米国における水処理機器およびサービス市場

Research Overview

Growing Need for Investment in the Water Industry

Demand-supply disequilibrium is a significant challenge facing the U.S. water industry, and this underscores the importance for increased investment. Between 1992 and 2003, the overall spending on water grew by a mere 2 percent, proving that investments to meet the industry growth targets are long overdue. As per the Environment Protection Agency (EPA), an estimated $138 billion is required by 2016 to upgrade/replace the water infrastructure for compliance with the safety standards prescribed by the Safe Drinking Water Act (SDWA). There is also an urgent need to address concerns surrounding the sustainability of public water systems and security of the water facilities. Since water stocks prove to be safe investments even when markets are down, industry participants need to make a concerted effort to generate higher investments.

This Frost & Sullivan research provides an investment overview of the water equipment and services market in the United States. It provides a detailed financial analysis of various companies and up-to-date information regarding the latest mergers and acquisitions in the industry. The study also provides a detailed analysis of the municipal, industrial, and residential segments in the water industry.

Growing Public Awareness Regarding Water Quality and Regulatory Controls Drive the Market

The distribution of funds in the Drinking Water State Revolving Fund (DWSRF) program revealed that treatment represented the largest percentage of project costs (43 percent), followed by projects to address transmission and distribution needs (32 percent). "The law requires that states give priority to projects that are needed to protect public health and ensure compliance with the SDWA," says the analyst of the research. Deriving its demand from this trend, advanced water treatment methods such as reverse osmosis, ultra violet filtration, and ozone treatment have gained considerable market attention in recent years.

Another key trend seen in the industry is the growing importance of contract services/outsourcing for the operation and maintenance of water and wastewater treatment facilities. As the demand for investment for expansion or upgrade of water infrastructure increases, service providers have emerged as a vital source of funding for water utilities.

Entry of Larger Companies Brings about Consolidation in the Water Industry

With the recent entry of several large participants such as GE, Siemens AG, Suez Lyonnaise des Eaux, and RWE Thames Water among others, a lot of consolidation activity has been taking place in the industry. Siemens AG recently purchased the systems and services businesses of USFilter Corporation from Veolia Environment, making it the largest water services company in the United States. "Such mergers and acquisitions in the U.S. water industry are bound to bring in the required funds for recent investment/expansion projects as the bigger participants jostle for market share," observes the analyst.

Frost & Sullivan Growth Partnership Service

Based on extensive and in-depth research, real-world consulting work, and new theories tested in hundreds of companies across many industries, Frost & Sullivan has evolved its Growth Partnership Services (GPS) program that provides established and emerging firms with powerful growth visions. Moving beyond token mission statements, GPS provides an actionable vision to growth consulting partners by illustrating how key intelligence and strategic research based on defined goals can guide day-to-day behavior and overall company direction. The foundation of Frost & Sullivans GPS includes:

• Assisting companies to reach their full potential in the core business
• Providing growth strategies to help companies expand into related businesses
• Preemptively redefining the core business during market turbulence
• Applying the Frost & Sullivan framework to identify and address common mistakes resulting from misaligned corporate strategies
• Recommending growth management strategies through continuous partnership

To maximize the potential for growth within a firms internal and external environment, Frost & Sullivan consultants can facilitate the creation of strategic programs that deliver improved market success. Frost & Sullivans strengths lie in combining strategic understanding with market expertise and applying these with absolute commitment to its clients growth.

1 U.S. WATER INDUSTRY OVERVIEW

• Executive Summary
  • Introduction
  • Conclusion
  • Inclusions Exclusions Assumptions Scope
• Federal Spending on Water Resources and Water Transportation from 1992 to 2003
  • Federal Spending on Water

2 REVENUE FORECASTS AND DEMAND SIDE PERSPECTIVES FOR THE U.S WATER INDUSTRY

• Revenue Forecasts and Demand Side Perspectives for the U.S. Water Industry
  • Total Water Equipment
  • Clarification Equipment
  • Gravity Filtration Equipment
  • Pressure Filtration Equipment
  • Membrane Treatment Equipment
  • Ion Exchange Equipment
  • Electrodialysis Equipment
  • UV Disinfection Equipment
  • Ozone Disinfection Equipment
  • Chlorine Disinfection Equipment
  • Desalination Equipment
  • Sludge Digestion Equipment
  • Sludge Dewatering Equipment
  • Sludge Drying Equipment
  • Sludge Incineration Equipment
• Revenue Forecasts for the U.S. Residential Water Treatment Equipment Market
  • Overview
  • Point-of-Entry Equipment
  • Point-of-Use (POU) Equipment
• Revenue Forecasts for the U.S. Operation and Maintenance and DBO Contracts
  • Operation & Maintenance Contracts and DBO Contracts

3 GROWTH OPPORTUNITIES

• Frost & Sullivan Water Industry Growth Monitor
  • U.S. Water Industry Growth Monitor
• Specific Growth Sectors
  • U.S. Water Financing
  • Membrane Market Trends
  • Drinking Water Security Markets

4 FINANCIAL ANALYSIS OF THE WATER INDUSTRY

• The Frost & Sullivan Water Universe
  • Industry Classification
• Industry Profitability
  • Common Size Income Statement
  • Year-over-Year Sales Growth
  • Average Operating Margin
  • Degree of Net Operating Leverage (Change in Net Income/Change in Sales)
  • Incremental Margin
  • Fixed Cost Structure Analysis
  • Selling General and Administrative Expenses (SG&A) as a Percent of Sales
  • Number of Employees
  • Sales Per Employee
  • R&D Per Employee
  • R&D to Sales
  • R&D per Employee and Operating Margin
  • R&D to Sales and Operating Margin
• Cash Flow and Balance Sheet Analysis
  • Free Cash Flow (FCF)
  • Free Cash Flow Margin
  • FCF As a Percent of Operating Income
  • Selected Uses of Cash - Quality of Earnings (QOE)
  • Industry Leverage - Leverage Ratio
  • Solvency Ratio
  • Efficiency Ratio
  • Working Capital Analysis
  • Profitability Ratio
• Pension Analysis
  • Pension Impact on EPS
  • Funded Status of Pension Plans
  • Comparison between Capex Expenditure and Pension Contribution
• Expensing Stock Options: What would be the Implications?
  • Expensing Stock Options - Impact on EPS

5 WATER INDUSTRY VALUATION

• Historical Valuation
  • Enterprise Value/LTM Sales to 6-Year Sales CAGR
  • Enterprise Value/LTM EBITDA to 3-Year Average Operating Margin
• Stock Performance
  • Individual Stock Performance
  • Price-Earnings to Growth (PEG)
  • Dividend Yield (As on 10/20/04)
• Water Industry Stock Index
  • Water Industry Stock Index (WISI)
• Historical M & A Valuation
  • Mergers & Acquisitions in the Industry
  • Acquisition Deals: Average EV/LTM Sales
• 2004 Industry Growth Outlook
  • EPS Guidance for the Next Fiscal Year