Danish consultancy benefits from major Swedish acquisition
Copenhagen-based engineering, environmental and economic consultancy Cowi has published preliminary results for 2009, which tell a story of record-breaking turnover and profit. However, the employee-owned firm is cautious in blowing its trumpet, terming the positive results “satisfactory” and acknowledging that they were achieved despite “great fluctuations” in the performance of its various businesses.
During 2009, the group generated a net turnover of DKK 3,999.4 million (€536.6 million), which is more than 14% greater than the previous year (DKK 3,498.0 million). Operating profit (EBITDA) increased by almost the same proportion, totalling DKK 297.7 million (€40.0 million), compared to DKK 261.8 million (€35.2 million) in 2008. Net profit for the year was DKK 153.4 million (€20.6 million).
The consultancy's operating margin remained unchanged, at 4.8%. This is lower than the margin recorded in 2007 and 2006, which were 6.0% and 5.7% respectively.
Although the group did achieve a certain degree of organic growth, a significant factor in Cowi's swelling turnover and profit in 2009 was the acquisition of Swedish engineering-led Flygfältsbyrån (FB), which included capabilities in environment and water. Active in southern Sweden, Denmark and Norway, FB increased Cowi's water & environment team by around 70 and its group staff by more than 750.
Elsewhere, Cowi acknowledges that its central and eastern European businesses were hit by recession, while it experienced growth in the Arabian Gulf region and in infrastructure-related work. Although Cowi's total headcount increased due to the acquisition of FB, to approximately 6,000 staff, there appear to have been some redundancies as well.
The water and environment business forms one of seven major business lines for the group, contributing approximately 12% of Cowi's annual turnover last year. Commenting on the operational structure, senior vice president of the water and environment business Mogens Heering told Environment Analyst: "We work internationally as lead environmental consultants, and at the same time we support our other service lines with environmental input to Cowi’s major projects on infrastructure, energy and buildings.
"Cowi delivers climate change consultancy out of all our business lines," he explained. "Within environment and water, we are focussed on carbon dioxide emissions reduction schemes (mitigation), adaptation measures to deal with the expected consequences of climate change and overall climate planning in industries and local/central government."
Similarly, sustainability services are embedded across all business lines, says Heering. Going forward, Cowi plans to focus its efforts on winning work in the energy, water, infrastructure and health sectors, with sustainability-related issues of growing importance.
The consultancy, which dates back to 1930, reports a “guarded optimism” about future prospects and says it expects “some growth in both turnover and earnings in 2010”. While there are no specific plans for further acquisitions in the environmental sector, according to Mogens Heering, "the general ambition is to considerably grow the environmental business in all Cowi’s regions and countries, and to look for acquisition targets where relevant."
"We see environment and water as global focus areas, which will call for our expertise and global presence in the coming years," he adds.
Cowi is a partner in the three-way joint-venture CAT Alliance, established in 2002, which offers a global advisory service focussed on environmental liabilities and asset management for multinationals based in Europe and the USA. The other CAT Alliance partners are SKM Enviros (UK) and Tauw (Netherlands).
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