The European Integrated Facilities

Management Services Markets

Frost & Sullivanwww.frost.com

Email: paul.alexander@frost.com

Interactive Analyst Briefing29 May 2002

Agenda

• Industrial Services At Frost & Sullivan

• I-FM Market Overview• Forecasts/National Trends• Market Challenges for I-FM Providers• Future Predictions• Conclusion• Forthcoming FM End-User Study• Questions and Answers

F&S Structure

R efrigeration MarketsAir C onditioningR esidentia l Boilers

H V A C

Lighting Equipm entBatteries Markets

L ig h tin g / B a tte ries

FM /I-FMIndustria l C EM

In d u s tria l S ervices

Build ing Autom ationSecurity

C on tro ls

F R O S T & S U L L IV A NB U IL D IN G TE C H N O L O G IE S U N IT

F&S Publications• Existing:• Contract Energy Management (CEM) #B004 Sept. 2001• Industrial Water Outsourcing #B081 March

2002• Integrated Facilities Management (I-FM) #3997 Sept. 2002• Industrial Waste Management Services #B005 Nov. 2002• Building Controls and Services #B061 May 2002

• Future Titles• End-User I-FM #B066 Aug. 2002• Technical FM - TBA• FM Service Procurement - TBA• White Collar FM - TBA• CEM End-User - TBA

FM Competitive Structure

Forecasts

National Trends

Integrated Facilities Management Services Market: Future Growth Trends by GeographicRegion, 2001-2007

Challenge 1-2 Years 3-4 Years 5-6 Years

United Kingdom High High Medium

Germany Medium Medium Medium

France Medium High High

Italy High High Medium

Scandinavia Medium Medium Medium

Benelux High High Medium

Alpine Medium Medium Medium

Rest-of-Europe Low Low Medium

Key: Low 0-5% annual growthMedium 5-10% annual growthHigh 10%+ annual growth

Source: Frost & Sullivan

Market Challenges for Integrated-FM Providers

The Future for Integrated FM in Europe

• Growth• Much depends on the UK• Globalisation will dictate development• Trade Union relationships will be of

paramount importance• Outsourcing will increase, but how much

of this will be integrated?• Local FM providers for local companies,

multinational providers for multinational companies

Summary conclusion

• I-FM is a market of unrivaled potential• Huge variation by country• Massive struggle for providers to

overcome the diverse cultural issues surrounding FM in Europe

• An increasingly competitive environment• Currently I-FM is in a difficult transition

stage in trying to move effectively from the theoretical ‘Total’ outsource model, to actual, workable solutions

FM End User Study

• Highlights– 150-200 Interviews– Identification of current outsourcing situation– Trends by Sector and by Nation– Includes UK, Germany, France, Italy,

Scandinavia and Benelux– Outline discrepancies– Identification of opportunities– Company ranking in terms of performance and

perception– Future trends and strategic analysis

Progress so far...

• 50 Interviews completed• Trends already becoming clear:

– Desire to outsource more services– Desire to increase the geographic scope of

contracts– Desire to minimise number of contracts, often

to just one– Low awareness of I-FM providers– Skepticism of I-FM providers ability– Feeling that I-FM market is being dishonest,

and is still ‘all hype, and little substance’

Questions and Answers