Businessmodel of CH2M

Customer Segments

CH2M provides a range of services designed to service clients across multiple industries, including public and private sector organisations. The Company’s customers can be organised into the following principal categories:

• Government, including municipal, state, and federal government bodies in the US, as well as public bodies and agencies in foreign jurisdictions;
• Oil and Gas, including national and independent oil and gas producers, pipeline operators, refiners, and chemicals processing companies;
• Energy, including power generators, and energy companies;
• Transportation, including companies operating in the aviation, highway and bridge, ports and maritime, and transit and rail market sectors;
• Water, including companies involved in the wastewater, drinking water, industrial water, conveyance and storage, water resources and ecosystem management, and intelligent water solutions industries; and
• Industrial, including engineering, manufacturing, and technology companies. CH2M serves a number of high-profile public sector organisations, including the US Department of Defense, the US Department of Energy, the US Department of Transportation, the UK Environment Agency, and the UK Department of Transport.

CH2M’s principal market is its native US. The Company also serves an international customer base, including clients across Asia Pacific; Canada; Europe; Latin and South America; and Middle East, North Africa, India.

Value Propositions

CH2M provides value to its clients in the following ways:

• Its industry standing and reputation, with the Company established as a leading provider of engineering, construction, and related consulting services, having a track record for providing high-quality services, and including a number of high-profile public bodies, such as the US Department of Energy, among its clients;
• Its broad portfolio of services and solutions, with the Company providing a broad range of services, targeting a broad spectrum of industries, including waste management, decontamination, design-build delivery, remediation, operations and maintenance management, and program management services;
• Its international reach, with the Company serving customers across 50 countries worldwide, including an extensive domestic client base, as well as international markets across Asia Pacific, Europe, Latin America, Middle East, and Africa; and
• Its industry expertise and experience, with the Company employing highly-trained specialist personnel across its multiple operating segments, as well as a team of experienced industry executives. ### Channels

CH2M operates a website at www.ch2m.com, through which it provides information on its various services, solutions, and locations. The Company, however, does not operate an online sales channel, nor does it offer customers an online portal through which they can manage their transactions.

The Company provides services to its customers directly through its in-house sales and service personnel. These members of staff operate out of the Company’s international network of offices, which spans North America, Latin America, Asia Pacific, the Middle East, and Europe, including locations in India, the US, Poland, the United Arab Emirates, Qatar, Hong Kong, and Malaysia.

CH2M also operates through a network of dedicated practices across its various operating, and provides services to its clients on-site as the prime contractor, a subcontractor, or through joint ventures or partnership agreements with other service providers.

Customer Relationships

CH2M does not provide products or services to its customers on a self-service basis. Instead, the Company serves its clients directly through its in-house sales and service personnel. These specialist professionals consult directly with clients to establish an individual project brief or contract with each customer, working closely with customers throughout the duration of its contracts and projects to ensure that all needs are met.

CH2M’s clients are typically given their own account management teams or individual account executives, who are available to provide assistance at all times. Customers are also able to contact the Company’s various offices around the world over the phone, or can contact certain departments via email, in order to receive personalised care.

CH2M publishes news coverage concerning the Company and press releases on its website for its customers, partners, and investors. It also provides information on its upcoming events, enabling customers to attend relevant events. Alternatively, customers can interact directly with the Company, and follow its corporate developments, through its social media accounts, including with LinkedIn, Facebook, and Twitter.

Key Activities

CH2M provides a range of engineering, construction, consulting, design, design-build, procurement, engineering-procurement-construction, operations and maintenance, program management, and technical services in the US, as well in international markets across Asia Pacific, Latin America, Europe, the Middle East, and Africa.

The Company aligns its operations into five principal business segments: Environment and Nuclear, which provides environmental services, government facilities design and operations services, and nuclear engineering and consulting services; Industrial and Urban Environment, which provides design, engineering, and consulting services to the industrial and advanced technology and the urban environments and sports markets; Oil, Gas, and Chemicals, which provides services such as engineering-procurement-construction, and construction management to the oil and gas, and chemicals sectors; Transportation, which provides horizontal and vertical infrastructure development services; and Water, provides integrated, sustainable solutions to various segments of the water industry. The Company also operates a Power segment the operations of which fall largely under the Industrial and Urban Environments segment.

Key Partners

CH2M works closely with a range of partner companies and organisations across its multiple operating segments. These partners can be organised broadly into the following categories:

• Supplier and Procurement Partners, comprising suppliers of materials, equipment, tools, technologies, and services that support the Company’s operations across all five core business segments, as well as companies to which certain functions can be outsourced;
• Joint Venture Partners, comprising a range of companies with which the Company jointly provides services and solutions through mutually owned entities;
• Research and Development Partners, comprising a range of industrial and engineering companies with which the Company jointly develops innovative solutions and processes; and
• Sustainability Partners, comprising a range of non-profits and charitable organisations, with which the Company collaborates on community and sustainability projects around the world. CH2M has launched a number of partnerships in recent years. This includes a partnership with the City of Grants in New Mexico to provide operations management services, a tie-up with ConocoPhilips as part of a collaborative water treatment study, and a consulting deal with DuPage Airport Authority.

Key Resources

CH2M’s key resources are its supply chain and physical resources – including tools and equipment, its intellectual properties, its IT and communications infrastructure, its network of offices, its partnerships, and its personnel – notably its technical staff.

CH2M owns a number of intellectual properties. Searches of records published by the US Patent and Trademark Office identified numerous patent applications in which the Company was named as applicant or assignee, including applications entitled ‘Aluminum phosphate ceramics for waste storage’, ‘Method and system for treating wastewater’ and ‘Low phosphorus water treatment systems’.

CH2M also owns and/or leases properties, primarily office space, in 37 countries across the Americas, Asia Pacific, Europe, the Middle East and Africa.

Cost Structure

CH2M incurs costs in relation to the development of its technologies and solutions, the procurement of supplies and equipment, the maintenance of its IT and communications infrastructure, the procurement of professionals services, the implementation of marketing campaigns, the management of its partnerships, and the retention of its personnel.

In 2015 CH2M accrued total cost of services in the amount of $4.34 billion, and selling, general, and administrative expenses totalling $930.27 million.

Revenue Streams

CH2M generates revenue through the provision of various engineering, consulting, and management services provided under contracts to private and public sector organisations. The Company’s services include decontamination, remediation, waste management, design-build delivery, operations and maintenance management, construction management and program management solutions.

In 2015 CH2M generated revenue of gross annual revenue in the amount of $5.36 billion, down on the $5.41 billion recorded by the Company in 2014. The Company’s largest revenue generator was its Environment and Nuclear segment, which generated revenue of $1.66 billion, followed by the Water segment, which generated $1.24 billion. None of the Company’s other segment generated more than $1 billion in revenue.