market research report : facilities management services market in india 2014 - sample

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Facilities Management Services Market – India

May 2014

2FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT

Executive Summary

Market

Facilities management services is slated to grow at a1% CAGR over 2013-18e

Facilities management services can be broadly classified into hard and soft services

It is a highly fragmented industry with the unorganized segment accounting for majority of the

sector

Drivers & Challenges

Competitive Landscape

Drivers– Boom in real estate

– Rise in infrastructural development

– Growth in retail sector

– Growth of hospitality sector

– Improving healthcare scenario

Challenges

– Shortage of manpower

– Large unorganized segment

Trends

Standardization of procedures

Facilities management as a stream of study

Mechanization of services

Project management and general contracting services continuing to evolve

Investments and M&A Activity in Facilities Management Sector

Major Players

Company 1 Company 2 Company 3

Company 4 Company 5 Company 6

3

•Macro-Economic Indicators

•Introduction

•Market Overview

•Types of Contracts

•Drivers & Challenges

•Trends

•Industry Association

•Competitive Landscape

•Strategic Recommendations

•Appendix

FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT

4

Economic Indicators (1/3)

11

12

13

14

15

b2

a2

Q1

d1c1

b1

a1

Q4

c4

b4

a4

Q3

c3

b3

a3

Q2

d2c2

INR tn

2013-142012-132011-122010-11

GDP at Factor Cost: Quarterly

Inflation Rate: Monthly

-2

-1

0

1

2

q

Jul 2013 - Aug 2013

p

%

Nov 2013 - Dec 2013

t

Oct 2013 - Nov 2013

s

Sep 2013 - Oct 2013

r

Aug 2013 - Sep 2013


5

Facilities management primarily ramifies into 2 major segments

Facilities Management Services

Hard Services Soft Services Hard Services Soft Services

p1

p2

p3

p4

p5

p6

p7

p8

p9

p10

z2

z1


6

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

witness significant momentum 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

unorganized 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

• 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

of office spaces is 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

0

f

INR bn

2016e

g e

2017e 2018e

cd

2015e

ba

2013 2014e

h

i

Unorganized Market

Organized Market

Market Segmentation (2013)


7

SAMPLE … through these following types of contracts

Entry Routes Description Examples

Direct Sub-contracts of ISPs

• Q1

• Q2

• Q3

S1,s2,s3

t1 t2

t3

t4

t5

t6

t7

t8

Facilities Management Services Market – Types of contracts (5/5)


8

SAMPLE A closer look reveals which type of contracts find the maximum takers

Facilities Management Services – Contract Segmentation (2013)

• Herein, the entire order for facilities management

services is doled out as a complete package

• In this case, service providers will have to look

after the entire gamut of services ranging

between hard services and soft services

• In majority of cases, facilities management service providers need to battle it out with other players for the contracts of different buildings 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 determines as to why a particular contract has a greater adoption rate over others

• In this case, contract for rendition of facilities

management services are given out as part-by-

part or by sub-contracting

• Herein, the total package is broken into sub-parts

and given to different service providers as various

contracts

PARTLY

ISP

g1

g2

Integrated Service Providers

Sub-contractors


9

Drivers & Challenges – Summary

Drivers

Boom in real estate

Rise in infrastructural development

Growth in retail sector

Growth of hospitality sector

Improving healthcare scenario

Challenges

Shortage of manpower

Large unorganized segment


10

SAMPLE Boom in real estate (1/2)

Facilities management business in India is rapidly growing on …

• Consistent economic growth, along with increased share of the service sector, has led to a booming real estate sector in India

• Strong growth in real estate sector has given immense potential to property management companies to provide integrated facilities management services

• Many residential and commercial complexes are being constructed including offices, business centres, housing apartments, manufacturing units and other such facilities

• This has led to a huge demand for facilities management services housekeeping, security, cleaning, electrical, mechanical and civil engineering services

• Boom in real estate sector has spurred growth in the facilities management services market in India and will help it to develop further

Impact

The Indian real estate market size is slated to reach ~INR 9,540 bn by the end of 2020

Demand for real estate spaces is estimated to grow at a CAGR of -% during the period 2010-14

The foreign direct investment (FDI) in the sector is slated to touch INR - bn over the next 10 years from

the current INR - bn

Real Estate growth can be summed up with the following takeaways

u1

Real Estate Contribution to GDP

v1

Metros

xxxxxx


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SAMPLE Boom in real estate (2/2)

… account of the booming real estate sector

Companies Project Description

xx • xxxx

xx • xxxx

xx • xxx

xx • xxx

xx • xxx

xx • xxx

xx • xxx

xx • xxx

xx • xxx

xx • xxx


12

`

Standardization of procedures

Facilities management as a stream of study


Trends – Summary

Key Trends

Investments and M&A Activity in Facilities Management Sector

Project management and general contracting services continuing to evolve


13

SAMPLE In 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• One of the main reasons why mechanization has taken this sector by a storm is because manual services were

loaded with faults and defects • Overcoming them and devising a fool proof solution led to the emergence of high adoption of mechanized

versions of services by the major players


• text

• text

• text

• text

• There should be a right combination of man, machine and consumables• Chances of human error is minimized with the introduction of mechanization in the processes adopted by these players


14

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

Membership

• Membership of this national association results in 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 expertise

Overview

• Its list of Board of Directors include leading names from the Facilities management fraternity such as Mr Paddy Menon, Mr TN Rao, Mr Anand Krishnan, Mr Sujeet Oomen, Mr Madan Kumar, Mr RVS Reddy, Mr Sudheer Kumar N, Mr Debapriya Ojha, Mr Sarosh Vatcha and others

• text

• text

Indian Facilities Management Association (2/3)


15

•Macro-Economic Indicators

•Introduction

•Market Overview

•Types of Contracts

•Drivers & Challenges

•Trends

•Industry Association

•Competitive Landscape

•Strategic Recommendations

•Appendix


16

SAMPLE Porter’s Five Forces Analysis

Competitive Rivalry

• text

Bargaining Power of Suppliers

• text

Bargaining Power of Buyers

• text

Threat of Substitutes

• text

Threat of New Entrants

• text

Impactb

Impactd

Impacta

Impactc

Impacte


17

SAMPLE Key Ratios of Top 3 Companies – Operational Basis (FY 2012) (1/3)

Competitive Benchmarking (1/4)

Knight Frank India Pvt. Ltd.

i4

i6

Dusters Total Solutions Services Pvt. Ltd.

i1 i2

%

i5

ISS Facility Services India Pvt. Ltd.

i3

Net MarginOperating Margin

• Dusters Total Solutions Services recorded operating margin of negative -%, lower than that of ISS Facilities Services which recorded operating margin of negative -% and lower than that of Knight Frank India which recorded operating margin of -%

• Net margin for Dusters Total Solutions Services is -%, ISS Facilities Services recorded the highest net margin of -% and Knight Frank India recorded a net margin of -%


18

SAMPLE Public: Domestic Company – Company 1(1/4)

Key People

Products and Services

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Stock Exchange

Category Products/Services

c1 p1

Name Designation

Head Office


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SAMPLE Financial Snapshot Key Ratios

Financial Summary

• The company incurred a net loss of INR - bn in FY 2013, as compared to net profit of INR - bn in FY 2012

• The company reported total income of INR - bn in FY 2013, registering a decrease of -% over FY 2012

• The company earned an operating margin of -% in FY 2013, a decrease of -percentage points over FY 2012

• The company reported debt to equity ratio of - in FY 2013, an increase of -% over FY 2012

Key Financial Performance Indicators

Indicators Value (dd/mm/yyyy)Market Capitalization (INR mn)

Total Enterprise Value (INR mn)

EPS (INR)

PE Ratio (Absolute)

Particulars y-o-y change

(2013-12)2013 2012 2011 2010

Profitability RatiosOperating Margin

Net Margin

Profit Before Tax Margin

Return on Equity

Return on Capital Employed

Return on Working Capital

Return on Assets

Return on Fixed Assets

Cost RatiosOperating costs (% of Sales)

Administration costs (% of Sales)

Interest costs (% of Sales)

Liquidity RatiosCurrent Ratio

Cash Ratio

Leverage RatiosDebt to Equity Ratio

Debt to Capital Ratio

Interest Coverage Ratio

Efficiency RatiosFixed Asset Turnover

Asset Turnover

Current Asset Turnover

Working Capital Turnover

Capital Employed Turnover

Improved Decline

Net Profit/LossTotal Income

0

2010

s1

t1

INR bnINR bn

2013

t4

s4

2012

s3

t3

2011

s2

t2

Public: Domestic Company – Company 1(2/4)


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SAMPLE Key Business Segments Key Geographic Segments

Business Highlights

Description News

Overview • Text• Text

Certifications • Text

0%

g1

2013

s1

0%

2013

f4

e4

2012

f3

e3

2011

f2

e2

2010

f1

e1

OverseasIndia

Public: Domestic Company – Company 1(3/4)


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SAMPLE Public: Domestic Company – Company 1 (4/4)

TO

WS


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SAMPLE Private: Domestic Company – Company 2 (1/5)

Key People

Products and Services

Company Information Offices and Centres – India

Category Products/Services

c2 p2

Name Designation

Ahmedabad

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Head Office


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SAMPLE Shareholders of the Company Ownership Structure

Name No. of Shares held

Name 1

Name 2

Total

30%

70%

Corporate Bodies Foreign holdings

Private: Domestic Company – Company 2 (2/5)


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SAMPLE Financial Snapshot Key Ratios

Improved Decline

Financial Summary

• The company earned a net profit of INR - mn in FY 2013, as

compared to net loss of INR - mn in FY 2012

• The company reported total income of INR - mn in FY 2013,

registering an increase of -% over FY 2012

• The company earned an operating margin of -% in FY 2013, an

increase of - percentage points over FY 2012

• The company reported debt to equity ratio of - in FY 2013, a

decrease of -% over FY 2012

Net Profit/LossTotal Income

0v3

u3

2011 2013

v4

u4

2012

INR mnINR mn

v2

2010

u1

v1

u2


Particulars y-o-y change

(2013-12)2013 2012 2011 2010

Profitability RatiosOperating Margin

Net Margin

Profit Before Tax Margin

Return on Equity

Return on Capital Employed

Return on Working Capital

Return on Assets

Return on Fixed Assets

Cost RatiosOperating costs (% of Sales)

Administration costs (% of Sales)

Interest costs (% of Sales)

Liquidity RatiosCurrent Ratio

Cash Ratio

Leverage RatiosDebt to Equity Ratio

Debt to Capital Ratio

Interest Coverage Ratio

Efficiency RatiosFixed Asset Turnover

Asset Turnover

Current Asset Turnover

Working Capital Turnover

Capital Employed Turnover


25

SAMPLE Business Highlights

Description News

Overview• Text

• Text

Network• Text

• Text

Awards• Text

• Text



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SAMPLE Private: Domestic Company – Company 2 – SWOT Analysis (5/5)

TO

WS


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