Table of contents
The European fire safety equipment market comprises businesses that develop and manufacture products that detect and eliminate fire hazards. Players in this industry offer sprinkler systems, high-pressure hoses, fireproof structures, flame retardants as well as fire and smoke detection equipment. As such, we segmented the European market into: (i) generalists, (ii) detection, (iii) active suppression and (iv) passive suppression & prevention.
The European market has a fragmented nature, with larger players in the generalist (e.g. Minimax Viking) and passive suppression & prevention segments (e.g. THOR Group) with niche dynamics for detection and active suppression businesses. A consolidation trend is expected to go forward, particularly driven by segment leaders, in order to acquire technological capabilities, expand product and service portfolios, gain international market access and increase proximity to customers. Herein, M&A activities are favourable for players that require local presence to achieve comprehensive service offerings (e.g. installation & maintenance). Additionally, low-innovation players (e.g. active suppression) demonstrate the strongest growth trajectory due to serving diversified end-markets and contractual agreements with clients
Sponsor-led interest has been significant with ~40% of identified assets being backed by financial sponsors (February 2023). Private equity investors are primarily attracted by the favourable regulatory landscape and long-term customer relationships, enabling clear sales visibility. Nevertheless, the market presents fewer buy-and-build opportunities in comparison to the adjacent services and maintenance niche.
Fire safety equipment plays an essential role in preventing and minimising ecological and social damage during fire accidents. On top of that, manufacturers have to maintain strong oversight of their value chains as the phasing out of toxic chemicals and the ongoing shortage of talent can affect long-term business development.
Statista (February 2023) projects the global market for fire suppression equipment and consumables to grow from ~$18.8bn in 2019 to ~$24.8bn in 2024, exhibiting a CAGR of ~5.7% during the period
Frost & Sullivan (June 2019) valued the European fire detection and suppression market at ~$3.3bn in 2018, projecting a CAGR of ~5.9% until 2025 to reach ~$4.9bn
Technavio (February 2023) estimated the global flame retardants chemicals market at ~$7.6bn in 2022, with the anticipation that it will grow to ~$9.5bn by 2027 (~4.7% CAGR)
Strict regulatory landscape to sustain the long-term demand (Lincoln International, August 2022). National governments and regional authorities are expected to keep a hard stance on existing policies with public opinions sharpened by high-profile disasters, such as Grenfell Tower in London and Notre Dame in Paris (interview by Gain.pro)
Digitalisation and transition towards intelligent fire safety. The increasing adoption of IoT and integration with other intelligent building systems (3M, February 2021) will create high-margin sales opportunities for manufacturers of fire suppression and detection systems (interview by Gain.pro
Rising living standards to expand the global addressable market. As this leads to risk-aversion and growing value attributed to human life, emerging and developing economies with limited existing infrastructure will drive demand for fire equipment (interview by Gain.pro)
Future demand uncertainty from the European construction sector slowdown. As new construction represents a large share of fire safety equipment sales (interview by Gain.pro), the reduction in new projects triggered by hostile macroeconomic conditions (Construction Europe, January 2023) will inevitably put pressure on identified players’ growth trajectories
Threats from low-quality low-cost providers. Such businesses are able to undercut identified peers for prolonged periods without reputational damage, especially in regions with more relaxed regulations, as the product quality of safety equipment is rarely put to test in a real-life scenario (interview by Gain.pro)
Pressure from global generalist consolidators. In particular, large US players with adjacent security capabilities possess superior R&D capacity and are better positioned to execute M&A deals (KPMG, 2020), thereby limiting value creation opportunities for identified mid-market European players (interview by Gain.pro)
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