Press release - Environment Analyst

Transcription

Press release - Environment Analyst
PRESS RELEASE
9 January 2015
Specialists stand out as global environmental consulting market grinds
to a halt again
• Twenty five companies are spearheading the global environmental consulting (EC) sector, together
accounting for 46% of the total US$28.7bn market
• But market revenues fell flat in 2013 following three successive years of growth - following the previous
dip associated with the GFC in 2009 - owing to the slowdown in demand from key client sectors such as
the US federal government and international mining industry. The ‘Global 25’ peer group of EC
practices saw a 1.4% decline in their combined turnover
• Those firms with a specialist environmental/sustainability focus are coping far better than those operating
as part of broader integrated and multi-service companies - going against the trend for ‘super-sized’
companies following the spate of M&A activity in the wider professional and technical services sector
• The global EC market is set to reach US$32.6bn in the next five years - up 13.5% on its 2013 value as key markets recover and growth also comes from emerging economies
The value of the global environmental consultancy (EC) market reached US$28.7bn (£17.3bn)
in 2013, down 0.8% over the previous year, according to the latest report1 by business
intelligence provider Environment Analyst. The sector was assessed to be lagging global
economic growth - which was 2.9% in 2013 - mainly owing to the impact of the international
mining sector downturn, and US government shutdown and federal budget squeeze.
The top ten firms ranked in order of gross global EC revenues in 2013 are: CH2M Hill, Tetra
Tech Inc, Arcadis, URS Corporation (owned by AECOM from 2014), Golder Associates,
Environmental Resources Management (ERM), AECOM, AMEC Environment &
Infrastructure, GHD (inc. CRA) and Grontmij NV and Cardno (in joint tenth position). The
next fourteen are: Antea Group, MWH Global, RPS Group, ENVIRON, Jacobs (inc. SKM
Consulting), Parsons Brinckerhoff (owned by WSP Global from 2014), WorleyParsons, Royal
HaskoningDHV, WSP Global, ICF International, Mott MacDonald, ATKINS, SLR and Coffey
International. The three market leaders in each global region are shown in the map provided.
www.Environment-Analyst.com
[email protected]
tel +44(0)1743 818101 fax +44(0)1743 818121
Environment Analyst Limited, 140B Longden
Coleham, Shrewsbury SY37DN, United Kingdom
As a result of recent M&A activity, two firms appear in the analysis for the first time in this
edition - Jacobs (which acquired SKM Consulting) and GHD (which bought Conestoga Rovers
and Associates (CRA). Antea Group (headquartered in the Netherlands) is another newlyprofiled firm this year.
Together, the environmental consultancy practices of the ‘Global 25’ claim a combined share of
46.3% of the total global market in 2013. Reflecting the fragmented nature of the market, only
the top three players - CH2M Hill, Tetra Tech Inc and Arcadis - are able to boast overall market
shares in excess of 4.5%, largely thanks to their strong positions in the dominant North
American region (which accounts for 53% of the total). But this is set to change when the latest
‘mega-mergers’ completed in the wider engineering and professional services sector are taken
into account.
The joining forces of AECOM and URS in a $4 billion takeover deal completed in Q4 2014 creating an entity with staff numbering 100,000 - will see this pairing leapfrog straight to the top
of the pile with combined pro forma EC sales giving it a market share of 7.2% and a clear lead
over its nearest rivals. Other M&A deals set to shake up the top rankings include the acquisition
of Parsons Brinckerhoff by WSP Global (also completed at the end of last year) and Danish
player Ramboll’s intended purchase of ENVIRON.
The nature of the global EC market is such that there are a wide variety of business models
operating in the space. Environment Analyst identifies three major types of operator in terms of
their core business model, market positioning and how environmental consultancy fits in with
the overall group, defined as: large-scale integrated firms, multidiscipline hybrids and specialists.
Editor of Environment Analyst's Global Market Intelligence Service and co-author of the report
Liz Trew commented: “International environmental consultancies are once again seeing
challenging conditions with many of their key markets flat or in decline - and this has been one
of the drivers for consolidation in the sector. Unfortunately news of job losses has once again
been hitting the headlines as many of these firms seek to adjust their resources to the slowing
demand.
“But positively, our research shows that the smaller specialist firms in the peer group have been
growing and thriving over the last few years in spite of the market challenges, while the largescale integrated and multidisciplinary firms - for whom environmental consulting activities
account for less than 50% of the business (and for some as little as 2-5%) - have been struggling
to grow organically in the space.”
Although they are in the minority among the Global 25, the report finds that the specialist firms
- including Antea Group, ENVIRON, ERM, Golder Associates, SLR and Tetra Tech - achieved
average organic EC revenue growth in excess of 25% from 2010-2013. Meanwhile, the nonspecialists were only able to record organic growth of 1-1.3% during the three-year period.
Trew added: “Our analysis supports the theory that there is a definite client preference for firms
which retain their specialist focus in the environmental/sustainability consulting field. But at the
same time, the wider support services market is moving towards super-sized companies with full
life-cycle service provision offering clients a one-stop shop, which means the specialists are
under pressure to diversify.
“Another issue is that the large integrated firms are more focused on winning high-value
contracts worth tens or hundreds of millions of dollars, while the EC sector is characterised by a
large tail of much smaller contracts. We have already seen some evidence of the super-groups
cutting back their environmental teams and operating them more as an internal support function
than as standalone consulting units.”
The EC staff numbers employed by the Global 25 rose by just 1.8% to reach approximately
72,400 in 2013, but twelve of the practices saw a contraction in headcount.
Based on the service area breakdown of the Global 25's aggregated EC revenues, Environment
Analyst finds contaminated land services remains the largest single work area in global EC
market in 2013, representing some 32% of the total, ahead of the 23% share held by water and
waste management. Environmental impact assessment & sustainable development takes a
further 18%, whilst environmental management, compliance and due diligence services
represent 14%. Climate change & energy related services generate a further 8% of the total. A
breakdown by key client sectors is also illustrated in the figures attached.
According to the study, the global EC market is forecast to reach $32.6bn (£19.7bn) by 2018, up
13.5%. Commenting on future growth prospects for the global EC market, Liz Trew said:
“Although our forecast model for the global market has been downgraded from the previous
edition of the report a year ago to a modest compound annual growth rate (CAGR) of 2.6%
over the next five years, this nevertheless equates to an additional £3.9 billion in EC revenues
being added by 2018.
“We expect the specialist firms which retain their independence and environmental focus to
continue to do well and grow organically above the market rate as they have done so historically.
There are also more big M&A deals on the horizon to further shake up the rankings.
“Future market growth will also be highly sector- and region-specific, with spend on climate
change and energy services set to grow by over 30.5% in the next five-year period, while Latin
America and Africa/Middle East will be higher growth regions - seeing increases of 33.6% and
26.7% respectively.”
Contact for further information:
Liz Trew, Editor
Environment Analyst Market Intelligence Service
Tel: +44 (0)20 3603 2106
Email: [email protected]
FURTHER INFORMATION
1. Global Environmental Consulting Strategies and Competitor Analysis 2014 is an in-depth
market report including detailed profiles of 25 leading operators – for further information
(including a full list of contents and figures, and sample company profile download) see
http://environment-analyst.com/global
2. The report is based on core financial figures and strategic information collated through an
annual research process in collaboration with the environmental consultancy companies –
via market surveys, phone/face-to-face interviews with senior executives, and publiclyavailable annual reports/accounts and websites. The 25 profiled firms have all had the
opportunity to review their company profiles and core financial statistics
3. The report is part of Environment Analyst’s 2014 Global Market Intelligence Service. The full
service includes this market assessment, company profiles of the leading 25 environmental
consultancies updated throughout the year, the results of a global market trends survey
issued each summer, weekly environmental services business news and Market and
Company Insight articles.
4. Environment Analyst Ltd (http://www.environment-analyst.com) is a publishing and market
research organisation focusing on the environmental consulting and support services sector
– we collect and analyse information from the industry for the benefit of the industry
The charts overleaf are provided for publication:
Global 25 – top 3 market leaders globally and in each region
Global environmental consultancy market share by service area 2013
Env. management,
compliance & due diligence
14%
EIA & sustainable
development
18%
Water and waste
management
23%
Other
5%
Climate change
& energy
8%
Contaminated land
32%
Global environmental consultancy market share by client sector 2013
Energy & utilities
(inc. waste)
27%
Government &
regulators
27%
Other
2%
Financial,
professional &
service sector
4%
Construction,
property &
transportation
10%
Mining, manuf.
& process
industries
30%
Global environmental consultancy market share by region 2013
Africa &
Middle
East
5%
East
Europe/
FSU
2%
AsiaPacific
15%
North
America
53%
West
Europe
20%
Latin
America
5%