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burohappold engineering Annual review 2015

S EC TO R: C U LT U RE

National 9/11 Memorial Museum Pavilion New York, NY, USA

ENGINEERING THE AMAZING

Image: Jeff Goldberg ESTO

burohappold engineering Annual review 2015

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4

7

11

CHIEF EXECUTIVE’S INTRODUCTION

a note from the chairman

about burohappold engineering

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19

23

beyond engineering

a year of highlights

engineering the amazing

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70

FINANCIAL OVERVIEW

the essence of burohappold

burohappold engineering Annual review 2015

CHIEF EXECUTIVE’S INTRODUCTION

Our year began with a bang. For the first time in 39 years we revealed a refreshed brand for the business, moving from a collection of independent entities and specialisms called Buro Happold, to a cohesive body with common goals under the name BuroHappold Engineering. The truth is, as engineers, we have been client and project focused, rather than examining ourselves to ensure we are building the kind of business we want to be, and indeed, the kind of international, multi-disciplinary business our clients expect us to be. The success of this year has been a testament to the galvanising force our new brand has signalled. We are on the journey and there is more to come. The foundations to the rebrand were based on our ‘Essence’ formed from client and stakeholder research. In this we were described by our clients as ‘passionate’, ‘innovative’, ‘collaborative’, ‘magic’. Marrying these qualities with wider societal implications reflecting our culture, our essence is now the mirror we hold up to ourselves. It is there to ensure that we continue to pursue the simple honest truth in our work, and in our dealings with one another. In turn this allows us to bridge the gap between science and society and forge meaningful and lasting global relationships that benefit all. There is a special magic to the engineering mind. Our teams tackle complex issues head on. We don’t just look for obvious answers; we question, investigate and challenge our clients to look wider than the immediate space of their projects. How can projects yield greater rewards, whether they be financial, societal or environmental, beyond the certain technical ones? It is this combination of innovation and bravery that is helping us to create a future that is solution-led, not problem driven.

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In fact, our driven, world-leading engineering professionals are not only a global community of technical experts that have mastered traditional specialisms, but are also integrators, who bring people together to lead and communicate holistic, ‘total problem’ solutions. The days of silo-like engineering thinking are waning. We have moved to a platform of service offers that prompt the client to think wider, such as Green & Efficient Design, Intelligent Re-use of Buildings, City Diagnostics & Strategy, Integrated Design and Inspirational Design to name some. Our ingenuity is employed for revitalising failing cities or pioneering master plans for emerging cities. Our people-flow specialists can move a million people across the desert with ease. Our innovators engineer facades that absorb pollution, create performance venues lauded as the best acoustic experience in the world, or re-engineer a stadium from being single use athletics, to multi-purpose athletics, football and rock concerts. We employ economists and planners who can help to create flexible financial strategies, specialists whose skills range from water management through to material science, and serial innovators who help us to find our unique solutions to our clients’ unique problems. On this foundation, and given the agility of our integrated service provision across the globe, the year ahead looks ever brighter.

Roger Nickells, CEO

burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

“Our essence is now the mirror we hold up to ourselves. It is there to ensure that we continue to pursue the simple honest truth in our work, and in our dealings with one another. In turn this allows us to bridge the gap between science and society and forge meaningful and lasting global relationships that benefit all.” Roger Nickells, CEO

Image: BuroHappold Engineering

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burohappold engineering Annual review 2015

a note from the chairman

Roger Nickells took on the role of CEO in June 2014 and has delivered a year of spectacular success, with growth, and a clarity of purpose that inspire a sense of confidence and ambition. Our success is built on the quality of the service we provide our clients. Our projects are all led by Partners who own and lead the activities of the business; we are engineers, consultants and specialists – some of the best in the world. We all have a close working knowledge of our industry, our clients and our people, working in partnership to make sure we deliver our vision. Partnership is core to achieving the quality of service that BuroHappold provides, the commitment to excellence and responsiveness to market opportunities and enables us to operate an international business characterised by innovative, effective and high value solutions. This success comes of course from our people, who bring energy and passion to all they do. This year we initiated the “Essence of BuroHappold Awards” to recognise individuals and teams who have shown exceptional spirit in the way they have collaborated, striven for excellence, innovated, or simply blown us away with their achievements. It has been a joy to read all the nominations that come in from far and wide and to read the stories. Our people select the final winners – and they are both diverse and inspiring. This year we also saw Young Engineer Forums spring into action in all our offices – our young people are showing us just how keen they are to make a difference in society and we are keen to support them with time and money to get into society and share their skills. We established a “Share our Skills” programme to lead this.

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Another key factor that ensures we provide our clients with the very best and most creative solutions is our continued commitment to research and development. This past year saw a 37% increase in our funding of research projects to support our project work and maintain a leading role in development of new ideas and new technologies. This investment embraces partnering with Universities around the world as well as supporting internal research communities that connect our people around crucial practice-wide research projects. Such projects range from development of numerical modelling tools that allow us to predict the technical performance of clients’ projects well ahead of execution, to developing ways to better assess the health and wellbeing of people in the buildings and spaces that we create. This allows us to serve our clients in ways that have not been possible before and raises the quality and value of our service.

Mike Cook, Chairman

8 BUROHAPPOLD ENGINEERING staff numbers around the world

104 HONG KONG

1 MALAYSIA

94 INDIA

108 UAE

55 KSA

65 GERMANY

1 MILAN

161 NEW YORK

52 LOS ANGELES

BEIJING 18

QATAR 1

KUWAIT 14

POLAND 117

DENMARK 11

UK 905

BOSTON 19

CHICAGO 9

SAN FRANCISCO 15

burohappold engineering Annual review 2015

burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

“So it has been a great year both in terms of building our essential commercial strength, and also for building our inner strength, that comes from the motivation and passion of our people and their growing skill base.” Mike Cook, Chairman

Image: BuroHappold Engineering / James Cheadle

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

BuroHappold Engineering is an international, multidisciplinary engineering consultancy operating in 24 locations worldwide, with over 50 partners and 1,750 staff including some of the world’s leading consulting engineers. For 40 years we’ve been building our reputation for delivering creative, value led building and city solutions for an ever changing world.

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burohappold engineering Annual review 2015

b e y ond engineering

SHARE OUR SKILLS PROGRAMME

Young E ngineers F orum

BuroHappold has a long history of supporting those less fortunate than ourselves. We understand that our staff have sought to deliver support through internal groups such as the International Development Community (IDC), through project work when the opportunity arose, and indeed in their own time. The BuroHappold community support involvement in, and championing of, development activities.

Set up by our younger engineers and technicians, Young Engineers’ Forums now exist in all our offices to help and support all junior BuroHappold staff in their professional and personal development. Forums are run locally and connected globally to provide a focus for activity throughout the entire organisation.

This programme allows employees to carry out non-fee paying work, during BuroHappold time. The aim being to offer our skills and services to those who need it most.

The Young Engineers Forum is here to: • Act as a support and communication network for all junior staff • Be a forum for sharing knowledge and experience • Promote BuroHappold’s young professionals externally.

H a p p old F oundation

essence of b uroha p p old awards

The Happold Foundation was established in 1995 by the late Sir Ted Happold and the founding partners of BuroHappold.

In January 2014 we launched the Essence of BuroHappold awards: a programme created to celebrate our people and projects around the globe and sponsored by our chairman, Mike Cook.

Ted and the founding partners had always believed that a firm such as BuroHappold exists to support the needs of society beyond its immediate activity as a professional practice in the built environment. The Happold Foundation is therefore a registered charity with an independent Board of Trustees, some of whom also work for BuroHappold. The Partners of BuroHappold donate a portion of annual profit to the Foundation to pursue its mission.

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The awards were inspired by the refreshed brand and an in depth look at the values of the practice which we termed “the Essence of BuroHappold”. They have allowed us to celebrate some of the great people and teams working in the practice, creating a stronger global community, striving for excellence and bridging science and society. It has now become an annual event involving a panel of international judges and final selection of the winner by the staff.

burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

Share Our Skills programme Courtney Crosson, a senior sustainability consultant in our LA office, has been leading a project to deliver rural schools in Haiti alongside the LA-MAS organisation.

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burohappold engineering Annual review 2015

YEF (Young Engineers Forum) Graduate engineers around the world reach out to schools – inspiring the next generation of problem-solving creative engineers.

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burohappold engineering Annual review 2015

Happold Foundation Sponsored by the Happold Foundation Global Travel Scholarship, Eleanor Davies was one of seven Cambridge engineering students who worked on a summer development project in Tanzania to design and construct the first simplified sewerage network in East Africa.

burohappold engineering Annual review 2015

The Essence Awards

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Mike Cook (right) presenting Nilesh Arjun Kudtarkar his award as Winner of the Outstanding Individual of 2015.

burohappold engineering Annual review 2015

a y ear of highlights

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burohappold engineering Annual review 2015

2014 £128.1m

2015 £148.5m

turnover increased b Y

16% 20

2014 £15.2m

2015 £18.0m

O p erating p rofit increased b Y

18%

burohappold engineering Annual review 2015

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award wins

average num b er of em p loy ees increased b y

15 % worked in

60

countries

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burohappold engineering Annual review 2015

1

b rand refreshed

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

Image: Zhong Ming

Engineering for future generations Nanjing Youth Olympic Centre (YOC) Nanjing, China

One challenge of this project was to express the fluid forms of this unique Zaha Hadid design. To achieve it we developed a complex series of graduated concrete panels set over a steel framework. SEC TO R: hos p italit y

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

S ECTOR: RAI L I NTE RC HANGE

Engineering the world’s most energy efficient transport hub Anaheim Regional Transportation Intermodal Center Anaheim, California, USA

This centre forms a hub for California’s future high-speed rail network, commuter and regional transport lines and Amtrak. We engineered a visually dramatic roof over the grand hall with the largest expanse of ETFE polymer ever used in North America, chosen for its light and heat insulation qualities.

Image: HOK

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

Image: Philip Handworth

Engineering the world’s largest green building development King Abdullah Financial District Riyadh, KSA

As the most significant commercial real estate development in Saudi Arabia the King Abdullah Financial District (KAFD) will cover an area of 1.6km². Our engineering supports 18 of the buildings to world leading sustainability. The development is a step change in urban commercial environments and it will enable progressive development of society for Saudi Arabia. SEC TO R: C O M M E R C I A L O F F I C E / retail

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

sector : C U LT U RE

Engineering prestigious cultural facilities, connecting the past, present and future King Abdulazziz Center for World Culture Dhahran, KSA

Achieving the natural forms of the five connected ‘pebble’ shaped buildings was the first challenge. For the next, we used thermal modelling to inform our solution in creating comfortable, multi-functional auditoriums and exhibition environments by integrating a ‘shade veil’ over the facades to deal with the sun’s heat.

Image: Phillip Handforth

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

Image: BuroHappold Engineering

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A masterpiece in progress Museum of the Future Dubai, UAE

Work in progress. This extraordinary building will be finished with an intricately-designed reflective facade. SEC TOR: C U LT U R E

burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

S EC TO R: COM M ERC I AL O F F I C E

Engineering the greenest tower in the world The Tower at PNC Plaza Pittsburgh, PA, USA

A complex combination of passive and low carbon strategies makes PNC a remarkable engineering achievement. A double skin facade assists natural ventilation and a floor plate which gives maximum daylight reducing energy use, are just two elements that contribute to its success.

Image: Gensler

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burohappold engineering Annual review 2015

Image: Alan Williams

Engineering to enhance Whitworth Art Gallery Manchester, UK

Our work on this involved an intelligent combination of passive (non-powered) humidification and cooling methods, and low or zero carbon technologies, to create climate-comfortable spaces and preserve collection exhibits. S ECTOR: CULTURE

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

S EC TO R: C ulture

Engineering venues for outstanding performance The National Polish Radio Symphony Orchestra Katowice, Poland

BuroHappold’s structural engineering and mechanical & electrical teams brought global knowledge to this project to enhance the audience experience and to meet stringent acoustics requirements. It was recently awarded the ‘best new cultural building in Poland’.

Image: Bartek Barczyk

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

S ECTOR: s p orts & entertainment

Engineering to create an amazing experience Fisht Olympic Stadium Sochi, Russia

Our work on this stadium meant planning ahead for its intended three lives: a 40,000 capacity Olympic stadium, a venue for the 2018 FIFA World Cup Finals, and as a home for the Russian national football team in winter. It also spearheads a drive for a level of sustainability not seen before in Russia.

Image: Populous

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

S EC TO R: COM M ERC I AL O F F I C E

Engineering outstanding corporate headquarters One Angel Square Manchester, UK

Image: Palin Images

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This is an award winning, highly sustainable, extremely low carbon space. We helped it to achieve its status as the first building to receive a BREEAM Outstanding rating by employing a holistic approach to ‘smart’ building strategies.

burohappold engineering Annual review 2015

S EC TO R: H O S P I TAL I T Y

Engineering the complex with style Hotel D, City of Dreams Macau, China

The extraordinary engineering complexity of the remarkable steel exo-skeleton for this six star, 42 storey hotel design by Zaha Hadid Associates, is self-evident.

Images: Zaha Hadid Architects

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

S ECTOR: C O M M E R C I A L R E S I D E N T I A L

Engineering urban regeneration Battersea Redevelopment London, UK

Despite being an historic London icon, this building hasn’t generated power since 1983. Our challenge with the redevelopment was to preserve its character, whilst unlocking a difficult site. Engineering the UK’s largest retail development, as well as providing residential, commercial and leisure spaces – is a huge undertaking and will completely transform this once run down area into a lively community, central to the London landscape.

Image: BuroHappold Engineering

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burohappold engineering Annual review 2015

Engineering urban regeneration

Millennium Dome / The O2 and the Greenwich Peninsula London, UK

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burohappold engineering Annual review 2015

Engineering urban regeneration

Shortlisted competition entry for the Nine Elms to Pimlico Bridge Crossing. London, UK

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

Images: BuroHappold Engineering / Wilfried Dechau

Engineering that connects communities Baakenhafen Bridge Hafen City, Hamburg, Germany

This multi-award winning project is a strikingly elegant landmark. Its gently curved form fits harmoniously into its surroundings and provides spacious recreational areas for pedestrians on undulating walkways. It fulfils the diverse requirements of a modern urban development, as well as the highest demands for sustainability.

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burohappold engineering Annual review 2015

1 a) The barge is positioned under the bridge span. Baakenhafen Bridge Hafen City, Hamburg, Germany

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burohappold engineering Annual review 2015

2 b) The rising tide lifts the 30m deck. Baakenhafen Bridge Hafen City, Hamburg, Germany

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burohappold engineering Annual review 2015

3 c) Providing an ingenious solution. Baakenhafen Bridge Hafen City, Hamburg, Germany

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burohappold engineering Annual review 2015

4 d) Cost effective and sustainable. Baakenhafen Bridge Hafen City, Hamburg, Germany

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

SEC TO R: C I VI C

Engineering that rejuvinates The High Line New York, NY, USA

BuroHappold and Field Operations created a masterplan for the reuse and reintegration of this railroad. Inspired by the wild beauty of the derelict line, the team reimagined this industrial pathway through the city as a route for leisure, life and growth, doing away with the need for demolition and instead enriching peoples’ lives.

Image: nimdok, flickr

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

Engineering learning facilities to inspire the leaders of tomorrow Yale University, School of Management New Haven, CT, USA

Image: Chuck Choi Architectural Photography

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We engineered the structural steel system, using slim interior vertical elements and intricate connections, to achieve the demanding architectural vision for this large facility. It creates light and airy spaces offering unobstructed views of the courtyard from the dramatic, four-storey, glass, curved facades. S EC TO R: H I G H ER EDU C AT I O N

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burohappold engineering Annual review 2015

Images: BuroHappold Engineering

Engineering a living museum Atturaif Ad-Diriyah, KSA

This is a series of stunning historic oasis settlements situated in Wadi Hanifah, itself an area of outstanding natural beauty. Leading an international team of specialists, we developed the historical district plan. Our team’s intervention and leadership has been instrumental in Atturaif being inscribed as a cultural site into UNESCO’s World Heritage List. SEC TO R: C U LT U RE

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burohappold engineering Annual review 2015

S EC TO R: U R B A N D E V E LO P M E N T

Engineering development strategies for masterplanning London 2012 Olympics and legacy London, UK

BuroHappold has been chosen as part of the design team for the exciting Stratford Waterfront redevelopment, Olympicopolis, which will include new buildings for the V&A, Sadler’s Wells, the Smithsonian, University of the Arts London and more. The site will also provide 75,000m² of new homes and represent a major regeneration programme for the area.

Image: By EG Focus, via Wikimedia Commons

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burohappold engineering Annual review 2015

financial overview

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burohappold engineering Annual review 2015

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burohappold engineering Annual review 2015

“We have come out of the recession a stronger and more robust practice, achieving a return to growth, improved funding and performance, with a debt free business. We have been able to invest in our people, service offers, a new brand, new facilities and infrastructure and moved towards an integrated practice. The recovery in demand for our services and strong revenue growth is encouraging. This combined with an improvement in profit, a drive on liquidity and better project performance gives us a robust platform for the future.” Michael Williamson, CFO

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burohappold engineering Annual review 2015

p erformance Our practice has successfully managed its way through 5 years of economic recession in the construction sector and related industries from 2008 to 2013. In the last two years there has been a recovery in our sector, which we have taken full advantage of, returning our business to its pre-recession highs. At the same time we have substantially improved our underlying performance increasing operating margins.

We have produced strong results with growth in demand for our services across all our markets and an increase in revenue of 16% to £148.5m (2014: £128.1m). Our operating profit is almost double that achieved in 2009 at £18m (2009: £9.8m). The number of partners has remained fairly constant at circa 50 since 2009. Operating profits as reported in an LLP structure, are stated before any partner profit share. The results therefore represent the operating results of all the contracts in the various entities across the globe.

14/15

£148.5m

14/15

£18.0m

13/14

£128.1m

13/14

£15.2m

12/13

£111.8m

12/13

£11.7m

11/12

£116.8m

11/12

£11.8m

10/11

£119.8m

10/11

£8.0m

09/10

£123.0m

09/10

£14.0m

08/09

£149.1m

08/09

£9.8m

turnover

64

operating profit

burohappold engineering Annual review 2015

We have increased operating profit to £18m in 2015 (2014: £15.2m), whilst at the same time increasing investment back into the business. The most significant expenditure was in marketing, with the launch of the new brand identity and the development of our strategic marketing capability across the business. There has also

been significant additional investment with the opening of new offices in Los Angeles, Mumbai, Hong Kong and Warsaw, the modernisation of existing offices, and the development of our technology infrastructure and design capability.

14/15

16%

14/15

12%

13/14

16%

13/14

12%

12/13

(4%)

12/13

10%

11/12

(3%)

11/12

10%

10/11

(3%)

10/11

7%

09/10

(18%)

09/10

11%

08/09

7%

turnover GROWTH

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OPERATING MARGIN

burohappold engineering Annual review 2015

p rojects At the heart of the business are the long term contracts and projects, which are delivered by our people and drive performance. We are an international business with 70% of our revenue generated on contracts outside of the UK. With such an international spread of activity it is vital that we have a strong financial controlling and reporting framework, alongside a robust set of corporate governance procedures.

The business has seen its turnover grow by 16% to £148.5m with the following regions experiencing the majority of the increase – UK, USA, Asia, Pacific and India. Therefore with a greater geographic spread of work our dependency on our traditional markets in the Middle East has been mitigated.

turnover by region 2013-14

turnover by region 2014-15

£8.9m

£10.2m

Europe 7%

Europe 7%

£15.9m

£19.3m £47.1m

Rest of World 12%

Middle East 37%

£21.0m

£48.0m

Rest of World 13%

Middle East 32%

£27.1m

USA 16%

£35.2m

USA 18%

£43.9m

UK 28%

TOTAL: £128.1m

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UK 30%

TOTAL: £148.5m

burohappold engineering Annual review 2015

L i q uidit y The other key financial change has been in the funding and liquidity of the business. In 2009 the business was using its facilities with a net debt position of £6.4m and borrowing from the banks of £10.6m. This indebted situation has been turned around through a strategy of targeting improvement in margin, cash flow, balance sheet management and working capital effectiveness.

The business in 2013 negotiated a new 3 year facility with HSBC. It is pleasing to see that the group now only has debt in the North American entities, where an overdraft facility of $3m is in use. We are operating under a net cash position of £15.6m at 30 April 2015. This has been increased further in the current financial year.

14/15

£17.2m

14/15

(£1.6m)

13/14

£12.9m

13/14

(£7.6m)

12/13

£6.9m

12/13

(£9.3m)

11/12

£5.0m

11/12

(£11.0m)

10/11

£2.0m

10/11

(£10.8m)

09/10

£3.6m

09/10

(£2.2m)

08/09

£2.4m

08/09

(£10.9m)

CASH

overdraft and loans

14/15

£15.6m

14/15

5%

13/14

£5.3m

13/14

32%

12/13

(£2.4m)

12/13

40%

11/12

(£6.0m)

11/12

58%

10/11

(£8.8m)

10/11

56%

09/10

£1.4m

09/10

10%

08/09

(£8.5m)

08/09

65%

NET CASH / (DEBT)

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DEBT to EQUITY RATIO

burohappold engineering Annual review 2015

working ca p ital Our project portfolio includes a number of long term contracts in a diverse number of countries. Historically our client base prefers to pay for our services once they have been delivered hence our business has previously operated with high levels of debt. Recently we have ruthlessly pursued markets, service offers, projects and clients where we have been able to better control cashflows and

as a result we have seen a significant improvement in our liquidity position. Our internal measure of working capital is Days Sales Outstanding (DSO) which is a blend of debtor days and unbilled value. Our DSO currently stands at 91 days, reducing from 137 days in 2009 and our trade debtors have significantly reduced from £56m in 2009 to £37m in 2015.

14/15

91

14/15

£36.9m

13/14

107

13/14

£37.7m

12/13

107

12/13

£32.9m

11/12

108

11/12

£34.4m

10/11

124

10/11

£40.8m

09/10

131

09/10

£44.4m

08/09

137

08/09

£55.9m

DSO DAYS

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TRADE DEBTORS

burohappold engineering Annual review 2015

PEOPLE Our ability to grow is entirely dependent on our access to exceptional people. Our market is highly competitive and we continue to attract the best in our industry across all of our markets. We have added talent in every part of our business and continue to grow to meet the changing needs of our project portfolio. Given our strong project book, we are excited to enter the new year with confidence.

14/15

1,562

13/14

1,354

12/13

1,268

11/12

1,320

10/11

1,348

09/10

1,396

08/09

1,607 average number of employees

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burohappold engineering Annual review 2015

T he E ssence of Buro H a p p old Through one global community of driven, world leading engineering professionals, we deliver elegant solutions for buildings and cities. We believe in harnessing the magic of the engineering mind; embracing the difficult, striving for progress; bridging science and society; and the pursuit of simple honest truth.

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