Richard Wankmuller, newly named CEO and Managing Director of Australia-based design firm Cardno Ltd., (No. 35-Top 150 Global Firms) is an American who formerly headed North American operations for GHD Pty., also based in that country. He has lived and worked in Australia twice over a five-year period. Wankmuller takes over the $1.1 billion-firm as it faces a profit shortfall in business results ahead of its year-end announcement on Aug. 18 and in adapting to changing markets in Australia and North America, in particular. The firm cut about 300 staff out of about 8,000 in the last six months, according to the Financial Review of Australia. ENR queried him on strategies ahead to meet the challenges.
Update: Cardno CFO Graham Yerbury, who had been interim CEO for six months before Wankmuller took over, is leaving the firm in October for a similar role at oil and gas firm Senex Energy, Cardno said on July 29. Chairman John Marlay expressed disappointment on the departure to an Australian publication, but said "no internal issues were at play."
What are the continuing risks in Australia’s economy? Are there potential market opportunities?
Australia remains a challenging and uneven market. The slowdown in capital expenditures in the resource sector has obviously had a significant impact in many key states. This situation has been further aggravated by recent delays and in some cases, cancellations of planned infrastructure upgrades due to recent changes in state governments and associated infrastructure policies, with cutbacks in public sector spending to rein in budget deficits. In parallel, New South Wales is moving forward on some very impressive infrastructure upgrades. This has created a shortage of top people in some areas while fueling business uncertainty in others. This is disappointing as it creates turmoil in our industry and we hope that some delayed work will be brought back to the market in the near future. Several very large infrastructure projects are due to start also in Queensland. The other hopeful signs relate to the need for the LNG projects to continue. This includes some work at the LNG Curtis Island and Gorgon facilities. It is our hope that the North Rankin gas compression project off the western coast continues as planned and that there will be ample opportunities for firms like Cardno to assist in development of facilities.
What is the outlook for Cardno in North America, particularly the US? How are you reassessing the region?
I feel positive about the outlook in the Americas. We have great people and a diverse platform from which to serve our clients. We are also now well positioned to benefit from the integration activities last year and expect to see some real gains in efficiencies and capabilities. Over the past couple of years, we have adjusted staffing levels in the region in response to the winddown of our monitoring and remediation of impacts of the Gulf of Mexico oil spill. We added up to 600 staff at the peak of our engagement and in the past 12 months we have reduced staffing to our normal level as our involvement wound back. We have also adjusted to impacts from the dramatic drop in oil prices and have begun to retool towards services that are less dependent on new investments. Recent wins are starting to replace cancelled work. In the interim, this will remain challenging, as it is for many in the sector. However we expect to see an improvement in performance of [our services unit.]
Are there specific factors that are helping your company find success in the international design market?
Cardno’s international presence and diverse technical expertise have the company well positioned on a wide range of projects, both large and small, across a broad range of market sectors. We applied our “big data” management techniques developed during our work on the oil spill to our work on the Inpex project in Darwin. We have also transferred our strong environmental remediation skills from the US to win work for a global oil and gas major in Australia. Likewise we’ve leveraged our construction materials testing expertise developed on LNG projects in Queensland and applied to projects in Texas. Deep water drilling expertise and asset management capabilities are also globally applicable to a wide range of clients. Cardno also has unveiled a new biodiversity mapping tool aimed at helping the US-based energy industry identify habitats of threatened or endangered species there.
Cardno is experiencing strong growth in markets where global clients are seeking a blend of engineering, environmental and social assistance to help solve complex problems on projects. Examples include Kosovo, Nigeria, Liberia, Mozambique, Angola, Kenya, Tanzania, Indonesia, Papua New Guinea, the Philippines and New Zealand. In these countries we are able to provide a range of engineering, environmental and social development services across sectors including transport, water, mining and oil and gas.