….. To Growth

Paul ThompsonBusiness Development Director ISS UK

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Last link in the value chain – Business Growth

Agenda

Defining Business Growth

Group Commercial Agenda

International Growth

UK Growth

4

-2,0%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1,0%

-1,5%

5,3%

6,3%

1,5%

3,0%

0,6%

9,0%

7,5%

6,0%5,5%

Business Growth – The ISS Sales Challenge

How are we going to reach the ambitious sales growth?

2013

=

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Business Growth (Price Adjusted Net Growth)Business Growth (Price Adjusted Net Growth)

New Sales New Sales + Increases Increases Decreases Price Adj. Price Adj. Losses - + -

Maximize Maximize Maximize MinimizeMinimize

5

Qualified leadsQualified Opportunities Proposal

presented

Lead

Contract wonC/B

D/C E/D F/E

FEDCB

Prospects

A

B/A

Fuelling the Portfolio

Fuelling the Portfolio

+ Once-Only Jobs & Projects

==

Organic Growth

Organic Growth

Business Growth - The Mathematical Definition

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Business Growth?

What is business growth and what is having a real impact on the growth of the company?

Is it…

Question: How would you define your top business growth initiative and area of focus?

…Please use 2 min to come up with your view!

Who do we grow with

Solution Selling

Consultative

Strategic and Tactical

Convenience

Business Chemistry

Volume Selling

Speed

Tactical and Operational

Unit Price

Geographic fit

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Both streams need a process , We call it NOSE

What are the Strategic considerations

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Property Strategy• Grow, stabilise,

retract

Workplace Strategy• Driven by Asset• Driven by

consumer

Outsourcing Strategy• Outsource• Out task• Partnering

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The ISS Sales Process Framework forms the basis of the Sales Excellence Program

Planning Processes

NOSE . An example

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Imagine a place where ....

• All FM staff were recognised and rewarded and subsequently feted for their achievements, where all were engaged with the common purpose to deliver a workplace which becomes a renowned destination and where all staff can articulate their role in fulfilling the objective and openly discuss their own career plan.

• Imagine a contract where there was financial transparency down to the front line with consistent and meaningful management information as a tool for continuous improvement, where the time from decision to execution was halved and all managers both knew and cared for their staff and their customers. Imagine how it could be if all staff acted as one team owning the tactical and operational delivery of your strategy and all felt responsible for the entire built environment irrespective of their role within it.

• Imagine a building where service excellence and customer delight were the common mantra and your business regions could compare their performance in healthy competition whilst being proud to showcase their best practise to others. Imagine a partner who anticipated your needs and executed delivery without you even having to ask.

• This is the Barclays we envision, this is an ISS ‘World of Service’

Barclays Vision and Purpose

Agenda

Defining Business Growth

Group Commercial Agenda

International Growth

UK Growth

141414

Commercial culture

Newsales

Cross-/upselling Retention

Commercial StrategyCustomer Segmentation

Global Positioning

Global

Region

Country

Organic growth

Delivery culture excellence

Business processes

Serviceconcepts

Operating margin

Value creation

Sustainable Profitable Organic Growth The ISS Commercial Value Creation Model and Strategic Direction

Serviceproduct

bestpractise

Best practicedeployment

Operating efficiencyConsistent Delivery

1515

Commercial Agenda supporting the ISS Way

Sustainable Profitable OrganicGrowth

Segmentation &Value Proposition

Creation

Customer Contract Lifecycle Processes

ISS BusinessSupport Tools

Sales Excellence

Sales Support, Marketing & Positioning

CustomerKnowledge

Global CorporateClients Contracts

ServiceCulture

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2

3

4

5

6

7

8

Agenda

Defining Business Growth

Group Commercial Agenda

International Growth

UK Growth

The International IFM Market

Unprecedented Market Activity

Demand for international deals is outstripping market capacity

Established sectors like Finance and IT and Pharma are leading the way

Emerging sectors in manufacturing especially Food and Drink are becoming more popular. Retail showing interest.

As Large Bluechips become global a mid market is emerging

Regional new business around DKK 200m to 400m

More current customers are looking at regionalisation (defensive strategy implications)

Those sectors who have looked at regional are now going Global

Still only a few customers really being strategic in their outsourcing

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Market remains strong and will continue to grow

IFS: Integrated Facility Services

Self-delivery

Which FM Model?

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FM: Facility Management

FMProviders

Subcontractor

Subcontractor

Subcontractor

Subcontractor

Self-delivery at ISS

ISS delivers a vast majority (typically >80%) of services with own employees which enables us to bring tangible benefits to our customers:

• Efficiency and consistency through excellence programs and standards

• Flexibility and scalability through efficient supply/demand planning across portfolio

• Risk reduction and brand protection through ensured regulatory compliance

• Transparency and convenience through single-point-of-contact

When used, our sub-contractors are secured to be fully compliant with all ISS and client quality requirements so that we can take full responsibility for the delivery chain.

vs.

Agenda

Defining Business Growth

Group Commercial Agenda

International Growth

UK Growth

UK Market

Maturing market, with more sophisticated buyers

Buying consolidation continuing, with procurement bundles growing larger and more complex

Customers have been under tremendous cost pressure over last few years

Direct delivery, integration, technology and sustainability all continuing trends

International dimension becoming more important forcing some UK only players to increasingly focus on public sector

Highly competitive market place

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UK competitor analysis

Updated slide

Describe key competitors’ strengths, weaknesses andstrategic direction e.g. focus customer segments

In regard to Revenue, Organic Growth and EBITA please use last fiscal year figures

Remember:What are your key takeaways from the competitor analysis?

Updated slide

Describe key competitors’ strengths, weaknesses andstrategic direction e.g. focus customer segments

In regard to Revenue, Organic Growth and EBITA please use last fiscal year figures

Remember:What are your key takeaways from the competitor analysis?

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Strengths Weaknesses Strategic direction Rev. (currency)

Org. Growth

EBITA %

• Offer single and multi service portfolio

• Well established brand & reputation

• Sales & marketing capability• Skills in Carbon & Energy mgt

• UK only footprint• Operations dont always deliver• Limited catering capability

(Creative Events)• Strategic sector entry at high

margin risk eg Healthcare

• Focus on Integrated Services• Strengthen facility and

property capability• Total UK coverage• M&E/Carbon offering• International dilemma,

homecare offering

£1,410m(FY Mar 12)- FM

Only

6.2% 6.36%

• Long established catering base

• Strong International IFS offer• Quality of market

communications & PR• Senior relationship focus &

customer retention

• Service support reduced to clients

• Reduced emphasis on client needs

• Major group focus• Reliance on multi service• Strengthening in global IFS

E700mHY Feb

13

(2.6%) 4.71%

• Global footprint• Long established catering

base• Focus on multinational

contracts through foodservice• Strength of procurement

• No real bundled hard/soft focus or TFM capability

• Seen as recovering from period of overgrowth

• Strong focus on margin

• Focus on emerging markets• Developing support services

through acq’n (VSG, ICM)• Delivering cost efficiencies in

mature markets• Moving into Global IFS

£6,243mFY Sep

12 (UK&I, Europe)

(0.7%) 6.36%

• International spread• Senior relationship focus &

customer retention• Increasing multi-service

Remain acquisitive

• Heavy reliance on manned guarding, prisons and border control business

• Short term reputation damage from Olympics

• Reliance on outsourcing of security

• Enhance cash services• Total UK coverage• UK the FS R&D Lab• Wide security focus

£1,312mFY Dec

12 – Secure

Solutions

8% 8.8%

• Single Service Cleaning• Well established reputation• Strong UK presence• Systems Investment

• Limited Service Lines• Limited Geography• Low Margins & lack of access

to funds

• UK seen as mature• Focus on Indian Development £721m

FY Mar 12

3.2% 1.71%

• National Coverage• Scope of Services – self

delivery• Aggressive bidding –

accepting of low margins

• Pest Control & Cleaning perception

• Lack of Investment• Weakness in delivery

• Likely to be broken up£592mFY Dec

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6.9% 4.95%

Market facing communications strategy

Continue to build ISS brand presence and recognition through:

Positioning ISS in terms of thought leadership in FM

Effective PR through industry and wider press channels

ISS UK web site

Investment in social media channels

Tactical response to brand threats

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Commercial and sales strategy

Retention as the foundation for growth

Build the pipeline for new customers through segmentation, targeting and proactive engagement

Build the pipeline with existing customers through targeting and proactive engagement

Convert more opportunities by improving our sales process through the Sales Excellence Programme

Alignment with SPF and effective use of CRM

Creation of bid support Centre of Excellence

Consistent sales training for all key UK sales personnel based on NOSE & VP principles

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Commercial culture

Newsales

Cross-/upselling Retention

Commercial StrategyCustomer Segmentation

Global Positioning

Organic growth

Our key differentiators

Depth of delivery coverage across many countries

Developing customer centred solutions

Choosing the right model for the customer

Putting people at the heart of the business

Creating lasting change

Business intelligence in practice

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Questions?

….. To Growth

Thank you for your attention!

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Global competitor analysis

Strategic direction Operating model

• Building self-delivery IFM capabilities within focus services (mainly business critical technical services) in key markets (US and UK)

• Partnership strategy in other markets and for service areas they have no wish to self-perform (e.g. soft and non-business critical hard services)

• “Corenet Model” with predominately managing agent in FM

• RE and project focused• Driven by ability to leverage

relationship into real estate deals

• Similar to CBRE. Very strong particular in Asia. Now taking this model to EMEA. Are pursuing a more “old fashioned” partnership strategy – they will partner with several subcontractors but without creating real strategic partnerships

• New strategy to move towards Self perform• Strong Tier 1 mgt , Strong in APAC

• “Corenet Model” with predominately managing agent in FM

• RE and project focused• Driven by ability to leverage

relationship into real estate deals

• Largest FM company (revenue exceeding USD 5 billion). Main focus on hard services capabilities. Most soft services are outsourced (e.g. cleaning, but not e.g. receptions etc)

• Adding RE services to their delivery model• Energy focus trying to leverage sister divisions • Business relationship with Compass• Losing business and not winning new

• FM • Engineering, maintenance and

process focused• Linked to product or other core service

offering• Service team structure when site

based critical mass

• Strong focus on increasing delivery capabilities outside food services. Have invested heavily in US, UK, APAC and LAR where they today self-deliver many facility services

• Sodexo have invested in developing centralised processes and systems to service global customers and a Corporate Clients organisation . KAM’s on targeted customers• Focus on Pharma sector been successful in number of global bids

• Food / other services• Service delivery increasingly based

on integrated model• Looking to acquire Hard FM service

capability

• Still mainly focus on food services but have won significant IFM contract (Shell Europe outside Nordic and Benelux). Their IFM focus is within petrochemical segment (off-shore and remote sites)

• Business relationship with JCI• Sleeping giant

• Food / other services• Service delivery increasingly based on

integrated model• Acquiring new service sets

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