Ladies and gentlemen, good morning. Dear shareholders, welcome to the ISS annual general meeting 2022. My name is Niels Smedegaard, and I am the Chair of the Board of Directors. We've been looking forward very much to this day, and we are happy that we're able to invite you all here physically. For the past two years, the annual general meeting has been conducted virtually, and therefore it's great we finally are able to come together here in Copenhagen. With that being said, I would also like to welcome all of you who are following the annual general meeting via our webcast. Safety is a very important focus area in ISS, and we start all of our board meetings with a brief safety moment.
Today, that means in the very unlikely event of, for instance, a fire here, that exit is through the two doors in the back of this room. You just go around the wall, and there you will find two exits marked with green, and that's where we will all calmly and quietly go if a situation occurs. A warm welcome to you, Rikke, as well, and now I'd like to hand over to you to take us through the agenda of the meeting.
Thank you. Thank you, Niels, and thank you to the board of directors for appointing me as chair of today's meeting. It is a great pleasure. To start with, I have a few practical remarks. The annual general meeting will be held in English in accordance with ISS' articles of association and as mentioned in the notice to convene. Simultaneous translation into Danish is available for both all attending here and those listening in online. You choose Danish by selecting channel one on the device that you were offered upon arrival. If you wish to listen to the Danish translation and do not have a device, please raise your hand, and someone will come down and help you. If you don't have a device and wish to hear the Danish translation, you are welcome to raise your hand, and someone will come down and help you.
Online, you click on the Danish language button on the screen. If a shareholder wishes to ask questions or provide comments to any of the items on today's agenda as we proceed, I kindly ask you to come down to the podium at the relevant time and state your name so that you can present yourself to the audience, and it can also be recorded in the minutes. Questions or comments may be provided in English or in Danish as you prefer. As stated in the notice, the general meeting will be webcast live on ISS' shareholder portal. After the general meeting, a recording of the meeting will also be made available on ISS' website. Now turning to the formalities.
As the chair of the annual general meeting, it is my duty to assess whether the meeting is duly convened and able to transact business in respect of all agenda items on today's agenda. The notice to convene this annual general meeting was published on ISS' website as well as through Nasdaq on Wednesday, 9th of March this year, and on the same date it was sent to shareholders who had so requested. This is in accordance with ISS' articles of association and the Danish Companies Act, and I can thus conclude that the notice given and the form of publication comply with the ISS articles and applicable law. The notice to convene the general meeting also contains the information required by the Danish Companies Act and ISS' articles.
Moreover, the information required to be made available to shareholders regarding this annual general meeting has been made available on ISS' websites since the date of the notice. The meeting today is held here at ISS' offices in Søborg, and thus in the capital region of Denmark, in Danish called Region Hovedstaden, and this is in accordance with ISS' articles. On this basis, I can consider the annual general meeting to be lawfully convened unless there are any objections. It doesn't. There are no objections. I hereby consider the annual general meeting as duly convened. The agenda of today's annual general meeting is presented on the slide behind me and next to me, and it is as stated in the notice to convene. The agenda contains the standard items for an annual general meeting of ISS as outlined in the articles.
Moreover, it includes two proposals from the board of directors, and no shareholders have submitted proposals for approval at this general meeting. The two proposals from the board of directors listed under agenda item ten A and ten B. Both relate to amendments of the articles of association of ISS, including a proposal to renew the existing authorizations to the board to increase the share capital and proposed amendment of the term Chairman to Chair. The proposals under agenda item ten A and ten B shall be passed by at least two-thirds of the votes cast, as well as at least two-thirds of the share capital represented at the general meeting. All other proposals on today's agenda shall be passed by a simple majority of votes, except for agenda item six, regarding the remuneration report for 2021, which is presented for an advisory vote.
Again, on this basis, I can consider the general meeting to be able to transact business in respect of all agenda items, unless anyone has objections. It does not seem to be the case, so I can hereby also conclude that the general meeting is able to transact business in respect of all items on the agenda. As regards to share capital and voting rights represented today at today's general meeting, I have also received the most recent information from this company's share register. Shares and voting rights representing approximately 61% of the total votes and share capital are represented at the general meeting today. Shareholders representing approximately 99% of the share capital and votes represented at the general meeting today have in advance of the meeting submitted votes by correspondence or proxies.
With the received votes by correspondence and proxies, it can therefore already now be established that all proposals on today's agenda will be approved with the requisite majority. There will, of course, as usual, be an opportunity to raise questions and comments under each agenda item. We can then continue to the agenda of today's annual general meeting, which is next to me, as mentioned. As it has become tradition, it is proposed to present agenda item one to four together, so that the report of the board of directors in item one, the approval of the annual report in item two, the proposal on allocation of profit in item three, and the resolution to grant discharge of liability to the members of the board of directors and executive group management in item four are presented together.
This means that the Chair of the Board of Directors, Niels Smedegaard, together with Group CEO Jacob Aarup-Andersen and Group CFO Kasper Fangel, will present the Board of Directors report, the key figures for 2021, as well as the ISS Group strategy and business. Following these presentations, it will be possible to ask questions or comments. Shareholders who wish to take the floor, as I mentioned, are kindly asked to come to the podium after the presentations. After the presentations and the questions from the audience, I will then return to the formal adoption of the resolutions under agenda item one to four. Unless there are any comments to this approach, which doesn't seem to be the case, we can then start with the presentations, and I'll pass the word to Niels Smedegaard, Chair of the Board of Directors.
Thank you, Rikke. I will now take you through the board of directors report, including some introductory remarks, our overall framework on sustainability, and some key governance themes. Group CEO, Jacob Aarup-Andersen, will subsequently give an update on the development of One ISS strategy, including the COVID-19 impact on ISS and our 2022 expectations, as well as turnaround targets. Kasper Fangel, our group CFO, will go through the financial results for 2021. Before I continue my speech on ISS and the events that have taken place since last year's annual general meeting, I'd like to address a matter that we have all been affected by in recent months. The invasion of Ukraine has resulted in an escalating humanitarian crisis, leading to millions of Ukrainian refugees. I think I speak on behalf of all of ISS when stating that this is a heartbreaking situation.
Even though ISS is not directly impacted financially in any significant way, ISS has taken a number of actions to help those affected by the war, both internally and externally. We are continuously building on these efforts as the crisis unfolds. Our efforts include a fundraising partnership with the International Committee of the Red Cross, where ISS employees can donate money to the victims of the war, and where ISS will match the donations from the employees. We also provide job offerings in many of our markets where Ukrainian refugees initially have settled. It is my hope that this devastating war will soon come to an end, and we remain committed to doing all we can to support our people, our customers, and those affected by this catastrophe. Two years ago, we launched our new purpose of connecting people and places to make the world work better.
Looking back at these past two years, I must say that this purpose is more relevant than ever. In a world impacted by a global pandemic and increasing uncertainty, recently amplified by the war in Ukraine, our most important task is to support a well-functional and fully operational global workplace. The positive difference we are able to make for the people we serve and for the people we employ should always be our guiding principle. The ISS of today is built upon the efforts of millions of cleaners, security guards, kitchen workers, technicians, and other dedicated colleagues. I wanna take this opportunity to thank all of our current and former employees for working tirelessly in ensuring this vital support to our customers. Today, we are more than 350,000 placemakers, representing approximately 200 nationalities and serving over 40,000 customers globally.
We are operating in more than 30 countries, and our diversified footprint supports our strategic ambitions. Focusing on key account customers, we'll use our global scale to drive superior value for all stakeholders to become the most respected global leader in integrated facility services and to strengthen our position as number one in cleaning. All supported by our OneISS strategy, which I'll come back to later. During 2021 and up until today, the share price has seen both increases and decreases. After a significant increase in the first half of 2021, the development in the second half of the year and the beginning of 2022 has been negative. Even though the share price development has not been impressive, a lot of things has happened within ISS, and the company today is in a much better shape.
The OneISS strategy has come to life. We already see the benefits in the market, and the financial results improved during 2021. More about that later. The executive group management team has been strengthened and additional complementing competencies have been added. All in all, I believe ISS today is much better positioned for the future. Now a quick view at our shareholder structure. Kirkbi is our largest shareholder and has been a major shareholder since 2012. We appreciate Kirkbi's engagement in ISS and long-term focus. With this commitment from the largest shareholder, it allows the company to focus on the long-term value creation. Longview has kept their position during 2021, and we are pleased to have a new major shareholder above 5%, the Norwegian investment firm Incentive.
Among other shareholders, around 17% of the shares are owned by Danish institutional investors and around 5% by retail investors. From the board of directors, we really appreciate the support from all shareholders and your continued confidence in the company. I'll now move to the next section for some comments on the work we are doing on sustainability. Sustainability is a key part of the One ISS strategy, and it's a must-win battle going forward. Conducting business in a responsible and sustainable way is part of our DNA and has been embedded in our business model throughout our 120 years of history. ISS is a people company, and every day we make a difference on several dimensions of sustainability to the benefit of employees, customers, and society as a whole.
Our work has also been recognized by external rating agencies, which generally have very solid scores among the major and most respected agencies, and we are viewed as a company with low risk on ESG issues and making strong contributions. To underline our work on sustainability, we have made several commitments, and everything we do at ISS is aligned with guidelines for responsible business behavior. Several important commitments on sustainability have taken place during the last year, and we have also increased our dedicated resources to this area, both on a global and a country level. One of our most important commitments is the launch of our net zero greenhouse gas emission targets. It's ambitious and important, but at the same time, it's also necessary. We want to do more than just comply with the environmental policies.
We want to be recognized among the environmental leaders and a catalyst for change in our industry. We have committed to reach net zero emissions within Scope 1 and 2 by 2030. These emissions are our direct and indirect emissions from our own buildings, our company vehicles, and the purchases of electricity, steam and heating, et cetera. In addition, we commit to reach full scope net zero emissions by 2040. This includes all emissions that occur in our value chain, including activities from assets and activities not owned and controlled by ISS. This is a significant commitment, as 97% of our emissions are here in Scope 3, and we can only reach those targets in close partnership with our suppliers and our customers. The net zero commitment is backed by several concrete initiatives, which also include tangible targets.
Within our food services, we will reduce CO2 emissions by 25% by 2030 and half the food waste by 27%. Everything measured against a baseline in 2019. Furthermore, we have initiated a project to electrify our entire fleet of more than 20,000 vehicles, reduce water used in cleaning services, and increase the amount of renewable energy used in our buildings. The environmental initiatives are embedded in the OneISS strategy, and in addition to reaching our own target, we have several opportunities to support our customers fulfilling their environmental ambitions. As I mentioned earlier, ISS is truly a people company with more than 350,000 employees, and we play an important role in society. Every year, we hire more than 125,000 people.
We do not only provide a job for them, but we also train, develop them, and engage them to improve their career opportunities. We have several examples of people starting out as cleaners or janitors now being employed as service, site, or even country managers. Education is a key focus area for us, and with constant education and training, we help our people reach their full potential. When we succeed in helping our employees to grow, they're able to contribute to our customers and the societies as a whole. Across the world, we have many initiatives in place to support our people. For example, in India, we are educating our frontline employees who come from an underprivileged and poor socioeconomic background.
In Spain, we are working actively to attract people with disabilities, and of the total workforce, more than 5% of our employees in Spain are either physically or mentally disabled. With our self-delivery model, and thereby full control of our value chain, these initiatives and proposition gives us a competitive advantage in the market. In 2021, the Board carried out a Board evaluation with the support of an external consultant. The processes consisted of an extensive bespoke questionnaire covering a broad range of Board-related matters, such as governance, meetings, processes, composition of the Board, strategy, performance, et cetera. Secondly, one-to-one sessions between the consultant and all Board members, including Group CEO, Group CFO, and the General Counsel took place. I also had one-to-one sessions between myself and the Board members, where feedback on the individual performance was discussed.
Finally, a presentation by the external consultant on the outcome of the evaluation and a discussion by the board resulting in agreed actions to ensure we also have continuous improvement in what we do. Excuse me. It's not COVID. It's an old flu lingering. No worries. The overall outcome of the 2021 board evaluation was positive, and the board was evaluated to be a well-functioning and diverse board. The tone was found to be open, respectful, and encouraging, and meetings were run in a structured way. For 2022, the board agreed to focus on ensuring the right balance between reviewing the progress on the turnaround plans and also ensuring the long-term profitable growth of the company. Reviewing the integration of and follow-up on environmental and social goals in general, and leveraging the opportunity to become a societal role model in particular, will also have our focus.
I would now like to turn to your Board and present the candidates nominated for the Board of Directors. Six out of the seven existing independent board members are seeking re-election. As it has been previously announced, Henrik Poulsen is not seeking re-election. Let me also use this opportunity to thank Henrik for his valuable contributions to ISS over many years and the last years also as Deputy Chair. Henrik has played a vital role in the transformation journey for ISS and not the least for me coming in as a new Chair. The Board has nominated Lars Petersson as new member of the Board. Lars, you are here, if you can wave to the crowd. Lars is sitting over there. Lars is Group President and CEO of Hempel Group, a global coating manufacturer headquartered here in Denmark.
Before joining Hempel, Lars held position as senior vice president of the window manufacturer, Inwido, and vice president of the global flooring company, Tarkett. A warm welcome to you, Lars. As it was the case last year, the remuneration report is up for advisory vote and at this year's annual general meeting. The overall objective of our remuneration policy are to attract, motivate, and retain high-performing leaders. To provide a strong link between remuneration and achievement of strategic goals, including financial goals, and to align the interest between the leadership team and you, the shareholders. I will in the following go through the elements of the executive remuneration for 2021 as outlined in the report. The executive remuneration is closely linked to the underlying performance of the company and the shareholder return. The fixed remuneration on an individual level has been constant over the last couple of years.
When looking at the variable pay, it was reduced at a reduced level in 2019 and 2020, as not all financial KPIs were met. In 2021, the short-term variable pay was achieved around the target level, but the long-term incentive did not vest as both earnings per share and total shareholder return development from 2019 were below the vesting threshold. Details of the remuneration for 2021 is set out in the remuneration report, which is available on our website, and it's, as mentioned, up for advisory vote on the agenda item six. Turning to remuneration of the board, the proposed payment for 2022 has no increase, and the level is therefore unchanged from the approved remuneration for 2021. We believe that the proposed fees are in line with market standards.
The board does not participate in any incentive schemes or receive variable remuneration, except the employee board members as part of their employment. The remuneration of the board of directors and executive group management board is aligned with the remuneration policy approved by the AGM in 2020. In summary, 2021 was a year of fundamental change for ISS. We made significant progress both strategically, financially, and operationally, and the company is in a much better shape now. The implementation of One ISS strategy is progressing well, and the first tangible results are visible. We are well on track in our turnaround journey.
I want to extend a personal appreciation to all of our stakeholders for their support during the year, to our shareholders, to our customers, to our partners, and our suppliers, and most of all, our colleagues, for their tireless effort and contribution to the business and making a difference for our customers and the societies we are part of. With this, I would like to hand over to our Group CEO, Jacob Aarup-Andersen, after a short video. Thank you.
At ISS, we believe that people make places and places make people. People are at the heart of all we do. People from diverse backgrounds ready to serve a diverse society, delivering the highest standards to our customers. We connect people to places, both within our own workplaces around the world and at places where we serve customers. From a smile at the door to inspiring the customers we work with, our people bring heart and soul to wherever they work. Without people who care, a hospital is just a building, an airport is just a terminal, a business is just an office. Our people bring places to life, and in turn, these places shape the people who use them. They make people happy, increase productivity, and support a healthy lifestyle. Great experiences happen when people meet great places.
Whether it's hospitals healing patients, businesses increasing potential, airports running smoothly, or manufacturing sites boosting productivity, our people are there to help because we understand the relationship between people and places, and we create the connection that creates the magic.
Excellent. Thank you, Niels, and also a warm welcome from me as well. Before I start my part of the presentation, I want to echo Niels' words on the devastating war in Ukraine. I have to say I'm deeply saddened by the horrific events and also the consequences that has led to, especially, of course, to the Ukrainian people. As a firm, our collective thoughts are going out to all of the victims of this terrible war. I want to thank the many thousands of ISS employees who have offered their support during this period, who have donated money, collected foods, raised charities, worked on the front line in Poland especially, and also opened up their homes to provide safety and comfort for those in need.
Those efforts confirm that we are a company of people who care, as you just saw in the video, and that makes me immensely proud as group CEO. Overall, I'm pleased with both the financial and strategic progress that we made during the year of 2021. Definitely a hectic year with many changes also externally, but we can be very pleased with where we are today. In 2021, the OneISS strategy came to life. That was despite the volatility that the industry faced from especially COVID-19. Despite that, we've executed according to the plan, delivering on both operational and financial improvements. COVID-19 has been and will continue to be throughout 2022 a significant external factor that will impact our business.
We'll continue to stay agile, flexible in the face of continued uncertainty. That's what we've done over the last couple of years, and I think we're getting quite good at it. Mandatory return to office programs, which is important in our industry, are generally delayed, and timing is uncertain in a number of geographies. The trend is clear. Employees across the world are returning to their workplaces, different paces depending on where we are in the world, but they are coming back to the office. The Omicron variant may have delayed the full-scale return to office across the world, but there's absolutely no doubt that we're seeing, even during Omicron, a gradual return to the office in all of our countries. For 2022, we are confirming the positive momentum that we exited 2021 with.
We enter a year where we guide for both an improving growth picture, but we also guide for an improving operating margin through the year. As such, we are also firmly confirming our turnaround targets for 2022. The One ISS strategy is categorized by two swim lanes. The first swim lane being our short-term turnaround, where we deal with events that occurred in 2019 and 2020. The second swim lane, which is the implementation and execution of our One ISS strategy, which is to us building the future ISS. Starting with the turnaround program, I have to say the big piece of work there has been the, what we refer to as the hotspots. They are all on track.
Here in Denmark, Danish Defence, we are progressing right now on the exit in a good and orderly way from the Danish Defence contract. The U.K. is very close to having achieved its turnaround and being out of the hotspot category. The two remaining hotspots, France and Deutsche Telekom, our big contract in Germany, both of those are in line with plan, which is also why I could just a second ago confirm the turnaround targets. Finally, the other piece of the turnaround program is our divestment program, and here we can say that we are actually a bit ahead of plan. We're nearing completion, and we've reached 90% of the targeted DKK 2 billion of proceeds. Moving to the second swim lane, which is the OneISS strategy execution. On our operating model, our foundation has been established.
We spent a lot of hard work in 2021 doing that, both in terms of new organizational structures in the countries but also in the group. Core elements of that structure is our new operations performance function, which is now fully up and running, the new global commercial team, but also the new global commercial approach, and then the establishment of our hub in Warsaw in Poland. The executive group team, as Niels also mentioned, has been strengthened, and I will come back to the details around that. Finally, a very important piece of our journey is the technology side of things, and we have launched our new IT and digitalization strategy, and shareholders will have seen that presented among other places at our annual results where Markus Sontheimer, our Chief Information and Digital Officer, presented to shareholders.
With the progress and the solid results we've achieved, we are now turning to the next phase of the strategy. We are at a stage where we feel that we can narrow the One ISS strategy to five key priorities that will make a real difference for ISS, not just in 2022, but also in the years to come. Our first priority is to improve our commercial momentum and to achieve segment leadership. Our efforts are centered around our key customer segments, headed by experienced industry leaders. We will improve customer relationships by doing that. We will leverage our global competencies, and it's all about strengthening also our bid to operations process. The second priority here is brilliant operating basics on our core operational performance, our financial processes, and our way of operating.
We want to be industry-leading, as simple as that.
When we are already leading in many areas, there are still areas where we can improve how we operate and especially how we leverage the global franchise and the global operations to deliver excellence on a daily basis on a daily site in every country. The third priority is to develop high-quality, consistent service products based on best practice from across the business, and here technology, of course, will be key. That's supported by the IT and digitalization strategy I just referred to. The fourth part Niels just referred to, which is the environmental sustainability. We need to accelerate our efforts here. ISS has a good foundation, but we've increased our resources significantly during the year, and we've also made, in January this year, a very ambitious net zero commitment. Our many initiatives have a dual purpose.
They have a dual purpose of improving ISS' own footprint on society, but really also helping our customers reduce their footprint on society. Finally, safe, diverse, and inclusive workplaces, that's basically social sustainability. This is a crucial part of the ISS story. It's been our foundation through the last 121 years. I need to remember that because we turned 121 on the first of April. Let me dig a little bit deeper into the social sustainability part in the next couple of slides. We are a people company. With more than 350,000 employees and over 40,000 customers, we're having a significant impact on the societies we're part of. It's a clear strategic priority for us to create and maintain a diverse, inclusive, and a workplace of belonging because that gives us clear strategic advantages.
Increasingly, corporations want to interact with organizations that meet requirements for social diversity. Diversity and inclusion is incredibly important for our customer base, just as it's always been the ethos of ISS. People expect us to live up to diversity standards, and they expect us to be able to demonstrate those behaviors as well. With our self-delivery model, which is quite unique in the industry, we can deliver this consistently to our customers, and we're in a position to make it a real competitive advantage. From an internal business perspective, there are also clear evidence that these efforts do make a difference, as employees are more engaged to perform, they are proud of their work, and they are increasingly likely to stay with their employers, as can also be seen up here.
A part of diversity and inclusion is, of course, to achieve gender balance.
Here we made a decent amount of progress during 2021 on several parameters, but we are still not there. We still haven't reached our target of 40% gender balance at all corporate leadership levels, but we're moving in the right direction. We leverage our diversity policy, and we require identification of at least one female candidate in every single vacant position. Looking at the numbers, we have progressed quite a lot in the year. Our broader strategy on diversity and inclusion and belonging is driven through five dimensions that you see up here. It's generation and age, it is cultures, race, and ethnicity, it's pride, abilities, and it's gender balance. Within each dimension, there are multiple initiatives, and they are all sponsored by EGM members, so they are owned at the executive level.
We're already making progress on this strategy and initiatives, and let me just point out a couple of the most significant achievements across these five. On gender balance, the very important Women's Empowerment Principles are now signed across all countries, including, of course, the group level where we started. We have gender in as an action or as a reflection for every single talent discussion we're having, and we are working across all of our teams to build specific KPIs for talents and leadership positions across the entire firm. With respect to abilities, the individual countries are now setting up local employee resource groups to make sure that we can drive it throughout the countries from the grassroots. We're working on implementing a reasonable accommodation policy and establish an abilities passport as part of the onboarding process at ISS.
Throughout the organization, we have created groups working to eliminate biases and raise awareness of cultural and race differences. This comes in many shapes and forms depending on the local market that we operate in. In several countries, we are also providing support for global refugees, and many countries have signed up for a mentorship for refugee women. Moving to another key topic, and I have to say, speaking to shareholders, this is clearly a topic that we've discussed a lot over the last 6-9 months. Managing inflation. This is an integrated part of our business model, and we've been dealing with inflation throughout our entire history. This is not a new phenomenon that just happened over the last 12 months. We have several mechanisms in place to deal with the pressure.
In the majority of our contracts, we can legally pass inflation on to the customers as part of the contract. In reality, we often engage in commercial discussions with our customers to find solutions that satisfy all parties as part of the agreement. This can lead to scope adjustments, the classic conversation being that a client has a limit in terms of how much they can increase their budgets, and then we help them adjust their scope. The important thing for us is that we protect our margins throughout these negotiations because we will not let inflation impact our margin performance. This framework we operate with is based on many years of experience with inflation across service lines and also across countries. We clearly leverage the experience we have of being a global company.
As an example, our business in Turkey has been exposed to very high inflation for many years, and we've successfully protected our margins in Turkey throughout that period. That also means that ISS Türkiye has actually been one of our best-performing countries throughout that period. We leverage those types of experiences as we work across these segments because to be honest, a number of our countries, if you look at the teams that are running those countries, they've never seen inflation in their country before. Just turning back to the divestment program. I mentioned before that it's nearly completed. In January, we re-scoped the program in the continued evaluation as a management team around what is the optimal footprint of ISS. We decided to reclassify Chile back to continued operations, and the remaining business unit assets were also significantly reduced.
Further in 2022, since that update, we've completed the divestment of Taiwan, and we have also divested Russia as well of our waste management business in Hong Kong. Even though we will be divesting fewer assets than we originally set out to do, the total net proceeds are still expected to be around DKK 2 billion, which is a testament to the strength of our disposal process and the strong execution from our teams. ISS is, of course, a large global portfolio company, and therefore, we will continue to adjust our portfolio as we continue. Structured divestment programs are now concluded. From here on, the focus will be on growth. In December, we announced a strengthening of the EGM to further support the OneISS strategy development and execution power.
To move EGM closer to the business and also to enhance commercial and operational execution, the management of the European region was split into two, Northern Europe and Central and Southern Europe, both headed by experienced and senior leaders, and also headed by members of the EGM. Furthermore, we created a new position on the EGM as head of global key accounts, and our colleague here, Sam Hochman, will be joining us later in the spring. This concludes my review of the strategic development, and therefore, I would love to hand over to our Group CFO, Kasper Fangel, who will take you through the financials.
Thank you. Thank you very much, Jacob, and good morning to all of you. I have to say it's a true pleasure to be here together with you today and have the opportunity to provide more color into the financial development for 2021. Like both Jacob and Niels mentioned, of course, we were like any other businesses in 2021 also impacted by the pandemic and COVID-19. We saw an increase in minimum wages and a labor shortage in a number of local markets, but we stayed resilient, and we actually came out of 2021 where we have moved significantly in the right direction, both operationally and financially.
Over the course of 2021, we upgraded our expectations to the financial KPIs, and we delivered on all three KPIs in line with the upgraded expectations. Organic growth for 2021 was + 2.0%, which was a significant improvement compared to 2020, where we reported a negative organic growth of 6.6%. Especially in the second half of 2021, we saw accelerated growth as a number of local markets lifted restrictions, and we saw employees started to come back into the offices. On growth, I just want to reinforce the point that Jacob also mentioned, of course, it's critical to us and to the enterprise.
We are with OneISS investing into strengthening our commercial processes, but also the commercial setup in general. I think for sure that we are moving in the right direction. We are seeing that the pipeline is building, and it's building fast. In terms of operating margin, we delivered 2.5% operating margin in 2021, which was also a significant improvement compared to 2020. There are two things that are driving the improvements year -over- year. The first one is recovery on what we call the four operating hotspots, where we saw that they improved significantly year -over -year.
The other thing is, the restructuring program and the benefits yield from the restructuring program, which was our response to the COVID-19 challenges that we initiated in 2020. On free cash flow, we reported free cash flow of DKK 1.7 billion. It's important to understand that in that number, we have a one-off negative cash flow of DKK 500 million coming from the restructuring initiatives that I mentioned before. What I'm saying with that is that the underlying position was actually significantly better than the reported DKK 1.7 billion. Generally, as a Group CFO for the company, I'm very pleased with the progress that we as an organization have made on free cash flow. The focus is there, the processes are embedded in our local markets, and today, cash flow is very high on the agenda.
It's not only a financial discipline, it's something that operation understands, and we're pulling all the right levers to improve on collecting cash fast from our customers. I think that's also well illustrated in the fact that our net working capital was more than DKK 1 billion positive in 2021. 2020 was indeed what I would call a perfect storm for the enterprise. Of course, that's also coming through in the numbers. You will see in the income statement for 2020 that we are significantly hit by one-off charges and restructuring charges. We recovered partly from that in 2021, and we are reporting a negative net profit of DKK 600 million. We also see that the financial health is starting to come into the enterprise again.
As you will see, our total equity increased to DKK 7.8 billion. The financial health is starting to come into the balance sheet in 2021. This chart is really showing the impact that we as a business suffered from COVID-19. If we look at the revenue levels in 2021 and we compare that to pre-COVID 2019 levels, then you can see that the volume has decreased with 6%. We are sitting in Q4 at an index of 94. If you look at it annualized, it's an index of 95. The interesting thing and the positive thing is that our cleaning business is actually sitting at index 100.
That means that the volumes on cleaning in 2021 is at the same high level as we saw in 2019. Of course, we have seen a decrease in the base recurring janitorial and cleaning services, but it's offset by a high demand for disinfection and hygiene across the globe. Where we impacted is in our food business. The food index is sitting at index 72, and that is because we are very exposed to the office segment. Basically we will start to see the recovery coming through on food volumes as employees are returning back into the offices. We expect, of course, that to happen over the course of this year.
A key priority that also Niels and Jacob spoke about is of course to improve the profitability of the company. We all appreciate that 2.5% is far from the opportunities that exist within this enterprise. Although an improvement year-over-year from underlying 0.5% to 2.5% is a good step in the right direction. As I mentioned before, the 2.5% is underlying improvements that is driving that increase of two percentage points. It is the four operational hotspots that are partly recovering. There's still more opportunities and improvements in that.
It is, as I said before, the benefits of the restructuring efforts which is coming through nicely across local markets. We're comfortable, of course, with the guidance of this year of above 3.5%, and more importantly, we're also comfortable that we are going to exit with a run rate, so an underlying profitability in the business greater than 4% at the end of this year, which is our commitment to the market as a part of the turnaround targets. When we look at the balance sheet, of course, the key KPI here is our leverage. We have reduced our leverage significantly year-over-year from 2020 to 2021. That's of course three things that is driving that deleveraging coming through. It's improved profitability and EBITDA.
It's a strong cash flow generation, but it's also the net proceeds from our divestment program. That in combination decreased our net debt with DKK 2.4 billion over the course of 2021. Our leverage was sitting at 3.8 x against a 2020 position of 77.1 x. We are therefore well on track to deliver on our turnaround targets also on leverage, which is to get the leverage below 3 x at the end of this year. In summary, in terms of the financial results for 2021, we are moving in the right direction.
We are pleased to see that we are moving in the right direction, but we fully acknowledge that we're not tapping into the real opportunities that sits in this enterprise and in this business. We're very much looking forward to the next chapter on the journey. We see a lot of potential in ISS, and certainly this is only the beginning that we have seen in 2021. With that actually concludes the presentation of the 2021 financials. I will now hand back to Jacob for a review of our financial outlook for this year.
Thank you, Kasper. Just a couple of remarks on how we see 2022. In 2022, we aim to continue the progress as Kasper and Niels both have referred to. There's gonna be a diligent focus on continuing to execute on our strategy. We will be working on all the daily improvements on the sites on a daily basis to make sure that the strategy and the operating model actually comes to life. All of it will be built on a relentless focus on customers. As you know, we are satisfied with the progress so far, but we also see much more potential in this business, and 2022 will be another step in that direction.
We will improve on 2021, just like 2021 was an improvement on 2020, but we are clearly not where we really want to be for the long term. Looking at the metrics for 2022 on organic growth, we expect organic growth above 2%. It's gonna be driven by continued revenue recovery from COVID-19, price increases with net effect from inflation, and growth from contract wins and expansions during the year. That being said, some of that will be offset by the effect of lower above-base revenue, which we've had a lot of in 2020 and 2021, and also there'll be a negative impact from our exit of the Danish Defence contract. On the margin side, we expect an operating margin above 3.5%. As you recall, in 2021, that was 2.5%.
We expect the continued turnaround initiatives and COVID-19 work to follow through in 2022, and then we also can expect that we can achieve the run rate margin of above 4% as we exit the year. Finally, on the cash flow side of things, we expect the free cash flow above DKK 1.3 billion as we continue to see the recovery. In that, as Kasper will also diligently point out, in that is a one-off of half a billion from our restructuring efforts that we've done in previous years, which also means that we are actually guiding you for an underlying free cash flow above DKK 1.8 billion in this year. Finally, on the turnaround targets, thankfully, I have confirmed them several times during this presentation, so let me do it for the last time.
We are on track to deliver on them. We feel confident around that. The turnaround targets includes the operating margin as we exit the year being above 4%. It also includes the cash flow I just referred to, and it includes, very importantly, the deleveraging below 3x. That concludes this part of the presentation around strategy and financials and outlook. Before I hand back over to Rikke, I would like to take the opportunity to thank our more than 350,000 colleagues across the world. I know some of you are watching this. I have to say I am truly impressed by your persistent hard work and dedication through what has been a turbulent time. Every day, you make an amazing difference for our customers and the societies we are part of.
With that, I can only say that I'm incredibly proud to be your colleague. After a short video, Rikke will take over and take us through the additional agenda. Thank you very much.
At ISS, we create places that work, think, and give. We create connections and experiences that add value to all our customers. We deliver high standards of service by people who care wherever they are. From factories and offices to hospitals and airports, we ensure an efficient, enjoyable workplace experience by giving people peace of mind, so they can do their jobs more easily every day and in every way. As the boundary between work and life blurs, people want places that are more personal and services that create more enjoyable personal experiences. We use data, tools, and technology to create tailored experiences for our customers. Today, many people value places that celebrate wellbeing, happiness, and satisfaction, places that resonate emotionally. That's what we call the human touch, and that is what we do.
From hospitals healing patients and airports transferring passengers to businesses boosting productivity and manufacturing sites producing goods, we are there to help. Always creating places that work, think, and give.
We have now heard the presentations, including the report and the activities of ISS in 2021. Thank you, Niels, Jacob, and Kasper for these presentations. It is now the time where I would like to open for questions or comments. As mentioned earlier, any shareholder who wish to take the floor are kindly asked to come to the podium, and please remember to bring your business card and your admission card. In order to present yourself for the audience, please kindly state your name, title, and if relevant, the organization you represent. Questions may, as I mentioned earlier, be made either in English or in Danish. ATP and Dansk Aktionærforening, the Danish Shareholders Association, have indicated that they would like to take the floor. As the first speaker, I would like to introduce ATP, represented by Portfolio Manager Anders Folmer.
Please, Anders, you're welcome to come to the podium.
Thank you. Thank you for the floor. My name is Anders Folmer, and I represent ATP. Thank you to the Chairman, the CEO, and CFO for their reports and the presentation of the results for 2021. 2021 was a year where organic revenue growth and operating margin came back in positive territory. This was combined with a strong free cash flow. The strong cash flow was better than expected and has significantly strengthened the balance sheet. Part of the explanation for the good result is related to all the initiatives taken in connection with the launch of the new strategy. We would like to acknowledge the effort made to simultaneously improving the current financial performance and, at the same time, laying the foundation for more long-term improvements of the company.
It is clear that the transformation program is moving forward with an exit of Danish Defence contract and good progress on Deutsche Telekom, U.K., and France. In our view, the transformation must stretch beyond this problem-solving to also improve the operating model to ensure that new problem areas will emerge less frequent going forward. Because looking at the past decade, ISS has always been in some sort of restructuring in one or more business units across the company portfolio.
ISS is on track with the current turnaround targets, which end in 2022, and we hope that during this year we will be updating on new medium targets, offering more transparency about the operating margin potential, a sustainable organic growth rate, and what leverage targets ISS is aiming for. The turnaround target of above 4% operating margin as a run rate entering 2023 is below the historic target of 5.5%. I would, in this regard, like to ask the management if there are any structural differences between ISS today versus ISS some years back in terms of profitability potential. We have full support for the strategy of One ISS, stronger, simpler, closer. In our view, the simpler and closer part does not rhyme with the recent transaction in Turkey, though. The transaction seems too complex.
Furthermore, this transaction was a continuation of ISS's track record of acquiring companies at high multiples and divest at low multiples. All this together makes it difficult to spot the real value creation from the information we have received. Therefore, I would like the management to elaborate on how this transaction contributes to the new strategy. In 2021, ISS initiated a journey to become net zero on Scope 1 and 2 emissions in 2030. While we applaud these important long-term ambition, a more near-term target would be valuable for us as investors, making it possible to also track the more short and medium-term progress. With that, we want to give credit to all the hard work put into this area and the effort made towards food waste and diversity and inclusion.
With these words, I would like to wish the management and all the many employees all the best with the work ahead in 2022. Thank you for the attention.
Thank you very much. Let me try to address the two questions. First of all, thanks for your questions and thanks to ATP for the ongoing very good dialogue we've had during the year, which is something we really appreciate, both when it's hard questions and easy questions. Really appreciate that. On your first question regarding the margin potential, as I understood it, nothing has structurally changed in our business model. I can make it very clear that we find the market dynamics and our market position to be just as attractive and favorable as it's been before. Recent years' events, both internally and externally, have not changed that conclusion. We've not communicated a specific long-term target, as you also allude to, but with one.
With the One ISS strategy, we've also set a very clear path towards returning to strong mid-single-digit margins. As a management team, I have to say our focus is on delivering very diligently on the 2022 turnaround and to make sure that we don't digress or in any way dilute the efforts around that. That's our license to operate, and I know you feel the same because we've discussed this. Later during this year, we do plan to come back and address what longer-term targets are for the simple reason that we're getting to a point where the current targets that we set out to you are running out at the end of 2022.
We echo your wish, and we think it's very reasonable to expect that we come back later this year with the targets. On your second question on Turkey, you're absolutely right that the Turkish transaction is indeed complex. We are also very confident as a team that we will create value for you as shareholders in this transaction. We have a strong business in Turkey, and we have the right exposures, and we have the right management team, an incredibly strong management team that has built that business from scratch over 30 years. It's also a higher risk country, and it's a volatile macroeconomic situation, which we are very well aware, acutely aware of.
Therefore, when this opportunity occurred, it was also important for us that we did it in a way we did, where we did not deploy additional capital, shareholders' money. This transaction has given us an opportunity to strengthen our position in what is a key global segment for us, which is healthcare. It's also higher margin contracts, and it's for very long duration contracts as well, which is quite different compared to our current Turkish business. With the above-mentioned focus on risks, we furthermore decided to get a local partner on board to de-risk the transaction. I know from the outside that adds complexity. For us on the inside, it actually took some complexity out in terms of some of the risk factors.
To your specific question, which is very important around the asset valuation, I should not comment on historic comments. I appreciate your comment, but I don't have a specific view on what we've done in the past. On this specific transaction, I think it's important to know that it's two very different assets we're talking about. We're talking about acquiring a high margin, very long-term duration asset versus what is a lower quality assets compared to that. That also requires different multiples, and we do believe that has created real value in the whole, and also de-risked the business operationally.
We take it on board, of course, and we do also acknowledge that there were elements we could have spoken even more about when we announced the transaction. We really appreciate the feedback. Thank you.
Thank you, Jacob. Thank you to ATP. As the next speaker, I would like to introduce Dansk Aktionærforening, represented by Kim Bregn. Thank you, Kim. Please, sir.
[Foreign Language]
Thank you very much to the Danish Shareholders Association. I will do this in English for the broader audience. You raise three specific questions. For everyone's benefit, I'll just repeat them in English as I address them. First of all, you ask whether there is a plan to show earnings per segment per quarter. As you know our business is built on large long-term contracts. That's also why we encourage our investors to focus on the longer term in terms of the short-term earnings. Because any short-term earnings volatility quarter to quarter can actually potentially more confuse and muddy the picture than give you the real understanding of the value of the long-term contracts. That's why we report the way we do on a quarterly basis, which is also in line with what our industry peers across the world also do.
We are doing it in the same way as our peers across the world. We obviously have an ongoing debate. Both Kasper and I and the investor relations team do spend a lot of time getting feedback from investors and therefore we will constantly reassess if there are things we can do to improve the transparency. I think you made some good suggestions here that we will have a look at. Thank you for that. In terms of management doing quarterly reporting in Danish. We are a global company. 99% of our employees are non-Danish. It's only 5% of our investors that are Danish retail investors and the company language is English.
As we can also see from us being here and therefore in order to make sure that we do not have several versions out there and create potential confusion, we decide to stay uniform in one language, which is the English reporting. We find it most appropriate that we report once in one language, and it's the same reporting that is available to all of our shareholders in a uniform way. I think we will probably have to agree to disagree on that, because I think for now this has been debated and we believe it's the right way to take it forward. On the third question, which is whether inflation is I've written taken appropriately into consideration in our commercial contracts and whether we will see an impact on our margin.
As I alluded to on one of the slides, management of inflation is very high on our agenda. At the moment it is the number one topic in every business review, every meeting. There's a lot of efforts going into it, but it's always been a high priority. Of course, at the moment, we are in hypercare around the topic. In a low margin business like ours, you cannot afford to just lose a couple of percent margin due to inflation. It's easier if you're a 30% margin business, not when you're a 5% margin business. It is a massive focus, and in the vast majority of our contracts, we do pass on inflation to the customers. Some of it are commercial negotiations, and in very
In a smaller part of our contracts, we then need to find a commercial agreement. It can also be that we need to find extra efficiencies. The one thing we as a management team has been making very clear throughout the organization to every single customer representative is that we do not give up on margins. If we cannot get inflation through, it is actually a cause for us to potentially leave the partnership with the customer. It is right now a massive focus for us, and there is absolutely no doubt that we will not see a major impact on our margins given the work we're doing. I think those were the three, and if you agree, then we'll leave it there. Thank you. Super.
Thank you, Jacob, and thank you to Dansk Aktionærforening, the Danish Shareholders Association. I would like to ask if there are any other shareholders who have questions or comments. It doesn't seem to be the case, and then we'll continue to the formal adoptions of agenda items one to four. Under agenda item one, the Board of Directors recommend that the report on ISS activities in 2021 be noted by the general meeting. Are there any comments to the report? It doesn't seem to be the case. We can consider the report as noted by the general meeting. Turning to agenda item two. Under agenda item two, the Board of Directors propose that the annual report for 2021 be approved.
The independent auditor's report is included in the annual report on page 104 to 106, and as you can see from the report, it is without any qualifications or supplementary comments. It is what we call in Danish [Foreign language: en blank påtegning]. On that basis, I would like to hear if there are any comments to the annual report. It is not the case, so we can also conclude that the annual report for 2021 is adopted. Turning to agenda item three. Under agenda item three, the Board of Directors propose that the general meeting approve the Board of Directors' proposal to carry forward the profit from 2021. Any comments to that proposal? As there are no comments, I can also conclude that the proposal is adopted. Turning to agenda item four.
Under agenda item four, the board of directors propose that the general meeting grant discharge of liability to the members of the board and the executive group management board for liabilities towards the company in relation to matters disclosed in the annual report for 2021. Are there any comments to the proposal? As there are no comments, the proposal is adopted. I will then continue to agenda item five. Under agenda item five, it is proposed that the general meeting authorize the board until the next annual general meeting in 2023 to approve that the company may acquire treasury shares for up to 10% of the total share capital, and subject to the company holding treasury shares after any acquisitions not exceeding 10% of the company's share capital.
The consideration may not deviate by more than 10% from the official quoted price on Nasdaq on the acquisition date. This is a customary authorization to allow ISS to acquire treasury shares. Any comments to this proposal? It doesn't seem to be the case, so we can consider the proposal as adopted. Turning to agenda item six. The company has prepared a remuneration report for 2021, which is presented for an advisory vote. The remuneration report has been prepared in accordance with the Danish Companies Act and includes the information on remuneration awarded or due during 2021 to members of the board and executive group management, as the chair also commented on in his presentation. The remuneration report is available on ISS's website. The board proposes that the remuneration report presented for an advisory vote be approved.
Any comments to this proposal? As there are no comments, the remuneration report is considered approved. Turning to agenda item seven. Under agenda item seven, the board of directors propose that the remuneration to the board of directors for the current financial year be approved. The proposed remuneration levels for the board are unchanged compared to the remuneration level since 2019. The proposed fees are shown on the screen next to me, and was also explained by Niels Smedegaard as chair in his presentation, so I will not go through the fee structure again. What I would like to hear if there are any comments to the proposal. It doesn't seem to be the case, so we can also consider the proposal as adopted. Turning to agenda item eight.
According to ISS's articles of association, the members of the board of directors elected by the general meeting are elected for a term of one year and re-election may take place. Also pursuant to ISS's articles, the board of directors shall consist of not less than four and not more than eight members elected by the general meeting. As Niels Smedegaard presented in his presentation, the board proposes the re-election of Niels Smedegaard, Valerie Beaulieu-James, Kelly Kuhn, Søren Thorup Sørensen, Ben Stevens, and Cynthia Marie Trudell, and they are all here today, and Valerie Beaulieu-James attend online. The current deputy chair of the board, Henrik Poulsen, is, as mentioned by Niels in his presentation, not seeking re-election. The board also propose to elect Lars Petersson as new member of the board. As mentioned, Lars is present here today.
The nominated candidates' qualifications, positions, and competencies, including the information on other managerial functions held by the candidates, are described in the appendix to the notice to convene. I would like to hear if there are any comments to the candidates nominated by the board. As there are no comments or questions, I can then conclude that Niels Smedegaard, Valerie Beaulieu-James, Kelly Kuhn, Søren Thorup Sørensen, Ben Stevens, Cynthia Marie Trudell, and Lars Petersson have all been elected to the board, and congratulations to you. Turning to agenda item nine, election of auditor. According to ISS's articles of association, the company's external auditor is elected for a period of one year and re-election may take place. The board of directors propose EY Godkendt Revisionspartnerselskab as to be re-elected as the company's auditor, and they're also present here today.
The proposal is in accordance with the recommendations from the Audit and Risk Committee, and the Audit and Risk Committee's recommendation has not been influenced by any third parties, nor has it been subject to any contractual obligations restricting the general meeting's choice of certain auditors and audit firms. Are there any comments to this proposal? As this is not the case, EY Godkendt Revisionspartnerselskab is hereby elected as the company's auditors. Turning to agenda item 10A, regarding the renewal of the authorizations to increase the share capital. The current authorizations in article 4.1 and 4.2, which authorizes the board to increase the share capital, expire on 10th of April, 2023. The Danish Companies Act allows the general meeting to grant to the board authorization to increase the share capital for a period of a maximum of five years.
Therefore, the board proposes under agenda item 10 A that the authorizations in article 4.1 and 4.2 are renewed until 7th of April 2027. As you can see on the slide next to me, the proposed size of the authorization are unchanged. The authorization in article 4.1 covers capital increases at market price without preempting rights for existing shareholders. The authorization in article 4.2 covers share issuances to employees, which may be below market price and without preemptive rights for existing shareholders. Both authorizations, they remain subject to an aggregate cap of nominally DKK 37 million. The full wording of the proposals are set out in the notice. Also here, I would like to see if there are any comments to the proposal.
As this is not the case, we can also consider this proposal as adopted. Turning to agenda item 10 B, the other proposal by the board. This is a proposal to update the articles of association by changing the term chairman to chair. Are there any comments to this proposal? Doesn't seem to be the case, so we can also conclude that this proposal is adopted. To the last item on the agenda which is left, any other business. Under this agenda item, it is only possible to provide comments. No formal resolutions can be adopted. I would like to ask if anyone would like to take the floor for a last comment. It doesn't seem to be the case, so it leaves us with no further on the agenda, and I can therefore conclude that the general meeting is adjourned.
As a last practical note, I should kindly ask you to leave the voting device on your chair when the meeting is finished. I would also like to thank you all for attending this annual general meeting of ISS and for maintaining good order. I will now pass the word to Niels Smedegaard, Chair of the Board of Directors, for a final remark.
Thank you, Rikke, also for doing a great job chairing today's meeting. 2021 was a year of change and progress for ISS, and today, the company is in a much better shape than a year ago, as hopefully the presentation has illustrated to you all here today. We still do have work to do to realize the full potential, and I'm very excited for the journey which lays ahead of us. Finally, I'd like to thank you, dear shareholders, for participating today and your support for ISS. Thank you, stay safe, and see you again next year. Thank you.