Facts and Figures
Environmental Resources Management (ERM) is a leading global provider of environmental, health and safety, risk, and social consulting services. We deliver innovative solutions for business and government clients, helping them understand and manage their impacts on the world around them.
- 3,300 professional staff
- 137 offices in 39 countries
- Projects in 170 countries
- Long-term relationships with Global Fortune 500 and FTSE 100 companies
- Annual gross revenues of US$695m
- 38 year history
What makes ERM different?
- Strong client focus.
- Our pursuit of consistent quality across all ERM offices.
- Emphasizing business outcomes for our clients, we are advisors not just project managers.
- International perspective from a large full-service organization combined with local expertise.
- Award winning global knowledge sharing platform.
- Motivated and highly qualified and experienced technical people.
- Ability to build multidisciplinary teams across multiple geographies for the most complex programs.
Our Services
We offer services across our client’s life cycle in five broad practice areas related to environmental, health, safety, and social concerns.
The Industries we Serve
We serve various industrial sectors, but our largest are:
- Oil and Gas
- Power Sector
- Manufacturing and Retail
- Transportation, Utilities and Construction
- Chemical and Pharmaceutical
- Mining and Metals
- High Tech and Communications
- Legal/Financial Institutions
Our History: Building a Global Company
ERM was founded in the UK in 1971 (as ERL) and in the US in 1977 as ERM. When the two companies merged in 1987, ERL had operations in the UK, Hong Kong, Italy, and Bahrain with gross revenues of US$5 million while ERM had over 500 staff operating from 25 locations across the US and gross revenues of US$50 million. The combined US$55 million operation allowed additional geographic expansion and growth to continue to meet our clients’ increasingly global needs.
In 2001, together with 3i Group plc, ERM management bought out the retiring founders and completely restructured the business with a single global board and management team. The resulting company ended FY2002 with gross revenues of over US$340 million. At the end of 2005, Bridgepoint Capital plc replaced 3i as ERM’s equity backer.
Currently, the UK based parent company of ERM is owned by 400 members of ERM’s senior management and Bridgepoint.
Health and Safety
ERM places the highest priority on the health and safety of its employees, business associates, and the community. Our goal is to have zero accidents in our operations. We have rolled out a behavioral-based health and safety program globally.
Sustainability
ERM has established a sustainability steering committee to set goals to ensure our corporate sustainability commitments are embedded in everything we do.
Operational Report
Continued Growth in Financial Performance
After substantial growth in the financial year ended 31 March 2008, the financial year ended 31 March 2009 was another year of continued growth for ERM. At constant exchange rates, we increased our net consulting revenue by 9% and our operating profit by 6%.
Throughout the financial year, we continued to undertake a number of actions to invest in the future growth of the business. Following internal promotions, we appointed new regional CEOs in EMEA, Asia Pacific and North America. We also continued to focus on growing our services in areas of increasing client demand such as Impact Assessment and Planning and Sustainability and Climate Change.
Operationally, our strongest growth region was Asia Pacific where trading profits grew 34% at constant exchange rates. This was achieved by continuing to provide services for multi-national corporations operating in the region as well as by delivering more projects for local clients.
Given its wealth of natural resources and continued development, the Latin American and Caribbean (LAC) region continued to represent a key area of business activity. Trading profits in this region grew 30% at constant exchange rates.
Across our practice areas we saw a 25% growth in sales in our Impact Assessment and Planning practice, driven by continued activity in the commodity markets, and a sales increase of 130% in our Energy and Climate Change services.
Other Operational Performance
Deteriorating global economic conditions impacted growth in consulting revenue, which was flat in the second half of the financial year (October 2008 to March 2009) compared to the first half of the financial year (April 2008 to September 2008).
Accordingly, we reduced our employee numbers from a mid-year peak in September 2008 of 3,640 Full Time Equivalent employees (FTEs) to a year-end total of 3,480 FTEs, a decrease of 4%. A further 4% of FTEs left the business in the subsequent quarter after the year-end. Excluding costs associated with the redundancies in the financial year ended 31 March 2009, operating profit for the year would have grown 11% at constant exchange rates.
Once again we had strong operating cash flow, in excess of 100% of operating profit. Our year-end cash balance increased to $46.7 million, an increase of 34% from the $34.8 million balance at the end of the previous year. This is after making $6.0 million of scheduled term debt repayments during the year, after making $5.3 million of cash payments to departing partners (net of the issue of new shares to partners), and after paying $2.0m to acquire minority interests in our South Africa business (now 100% owned) and our Information Solutions business (now 86% owned). ‘Days Sales Outstanding’, our key performance indicator for cash collection, reduced to 56 days at 31 March 2009 from 67 days at 31 March 2008.
Our knowledge-sharing intranet, Minerva, has continued to be of immense value in sharing information throughout the company’s global operations. We won two external awards during the year reflecting Minerva’s quality – the Hong Kong Most Admired Knowledge Enterprise award (October 2008) and the Neilson Group Top 10 Best Intranet award (January 2009).
Corporate Governance
The over-arching governance framework has remained similar to last year. The Board met every other month, a total of six times, and there continue to be two sub-committees for Audit & Risk and Remuneration.
On a day-to-day basis we continue, as always, to be managed by the executive directors, who are supported by the Senior Leadership Team and a larger group of senior partners. These groups consist of the senior executives who lead regional and country operations, business development, people development and other support functions. The Senior Leadership Team generally meets two to four times a year in differing locations around the world, which enables us to meet clients and our people and to share knowledge across a variety of markets.
During the year we augmented our risk management procedures, including a re-issue of our Approval Levels and a tightening of our Cash Management and Credit Policy.
Summary and Outlook
The financial year ended 31 March 2009 was another successful year for ERM in terms of ongoing growth in financial performance, improved cash management and continued investment in the future growth of the business. Our business has continued to thrive. This is partly due to our diverse spread of operations across geographies, sectors and services. In addition, the issues of regulation, reputation and risk, as well as long-term resource needs, continue to drive spending in our market.
Despite tightening market conditions, we believe that the actions we have taken to reduce headcount and other overhead costs sets us up for a robust financial performance in the forthcoming financial year ending 31 March 2010. Trading in the first quarter was ahead of budget and our banking covenant headroom remains healthy.
John Alexander
Chief Executive Officer, July 2009
Andrew Silverbeck
Finance Director, July 2009
Historical Financial Performance
ERM Global Code of Conduct
The following ethical principles support our ERM business strategies and our commitment to respect and consideration for all our People. We will be guided by these Principles as we work with colleagues, clients and the communities in which we do business.
Code of Business Conduct and Ethics
Global Diversity Policy
We believe our most important strength is our employees.Due to our principles of Respect and Collaboration, ERM is committed to diversity and to equal opportunity in all aspects of employment. We seek to provide a work environment where all employees have the opportunity to reach their full potential and contribute to ERM’s success. Our objective is for the diversity of our employees to reflect the diversity of the communities in which we do business, and for ERM to respect the customs and cultures of those communities.
Global Diversity Policy (pdf, 21 KB)