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Facilities Management Services Market IndiaFacilities Management Services Market – India
April 2013
SAMPLE Executive Summary
MarketGlobal 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
It is a highly fragmented industry with unorganized segment covering majority of the sectorIt is a highly fragmented industry with unorganized segment covering majority of the sector
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
g p
–Large unorganized segment
Trends
Standardization of proceduresFacilities management as a stream of study
Project management and general contracting services continuing to evolve Investments and M&A Activity in Facilities M S
Competitive Landscape
Mechanization of services Management Sector
Major Players
Company A Company B Company C
2FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
LandscapeCompany D Company E Company F
•Macro‐Economic Indicators
I t d ti•Introduction
•Market Overview
T f C t t•Types of Contracts
•Drivers & Challenges
T d•Trends
•Industry Association
C i i L d•Competitive Landscape
•Strategic Recommendations
d
3
•Appendix
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
SAMPLE Facilities management primarily ramifies into 2 major segments
Facilities Management Services
Hard Services Soft Servicess11 s12Hard Services Soft Services s11 s12
s1 s6
s2
s3
s7
s8s3
s4
s8
s9m
x
s5 s10
n
4
ny
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
•Macro‐Economic Indicators
I t d ti•Introduction
•Market Overview
T f C t t•Types of Contracts
•Drivers & Challenges
T d•Trends
•Industry Association
C i i L d•Competitive Landscape
•Strategic Recommendations
d
5FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
•Appendix
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 global economy looks to rise and corporate spending infrastructure becomes healthyglobal economy looks to rise and corporate spending infrastructure becomes healthy
• 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 segment in this marketsegment 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
a1
2
xxxxxxxxx
6
a2
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
Facilities management services market is poised for strong growth in the ensuing years
Facilities Management Services Market Market Size and Growth• Facilities management services market in India has been growing steadily over the years and is set to i id h h fi
INR bn
b6witness rapid growth over the next five years
• It is a highly fragmented industry with few organized players and mostly unorganized small operators
• Facilities management business is largely d d d l
b7b6
b5b4
b3b2
b1unorganized in India and operates on low margins
• Consolidation in this segment is slowly gaining momentum as players are growing their business by acquiring smaller firms
l l
0
2017e2016e2015e2014e2013e2012
• Facilities management services are primarily concentrated in and around metros with low penetration in tier II and tier III cities
• There is an increasing demand for such services as emphasis on urban development and modernisation
b8
10
emphasis on urban development and modernisation of office spaces are growing
• Consistent economic growth has led to a booming real estate sector in India, which will drive the growth of this market in the near future b9
b13b12
b11
7
of this market in the near future b9
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
SAMPLE A cost break‐up analysis reflects which input carries how much weightage in this sector
Facilities Management 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 j q g g g p y g y
proper training as well• These basic units are required in different proportions for fulfilling various operational objectives
X
UTS
• Xxxx• Xxxx• xxxx
e1 c6
c5
c4
• Xxx• Xxx• Xxx
e2
c3
c2
• Xxx• Xxxe3
c1
8
• Xxx• Xxx
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
SAMPLE A closer look reveals which type of contracts garner maximum takers
Facilities Management 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 d3Xxx
• Xxx
• xxxe4
d2
d4
• Xxx
• Xxx
• Xxxe5
d1
9FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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
10FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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
f di h d f i h d l d d i i f i• Government of India has started focusing on the development and modernization of 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 trk2
0
k1
11
0
2012‐17e2007‐12
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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 bn
i5i4
Bangalore
i3
Chennai
i2
Delhi
0 0.0
2013‐142012‐13
• Delhi Metro Rail Corporation has been allocated a major share of the Budget 2012‐13 allocations to the Urban Development Ministry for investments in
• Delhi Metro was allocated INR i7 bn in the Union
BangaloreChennaiDelhi 2013‐142012‐13
the Urban Development Ministry for investments in 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, Jaipur 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
12
, p
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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
h6h5h4
h3h2h1
%
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 which will further capitalize into opportunities for
Passenger Traffic in Airports – Growth
mnh10
which will further capitalize into opportunities for 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 green field airports via automatic route
h9
13
g p0
2017e2012
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
Trends – Summary
Standardization of procedures
Facilities management as a stream of study
` Mechanization of servicesKey Trends
Project management and general contracting services continuing to evolveProject management and general contracting services continuing to evolve
14
Investments and M&A Activity in Facilities Management Sector
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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• Increasing number of companies have now started to include mechanized services in their services portfolio
Mechanization of services
• Increasing number of companies have now started to include mechanized services in their services portfolio• 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
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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 ‐
16FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
Trade Association – Indian Facility Management Association
Overview
IFMAIFMA
Benefits Membershipe be s p
17FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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 i f i i hi fi ld b h f
•Different categories in this segment are Corporate Member – Annual membership fee is
opening up of various avenues in this field both for amateurs as well as for experienced professionals
•There are different types of memberships provided that professionals and organizations can choose from depending on qualifications, experience and
Corporate Member Annual membership fee is INR ‐ Professional Member – Annual membership fee is INR ‐ Associate Member – Annual membership fee is INR ‐
18
p g q , pexpertise Student Member – Annual membership fee is
INR ‐
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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
Products and Services
Stock Exchange
Head Office
Key People
Products and Services
Category Products/Services
Soft Services P1,p2N D i ti
Hard Services P3,p4
Name Designation
xx MD (Facility Management ‐Americas)
xxMD (Integrated Facilities Management ‐Asia Pacific)
19
Others P5,p6 xxSenior Business Development Director ‐Facilities Management
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
SAMPLE i i l S h K i
Public: Foreign Company – Company A (2/4)
Financial Snapshot Key Ratios
Particulars y‐o‐y change (2012‐11)
2012 2011 2010 2009
Profitability RatiosOperating Margin ‐0.10 8.46% 8.56% 9.13% 6.60%
Net Profit/LossTotal 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% 11.89% 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%
0201220112010
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, registering an increase of r1% over FY 2011
Return on Fixed Assets ‐2.99 124.31% 127.30% 134.41% 76.66%
Cost RatiosOperating costs (% of Sales) 0.06 91.49% 91.43% 90.87% 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%registering an increase of r1% over FY 2011
• 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
Interest costs (% of Sales) 0.10 0.89% 0.99% 1.57% 2.22%
Liquidity RatiosCurrent Ratio ‐5.47% 0.91 0.96 0.92 0.86
Cash Ratio ‐16.68% 0.25 0.30 0.33 0.22
Leverage RatiosDebt to Equity Ratio 4.86% 0.21 0.20 0.10 0.10
b i l iKey Financial Performance Indicators
Indicators Value (dd/mm/yyyy)Market Capitalization (INR mn)
Total Enterprise Value (INR mn)
EPS (INR)
Debt to Capital 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 RatiosFixed 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
EPS (INR) ‐PE Ratio (Absolute) ‐
Working Capital Turnover 64.24% ‐26.86 ‐75.10 ‐28.83 ‐15.99
Capital Employed Turnover ‐7.72% 1.09 1.18 1.17 1.16
Improved Decline
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
SAMPLE Public: Foreign Company – Company A (3/4)
Key Business Segments Key Geographic Segments
10
r9
r8r7r6
r14
r13
r12
r11
r10
Business Highlights
20122011201020090%
2011 r15
r14
Description News
Overview • r16 provides integrated real estate and investment management services to owner, occupier, and investor clients worldwide
Collaborations • It has recently merged with international property consultancy r17 for a consideration of ~r18, with all Collaborations 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
• It was also awarded the Award 2 in 2008, 2009 and 2011
21
It was also awarded the Award 2 in 2008, 2009 and 2011
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
SAMPLE Public: Foreign Company – Company A – SWOT Analysis (4/4)
SWTO
• Xxx• Xxx
• Xxx
• Xxx• xxx • Xxx
• Xxx
• Xxx
• Xxx
• Xxx
• Xxx• Xxx• Xxx
22FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
SAMPLE Private: Domestic Company – Company B (1/4)
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Gurgaon
Products and Services
Year of Incorporation
Head Office
Key People
Products and Services
N D i ti
Category Products/Services
Engineering P1,p2
Soft Services P3,p4Name Designation
xx MD
xx Director
xx Director
,p
Business Support P5,p6
23
xx Director
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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 a5xx a5
xx a6
xx a7r1
xx a8
r1
24
Total a9
SAMPLE i i l S h K i
Private: Domestic Company – Company B (2/4)
Financial Snapshot Key Ratios
Particulars y‐o‐y change (2011‐10)
2011 2010 2009
Profitability RatiosOperating Margin 1.50 8.81% 7.31% 6.17%
Net Profit/LossTotal Income
P3INR 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
P3
Return on Fixed Assets 23.49 103.12% 79.63% 46.47%
Cost RatiosOperating 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
Interest costs (% of Sales) 0.92 2.12% 1.20% 0.37%
Liquidity RatiosCurrent Ratio ‐5.58% 2.96 3.14 1.78
Cash Ratio 2326.55% 1.25 0.05 0.07
Leverage RatiosDebt to Equity Ratio ‐37.94% 0.54 0.87 0.90
b i l i
• 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
Debt to Capital Ratio ‐24.61% 0.35 0.47 0.47
Interest Coverage Ratio ‐31.97% 4.15 6.11 16.71
Efficiency RatiosFixed 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
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
SAMPLE Private: Domestic Company – Company B (3/4)
Business Highlights
Description News
• g1 is a subsidiary of g2 with pan India presence spanning across all metros tier 2 tier 3 and even tier 4
Overview
• g1 is a subsidiary of g2 with pan India presence spanning across all metros, tier‐2, tier‐3 and even tier‐4
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
Alliances• As part of its expansion and consolidation drive, it has recently acquired a strategic stake in g8, which will
Alliancesalso 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
26FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
SAMPLE Private: Domestic Company – Company B – SWOT Analysis (4/4)
• Xxxx• Xxxx
• Xxx
• Xxx• Xxxx• Xxx
• Xxx
S W
TO • Xxx
• Xxx
• xxx
• Xxx• Xxx• Xxx• xxx
27FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT
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