WET News

leaders 2016 17 AECOM realigns following URS takeover Amec Foster Wheeler expects growth in water AECOM Wentworth Industrial Park Tankersley Barnsley S75 3DL T: 01226 224466 www.aecom.com AMEC FOSTEr WhEELEr 4th Floor Old Change house 128 Queen Victoria Street London EC4V 4BJ T: 020 7429 7500 www.amecfw.com the LeADeRS 2016 Following the acquisition of URS in its first quarter of fiscal 2015, AECOM has realigned its business into three primary business segments to reflect the operations of the combined company. The realigned business segments are organised by the types of services provided, the differing specialised needs of the respective clients, and how the group manages its business. The three realigned business segments are: • Design and Consulting Services (DCS) – planning, consulting, architectural and engineering design services to commercial and government clients worldwide in major end markets such as transportation, facilities, environmental, energy, water and government • Construction Services (CS), including building construction and energy, infrastructure and industrial Amec Foster Wheeler designs, delivers and maintains strategic and complex infrastructure assets across a range of markets including water, power, nuclear, and mining. On the water side the group offers a wide variety of services such as stormwater and flooding; water quality, municipal wastewater, and water policy and planning. Last year, Amec completed its £2bn acquisition of Swiss rival Foster Wheeler, creating a group that has a workforce of more than 40,000 staff across 50 countries, with environment and infrastructure activities accounting for around 9% of the business. Key benefits of the merger include: • Annual cost synergies, estimated by AMEC to be at least £46M • Retaining AMEC's low-risk and cash generative business model. Foster Wheeler has a similar business model, with predominantly cost-plus construction, primarily in the Americas • Management Services (MS) – program and facilities management and maintenance, training, logistics, consulting, technical assistance, and systems integration and information technology services, primarily for agencies of the US government and other national governments. In the UK, AECOM's AMP6 contracting and an asset-light engineering and project management business • Combining two highly skilled workforces with industry-leading engineering and project management expertise • Adding a robust and profitable power equipment business with a solid backlog of orders Chief executive Samir Brikho says: "I am pleased to report that we have delivered 2014 results in line with expectations. Looking ahead, I believe our low-risk, workload includes providing design services to support the delivery of Wessex Water's capital delivery programme. The initial five-year contract, which has the potential to be extended by a further five years to cover all or part of AMP7, will see AECOM working closely with Wessex Water's in-house engineering arm to deliver design services for projects across the South-west on schemes such as the construction of new assets. multi-market model combined with the additional benefits from our integration and cost savings programmes, is a strong platform from which to create long-term value for shareholders." The group expects growth this year to be driven by the expansion of environmental and infrastructure service needs. Lower energy costs are driving new project activity in the industrial sector, while the increasing demand for water will drive growth in wastewater and water treatment facilities. ThE NUMBErS 11/12 12/13 13/14 % ChANgE Sales £M 35.8 61.0 51.5 -16 Gross profit £M 9.2 10.6 4.0 -62 Operating profit £M 0.6 0.5 0.6 17 Pre-tax profit £M 0.9 0.5 0.7 31 Staff 147 159 173 9 Net assets £M 8.9 6.9 4.3 -38 ThE rATIOS 11/12 12/13 13/14 % ChANgE Return on capital % 9.7 7.9 16.5 109 Gross margin % 25.8 17.4 7.8 -55 Operating margin % 1.7 0.9 1.2 39 Net margin % 2.4 0.9 1.4 55 Sales/employee £K 243.5 383.8 297.7 -22 ThE NUMBErS 2012 2013 2014 % ChANgE Sales £M 4,088.0 3,974.0 3,993.0 0 Gross profit £M 532.0 543.0 518.0 -5 Operating profit £M 228.0 243.0 148.0 -39 Pre-tax profit £M 254.0 255.0 155.0 -39 Staff 23,379 23,572 24,225 3 Net assets £M 1,079.0 1,122.0 1,995.0 78 ThE rATIOS 2012 2013 2014 % ChANgE Return on capital % 23.5 22.7 7.8 -66 Gross margin % 13.0 13.7 13.0 -5 Operating margin % 5.6 6.1 3.7 -39 Net margin % 6.2 6.4 3.9 -40 Sales/employee £K 174.9 168.6 164.8 -2

• Cover