IMPROVING MARGINS THROUGH BETTER MI23RD JUNE 2016

Neil Morling CFO, Olswang LLP

Margin Improvement: to some a simplistic cost cutting exercise but to the more fortunate an opportunity to challenge the way an entity operates.

Pivotal to any improvement will be the M.I.

Introduction

EC Harris was a traditional LLP exiting recession, while having remained profitable found the world a very different place

We were an international built asset consultancy driven to deliver positive client outcomes across an asset's lifecycle.

Background

Sector consolidation was rampant driven by a blend of "survival instinct" and mega opportunities which demanded breadth and depth on a global level combined with the need for stronger balance sheets.

ARCADIS NV appeared a near perfect fit for EC Harris BUT our numbers just weren't good enough to secure full value.

Context

Spring of 2011 Gross revenue of £300m: 60% UK, 20% Middle East (Dubai),

20% Asia (Hong Kong) Our EBITA was c. 3%, entry ticket was 5% with a clear three

year route to 10% Predicted revenues were not wholly reliable 80% of cost base was people, 10% accommodation

The Challenges

1. Creating an awareness – WHY2. Creating a vision – WHAT3. Some examples – HOW4. Embedding - WHEN

The 4 key stages

Creating an awareness – WHYAssessment

1. Challenges of growth especially global Yes2. Economic downturn and tougher trading conditions Yes3. Changes in strategy Yes4. Technological changes Yes

5. Competitive pressures incl. M&A Yes6. Customer pressures, shifting markets Yes7. Learning new organisation behaviours and skills Looming8. Government legislation Probably

1. Creating an awareness – WHY2. Creating a vision – WHAT3. Some examples – HOW4. Embedding - WHEN

The 4 key stages

Desired Outcomes Ability to continually invest in clients, markets,

technology and capability Clearly understood Operating Model Clear accountability for P&L performance Clarity of MI at all levels within the organisation. Improved certainty on view of future revenues A cost base managed using foresight and not

hindsight,

1. Creating an awareness – WHY2. Creating a vision – WHAT3. Some examples – HOW4. Embedding - WHEN

The 4 key stages

Reshaped P&L

An MI Pyramid

The “Fan” Chart

Revenue Outlook

The Business Cycle

1. Creating an awareness – WHY2. Creating a vision – WHAT3. Some examples – HOW4. Embedding - WHEN

The 4 key stages

Embedding ChangeWe Identified 8 steps

1. Develop a high degree of urgency2. Secure absolute support of Board3. Develop a vision4. Communicate 5. Empower6. Capture quick wins7. Do not give in, refine if necessary8. Embed, play to it at all levels at all times

Twelve months to December 2011: Gross revenue £305m, Net Revenue £270m EBITA 4.2% Averaged DRO 95 days

Twelve months to April 2014 Gross Revenue £325m, Net Revenue £300m EBITA 10.1% Average DRO 80 days

The Rewards

Questions … ?