Strong profitable growth
The financial year ended 31 March 2011 represented another successful 12 months for ERM. At constant exchange rates, we increased our net consulting revenue by 12% and our trading profit by 18%. In total, trading profit grew faster than net revenues, and the impact of this positive operational gearing raised our operating margin.
Once again we maintained a strong operating cash flow, which was just below 100% of trading profit. Since the year end we have completely refinanced the business to provide us with the financial ability to continue to grow both organically and by acquisition.
On 1 April 2010, ERM acquired the trade and certain assets of IRC Risk and Safety LLC, a Texas-based limited liability company providing process safety and risk management consulting services. We have integrated IRC with our core operations and trading for that part of the business has been above expectations, with post-acquisition net revenue in this business growing by over 30%.
Our “niche” global business areas – Information Solutions, which delivers systems for gathering and using Environmental, Health and Safety information, and Certification & Verification Services (CVS) – continued to grow rapidly, with trading profit up 20%. We increased our ownership stake in Information Solutions by 5% to 95% during 2011, and completed the purchase of the remaining shares shortly after the year end to attain full ownership.
Our people and strategy
During 2011 we expanded our Partner base by 14%, which will help enhance offerings and outcomes for our clients. This expansion included the promotion of ERM employees as well as external recruitment of experienced professionals.
We also appointed a Global Human Resources Director who will deliver our people strategy and ensure that ERM continues to provide a great working environment, with suitable career challenges and opportunities for our people. We ended the financial year with 3,880 employees, an increase of 17%.
We combined our North America and Latin America & Caribbean (LAC) regions into a single entity. Creating a combined Americas region will help accelerate our strategic goals and improve collaboration across the company’s practices.
A key element of all aspects of our strategy is sustainability. ERM aims to create long-term shareholder value by balancing the necessary financial performance of the company with how we affect and contribute to the world’s environment and communities.
Corporate governance
The over-arching governance framework has remained similar to last year’s. The Board met a total of seven times on approximately a bimonthly basis. Day-to-day, the company remains under the management of the Executive Committee, which is supported by the Senior Leadership Team and a broader group of senior Partners. These groups consist of the senior executives heading up our geographic, practice and sector business divisions as well as business development, people development and other support functions.