Denmark's ISS hit by headwind in Sweden and China, shares down

COPENHAGEN, Aug 16 (Reuters) - Danish facility services company ISS A/S (LSE: 0QRS.L - news) narrowed its 2017 growth forecast to the low end of its earlier range due to weak sales in Sweden and China, sending its shares down.

* The 2017 outlook for organic revenue growth was narrowed to between 1.5 percent and 2.5 percent from a previous guidance of between 1.5 and 3.5 percent

* "Relative to our previous expectations, we now foresee weaker 2017 revenue in Sweden and China," the company said

* The share price fell 6 percent to the lowest level in more than six months after Thursday's report

* "The share price is falling due to lower than expected organic growth in the second quarter, and the lowered growth forecast for 2017," said Sydbank (LSE: 0MGE.L - news) analyst Soren Lontoft Hansen, who has a 'hold' recommendation on ISS

* ISS has lost revenue in China 'on purpose' as it is leaving the low end of the retail marked, Chief Executive Jeff Gravenhorst told Reuters.

* "It is a very price competitive market while our main skills are within training and educating our employees, and we rather do that with focus on blue-chip companies," he said

* He said ISS would be able to turn its business around in Sweden, where it is still the market leader despite losing some market share in the second quarter

* "We've set up an efficiency programme to become more competitive on the Swedish market," Gravenhorst said

* ISS said 2017 revenue would also be dented by lower sales to DXC Technology, a spin-off of ISS customer Hewlett Packard (NYSE: HPQ - news) Enterprise

* ISS posted second quarter revenue of 20.09 billion Danish crowns ($3.17 billion), slightly lower than the 20.27 expected by analyst in a Reuters poll, while the operating result (EBITDA before other items) of 1.26 billion crowns was in line with expectations.($1 = 6.3345 Danish crowns) (Reporting by Teis Jensen, additional reporting by Julie Astrid Thomsen, editing by Terje Solsvik)