Driving sustainable growth with an increasing order book
The Ramboll Group further improved revenue in 2018 and significantly strengthened its international presence with a major US acquisition. The company order book is developing positively.
Ramboll realised strong organic growth of 7% in 2018, while our order book stood at a record high - up by 31% growth compared to last year.
Underlying this were some significant measures aimed at further driving our growth.
A central element of our ‘Winning Together’ strategy launched in 2017 were our Spearhead services where we utilise our global expertise to provide high-end solutions internationally.
In 2018 Ramboll operationalised and further developed new Spearhead service offerings to drive growth and strengthen specialisation. They include services such as High-Rise Buildings, Major Crossings, Smart Mobility, Offshore Wind and Waste-to-Energy. Since their introduction, Spearhead services have shown impressive growth, particularly within Buildings and Transport which have experienced double-digit growth rates.
Spearhead services are part of a new matrix operating model to enhance efficiency and collaboration across the company which was made fully operational on 1 January 2018. As a result, we have initiated more projects across business units than ever before, and cross-regional revenue synergies have increased significantly. Similarly, the establishment of our Key Account Programme has helped Group-wide accounts grow by 15% during the year, well in line with our target of these accounts being double the growth of the company.
In addition, our sustainability strategy is now bearing fruit. We can see how our strong expertise in sustainability is increasingly recognised as a differentiator in the market and thus a catalyst for growth. Today 55% of our services are already directly and positively contributing to the UN Sustainable Development Goals (SDGs), through services in green energy, water treatment, environmental remediation and our sustainability consulting services in Management Consulting among others.
The UN Sustainable Development Goals and the UN Global Compact Principles will continue to be important frameworks for Ramboll. We remain committed to them, and we are well on the way to delivering on our ambitions to grow the services that directly and positively contribute to the SDGs by 40% until 2020.
Reinforcing the focus on continuing to integrate sustainability into our business, we have this year chosen to combine our Corporate Responsibility reporting into the Annual Report.
In 2018, we also launched our digital innovation strategy which focuses on ‘How We Work’, e.g. using digitalisation and automation to increase productivity, ‘What We Offer’ - such as digital twins and smart city solutions - and ‘How We Innovate’, utilising the skills of all our 15,000 employees.
The acquisition of OBG was another important strategic milestone that was reached in 2018. OBG significantly strengthens our US platform by expanding our Water, Energy and Environment & Health services and almost doubling the workforce in the US to close to 2,000 employees. Over 90% of shareholders in OBG voted in favour of the acquisition, reflecting the fact that Ramboll and OBG are a strong commercial and cultural fit and that it is a group of motivated colleagues who are now joining Ramboll. On that basis we are confident that we will be able to leverage the many synergies between our companies to the benefit of clients and employees alike.
In the UK, our results were impressive despite the insecurity surrounding Brexit, and we achieved 19% growth. Our business units in the Middle East & Asia have also shown strong growth and solid profitability.
However, there were challenges during the year. While we have seen a significant improvement in areas that have been underperforming, we have also seen a slight slowdown among traditionally strong performers. Geographies such as Sweden and Denmark had slower than expected growth which resulted in reduced profitability. Our Energy market, which in the past has been among one of our most profitable, was affected by a sluggish Danish market.
These setbacks unfortunately impacted our profit margin which ended below our ambitions. In the coming year we will therefore focus on improving these areas so that we can better transform the strong growth into higher profits.
Another priority will be to successfully integrate OBG within Ramboll and establish a new Americas business unit in order to create a strong platform for future investments. We will also focus efforts on Germany which we see as a key market for future growth. We aim to create a strong platform there during the next few years in order to achieve significant growth, both organically and through acquisitions. With close to 500 engaged employees in Germany, we have a great starting point.
And last but not least, we will continue to invest heavily in implementing our digital strategy to realise our ambition to become a digital leader in our industry.
None of the hard work carried out during 2018 would be possible without the professionalism and dedication of our employees and we would like to take this opportunity to thank them for their hard work throughout the year.
Jens-Peter Saul, Group CEO
Jeff Gravenhorst, Chair of the Board