Ch2m Hill Companies, Ltd.

CH2M HILL's name is a bit tricky, but the engineering and construction firm is all up front. The firm (named for its founders Cornell, Howland, Hayes, and Merryfield) operates two divisions: Energy, Water and Facilities; and Government, Environment and Infrastructure. Federal projects are a significant source of revenue. Public sector clients include the US Department of Energy and the Department of Defense. CH2M HILL also works for state and local governments building water and wastewater systems, airports, highways, and other transportation projects. Its energy and water division targets private sector clients, utilities and local and state governments. Founded in 1946, the firm is owned by its employees.

Geographic Reach

The US accounts for more than two-thirds of Colorado-based CH2M HILL's business. The remainder comes from some Asia, Australia/New Zealand, Canada, Europe, Latin America, and the Middle East and Africa: some 120 countries in all.

Operations

CH2M HILL operates two business segments. The larger of the two, Energy, Water and Facilities (EWF), accounts for about 55% of sales, while Government, Environment and Infrastructure (GEI) represents the rest. The firm's EWF business is comprised of the energy and chemicals, industrial and advanced technologies, operations management, and power and water businesses. Services include consulting, design, engineering, design-build, operations and maintenance, construction management, and program management, among others. GEI houses the environmental services, government facilities and infrastructure, nuclear, and transportation businesses. The US government is the division's #1 client. Indeed, US federal contracts accounted for 18% of the company's revenues in 2013, compared with about 28% of revenue in 2012.

In 2013 CH2M HILL derived 36% of its total revenues from fixed price and guaranteed maximum price contracts.

Sales and Marketing

The company’s clients include  US federal and foreign government agencies, state and local governments, private sector companies and utilities.

Financial Performance

After experiencing revenue growth in 2012 in the EWF segment and GEI segments, in 2013 CH2M HILL’s revenues decreased by 5% as a result of reduced EWF segment revenues due to less work done on three EPC power projects and lower demand for new power plants (due to increased energy efficiency efforts that has pushed back new construction projects). A decrease in gas processing and pipeline projects in Canada resulted in lower revenues from the engineering and construction business, partially offset by stronger revenues from construction projects in Alaska and program management services in the Middle East). GEI segment revenues declined by 1% due to lower volumes in its nuclear markets as a result of a decrease in funding levels for large DOE projects.

In 2013 HC2M HILL’s net income grew by 27% due to lower operating costs and a decline in the provision for income taxes.

The company’s operating cash inflow decreased to $93.24 million in 2013 (from $134.19 million a year earlier) due to a gain on the termination of lease obligation and a change in working capital.

Strategy

In 2014 CH2M HILL announced that it is taking steps to restructure the company to improve efficiency, reduce risk, and create more opportunity for profitable growth. The restructuring aims to gain over $US100 million in operational efficiencies, and will include cutting the company’s workforce by about 5% (about 1,200 people).

It plans to align its business to five key integrated markets and six core regions in order to more effectively serve the infrastructure needs of its clients: Energy, Environment & Nuclear, Facilities & Urban Environments, Transportation, and Waters. T

Company Background

In November 2011 the company acquired Halcrow Group, a London-based specialist in environmental, infrastructure and transport projects for an estimated $192 million. The deal helped boost CH2M HILL's facilities and infrastructure revenues and expanded the company's global reach, adding Halcrow's extensive client list and about 100 offices worldwide.

In 2011 CH2M HILL expanded its public transit business when it acquired the state and local government transit consulting business of  Booz Allen Hamilton.

The company, which is owned by its employees, was founded in 1946.

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Ch2m Hill Companies, Ltd.


9191 S Jamaica St
Englewood, CO 80112-5946
Phone: 1 (303) 771-0900
Fax: 1 (303) 7702616
www.ch2m.com

STATS


  • Employer Type: Private
  • Chairman and CEO: Jacqueline Hinman
  • EVP and CFO: Gary McArthur
  • EVP, Chief Operational Excellence Officer, and Chief Delivery Officer: Michael Szomjassy

Major Office Locations

  • Englewood, CO

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