Enr.Com April 27/May 4, 2020 ENR 39
Total Page：16
File Type：pdf, Size：1020Kb
Overview p. 40 // Profitability p. 40 // Top 500 Volume p. 40 // Backlog p. 40 // Past Decade’s Design Revenue p. 40 Markets’ Share of Total Revenue p. 41 // Domestic and International Staff Hiring p. 41 // International Market Analysis p. 42 SmithGroup on Lessons Learned From COVID-19 p. 43 // Top 20 Design Firms by Sector pp. 44-46 // Top 50 Designers in International Markets p. 47 // Sasaki Reimagines Boston’s Waterfront p. 47 // Top 100 Pure Designers p. 48 // Burns & McDonnell’s Brainy Kids p. 51 // Top 500 Dialogue p. 52 // Wood To Design Chevron’s Gulf of Mexico Platform p. 53 How To Read the Tables p. 53 // Top 500 Design Firms List p. 54 // Where To Find the Top 500 p. 64 CANAL CROSSING T.Y. Lin International is the Panama Ministry of Public Works’ engineer and program manager for the Fourth Crossing over the Panama Canal. NUMBER 38 NUMBER PHOTO COURTESY OF T.Y. LIN INTERNATIONAL T.Y. OF PHOTO COURTESY Will COVID-19 Change Design? The current pandemic has disrupted the market and design practices. But will its impact last beyond simply a market dip? By Gary J. Tulacz enr.com April 27/May 4, 2020 ENR 39 0504_Top500_Intro.indd 39 4/28/20 6:11 PM THE TOP 500 DESIGN FIRMS 2019-2020 at a Glance TOTAL REVENUE NUMBER OF FIRMS VOLUME NUMBER OF FIRMS HIGHER $103.2 DOMESTIC REPORTING PROFITABILITY REPORTING 290 PROFITS $ BILLIONS 426 SIZE OF BACKLOG DOMESTIC INTERNATIONAL REVENUE PROFITS $86.8 92 SAME 99 INTERNATIONAL DOMESTIC REVENUE LOSSES LOWER INTERNATIONAL $16.4 9 LOSSES 45 12 COMPARING THE PAST DECADE’S DESIGN REVENUE $79.82 $85.06 $90.24 $92.69 $92.31 $91.81 $92.84 $93.90 $101.16 $103.24 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $ BILLIONS SOURCE: ENR Design fi rms began this year with high hopes that 2020 fi nancial data to third parties before it is fully released to would provide the tenth straight year of market growth. the public in an SEC 10-K disclosure, Fluor was unable The emergence of the devastating COVID-19 pandemic to fi le a survey this year. in late February put paid to those hopes. Now, design Also missing from this year’s Top 500 is Worley, fi rms, like the rest of the U.S. economy, are scrambling formerly WorleyParsons, which ranked No. 30 on last to cope with the disaster and how it will impact them, and year’s ENR Top 500 with $527 million in design the markets, going forward. “While other revenue. Worley finalized its acquisition of Jacobs Taking a look back to last year, the rise in the markets recessions Engineering Group Inc.’s Energy, Chemicals and can be seen in the data collected on revenue earned in have taken 12 Resources division in April 2019. Worley also failed to to 18 months to 2019 from the participants on ENR’s Top 500 Design make their full fi le a survey. If Fluor’s and Worley’s revenue from last Firms list. Taken as a group, the fi rms had a record total impact on the year’s Top 500 were not considered, the revenue for the design revenue of $103.24 billion in 2019—up 2.1% from water industry, remaining Top 500 fi rms rose 5.9%. $101.16 billion in 2018. Market growth was up on the this pandemic Mergers and acquisitions were again on the menu for domestic side, rising 8.9% to $86.80 billion in 2019 from has had a major design fi rms. Management consultant and M&A signifi cant $80.55 billion in 2018. But revenue from projects outside impact in four fi rm Morrissey-Goodale, Natick, Mass., tracked 307 the U.S. fell 20.2%, to $16.44 billion. weeks … and M&A deals among design fi rms during 2019. However, the figures actually undercount the we haven’t Private equity companies have been particularly active market growth in 2019. For the fi rst time in decades, seen the health in investing in the design profession. For example, in Fluor Corp., which ranked No. 3 on last year’s ENR or economic 2019, the Pritzker Organization in Chicago recapitalized peak yet.” Top 500 list with $3.11 billion in design revenue, did STV Group; New York City-based Kohlberg & Co. not fi le a survey. In February, the U.S. Securities & Lou Carella, invested in EN Engineering; Alexandria, Va.-based DC Executive Vice Exchange Commission raised questions about Fluor’s Capital Partners invested in Pond & Co.; New York President,Carollo accounting methodology. Engineers Inc. City-based NewHold Enterprises invested in PRIME As a result of this inquiry, Fluor announced it was AE Group; and Miami-based TriVest Partners invested reviewing its fi nancial reporting and received a maximum in BCC Engineering. six-month extension from the SEC in late March on fi ling However, for some fi rms, there are no “for sale” signs its year-end results. Because SEC rules bar release of posted. “Carollo is the nation’s largest independent 40 Ⅲ ENR Ⅲ April 27/May 4, 2020 enr.com 0504_Top500_Overview.indd 40 4/28/20 6:42 PM OVERVIEW 27.0% BUILDING $27,857.7 25.3% TRANSPORTATION Markets’ Share of $26,098.7 Total Revenue $ MILLIONS 8.0% HAZARDOUS WASTE 5.6% 8.1% SEWER $8,253.0 POWER AND WASTE 8.0% $8,329.7 3.0% $5,806.5 PETROLEUM 2.1% MANUFACTURING 6.7% TELECOM WATER $8,239.2 $3,085.1 $2,215.8 3.6% $6,943.6 INDUSTRIAL 2.6% $3,750.4 OTHER $2,660.4 PROFESSIONAL PROFESSIONAL (MEASURED IN 334 INCREASE 53 FIRMS REPORTING) DOMESTIC INTERNATIONAL STAFF HIRING 36 DECREASE STAFF HIRING 11 85 STAYED THE SAME 29 SOURCE: ENR engineering firm specializing solely in the water sector, There are many things that are unique to this and that makes us an acquisition target,” says Carollo 480 pandemic, but the most dramatic condition is clearly the Engineers’ CEO B. Narayanan. However, the firm has Top 500 Firms pace at which this pandemic has struck globally. “While no interest in selling. Narayanan says the firm does what also sent other recessions have taken 12 to 18 months to make their is necessary to remain independent by having a written surveys last year full impact on the water industry, this pandemic has had transition plan, maintaining financial stability and a significant impact in four weeks … and we haven’t seen fostering a strong corporate culture. the health or economic peak yet,” says Lou Carella, But the biggest deals were the ones that didn’t happen. 80.8% executive vice president of Carollo Engineers. In April, Fluor announced a shareholder rights Report revenue This sudden reversal left design firms struggling on program—effectively a “poison pill” plan—to guard rose between how to cope with the new reality. A few of the larger, against a potential hostile takeover after its share prices 2018 and international firms already had a head start from their fell sharply these past few months. And the much- 2019. experiences in Asia and Europe. “The global nature of discussed merger talks between design giants AECOM AECOM provides us a unique ability to draw on and WSP broke off in April, when the COVID-19 crisis experiences, lessons learned and best practices from left market prospects uncertain. 17.7% around the world in response to challenges like Report revenue COVID-19, and pass that information to our clients,” COVID-19 Hits declined says Steve Morriss, AECOM’s president of design and The market was buoyant at the beginning of this year, between 2018 consulting services for the Americas. with the only worry of most firms relating to the and 2019. Another international firm that acted early was outcome of the presidential election in November. But Mott MacDonald. It implemented a Group Pandemic on January 31, the U.S. Dept. of Health and Human Response Plan in January 2020, says Nick DeNichilo, Services declared coronavirus a public health the firm's CEO for North America. “This includes emergency in the U.S. By early March, states and cities establishing a Group Pandemic Management Team started issuing quarantine orders, and work began to that meets daily to coordinate and update our slow down, and even halt in some jurisdictions. This response while providing executive governance and left design firms, and the rest of the industry, oversight,” says DeNichilo. scrambling on how to cope with the crisis. Other firms had contingency plans in place for enr.com April 27/May 4, 2020 ENR 41 0504_Top500_Overview.indd 41 4/28/20 6:42 PM THE TOP 500 DESIGN FIRMS International Market Analysis $ MILLIONS 30.6% NUMBER OF FIRMS IN ASIA AND EACH REGION 25.8% AUSTRALIA ARCTIC/ ANTARCTIC 25.6% EUROPE $5,034.2 AFRICA 6 CANADA $4,241.3 63 CANADA $4,210.3 154 ASIA/ AUSTRALIA 9.5% 144 MIDDLE 5.1% EAST LATIN LATIN $1,566.5 AMERICA AMERICA 115 2.2% 1.2% $834.5 AFRICA CARIBBEAN MIDDLE EAST 0.0% ISLANDS $354.3 100 ARCTIC/ CARIBBEAN $189.8 ANTARCTIC EUROPE 75 $5.8 117 emergencies. VHB put in place its Business Continuance Bentley’s ProjectWise and Microsoft Teams was born out Program following the World Trade Center disaster in of the need to collaborate across a global company—now 2001. “From a business continuity perspective following it’s helping to ensure business continuity for critical the events of 9/11, VHB established a global risk infrastructure projects.” committee to periodically analyze a wide variety of Cuningham Group Architecture is another fi rm potential threats to our business, from cyberattacks and that found the transition to a work-at-home natural disasters to pandemics, to prepare the fi rm to “We were environment relatively easy.