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

COPENHAGEN, Aug 16 (Reuters) - Danish facility services company ISS A/S 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 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 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)