Facility Management

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Andreas Erdpresser

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Andreas Erdpresser is Managing Director of Interconnection in Bratislava. He has extensive industry knowledge and is an expert in market intelligence, industry and product trends, as well as in innovation management. Before his time at Interconnection, Andreas Erdpresser worked at IBM, Kraft Foods (Mondelez) in Product Change Management, and at Management Consulting Partners in implementation consulting for industrial customers. He studied Economics at the JKU (Linz, Austria) and at the University of Western Ontario (Richard Ivey Business School, Ontario, Canada).

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E-mail:erdpresser@interconnectionconsulting.com

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IC Market Tracking in Europe 2019

IC Market Tracking

IC Market Tracking Facility Services in Germany, Austria and Switzerland 2018

IC Market Tracking

IC Market Tracking Facility Service in CEE 2018

IC Market Tracking

IC Market Tracking Facility Services in Western Europe

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IC News

Outsourcing Galvanizes Facility Services

The market for external facility services in Austria will increase by 4.5% in 2018. The boom in office building services in particular is behind the industry’s significant growth in market volume. This trend will lead to a further increase in external real estate services in the future as well. The industry is thus expected to see an average annual increase of 4.6% to the year 2021

Offices Stepping on the Gas

The market for external facility management services will increase to nearly EUR 6.7 billion by 2021, thereby overtaking internal services to an ever greater degree. There are several reasons for this. Companies themselves promote outsourcing as they focus on their core business across all their divisions. New technologies require new types of maintenance and care, even if only a portion of the providers offer these options. With an increase of 6.2%, the customer segment office buildings was the driving force behind external real estate services in 2017. Such momentum is particularly striking since the segment clearly underperformed in the previous years. As a result of this vitality, offices have not only been able to catch up with industry’s rate of growth, but have actually overtaken it (6.2% to 4.6%).

Technical Services Catching Up

Once again, technical services outperformed all others, notching an increase of 6.3%. The tremendous need can be explained by both the continued outsourcing of services and the increase in production, trade, and logistics in the booming economy. Over the long term, technical services will see revenue growth at the expense of the currently dominant infrastructural services. The developments of infrastructural services’ sub-segments were quite varied. While office cleaning/janitorial grew strongly (+4.6%), catering managed a plus of only 3.2%. Growth in security, the other high-volume sub-segment, was also a sub-par 3.3%. “Since 2016, contracts have been expiring that were made during the refugee crisis,” explains Tobias Stickelberger, author of the study. Yet the general need for security has by no means diminished among customers. However, job qualifications have become more stringent, and so not every job can be carried out as requested because the staff is lacking, Stickelberger explains. The largest sub-segment in infrastructure management continues to be commercial cleaning, with a volume of EUR 1.7 billion, followed by security (EUR 652 million) and catering (EUR 608 million). The share of infrastructure services currently stands at 61.0%, ahead of technical services (32.7%) and entrepreneurial services (6.4%).

 

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Outsourcing is the Turbo Engine for Facility Services in Germany

On account of the ongoing outsourcing of real estate services, growth in the external facility services sector will continue to far exceed inflation in the future. A new study by Interconnection Consulting foresees an average annual growth of 4.3% until 2021. For the first time, turnover in technical facility services in Germany was higher than that of infrastructural facility services.

Technical Services on the Rise

The overall market for external facility services in Germany succeeded in breaking the EUR 60 billion mark for the first time (EUR 60.3 billion). Since 2013, infrastructural and technical services in Germany have been roughly equal. However, on account of lower growth in 2017, infrastructural services are, for the first time, less valuable than technical services, which saw an increase of 5.6% in the previous year. Technological advances make infrastructure maintenance of a given property less labor-intensive and thus cheaper, and yet providers cannot just conjure up a slew of new services. Such is not the case in technical services, explains Tobias Stickelberger, author of the study. “Despite general deindustrialization, the advancement in the mechanization of buildings and facilities ends up generating increased revenue in this sector.”

Outsourcing the Driving Force Behind External Services

The market for external facility management services of all providers will expand to over EUR 71 billion by 2021. Companies tend to focus on their core business especially during difficult economic times and therefore outsource facility services. So it is not surprising that the outsourcing rate in 2017 was 56.87%. By comparison, the rate was under 50% in 2012. Overall, the external market increased by 4.7%, but the overall market for facility management (external plus internal) only by 2.1%.

Bitter Price War

The customer segment industry witnessed a growth of 5.0%, making it the leading segment ahead of transport at 5.1% and trade at 4.8%. 16.5% of all services were generated in the newly formed German states and Berlin, whereby the vitality (+4.3%) appears to be flattening again somewhat. Facility services providers complain of shorter contracts and the frequent need to renegotiate prices. “Even well-known providers are hardly able to distinguish themselves enough from the pack to make the price of secondary importance,” explains Stickelberger. Customers who advertise each maintenance group individually and negotiate strictly according to price are common. The top five companies hold 9.4% of the total market. The top ten have a share of 14.86%.

 

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External Facility Services Dominate British Market

The British market for facility management is expected to grow 3.1% this year, with market volume reaching EUR 130.8 billion by year’s end. The trend towards outsourcing has largely been responsible for fueling the growth. According to a new study by Interconnection Consulting, external facility management is currently growing by 4.0% in Great Britain, while internal services are declining.

 

Infrastructure Services On Top

External facility management had a total market share of 78.5% in 2017, a number that is expected to increase. By 2021, Interconnection is anticipating a share of 80.7% for outsourced services in the facility management sector. Infrastructure services represents the largest product group, with a share of 52.2%, followed by technical services and commercial services with 12.3%. Within infrastructure services, cleaning is by far the largest segment, with a share of 35%, followed by security services (27.8%) and catering (18.6%).

 

Low Market Concentration

Compared to other branches, the market concentration is still relatively low. The top ten companies have a share of 14.5%. The most important providers of facility management services in the British market are Mitie, Interserve, Sodexo, Engie, Servest, Compass Group, Serco, and G4S.

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Professional Facility Management on the Rise in the CEE Countries

The market for facility management in Central and Eastern Europe (Poland, the Czech Republic, Slovakia, Hungary) is currently benefiting from solid economic trends. In fact, the overall market for external facility management is set to increase 6.6% in 2018 over the previous year. According to a study by Interconnection Consulting, annual growth in this sector to 2021 is expected to be 6.8%.

 

In 2017, external services in facility management in the four countries studied garnered one-third of the market. This share is expected to continue to rise sharply in the upcoming years. Compared to the annual growth rate of 6.8% in external facility management, internal facility management will grow at only a rate of 1.2%. “It’s the recent investments by the automotive industry, such as BMW in Hungary and Jaguar in Slovakia, and also the commitment by international companies in other sectors that have been promoting the development of professional facility management,” explains Jan Hudak, author of the study.

 

Technical Services on the Fast Track

Infrastructure services represents the largest product group, garnering the lion’s share of the market (49.6%). Within infrastructure services, cleaning is the largest service, with a share of 35.5%, following by security (32.7%). The security sector is currently undergoing a tremendous technological shift on account of new monitoring methods that use technology instead of personnel. The second-largest product group is technical services, with a share of 37.6%, followed by commercial services with 12.9%. These two sectors will also be experiencing strong growth in the future since professional management will be required to accommodate the boom in construction.

 

Trade the #1 Customer Group

The leading customer group is trade, with a share of 29.5%, followed by industry (28.1%). Trade is actually expected to further increase its share in the upcoming years, whereas industry will be facing a slight decline. Strong growth is also forecast for sports & entertainment and hotels. “The government is also becoming a more vital customer as it attempts to professionalize and economize its services through outsourcing,” Hudak explains.

 

Fragmented Market

The market for facility management in the four countries analyzed is extremely fragmented. Over 40,000 companies are in the facility management business, which explains the very low level of market concentration. The top ten companies have a mere 7.8% share of the market. The leading companies are ISS, Impel, Atalian, Securitas, G4s, Sodexo, Compass Group, Mitie, Elior, Servest, Bilfinger, and Strabag.

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Die gute Entwicklung in der österreichischen Facility Services Landschaft verfestigt sich weiterhin aufgrund der guten Wirtschaftsentwicklung. 2017 konnten landesweit 4,1% Umsatzwachstum in den Servicetypen Gebäudereinigung, Sicherheit, technische Services und Catering erzielt werden. Vor allem das Bundesland Tirol stieg zum Wachstumskaiser empor, wie die neue Regionalstudie, Win!Local-Facility Services in Österreich von Interconnection Consulting zeigt.

Die Regionalstudie Win!Local will den Entscheidern im Facility-Service fundierte Antworten auf die Fragen geben: Wo setze ich meine Ressourcen am besten ein? Auf welche Regionen soll ich meinen Fokus legen? Welche Kundensegmente bieten das größte Potential? Dafür hat Interconnection Consulting nun alle neun Bundesländer bis hinunter zur Bezirksebene genau unter die Lupe genommen.

Wien ist Kernmarkt für Facility Services

Tirol hat mit einem Plus von 5,0% am gesamten Facility-Markt die Nase vorn, was das Wachstum betrifft. Dahinter folgen Wien, Vorarlberg und Niederösterreich mit jeweils einem Wachstum von 4,7%. Insgesamt hat die Bundeshauptstadt mit einem Anteil von rund einem Drittel am Gesamtmarkt eine dominante Rolle am österreichischen Facility-Service-Markt inne. Mit etwa 1,4 Mrd. Euro Umsatz ist Wien als Markt für Facility Services, die klare Nummer Eins vor Oberösterreich mit 935 Mio. Euro. „In puncto Sicherheit, Infrastruktur und Leistbarkeit überzeugt die Bundeshauptstadt, so dass viele internationale Investoren dem Wiener Immobilienmarkt vertrauen“, erklärt Viorica-Maria Jeler, Autorin der Studie. Den größten Anstieg in Wien erwartet Interconnection im Sicherheitssegment mit 5,7%, gefolgt vom Reinigungssegment mit 5,1%.

Bundeshauptstädte profitieren von Neubautätigkeit

Zusätzlich erfreuen sich insbesondere die Bundeslandeshauptstädte vom neuen Schwung in der Neubautätigkeit von Nichtwohngebäuden. Das wirkt sich auch auf die verschiedenen Segmente des Facility Services aus. Im Reinigungssegment legte Innsbruck im vergangenen Jahr um 6,6% zu, Sankt Pölten gar um 7,9%. Im Bereich der Sicherheit ist Sankt Pölten mit einem Plus von 30,7% sogar an zweiter Stelle aller Bezirke österreichweit, nur geschlagen von Tamsweg (+43,7%). Auch Graz ist in diesem Bereich mit einem Plus von 12,4% im Spitzenfeld zu finden. Die Landeshauptstädte Innsbruck, Graz und Sankt Pölten sind es auch, die im Bereich Technische Services ganz vorne liegen. Im Catering sind es Innsbruck (+6,6%) und die Stadt Salzburg (+5,3%), die ganz vorne mitmischen, wenn es ums Wachstum geht.

Kundensegmente wachsen stabil

Im Kundenbereich zeigt sich, dass der Bereich Krankenhäuser ein stabiles Wachstum in allen Bundesländern aufweist. Wien weist in diesem Kundensegment mit einem Plus von 4,5% den größten Anstieg auf. Bei den Bürogebäuden liegt die Steiermark mit einem Wachstum von 5,2% im vergangenen Jahr in Front vor Tirol mit 4,7%. Beide Bundesländer profitieren von der starken Neubautätigkeit in den Landeshauptstädten Graz und Innsbruck. Bei den Industrie- und Lagergebäuden gehört Tulln aber auch Klagenfurt zu den schlechtesten Performern, wie die Studie zeigt.

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Deutscher Holzfertigbau Verband

Interconnection provides us with the prefabricated house study a plausible and veritable data basis for the analysis of the actual situation in the prefabricated house market and beyond for the assessment of the future market development. We are happy to use this interpreted data for our lobbying and everyday work.

Thomas Schäfer (Managing Director, Deutscher Holzfertigbau-Verband)

ELK

The prefabricated housing study by Interconnection Consulting shows a real picture of the actual market situation and forms a valuable basis for our strategic decisions.

Gerhard Schuller (CFO ELK)

Epson

EPSON is satisfied with the Interconnection's way of communication with the market and with clients. EPSON is also appriciate the Interconnection's continuous work trying to aim the report to be at the higher level. As a result, EPSON rely on Interconnection data, for the market of POS Printers and Systems.

T.Murakami (Brand Management, Seiko Epson Corporation)

Saint Gobain

Long experience and deep understanding of the construciton industry markets make up the quality of the IC studies. Interconnection Consulting is a constant companion concerning the assessment of markets and helpful for decision-making.

Bernd Blümmers (Directeur General, Saint-Gobain Solar Systems, Central Europe, Aachen)

Salamander

Interconnection Consulting reports deliver a worthfull external perspective and are so a good contrast with regards to our internal market point of views.

Pedro Posada (CEO Salamander Industrial Products Spain)

Scandinavian Business Seating

The IC Report gives a very good overview of the Western European office furniture market, in a well-structured way. The data is helpful to better understand the market developments and drivers.

Beatrice Sotelo (Director Business Development , Scandinavian Business Seating)

Schneider Electric

Under a short time constraint, Interconnection was able to deliver an outstanding study that exceeded my expectation in terms of quality and market breadth. I highly recommend Interconnection to anyone in need of market research.

Jeff Canterberry (Director of Strategy and M&A, Schneider Electric)

Österreichs Personaldienstleister

The sales management tool ZAIS has become indispensable for many Austrian temporary staffing providers for fast and correct sales management decisions. A tailor-made online cockpit provides comprehensive monthly figures and data on temporary work and the labor market in Austria, while at the same time impressing with its overview and intuitive user guidance. Interconnection Consulting has consider individually to all user needs during development process and also convinces with fast response times during operation.

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Admonter

At the IC Impulsworkhop "Sales Optimization" we appreciate not only the practical relevance, but also the eloquent language and the perfect rhetoric. The most important benefit for our company was the sales pipeline. Adrian Capellarie (Head of Sales Admonter Holzindustrie)

Gaulhofer

I appreciate on the forum "Impulsworkshop Vertriebsoptimierung" the practical relevance of Peter Berger linked with his practical examples. I also liked the sovereign presentation style. The most important benefit was for me, on the one hand refresh of methods and also the sales management tools that were shown. Ing. Dietmar Hammer (Head of Product Management Gaulhofer)

Kontron

The most important benefit of the Impulsworkshop "sales optimization" was in my view the procedure of the definition of strengths and the entire sales process. Mr. Berger is very competent and professional. Fabian Freund (Sales Manager, Kontron Austria)

Sodexo

When developing new market strategies, Interconnection is a trusted source we always come back to. Christian Frey (Marketing Manager CS DACH)

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