SAZUN BLOG
Dezember 7, 2020

Industry Insight Facility Management

“Welcome to our latest Facility Management Industry Insight. We expect that the facility management industry will continue to grow rapidly in emerging markets and that tech will disrupt established business models in mature markets. For COVID-19, we see a negative impact in the short-term which will turn into a positive mid-term growth driver, due to increased hygiene sensitivity. Taking a look at recent transactions, we observe consolidation dynamics, focus on high margin segments and integration of value-add services.”

Market Insights
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Global Facility Management Market

Total FM Market 2020
Market share by segment (%)

Forecast 2020 – 2025
Growth by segment in EUR b

  • The global facility management (FM) market, comprising in-house FM and outsourced FM, was valued at EUR 1,075b and is expected to grow up to EUR 1,258b by 2025 with a CAGR of 3.2%. The global market owes its growth to ongoing urbanization, industrialization and an increased sensitivity for hygiene
  • The current split of in-house to outsourced services is approx. 50/50, but driven by the continuing outsourcing trend this split is expected to reach a 44/56 split by 2025. Integrated* FM, part of outsourced services, is expected to grow at a CAGR of 7.6% until 2025

Note:  *Integrated FM = full-service facility management

German Facility Management Market

Facility Management 2020
by segment (%)

Market Development
by segment in EUR b

Facility Management 2020
by client industry (%)

  • Even though growth slowed down after the exceptional year of 2017, the ongoing outsourcing trend presents optimal growth potential for professional players accompanied by extensive acquisition opportunities
  • Despite the home-office trend, fuelled by COVID-19, offices are still the leading client segment for German facility managers
  • Highly segmented market, dominated by the German “Mittelstand” with only five companies exceeding a turnover of EUR 800m

Sources: Global FM Market Report (2019), Globe News Wire (2020), Statista (2020), Der Facility Manager (2020)

Recent Trends in Facility Management

COVID-19 has a two folded impact on the facility management industry. On the one hand, many clients have been severely impacted by the lockdowns in 2020 – namely retailers, the tourism and leisure industry, etc. Consequently, this will also influence facility managers. Along with this impact, especially the main segment – office buildings – will be potentially impacted by the increasing home-office trend.
On the other hand, the sensitivity for a clean working environment got increased significantly accompanied by a boost of outsourced services in public and infrastructural buildings

Technical services keep heading the facility management trends. The most important reasons therefore are the higher need for technical knowledge and applications which increases entry barriers, the higher margins given the severe consequences of low-quality services and the growing automation of buildings. Given the resilience of these factors, we expect this trend to continue also in the mid-term

Big data’s ability to uncover trends and provide information will also impact the facility management industry. For example, Sodexo launched a partnership with Microsoft to provide customers with individualized experiences. In combination, facility management companies increasingly offer cloud-powered software-as-a-service products for analytics and remote management

Increasing automation and digitalized supervision and monitoring will shape the way how facility services are provided. For example, autonomous cleaners will take over tasks from personnel as automated systems become more affordable, never get sick and always provide the same high quality, especially for large scale areas. Additionally, monitoring and maintenance will be changed significantly by sensors and integrated measuring devices

Sources: Global FM Market Report (2018), CBRE Top trends (2018), Lünendonk (2019),
Fortune Business Insights (2020), Markets and Markets (2020)

M&A Insights: Facility Management
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Trading Multiple Comparables

EV/Revenue (NTM)
EV/EBITDA (NTM)

Facility management companies have shown stable multiples (NTM trading) over the past two years despite the COVID-19 crisis, with EBITDA multiples in the range of 7.0x – 9.0x and revenue multiples fluctuating at around 0.6x – 0.8x for listed companies

Note: The peer group is formed out of international stock-listed companies. For calculation purposes, two-year averages of consensus estimates on a next 12 months (NTM) basis were used


Key Performance Indicators

Selected Recent Transactions

Sources: MergerMarket (2020), Sazun Market Research (2020)

Want to know more?
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If you would like to learn more about the valuations and deals of your industry, the transaction mentioned above or generally our way of working, we would certainly be happy to demonstrate our m&a PLUS® principle in a confidential meeting.
Just get in touch and we will share our experience on how to grow businesses with long-lasting partnerships.

With passion for M&A,
Your SAZUN Team