- Market assessment of the Dutch professional services industry - November 2014 Copyright 2014. All rights reserved.
Table of Contents Introduction 3 Professional Services Industry 5 Market Size per Industry 11 Key Findings 24 Appendix 31 2
Introduction Research Question Key Question What is the size of the Professional Services industry in the Netherlands? Definition of Professional Services Accounting Advertising Architecture Engineering IT Consultancy* Management Consulting Market Research Notary Public Relations Scientific Research Legal Other Professional Services* Market Definition Definition of professional services is for a large part in line with the definition applied by the CBS, with two differences * Note that IT consultancy (SBI 08 code 62.02) and Other professional services (SBI 08 code 82) are not categorised as professional services by the CBS (SBI 08 code M). For the purpose of this study both segments have been added to the definition of the professional services market. Other professional services in addition includes professional services not explicitly classified in one of the other categories. Companies of all sizes in scope Market Scope 100+ FTE 50 100 FTE 10 50 FTE 1 10 FTE Geographic Scope + UK benchmark Companies located in The Netherlands Data Scope Publicly available information: Government statistics, annual reports of firms Analyst firms, economic institutions, research departments of banks Databases: Statline, Kamer van Koophandel, Company.info, ONS 3
Table of Contents Introduction 3 Professional Services Industry 5 Market Size per Industry 11 Key Findings 24 Appendix 31 4
Professional Services Industry Development of Dutch Enterprises There currently are more than >1,4 million enterprises in NL, an increase of 114% over the past 15+ years The number of active enterprises has increased every single year (CAGR of 5,2%) with the exception of 2002 Development of total number of Dutch enterprises (1999 2014) 1.600.000 1.400.000 1.200.000 1.000.000 Other firms Professional Services + 756.960 enterprises = +113% +32% * 987.365 1.088.375 1.158.410 1.227.795 5,4% 1.296.105 1.365.960 1.387.995 1.428.005 +113% 800.000 671.045 679.565 688.655 1,2% 693.430 689.180 705.180 719.405 746.365 600.000 400.000 +281% 200.000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2013 2014 15% 10% 5% 0% 1,3% 1,3% 0,7% -0,6% 2,3% 2,0% 3,7% Change of definition 10,2% 6,4% 6,0% 5,6% 5,4% 1,6% 2,9% -5% Year over year growth of total number Dutch enterprises * See Slide 35 in the Appendix for details 5
Professional Services Industry Development of Dutch Enterprises Industry Development of Enterprises per Industry Number of companies per sector Sector % Growth 2007-2014 % Growth 2013-2014 +2,9% 1.400.000 1.200.000 1.000.000 800.000 +24,4% 987.365 3,4% 4,9% 3,7% 6,8% 5,6% 4,8% +13,0% 1.227.795 3,6% 4,3% 3,7% 5,7% 5,7% 5,4% 6,2% 6,0% 1.387.995 3,5% 4,0% 4,0% 5,1% 5,6% 6,1% 5,8% 7,5% 10,0% 1.428.005 3,5% 4,0% 4,1% 4,9% 5,5% 5,9% 6,2% 7,8% 9,8% Administrative & Support Services Manufacturing Information & Communication Agriculture, Forestry & Fishing Financial & Insurance Activities Arts, Entertainment & Recreation Other Service Activities Human Health & Social Work Construction 46,6% 16,9% 60,9% 5,8% 42,1% 77,1% 40,1% 39,6% -0,1% -1,0% 155,6% 1,6% 1,0% 0,9% 0,8% 5,4% 7,3% 9,2% 6,4% 10,9% 600.000 4,4% 10,2% 15,4% 14,9% Wholesale & Retail Trade 10,5% -0,2% 16,8% 400.000 19,5% 20,6% 21,0% Professional Services 74,3% 4,8% 19,6% 200.000 17,4% 9 different sectors (see Slide 32 for details) Professional services is the largest sector in the Netherlands, based on the number of companies 0 2007 2013 2014 6
Professional Services Industry Development of Professional Services The professional services industry consists of ~300,000 companies, of which ~86% is freelancer Over the past 15+ years, the industry has grown by 281% accounting for 21% of the total number of NL enterprises Development of Professional Services firms (1999 2014) 350.000 % CAGR 300.000 + 220.705 enterprises = +281% +8% 278.270 285.670 299.245 6 categories (see Slide 33 for details) 250.000 221.620 240.080 257.790 IT Consultancy Advertising 200.000 +40% * 171.665 199.935 Accounting Engineering 150.000 100.000 78.540 81.760 82.450 +6% 88.915 91.080 111.155 113.630 123.080 Other Professional Services - Industrial design consultancy - Translation and interpretation - Other professional services n.e.c. 50.000 Management Consulting 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2013 2014 Size % Share 25% 20% 15% 11,7% 12,0% 12,0% 12,8% 13,2% 15,8% 15,8% 16,5% 17,4% 18,4% 19,1% 19,6% 19,9% 20,4% 20,6% 21,0% Freelance 86% Small 10% Boutique 2% 0 Professional Services as % of total NL enterprises 9,3 >Medium 2% Rounded * See Slide 35 in the Appendix for details 7
Professional Services Industry Industry Breakdown 2014 Industry # Firms Freelance Breakdown by employee size (2014) Boutique Small Medium Large 2-5 FTE 5-10 FTE 10 50 FTE 50+ FTE Growth (2007 2014) Accounting 29.480 10% 79,2% 14,5% 3,6% 2,3% 0,32% 35,7% Advertising 29.090 10% 83,6% 11,9% 2,7% 1,5% 0,17% 43,9% Architecture 6.325 2% 78,6% 14,9% 3,6% 2,7% 0,24% 83,1% Engineering 30.070 10% 82,6% 10,8% 3,2% 2,9% 0,58% 45,7% IT Consultancy 14.325 5% 83,2% 9,5% 3,1% 3,5% 0,77% 107,8% Law* 8.185 3% 70,4% 17,9% 7,0% 4,1% 0,61% 70,7% Management Consulting 91.200 30% 90,1% 7,5% 1,2% 1,0% 0,13% 109,8% Market Research 5.550 2% 82,3% 11,1% 3,1% 3,0% 0,54% 33,9% Notary 1.405 1% 47,7% 18,5% 21,7% 11,7% 0,36% 16,1% Public Relations 2.660 1% 84,6% 10,2% 2,8% 2,3% 0,19% 36,4% Scientific Research 3.345 1% 74,1% 11,7% 5,2% 6,7% 2,24% 56,3% Other Professional Services 77.610 26% 88,8% 7,7% 1,6% 1,5% 0,47% 89,1% 299.245 Rounded * Looks only at Law firms, other Legal service providers included in the category Other 8
Professional Services Industry Employee and Concentration Analysis 2007 vs. 2014 Development by employee size (2007 2014) +74% 299.245 124.220 3.480 + 2,7% - 245-0,19% 135-10 + 0,11% - 0,01% 299.245 171.665 + 127,580 enterprises + 97,4% 171.665 ~97% of the growth in enterprises can be attributed to freelancers 2007 2014 2007 Freelance 1 FTE Boutique Small Medium Large 2-5 FTE 5-10 FTE 10 50 FTE 50+ FTE 2014 Development of concentration (Medium + Large enterprises as a share of total) Concentration ranges from 1.1% to 12.1% depending on industry -49,5% 24,0% -21,7% -66,3% 12,1% Large Medium -37,3% 8,7% -26,6% -27,9% 7,5% -29,0% -27,2% -20,6% -34,4% 5,8% 4,8% 4,7% -39,8% 4,9% 4,3% 3,6% 3,5% 2,6% 2,6% 2,9% 3,5% 3,1% 2,4% 1,7% 1,8% 1,1% 11,4% 9,0% -51,7% 4,1% 2,0% Weighted Avg. 2014 2,26% 2007 2014 2007 2014 2007 2014 2007 2014 2007 2014 2007 2014 2007 2014 2007 2014 2007 2014 2007 2014 2007 2014 2007 2014 Accounting Advertising Architecture Engineering IT Consultancy Law Management Consulting Market Research Notary Public Relations Scientific Research Other 9
Table of Contents Introduction 3 Professional Services Industry 5 Market Size per Industry 11 Key Findings 24 Appendix 31 10
Per employee range Market Size per Industry Accounting Firms 299,245 10% Growth 07 14 = 35,7% 5,4% 5,0% 5,2% 27.365 8,3% 25.975 24.745 23.525 Development of enterprises by employee size 2,2% 4,2% 1,2% 29.480 28.505 28.855 Large Medium # Firms 95 0,3% 675 2,3% -20,8% Growth 2007-2014 2,3% 21.730 Small 1.075 3,6% -5,3% Boutique 4.275 14,5% 8,9% Freelance 23.360 79,2% 47,0% 2007 2008 2013 2014 29.480 Development of financials ( /x million) Development of employees (x000) Revenue Costs EBIT EBIT Margin External/hired employees Internal employees 9.989 18,2% 1.815 9.743 18,5% 1.807 9.860 17,6% 1.733 9.727 17,7% 1.723 115,5 28,5 116,5 27,5-1,0% 114,2 27,2 112,1 27,2-2,4% 87,0 89,0 87,0 84,9-8.173-7.936-8.127-8.004 Industry Size % CAGR 11
Per employee range Market Size per Industry Advertising Agencies 299,245 10% Development of enterprises by employee size Growth 07 14 = 43.9% 3,2% 4,9% 0,3% 4,3% Large 29.090 7,0% 28.100 28.185 8,0% 26.800 25.685 9,9% Medium 23.995 22.210 Small 20.215 # Firms 50 0,2% 450 1,5% 795 2,7% -9,1% -5,3% -9,1% Growth 2007-2014 Boutique 3.470 11,9% 4,5% Freelance 24.325 83,6% 57,0% 2007 2008 2013 2014 29.090 Development of financials ( /x million) Development of employees (x000) Revenue Costs EBIT EBIT Margin External/hired employees Internal employees 6.223 6.646 6.387 13,7% 6.329 13,7% 54,2 +1,7% 57,9 55,9 57,0 11,1% 693 10,5% 695 875 866 23,6 25,1 26,1 26,6-0,7% 30,6 30,8 31,8 30,4-5.530-5.951-5.512-5.463 Industry Size % CAGR 12
Per employee range Market Size per Industry Architecture Firms 299,245 Growth 07 14 = 83.1% Development of enterprises by employee size 17,5% 1,1% # Firms Growth 2007-2014 2% 6,7% 2,6% 10,2% 20,6% 5.025 4.560 6,0% 5.325 6.255 6.325 Large Medium 15 0,2% 170 2,7% -57,1% -35,8% 3.455 3.685 3.780 Small 225 3,6% -26,2% Boutique 945 14,9% 21,2% Freelance 4.970 78,6% 140,1% 2007 2008 2013 2014 6.325 Development of financials ( /x million) Development of employees (x000) Revenue Costs EBIT EBIT Margin External/hired employees Internal employees 1.406 14,4% 1.339 14,5% 202 194 1.221 10,2% 125 1.053 11,9% 125 18,9 4,7 17,5 5,0-7,4% 16,2 4,2 15,0 4,7-27,5% -1.204-1.145-1.097-928 14,2 12,5 12,0 10,3 Industry Size % CAGR 13
Per employee range Market Size per Industry Engineering Firms 299,245 Development of enterprises by employee size Growth 07 14 = 45.7% 2,4% 3,3% 0,0% 4,8% Large 4,0% 30.070 11,3% 29.350 29.360 28.415 27.120 13,5% 26.070 Medium # Firms 175 0,6% 865 2,9% Growth 2007-2014 2,9% 5,5% 23.430 10% 20.635 Small 950 3,2% -3,1% Boutique 3.250 10,8% 4,8% Freelance 24.830 82,6% 59,5% 2007 2008 2013 2014 30.070 Development of financials ( /x million) Development of employees (x000) Revenue Costs EBIT EBIT Margin External/hired employees Internal employees 12.047 12,3% 12.360 12,1% 12.537 12,0% 12.275 11,0% 118.4 33,6 117.5 30,0-1.2% 116.2 30,7 114.2 30,8 1.486 1.495 1.507 1.345-1.7% 84,8 87,5 85,5 83,4-10.562-10.865-11.030-10.931 Industry Size % CAGR 14
Per employee range Market Size per Industry IT Consultancies 299,245 Development of enterprises by employee size Growth 07 14 = 107.8% 3,7% -0,6% 0,4% 3,6% 8,1% 32,4% 14.350 14.265 14.325 13.840 13.355 Large 12.355 35,4% Medium # Firms 110 0,8% 500 3,5% Growth 2007-2014 47,1% 83,3% 9.335 Small 445 3,1% 23,6% 5% 6.895 Boutique 1.355 9,5% 28,4% Freelance 11.915 83,2% 134,5% 2007 2008 2013 2014 14.325 Development of financials* ( /x million) Development of employees* (x000) Revenue Costs EBIT EBIT Margin Indicative Indicative 7.334 8,5% 7.674 9,4% 7.872 7,8% 7.934 8,9% 61,8 62,8 +1,8% 63,8 65,2 622 722 617 709-6.712-6.951-7.254-7.225 Industry Size * Indicative, financials and employee development estimated based on share within IT services market % CAGR 15
Per employee range Market Size per Industry Law Firms 299,245 Growth 07 14 = 70.7% 13,1% 9,6% 11,2% 6.605 5.840 5.330 4.795 7,8% Development of enterprises by employee size 5,5% 6,3% 2,6% Large 8.185 7.565 7.760 7.120 Medium Small # Firms 50 0,6% 335 4,1% 570 7,0% Growth 2007-2014 11,1% 6,3% 2,7% Boutique 1.465 17,9% 36,9% 3% Freelance 5.765 70,4% 105,2% 2007 2008 2013 2014 8.185 Development of financials* ( /x million) Development of employees* (x000) 3.224 Revenue Costs 3.158 EBIT EBIT Margin 3.305 3.263 Indicative 33,4 33,4 +0,7% 33,8 34,1 Indicative 20,0% 644 20,5% 647 20,2% 668 19,1% 622-2.580-2.511-2.638-2.640 Industry Size * Indicative, financials and employee development estimated based on share within legal market % CAGR 16
Per employee range Market Size per Industry Management Consulting Firms 299,245 Growth 07 14 = 109.8% 23,1% 53.490 13,4% 60.635 15,4% 70.000 8,2% Development of enterprises by employee size 10,2% 83.445 4,1% 86.895 5,0% 91.200 75.740 Medium 890 1,0% 27,1% Large Small 120 1.130 # Firms 0,1% 1,2% Growth 2007-2014 20,0% 9,2% 43.460 Boutique 6.850 7,5% 31,7% Freelance 82.210 90,1% 125,7% 2007 2008 2013 2014 91.200 30% Development of financials ( /x million) Development of employees (x000) Revenue Costs EBIT EBIT Margin External/hired employees Internal employees 14.289 18,7% 2.679 14.838 20,4% 3.034 15.231 19,9% 3.031 15.187 22,4% 3.405 141,2 54,1 154,4 60,5 +4,1% 162,5 159,3 66,0 64,2 +9,3% 87,0 93,8 96,5 95,1-11.610-11.804-12.200-11.782 Industry Size % CAGR 17
Per employee range Market Size per Industry Market Research Firms 299,245 Growth 07 14 = 33.9% 15,0% 26,2% 6.015 5.230 6,4% Development of enterprises by employee size 3,0% -2,7% -8,3% 6.590 6.400 6.415-5,7% 5.885 5.550 Large Medium # Firms 30 0,5% 165 3,0% -25,0% Growth 2007-2014 0,0% 4.145 Small 170 3,1% -5,6% Boutique 615 11,1% -10,2% Freelance 4.570 82,3% 48,6% 2007 2008 2013 2014 5.550 Development of financials ( /x million) Development of employees (x000) Revenue Costs EBIT EBIT Margin External/hired employees Internal employees 2% 1.764 14,0% 247 1.832 15,6% 285 1.775 14,6% 259 1.669 13,8% 230 22,0 5,8 22,4 6,4-2,5% 22,2 6,4 20,4 5,9-10,5% 16,2 16,0 15,8 14,5-1.517-1.546-1.516-1.440 Industry Size % CAGR 18
Per employee range Market Size per Industry Notary Firms 299,245 Growth 07 14 = 16.1% 1,0% 9,9% 2,8% -3,0% 7,4% 1,2% 1.445 1.485 1.500 1.455 1.300 1.315 1.210 Development of enterprises by employee size -3,4% Large 1.405 Medium # Firms 5 0,4% 165 11,7% -50,0% -41,1% Growth 2007-2014 Small 305 21,7% 24,5% Boutique 260 18,5% 44,4% Freelance 670 47,7% 35,4% 2007 2008 2013 2014 1.405 Development of financials* ( /x million) Development of employees* (x000) Revenue Costs EBIT EBIT Margin Indicative Indicative 639 626 655 647 6,6 6,6 +0,7% 6,7 6,8 0.5% 19,9% 128 20,5% 128 20,2% 132 19,1% 123-512 -498-523 -523 Industry Size * Indicative, financials and employee development estimated based on share within legal market % CAGR 19
Per employee range Market Size per Industry Public Relations Firms 299,245 Growth 07 14 = 36.4% 4,6% 6,2% 2.165 2.070 1.950 6,5% 2.305 5,2% Development of enterprises by employee size 2,3% 1,3% 5,8% Large 2.625 2.660 2.565 2.425 Medium Small # Firms 5 0,2% 60 2,3% 75 2,8% Growth 2007-2014 0,0% 9,1% 15,4% Boutique 270 10,2% 22,7% Freelance 2.250 84,6% 40,2% 2007 2008 2013 2014 2.660 Development of financials* ( /x million) Development of employees* (x000) Revenue Costs EBIT EBIT Margin Indicative Indicative 1% 439 18,7% 82 456 20,4% 93 468 19,9% 93 467 22,4% 105 4,3 4,7 +4,1% 5,0 4,9-357 -363-375 -362 Industry Size * Indicative, financials and employee development estimated based on share within respective market % CAGR 20
Per employee range Market Size per Industry Scientific Research Firms 299,245 Growth 07 14 = 56.3% 14,1% 12,4% 2.745 8,0% 2.965 5,7% Development of enterprises by employee size 2,9% 1,1% 3.225 3.260 3.135 2,6% Large 3.345 Medium # Firms 75 2,2% 225 6,7% Growth 2007-2014 0,0% 32,4% 2.140 2.405 Small 175 5,2% -2,8% Boutique 390 11,7% 23,8% Freelance 2.480 74,1% 77,1% 2007 2008 2013 2014 3.345 Development of financials ( /x million) Development of employees (x000) Revenue Costs EBIT EBIT Margin External/hired employees Internal employees 1% 3.922 4.336 4.618 4.666 37,3 5,4 38,4 5,1 +1,6% 38,5 39,1 4,3 4,9 +7,2% -4,1% -160-5,4% -233-2,9% -132-6,6% -307 31,9 33,3 34,2 34,2-4.082-4.569-4.750-4.973 Industry Size % CAGR 21
Per employee range Market Size per Industry Other Professional Services 299,245 Growth 07 14 = 89.1% Development of enterprises by employee size 9,5% # Firms Growth 2007-2014 13,5% 4,3% 77.610 Large 365 0,5% -6,4% 11,5% 8,4% 3,3% 59.850 16,8% 51.960 53.665 47.925 67.925 70.870 Medium Small 1.165 1,5% 1.240 1,6% -9,3% -16,5% 41.035 Boutique 5.960 7,7% 3,2% Freelance 68.880 88,8% 114,6% 2007 2008 2013 2014 77.610 Development of financials* ( /x million) Development of employees* (x000) Revenue Costs EBIT EBIT Margin Indicative External/hired employees Internal employees Indicative No data available 24.207 5,7% 1.376 23.478 4,8% 1.125 24.635 2,3% 573 158,7 51,7 179,7 55,2 +6,1% 187,0 57,8 189,7 58,3 +22,7% 26% 107,0 124,5 129,2 131,3-22.831-22.353-24.062 Industry Size * Indicative only, ~20% of financials included based on data from other providers in the market, mainly legal % CAGR 22
Table of Contents Introduction 3 Professional Services Industry 5 Market Size per Industry 11 Key Findings 24 Appendix 31 23
Key Findings Professional Services market valued at 88 billion, employs ~818.000 people Employees per Segment % Emp. Industry % Rev. Revenue per Segment /x billion 4.897 0.6% Public Relations 0.5% 0,5 6.758 0.8% Notary 0.7% 0,6 15.000 1.8% Architecture 1.2% 1,1 817.744 professionals 20.400 34.080 2.5% 4.2% Market Research Law 1.9% 1,7 3.7% 3,3 88 billion 39.100 4.8% Scientific Research 5.3% 4,7 57.000 7.0% Advertising 7.2% 6,3 65.244 8.0% IT Consultancy 9.0% 7,9 112.100 13.7% Accounting 11.1% 9,7 114.200 14.0% Engineering 14.0% 12,3 159.303 19.5% Management Consulting 17.3% 15,2 189.662 23.2% Other Professional Services 28.0% 24,6 24
Key Findings Market performance differs, as a result EBIT margins vary from 7% to 22%... Costs per Employee Revenue per Employee Profit per Employee Total Profit (x million) EBIT Margin Δ EBIT Margin - Accounting -71.401 86.771 15.370 1.723 17,7% -0,5 Advertising -95.842 111.035 15.193 866 13,7% 2,5 Architecture -61.867 70.200 8.333 125 11,9% -2,5 Engineering -95.718 107.487 11.769 1.344 10,9% -1,4 IT Consultancy -110.737 121.601 10.864 709 8,9% 0,5 Law -77.468 95.732 18.264 622 19,1% -0,9 Notary Management Consulting -73.959 95.335 Data only available at higher level, estimate for both segments 21.376 3.510 22,4% 3,7 Public Relations Market Research -70.588 81.814 11.225 229 13,7% -0,3 Scientific Research -127.187 119.335-7.852-307 -6,6% -2,5 Other Professional Services -126.870 129.891 3.022 573 2,3% -3,4 * data not accurate, Δ EBIT margin represents 25
Key Findings Also explained by different cost structures Staff Purchase Value of Sales Other Costs Housing Transport Total Costs ( /million) Change in Costs ( ) Breakdown of Costs () Accounting 8.004-2,1% 59% 9% 22% 6% 4% Advertising 5.463-1,2% 24% 58% 12% 3% 2% Architecture 928-22,9% 57% 13% 21% 6% 3% Engineering 10.931 3,5% 8% 56% 26% 5% 4% IT Consultancy 7.225 7,6% 45% 31% 18% 3% 4% Law 2.640 2,3% 52% 8% 29% 9% 2% Notary 523 2,3% Management Consulting 11.782 1,5% Breakdown of costs only available at higher level, estimate for both segments 47% 26% 20% 3% 4% Public Relations 362 1,5% Market Research 1.440-5,1% 41% 36% 17% 3% 3% Scientific Research 4.973 21,8% 47% 21% 28% 4% 1% Other Professional Services 24.062 5,4%* 28% 30% 37% 3% 1% * Growth represents period 26
Average EBIT Margin () Key Findings Average industry growth is strong, underpinned by a relatively high variation Management Consulting is the largest industry within professional services, followed by Engineering Architecture is the fastest growing industry, with Market Research the only segment that is contracting EBIT margins vary from -7% to +22%, with the majority of industry s performing between the 8% to 20% range 24% Notary Public Relations Law Management Consulting Accounting 16% Market Research Engineering Advertising Architecture 8% Other Professional Services IT Consultancy 0% Legend Scientific Research EBIT Confidence Level Low High Size of Market (x billion in ) 0,5 25 6bn -8% -10% 0% 10% 20% 30% 40% 50% 60% 70% Industry Growth - 2014 (# Companies) 27
% freelancers in industry Key Findings Industry growth driven mainly by freelancers flocking into the market Nearly 86% of the professional services market consists of freelancers, with notary the only exception (<50%) The number of freelancers has over the past 5 years grown strongly, and even more than doubled in Architecture 95% Legend 90% 13k # of freelancers (x000; 2014) 670 82.210 Management Consulting Public Relations IT Consultancy 85% Engineering Advertising Other Professional Services 80% Market Research Accounting 75% Scientific Research Architecture 70% Law 50% Notary Outliers 0% -10% 0% 10% 20% 30% 40% 50% 60% 105% Growth freelancers - 2014 28
Key Findings Compared to UK, Netherlands has significantly higher % of freelancers Growth - 2014 Netherlands Employee size (2014) Other Freelancers + Boutique % Firms Industry United Kingdom % Firms Employee size (2014) Freelancers + Boutique Other Growth - 2014 20,8% 6,3% 93,7% 9.9% Accounting 7.1% 79,5% 20,5% 16,2% 16,4% 4,5% 95,5% 9.7% Advertising 3.4% 82,4% 17,6% 32,4% 21,4% 6,5% 93,5% 2.1% Architecture 2.5% 81,9% 18,1% 30,0% 17,4% 6,6% 93,4% 10.0% Engineering 12.3% 88,8% 11,2% 18,8% 16,8% 7,4% 92,6% 4.8% IT Consultancy 14.7% 92,7% 7,3% 12,5% 29,6% 11,7% 88,3% 2.7% Law 52,3% 33,8% 66,2% 0.5% Notary 5.7% 73,8% 26,2% 7,1% Data only available at higher level, estimate for both segments 9,9% 2,3% 97,7% 30.5% Management Consulting 25.5% 93,5% 6,5% 25,2% 17,7% 6,6% 93,4% 1.9% Public Relations 0.6% 74,9% 25,1% 0,5% 15,4% 5,3% 94,7% 0.9% Market Research 0.7% 81,6% 18,4% 11,5% 25,9% 14,2% 85,8% 1.1% Scientific Research 0.8% 73,4% 26,6% 11,4% 11,2% 3,6% 96,4% 25.9% Other Professional Services 26.8% 85,4% 14,6% 13,7% 299.245 Total 547.145 29
Table of Contents Introduction 3 Professional Services Industry 5 Market Size per Industry 11 Key Findings 24 Appendix 31 30
Appendix Contact and Authors Herikerbergweg 284 (7th floor) Dalí gebouw, Arena Boulevard 1101 CT Amsterdam, The Netherlands Tel: +31 (0)20 696 51 48 Email: info@consultancy.nl Internet: www.consultancy.nl Authors Larry Zeenny Director of & Consultancy.uk larry@consultancy.nl Stephan Kersten Research Analyst at stephan@consultancy.nl This document has been prepared with the utmost care yet the authors make no representation or warranty, express or implied, that the information is accurate or complete. Information, analyses and conclusions contained in the report are based (unless sourced otherwise) on the judgments of, and should not be construed as definitive results. does not accept any responsibility or liability with respect to this document. The information is copyright, and may not be published, copied or duplicated, in whole or in part, without the written permission of the authors. 31
Appendix Development of Total Dutch Enterprises 987.365 Development of Enterprises per Industry Number of companies per sector 1.227.795 12% 1.387.995 12% 1.428.005 13% 88% 88% 11 sectors presented in Slide 6 88% 87% 12% Sector 9 small sectors bundled in Slide 6 % Growth 2007-2014 % Growth 2013-2014 9 small sectors bundled in Slide 5 3.605 (0,37%) 0,04% 0,09% 0,06% 3.100 (0,25%) 0,03% 0,06% 0,06% 3.355 (0,24%) 0,03% 0,06% 0,06% 3.495 (0,24%) 0,03% 0,06% 0,06% Other n.e.c. Mining and Quarrying Public Administration & Defense Electricity, Gas, Steam & Air Conditioning Supply -4,7% 0,0% 52,1% 130,0% -8,0% -3,0% 5,7% 12,4% 0,18% 0,10% 0,09% 0,09% Water Supply -25,5% 4,4% 123.320 (12,5%) 2,7% 2,8% 4,4% 2,6% 145.135 (11,8%) 2,5% 2,6% 3,8% 3,0% 166.780 (12,0%) 2,4% 2,4% 3,5% 3,7% 173.020 (12,1%) 2,3% 2,4% 3,5% 3,9% Real Estate Activities Transport and Storage Accommodation & Food Services Education 23,8% 21,7% 15,5% 119,9% 0,1% 2,2% 2,3% 8,4% 2007 2013 2014 32
Appendix Development of Professional Services Development of Professional Services firms (1999 2014) 300.000 200.000 40% 171.665 199.935 221.620 240.080 257.790 278.270 285.670 299.245 6 segments bundled in Slide 7 100.000 78.540 81.760 82.450 88.915 91.080 111.155 113.630 123.080 6 sectors presented in Slide 7 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2013 2014 30.000 25.000 20.000 15.000 10.000 5.000 0 13,0% 1,0% 1,6% 2,2% 3,2% 2,4% 2,5% 1999 12,7% 1,0% 1,6% 2,1% 3,2% 2,4% 2,4% 2000 12,3% 0,9% 1,6% 1,8% 3,2% 2,4% 2,3% 2001 11,7% 0,7% 1,6% 1,9% 3,1% 2,4% 1,9% 2002 11,6% 9,7% 0,7% 0,5% 1,6% 1,4% 2,0% 1,8% 3,1% 2,4% 2,4% 2,1% 1,8% 1,5% 2003 2004 9,9% 0,5% 1,3% 1,9% 2,5% 2,1% 1,6% 2005 +47% 9,8% 0,5% 1,2% 1,9% 2,6% 2,0% 1,5% 2006 * 10,3% 0,7% 1,1% 1,2% 2,4% 2,0% 2,8% 2007 10,0% 0,7% 1,0% 1,2% 2,6% 1,8% 2,7% 2008 9,9% 0,6% 1,0% 1,2% 2,7% 1,7% 2,6% 10,1% 0,6% 1,0% 1,2% 2,7% 1,9% 2,8% 10,0% 0,6% 0,9% 1,2% 2,6% 1,9% 2,8% 9,6% 0,5% 0,9% 1,2% 2,3% 1,9% 2,7% 9,5% 9,2% 0,5% 0,5% 0,9% 0,9% 1,1% 1,1% 2,1% 2,2% 1,9% 2,1% 2,7% 2,7% 2013 2014 Notary Public Relations Scientific Research Market Research Architecture Law * See Slide 35 in the Appendix for details 33
Appendix Intervals for Employee Size Ratio Analysis Mean Interval Estimate Employees per Segment % Emp. Industry Employee Estimate per Method 4.897 0.6% Public Relations 4.897 5.620 817.744 professionals 6.758 15.000 0.8% 1.8% Notary Architecture 6.758 15.000 16.623 9.640 Based on Ratio Analysis approach, however a different method would lead to slightly lower or higher estimate 20.400 34.080 39.100 2.5% 4.1% 4.8% Market Research Law Scientific Research 17.475 20.400 28.438 34.080 21.475 39.100 57.000 6.9% Advertising 57.000 57.378 65.244 7.9% IT Consultancy 45.010 65.244 112.100 13.6% Accounting 74.738 112.100 114.200 13.9% Engineering 86.898 114.200 159.303 20.0% Management Consulting 139.015 164.200 189.662 23.1% Other Professional Services 167.150 189.662 34
Appendix Change in Definition: 2007 In 2007 the CBS modified the way with which it registers enterprises in the Netherlands Before 2007 the CBS only counted companies that were considered economically active : companies in which at least one person worked 15 hours or more per week. From 2007 onwards the so-called Hour Criterion ( Urenciterium ) was discarded, leading to a large increase in the number of in-scope enterprises (+32%) The impact of the change had different implications per industry, overall it can be concluded that the definition alteration had a higher than average impact on the professional services industry (+40% vs. +32%) Development of total Dutch enterprises (2004 ) 1.200.000 1.158.410 +32% 1.088.375 1.000.000 987.365 800.000 600.000 705.180 719.405 746.365 See Slide 5 for details on the development of the total number of enterprises. See Slide 7 for an overview of the impact on the professional services industry. 400.000 200.000 0 2004 2005 2006 2007 2008 35
Appendix Data Quality? Example Management Consulting The accuracy of the research is to an extent dependent on data from CBS and KvK. An analysis from on ~1,000 records within Management Consulting reveals that the data is not entirely complete and/or accurate Data Completeness (50+ FTE firms) CBS 450 +9% 489 According to the CBS, there are 450 management consulting firm with more than 20 FTE s. Data from, reconciled with the CBS data, shows that the actual number of firms is nearly 10% higher Incorrectly assigned; --> Not PS Incorrectly assigned; --> Other PS 998 12% 39% Firms registered in Management Consulting, however in practice they do not fall within the segment and even should not be classified as professional services. Examples include hotels, fitness companies, catering, child care, retailers, newspaper and more Data Quality Correctly Assigned Grey Area 49% Firms registered in Management Consulting, however in practice they would be better suited in other industries within professional services. In some cases most relevant category is not entirely clear due to multi-disciplinary business model and services Enterprises Assessed 36
- Market assessment of the Dutch professional services industry -