May 02, 2024 09:59 GMT
ISS Global (Baa3 S, BBB- P) {ISS DC Equity} 1Q Earnings Call
CONSUMER CYCLICALS
ISS lines have had a high beta rally since late last year & finally hit a pause on that over last 2months. Its closer to what we see as FV here - still see some value in the 26s at Z+64/G+97/4% for carry hold. A new issue further out - if it refis the Dec €300m line - may bring some more value/excitement with it.
- Confirmed leverage will temporarily step up in 1H on FCF/WC seasonality - mgmt says will be flat yoy/around negative DKK1b.
- It didn't give a purchase price on the Swiss co bolt-on this qtr but said in line with previous M&A outlook - Q asked around €500m for total firepower this year - mgmt didn't explicitly comment on that number.
- On the unch FY guidance for +4-6% implying slower yoy increases for remaining quarters (base effects gets easier & this qtr was strong +6%) - mgmt did not really give much/a bias to revising that higher.
- Does expect net contracts wins - which was negative (-1% drag on organic revenue) in 1Q - to turn positive for FY24.
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