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Similaire à Uk fm in offices and commercial buildings 31 dec 2020 (20)
Uk fm in offices and commercial buildings 31 dec 2020
- 1. Copyright © 2020 by Baachu
FM in Offices and
Commercial Buildings
Overview and COVID-19
Impact
Market Report
- 2. Copyright © 2020 by Baachu
2
The UK Market Facts..
Zero strategy, tactical bidding only
Typical punitive contract structure, EBITDA margin erosion (as low as 3%), high
CAPEX and OPEX are common factors in the FM industry producing high stressed
assets
Providers rightly are spending more time in fixing operations. Lucky few who have
fixed their operations are successfully mining their existing accounts by cross
selling and upselling more services.
Even the providers who have grown through acquisition in the past are constraint
due to poor cash position with integrations taking longer than expected
Gone are the times of market intimidation - Very few FM providers have new
business win rates above 50% and retention above 80%. Some running as low as
10%
Many have stopped measuring and continue to approach the market impulsively.
Any provider can be displaced from their contract with the right strategic
approach
- 3. Copyright © 2020 by Baachu
3
Why This Is Important To You NOW
Over Half of the Top 50 FM Providers are in Financial Distress
Commercial Value of UK Contract – 0.5 (Commoditised Market)
Synchronised Slowdown in an uncertain environment : US China, Brexit, Covid19
− Trade wars wiping out $700bn from global GDP by 2020
− $19 Trillion Corporate Debt predicted to default (40% of total debt in 8 major
economies)
YOU Have To EXPAND YOUR MIND and
Create Your Opportunities
- 4. Copyright © 2020 by Baachu
Outsourced FM Market in UK: By Service and Sector
Deal Volume over next four years: Split between hard FM, soft
FM and Integrated FM
Growth block formula and Implementation
Opportunities in COVID-19 environment
Growth Strategy and Implementation
Offices and Commercial Buildings Breakdown in Outsourced
FM Market
Table of Content
UK FM Market - Office Sector: Key Players
- 5. Copyright © 2020 by Baachu
5
Outsourced FM Market in UK
Outsourced FM Market in UK – Public and Private, 2020
50.1%
49.9%
Total UK FM Market = £117.0 Bn
Private Public
Outsourced FM market in the UK was c.£117.0 Bn in Total Contract Value (TCV) in 2020
Market was dominated by Private Sector which exhibited a high level of outsourcing
activity contributing 50.1% (£58.6 Bn) to the total FM market
Source:
1. Rain FM Database
2. Baachu Analysis
Source: Baachu RAIN Database dated 20 Dec
2020
- 6. Copyright © 2020 by Baachu
6
Outsourced FM Market in UK: By Service Type
Outsourced FM Market – By Service (2020)
In Public Sector, Soft FM contributed 36.8% to the public FM market; followed by
Integrated FM (26.2%)
Whereas in Private Sector, Integrated FM contributed 45.2% to the private sector market;
followed by soft FM (27.8%)
Source:
1. Rain FM Database
2. Baachu Analysis
19.7%
32.3%
35.7%
12.3%
Total UK FM Market = £117.0 Bn
Hard FM Soft FM Integrated FM Other Support Services
Source: Baachu RAIN Database dated 20 Dec
2020
- 7. Copyright © 2020 by Baachu
21.4%
17.2%
11.7%
7.6%
6.6%
5.6%
5.4%
5.2%
5.1%
4.7%
3.9%
3.6%
1.0%
1.0%
Office
Central Government
Local Government
Manufacturing & Industrial
Energy and Utilities
Defence
Residential and Housing
Health Care
Leisure
Transport
Retail
Education
Others
Property Management
Outsourced FM Market in UK: By Sector
Outsourced FM Market – By Sector (2020)
In Public sector, Central Government contributed 34.5% to the public FM market; followed
by the Local Government (23.1%)
Whereas in private sector, Office sector contributed 42.3% to the private sector market;
followed by Manufacturing & Industrial (15.1%)
Source:
1. Rain FM Database
2. Baachu Analysis
Total UK FM Market = £117.0 Bn
Note:
A. Media sector has been included in Others as part of the analysis
Source: Baachu RAIN Database dated 20 Dec
2020
- 8. Copyright © 2020 by Baachu
Outsourced FM Market in UK – Market Share (by TCV)
Outsourced FM Market in UK – Top FM Players
Source:
1. Rain FM Database
2. Baachu Analysis
14.5%
5.8%
3.9%
3.3%
3.2%
2.7%
1.5%
1.4%
1.2%
1.0%
1.0%
1.0%
0.9%
0.8%
0.8%
57.1%
Mitie
Interserve
ENGIE
Compass
Sodexo
ISS
Serco
CBRE
EMCOR
G4S
OCS
Vinci Facilities
Integral
Skanska
Kier
Total UK FM Market = £117.0 Bn
Source: Baachu RAIN Database dated 20 Dec
2020
Note:
1. The liquidation of Carillion in Jan 2018 impacted the UK FM Market, however,
most of the contracts were awarded to other FM Providers. Hence, its contracts
were considered to calculate the market size
2. Others also includes contracts that were awarded to multiple vendors
3. Mitie has acquired Interserve’s FM division in Dec. 2020; the impact has not
been included in current analysis
UK FM Market is highly fragmented with top 15 players holding ~40% share of overall
FM market and remaining held by other players
Mitie leads the FM services market with TCV of ~£17 Bn, followed by Interserve (~£6.8
Bn) and Engie (~£4.6 Bn)
− Mitie Group is the largest provider of Soft FM, Hard FM, and Integrated services in the
UK FM market, with share of ~14.2%, 6.6% and ~22.0% respectively
- 9. Copyright © 2020 by Baachu
45.2%
27.8%
17.0%
10.0%
Integrated FM Soft FM Hard FM Other Support Services
9
Outsourced FM Market: Private Sector
Outsourced Private FM Market in UK – By Service (2020)
Source:
1. Rain FM Database
2. Baachu Analysis
Total UK Private FM Market = £58.6 Bn
Integrated FM services account for 45.2% of the outsourced private FM market in UK,
followed by soft FM services (27.8%)
Source: Baachu RAIN Database dated 20 Dec
2020
- 10. Copyright © 2020 by Baachu
42.3%
15.1%
12.2%
8.8%
7.9%
5.0%
8.6% Total UK Private FM Market = £58.6 Bn
Office
Manufacturing & Industrial
Energy and Utilities
Leisure
Retail
Residential and Housing
Others
10
Outsourced FM Market: Private Sector
Outsourced Private FM Market in UK – By Sector (2020)
Source:
1. Rain FM Database
2. Baachu Analysis
Within the Private Sector, Offices are the largest procurer of FM services accounting for
over a third (~42.3%) of the private FM market in the UK, followed by Manufacturing &
Industrial (~15.1%) and Energy and Utilities (~12.2%) sectors
Note:
A. Transport includes private transport players- Train Operators, Airport Operators, Airlines..
B. Leisure includes private facilities such Sports Venues , Zoos, Exhibition Centers and Theatres etc.
C. Education includes private schools, colleges and universities .
Source: Baachu RAIN Database dated 20 Dec
2020
- 11. Copyright © 2020 by Baachu
11
UK FM Market - Office Sector: Key Players
Source:
1. Rain FM Database
2. Baachu Analysis
The Office sector in the UK is estimated at ~£25.0 Bn in terms of Total Contract Value
(TCV), accounting for 21.4% of the total UK FM Market
Mitie is the largest supplier of FM services in UK Offices Sector with TCV of ~£7.9 Bn,
followed by Interserve (~£1.6 Bn) and ISS (~£1.5 Bn).
‒ Mitie Group is the largest soft FM and integrated FM provider in the UK FM market with a market
share of 13.5% and 21.9% respectively
Office Sector – Key Players (2020)
31.8%
6.3%
6.0%
3.9%
3.3%
2.0%
46.6%
Total Market = £25.0 Bn
Mitie
Interserve
ISS
CBRE
Engie
EMCOR
Others
Note:
1. The liquidation of Carillion in Jan 2018 impacted the UK FM Market, however,
most of the contracts were awarded to other FM Providers. Hence, its contracts
were considered to calculate the market size
2. Others also includes contracts that were awarded to multiple vendors
3. Mitie has acquired Interserve’s FM division in Dec. 2020; the impact has not
been included in current analysis
Others includes Transport, Health Care, Property Management and
Education
Source: Baachu RAIN Database dated 20 Dec
2020
- 12. Copyright © 2020 by Baachu
12
Outsourced FM Market : Offices and Commercial Buildings
Breakdown
Outsourced Offices and Commercial Buildings FM Market in UK – (2019)
Source:
1. Rain FM Database
2. Baachu Analysis
Banking and Financial Services contributed the highest to the outsourced offices and
commercial buildings FM market – accounting for 37% of the total followed by Other
buildings at 27% with the remaining market split between Accounting and Law firms,
Media and IT and Telecoms
HQ others
Note:
A. Transport includes private transport players- Train Operators, Airport Operators, Airlines..
B. Leisure includes private facilities such Sports Venues , Zoos, Exhibition Centers and Theatres etc.
C. Education includes private schools, colleges and universities .
Offices and Commercial Buildings Breakdown
Financial Services IT and Telecoms Law and Accountacy Firms Others Media
- 13. Copyright © 2020 by Baachu
13
Buyers
In post recession - What will be my target operating model?
− Who can guide us through the new abnormal? Who is prepared for the future?
Long term and short term leases and equity impact
Brexit Impact, GDPR
Banks and debts
Location and optimisation
− Shared services didn't cope well
− Property rationalisation - big cities vs regions - unique opportunity to
reconfigure Office footprint
− Digital Shift – Cloud Infrastructure
- 14. Copyright © 2020 by Baachu
Top Market Sectors
Note:
1. Break-up by service may not add-up as the contribution of “Other Support Services” and “Uncategorised”
categories have not been mentioned
Housing
Market SizeA >£21 Bn >£6 Bn ~£6 Bn ~£6 Bn ~£5 Bn
Soft FM 17% 51% 30% 6% 20%
Hard FM 13% 11% 19% 63% 27%
Integrated FM 71% 3% 26% 11% 53%
Office Central Govt. Energy & Utilities
Local Govt.
- 15. Copyright © 2020 by Baachu
Top Market Sectors: Deal Volume (next four years)
Source:
1. Baachu Rain FM
2. Baachu Analysis
Note:
1. Break-up by service may not add-up as the contribution of “Other Support Services” and “Uncategorised”
categories have not been mentioned
Leisure
# of Deals 194 155 138 118 111
Soft FM 54% 25% 56% 86% 47%
Hard FM 20% 30% 18% 6% 12%
Integrated FM 11% 44% 25% 8% 23%
Local Govt. Office Central Govt.
Education
- 16. Copyright © 2020 by Baachu
How much of your growth is coming from R or N or A?
Rebid
(Contracts awarded in
the past)
New Business
(Services
outsourced
for the
first time)
Acquisition
(Company,
Contract,
Capability)
R N A
Rebid New Business Acquisition
TARGET GROWTH
G
=
+ +
Growth block – Formula
All rights reserved. This presentation or any portion thereof may not be reproduced or used in any manner whatsoever without the written permission from
Baachu Works Limited.
- 17. Copyright © 2020 by Baachu
Do you know your target growth?
Target Growth
Target Growth
Target Growth
Target Growth
Target Growth
Block 1
RebidA opportunities
(R)
Block 2
Greenfield
opportunities
(N1)
Block 3
Sub-contracting /
Partnership opportunities
(N2)
Block 4
Market shaping /
Opportunity creation
(N3)
Block 5
Acquisition
(A)
Which block generates faster growth? Why?
Which block(s) generate disciplined growth? Why?
Growth blocks – Implementation
All rights reserved. This presentation or any portion thereof may not be reproduced or used in any manner whatsoever without the written permission from
Baachu Works Limited.
Source:
1. “Rebid” means opportunities re-tendered (held
by you or competition)
- 18. Copyright © 2020 by Baachu
18
The Opportunities
Outsourced Opportunities
− Around 11000 FM opportunities outsourced (£85* Billion) in UK
− 1250 opportunities expiring (next 12- 18 months) across both Public and Private
sectors
− 50% of these are between £500k to £5m annual revenue
− Insourcing and Integrator
Covid opportunities – Taskforce (safer environment)
− W curve (close offices, employee affected covid19)
− Disinfection and security - high growth
− Regular deep cleaning , swab testing
− Workplace planning and Virtual teams
− Mandatory floor markings and restriction in lifts (2 metres apart)
− Staggered breaks and open and close times
Reactional opportunities – people, property and company
Growth is harder to find and needs to be driven by new value propositions, advanced
technical solutions, and productivity gains for customers.
*Our Research
- 19. Copyright © 2020 by Baachu
19
The Opportunities
How quickly can companies restart and recreate ?
− 70 -80 contracts with size - Global $100 - $500m (HP, Kraft, Motorola, Shell, Pfizer)
− Major players will halt innovation and put back to core business and pull back from
marginal business worth millions. Based on Covid – 19 personal experience, some
companies will dig deep and align to values and purpose
− New opportunities in the market will be even more reliant on the resilience of the
companies and relationships
− Entrepreneur and SMEs space – have 18 month head start
Our Research
- 21. Copyright © 2020 by Baachu
Growth Strategy and Implementation
Where are we? Market
Analysis
What might the
future bring?
Boost &
Qualification of
Opportunities
How do we get
there?
Market Reach
Implementation
Scopeofthisstudy Customizedsolutions
Deep analysisof the market and
competition
Predictingthe futureof this market
Determinationof opportunityuniverse
Qualificationofgrowthopportunities
Sales & Marketing planning and
implementation
Strategic Planning, Market Monitoring
and Sales Ooptimization
Growth
Pipeline
Capture
Strategy
Go to Market
Implementation
Sales and
Marketing
Strategy
Market Sizing
- 25. Copyright © 2020 by Baachu
COVID-19 Will Hit Certain FM Contracts Harder Than Others
If there’s one thing that is certain right now, it’s that a recession is coming soon. By almost
all accounts, it looks like it will be the biggest hit since the 1930s when the stock market
collapsed in New York. However, identifying who will perish, or adapt and flourish, post
COVID-19 is still very much an impossible task
Digital projects that save money and lower operating costs would continue to attract
investment, but those that require capital may not be as popular
Reactional Opportunities Spotting, Gap filling and consolidation –
‒ Behaviour bites and breaks
‒ People planet profit
What kind world will emerge ?
There will be scars economy will have to live with
- 26. Copyright © 2020 by Baachu
The path ahead..
The UK FM market has rapidly fragmented and shifted, resulting in a growing polarisation
of ‘winners’ and ‘losers’ depending on providers’ market positions and their ability to
identify changing market dynamics and quickly adapt accordingly.
For those able to identify on-trend influences, clearly plan and implement exit strategy of
the isolation/furlough, exploiting market growth of 10% or above the next four years is a
realistic target. For those FM providers less able to recreate quickly, identify trends and
adapt, the number of pitfalls in the market continues to grow….
- 27. Copyright © 2020 by Baachu
Title
UNPREPARED
It's now more important than ever to remain positive, stay strong and build your future
self.
These are testing times for all of us. Do not give in to fear. Stay calm and serve those who
need you.
- 28. Copyright © 2020 by Baachu
Building Cleaning Services
A Dynamic Purchasing System (DPS) to buy a full range of internal and external building
cleaning services.
- 29. Copyright © 2020 by Baachu
BSA - Government on exiting lockdown and getting Britain going
What consideration needs to be given to sequencing as different parts of the economy begin
to operate?
What planning considerations are necessary to support the safe return of staff to the
workplace? For example, face masks, testing kits, re-engineered office spaces.
How can BSA members support the government to make exit as smooth as possible?
For the longer-term, how can government avoid a procurement bottleneck in H1 2021, as
all contracts in the public and private sector are being extended to around the New Year.
Also in the longer-term, what measures should the government be thinking about now to
spur confidence and stimulate the economy post-crisis? For example, conversations with
the sector on productivity, innovation and skills.
- 30. Copyright © 2020 by Baachu
30
At Baachu, we design and implement simple, sustainable and data driven outsourcing
solutions every day.
We have organized our team into:
Growth and Strategy
Learning and Development
Our culture is based on five values – capability, creativity, credibility, connections and
confidence. These values are the essence of how we behave, what we believe, what we expect,
who we are, what we deliver, and what we exist for.
Baskar Sundaram
Trusted Advisor to Facilities Service Providers
Website: www.baachurain.com and www.baachuscribble.com
Phone: 0203 574 8855
Mobile : 0771 819 3599
Email: baskar@baachu.com
- 31. Copyright © 2020 by Baachu
At Baachu, we design and implement simple, sustainable and data driven outsourcing solutions every
day.
Our vision is to be the world’s premier research driven, technology enabled outsourcing capability
partner achieving sustainable results for our customers, building fulfilling careers for our people and
earning a fair return on the value we deliver.
Our culture is based on five values – capability, creativity, credibility, connections and confidence. We
call our values “multipliers” - the combination of 5Cs that enables us to grow and serve as a powerful
integrated business. These values are the essence of how we behave, what we believe, what we expect,
who we are, what we deliver, and what we exist for.
Why Baachu?
Baachu’s solutions aim to integrate growth consulting, bespoke research, data analytics, subscription
products, bid and capture support to enable our clients achieve their goals.
Contact:
Baskar S Sundaram
Director, Baachu
11th Floor, Sussex Innovation, No.1
Croydon, 12-16 Addiscombe Rd,
Croydon CR0 0XT
0771 819 3599
020 818 13602
baskar@baachu.com
Notes de l'éditeur
- http://www.fm-world.co.uk/news/fm-industry-news/corporate-fm-outsourcing-sector-is-maturing/
http://www.prnewswire.com/news-releases/facilities-management-outsourcing---uk-2015-2019-analysis---market-to-improve--grow-by-3-300184811.html
http://www.amaresearch.co.uk/Facilities_Manag_Outsource_14s.html
http://www.bifm.org.uk/bifm/knowledge/research
- http://www.fm-world.co.uk/news/fm-industry-news/corporate-fm-outsourcing-sector-is-maturing/
http://www.prnewswire.com/news-releases/facilities-management-outsourcing---uk-2015-2019-analysis---market-to-improve--grow-by-3-300184811.html
http://www.amaresearch.co.uk/Facilities_Manag_Outsource_14s.html
http://www.bifm.org.uk/bifm/knowledge/research
- http://www.fm-world.co.uk/news/fm-industry-news/corporate-fm-outsourcing-sector-is-maturing/
http://www.prnewswire.com/news-releases/facilities-management-outsourcing---uk-2015-2019-analysis---market-to-improve--grow-by-3-300184811.html
http://www.amaresearch.co.uk/Facilities_Manag_Outsource_14s.html
http://www.bifm.org.uk/bifm/knowledge/research
- http://www.fm-world.co.uk/news/fm-industry-news/corporate-fm-outsourcing-sector-is-maturing/
http://www.prnewswire.com/news-releases/facilities-management-outsourcing---uk-2015-2019-analysis---market-to-improve--grow-by-3-300184811.html
http://www.amaresearch.co.uk/Facilities_Manag_Outsource_14s.html
http://www.bifm.org.uk/bifm/knowledge/research
- http://www.fm-world.co.uk/news/fm-industry-news/corporate-fm-outsourcing-sector-is-maturing/
http://www.prnewswire.com/news-releases/facilities-management-outsourcing---uk-2015-2019-analysis---market-to-improve--grow-by-3-300184811.html
http://www.amaresearch.co.uk/Facilities_Manag_Outsource_14s.html
http://www.bifm.org.uk/bifm/knowledge/research
- http://www.fm-world.co.uk/news/fm-industry-news/corporate-fm-outsourcing-sector-is-maturing/
http://www.prnewswire.com/news-releases/facilities-management-outsourcing---uk-2015-2019-analysis---market-to-improve--grow-by-3-300184811.html
http://www.amaresearch.co.uk/Facilities_Manag_Outsource_14s.html
http://www.bifm.org.uk/bifm/knowledge/research
- http://www.fm-world.co.uk/news/fm-industry-news/corporate-fm-outsourcing-sector-is-maturing/
http://www.prnewswire.com/news-releases/facilities-management-outsourcing---uk-2015-2019-analysis---market-to-improve--grow-by-3-300184811.html
http://www.amaresearch.co.uk/Facilities_Manag_Outsource_14s.html
http://www.bifm.org.uk/bifm/knowledge/research
- Enforcement Agency example
- http://www.fm-world.co.uk/news/fm-industry-news/corporate-fm-outsourcing-sector-is-maturing/
http://www.prnewswire.com/news-releases/facilities-management-outsourcing---uk-2015-2019-analysis---market-to-improve--grow-by-3-300184811.html
http://www.amaresearch.co.uk/Facilities_Manag_Outsource_14s.html
http://www.bifm.org.uk/bifm/knowledge/research