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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
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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
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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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
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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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)
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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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)
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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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
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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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
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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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
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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`
Standardization of procedures
Facilities management as a stream of study
Mechanization of services
Trends – Summary
Key Trends
Investments and M&A Activity in Facilities Management Sector
Project management and general contracting services continuing to evolve
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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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
Mechanization of services
• 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
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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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)
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•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
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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
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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 -%
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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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)
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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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
Private: Domestic Company – Company 2 (3/5)
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
FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT
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SAMPLE Business Highlights
Description News
Overview• Text
• Text
Network• Text
• Text
Awards• Text
• Text
Private: Domestic Company – Company 2 (4/5)
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SAMPLE Private: Domestic Company – Company 2 – SWOT Analysis (5/5)
TO
WS
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FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2014.PPT