2012 UK Market Assessment of the Environmental Consulting Sector

Over 200 pages of detailed commentary, analysis and forecasts, including 120 charts and tables drivers and constraints

Includes all 32 Competitor Analysis profiles, Executive Summary and Full Data Package

Who Should Buy This Report:

- CEOs, MDs, FDs, business development teams in environmental services industry
- Investors and analysts
- Consultancy client organisations

1. Contents

2. List of figures

3. About
3.1 Environment Analyst
3.2 Market assessment methodology
3.3 Acknowledgements
3.4 Explanatory notes

4. Definition

5. Executive summary

6. Market structure & operational trends
6.1 Market history
6.2 Number of operators
6.3 Types of operator
6.4 New market entrants
6.5 Geographic coverage – office networks rationalised
6.6 Ownership structure
6.7 Private equity interests
6.8 Related services
6.9 Overview of operational trends
6.10 Overseas work
6.11 Mergers & acquisitions
6.12 Alliances & joint-ventures

7. Market size, drivers & financial trends
7.1 Methodology and confidence level
7.2 Market context and historic growth
7.3 Organic versus acquisitive growth
7.4 Survey market growth trends 2009-2010 & Q1 2
7.5 Market drivers, risks and recession
7.6 Changing policy landscape shapes demand for consultancy
7.7 Market drivers – economic vs. legislative (US case study)
7.8 Market leaders – recession's winners and losers
7.9 The quoted consultants – 2011 and beyond
7.10 Financial performance metrics
7.11 Contract trends and visibility of order book
7.12 Profitability – focus on improving margins through the downturn

8. Staff trends & fee rates
8.1 Human resources – trends in redundancy & recruitment
8.2 Staff turnover
8.3 Professional qualifications, accreditation and trade bodies
8.4 Fee rate trends
8.5 Salaries

9. Service areas
9.1 Market breakdown, historic growth and key metrics by service area
9.2 Service area snapshot growth trends 2
9.3 Air quality consultancy
9.4 Climate change & energy consultancy
9.5 Contaminated land/remediation consultancy
9.6 Ecological/landscape services
9.7 EIA & sustainable development consultancy
9.8 Environmental liabilities, risks & hazards consultancy
9.9 Environmental management & compliance consultancy
9.10 Environmental noise & vibration consultancy
9.11 Environmental/sustainability policy & strategy consultancy
9.12 Waste management/recycling consultancy
9.13 Water quality & resource management consultancy
9.14 Other consultancy services
9.15 Service area prospects 2010-2015

10. Client sectors
10.1 Market breakdown by client sector
10.2 Client sector snapshot growth trends 2011
10.3 Client sector rankings and market shares of top firms
10.4 Client sector prospects 2010-2015

11. Other environmental services

12. Strategic trends
12.1 Business drivers, threats and response
12.2 Strategic outlook

13. Forecasts
13.1 UK market forecasts 2010-2015
13.2 Service area forecasts 2010-2015
13.3 UK regional growth prospects
13.4 Global market forecasts 2010-2015
13.5 Global regional growth prospects

14. Top 32 UK Environmental Consulting Companies 2011: Competitor Analysis
14.1 Notes on information presented in the Competitor Analysis
14.2 Company profiles
ADAS
AEA
AECOM
AMEC Environmental & Infrastructure
Arcadis
Arup
Atkins
Black and Veatch
Bureau Veritas
Capita Symonds
Cefas (Centre for Environment, Fisheries & Aquaculture)
Environ
Environmental Resources Management (ERM)
Golder Associates
Halcrow Group
Hyder Consulting
Jacobs Engineering
JBA Consulting
Mott MacDonald
Mouchel Group
MWH
Parsons Brinckerhoff
PricewaterhouseCoopers (PwC)
RPS Group
RSK Group
SKM Enviros
SLR Consulting
URS/Scott Wilson
Wardell Armstrong
Waterman Energy, Environment & Design
WSP Environment & Energy
WYG Environment

15. The top 100 UK environmental consultancies

16. Appendix 1 – EC market boundaries

17. Appendix 2 – EC service area definition

18. Appendix 3 – Survey questionnaire

2. List of figures
Fig 1 Growth in the number of UK environmental consultancies
Fig 2 Market structure: 2010 environmental consulting revenues by size of firm
Fig 3 Market structure: 2010 EC market breakdown by consultancy type
Fig 4 UK branch office distribution
Fig 5 UK branch offices, 2008-2
Fig 6 Ownership structure
Fig 7 Related services offered
Fig 8 Operational changes in the last year
Fig 9 Operational trends in last year compared with previous year
Fig 10 Proportion of work that is repeat business
Fig 11 Repeat and new business trends compared to last year
Fig 12 Revenue derived from overseas projects by top 32 UK environmental consultancies, 2
Fig 13 UK mergers and acquisitions, 2
Fig 14 UK mergers and acquisitions, 2
Fig 15 UK mergers and acquisitions, 2011 to 31 August
Fig 16 International mergers and acquisitions (involving UK operators), 2
Fig 17 International mergers and acquisitions (involving UK operators), 2
Fig 18 International mergers and acquisitions (involving UK operators), 2011 to 31 August
Fig 19 UK environmental consulting market revenues, 2003-2011e
Fig 20 UK environmental consultancy market growth vs key economic indicators, 2004-2
Fig 21 Environmental consulting organic vs acquisitive revenue growth, 2004-2011e
Fig 22 Top 32 UK turnover growth, EC vs. group, 2009-2
Fig 23 Top 32 global turnover growth, EC vs. group, 2009-2
Fig 24 Average UK turnover growth, 2009-2
Fig 25 Range of average turnover growth, 2
Fig 26 Q1 2011 performance
Fig 27 Green drivers influencing demand for environmental consultancy over next five years
Fig 28 Key metrics of top 32 environmental consultancies in UK, 2009-2
Fig 29 Consultancy share price trends, Jan 2011 – Sept 2
Fig 30 Consultancy share price change, 2011 year to date
Fig 31 Market capitalisation of quoted consultants
Fig 32 Top 32 UK turnover per head, 2009-2
Fig 33 Top 32 global turnover per head, 2009-2
Fig 34 Average revenue per employee, by size of consultancy, 2008-2
Fig 35 Range of turnover per employee, 2009-2
Fig 36 Benchmark key performance indicators of selected large consultancies, 2010*
Fig 37 Benchmark key performance indicators of selected small consultancies, 2010*
Fig 38 Top 32 number of contracts, 2009-2
Fig 39 Top 32 average contract value, 2009-2
Fig 40 Average project value, by size of consultancy, 2009-2
Fig 41 Average mean profitability (based on pre-tax or operating margins), 2009-2011e
Fig 42 Average profitability trends (based on pre-tax or operating margins), 2009-2
Fig 43 Profitability of selected environmental consultants
Fig 44 Change in employee numbers over last 12 months
Fig 45 Range of change in employee numbers over last 12 months
Fig 46 Top 32 UK staff change, 2009-2
Fig 47 Top 32 global staff change, 2009-2
Fig 48 Current trends in recruitment
Fig 49 Average daily fee rates
Fig 50 Average daily fee rates, year-on-year comparison
Fig 51 Fee rate trends in last 12 months
Fig 52 Fee rate year-on-year comparison
Fig 53 Average remuneration and annual remuneration change
Fig 54 Range of average remuneration change
Fig 55 Market revenue breakdown by service area 2009-2
Fig 56 Proportion of market revenue in each service area, 2009-2
Fig 57 Revenue growth in each service area, 2009-2
Fig 58 CAGR in each service area, 2005-2
Fig 59 Absolute revenue growth in each service area, 2005-2
Fig 60 Numbers of professional staff (full-time equivalent) in each service area
Fig 61 Revenue per head in each service area
Fig 62 Historic revenue growth in top 4 service areas, 2003-2
Fig 63 Historic revenue growth in mid 4 service areas, 2003-2
Fig 64 Historic revenue growth in low 4 service areas, 2003-2
Fig 65 Market share of top ten firms by service area, 2009-2
Fig 66 Snapshot revenue growth trends by service area (current)
Fig 67 Snapshot revenue growth trends by service area (last year)
Fig 68 Snapshot mean revenue growth trends by service area
Fig 69 Top firms in air quality consultancy, 2008-2010*
Fig 70 Top firms in climate change & energy consultancy, 2008-2010*
Fig 71 Top firms in contaminated land/remediation consultancy, 2008-2010*
Fig 72 Top firms in ecological/landscape services, 2008-2010*
Fig 73 Top firms in EIA & sustainable development consultancy, 2008-2010*
Fig 74 Top firms in environmental liabilities, risks & hazards services, 2008-2010*
Fig 75 Top firms in environmental management & compliance consultancy, 2008-2009*
Fig 76 Top firms in environmental noise & vibration consultancy, 2008-2010*
Fig 77 Top firms in environmental/sustainability policy & strategy consultancy, 2008-2010*
Fig 78 Top firms in waste management/recycling consultancy, 2008-2
Fig 79 Top firms in water quality & resource management consultancy, 2008-2010*
Fig 80 Top firms in other environmental consultancies services, 2008-2009*
Fig 81 Turnover prospects across service areas (CAGR 2010-2015)
Fig 82 Mean turnover prospects across service areas (CAGR 2010-2015)
Fig 83 Trends in environmental protection spend by major industry sectors
Fig 84 Proportion of revenue in each client sector, 2009-2010*
Fig 85 Proportion of revenue in each client sector, 2009-2010 (top 32 EC firms)*
Fig 86 Revenue change in each client sector, 2009-2010*
Fig 87 Snapshot revenue growth by client sector (current)
Fig 88 Snapshot revenue growth by client sector (forecast)
Fig 89 Snapshot mean revenue growth by client sector
Fig 90 The top firms working for government & agencies, 2010*
Fig 91 The top firms working for regulated industries, 2010*
Fig 92 The top firms working for extractive, manufacturing & processing clients, 2010*
Fig 93 The top firms working for construction/property clients, 2010*
Fig 94 The top firms working for financial & service sectors clients, 2010*
Fig 95 The top firms working for other clients, 2010*
Fig 96 Mean turnover prospect for client sectors (CAGR 2010-2015)
Fig 97 Turnover prospect for client sectors (CAGR 2010-2015)
Fig 98 Snapshot 2011 turnover trends for other environmental services
Fig 99 Turnover prospects for other environmental services (CAGR 2010-2015)
Fig 100 Mean turnover trends for other environmental services
Fig 101 Strategic business drivers for next 5 years
Fig 102 Strategic actions in next 5 years
Fig 103 Snapshot UK EC business prospects (for own consultancy), 2011-2
Fig 104 UK mean annual growth expectations (for own consultancy), 2010-2012*
Fig 105 Range of UK annual growth expectations (for own consultancy), 2009-2012*
Fig 106 UK mean annual revenue growth expectations, 2010-2015
Fig 107 Range of UK annual growth expectations for next 5 years
Fig 108 Environment Analyst forecast market revenue, 2003-2015
Fig 109 Additional annual market revenue, 2004-2015
Fig 110 Additional revenue forecast in each service area, 2010-2015
Fig 111 Forecast CAGR in each service area, 2010-2015
Fig 112 Forecast revenue growth in top 4 service areas, 2010-2015
Fig 113 Forecast revenue growth in mid 4 service areas, 2010-2015
Fig 114 Forecast revenue growth in low 4 service areas, 2010-2015
Fig 115 UK regions turnover prospects for the next 5 years
Fig 116 UK regions mean turnover prospects for the next 5 years
Fig 117 Mean global annual growth expectations for next 5 years
Fig 118 Global annual growth expectations for next 5 years
Fig 119 Global regions turnover prospects for next 5 years
Fig 120 Global regions mean turnover prospects for next 5 years

UK environmental consulting market stabilises

Modest growth of 0.7% recorded in Environment Analyst's latest research

After two successive years of decline, the UK environmental consultancy market managed to halt the downward trend in 2011, and even secure a modest 0.7% increase, according to research undertaken by Environment Analyst.

The small but welcome growth, following contractions of 8.8% and 7.7% in 2009 and 2010 respectively, brought the value of the sector up £30 million to £1.23 billion from £1.2 billion the previous year. While indicating a return to stability, the market’s performance in 2011 remains a far cry from the high of 2008, the culmination of two decades of unbroken growth.

Data collected for Environment Analyst's annual UK environmental consultancy market assessment indicates that the industry continues to feel the pinch of Government austerity measures and a sluggish domestic market. Further exacerbating the sector’s efforts at recovery has been the financial fall-out from the Eurozone crisis. Given the wider economic backdrop, many practices have struggled to stabilise their businesses in the challenging conditions.

Nevertheless, some have taken the opportunity – and successfully so – to remodel their businesses to maximise the potential from those sectors which remain relatively buoyant, and a concerted strategy of diversification has been at the heart of recovery for many firms. Also helping to reverse the industry’s woes of the past two years has been a greater focus, particularly among the larger players, away from the beleaguered domestic market towards more promising international markets from which several firms have managed to secure strong growth.

Within the domestic market, encouraging signs of growth have been noted within the private sector (combining privatised utilities and other private corporates), where a 4.1% increase was recorded in 2011, bringing its share of total market revenue to 72%. In particular there has been evidence of a long-awaited rebound over the past twelve months in the construction, property and transport sectors, which were among the first and hardest hit since the recession took hold in 2009. In contrast, spending by public sector clients, whose share of total market revenue stands at 28%, saw continued contraction during the year, falling a further 7.2%, as government austerity and reduced local authority expenditure continue to factor heavily.

EIA activities remain at heart of consultancy services
Environment Analyst's analysis of changing client demand for specific types of environmental consultancy also shows continued flux in the top four service areas.

Environmental impact assessment (EIA) and sustainable development remains the largest discipline by value, generating £188 million, having enjoyed a solid 13.8% increase year-on-year and thereby helping reverse the losses recorded in 2009 and 2010. The sector’s fortunes have been boosted by investment in offshore wind and infrastructure developments including High Speed 2 and the nuclear new-build programme.

Contaminated land services are the second-largest area of activity for UK environmental consultancies, accounting for £180 million, having also benefited from a robust rise in 2011 – up 11.2% on the 2010 figure. In contrast, water quality and resource management-related work saw a 2.8% decline in value terms, generating revenue of £139 million in total. The sector remains, however, the third-largest discipline within UK environmental consultancy.

For the second year running, there has been a shuffle for the number four spot of leading service areas. In 2009, the top four listing was completed by waste-related services, replaced by climate change and energy services in 2010. In 2011, feeling the full impact of government austerity and changing priorities within the industry (albeit largely focused on one particular consultancy), climate change and energy services endured a 12.5% decline and fell to fifth place. Meanwhile, replicating the 11.2% increase year-on-year recorded by contaminated land services, ecological/landscape services have performed strongly in the past year and, as a result, have risen to take the fourth ranking, generating £116 million in 2011.

Job losses assuaged

Job losses among the industry’s top 32 firms have been a sustained and prominent feature of the industry over the past three years, but the rate of reduction in the workforce during 2011 was significantly lower than in the previous two years – at around 2.1% – equivalent to some 240 posts. While still falling, the reduced decline is a dramatic improvement compared with the 6-7% declines and 2,000 lost jobs over the previous two years.

International dimension strengthened

Given the ongoing turbulence of the domestic market, not surprisingly those firms with an international dimension have turned to their overseas work in a bid to recover lost ground. There appears to have been a growing trend for deploying under-utilised UK staff to non-domestic projects, which now account for approaching 10% of UK environmental consultancy revenues of the leading practices. Furthermore, the international environmental consultancy businesses of the leading 32 players have risen by a healthy 11.3% in 2011.

Long-term drivers still valid

Despite the largely subdued nature of the UK environmental consulting sector, for the current year Environment Analyst is forecasting growth of 1.8%, with many of the long-term drivers still valid – despite ongoing uncertainties surrounding economic growth and the Eurozone crisis – namely investment in capital infrastructure projects while meeting legislative targets in the transition to a low carbon, low waste and energy secure market. While even modest growth is a welcome prospect for the industry, there are no indications that it will see a return to 2008’s high point of £1.45 billion within the next five years.

- ADAS
- AEA
- AECOM
- AMEC Environmental & Infrastructure
- Arcadis
- Arup
- Atkins
- Black and Veatch
- Bureau Veritas
- Capita Symonds
- Cefas (Centre for Environment, Fisheries & Aquaculture)
- Environ
- Environmental Resources Management (ERM)
- Golder Associates
- Halcrow Group
- Hyder Consulting
- Jacobs Engineering
- JBA Consulting
- Mott MacDonald
- Mouchel Group
- MWH
- Parsons Brinckerhoff
- PricewaterhouseCoopers (PwC)
- RPS Group
- RSK Group
- SKM Enviros
- SLR Consulting
- URS/Scott Wilson
- Wardell Armstrong
- Waterman Energy, Environment & Design
- WSP Environment & Energy
- WYG Environment