TZL 1337

T R E N D L I N E S M a r c h 2 3 , 2 0 2 0 , I s s u e 1 3 3 7 W W W . T H E Z W E I G L E T T E R . C O M

Value per EBITDA

The situation is changing quickly, but versatility and fast decision-making have become necessary. How are AEC firms reacting to COVID-19?

In Zweig Group’s 2020 Valuation Survey of AEC Firms , value per EBITDA (earnings before interest, taxes, depreciation, and amortization) was calculated for firms and sectioned off into many subcategories. The growth rate of firms was particularly interesting in this analysis. Fast growth firms had a much lower value per EBITDA (2.70) relative to the overall median (3.87), while firms who were stable (5.31), or experiencing a decline in growth (6.89) were on the other end of the spectrum. As firms grow in size and revenue, the relative value of the equity of the firms also increases. F I R M I N D E X ATSE Consultants, LLC.........................10 BSI Engineering......................................6 CHA Consulting, Inc................................4 Environmental Design Group.................10 Moody Nolan..........................................8 RLG Consulting Engineers....................10 Urban Engineers.....................................8 MO R E A R T I C L E S xz MARK ZWEIG: We can all make it through this Page 3 xz Positive force: Phil Beirne Page 6 xz TAMMI NAGUCKI: Connecting through empathy Page 9 xz STEPHEN KEEFE: Intellectual property (Part 1) Page 11 Participate in a survey and save 50 percent on any Zweig Group research publication.

O n Thursday, March 12th, Zweig Group launched a survey to see how AEC firms are reacting to challenges presented by the situation surrounding the coronavirus (COVID-19). As of Sunday, March 15th, 77 firms from nearly every geographic region of the U.S., size range, and AEC discipline, had responded to the survey. The majority of the respondents to the survey were firm leaders, directors, and managers with decision-making capability in their organizations. At the time of this survey, just 8 percent of firms had suspended all business travel, with the majority of firms (55 percent) conducting business travel on a case-by-case basis. Twenty-two percent of firms stated the virus has not impacted travel policies at their firm in any way. Zweig Group expects these numbers to shift rapidly as the government institutes more strict policies around social distancing in an effort to stop the spread of the virus. With many organizations across all industries encouraging or requiring employees to work remotely, more than 14 percent of AEC firms that participated in this survey do not currently allow for any employees to work remotely and had not issued any policy changes in response to COVID-19. WGI, a 600-person national design and professional services firm, was early to institute policy changes: “At WGI our number one priority is the health of our associates and their families. Our Crisis Management Team is working hard to review countless sources of information from a diverse array of experts and communicate across 18 offices in eight states in a calm, consistent, and clear voice. The reality is that there is no crystal ball that provides perfectly clear guidance on how to proceed. The data and trends are alarming and the COVID-19 pandemic is a very fluid and quickly changing situation. In real time we must evaluate the data before us and use our best collective judgement. Our goal is to implement a plan that addresses the potential serious health and operational consequences without adding to the fear and overreacting,” said Michael L. Davis, senior vice president and chief strategy officer, WGI. Firms that already have the policies and technology in place to allow for remote work have a leg up, but are still seeing some challenges related to the virus. Blackstone Consulting LLC, an environmental firm with 55 employees, currently has a completely remote workforce. Although

Christina Zweig Niehues

See CHRISTINA ZWEIG NIEHUES, page 2

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