Novartis to end $300m a year facility services deal with ISS

Eight years after inking a deal to provide facilities services across 22 sites, Danish firm ISS says Novartis is unlikely to extend its contract beyond December.

In August 2012, Swiss pharma firm Novartis inked a deal with Danish facilities services provider ISS to provide integrated facilities services at 22 sites, including numerous production plants.

The deal included the fulfilment of services including catering, property, cleaning, support and security at five sites in Switzerland, eleven sites in Germany, two in Austria, and four in Slovenia.

Image: iStock/ChesiireCat

But now ISS has revealed Novartis is “not likely” to extend the contract beyond December 31 2019.

According to the firm, the revenue generated from Novartis amounted to DKK 2 billion ($300 million) in 2018 and represented 2.8% of ISS’s Group revenue with an operating margin above Group average.

“The annualized first year net negative margin impact, including exit related costs, is expected to be 0.1-0.2 percentage points.”

The facilities services firm says it does not expect any material impact in 2019 and the outlook for the year remains unchanged.