Market Research Report : Facilities Management Services Market in India 2013

7/28/2019 Market Research Report : Facilities Management Services Market in India 2013

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–April 2013



SAMPLE

Executive Summary

Market

Global market for Facilities Management Services is slated to reach ~‐ bn by the end of 2017

Facility management services can be broadly classified into e1 and e2

Drivers

– Boom in real estate

Challenges

– Shortage of manpower

Drivers &

Challenges

– Rise in infrastructural development

– Growth in retail sector

– Growth of

hospitality

sector

– Improving healthcare scenario

– Large unorganized segment

Trends

Standardization of procedures

Facilities management as a stream of

study

Project management and general

contracting services continuing to evolve

Investments

and

M&A

Activity

in

Facilities

Competitive

Mechanization of services Management Sector

Major Players

Company A Company B Company C

2FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT

Company D Company

E Company

F



•Macro‐Economic Indicators

• n ro uc on

•Market Overview

• ypes o ontracts

•Drivers

&

Challenges• ren s

•Industry Association

• ompet t ve Lan scape

•Strategic Recommendations

3

•Appen ix

FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT



SAMPLE

Facilities management primarily ramifies into 2 major segments

Facilities Management Services

s1 s6

s2 s7

s4 s9m

x

s5 s10

4

n

y




•Macro‐Economic Indicators

• n ro uc on

•Market Overview

• ypes o ontracts

•Drivers

&

Challenges• ren s

•Industry Association

• ompet t ve Lan scape

•Strategic Recommendations


•Appen ix



As companies delve into modernizing their business

environment, facilities management services get a boost

Facilities Management

Services

Market

– Global

Overview

•Though sub‐prime crisis affected the sector badly, yet facilities management services continue to emerge as

•f1and f2 account for a major share of the global facilities management services market, while countries

including f3,

f4,

f5,

f6

hold

the

key

to

future

growth

• Technical services in the likes of mechanical engineering and energy management emerge as the most popular

se ment in this market

•Private equity investments have been looming large in the sector owing to its ability to generate high recurring

revenues

Facilities Management Market – Growth

a4a3 xxxxxxxx

a1xxxxxxxxx

6

a




Facilities management services market is poised for strong

growth in the ensuing years


Services

Market Market

Size

and

Growth

• Facilities management services market in India has

been growing steadily over the years and is set to

INR bn

witness rapi growt over t e next ive years

• It is a highly fragmented industry with few organized

players and

mostly

unorganized

small

operators

• Facilities management business is largely

b7b5

b4b3

b2b1

unorganize in In ia an operates on ow margins

• Consolidation in this segment is slowly gaining

momentum as players are growing their business by

acquiring smaller

firms

0

2017e2016e2015e2014e2013e2012

• Faci ities management services are primari y

concentrated in and around metros with low

penetration in tier II and tier III cities

• There is an increasing demand for such services as

b8

10

emp as s on

ur an

eve opmen

an

mo ern sa on

of office spaces are growing

• Consistent economic growth has led to a booming

real estate sector in India, which will drive the growth

b13b12

b11

7




SAMPLE

A cost break‐up analysis reflects which input carries how

much weightage in this sector


Services

– Cost

Break

‐up

• Every facility management service provider needs three basic components to render services which make up the costs involved• Since it is a job requiring high‐end amalgamation of manpower and machinery, rendering service deem it necessary to have

INP

proper training as well• These basic units are required in different proportions for fulfilling various operational objectives

UTS

• xxx• Xxxx• xxxx

e1c6

c5

c4

• Xxx

• Xxx

• Xxxe2

c3

c2

• Xxx• Xxxe3

c1

8

• Xxx• Xxx




SAMPLE

A closer look reveals which type of contracts garner maximum takers


Services

– Contract

Segmentation

• In majority of cases, facility management service providers need to battle it out with other players for the

contracts of different building or infrastructure

• These contracts are either doled out as a complete package of the entire services or broken down to small sub‐

parts and given to service providers

• Each type

has

its

own

set

of

advantages

and

disadvantages

which

answers

the

query

of

why

a particular

has

a

greater adoption rate than the other

• Xxx d3

• Xxx

• xxx

e4

d2

d4

• Xxx

• Xxx

• Xxxe5

d1




Drivers & Challenges – Summary

Drivers

Boom in real estate

Rise in

infrastructural

development

Challenges

Shortage of manpower

Growth in retail sector

Growth of hospitality sector

Large unorganized segment

Improving healthcare scenario




Development of infrastructural facilities across India…

Rise in

infrastructural

development

(1/4)

• Backed by strong economic growth, the infrastructure development in India has been growing

consistently over the last few years

Impact

• Government has been increasingly focusing on investing in infrastructural facilities such as

roads, railways, ports, airports and metro rail

• Development of infrastructural facilities such as metro rail and airports have increased the

demand for facilities management services, as these projects require consistent maintenance

• Government o In ia as starte ocusing on t e eve opment an mo ernization o airport

infrastructure and plans to invest INR 2 tr in metro rail system in the next 10 years

• Development of airport and metro rail infrastructure will translate into substantial business for

facilities management

market

in

India

Investments in Infrastructure in the 12th Plan (2012‐17)

xxxxxxxxxINR tr

k2

k1

11

2012‐17e2007

‐12




SAMPLE

… in areas of metro rail development plan or …

Rise in

infrastructural

development

(2/4)

Union Budget Grant for Delhi MetroGovernment Allocation in Metro Rail (2013‐14)

i1INR

bn INR

bni5

i4

i3

i2

0 0.0

‐‐

• Delhi Metro Rail Corporation has been allocated a

major share of the Budget 2012‐13 allocations to

• Delhi Metro

was

allocated

INR

i7

bn

in

the

Union

e

r an

eve opmen

n s ry

or

nves men s

n

Metro corporations across India

• The ministry has got a substantial hike of INR i6 bn

for construction and extension of the Metro

network in Delhi, Bangalore, Kolkata, Chennai,

Mumbai Jai ur and Kochi

Budget 2013‐14

• This amount is slated to be spent on construction of

Phase – III in order to lay another i8 km of tracks in

the national capital




SAMPLE

… airport infrastructural development plan …

Rise in

infrastructural

development

(3/4)

Cargo in India – Growth (2012‐17) Investments in Airport in 11th Plan

INR bn

h6h5h4h3

h2h1

%

h8h7

0

Total

Investment

CNS‐ATM

and

Equipment

NE

Airports

Greenfield

Airports

Non‐

Metro

Airports

Metro

Airports

0

InternationalDomestic

• This growth in cargo traffic will necessitate

investments in specialized terminals and equipment

Passenger Traffic in Airports – Growth

mn

h10 w c

w

ur er cap a ze

n o

oppor un es

or

facilities management services providers

• Moreover, policies are drafted to facilitate the

process of infrastructural development in the likes

of allowing 100% foreign direct investment for

reen field air orts via automatic route

h9

13

02017e2012




Trends – Summary

Standardization of

procedures

Facilities management

as

a stream

of

study

` Mechanization of

servicesKey

Trends

14

Investments and

M&A

Activity

in

Facilities

Management

Sector


A ff l h i l



SAMPLE

As an

effort

to

overcome

manual

shortcomings,

players

are

focusing on mechanization of services

• Facilities management services have witnessed the rise of mechanization in its offerings

•

Mechanization of

services

• One of the main reasons why mechanization has taken this sector by a storm is because of the fact that manual services were loaded with more faults and defects

• Overcoming them and devising a full proof solution led to the emergence of high adoption of mechanized

versions of services by the majors

•xxx •xxx

•xxx •xxx

15

• Xxx• xxx


i h f ili i i fl i i



SAMPLE

… in

the

facilities

management

services

sector

reflecting

its

potential to grow even further

Investments and

M&A

Activity

in

Facilities

Management

Sector

(2/2)

M&A activity in Facilities Management Services

Year Buyer Target Deal Size (INR mn)

2013 yy zz ‐

2013 yy zz ‐

2012 yy zz ‐

2012 yy zz ‐

2010 yy zz ‐

2009 yy zz ‐

2009 yy zz ‐

2009 yy zz ‐




Trade Association – Indian Facility Management Association

Overview

Benefits Membershi




SAMPLE

… sector, yet presence of industry body defines ...

Overview

Indian Facility

Management

Association

(2/3)

•Its list of Board of directors include leading names

form the facility management fraternity in the likes

• Leading players have already registered

itself under this association in the likes of

of u1, u2, u3 u4, u5, u6

Membership

• Membership to this national association results in

• Different categories in this segment are

Cor orate Member – Annual membershi ee isopening up o various avenues in t is ie ot or

amateurs as well as for experienced professionals

•There are different types of memberships provided

that professionals and organizations can choose

from de endin on ualifications, ex erience and

INR ‐

Professional Member – Annual membership fee

is INR ‐

Associate Member – Annual membership fee is

INR ‐

18

expertise Student Member – nnual membership fee is

INR ‐




SAMPLE

Public: Foreign Company – Company A (1/4)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Gurgaon

Stock Exchange

Head Office

Key People

Category Products/Services

Soft Services P1,p2

Hard Services P3,p4

ame es gna on

xx MD (Facility Management ‐Americas)

xxMD (Integrated Facilities Management ‐

Asia Pacific)

19

Others P5,p6 xx

Senior Business Development Director ‐





SAMPLE


F nanc a Snaps ot Key Rat os

Particulars

y‐o‐y change

(2012‐11)2012 2011 2010 2009

Profitability Ratios

Operating Margin ‐0.10 8.46% 8.56% 9.13% 6.60%

Net Profit/Loss Total Income

po

INR mnINR mn

Net Margin 0.68 5.26% 4.58% 5.26% ‐0.14%

Profit Before Tax Margin 0.85 7.03% 6.18% 6.96% 0.10%

Return on Equity 0.47 6.94% 6.47% 6.74% ‐0.18%

Return on Capital Employed 0.56 12.45% 1 1.89% 13.00% 8.18%

Return on Working Capital 415.22 ‐228.64% ‐643.86% ‐263.17% ‐105.57%

Return on Assets ‐0.12 7.69% 7.81% 7.97% 5.29%

0

201220112010

n

2009

m

0

Financial Summary

• The company incurred a net profit of INR ‐ mn in FY 2012, as

compared to net profit of INR ‐ mn in FY 2011

• The company reported total income of INR ‐ mn in FY 2012,

Return on Fixed Assets ‐2.99 124.31% 127.30% 134.41% 76.66%

Cost Ratios

Operating costs (% of Sales) 0.06 91.49% 91.43% 9 0.87% 93.40%

Administration costs (% of

Sales) ‐0.25 64.76% 65.02% 64.92% 65.46%

Interest costs % of Sales ‐0.10 0.89% 0.99% 1.57% 2.22%reg s er ng an ncrease o r over

• The company earned an operating margin of r2% in FY 2012, a

decrease of r3 percentage points over FY 2011

• The company reported debt to equity ratio of ‐ in FY 2012, a

decrease of r4% over FY 2011

Liquidity Ratios

Current Ratio ‐5.47% 0.91 0.96 0.92 0.86

Cash Ratio ‐16.68% 0.25 0.30 0.33 0.22

Leverage Ratios

Debt to Equity Ratio 4.86% 0.21 0.20 0.10 0.10

Key Financial Performance Indicators

Indicators Value (dd/mm/yyyy)

Market Capitalization (INR mn)

Total Enterprise Value (INR mn)

De t to Capita Ratio 4.03% 0.17 0.16 0.09 0.09

Interest Coverage Ratio 10.24% 9.52 8.64 5.83 2.98

Efficiency Ratios

Fixed Asset Turnover ‐1.66% 14.60 14.85 14.72 11.61

Asset Turnover ‐0.84% 0.90 0.91 0.87 0.80

Current Asset Turnover ‐5.82% 2.60 2.76 2.45 2.64

20

‐

PE Ratio

(Absolute)

‐Working

Capital

Turnover64.24% ‐26.86 ‐75.10 ‐28.83 ‐15.99

Capital Employed Turnover ‐7.72% 1.09 1.18 1.17 1.16

Improved Decline




SAMPLE


Key Business Segments Key Geographic Segments

r9

r8r7r6

r13

r12

r11

r

Business Highlights

20122011201020090%

2011r15

Description News

Overview• r16 provides integrated real estate and investment management services to owner, occupier, and investor

clients worldwide

• It has

recently

merged

with

international

property

consultancy

r17

for

a consideration

of

~r18,

with

all

r19 offices and businesses across Europe operating under r19

Clientele • Its clientele in India includes r20,r21,r22

Awards and Recognition• Bagged the Award 1 in 2011

•

21

,


Public: Foreign Company Company A SWOT Analysis



SAMPLE

Public: Foreign

Company

– Company

A

– SWOT

Analysis

(4/4)

SWTO

• Xxx

• Xxx• Xxx

• xxx• Xxx

• Xxx

• Xxx

• Xxx

• Xxx• Xxx• Xxx




SAMPLE

Private: Domestic Company – Company B (1/4)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Gurgaon

Year of Incorporation

Head Office

Key People

Category Products/Services

Engineering P1,p2

Soft Services P3, 4 ame es gnat on

xx MD

xx Director

xx Director

Business Support P5,p6

23

xx Director




SAMPLE

Company B – Shareholding Pattern

Shareholders of the Company Ownership Structure

Name No. of Shares held

r5r4 r6

xx a1

xx a2 r2 r3

xx a3

xx a4

xx a6

xx a7

xx a8

24

Total a9



SAMPLE


F nanc a Snaps ot Key Rat os

Particulars

y‐o‐y change

(2011‐10)2011 2010 2009

Profitability Ratios

Operating Margin 1.50 8.81% 7.31% 6.17%

Net Profit/LossTotal Income

P3

INR mnINR mn

Net Margin 0.60 4.42% 3.82% 3.81%

Profit Before Tax Margin 0.57 6.69% 6.11% 6.08%

Return on Equity ‐6.71 10.63% 17.34% 94.96%

Return on Capital Employed ‐4.00 13.73% 17.73% 80.93%

Return on Working Capital 3.25 26.06% 22.81% 33.30%

Return on Assets ‐3.89 13.84% 17.73% 19.38%

P1P2

Return on Fixed Assets 23.49 103.12% 79.63% 4 6.47%

Cost Ratios

Operating costs (% of Sales) ‐1.50 91.19% 92.69% 93.81%

Administration costs

(%

of

Sales) N.A. N.A. N.A. N.A.

Interest costs % of Sales 0.92 2.12% 1.20% 0.37%Financial Summary

20‐‐

0

20‐‐ 20‐‐

0

Liquidity Ratios

Current Ratio ‐5.58% 2.96 3.14 1.78

Cash Ratio 2326.55% 1.25 0.05 0.07

Leverage Ratios

Debt to Equity Ratio ‐37.94% 0.54 0.87 0.90

• The company incurred a net profit of INR ‐ mn in FY 2011, as

compared to net profit of INR ‐ mn in FY 2010

• The company reported total income of INR ‐ mn in FY 2011,

registering

an

increase

of

q1%

over

FY

2010 De t to Capita Ratio ‐24.61% 0.35 0.47 0.47

Interest Coverage Ratio ‐31.97% 4.15 6.11 16.71

Efficiency Ratios

Fixed Asset Turnover 7.48% 11.71 10.89 7.51

Asset Turnover ‐35.22% 1.57 2.43 3.13

Current Asset Turnover ‐7.80% 1.96 2.13 2.35

• The company earned an operating margin of q2% in FY 2011,

an increase of 1.50 percentage points over FY 2010

• The company reported debt to equity ratio of ‐ in FY 2011, a

decrease of q3% over FY 2010

25

Working Capital Turnover ‐5.18% 2.96 3.12 5.38

Capital Employed Turnover ‐47.09% 2.40 4.54 24.87

Improved Decline




SAMPLE


Business Highlights

Description News

Overview

g s a su s ary o g w pan n a presence spann ng across a me ros, er‐ , er‐ an even er‐

cities

• It has

over

g3employees

and

is

one

of

the

top

facility

management

service

companies

in

India,

servicing

sectors like BFSI, retail, corporate, airports, ITES, government, telecom and diplomatic missions

Clientele

• Its clientele includes g4, g5, g6, g7

• Additionally, its clients also include government organizations like Indian Railways, BCCI, Delhi Metro and

diplomatic organizations like the Singapore High Commission

• As

part

of

its

expansion

and

consolidation

drive,

it

has

recently

acquired

a

strategic

stake

in

g8,

which

will

also help to expand its client base

Awards and Recognitions • It was the first FMS ISO 9001 certified company and has also achieved ESCO Certification in 2010


Private: Domestic Company Company B SWOT Analysis



SAMPLE

Private: Domestic

Company

– Company

B

– SWOT

Analysis

(4/4)

• Xxxx

• Xxxx• Xxx

• Xxxx

• Xxx

S W

TO • Xxx

• Xxx

• xxx

• Xxx• Xxx• Xxx• xxx




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Market Research Report : Facilities Management Services Market in India 2013