June 2020 / FacilitateMagazine.com
Taster edition
S PAC I N G
Taking on the enormous responsibility
SIGNIFICANT of welcoming building users back
CHALLENGES
to a workplace fundamentally altered
FAC I LITATE JUNE 2020
CONTENTS COVID-1 9 A NA LYS I S
KNOW LE DGE
6 NEW RE ALITIE S The post-lockdown return to work means new regimes for FM operations
44 ALLIED TO DIVERSITY Workplace and facilities managers have a vital role as social leaders
8 P REPAR ATI ON S FOR CHAN G E Trepidation is set to continue as staff travel to and from the workplace
45 PERFORMANCE ANXIETY Interviews can be nerve-racking – Kate Walker Miles has tips for keeping calm
10 B EST PR AC TICE Industry experts offer a thematic analysis of return-to-work guides
46 SUSTAINABLE CHOICES Sustainable catering options might cost more but they are the right choice
COVER: GETTY
12 B REAT HE E AS IE R Good ventilation plays a critical role in reducing viral transmission
COM M UNI TY
27 IWF M POLICY PIPE LINE FMs have the chance to help to shift the focus from cost to value metrics
14 SH I FTI NG PRE FE RE N CE S More remote working may be demanded as employees suffer corporate social distancing solutions
3 6 PE R SPE C TIV E S The four most interesting and insightful opinions on FM this month
16 I N TH E FAST-TR ACK E D L AN E The government is making cycling and walking a big part of transport policy
3 9 A BIT A BOU T YOU Christina Voigt, workplace manager at Penguin Random House UK
18 A CLEAN S HE E T The Covid-19 pandemic has brought a new impetus to cleaning operations
40 JU NE @ IWF M The people and projects currently informing IWFM activity
20 RETH I NKIN G CATE RIN G Contract caterers are having to reassess how they go about food delivery
41 C A LL S TO AC T ION The events and training options that deserve your attention
WHAT WE DO
Facilitate – the magazine and online news content resource of the Institute of Workplace and Facilities Management (IWFM) – keeps IWFM members and others up-to-date on all workplace and facilities management issues, ensuring you are informed of the latest developments and thinking.
50 PASSPORT CONTROL Building passports are a new answer to an old building management problem 50 IN THE SPOTLIGHT Don’t base LED lighting decisions on price over suitability of application
LONG FORM
28
MADE TO MEASURE Aerospace and automotive organisations using trailblazing advanced manufacturing processes need flexibility to scale up and down production as required – and a facilities management function that can flex with them.
– your award winning magazine
Facilitate is the current holder of the Best Magazine (10-32,000 members) award, as voted for by judges at the Association Excellence Awards, a body which assesses the media brands of trade bodies, professional membership organisations and associations. We have an ambitious programme for 2020 and look
ce forward to continuing to produce content that meets your needs.. ase We always work ahead, so please e contact us if you have an angle g. or format we should be pursuing. Got a story? email editorial @facilitatemagazine.com
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LE A D E R
COMMENTS
MA RTI N R E A D
L INDA HAUSM ANIS
Advancing the agenda In a crisis, it is natural for our focus to be monopolised by the immediate challenges at hand; however, there is a risk that we might lose sight of other challenges that also demand action before it is too late. The environment is one such challenge and its importance was highlighted on 13 May when we celebrated World FM Day. IWFM had a programme of activity to mark the occasion, including the launch of our sustainability hub: a web page hosting a variety of research, insight, guidance, inspiration, resources, and more to help our profession tackle the global crises of climate change and environmental damage. Please do take a look at: iwfm.org.uk/insight/ sustainability.html The hub will also host the results of the IWFM Sustainability Survey 2020, which, thanks to the engagement of our members, gives unique insight into sustainability across the full breadth of the workplace and facilities management sector. The survey is due to go live towards the end of June, so keep an eye on your inboxes and IWFM’s other channels to take part. Workplace and facilities management professionals are uniquely placed to make a difference in the sustainability agenda. A crisis like Covid-19 is devastating in many ways, especially the tragic losses we are seeing; it is also an opportunity to change how we do things and advance the sustainability agenda for the benefit of all, now and in the future. Business as usual is no longer an option. We must be the change the world needs and it will be this generation’s responsibility to rebuild businesses, economies and societies. We must build back better.
LINDA HAUSMANIS is CEO of the IWFM
FROM THE EDITOR
T
hey say necessity is the mother of invention, and there’s no doubting the creative endeavour so many workplace and facilities managers have engaged in over recent weeks. And now, as government guidance loosens, thoughts turn from mitigation measures to wider reappraisals. For office-based organisations, the questions are revolutionary. What volume of office space will we need? What has changed irrevocably? Will we ever go back to the way things were before? Pre-Covid, the enthusiasm for remote working, powered by video calls and communication tools, could be offset by a preference for old-school line-ofsight management. The coronavirus has surely enlightened business to remote working’s genuine viability. As for returning to the office, intractable issues include how to manage washroom queues and (ironically) how to police all those carefully crafted yet temporarily redundant collaboration spaces. Suggested solutions are legion, as evidenced in our coverage this month. Beyond an initial focus on distancing, will output-based management, anathema to so many before March, survive the powerful countervailing effects of human nature? Twenty years’ development of devices and infrastructure has made the grand concept of ‘the death of distance’ – proposed in the 1990s as a principal benefit of the nascent internet - more achievable than ever. Yet human nature continues to work against it. Remote working may suit established teams and workflows, but the initial spark of business, its broader ebb and flow, demands physical interaction. The office also empowers serendipitous interaction which, whether experienced operationally or strategically, is the business world’s ‘dark matter’ – impossible to explain yet fundamental to how business is conducted. Just as the internet did not lead to the death of the exhibition, conference or other form of business meeting place, so the coronavirus will not kill off offices. My view? Changing business structures will ultimately see existing workspace occupied by more and smaller organisations. Whatever the outcome, this great workplace experiment has, in fact, only just begun.
“THE BROADER EBB AND FLOW OF BUSINESS DEMANDS PHYSICAL INTERACTION”
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MARTIN READ is the editor of Facilitate magazine
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F RO NT D E S K A N A LY S I S
Building Cleaning Space Work Management
Analysis
“The guides are dominant in looking at the physical spaces we will return to. Buildings are referred to the most in terms of how we manage building systems, operations, safety and equipment. The guides frequently refer to different types of building operations, systems and maintenance, such as HVAC and water cooler tests. An interesting feature was references regarding the provision of disposable equipment and the impact this will have on increasing building waste, predominantly from use of PPE, but also disposable cups and other single-use items to minimise the risk of spreading the virus. Cleaning was identified as a theme in its own right due to its high frequency of references across the guides. Specific guidance is given regarding how we disinfect buildings specifically with hightouch areas and equipment; how we raise awareness of good hygiene practices, and implementing advanced cleaning regimes with more frequent deep cleaning. This enhancement will inevitably have an impact on increased costs and budgeting. Building space is another dominant theme across the guides. Much of this relates to distancing, with some guides using the term ‘social distancing’ whilst others preferring ‘physical distancing’ as being more appropriate in terms of how we use common areas such as
building, cleaning, and space, these issues lack granularity in their guidance. “The management of our workplace is considered, more from the perspective of ensuring requirements are met that adhere to standards and protocols that have been issued by government, with references also around change management and the ability for organisations to develop return to work plans and change management strategies. There is also emphasis placed around risk management in terms of contingency planning and scenario planning.
Summary
“Given the urgency to produce guidance on returning to work, it is perhaps
WORKPLACE S
RETURN TO WORK GUIDES: A THEMATIC ANALYSIS
PHOTOGRAPHY: ISTOCK
“Eight return to work guides were selected from different CRE and FM providers. The guides were analysed using qualitative data analysis software to establish the main themes and relationships emerging, ranked here by the weight given to them:
lifts, receptions, and toilets. Distancing will have a major impact on the utilisation of building space and the need to implement occupancy and usage plans, whilst the configuration of floor plans and rooms will be repurposed and redesigned in many cases. Themes regarding the ways in which we work and how we manage our organisations and culture are identified. References are made in the guides regarding how employees transition back in to the workplace, in terms of their arrangements, work patterns, needs, health, specifically being able to undertake regular health checks, and references about working from home. However, unlike the themes regarding
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PHOTOGRAPHY: XXXXXXXXXX
A
s government advice pivots to a gradual reopening of workplaces, service providers rushed to advise workplace managers on best practice. Here, Liverpool John Moore University’s Dr Matthew Tucker and Dr Hannah Wilson evaluate eight such guides to identify recurring themes.
F RO NT D E S K A N A LY S I S
R ET H INKING C AT E RING
CATERING IN THE TIME OF COVID-19
A
s lockdown eases, food service providers are rethinking how they can continue to deliver catering to workplaces. Some of the main ways that providers are adapting include at-yourdesk delivery, takeaways, packed lunches, ‘pop-up’ pods for a grab-and-go option and dine-in settings but using disposable trays and plates. (Plant-based compostable food service packaging company, Vegware has even introduced a guide to eco-packaging for socially distanced catering.) Francois Gautreaux, managing director of caterer Bartlett Mitchell, told Facilitate that one measure has been to start using an app in its restaurants. He said the firm has been collaborating with UK Hospitality, and had held virtual round table discussions with its clients, consultants, suppliers, teams and other key stakeholders since the crisis first hit. Gautreaux said: “To help tackle issues around social distancing, queuing, ordering etc, we’ve introduced a wide range of measures. These include click-and-collect, virtual queuing, desk deliveries and cashless payments. “We have introduced new queuing systems with floor markings and improved signage for where queuing is required; we have mobilised multiple service points to remove the need for customers to unnecessarily travel to other floors, using lifts and congregating in the same space.” Service window openings have also been lengthened to cater for customers who are on varying shift patterns. “We have also tried to add value for customers that do have to go into the office by offering take-
home meal kits and grocery items.” Bartlett Mitchell has also assembled distanced seating areas, removing many chairs. Seating set-up now enables a minimum two-metre distancing alongside more frequent sanitising of surfaces. It has also removed buffet-style selfservice and distanced its back-of-house production into zones so that teams have adequate space to move around them. Gautreaux said the company has also “massively increased cleaning frequency and training, and introduced new procedures for decanting and disinfecting deliveries to avoid cross contamination on products coming into our kitchens”. The measures “not only ensure that we are doing what we can to keep our clients’ employees safe, but it also helps to minimise any risk to our own teams”. Gautreaux said that while measures put forward by government seemed “onerous”, some of the guidance was decided in consultation with the sector and had been expected. But he added that the guidelines were “a baseline for organisations to work to” and “clearly every business will have their own process of implementation”. From a space planning and efficiency
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EATING AT WORK
CATERING SOLUTIONS
‘Al desko’ delivery: Food brought to clients at their desks, pre-packaged and in a bag or carry pack. Pop-up pods for grab-and-go: Instead of one large restaurant, smaller pods cater for different areas of the site. Units may include hot drinks, snacks, and a small chiller and hot cabinet for grab-and-go. Takeaway: A highly practical solution for distancing, incorporating contactless collection. Carriers and cutlery packs are a must. Packed lunches: Many food service settings are finding packed lunches the simplest solution. Sitting in: QSR and dine-in contract catering settings are seeing attractive disposable trays and plates as a good temporary solution. Delivery: Practical and attractive packaging is key to customer W W W. I W F Mhow .O RG K experience, including the.U food looks after delivery.
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F RO NT D E S K A N A LY S I S
SAFETY CHECKLIST
PREPARING TEAMS
SE C U RIT Y
WHO IS GUARDING THE GUARDS?
PHOTOGRAPHY: ALAMY
S
hocking figures from the Office of National Statistics (ONS) showing that male security guards are among those with the highest death rates from Covid-19 reveal just how vital and exposed the profession is. As Mike Bullock, CEO of Corps Security, said: “It is one of the few facilities functions which will have had a presence on site throughout lockdown and security teams will play a key role in getting facilities ready for the return to work.” Martin Reed, managing director of Incentive FM, said: “Good employers shouldn’t be putting any members of staff at risk in the workplace, regardless of what they do.” He ensures that his staff are given face masks and gloves so they are safe on the job. Abbey Petkar of Magenta Security Services points out that security guards have continued to work during the crisis and the industry has a proportionally higher level of black, Asian and minority ethnic males. “These two factors mean we have a statistically more at-risk
workforce demographic putting themselves in higher-risk situations. The ONS report also contains a number of caveats around the data that must also be considered.” The report, for example, does not take into consideration who a guard might be living with and their occupations, residential status or other factors that could increase risk. He added: “Security guards are ultimately part of a frontline, people-facing workforce. “Yes, they are more likely to come into contact with other people, they are more likely to handle goods due to postal deliveries etc, and are more likely to be the first person someone speaks to when they walk on to commercial premises – but we can protect them if we make it our priority, ’ said Petkar. “Professional security companies need to consider all of these factors when putting in place plans, policies and subsequent equipment to protect our workforce. PPE is high on the list, but so are the many other measures that must be considered to ensure our industry is not used as a poster statistic.” A spokeswoman for the Security Industry Authority said the body would “continue to speak with government and businesses on this matter, and will take whatever action it is legally allowed to take that will contribute to the safety of those working in private security”.
Mike Bullock from Corps Plan said managers of security teams should take the following actions. Provide security staff with appropriate PPE such as gloves and masks, particularly if they will be handling visitors’ bags when they’re scanned. Install transparent screens in front of security officers at reception/concierge desks. Place graphics on the floor to show your employees and visitors where to go – and how to guarantee social distancing. Change the check-in/ security procedures to reduce human contact. This could include removing the need for access cards for visitors or ensuring that the passes are disinfected between each use – and work with the cleaning team to ensure that turnstiles, gates, and reception counters together with any scanning equipment are regularly cleaned and disinfected. Introduce antibacterial gel in reception areas and explore what technology you can use to keep people safe. Use thermal imaging cameras to check for abnormally high human temperatures – a symptom of Covid-19 – may become widespread. Decide whether to opt for fixed or hand-held cameras. Install occupancy counters in reception areas; these are good for ensuring that a building doesn’t exceed its planned capacity as buildings are reoccupied. Decide how to adapt emergency evacuations with social distancing in mind. In the event of a fire, is social distancing important or is the fire the greater threat? Finally, before people move back in, carry out a full security risk assessment to make sure that the building is safe WW W.and I W Fsecure. M .O RG .U K
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Ten of the top stories from Facilitate online last month
NEWSMAKERS
F RO NT D E S K TOP STORIES
ASFP hails building safety bill
The Association for Specialist Fire Protection (ASFP) has welcomed the government’s plans to reform building safety and undertake a major review of the building regulations. The ASFP also welcomes proposals to establish new regulators for building safety and for construction products, and a new construction products standards committee. tinyurl.com/FacMag0620-ASFP
22/04 22/04
Firms can do more to cut emissions during lockdown
Sustainability experts from energy data company Carbon Intelligence found a 16 per cent average reduction in building energy use, with the worst-performing 10 per cent of buildings achieving 3 per cent reduction and the top 10 per cent achieving 54 per cent reduction – equating to 5,600kg CO2e/week of carbon emissions. tinyurl.com/FacMag0620-CO2
UK’s Big Nine office markets can weather the storm
Hand dryers unlikely to spread coronavirus
The risk of contracting Covid-19 should be no greater in the washroom than in any other communal space, says independent microbiologist Dr David Webber. He confirms that Covid-19 is spread by droplet transmission and contact with contaminated surfaces. tinyurl.com/FacMag0620-hand-dryer
27/04 30/04
UKGBC publishes social value measurement guide
The UK Green Building Council (UKGBC) has published guidance, Delivering Social Value: Measurement, to demystify the practice of measuring the social value of buildings and places. The guide considers the relevance of social value metrics to practitioners acting at each stage of the project life cycle. tinyurl.com/FacMag0620-UKGBC
70% of bosses call remote working the future
Confidential waste policies – documents possessed by any company that can expose information about suppliers, customers, or employees – could be breached during fullscale remote working, according to UK waste collection agency BusinessWaste.co.uk. tinyurl.com/FacMag0620-confidential
05/05
06/05
Covid-19 blow shrinks demand for managed services
The annual value of outsourcing deals in the EMEA region rose almost 4 per cent in the first quarter of 2020, but would have grown at a higher rate had the impact of Covid-19 not hit the market in March, says technology research and advisory firm Information Services Group (ISG). tinyurl.com/FacMag0620-EMEA
Seven out of 10 business owners believe that remote working will be the future even after the Covid-19 pandemic has been brought under control. Research by consultancy firm Hoxby also shows that 71 per cent of bosses have been “pleasantly surprised” by productivity levels of staff working from home. tinyurl.com/FacMag0620-remote
01/05
06/05
Remote working could pose security risk
Take-up across the ‘Big Nine’ office markets (Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Manchester and Newcastle) fell to 1.96 million square feet in Q1 2020 – 8 per cent below the quarterly average, says real estate adviser Avison Young. tinyurl.com/FacMag0620-big-nine
Fire brigade FM reports profile boost during crisis
Laura Birnbaum, head of property at London Fire Brigade (LFB) has spoken of the organisation’s property and FM service’s higher profile because of its adaptation to the Covid-19 crisis. The former IWFM manager of year said she and her team had sought to capitalise on this new awareness. tinyurl.com/FacMag0620-Birnbaum
Lucy Black to chair new FM group
12/05
Lucy Black, head of facilities and student accommodation at the University of Plymouth and IWFM board NED, will chair a new strategic FM group of the Association of University Directors of Estates (AUDE). The group will enable collaboration on FM issues between members and aims to be the authority on FM in higher education. tinyurl.com/FacMag0620-AUDE
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14/05
l @Facilitate_Mag f FacilitateMagazine 25
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LO N G FO R M
F M I N A D VA N C E D M A N U FA C T U R I N G
MADE TO
Aerospace and automotive organisations using trailblazing advanced manufacturing processes need flexibility to scale up and down production as required – and a facilities management function that can similarly flex with them. Bradford Keen explores the vital role FM plays in this high-tech market
The role of FM in advanced manufacturing “Advanced manufacturing doesn’t always take place in what you’d conventionally see as advanced environments,” says Andy Candelent, chair of the IWFM’s Manufacturing Working Group and head of facilities at Leadec, a provider of technical services for the automotive and manufacturing industries. Yet important distinctions do arise in advanced manufacturing settings, and increasingly it is a sector of industry that is helping to drive innovation in FM itself. Consider power supply and mechanical and electrical maintenance. Much depends on the scope of contract and whether it covers exclusively building infrastructure or extends to the site’s production functionality itself. Carlo Alloni, managing director of technical services at Mitie, says: “Perhaps most important is that all operations must be managed to fit in around the production and machinery on site. Often these are incredibly complex pieces of kit that operate within very specific environmental parameters.
AMRC/Cymru is an advanced manufacturing research hub backed by the Welsh Government, local authorities and private enterprises
M
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LO N G FO R M
F M I N A D VA N C E D M A N U FA C T U R I N G
“Whereas in a typical office the temperature could fall by one degree and nobody would notice, in a manufacturing plant this could mean equipment stops working and production put on hold. Humidity, air quality, and lighting all need to be considered too. Maintaining HVAC systems is incredibly important in these environments. Preserving uptime is vital, as anything which prevents operational ability not only costs time but ultimately money.”
People management
FM services tend to be “more specialised” in advanced manufacturing, Alloni explains. “For example, waste management involves working with industrial waste to ensure it is safe for disposal – a role we hire industrial chemists for. Similarly, energy management is a huge cost for these clients. Ensuring that energy use is as efficient as possible, with financial and carbon savings, is vital.”
Measuring efficiency
A second key factor is people management – and particularly shift patterns. “These manufacturing sites are often running near-constantly,” says Alloni, “with some operating 23 hours a day, six-and-a-half days a week. This means that our FM teams must work around these same shifts and often have very small windows of time to provide critical cleaning and maintenance. “Similarly, the work that is taking place is constantly changing. On a daily basis the product going down a manufacturing line might change and volumes, shift times, all might be altered. As FM suppliers, we must flex with this seamlessly. We must also ensure that the quality of execution for tasks on site is incredibly high – seemingly small errors can have a big impact in this environment.”
An important measurement criterion in these environments is overall equipment effectiveness (OEE), by which reliability is calculated based on availability versus total available production time. “That factor can be critical because manufacturers are often producing bespoke specifications or build-ondemand orders, which are enabled by IoT and advanced manufacturing techniques. But this also means there is often little or no stock to feed customer orders in the event of any breakdowns or production failure,” according to Candelent. “They may frame the OEE rate by, for instance, regular plans for preventative maintenance activity with some reactive capability on standby. Use of sensors and remote monitoring allows the FM to deliver more agile and less invasive approaches to M&E maintenance.”
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K N OW H OW EXPL AINER
ROBERT MILLAR is operations director at Blue Apple Catering
H
istorically, for contract caterers the sustainable option has usually been decided on a cost basis. These days clients don’t need much convincing to implement responsible, sustainable choices. Many initiatives are being driven by clients and their staff from within, which makes the task of implementation and uptake even more seamless. But if your clients need a push in the sustainable direction, consider these following two arguments.
1
It will engage millennials
Many employees from the millennial generation want to work for a company that cares about the environment. When their employer takes their ideas on board, they are more satisfied employees. Additionally, a company focusing on the three Ps of sustainability – people, planet and profits – can use this to attract and retain talent.
2
costs. Stainless steel or bamboo alternatives are quick wins to improve sustainable offerings. Removing single-use pots for salad, fruit pieces and protein items and replace with Kilner-style jars, which need to be returned. Make this known to end users through highly visible countertop messaging.
tasked with reducing use of disposables by 50 per cent. After we took a client on a research trip to a recycling plant to show the sheer volume of waste and the time and resource it takes to separate waste, the company decided to issue each of its employees (more than 700) with a coffee KeepCup, a reusable soup cup and a jute-style bag. Although this was a large initial investment, 14 months later the company had covered its investment with the disposable cost saving alone.
Choose sustainability and communicate your choice
Once clients have been persuaded of the value of sustainable catering choices, make sure to communicate this choice to end users. It is critical as part of a broader educational strategy. We recently engaged with Dr Lily Da Gama, founder of The Food Waste Doctor and an expert in how organisations can better manage the environmental balance between food and packaging waste levels. Her advice on engaging with consumers is particularly noteworthy. “I would advise utilising every form of contact you
Single-use plastics
Replacing single-use plastic bottled water with glass or cans is becoming more popular. They are recyclable with close to zero loss of properties, which keeps the material within the circular economy and out of general waste streams if recycled correctly. There are costs associated with missing stainless steel cutlery but businesses should factor this into operational
have. Depending on the type of business you run you can use your website, your menus, your posters, your serving staff,” says Da Gama. “The key is to start a dialogue. Explain why you’re making this a priority and not only does it help educate your customers and hopefully helps the planet, but it also showcases your environmental credentials!” How you address areas that can be affected, as we have seen in the case of catering operations, can influence how your staff view your business, their levels of satisfaction, how your own CSR initiatives develop and how your customers view you as a viable business partner. Act now, and the benefits you will experience will be good for people, planet and profits alike.
Sustainable catering ties into their CSR
In addition to inspiring your employees, making your own operations as sustainable as possible feeds directly into corporate social responsibility efforts. This can give you the edge with potential customers looking to do business with companies with an eye on sustainability. There are several examples within our own estate where making subtle changes has had a big impact.
COMPA N Y CATE R I N G
SUSTAINABLE CHOICES Sustainable catering options might be more expensive but customers TO ACCESS THE can be convinced that FULL VERSION it’s the right choice to OF FACILITATE MAGAZINE, JOIN IWFM make, says Robert Millar
Reusable coffee mugs
Increasingly clients are moving to provide merchandised, reusable travel mugs for coffee, for instance, with a fine on the tariff for those not using them, and for one client we were
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INSIDE 56 57 58 59 61
Covid-19: Service sector impacts Veolia fires up virus disinfection services Call for urgent uptake of e-cargo bikes Vacherin says growth will mitigate impact of Covid-19 Comment: Some thrive, most dive in wake of virus
SUPPLY SIDE O U TS O U RC E D S E RV I CE MA RK E T N E WS
FINANC IAL RE SULTS
ISS ‘TO COME OUT STRONGER’ DESPITE TOLL OF COVID-19 W O R D S : H ER P R EE T K AU R G R E WA L
F
acilities services provider ISS has reported that its revenue increased by 2.4 per cent year-on-year in Q1 2020, showing solid organic growth of 4.1 per cent. The group said organic growth was driven in particular by key account organic growth of 9.1 per cent and strong demand for deep-cleaning and disinfection services.
As the Covid-19 crisis has unfolded, ISS has seen “an increasing impact on our operations over the last weeks” and “the estimated negative organic growth in April was around 20 per cent” while “in isolation, the estimated negative organic growth impact from Covid-19 was around 25 per cent with an operating profit drop-through of around 25 per cent”, the company said.
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As a result of the sudden shortterm reduction in activity, ISS said it has been focusing on cost control and cash generation. It is adjusting its cost base and investments and has had to furlough or lay off many employees. Total readily available liquidity was strong at above DKK 11 billion (£1.3 billion) at 30 April (20 March 2020 announcement: above DKK 8 billion) positively impacted since its update on 20 March 2020 by additional undrawn liquidity facilities of DKK 2.2 billion and broadly neutral free cash flow. The group has no financial covenants and no short-term debt maturities. Jeff Gravenhorst, group CEO, ISS A/S, said: “Our number one priority is the health and safety of our employees and our customers. Our solid organic growth, our ability to adapt swiftly to unprecedented circumstances, as well as the central role we take in the business continuity plans of our customers are all the result of our strategic focus towards key accounts. “The awareness and perception of the role of facility services and the work of our employees have changed significantly. With our international reach, flexible costs base and solid liquidity, W ISS WisW.well I W Fpositioned M .O RG .UtoK come out as an even stronger company.”
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S U P P LY S I D E
BUSINESS NEWS
GRAEME DAVIES writes for Investors Chronicle
Weeks to view
CO M M E NTARY
SOME THRIVE, MOST DIVE IN WAKE OF VIRUS
T
he breadth and pace of economic slowdown in the wake of the surge of Covid-19 cases in March was sharper than almost anything seen in living memory. As the government ordered the public to stay at home and closed down all but the most essential business activities, companies scrambled to react. Many FM companies shut down operations while some were in the unenviable position of having to rapidly adapt working practices as workers have become frontline operatives servicing hospitals and other facilities tasked with coping in the wake of the pandemic. The financial impact of the crisis is still almost impossible to quantify, although the early signs are that the economy shrank dramatically in March and concern across the corporate world about the hit to profits is illustrated by the number of companies cancelling dividend payments, withdrawing financial forecasts and imposing pay cuts across their workforces – something already seen at the likes of Rentokil, Mears and Serco. Some companies have been able to offer investors a little comfort on public sector contracts, but private sector business prospects are far more uncertain. The government signalled in early May that it intends to begin the process of bringing the economy back online but uncertainty remains about how long this will take, or if further lockdowns will be required should infections spike again. And the return to work in the private sector is likely to thrust yet more FM employees onto the frontline in alien office environments dominated by social distancing rules. The government’s furlough scheme has been extended to October, which suggests that there is little expectation of a return to anything like normality this side of Christmas. Almost every FM company saw its valuation take a pounding. But those that have been able to reassure investors on contracts and their capital position, such as Serco, have bounced back more strongly than others. As thoughts start to turn to the ‘new normal’ and a return to more widespread economic activity, which companies could bounce back quickest? Those with considerable public sector exposure and also international reach could be viewed as more likely to weather the storm. Some smaller operators could struggle to survive, leaving those with stronger foundations well placed to pick up market share in their wake. And companies with specialised skills suited to the zeitgeist such as Rentokil, with its specialisation in hygiene and pest control, could see demand for their services thrive. Rentokil has also developed an enviable reputation for growing through acquisition and could find itself in a strong position to consolidate and grow its position across its many global markets by picking off weakened competitors.
“THE FINANCIAL IMPACT OF THE CRISIS IS STILL ALMOST IMPOSSIBLE TO QUANTIFY”
GRAEME DAVIES newsdesk@facilitatemagazine.com
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FacilitateMagazine.com / June 2020
A month of mixed fortunes Week commencing 30 Mar
Safety and regulatory compliance services firm Marlowe was among many to report on the coronavirus effect as it hit hard in March. But Marlowe said that although some of its operations were affected, some services were deemed to be key to the coronavirus response effort, which would protect its performance to an extent. The firm also confirmed the sale of the non-core activities within its air quality operation for up to £7 million.
Week commencing 6 Apr
G4S allayed some investor concerns about the coronavirus crisis by updating on the process of cleaving out and selling its cash-handling businesses to The Brinks Company. The deal places a total enterprise value of £727 million on the operations, of which expected net cash proceeds to G4S are expected to be £670 million. The group said it had received just over half the sale proceeds, with the balance expected during 2H 2020. The cash injection helped swell G4S’s cash position, which at the end of 2019 stood at £1.3 billion in cash and unused credit facilities.
Week commencing 13 Apr
Rentokil Initial said it had enjoyed a strong first quarter to the year in which ongoing revenues rose by over 7 per cent at constant exchange rates. Much of this success came before the coronavirus moved from China into other countries, although the global nature of Rentokil’s operations meant it was affected in China, Hong Kong and South Korea. But in most of its jurisdictions its services have been deemed essential and have continued to operate. Management’s recovery plan is under way.
Week commencing 20 Apr
Smart Metering Systems (SMS), which specialises in installing and managing carbon reduction assets, revealed the completion of a deal to sell a minority of its large estate of meter assets to investment group Equitix for a total of £291 million, of which £282 million in cash is coming to the firm. This has reversed a debt position to leave SMS with £45 million in the bank and borrowing facilities of £300 million to support its next growth phase. But that phase has been put on hold due to W W W. I W FasMmost .O RG K the Covid-19 crisis, of .U its installation operations were suspended in March.
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