-term value.

Speaker #1: Let me finish with a brief update on Turkey post-Dactea transaction. Following Actea's exit, we are now completing the planned recapitalization of the business, reducing the debt level, and lowering the financing costs.

Speaker #1: We remain on track to deliver the expected 3% EPS uplift on an annualized basis. With that, I will hand it back to Kasper. Please turn to slide 18.

Mads Holm: We remain on track to deliver the expected 3% EPS uplift on an annualized basis. With that, I will hand it back to Kasper. Please turn to slide 18.

Speaker #2: Thank you, Mads. Following another solid quarter, we are pleased to reconfirm the guidance for 2026 that we upgraded in May. We continue to expect organic growth of above 6% for the full year.

Kasper Fangel: Thank you, Mads. Following another solid quarter, we are pleased to reconfirm the guidance for 2026 that we upgraded in May. We continue to expect organic growth of above 6% for the full year. Pricing, including the contribution from Türkiye, is still expected to be the largest growth driver. However, as we have shown today, the growth composition is becoming more balanced with stronger contributions from volume growth, net new wins, and above-base activity. Our focus on expanding with existing customers continues to deliver results, while we are also making progress in winning new customers within our target segments. At the same time, stronger commercial ownership at site level is helping us identify and capture more opportunities closer to our customers, supporting our above-base contribution. However, as always, visibility on above-base activity remains more limited, but the momentum we see is encouraging.

Speaker #2: Pricing, including the contribution from Turkey, is still expected to be the largest growth driver. However, as we have shown today, the growth composition is becoming more balanced, with stronger contributions from volume growth, net new wins, and above-base activity.

Speaker #2: Our focus on expanding with existing customers continues to deliver results, while we are also making progress in winning new customers within our target segments.

Speaker #2: At the same time, stronger commercial ownership at site level is helping us identify and capture more opportunities closer to our customers, supporting our above-base contribution.

Speaker #2: However, as always, visibility on above-base activity remains more limited, but the momentum we see is encouraging. On profitability, we remain on track and reconfirm our full-year margin guidance of around 5.25%.

Kasper Fangel: On profitability, we remain on track and reconfirm our full-year margin guidance of around 5.25%. Overall, the H1 reinforces the message you have heard throughout today's presentation. Our strategy is delivering, commercial execution is improving, and the quality of our growth continues to strengthen. Please turn to the next slide. To echo Mads, we keep a relentless focus on cash flow in ISS, and we are on track to deliver a cash conversion of above 60%. This equals above DKK 2.7 billion in underlying cash flow, adjusting for the DKK 200 million negative impact from invoices with due date in 2026 that was paid in 2025, and including the payment from Deutsche Telekom, we expect free cash flow of above DKK 3.1 billion for the full year. Please turn to the next and final slide.

Speaker #2: Overall, the first half reinforces the message you have heard throughout today's presentation. Our strategy is delivering, commercial execution is improving, and the quality of our growth continues to strengthen.

Speaker #2: Please turn to the next slide. To echo Mads, we keep a relentless focus on cash flow and ISS, and we are on track to deliver a cash conversion of above 60%.

Speaker #2: This equals above €2.7 billion in underlying cash flow, adjusting for the €200 million negative impact from invoices with a due date in 2026 that was paid in 2025. Including the payment from Deutsche Telekom, we expect free cash flow of above €3.1 billion for the full year.

Speaker #2: Please turn to the next and final slide. As we wrap up today's presentation, let me take a step back and bring together the key messages.

Kasper Fangel: As we wrap up today's presentation, let me take a step back and bring together the key messages. Our equity story remains unchanged. ISS is a global market leader in an attractive facility service market with long-term structural growth opportunities. We combine this strong market position with disciplined execution, a clear commercial strategy, and a relentless focus on profitable growth. As you have heard throughout today's presentation, we are continuing to improve the quality of our business. Commercial momentum is strengthening. Underlying growth is becoming more balanced. Financial performance and cash generation are improving. At the same time, we remain disciplined in how we allocate capital, investing in the business while returning excess capital to our shareholders. The H1 of 2026 demonstrates that our strategy is delivering.

Speaker #2: Our equity story remains unchanged. ISS is a global market leader in an attractive facility services market with long-term structural growth opportunities. We combine this strong market position with disciplined execution, a clear commercial strategy, and a relentless focus on profitable growth.

Speaker #2: As you've heard throughout today's presentation, we are continuing to improve the quality of our business. Commercial momentum is strengthening, underlying growth is becoming more balanced, and financial performance and cash generation are improving. At the same time, we remain disciplined in how we allocate capital, investing in the business while returning excess capital to our shareholders.

Speaker #2: The first half of 2026 demonstrates that our strategy is delivering. We've strengthened the underlying business, reached an important long-term agreement with Deutsche Telekom, continued to improve our commercial execution, and maintained the financial discipline needed to support sustainable value creation.

Kasper Fangel: We have strengthened the underlying business, reached an important long-term agreement with Deutsche Telekom, continued to improve our commercial execution, and maintained the financial discipline needed to support sustainable value creation. Looking ahead, our priorities remain unchanged. We will continue executing our strategy to deliver profitable growth, deliver consistent financial performance, and ensure strong engagement across the organization. We are confident that these priorities will continue to strengthen ISS and create long-term value for our customers and our shareholders. Finally, I would like to thank all our Placemakers around the world. Your commitment and professionalism are what make ISS successful every day. I would also like to thank our customers for their continued trust and partnership. With that, we conclude today's presentation, and I hope to see you all at our upcoming Capital Markets Day in Copenhagen on 14 September. Now we are ready to take your questions.

Speaker #2: Looking ahead, our priorities remain unchanged. We will continue executing our strategy to deliver profitable growth, consistent financial performance, and strong engagement across the organization.

Speaker #2: We are confident that these priorities will continue to strengthen ISS and create long-term value for our customers and our shareholders. Finally, I would like to thank all our placemakers around the world.

Speaker #2: Your commitment and professionalism are what make ISS successful every day. I would also like to thank our customers for their continued trust and partnership.

Speaker #2: With that, we conclude today's presentation, and I hope to see you all at our upcoming Capital Markets Day in Copenhagen on the 14th of September.

Speaker #2: And now, we are ready to take your questions.

Speaker #1: Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone.

Operator: Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. In the interest of time, please limit yourself to two questions. Anyone with a question may press star and one at this time. The first question comes from Mats Brinckmann from Berenberg. Please go ahead.

Speaker #1: You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two.

Speaker #1: In the interest of time, please limit yourself to two questions. Anyone who has a question may press star and one at this time. And the first question comes from Mads Brinkmann from Berenberg.

Operator: The first question comes from Mats Brinckmann from Berenberg. Please go ahead.

Speaker #1: Please go ahead.

Speaker #3: Yeah, good morning. Thank you very much for taking my questions. Just if we start on the guidance, please. On top line, obviously a very strong print in Q2, and just, I guess, the implied growth.

Mats Brinckmann: Yeah, good morning. Thank you very much for taking my questions. Just if we start on the guidance, please. On top line, obviously very strong prints in Q2 and just, I guess the implied growth. I know you guys are above 6%, but I am still just struggling to understand why you have not raised guidance further. I mean, the implied growth in H2 is now 4%. I know you flag Q4 as a tough comp, but still assuming that Q3 is sort of not too dissimilar to Q1, maybe not Q2, but Q1 at least, then, I mean, it looks like you are in a very good place. So why have you not lifted guidance on that one, please?

Mads Brinckmann: Yeah, good morning. Thank you very much for taking my questions. Just if we start on the guidance, please. On top line, obviously very strong prints in Q2 and just, I guess the implied growth. I know you guys are above 6%, but I am still just struggling to understand why you have not raised guidance further. I mean, the implied growth in H2 is now 4%. I know you flag Q4 as a tough comp, but still assuming that Q3 is sort of not too dissimilar to Q1, maybe not Q2, but Q1 at least, then, I mean, it looks like you are in a very good place. So why have you not lifted guidance on that one, please?

Speaker #3: I know you guys for above six, but I'm still just struggling to understand why you haven't raised guidance further. I mean, the implied growth in H2 is now 4%.

Speaker #3: I know you flagged Q4 as a tough comp, but still, assuming that Q3 is sort of not too dissimilar to Q1—maybe not Q2, but Q1 at least.

Speaker #3: Then, I mean, it looks like you're in a very, very good place. So why haven't you lifted—why haven't you lifted guidance on that one, please?

Speaker #3: And then separately on the free cash flow, this goes back to the upgrade you did in May. Obviously, you lifted organic growth, and on the margin, and at least just on my back of the envelope calculation, that would sort of mean an incremental 200 million in post-tax EBIT.

Mats Brinckmann: Then separately on the free cash flow, this goes back to the upgrade you did in May. Obviously, you lifted organic growth and on the margin, and at least just on my back of the envelope calculation, that would mean an incremental DKK 200 million in post-tax EBIT. So I am just trying to understand why the guidance when you upgraded was only upgraded by the DKK 600 million payment related to Deutsche Telekom and not the operating performance of the business as well. Does it mean that you essentially have a cushion for if you need to invest more in H2 or mobilize new contracts, or what is the deal here? Then secondly, sorry, just lastly on DTAG, you mentioned a 10 to 15 bps uplift here over the longer run or over the year. Just want to make sure I have not missed this.

Mads Brinckmann: Then separately on the free cash flow, this goes back to the upgrade you did in May. Obviously, you lifted organic growth and on the margin, and at least just on my back of the envelope calculation, that would mean an incremental DKK 200 million in post-tax EBIT. So I am just trying to understand why the guidance when you upgraded was only upgraded by the DKK 600 million payment related to Deutsche Telekom and not the operating performance of the business as well. Does it mean that you essentially have a cushion for if you need to invest more in H2 or mobilize new contracts, or what is the deal here? Then secondly, sorry, just lastly on DTAG, you mentioned a 10 to 15 bps uplift here over the longer run or over the year. Just want to make sure I have not missed this.

Speaker #3: So I'm just trying to understand why the guidance, when you upgraded, was only upgraded by the €600 million payment related to Deutsche Telekom and not sort of the operating performance of the business as well.

Speaker #3: Does it mean that, essentially, you have a cushion in case you need to invest more in H2 or mobilize new contracts? Or what's the deal here?

Speaker #3: And then secondly, sorry, just lastly on DTEK, you mentioned a 10 to 15 bps uplift here. Over the longer run, or sort of over the year?

Speaker #3: And I just want to make sure I haven't missed this. Sorry, is this on the same scope of services, or is this an expanded scope of services as well?

Mats Brinckmann: Sorry, is this on the same scope of services or is this an expanded scope of services as well? Thank you.

Mads Brinckmann: Sorry, is this on the same scope of services or is this an expanded scope of services as well? Thank you.

Speaker #3: Thank you.

Speaker #2: Thank you very much. Mads, my Mads in the room—do you want to take the guidance and the free cash flow? Then I can talk to the DTEK.

Kasper Fangel: Thank you very much. Mads, my Mads in the room, do you want to take the guidance and the free cash flow, then I can talk to the Deutsche Telekom.

Speaker #4: Hey, Mads, and good morning to you. First of all, I think it's a little bit of a notch too early. And as you alluded to yourself, we are saying that above six percent, and that of course doesn't mean that we are delivering 6.01.

Mads Holm: Hey, Mads, and good morning to you. First of all, I think it is a little bit of a notch too early. As you allude to yourself, we are saying that above 6%, and that of course does not mean that we are delivering 6.01. That believes that we have maybe, as you alluded to, a caution, but we are confident in delivering above the 6%, which is therefore also de-risked to a large extent. You touched upon another point yourself, which is of course the tough comp base in Q4, where we had several contracts start up last year, including the DWP. Then the last one, I just want to emphasize when it comes to it.

Speaker #4: That believes that we have maybe, as you alluded to, a caution, but we are confident in delivering above the 6%, which is therefore also de-risked to a large extent.

Speaker #4: You touched upon another point yourself, which is, of course, the tough comp base in the fourth quarter, where we had several contracts start up last year, including the DWP.

Speaker #4: And then the last one, I just want to emphasize, when it comes to it, we are still uncertain, of course, about the above base activity—not because we are seeing any trend, but still, as alluded to in the beginning, it's just a notch too early to see where we are on the above base side.

Mads Holm: We are still uncertain, of course, about the above-base activity, not because we are seeing any trend, but still, as alluded to in the beginning, it is just a notch too early to see where we are on the above-base side. Looking at the free cash flow side, we are mentioning a number, but we are also targeting a cash conversion of 60%. That is the primary goal. Remember, we also alluded to that we will deliver above the DKK 3.1 billion, and of course, we will see that any additional earnings will, of course, be moved into cash. Therefore, the above DKK 3.1 billion also includes an upside, of course.

Speaker #4: Looking at the free cash flow side, I mean, we are mentioning a number, but we are also targeting a cash conversion of 60%. That is the primary goal.

Speaker #4: And remember, we also alluded to the fact that we will deliver above this $3.1 billion. And, of course, we will see that any additional earnings will, of course, be moved into cash.

Speaker #4: So therefore, the above 3.1 also includes an upside, of course.

Speaker #2: Thank you very much, Mads. And in regards to your question on Deutsche Telekom, it is on the same scope. So there's no change to the scope, Mads.

Kasper Fangel: Thank you very much, Mads. In regards to your question on Deutsche Telekom, it is on the same scope, so there are no changes to the scope, Mads.

Speaker #3: Fair enough. Thank you for that. So that's very clear. But maybe, just—I know it's limited what you can say—but, in essence, I'm just trying to understand the sort of retroactive, sort of backward-looking impact in the quarter here on DTEK.

Mats Brinckmann: Fair enough. Thank you for that. That is very clear. Maybe just, I know it is limited what you can say, but in essence, just trying to understand the retroactive backward-looking impact of in the quarter here on DTAG. I know it is on a group level, you say it is not meaningful, but the growth in Central and Southern Europe, of course, very, very high. So I am just trying to understand the retro aspect. Sorry, I cannot speak today. The impact going back a few years, is that essentially from when you initiated the arbitration, I believe it was 2022, or does it go further back than that?

Mads Brinckmann: Fair enough. Thank you for that. That is very clear. Maybe just, I know it is limited what you can say, but in essence, just trying to understand the retroactive backward-looking impact of in the quarter here on DTAG. I know it is on a group level, you say it is not meaningful, but the growth in Central and Southern Europe, of course, very, very high. So I am just trying to understand the retro aspect. Sorry, I cannot speak today. The impact going back a few years, is that essentially from when you initiated the arbitration, I believe it was 2022, or does it go further back than that?

Speaker #3: I know it's on group level; you say it's not meaningful, but I mean, the growth in central and southern Europe is, of course, very, very high.

Speaker #3: So I'm just trying to understand the retro aspect—sorry, I can't speak today. But the impact, going back a few years, I mean, is that essentially from when you initiated the arbitration?

Speaker #3: I believe it was '22, or does it go further back than that? Any color would be much appreciated, please.

Kasper Fangel: Yeah.

Mats Brinckmann: Any color would be much appreciated, please.

Mads Brinckmann: Any color would be much appreciated, please.

Kasper Fangel: Yeah. I totally understand, Mads. As I am sure you will understand, it is limited what I can disclose, as you were saying yourself, because that is what we agreed with the customer. So I cannot give you the exact details in terms of value, but I can give you some more color that will be helpful. The one-off is booked as project volume in Q2, and that is where we have a contribution of 3% in the quarter to the organic growth. If I strip out the DTAG impact, then I would still have a decent contribution from project work in Q2.

Speaker #2: Yeah, yeah. No, no. I totally understand, Mads. And, as I'm sure you will understand, it's limited what I can disclose, as you were saying yourself.

Speaker #2: Because that would be agreed with the customer. So, I can't give you the exact details in terms of value, but I can give you some more color that will be helpful.

Speaker #2: So, the one-off is booked as project volume in Q2, and that's where we have a contribution of 3% in the quarter to the organic growth.

Speaker #2: And if I strip out the DTEK impact, then I would still have a decent contribution from project work in Q2.

Speaker #3: Thank you very much. Yeah, I mean, it's fair. Is it fair to assume a flat above-base underlying quarter-over-quarter?

Mats Brinckmann: Thank you very much. Is it fair to assume a flat above base underlying quarter-over-quarter?

Mads Brinckmann: Thank you very much. Is it fair to assume a flat above base underlying quarter-over-quarter?

Speaker #2: In Q2, you mean?

Kasper Fangel: In Q2, you mean?

Speaker #3: Yeah.

Mats Brinckmann: Yeah.

Mads Brinckmann: Yeah.

Speaker #2: No, because then it will not be a decent contribution. So it is a positive contribution in the quarter, also excluding the DTEK one-off impact.

Kasper Fangel: No, because then it will not be a decent contribution. It is a positive contribution in the quarter, also excluding the DTAG one-off impact.

Speaker #3: No, sorry. Okay, sorry. Fair enough. So I just meant, like, you did one and a half in Q1, so one and a half in Q2 is not unreasonable.

Mats Brinckmann: No, sorry. Okay. Sorry. Fair enough. I just meant you did 1.5 Q1, so 1.5 in Q2 is not unreasonable. Ex DTAG.

Mads Brinckmann: No, sorry. Okay. Sorry. Fair enough. I just meant you did 1.5 Q1, so 1.5 in Q2 is not unreasonable. Ex DTAG.

Speaker #3: X DTEK.

Kasper Fangel: Ish. Yes. That's-

Speaker #2: Ish, yes. That's yeah.

Mats Brinckmann: Thank you.

Mads Brinckmann: Thank you.

Kasper Fangel: Yeah.

Speaker #3: Thank you very much. Yes.

Mats Brinckmann: Thank you very much. Cheers.

Mads Brinckmann: Thank you very much. Cheers.

Speaker #1: The next question comes from Thomas and Peter from Nordea. Please go ahead.

Operator: The next question comes from Thomas Petersen from Nordea. Please go ahead.

Thomas Petersen: Hi. Good morning, everyone. Congrats on the strong results here. Maybe a follow-up on Mads Holm's. Regarding Central and Southern Europe, obviously super strong growth here. Can you split the underlying growth between pricing in Türkiye and Germany/DTAG and other regional momentum? That would be my first question. My second one would be around Americas, if you could just give us a bit of an update here, because it remains weak, at least in terms of organic growth here, and margin is also declining. What is also expected in timeline for America's margin to recover? That would be my two questions. Thank you.

Speaker #5: Hi, good morning everyone, and congrats on the strong results here. Maybe sort of a follow-up on Mads's, so regarding Central and Southern Europe—obviously, super strong growth here.

Speaker #5: Can you split the underlying growth between pricing in Turkey and then Germany/DTEK, and other regional momentum? So, that would be my first question.

Speaker #5: And then the second one would be around Americas. If you could just give us a bit of an update here, because it remains weak, at least in terms of organic growth, and margin is also declining.

Speaker #5: So, what is also expected in the timeline for Americas margin to recover? That would be my two questions. Thank you.

Speaker #2: Yeah. No, thanks, Thomas. So in terms of Central and Southern, and just zooming in on Q2 in isolation, it's very pleasing to see that the like-for-like growth—so the net new contract wins and the scope changes—are high.

Kasper Fangel: Yeah. No, thanks, Thomas Petersen. In terms of Central and Southern, just zooming in on Q2 in isolation. It is very pleasing to see that the like-for-like growth, so the net new contract wins and the scope changes are high. That is a significant contribution. That does not have anything to do with the DTAG one-off, and it does not have anything to do with prices in Türkiye as you are alluding to. Then, of course, we have the same impact on prices in the second quarter as we had in the first quarter, so nothing there that is really moving. What is the difference in Q2 versus Q1 for Central and Southern is a stronger like-for-like, and then, of course, an uptick in the project work due to ongoing project work, excluding DTAG, and then the DTAG on top. That is the color on Central and Southern.

Speaker #2: So that's a significant contribution. That does not have anything to do with the DTEK one-off, and it doesn't have anything to do with prices in Turkey, as you alluded to.

Speaker #2: Then, of course, we have the same impact on prices in the second quarter as we had in the first quarter. So, nothing there that is really moving.

Speaker #2: So what is the difference in Q2 versus Q1 for Central and Southern is a stronger like-for-like, and then of course, an uptick in the project work due to ongoing project work, excluding DTEK, and then the DTEK on top.

Speaker #2: That's the color on Central and Southern. And in terms of your question on the US, I just want to say that my enthusiasm around the US has not faded away over the course of Q2.

Kasper Fangel: In terms of your question on the US, then I just want to say that my enthusiasm around the US has not faded away over the course of Q2. I had the pleasure to be in the US, meeting current customers and potential new customers and spending time with our team there for a full week last week. I got reconfirmed in the fact that we are doing all the right things and we are investing in all the right things. Of course, we will provide more color on the Capital Markets Day, where our country manager, Stephen Quick, will give a dedicated presentation on the US. I do not want to repeat mistakes that has been done in ISS previously by saying, comes a certain quarter or a certain month, then you will see the significant breakthrough in the US.

Speaker #2: I had the pleasure to be in the US, meeting current customers and potential new customers, and spending time with our team there for a full week last week.

Speaker #2: And I got reconfirmed in the fact that we're doing all the right things, and we're investing in all the right things. Of course, we will provide more color on Capital Markets Day, where our country manager, Stephen Quick, will give a dedicated presentation on the US.

Speaker #2: And I don't want to repeat mistakes that have been made at ISS previously by saying, "Come a certain quarter or a certain month, then you will see the significant breakthrough in the US."

Speaker #2: What we are focused on, and what I'm focused on, is that we are doing the right things. We can see we are becoming stronger, and that's also the case in Q2.

Kasper Fangel: What we are focused on and what I am focused on is that we are doing the right things. We can see we are becoming stronger, and that is also the case in Q2, and that the pipeline is healthy. Then over time, we will see the return. Of course, we need a return because it is a significant investment. So we are doing this with the expectation that the return will come through. Then we are also mindful and, of course, humble about the fact that we need to be able to afford to do those investments in the US. So I think it is also, when you assess that whole thing, it is also important to look at in a broader context.

Speaker #2: And that the pipeline is healthy. Then, over time, we will see the return. And of course, we need a return because it's a significant investment.

Speaker #2: So, we are doing this with the expectation that the return will come through. And then we are also mindful, and of course humble, about the fact that we need to be able to afford to do those investments in the US.

Speaker #2: So I think when you assess the whole thing, it's also important to look at it in a broader context. You can see that our corporate costs in the first half of 2026 are the same, in nominal terms, as in the first half of 2022.

Kasper Fangel: You can see that our corporate costs in H1 2026 is the same nominal costs as in H1 2022, and that is with an organic growth of 8.2% in H1. It is not that we are just spending money in the US, we are very mindful of the fact that we need to be able to afford it and do it in a focused way and investing in the right things.

Speaker #2: And that's with an organic growth of 8.2% in the first half. So it's not that we're just spending money in the US. We are very mindful of the fact that we need to be able to afford it and do it in a focused way, investing in the right things.

Thomas Petersen: Thanks. Can I just a quick follow-up on the US. Are the US commercial investments now largely complete, or should we expect the continued margin pressure in H2?

Speaker #5: Thanks. Can I just ask a quick follow-up on the US? Are the US commercial investments now largely complete, or should we expect continued margin pressure in H2?

Kasper Fangel: The short answer to that is that the margins in Americas for H2 of this year will be at the same ratio level as H2 of last year.

Speaker #2: I mean, the short answer to that is that the margins in Americas for the second half of this year will be at the same ratio level as the second half of last year.

Speaker #5: Thank you. Very clear.

Thomas Petersen: Thank you.

Kasper Fangel: Okay.

Operator: The next question comes from Kristian Godiksen from SEB. Please go ahead.

Speaker #1: The next question comes from Christian Godickson from SEB. Please go ahead.

Speaker #5: Thank you. A couple of questions from my side as well. So you have had a strong momentum in the UK and especially within the government contracts winning especially contracts from Mighty.

Kristian Godiksen: Thank you. A couple of questions from my side as well. You have had strong momentum in the UK, especially within the government contracts, winning, especially contracts from Mitie. Just wondering what your view is with Mitie being taken over by the OCS Group. Is that creating a stronger competitor? What is your view on that? That would be the first question. Secondly, maybe you can comment a bit on this year being more successful in having commercial momentum in the expansion of existing contracts rather than new wins. Are there any reasons for that? Then I noticed that on slide 18 on the outlook, on the contrary, it looks like growth contribution in the outlook is less for volume growth than for net new wins, which was not the case in the Q1 presentation.

Speaker #5: So I was just wondering what your view is with Mitie being taken over by the OCS Group. Is that creating a stronger competitor, or what's your view on that?

Speaker #5: That would be the first question. And then, secondly, could you comment a bit on this year being more successful in generating commercial momentum from the expansion of existing contracts rather than from new ones?

Speaker #5: Are there any reasons for that? And then I noticed that on slide 18, on the outlook, on the contrary, it looks like growth contribution in the outlook is less for volume growth than for net new wins, which was not the case in the Q1 presentation.

Speaker #5: So maybe if you could put some color on that as well. Thank you. That would be my two questions, I guess.

Kristian Godiksen: Maybe if you could put some color on that as well. Thank you. That would be my two questions, I guess.

Speaker #2: Thank you, Christian, for those questions. So, first of all, in terms of what is happening in the UK with Mitie and OCS, of course, we are following that closely.

Kasper Fangel: Thank you, Kristian, for those questions. First of all, in terms of what is happening in the UK with Mitie and OCS, of course, we are following that closely, similar to how we are following all other local markets that we are operating within and what is happening in the market. What I will say as an overall consideration around that is that we operate in markets where there are opportunities for both us and the competition to grow. Massive opportunities, and that goes for UK as well, not only for the scope that is outsourced today, but if you are also adding into the equation the work that is insourced today. Of course, we are following the OCS and Mitie situation.

Speaker #2: Similar to how we are following all other local markets that we are operating within and what is happening in the market. What I will say as an overall consideration around that is that we operate in margins where there are in markets where there are opportunities for both us and the competition to grow.

Speaker #2: So, massive opportunities. And that goes for the UK as well—not only for the scope that is outsourced today, but also if you add into the equation the work that is insourced today.

Speaker #2: But of course, we are following the OCS and Mighty situation. I think it's too early to be conclusive on it, but we are proactive and very close to that. We don't see that as a structural thing that will hinder growth for us globally, and also not isolated for the UK.

Kasper Fangel: I think it's too early to be conclusive of it, but we are proactive and very close to that, but don't see that as a structural thing that will hinder growth for us globally and also not isolated for the UK. In terms of your question on expansions with existing customers, it is a strategic initiative, and as you will recall, that's exactly what we have worked on in the last 3 years, and it's really starting to come through now. We have a structured approach around it. We have the right setup, where people are working together across countries on making sure that opportunities to grow outside your own remit, outside your local market, is fostered in a good and not bureaucratic way. We're working on stakeholder management, making sure that we speak to the right people in terms of the people that are making the decisions.

Speaker #2: In terms of your question on expansions with existing customers, it is a strategic initiative. And, as you will recall, that's exactly what we have worked on in the last three years.

Speaker #2: And it's really starting to come through now. We have a structured approach around it. We have the right setup where people are working together across countries, making sure that opportunities to grow outside your own remit—outside your local market—are fostered in a good and not bureaucratic way.

Speaker #2: And we are working on stakeholder management, making sure that we speak to the right people, in terms of those who are making the decisions.

Speaker #2: So, I'm pleased with the progress, and the good thing is that we have not untapped all those opportunities that we have with our existing customers.

Kasper Fangel: I'm pleased with the progress, and the good thing is that we have not untapped all those opportunities that we have with our existing customers. It's still a growth lever that you will hear more about at the Capital Markets Day, but there are still, I would actually call it significant opportunities to be had around that growth opportunity. Then in terms of the outlook, I appreciate you looking at the details on that, and that's very clear. There's nothing material that has changed there. It's immaterial, Kristian, minor roundings. So nothing structural that has changed since the last update in terms of outlook and the contribution from volume.

Speaker #2: So, it's still a growth lever that you will hear more about at the Capital Markets Day. But there are still, I would actually call them, significant opportunities to be had around that growth opportunity.

Speaker #2: And then, in terms of the outlook, I appreciate you looking at the details on that, and that's very clear. There’s nothing material that has changed there.

Speaker #2: It's immaterial, Christian—minor roundings. So, nothing structural has changed since the last update in terms of outlook and the contribution from volume.

Speaker #5: Okay. Okay. Because I noticed on the retention rate—that's maybe, I guess, the flip side of that—so that's actually improving. So how sustainable is this 95%?

Kristian Godiksen: Okay. Because I noticed on the retention rate, maybe that, I guess, that's the flip side on that. So that's actually improving. How sustainable is this 95%? Just trying to square it up because that volume growth seems like there's a small notch decline there, and then on the contrary, you have retention rates going up.

Speaker #5: I'm just trying to square it up. Is it that volume growth seems like there's a small notch of decline there, and then on the contrary, you have retention rates going up?

Kasper Fangel: Yeah.

Speaker #5: So yeah.

Kristian Godiksen: So,

Kasper Fangel: Yeah. That's a fair question. What I can say, as a simple answer to that, is that we see no reason why retention rate shouldn't remain at 95% for the remainder of the year.

Speaker #2: And that's a fair question. What I can say as a simple answer to that is that we see no reason why retention rate shouldn't remain at 95% for the remainder of the year.

Speaker #5: Okay. Perfect. Thank you. I'll jump back.

Kristian Godiksen: Okay, perfect. Thank you. I'll jump back.

Speaker #1: The next question comes from Oliver Benebal from DNB Carnegie. Please go ahead.

Operator: The next question comes from Oliver Benkel from DNB Carnegie. Please go ahead.

Operator: The next question comes from Oliver Benneballe from DNB Carnegie. Please go ahead.

Speaker #5: Yes, thank you for taking my questions. You flagged one of the revenue adjustments from the DeTax settlement, recognized as part of Q2 above base work.

Oliver Benkel: Yes. Thank you for taking my questions. You flagged a one-off revenue adjustment from the DTAG settlement recognized as part of Q2 above base work. I realize you cannot specify the size, but could you please provide some comments on its impact on earnings and specifically how we should think about its impact on EBIT? Also a question on Americas, could you please provide an update on the pipeline progressions and what initiatives you are working with? Separately, how are you thinking about M&A as a tool to accelerate presence in the US? Thank you.

Oliver Benneballe: Yes. Thank you for taking my questions. You flagged a one-off revenue adjustment from the DTAG settlement recognized as part of Q2 above base work. I realize you cannot specify the size, but could you please provide some comments on its impact on earnings and specifically how we should think about its impact on EBIT? Also a question on Americas, could you please provide an update on the pipeline progressions and what initiatives you are working with? Separately, how are you thinking about M&A as a tool to accelerate presence in the US? Thank you.

Speaker #5: I realize you cannot specify the size, but could you please provide some comments on its impact on earnings, and specifically, how we should think about its impact on EBIT?

Speaker #5: And also, a question on Americas: could you please provide an update on the pipeline progression and what initiatives you are working with? And separately, how are you thinking about M&A as a tool to accelerate presence in the US?

Speaker #5: Thank you.

Speaker #2: Yes. Thank you for those questions. In terms of Deutsche Telekom, I think I have covered the revenue recognition in one of the previous questions. So just a quick recap on that.

Kasper Fangel: Yes. Thank you for those questions. In terms of Deutsche Telekom, I think I have covered the revenue recognition in one of the previous questions. Just a quick recap on that. It is booked as project volume in Q2. We have a contribution of 3% in Q2 from project volume, and if I exclude the impact from the DTAG one-off impact, then we still have a decent growth in project volume in Q2. So that is the closest I can come to magnitude. Then in terms of from a margin perspective, the settlement agreement has allowed us to improve the contractual profitability. So what I call the run rate to a level where it benefits group margins with 10 to 15 bps annually. That is the case for 2026, and that will stick going forward as a minimum improvement.

Speaker #2: It's booked as project volume in Q2. We have a contribution of 3% in Q2 from project volume. And if I exclude the impact from the detag one-off impact, then we still have decent growth in project volume in Q2.

Speaker #2: So that's the closest I can come to magnitude. And then, in terms of, from a margin perspective, the settlement agreement has allowed us to improve the contractual profitability.

Speaker #2: So, what we—and I—call the run rate, to a level where it benefits group margins with 10 to 15 basis points annually. And that's the case for 2026.

Speaker #2: And that will stick going forward as a minimum improvement. And then, in terms of the Americas pipeline, I think I alluded to it before.

Kasper Fangel: In terms of the Americas pipeline, I think I alluded to it before. The pipeline in Americas has improved over the course of Q2. We have further progressed in some of the process that we are attending in. That is not the same as saying that we are winning, but we are obviously making a positive progress. You get feedback also from customers that are in those processes, and what I meant about that we are improving is that feedback that I am getting are more and more positive around the US. So we are both strengthening our go-to-market and our value proposition that we are putting forward to our customers. At the same time, our operating model is also improving, working in a more efficient way. So I am optimistic, and I remain optimistic about the Americas, and in particular, the US.

Speaker #2: The pipeline in Americas has improved over the course of Q2, and we have further progressed in some of the processes that we are attending in.

Speaker #2: That's not the same as saying that we are winning, but we are obviously making positive progress. And you get feedback also from customers that are in those processes, and what I meant about that we are improving is that the feedback that we and I are getting is more and more positive.

Speaker #2: Around the US. So, we are both strengthening our go-to-market and our value proposition that we are putting forward to our customers. And at the same time, our operating model is also improving, working in a more efficient way.

Speaker #2: So, I am optimistic, and I remain optimistic about the Americas, and in particular, the US. And from an M&A perspective, don't expect M&A in the next chapters in the Americas for us.

Kasper Fangel: From an M&A perspective, don't expect M&A in the next chapters in Americas for us. We want to make sure that what I have just alluded to here in such a positive way is also coming through. That is the test that we can deliver, and things are coming through. Once then we have that comfort that things are coming through, then we can talk about accelerating things with inorganic growth in the US. But it is not the plan and not on the table to do that in the initial phase.

Speaker #2: We want to make sure that what I've just alluded to here in such a positive way is also coming through, and that's the test that we can deliver.

Speaker #2: And things are coming through. Once we have that come forth, then there's talk about accelerating things with inorganic growth in the US. But it's not the plan and not on the table to do that in the initial phase.

Operator: Very clear. Thank you. The next question comes from Nicole Manning from UBS. Please go ahead.

Oliver Benneballe: Very clear. Thank you.

Speaker #5: Thank you. Thank you.

Operator: The next question comes from Nicole Manion from UBS. Please go ahead.

Speaker #1: The next question comes from Nicole Manning from UBS. Please go ahead.

Speaker #6: Hi, good morning. Just one on Northern Europe, please. I think you said that volume and net new was slightly negative in Q2. Obviously, aware of the exits and scope reductions you've announced there, but given the size of what's still ramping up, I would have maybe expected the balance to still be slightly positive on, maybe, the net new.

Nicole Manning: Hi, good morning. Just one on Northern Europe, please. I think you said that volume and net new are slightly negative in Q2. Obviously aware of the exits and scope reductions you have announced there, but given the size of what is still ramping up, would maybe have expected the balance to sort of still be slightly positive on maybe the net new. Is there anything to be aware of in the region in terms of maybe some smaller unannounced exits or reductions, or perhaps the phasing of some of the contracts that are ramping up or down? Thank you.

Nicole Manion: Hi, good morning. Just one on Northern Europe, please. I think you said that volume and net new are slightly negative in Q2. Obviously aware of the exits and scope reductions you have announced there, but given the size of what is still ramping up, would maybe have expected the balance to sort of still be slightly positive on maybe the net new. Is there anything to be aware of in the region in terms of maybe some smaller unannounced exits or reductions, or perhaps the phasing of some of the contracts that are ramping up or down? Thank you.

Speaker #6: Is there anything to be aware of in the region in terms of maybe some smaller, unannounced exits or reductions, or perhaps the phasing of some of the contracts that are ramping up or down?

Speaker #6: Thank you.

Speaker #2: Thanks, Nicole. So, in Northern Europe, the contract exits that we announced on February 26 are the one. It was not two, but one.

Kasper Fangel: Thanks, Nicole. In Northern Europe, the contract exits that we have announced in 2026 or the one, it was not two, but one. It is the first quarter where that has a full impact in Q2. Two of the wins and the expansions that we have announced in the region does not have a full impact in Q2, and that is totally as expected. We do expect organic growth to improve in Q3 in Northern Europe. I think that is the summary of what I just mentioned. Q3 organic growth is expected to be stronger in Q3 versus what we saw in Q2.

Speaker #2: That's the first quarter where that has a full impact—in Q2. And then, two of the wins and the expansions that we have announced in the region do not have a full impact in Q2, and that's totally as expected.

Speaker #2: We do expect organic growth to improve in the third quarter in Northern Europe. So, I think that's the summary of what I just mentioned.

Speaker #2: So, the third quarter organic growth is expected to be stronger in Q3 versus what we saw in Q2.

Speaker #6: Got it. Thank you.

Nicole Manning: Got it. Thank you.

Nicole Manion: Got it. Thank you.

Operator: The next question comes from Mikkel Løgsted from ABG Sundal Collier. Please go ahead.

Speaker #1: The next question comes from Michael Loxette from ABG Sandel Collier. Please go ahead.

Speaker #7: Hi. Good morning, everyone. I just have one question, and that's about the US. Some of your peers over there have been somewhat vocal about increased demand within technical services from hyperscalers.

Mikkel Løgsted: Hi, good morning, everyone. I just have one question, and that is about the US, and some of your peers over there have been somewhat vocal about increased demand within technical services from hyperscalers. Is that something you have noticed as well? Do you think your current capabilities can meet this demand? Thank you.

Speaker #7: Is that something you have noticed as well? And do you think your current capabilities can meet this demand? Thank you.

Speaker #2: Thank you. Super question, much appreciated. And you are indeed right— that's an exciting opportunity and something that we are, of course, also looking at and reviewing at the moment.

Kasper Fangel: Thank you. Super question. Much appreciated. You are indeed right. That is an exciting opportunity and something that we, of course, also are looking at and reviewing at the moment. I will be honest with you and say that particularly what you are referring to in terms of technical services in data centers in the US with the scale-up and the ramp-up that is happening there, is not something that you should expect in the short term will be a contribution to us. On the other side, though, in data centers, they also need janitorial services, cleaning services, and they need food to be fed. That is something where we have the capabilities in the US today. Also are excited about some of the conversations that we are having to deliver those offerings to the many data centers that are popping up in the US.

Speaker #2: But I'll be honest with you and say that, particularly what you're referring to in terms of technical services in data centers in the US, with the scale-up and the ramp-up that is happening there, is not something that you should expect in the short term.

Speaker #2: Will be a contribution to us. On the other side, though, in data centers, they also need janitorial services, cleaning services, and they need food to be fed.

Speaker #2: And that is something that we have, where we have the capabilities in the US today. We are also excited about some of the conversations that we are having to deliver those offerings to the many data centers that are popping up in the US.

Speaker #7: Thank you. Very clear.

Mikkel Løgsted: Thank you. Very clear.

Speaker #1: The next question comes from Anneliese Vermeulen from Morgan Stanley. Please go ahead.

Operator: The next question comes from Annelies Vermeulen from Morgan Stanley. Please go ahead.

Speaker #8: Hi. Good morning, Kasper and Mads. Two questions, please. So, firstly, on the additional legal fees in APAC, could you quantify the impact on the margin there?

Annelies Vermeulen: Hi, good morning, Kasper and Mads. Two questions, please. Firstly, on the additional legal fees in APAC, could you quantify the impact to the margin there? Would you expect a similar impact in Q3 and Q4 until the matter in Hong Kong is resolved? I think the review is expected for Q4. Secondly, all these wildfires in Europe, have you had any customers affected by that or any impact to your business operations in those regions in Q3? Thank you.

Speaker #8: And would you expect a similar impact in Q3 and Q4 until the matter in Hong Kong is resolved? I think the review is expected for Q4.

Speaker #8: And then secondly, all these wildfires in Europe—have you had any customers affected by that, or any impact to your business operations in those regions in Q3?

Speaker #8: Thank you.

Speaker #2: Thank you. So, if we exclude—so we just look at the underlying—and we exclude the incremental cost related to legal fees, then the margins are slightly improving in Asia and Pacific in the first half.

Kasper Fangel: Thank you. If we exclude, if we just look at the underlying, and we exclude the incremental cost related to legal fees, then the margins are slightly improving in Asia Pacific in H1. We do not expect cost of the same magnitude in H2 as we had in H1 related to that particular case in Hong Kong. On your last or your second question on the wildfires, that is obviously devastating. No, we have not, luckily, had any customers or any of our people that have been involved or caught by the wildfires in Europe during the summertime.

Speaker #2: And we do not expect costs of the same magnitude in the second half as we had in the first half related to that particular case in Hong Kong.

Speaker #2: And on your last, or your second question on the wildfires, that's obviously devastating. And no, we have not, luckily, had any customers or any of our people that have been involved or caught by the wildfires in Europe during the summertime.

Speaker #8: Great. Thank you.

Annelies Vermeulen: Great. Thank you.

Speaker #1: The next question comes from Kasper Blom from Danske Bank. Please go ahead.

Operator: The next question comes from Casper Blom from Danske Bank. Please go ahead.

Speaker #6: Thanks a lot. And just yet another follow-up on the deep tech story—sorry about that. But Kasper, you've given us quite some building blocks to try and triangulate what the revenue impact is.

Casper Blom: Thanks a lot. Just yet another follow-up on the DTAG story. Sorry about that. Kasper, you have given us quite some building blocks to try and triangulate what the revenue impact is. This one-off revenue that you have from the DTAG settlement in the quarter, is that one we should think about as having 100% margin? Is that just a full drop-through without any cost related to it? Secondly, on Northern Europe, you mentioned these mobilization costs related to new contracts having an impact on the margin in H1. Will we see similar costs in H2, or should it then, how could you say, reverse into more business and thereby higher margin? Thank you.

Speaker #6: This one-off revenue that you have from the Detect settlement in the quarter, is that one we should think about as having, like, 100% margin?

Speaker #6: Is that just a full drop-through without any cost related to it? And then, secondly, on Northern Europe, you mentioned these mobilization costs related to new contracts having an impact on the margin in the first half.

Speaker #6: Will we see similar costs in the second half of the year, or should it then, how could you say, reverse into more business and thereby higher margin?

Speaker #6: Thank you.

Speaker #2: Thank you, Kasper. So, first on the mobilization cost incurred in Northern Europe in the first half—that will fade away in the second half.

Kasper Fangel: Thank you, Kasper. First on the mobilization costs incurred in Northern Europe in H1, that will fade away in H2. Yes, we expect higher margins in H2 versus H1 for the exact reason that you are mentioning. New business is coming in, and these incremental costs will fade away. On the revenue recognition and whether that has 100% drop-through, absolutely not. Let me explain how it works. Basically, the revenue that we are recognizing in Q2, it is that revenue that we are using to generate the run rate improvements of the 10 to 15 bps annually that I mentioned before. That will be implemented throughout the year of 2026, revenue being recognized in H1 and then offset by costs during the year.

Speaker #2: And yes, we expect higher margins in the second half versus the first half, for the exact reason that you are mentioning: new businesses coming in, and these incremental costs will fade away.

Speaker #2: On the revenue recognition and whether that has a 100% drop-through—absolutely not. Let me explain how it works. So, basically, the revenue that we are recognizing in Q2 is the revenue that we are using to generate the run-rate improvements of the 10 to 15 bps annually that I mentioned before.

Speaker #2: So that will be implemented throughout the year 2026, with revenue being recognized in the first half and then offset by costs during the year.

Speaker #2: And that is what then leads to the 10 to 15 bps uptick underlying positive impact at group level. So no, it's not a full drop-through.

Kasper Fangel: That is what then leads to the 10 to 15 bps uptick underlying positive impact at group level. No, it is not a full drop-through. There are costs against it, both in H1, and that will come gradually throughout the year and then give this nice uptick of 10 to 15 basis points for the full year, which sticks. It will sit there as a minimum also going forward.

Speaker #2: There are costs against it both in the first half, and that will come gradually throughout the year. And then give this nice uptick of 10 to 15 basis points for the full year, which sticks.

Speaker #2: So, it will sit there as a minimum also, going forward.

Speaker #6: That's very clear, Kasper. If I may follow up—the 10 to 15 basis points run rate improvement that you speak to, and you also very clearly say that it will stick.

Casper Blom: That is very clear, Kasper. If I may follow up, the 10 to 15 basis points run rate improvement that you speak to, and you also very clear in saying that it will stick, is it also correctly understood that we should expect more on top of this over the next, I do not know, two to three years as you gradually improve the Deutsche Telekom contract towards group average margins?

Speaker #6: Is it also correctly understood that we should expect more on top of this over the next, I don't know, two to three years, as you gradually improve the dodgy telecom contract towards group average margins?

Kasper Fangel: I think the first point to understand here is that this is 10 to 15 points at group level. So of course, when the Deutsche Telekom revenue is around DKK 4 billion, then you will see that it is quite a meaningful uptick to the run rate on that contract. We are getting that right, and we are implementing that as we speak. We can already see here in the H1 that it is coming nicely through, and I am convinced that we will get it done over the course of this year. So let us focus on that first before we start to talk about further improvements from Deutsche Telekom. One step at a time. I am very pleased with the settlement with Deutsche Telekom.

Speaker #2: I think the first point to understand here is that this is 10 to 15 points at group level. So of course, when the Deutsche Telekom revenue is around €4 billion, then you will see that it's quite a meaningful uptick to the run rate on that contract.

Speaker #2: We are getting that right, and we are implementing that as we speak. We can already see here in the first half that it’s coming nicely through.

Speaker #2: And I'm convinced that we will get it done over the course of this year. So let's focus on that first before we start to talk about further improvements from Deutsche Telekom.

Speaker #2: One step at a time. I'm very pleased with the settlement with Deutsche Telekom. The way we are working together now—looking forward and helping each other to create win-win situations in the partnership—is a completely different ballgame compared to how it used to be.

Kasper Fangel: The way we are working together now, looking forward, and helping each other to create win-win situations in the partnership is a completely different ballgame compared to how it used to be. So I am optimistic about the future, but I am not going to sit here on a call and say 10 to 15 basis points, and then you should expect significantly more on top of that. One step at a time, and we are in a very good position as of today.

Speaker #2: So I'm optimistic about the future, but I'm not going to sit here on a call and say 10 to 15 basis points, and then you should expect significantly more on top of that.

Speaker #2: One step at a time, and we're in a very good position as of today.

Casper Blom: Understood. Thanks a lot.

Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Kasper Fangel for any closing remarks.

Speaker #1: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Kasper Fangel for any closing remarks.

Speaker #2: Thank you very much. Thank you, everyone, for attending. Thanks for the good questions in the Q&A session—much appreciated. Our IR team obviously remains available today, and we are also looking forward to meeting many of you in the coming days during the upcoming roadshow.

Kasper Fangel: Thank you very much. Thank you, everyone, for attending. Thanks for the good questions in the Q&A session. Much appreciated. Our IR team obviously remains available today, and we are also looking forward to meet many of you in the coming days in the upcoming roadshow. I have to say, we are incredibly excited about the Capital Markets Day on 14 September here in Copenhagen, where I hope to see as many as possible of you attending in person, or if not in person, then virtually on the Capital Markets Day. With that, thank you very much indeed for your interest in the business, in the company, in ISS, and have a fantastic rest of your day. Thank you.

Speaker #2: And then I have to say we are incredibly excited about the Capital Markets Day on the 14th of September here in Copenhagen, where I hope to see as many of you as possible attending in person or, if not in person, then virtually on the Capital Markets Day.

Speaker #2: But with that, thank you very much indeed for your interest in the business, in the company, in ISS, and have a fantastic rest of your day.

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