i-fm 2018 TRENDS & OPPORTUNITIES Executive Summary

Transcription

1 i-fm 2018 TRENDS & OPPORTUNITIES Executive Summary An i-fm insight report Your Insight Partner

2 The UK FM market Insight: The pace of change in UK FM is the fastest that suppliers have ever seen Continued high levels of merger and acquisition activity Energy management services growing strongly Technology and data analytics increasingly central to service delivery models and to creating value-adding opportunities Source: Frost & Sullivan Companies must embrace service innovation value propositions if they are to remain profitable Source: Frost & Sullivan Market growth between and projected growth to 2020 Source: AMA Research Insight: The demand for outsourced bundled and Total Facilities Management services will continue to grow, but at reduced levels The market was valued at 19.3bn in 2016 and will pass 21bn in 2020 Key to future growth: maintaining a high standards of service while adding value via differentiated services Likely new development: the consolidation of facilities management contracts among central government departments Source: AMA Research i-fm 2018 Trends and Opportunities Report - Executive Summary 2

3 Market trends Insight: M&A is down from peak levels but remains a significant market feature M&E, building management systems and compliance together account for around half of all recent transactions Cleaning deals are on the up, with a near doubling in volumes in 2016, a trend that continues into 2017 Competition for quality businesses driving innovation in FM is driving attractive valuations for vendors. Insight: i-fm Top 50 list of major FM service providers represents a total turnover of more than 16.8bn, with total employment well above 430,000 Both figures are down from 2016, reflecting the headwinds blowing through the marketplace. Total turnover has declined about 5% and total employment is down about 2% Mergers and acquisitions by sector i-fm 2018 Trends and Opportunities Report - Executive Summary 3

4 The business climate Insight: 62% of respondents describe the facilities management business environment as positive or very positive 40% expect the business climate to improve; just over half (51%) expect it to remain the same There is less optimism than last year, when the figures were 49% and 46% respectively Management worries about competition in the market (45%), recruiting/retaining staff (23%), skills shortages (22%). Source: 2017 Facilities Management Business Confidence Monitor More than half (57%) believe the economy will be the biggest challenge to operational performance i-fm 2018 Trends and Opportunities Report - Executive Summary 4

5 Contract trends Insight: Sector breakdown - commercial deals dominate: 51% of 1000 contracts analysed were agreements forged in the commercial client sector. Education and local government were the next most common sectors Insight: Services breakdown - plenty of life left in single-service deals: The majority (57%) of contracts were for two or more services. But more than two-fifths were for a single service, the most common being catering followed by cleaning Insight: Contract term - the threeyear deal lives on: The length of contracts varies substantially but the traditional three-year agreement is still very much with us, accounting for 40% of the contracts analysed i-fm 2018 Trends and Opportunities Report - Executive Summary 5

6 Sector issues & trends Insight: Technology The next growth spur in FM will come from technology and the Internet of Things, offering progressive operators and their customers the ability to offer far greater efficiency. People are looking for work environments that embrace technology to enable seamless, collaborative, healthy and comfortable working experiences. Organisations, and their FMs, need to act on this. Source: Memoor Insight: Disruption Service providers may soon be challenged by new competitors who offer customers a cheaper flexible service. Insight: FM and marketing strategy FM has a huge role to play in creating attractive workplaces and helping to win the war for talent. A strong brand is invaluable as the battle for customers intensifies. Source: ISS The lesson of the annual Brands Survey is that those in FM who do not effectively promote themselves to potential clients and the wider industry risk missing out on the opportunities in an expanding sector. Insight: People Diversity and inclusion need to be embedded at the heart of the business strategy and driven throughout the organisation. Source: Sodexo Insight: Brexit Brexit views: 27% described the impact of the UK s withdrawal from the EU as positive or very positive ; 52% believe Brexit will have negative or very negative impact. Source: 2017 FM BCM In some cases, the prospect of Brexit is driving increased appetite for investment in the UK, while in others it means a pause on major M&A decisions until the outcome becomes more certain. Inight: Market headwinds and other business challenges External factors the general election, Brexit, economic uncertainty only partially explain FM company performance below expectations over recent years. Key actions for service providers include: More disciplined bidding Making operational excellence repeatable Implementing longer term account development plans Source: OC&C i-fm 2018 Trends and Opportunities Report - Executive Summary 6

7 The annual i-fm Trends & Opportunities report takes an in-depth look at the FM sector, exploring the size and structure of the market, highlighting recent developments that illustrate both current issues and ongoing trends, and identifying some of the major themes that will be important over the near to mid-term. Read the full i-fm 2018 Trends & Opportunities report here: Your Insight Partner