Growth areas in building technology

What exactly is building technology and how has the segment changed?

Building technology is now a very broad term that includes technical building equipment, i.e. all technical installations in the areas of electrical, sanitary, heating, ventilation and cooling technology. As the individually installed product groups and, above all, the requirements for networking them are becoming ever more complex, building services engineering is increasingly being given a technology and software spin. In larger commercial buildings in particular, but also in residential and public buildings, building automation (the building reacts independently to the environment, e.g. indoor or outdoor temperature) is already standard. Building Intelligence now enables the building to react to people and the environment depending on the floor or room. This requires intelligent system devices and products, intelligent sensors and actuators, but above all programmed and increasingly self-learning building networks. The installation and product world is therefore changing considerably, presenting installers, dealers and manufacturers with increasingly complex challenges.

Which sub-segments are particularly exciting?

The segments in which technological complexity and the resulting lack of personnel are particularly pronounced are highly dynamic. Lean processes, automation, focussing on the key value creation steps and skills as well as strategically oriented investments are required here. Examples include system integrators, sensor and actuator manufacturers, module and interim builders or the entire sub-segment of complex heating/ventilation/air conditioning/sanitary installations (HVAC) - from system device manufacturers to specialised planning and installation companies. It therefore makes sense to define the strategy and the associated measures clearly and comprehensibly very quickly after the takeover and to implement them pragmatically. Clear risks are the excessive demands placed on an organisation that has historically not focused on "efficiency" and the excessive complexity caused by add-on acquisitions made too quickly. As a result, the profitability potential threatens to evaporate right at the beginning of the equity story.

Where do attractive opportunities arise for investors?

Many manufacturers or installation companies are now faced with the question of whether and how to invest in order to actively shape the competition of the future. New processes, skills or regions need to be established or developed, but the expertise is often lacking internally. This is where the process and strategy-related experience and capital of investors can help to overcome the next growth threshold. In the construction industry in particular, ESG - especially E and G - is becoming increasingly important and primarily offers an opportunity for differentiation and price optimisation in many sub-segments and should therefore at least be considered in strategy implementation.