dean foxdean fox ceo, north america/media/files/a/... · market funding dynamics are changing north...
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North American consultancy marketsDean FoxDean FoxCEO, North America
26 September 2012
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Summary
North American market is the largest market in the world … we have less than 1% market share%
OpportunitiesNext stageInitial focus
Improve operational performance
Continue operational excellence
Focus on differentiated markets – tolls, metro/rail
d i tiReduce overhead
Streamline operations
Leverage Atkins’ worldwide resources
U d t k i t t i
and aviation
Focus resources on selected Federal, water
Undertake investment in key markets/regions
,and energy markets
Expand regionally – West and Northeastand Northeast
North American design and engineering $market is worth $80bn pa
General Industrial & other buildings
21%
W t &
other 13%
Transportation
Water & environment
19%
20%
Energy27%
3Source: Engineering News Record (ENR) – Top 500 US design firms .
Emerging ‘mega regions’ in North America
Northeast$3.4bn market Atkins Market share nm Atkins #84 in ENR
California$3.5bn market Atkins Market share 1% Atkins #23 in ENR
Florida$1.4bn market Atkins Market share 11%
Texas$2.5bn market Atkins
Mega Regions North EastSouth East FloridaMid W t
Atkins regionsWest RegionMidwest regionSouthwest RegionN th t R i
MountainSouth WestSouthern CaliN th C li
Market share 11% Atkins #2 in ENR
4Source: www.america2050.org
$Market share 4% Atkins #7 in ENR
Mid West Gulf Coast Texas
Northeast RegionSoutheast
Northern CaliNorth West
We have a range of end clients
Revenue by sectorRevenue by client type
Other 10%
Private sector 25% Buildings 9%25%
Public Sector: Local Transportation 56%Water &
environment 25%
Public Sector: Local Government 65%Public Sector:
National Government 10%
Transportation 56%
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Initial focus on improving performance
Initial focus has been on:● Improving operational performance7.0%
Consultancy operating marginImproving operational performance
● Reducing overhead● Streamlining operations5.7%
6.6%6.0%
4.1%4.0%
5.0%
2.0%
3.0%
1.0%
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0.0%Pre ownership* 2010/11 2011/12
* Year ended 30 September 2009, source: SEC filing
Market funding dynamics are changing
North American infrastructure needs solutions for inadequate public funding● Need for 2.5x current spending levels in transportation alonep g p● Solutions such as increased tolling, user fee discussions, etc ● Special sales tax solutions by State and local public agencies● Increasing interest in Public-Private Partnerships for developer-funded solutions
to reduce one-time costs for public clients
Design-Bid-Build
7Source: U.S. Dept of Transportation, 2011 and RS Means Business Solutions
Transportation
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Transportation market is large and well-funded
Revenue analysis Market drivers
Rail & transit 6% • $16bn transparent market
• Ageing infrastructure• Increased population and urbanisation
Aviation 18%
• Increased population and urbanisation in mega regions – areas where we have a presenceE i
Tolls 15%
• Economic recovery• Passage of transportation bill (HR 7)• Need for asset management and
Highways & bridges
61%
grenewal – relatively untapped market
• Different funding models emerging, egself help counties in California
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self help counties in California
We are well placed in Transportation
ENR ranking no 11 (up from 12 in 2011) Deep knowledge of regional markets and
Position Differentiators
ENR ranking no 11 (up from 12 in 2011)
1,200 employees
Over 90% of work is qualification-based
Deep knowledge of regional markets and clients, eg Florida
Strong brand in growing markets in Texas Nevada and ColoradoOver 90% of work is qualification based
selection
25% of revenue to sub contractors driven by government procurement policy
Texas, Nevada and Colorado
Strong resume in key skill areas in Intelligent Transport Systems, tolls,
i tiby government procurement policy aviation
Ability to leverage the Atkins worldwide skill base eg rail, bridge engineering
Strong programme management capability
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There are prospects for growth on two complementary vectors
Target to become Top 10 player in North America• Current #11 $288m
Top transportation companiesAECOM $2.1bn
Expand geographically • California a $1bn market, largest in North America where
we have 1.5% share$
URS $1.6bn
Parsons Brinkerhoff $1.0bn
CH2M Hill $852m• Northeast a $1.5bn market with attractive segmentsFocus on opportunities where skills provide differentiation• Tolling and traffic management
$
HNTB $814m
Jacobs $755m
HDR $586m• Transit/rail• Aviation• Alternative financing and delivery – public-private
HDR $586m
Parsons $483m
STV Group $363m
L i B $342 partnerships (PPP) and design-buildLouis Berger $342m
Atkins $288m
11Source: Engineering News Record 2012, ranked by transport revenue
Transit and rail opportunities emerging in th i ill d G killthe mega regions will draw on Group skills
$55bn public transit industry providing $3bn
Opportunities Leveraging skills
Asset management and safety engineering in$55bn public transit industry providing $3bn pa engineering services market
Mix of legacy aged infrastructure upgrade and renewal and new build markets (eg California
Asset management and safety engineering in older metros
Systems engineering in traction power, signalling and train control comms andrenewal and new build markets (eg California
high speed rail)
$400m spend on rail systems where there is a significant shortage in key skills in rail
signalling and train control, comms and operations – possible adoption of European standards eg ERTMS
Systems engineering opens wider g g ysystems – a key Atkins strength
Developing systems integration resources in Northeast and West
y g g popportunities in core railway engineering
Builds on deep capability in the UK, Bangalore, Hong Kong and Denmark.
12Source: APTA: American Public Transportation AssociationERTMS: European Rail Traffic Management System
Our aviation practice is well-positioned in j ti ith th id G bilitconjunction with the wider Group capability…
Safety and security
Airfield design
Terminal design
ycommunications UK Mechanical,
electrical &gNorth America
Asia Pacific
electrical & process and fuelling Middle EastMiddle East
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… to pursue the target rich environment
Region 2011 2012 2013-16
North American consultancy market is worth $1.6bn
Capital expenditure by region ($bn)
Region 2011 2012 2013 16Africa 0.7 1.6 8.4
Asia-Pacific 5.3 5.8 42.0
Europe 10 2 13 2 44 6
Atkins #13 with $44m revenue
Our key engineering capability in sub specialism of airfield and apronEurope 10.2 13.2 44.6
Latin America 2.5 3.9 10.7
North America 10.8 9.8 29.2
W ld id 29 5 34 3 134 9
sub specialism of airfield and apron engineering provides the opportunity to grow and diversify using Group skills.
Worldwide 29.5 34.3 134.9
14Source: Global aviation Architects & Engineers (AE) market sourced from Airports Council International (ACI) world market estimate extrapolated to include ME
and China; Regional information from ACI Airports Economic Survey. Global aviation AE market worth $6.2bn and ENR
Philadelphia International Airport, Pennsylvania
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Design & Engineering
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Design & Engineering
• Infrastructure investments driven by population growth and ageing assets• More reuse/repurposing/rehabilitation of existing assetsMarket drivers More reuse/repurposing/rehabilitation of existing assets• Outsourcing of professional engineering services in all sectors
• $140m revenue
Market drivers
$140m revenue • 690 staff from east to west coast• Industry size¹: North American market exceeds $30bn for facility and
infrastructure design
Positioning
• Multi-disciplinary service offerings• Innovative client focused solutions in the Southeast, Mid-Atlantic, Texas
and CaliforniaDifferentiators
and California
• Focused on regional growth in California Texas and Northeast throughKey
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• Focused on regional growth in California, Texas and Northeast through strategic hires to create hub offices and expanded service offerings
Key opportunities
¹ Source: ENR
Design & Engineering
Vopak Rail Expansion Deer Park, Texas
18The Statue of Liberty, New York
Design & Engineering
The Wizarding World of Harry Potter, Florida
19Fort Belvoir, Virginia
Water & Environment
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Water & Environment
• Constrained critical natural resources and demand in mega regions with strong regulatory regime to ensure environmental qualityMarket drivers • Opportunities in the water/energy nexus and on demand side infrastructure
• $81m revenue
Market drivers
$81m revenue • 460 staff from east to west coast • Industry size¹: Water $5.4bn, Wastewater $5.2bn and Environmental
$4.8bn
Positioning
• Engineering and science capabilities with advanced technology • Strong reputation in coastal science and restoration, flood mapping and
management and permitting in the Southeast Texas and CaliforniaDifferentiators
management and permitting in the Southeast, Texas and California
• Focused on growth in Texas water resources Key
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g• Shale oil and gas development in the Northeast, Colorado and Texas• Gulf of Mexico coastal restoration
Key opportunities
¹ Source: ENR
Water & Environment
Pineywoods Mitigation Bank, Texas
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FEMA IDIQ for Risk MAP Production and Technical Services, Nationwide
Water & Environment
Little Patuxent Water Reclamation Plant, MarylandMaryland
23Elwha River Fish, Hatchery Washington
Summary
Focusing on operational excellence and improving financial performancep● Margin progression
Leveraging Atkins’ worldwide capabilities● Tolls, rail and aviation
Growing in an opportunity rich environmentg y● Key focus areas: transportation, water, energy● Scope to expand geographic footprint.
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Disclaimer
The information in this presentation pack, which does not purport to be comprehensive, has been provided by Atkins and has not been independently verified. While this information has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by Atkins as to or in relation to the accuracy or completeness of this presentation pack or any other written or oral information made available as part of the presentationpresentation pack or any other written or oral information made available as part of the presentation and any such liability is expressly disclaimed. Further, whilst Atkins may subsequently update the information made available in this presentation, we expressly disclaim any obligation to do so.
The presentation contains indications of likely future developments and other forward-looking t t t th t bj t t i k f t i t d ith th thi th i dstatements that are subject to risk factors associated with, among other things, the economic and
business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group’s results, strategy and prospects. Forward-looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomesto events and/or depend on circumstances in the future which could cause actual results and outcomes to differ materially from those currently anticipated. No obligation is assumed to update any forward-looking statements, whether as a result of new information, future events or otherwise.
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