Engineering consultancy DHV is busy adjusting its capacity to the shifts in the engineering market. As a result, the number of jobs in its Building & Industry and Aviation business groups decreased by 10%. However, thanks to growth in its infrastructure and water consulting activities, DHV's total staff numbers remained unchanged at 5,500. These figures are from the Group’s mid-year results.
The movements in staffing demonstrate how the entire engineering market is being affected by the recession. It is primarily those segments that have many private clients that are feeling the squeeze.
Despite the weakening market, DHV’s turnover in the first half of the year rose to EUR 235 million, an increase of 8%, which was also affected by currency-market pressures. The operating result before amortization, however, dropped by 15% to EUR 8.8 million, while net profits decreased by 37% to EUR 3.2 million. The causes of this decrease include one-off items and higher financing costs. "Given the poor state of the economy, our performance was actually not bad", says executive president Bertrand van Ee.
According to the DHV executive, the market worsened particularly in the second quarter. "From that point on, we saw sales into 2010 falling back." However, there are wide variations between the markets. In those Asian countries where DHV is active - primarily China, India, and Indonesia - there is still a great amount of work, as there is in Poland, which is preparing its infrastructures for the European football championships in 2012. In South Africa, where DHV has a large subsidiary, the order-flow has dropped radically, now that the preparations for the football World Cup are all but complete. "But everybody there is actually waiting for the moment that Zimbabwe opens up", says Van Ee, "when that happens, you’ll suddenly have a completely different scenario."
DHV says that it is experiencing little pressure on its fees. According to Van Ee, this is mostly because government clients no longer only look at the price, but are also increasingly focusing on quality. "Large clients like the Dutch Directorate for Public Works and Water Management, ProRail, and Schiphol have made huge progress in professionalizing their commissioning over the last few years", he says.
Van Ee does not think the crisis provides grounds for tempering DHV's growth ambitions - the consultancy aspires to 10% annual growth in turnover. "That 10% is what you need just to hold onto your position in the sector. Worldwide, the market is undergoing enormous consolidation."