The European Integrated Facilities Management Services Markets Interactive Analyst Briefing 29 May 2002 Frost & Sullivan www.frost.com Email: paul.alexander@frost.com

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

F&S Publications Existing: Future Titles 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

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