201818Apr

2017 Annual Report – Facilicom Group responds to growing market demand for integrated services

201818Apr

Last year Facilicom Group realised an increase in net profit from 18.1 million to 22.8 million euros (+26%). This is mostly due to the incidental result of the sale of Facilicom France in 2017. Adjusted for this divestment, the turnover rose slightly (+2%) to 1,243 million euros. Strategically, the company in particular invested in a more integrated service package, innovations and a more customer-oriented approach.

As in other years, there were clear differences between developments in different business units, each of which is confronted with a different market dynamic. For example, Facilicom Solutions turned a loss-making position in 2016 into a positive financial result in 2017. The successful merger of two Facilicom Solutions business units and Breijer Bouw en Installatie also contributed to the clearly improved result.

The merger of Prorest, originally Facilicom's own catering company, with Albron also produced positive financial results in the company restaurant segment, as well as in the catering and hospitality segments. The further integration of Albron into Facilicom Group is planned for 2019.

The Gom cleaning services division once again did well and with its increased turnover and profit figures managed to establish itself among the top 3 cleaning companies in the Netherlands.

Challenging market conditions

Facilicom is faced with challenging market conditions in various markets. As such, the disappointing results in the Trigion security branch, the Incluzio care division and Facilicom Belgium caused the operating result to drop by 7% to 24.7 million euros. While Trigion achieved its turnover target, the result was below expectations. The company is faced with various challenges, including the continued pressure on margins in the personal security segment. Incluzio is experiencing satisfactory growth, but is still not sufficiently contributing to profit due to start-up investments, for example in new small-scale care institutions (Compartijn).

Turnover and profit generated by the foreign divisions of Facilicom (including in the UK and Belgium) lagged expectations. Since the Board of Directors observed too little turnover and profit growth in France to be able to evolve towards a top position in the market, it was decided to sell this business unit to industry peer Atalian. As a result of this divestment, the group-wide number of employees dropped from 30,777 to 28,093. Adjusted for this divestment, the number of employees increased by 1.4%.

Growing market demand for integrated service delivery

2017 was a dynamic year for Facilicom in which the company introduced innovations on various fronts. These are related to the company's shift towards becoming a more integrated facilities services provider and the shift in focus from operational excellence to customer excellence. CEO Geert van de Laar: ‘We are increasingly focusing on increasing the interrelationship between various business units and are managing to derive increasingly more profit from sharing knowledge, experience and networks among divisions. As such we are responding to the growing market demand for integrated service delivery. In addition, more than ever we are carefully assessing the needs of our clients, so that we can develop a precisely customised offer of coherent targeted services on this basis. This is a shift in direction that requires a change in culture in multiple divisions.’

The company is going to focus even more on integrated 'hostmanship', whereby employees are trained to go the extra mile each day in terms of hospitality and communication, if necessary also beyond their own boundaries. Van de Laar: ‘Instead of just simply providing excellent cleaning, security and hospitality services, we are focusing on collaborating in creating an inspiring living environment for everyone.’ According to the company's top executive, this new 'why' is already having a demonstrable impact on customer satisfaction and the retention score. Over the past five years this score rose from 85 percent to a high of 94 percent in 2017.

Social employer

Due to the improved economy, Facilicom, just like other large employers, has difficulty finding staff for all of its divisions. By applying a joint job market policy and by adhering to good employment practices in all divisions, the company is trying to as much as possible counter this trend. In addition, the company is actively approaching new target groups, such as people with poor prospects on the job market. Van de Laar: ‘This is also part of our DNA, as a socially committed family business with a focus on social enterprise. The creation of Facilicom Buitengewoon (Exceptional): an organisation that provides people with poor prospects on the job market with a new perspective. The launch of the Facilicom Foundation for social goals is also a specific example of this.’

In 2017 Facilicom also worked hard on the company's energy policy (buildings and car fleet). The company aims to be the first large company in the Netherlands to be CO2-neutral by 2030. To achieve this goal, the company will clearly focus on the procurement of sustainably generated energy, in-house generated energy (wind turbines, solar parks, heating plants and thermal energy storage (TES)) and energy storage.

Continuous innovation

In 2017 a great deal of attention was also focused on initiating and implementing technology-driven and other innovations. The organisation in fact created a separate Innovation Board, with representation from all divisions, for this purpose. Specific examples of this are measuring the degree of dirt using sensors, the use of cleaning, monitoring and care robots, nano coating on kitchen equipment and big data analysis.

According to Van de Laar, despite a slight decrease in the operating result, Facilicom's financial position remains 'very solid' (solvency of 41%) and the group as a whole is exceptionally well-positioned to continue to grow on the basis of its broad palette of services. For the coming year, Facilicom will therefore strictly adhere to the direction it has set for itself. Namely, the further development of integrated services, driven by continuous innovation and with a strong focus on customer orientation. The company expects to further expand its strong market position this way.