Sustainability report 2009

The majority of our work is for customers who are financially stable, long-term investors in infrastructure. There is long-term demand for infrastructure − driven by demographic change, growing prosperity and expectations, and the need to replace ageing assets. As infrastructure assets grow in scale and complexity, their owners want to work with more fully integrated partners who can deliver more complete solutions.

We have built a portfolio of high-quality, market-leading businesses operating in Professional services, Construction services, Support services and Infrastructure investments. Together, they are the four components of a full-service infrastructure business: they can be brought together in any combination to provide an integrated capability. Where all four components meet, we are at our most competitive and capable, meeting the needs of major customers in the public, regulated and private sectors.

The acquisition of Parsons Brinckerhoff has brought the scale and reach of our Professional services business into proportion with the other three businesses, and gives us the capacity to develop the Group’s depth of expertise and breadth of geographies and services across the infrastructure market.

Our goal is to become a world-leading provider of services to infrastructure owners.

We have first-class capabilities and experience in many fields, and can bring them together to deliver the largest and most complex projects.

Track record and proven expertise are hard for competitors to imitate. They enable us to attract the best people, win the most interesting and challenging projects from the best customers, and develop the best relationships with our supply chains.

The opportunities in our markets are substantial. The underlying demand, and necessity, for social and civil infrastructure provides us with a secure and attractive market environment. There will continue to be exciting opportunities in many of our markets and inevitably, there are also going to be challenges in others.

The aftermath of the global financial crisis is changing our world. Over half our work is for governments, mostly in the UK and US, and so far we have benefited from the length of our order book and governments’ need to maintain economic stimuli. However, while they recognise the need to maintain long-term investment in infrastructure, in the short term there will be cut backs while large fiscal deficits are paid down.

Around half of the rest of our work is for utilities and other regulated businesses. These tend to invest through the economic cycle and we expect their spending to remain stable, with the potential for future growth.

We are diversified through our market and geographic positions, and have the right skills and capabilities to take advantage of the demand for infrastructure.

To realise our potential we must:

– Share knowledge and integrate our capabilities even more effectively. We have made progress over the past few years, but still have some way to go and must integrate Parsons Brinckerhoff into the process.

– Ensure we are as competitive as we can be by evolving our structures and processes to leverage our scale and maximise efficiency.

– Continue to act like a leader, setting the standard in areas such as ethics, safety, sustainability and in our relationships with our customers, our supply chain and our people. Leadership is not only about having the biggest market share; we must behave like an organisation of real substance and stature.

To maintain growth in these market conditions, we need to focus our strategic development where most investment is going to be made. We cannot forecast with certainty where this will be, but have taken positive steps to meet future trends and expect our focus to include growing our business in the US, expanding our capabilities in particular sectors such as water and power generation, including nuclear, and building our position in industrial and commercial building markets.

Importantly, we now have a platform with the capability and strength to adapt rapidly to market conditions. This flexibility is itself a further competitive advantage, and will enable us to participate in the most promising opportunities as they emerge.