UGL Unicco Investor Presentation

UGL Unicco Investor Presentation
April 1, 2008
George A. Keches
President
UGL Unicco
Today’s Discussion
•
Company overview
•
Delivery model
•
Company performance and market conditions
2
Company History
•
Founded in 1949 by Herb Kletjian in Cambridge, MA as a cleaning
company located near many of the local universities and colleges
•
Name was an acronym for UNIversity Cleaning COmpany
•
Since 1949, the Company has expanded its services, markets and
geographical locations
UNICCO is
founded by
Herb Kletjian in
Cambridge,
Massachusetts
1949
Steven
Kletjian
becomes
CEO of
UNICCO
1969
Expands
outside
Boston
area to
Hartford,
CT
Acquires
New
England
portfolio of
the
Facilities
Services
division of
Ogden
Corp.
1972
1991
Acquires the
Facilities
Services
division of
Ogden Corp.
Sells the
Security
Business;
Enters the
retail markets
with Simon
Property
Group as a
customer
Shared
Service
Center in
full
operation
1996
1998
2001
Merges its
Commercial
and Industrial
divisions into
one integrated
operating unit;
Launches
Launches
(SM)
GreenClean
myUNICCO.com
program
web based portal
2002
2004
Acquired by
United Group
Limited in
September
Name changed
to UGL Unicco
2007
3
UGL Unicco
•
Founded in 1949
•
A subsidiary of United Group Limited
•
Headquartered in Auburndale, Massachusetts
•
Regional and operational support offices throughout North America
•
Serving over 900 customers at more than 10,000 locations
•
18,000+ employees in North America
•
95% client retention rate
4
Integrated Facilities
Services®
Custodial Services
Operations and Maintenance
•
•
•
•
•
•
•
•
•
•
•
•
Janitorial/housekeeping
Green cleaning
Recycling
Porter/matron service
Clean rooms/high tech
Subcontract management
Facility maintenance/repair
HVAC maintenance/repair
Production maintenance
Warehouse service and inventory control
Construction project management
Elevator/escalator maintenance
Engineering
Administration
• Mechanical engineering
• Mail distribution
• Plant engineering
• Copy center managements
• Logistics
• Audio/visual services
• Space planning
• Secretarial/clerical services
• CMMS programs
Landscaping and Grounds
• Switchboard/reception
• Plant maintenance
• Lawn care and fertilization
• Flower-bed maintenance
• Snow removal
5
Broad Diversification by
Customer Served
•
•
•
•
UGL Unicco by Customer Market
Extensive and distinguished
list of customers
20% of the Fortune 100
companies
Top fifteen customers
average 15 years of service
(based on annual revenue)
Public Venue
5%
Other
6%
Education
12%
Government
5%
Real Estate*
17%
Retail
12%
No single customer
represents more than 11%
of the Company’s FY 2007
revenues
Financial & Insurance
14%
Manufacturing
29%
* Real Estate includes primarily multi-tenant office buildings
6
Representative Customers
Market
Manufacturing
Representative Customers
Cargill
Gulf Stream
Poly One
Honeywell
Real Estate
Equity Office
CBRE
Hines
Beacon Capital
Partners
Financial & Insurance
Fidelity
Investments
Bank of
America
All State
Cuna Mutual
Group
Retail
Education
Simon
Miami
University
TJX Companies
Harvard
University
Pyramid Mall
Drexel
The Macherich
Company
University of
Pennsylvania
Government
General Services
Administration
General
Accounting Office
Internal Revenue
Service
US Patent and
Trademark Office
Public Venue
Miami International
Airport
Gillette
Stadium
Museum of
Science
Air Canada
Center
7
Top Customers in Top
Markets
Finance & Insurance
Education
Services
Years a
Customer
Bank of America
IFS
8
“Large Insurance Company”
IFS
Janitorial
Customer Name
Fidelity
Services
Years a
Customer
University of Miami
Bundled
18
6
Harvard University
Bundled
18
29
Harvard Business School
Bundled
14
Customer Name
Manufacturing *
Real Estate
Services
Years a
Customer
Bridgestone
IFS
39
Cargill
IFS
Federal Express
IFS
Customer Name
Services
Years a
Customer
Equity
Janitorial
9
12
CB Richard Ellis
Janitorial
18
9
Hines
Janitorial
21
* Includes manufacturing,
utilities and transportation
Customer Name
Retail
Services
Years a
Customer
Simon Property Group
IFS
10
Macerich
IFS
3
Janitorial
11
Customer Name
General Growth Properties
Key: Bundled represents two services
IFS represents three or more services
8
Growth Strategies
•
Capitalize on emerging market trend towards integrated CRE/FM (E2E)
•
Capture significant growth opportunity in servicing customers with large
numbers of geographically dispersed locations
•
Maintain and enhance primary service offerings, especially O&M and
energy management
•
Continue to develop advanced, customer-driven technology solutions
•
Leverage industry leading position in sustainability initiatives
9
Solid Relationships With
Organized Labor
•
30 years of experience with unions
•
8,500 unionized employees across North America
•
134 collective bargaining agreements
•
Largest union – Service Employees International Union (SEIU)
– 6,900 employees
•
Currently, SEIU relationship is cooperative
10
Growth Strategies
•
Focus sales and marketing efforts on manufacturing, corporate
owners and colleges/universities
•
Expand existing customer relationships
– Provide bundled and integrated facilities service offerings
– Leverage our strong customer base
•
Grow geographically
– Both in underrepresented markets and Centers of Excellence
•
Increased focus on strategic relationships
11
UGL Unicco Delivery Model
12
Operating Model
•
Market positioning as ‘Solutions Provider’
•
Transition project management
•
Quality review assessments
•
Standardization (SOPs, Best Practices, PM
Scorecard)
•
Organizational and process development
•
Integrated technology platform
•
Consulting services
•
Value-added partners and alliances
13
Technical Services
•
Program development/deployment
–
–
•
Facilities condition assessment
–
•
Best practice repository and SOPs
Energy services
–
•
•
Structured/standardized methodology with defined measures
Subject matter experts (SMEs)
Green consulting services (LEED certifications)
Knowledge Center
–
•
Industry based facility services data mart
Startup and transition support
–
•
•
•
Facility/asset assessment process based on criticality coding
Benchmarking (internal/external)
–
•
Maintenance management process
Asset life cycle planning
Energy Star auditing and consulting
Indoor air quality management
Quality review audits
–
Standard internal technical/program compliance audits
14
Sustainability
•
•
Launched GreenClean© program mid 2004
GreenClean is a holistic approach to
services that takes into account:
– The health, safety, and environmental risks
of products and processes
– The function and activities of the facility and
occupants
– The cleaning, maintenance, and sanitation
needs of the facility
•
•
•
•
www.greencleaning.com
GreenClean Toolkit 2005
Executive appointed to LEED-EB Core
Committee of the U.S. Green Building
Council
Awarded the “2007 PR News Corporate
Social Responsibility Award for
Environmental Communications”
15
Process Focused Service
Delivery
•
Key business processes
– Work order management
(asset management)
‘Day in the life of a work-order’ example
– Safety management
– Quality management
– Supply chain management
– Capital planning and facilities
assessment
– Strategic account
management
– Transaction management
(back office)
– Performance based
management
16
Back Office Integration
•
Automated time reporting
•
Electronic procurement
•
Payable processing and
approval
•
Communications, SOPs, ‘Best
Practices’
•
Web services portal – employee
self service and financial
dashboards
Shared Service Center
Payroll
Accounts
Payable
Purchasing
Credit &
Collections
Office
Services
Billing
Subcontract
Management
Benefits
Customer
Help Desk
17
Safety Management
• Guiding principles
– Leadership: right attitude, working
safely, it’s the USafe Way
– Focus on the ‘middle line’ (loss
control), not simply the bottom line
– Lead safety as an operations (line)
function, not a staff function
– Measure and verify performance:
both lagging and leading indicator
metrics
– Proactive with safety SOPs and job
risk review process
– uTrac – proprietary safety
management system
18
Performance Measurements
19
Performance and Market Conditions
20
Business Fundamentals
•
Predictable, stable cash flows
•
Low CAPEX
•
No seasonality
•
High customer retention
21
Commercial Office Market Conditions –
Top Three UGL Unicco Cities
• Boston
– Rents increased 35% during 2007
– Vacancy rate (6%) lowest in seven years
– Net positive absorption for 13 consecutive quarters
• Washington, D.C.
– Rents increased by 10% during 2007
– Vacancy rate remained steady for the past five years at 6.6%
– Net positive absorption of 500,000 square feet
– “One of the most desirable markets worldwide”
• Toronto
– Rents increased by 6% during 2007
– Record low vacancy rate at 7%
– Net absorption in suburbs increased 700% in 2007
Source – CBRE MarketView, Fourth Quarter 2007
22
Impact of U.S. Market
Downturn
•
General
– Economic downturn fosters outsourcing opportunities
– Facilities need to be maintained in any economic climate
– No UGL Unicco business in single-family or multi-family residential
– Residential market is very different from commercial market
•
UGL Unicco Performance
– Historically has not been greatly effected by recessions
– Record new business with wins in virtually all vertical markets
– Record pipeline with strongly diversified opportunities
– No margin erosion
23
Pipeline as of March 3, 2008
UGL Unicco
Optic III (50% or better)
FY08 Vs. FY07
(In millions)
$200
$180
$177.0
$173.2
$160
$174.6
$172.4
$156.3
$147.9
$140
$120
$115.3
$112.2
$111.4
$100
$110.1
$106.5
$105.0
$89.1
$80
$83.5
$79.4
$72.5
$60.6
$60
$59.9
$48.6
$40
$29.6
$20
$Jul
Aug
Sep
Oct
Nov
Fiscal Year 2008
Dec
Jan
Feb
Mar
Apr
May
Jun
Fiscal Year 2007
24
Fiscal Year to Date New
Sales
UGL Unicco
Annualized New Business Wins
FY08 Vs FY07
(In millions)
$100
$90
$88.1
$80
$75.7
$70
$68.2
$66.3
$62.1
$59.8
$60
$53.6
$50.8
$50
$64.6
$47.8
$40
$40.2
$39.6
$32.9
$32.5
$30
$23.7
$20.3
$20
$10.5
$10
$14.5
$12.6
$9.2
$Jul
Aug
Sep
Oct
Nov
Dec
Fiscal Year 2008
Jan
Feb
Mar
Apr
May
Jun
Fiscal Year 2007
25
New Business Statistics
•
Annualized revenue
– 85% increase in new sales
through February 2008 over
same period FY 2007
New Business FY 2006, 2007 & 2008
(annualized revenue)
100.0
$88.1
90.0
80.0
70.0
$64.6
$59.8
– Broadly diversified market
penetration
60.0
50.0
$47.1
$47.8
40.0
30.0
20.0
10.0
0.0
2006
1
2
2007
YTD Q3
2008 3
Total Year
26
New Business by Customer
Market - Fiscal 2008
New Business by Customer Market
(annualized revenue)
Other
2%
Information/
Telecom
28%
Retail
15%
Real Estate
8%
Financial & Insurance
13%
Healthcare
6%
Public Venue
4%
Education
6%
Manufacturing
19%
27
New Business by Service
Type - Fiscal 2008
New Business by Service Type
(annualized revenue)
O&M
14%
Janitorial
31%
IFS
55%
28
New Business Started and
Awarded - Fiscal 2008
•
Contract value
New Business by Quarter
(contract value)
– $306M total new contracts
in FY 2008
– $89M in new business
currently scheduled to
start in fourth quarter
Q1
$36.2
Q4 *
$88.9
– Additional new business
awards are anticipated for
Q4
Q2
$117.2
Q3
$71.7
* Additional new business
awards are anticipated for Q4
Contract value equals annualized revenue multiplied by the number of years of the contract
29