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ndiawoke up to facilities management services when companies started outsourcing their non-core activities to different vendors. Non-core services would refer to activities in the likes of cleaning, maintenance, house keeping, electrical and plumbing and other multifarious issues. Biggies would generally outsource these activities to vendors as an initiative for cost cutting move. Facilities management comprises a wide range of services that are common to all organizations. Presently, facilities management has widened its reach to every infrastructural facility that requires maintenance including shopping malls, airports, hospitals, hotels, metro rail and others. With the passage of time facilities management is expected to experience robust growth riding on the infrastructural developments in the country.
The report begins with a snapshot of macro-economic indicators inIndia. It proceeds towards giving a brief introduction to the term facilities management and its definition. It also provides with the categorization of the broad types of services in facilities management along with a break-up of the same inIndia. The introduction section ends with an overview of the diverse applications of facilities management services. This section gets followed with an overview section which throws light on both the global as well as the Indian market for facilities management services. The Indian market is overview is tagged with a brief description of the market along with its market size and its growth rate. This is followed with a geographic distribution and a supply chain that makes up the sector. The cost break-up helps to analyze the different heads that are counted when end product (service in this case) is finally rendered.
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FM Services Market Growth in India
1. Insert Cover Image using Slide Master View
Do not distort
Facilities Management Services Market –
Facilities Management Services Market India
April 2013
2. Executive Summary
SAMPLE
Global market for Facilities Management Services is slated to reach ~‐ bn by the end of 2017
Market Facility management services can be broadly classified into e1 and e2
It is a highly fragmented industry with unorganized segment covering majority of the sector
It is a highly fragmented industry with unorganized segment covering majority of the sector
Drivers Challenges
– Boom in real estate – Shortage of manpower
g p
Drivers & – Rise in infrastructural development – Large unorganized segment
Challenges – Growth in retail sector
– Growth of hospitality sector
– Improving healthcare scenario
Standardization of procedures Project management and general
Facilities management as a stream of contracting services continuing to evolve
Trends Investments and M&A Activity in Facilities
study
Mechanization of services Management Sector
M S
Major Players
Competitive
Company A Company B Company C
Landscape
Company D Company E Company F
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 2
3. •Macro‐Economic Indicators
•Introduction
I t d ti
•Market Overview
•Types of Contracts
T fC t t
•Drivers & Challenges
•Trends
T d
•Industry Association
•Competitive Landscape
C ii L d
•Strategic Recommendations
•Appendix
d
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 3
4. Facilities management primarily ramifies into 2 major
segments SAMPLE
Facilities Management Services
Hard Services
Hard s11
s11
Services Soft Services
Soft Services
s12
s12
s1 s6
s2 s7
s3 s8
x
m
s4 s9
s5 s10
n
y
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 4
5. •Macro‐Economic Indicators
•Introduction
I t d ti
•Market Overview
•Types of Contracts
T fC t t
•Drivers & Challenges
•Trends
T d
•Industry Association
•Competitive Landscape
C ii L d
•Strategic Recommendations
•Appendix
d
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 5
6. 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 healthy
global 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 market
segment 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
a3 a4 xxxxxxxx
a1
xxxxxxxxx
a2
2
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 6
7. 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
INR bn
been growing steadily over the years and is set to
witness rapid growth over the next five years
i id h h fi b6
b7
• It is a highly fragmented industry with few organized b5
players and mostly unorganized small operators b4
b3
• Facilities management business is largely b2
b1
unorganized in India and operates on low margins
d d d l
• Consolidation in this segment is slowly gaining 0
momentum as players are growing their business by 2012 2013e 2014e 2015e 2016e 2017e
acquiring smaller firms
• Facilities management services are primarily
l l
concentrated in and around metros with low 10
penetration in tier II and tier III cities
• There is an increasing demand for such services as b8
emphasis on urban development and modernisation
emphasis on urban development and modernisation
of office spaces are growing
b11
• Consistent economic growth has led to a booming
real estate sector in India, which will drive the growth
b12 b13
of this market in the near future
of this market in the near future b9
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 7
8. A cost break‐up analysis reflects which input carries how
much weightage in this sector SAMPLE
Facilities Management Services – Cost Break‐up
I
N • Every facility management service provider needs three basic components to render services which make up the costs involved
P j q g g g p y g y
• Since it is a job requiring high‐end amalgamation of manpower and machinery, rendering service deem it necessary to have
U proper training as well
T
S • These basic units are required in different proportions for fulfilling various operational objectives
•XXxxx
e1 • Xxxx
• xxxx c4 c6
c5
• Xxx c3
• Xxx
e2
• Xxx
c2
• Xxx c1
e3 • Xxx
• Xxx
• Xxx
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 8
9. A closer look reveals which type of contracts garner
maximum takers SAMPLE
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 d3
e4 • Xxx d4
• xxx
d2
d1
• Xxx
• Xxx
e5
• Xxx
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 9
10. Drivers & Challenges – Summary
Drivers
Boom in real estate Challenges
Rise in infrastructural development Shortage of manpower
Growth in retail sector Large unorganized segment
Growth of hospitality sector
Improving healthcare scenario
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 10
11. Development of infrastructural facilities across India…
Rise in infrastructural development (1/4) Impact
• Backed by strong economic growth, the infrastructure development in India has been growing
consistently over the last few years
• 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 of India has started focusing on the development and modernization of airport
f di h df i h d l d d i i f i
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)
INR tr
k2 xxxxxxxxx
k1
0
2007‐12 2012‐17e
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 11
12. SAMPLE
… in areas of metro rail development plan or …
Rise in infrastructural development (2/4)
Government Allocation in Metro Rail (2013‐14) Union Budget Grant for Delhi Metro
INR bn INR bn
i1 i5
i4
i2
i3
0 0.0
Delhi Chennai Bangalore 2012‐13 2013‐14
• 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
the Urban Development Ministry for investments in
the Urban Development Ministry for investments in
Budget 2013‐14
Metro corporations across India
• This amount is slated to be spent on construction of
• The ministry has got a substantial hike of INR i6 bn
Phase – III in order to lay another i8 km of tracks in
for construction and extension of the Metro
the national capital
network in Delhi, Bangalore, Kolkata, Chennai,
Mumbai, Jaipur and Kochi
, p
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 12
13. … airport infrastructural development plan …
SAMPLE
Rise in infrastructural development (3/4)
Investments in Airport in 11th Plan Cargo in India – Growth (2012‐17)
INR bn %
h6 h7
h4 h5 h8
h3
h1 h2
0
Metro Non‐ Greenfield NE CNS‐ATM Total 0
Airports Metro Airports Airports and Investment Domestic International
Airports Equipment
Passenger Traffic in Airports – Growth
• This growth in cargo traffic will necessitate
mn investments in specialized terminals and equipment
h10
which will further capitalize into opportunities for
which will further capitalize into opportunities for
facilities management services providers
h9
• Moreover, policies are drafted to facilitate the
process of infrastructural development in the likes
of allowing 100% foreign direct investment for
g
green field airports via automatic route
p
0
2012 2017e
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 13
14. Trends – Summary
Standardization of procedures
Facilities management as a stream of study
Key Trends
` Mechanization of services
Project management and general contracting services continuing to evolve
Project management and general contracting services continuing to evolve
Investments and M&A Activity in Facilities Management Sector
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 14
15. As an effort to overcome manual shortcomings, players are
focusing on mechanization of servicesSAMPLE
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
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
• Xxx
• xxx
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 15
16. … in the facilities management services sector reflecting its
potential to grow even furtherSAMPLE
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 ‐
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 16
18. SAMPLE
… sector, yet presence of industry body defines ...
Indian Facility Management Association (2/3)
Overview
• Its list of Board of directors include leading names • Leading players have already registered
form the facility management fraternity in the likes 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
Corporate Member – Annual membership fee is
Corporate Member Annual membership fee is
opening up of various avenues in this field both for
i f i i hi fi ld b h f INR ‐
amateurs as well as for experienced professionals Professional Member – Annual membership fee
• There are different types of memberships provided is INR ‐
that professionals and organizations can choose Associate Member – Annual membership fee is
from depending on qualifications, experience and
p g q , p INR ‐
Student Member – Annual membership fee is
expertise
INR ‐
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 18
19. Public: Foreign Company – Company A (1/4)
Company Information
SAMPLE Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Gurgaon
Year of Incorporation
Ticker Symbol
Stock Exchange
Head Office
Products and Services
Products and Services
Category Products/Services
Key People
Soft Services P1,p2
Name
N Designation
D i ti
xx MD (Facility Management ‐Americas)
Hard Services P3,p4
MD (Integrated Facilities Management ‐
xx
Asia Pacific)
Others P5,p6 Senior Business Development Director ‐
xx
Facilities Management
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 19
20. Public: Foreign Company – Company A (2/4)
Financial Snapshot
i i lS h
SAMPLE Key Ratios
K i
y‐o‐y change
Total Income Net Profit/Loss Particulars 2012 2011 2010 2009
(2012‐11)
INR mn INR mn
Profitability Ratios
p Operating Margin ‐0.10 8.46% 8.56% 9.13% 6.60%
o
n Net Margin 0.68 5.26% 4.58% 5.26% ‐0.14%
m Profit Before Tax Margin 0.85 7.03% 6.18% 6.96% 0.10%
0 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%
0 Return on Working Capital 415.22 ‐228.64% ‐643.86% ‐263.17% ‐105.57%
2009 2010 2011 2012 Return on Assets ‐0.12 7.69% 7.81% 7.97% 5.29%
Financial Summary Return on Fixed Assets ‐2.99 124.31% 127.30% 134.41% 76.66%
Cost Ratios
• The company incurred a net profit of INR ‐ mn in FY 2012, as Operating costs (% of Sales) 0.06 91.49% 91.43% 90.87% 93.40%
compared to net profit of INR ‐ mn in FY 2011 Administration costs (% of
‐0.25 64.76% 65.02% 64.92% 65.46%
• The company reported total income of INR ‐ mn in FY 2012, Sales)
registering an increase of r1% over FY 2011
registering an increase of r1% over FY 2011 Interest costs (% of Sales)
Interest costs (% of Sales) ‐0.10
0.10 0.89% 0.99% 1.57% 2.22%
Liquidity Ratios
• The company earned an operating margin of r2% in FY 2012, a
Current Ratio ‐5.47% 0.91 0.96 0.92 0.86
decrease of r3 percentage points over FY 2011
Cash Ratio ‐16.68% 0.25 0.30 0.33 0.22
• The company reported debt to equity ratio of ‐ in FY 2012, a Leverage Ratios
decrease of r4% over FY 2011 Debt to Equity Ratio 4.86% 0.21 0.20 0.10 0.10
Debt to Capital Ratio
b i l i 4.03% 0.17 0.16 0.09 0.09
Key Financial Performance Indicators
Interest Coverage Ratio 10.24% 9.52 8.64 5.83 2.98
Indicators Value (dd/mm/yyyy) Efficiency Ratios
Market Capitalization (INR mn) Fixed Asset Turnover ‐1.66% 14.60 14.85 14.72 11.61
Total Enterprise Value (INR mn) 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
EPS (INR)
EPS (INR) ‐ Working Capital Turnover 64.24% ‐26.86 ‐75.10 ‐28.83 ‐15.99
PE Ratio (Absolute) ‐ Capital Employed Turnover ‐7.72% 1.09 1.18 1.17 1.16
Improved Decline
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 20
21. Public: Foreign Company – Company A (3/4)
Key Business Segments
SAMPLE Key Geographic Segments
r6 r7 r8
r9
10
r10
r11
r12
r13
r14
0%
2009 2010 2011 2012 2011 r15
Business Highlights
Description News
• r16 provides integrated real estate and investment management services to owner, occupier, and investor
Overview clients worldwide
• 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
• Bagged the Award 1 in 2011
Awards and Recognition
• It was also awarded the Award 2 in 2008, 2009 and 2011
It was also awarded the Award 2 in 2008, 2009 and 2011
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 21
23. Private: Domestic Company – Company B (1/4)
Company Information
SAMPLE Offices and Centres – India
Corporate Address
Tel No.
Gurgaon
Fax No.
Website
Year of Incorporation
Head Office
Products and Services
Products and Services
Category Products/Services
Engineering P1,p2 Key People
Soft Services P3,p4
,p
Name
N Designation
D i ti
Business Support P5,p6
xx MD
xx Director
xx Director
xx Director
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 23
25. Private: Domestic Company – Company B (2/4)
Financial Snapshot
i i lS h
SAMPLE Key Ratios
K i
y‐o‐y change
Total Income Net Profit/Loss Particulars
(2011‐10)
2011 2010 2009
Profitability Ratios
INR mn INR mn
Operating Margin 1.50 8.81% 7.31% 6.17%
P3
Net Margin 0.60 4.42% 3.82% 3.81%
Profit Before Tax Margin 0.57 6.69% 6.11% 6.08%
P2 Return on Equity ‐6.71 10.63% 17.34% 94.96%
Return on Capital Employed ‐4.00 13.73% 17.73% 80.93%
P1 Return on Working Capital 3.25 26.06% 22.81% 33.30%
Return on Assets ‐3.89 13.84% 17.73% 19.38%
Return on Fixed Assets 23.49 103.12% 79.63% 46.47%
0 0 Cost Ratios
20‐‐ 20‐‐ 20‐‐ Operating costs (% of Sales) ‐1.50 91.19% 92.69% 93.81%
Administration costs (% of Sales) N.A. N.A. N.A. N.A.
Financial Summary Interest costs (% of Sales)
Interest costs (% of Sales) 0.92 2.12% 1.20% 0.37%
• The company incurred a net profit of INR ‐ mn in FY 2011, as Liquidity Ratios
Current Ratio ‐5.58% 2.96 3.14 1.78
compared to net profit of INR ‐ mn in FY 2010
Cash Ratio 2326.55% 1.25 0.05 0.07
• The company reported total income of INR ‐ mn in FY 2011, Leverage Ratios
registering an increase of q1% over FY 2010 Debt to Equity Ratio ‐37.94% 0.54 0.87 0.90
Debt to Capital Ratio
b i l i ‐24.61% 0.35 0.47 0.47
• The company earned an operating margin of q2% in FY 2011, Interest Coverage Ratio ‐31.97% 4.15 6.11 16.71
an increase of 1.50 percentage points over FY 2010 Efficiency Ratios
• The company reported debt to equity ratio of ‐ in FY 2011, a Fixed Asset Turnover 7.48% 11.71 10.89 7.51
decrease of q3% over FY 2010 Asset Turnover ‐35.22% 1.57 2.43 3.13
Current Asset Turnover ‐7.80% 1.96 2.13 2.35
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 25
26. 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
g1 is a subsidiary of g2 with pan India presence spanning across all metros, tier‐2, tier‐3 and even tier‐4
cities
Overview
• 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
• Its clientele includes g4, g5, g6, g7
Clientele • 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
Alliances
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
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 26
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FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT 28