A year into the role as FTI Consulting’s Chief Executive Officer let me share three reflections.
First, I continue to be thrilled to be here — this is a great firm, with the most important asset a professional services firm can have — great people. Our people are not only professionals with world-class reputations; they are also dedicated, incredibly hard-working and committed to making a major difference for our clients. As a result, we have developed a reputation as the people our clients call when their most important issues are at stake — it is a joy to work with people like this, and to engage with our clients.
Second, I see our core mission as realizing the potential of this talented group — for our clients, for the team itself, and not least, for you, our stockholders. The best professionals develop the most helpful and deepest client relationships, serving clients in ever better, innovative ways. These professionals attract and mentor new generations of great client service professionals. With the right support, they thereby grow businesses, gain share and create substantial stockholder value — which is what we are committed to do.
Third, we are making progress on delivering against that mission. We should not underestimate the amount of work we have ahead, but let me also underscore that in 2014 we made material progress on the initiatives to build on the Company’s strengths — where we have a right to win.
We made substantial progress on a number of specific initiatives discussed at our investor day, from driving bets in our EMEA transaction advisory and tax businesses, to reinvesting in our core U.S. businesses, to growing in key areas of international arbitration and construction solutions. We are seeing tangible growth from these and other strategic investments:
- In our Technology, Forensic and Litigation Consulting and Economic Consulting segments, we reported record revenues in 2014.
- In our Corporate Finance & Restructuring segment, our initiatives allowed us to grow our top line in the face of the worst market for bankruptcy services in recent memory.
- In our Strategic Communications segment, these initiatives allowed us to address costs and focus on growing in areas of strength, which resulted in a 190 basis point improvement in adjusted segment EBITDA margin in 2014.
- Overall, these efforts resulted in 5.1 percent organic revenue growth in 2014, the Company’s highest organic growth rate since 2009.
In addition to these segment-level initiatives, in 2014 we also focused on launching critical enterprise-wide improvement efforts.
- We strengthened our management team, bringing in world-class professionals with fresh perspectives in the Chief Financial Officer, Chief Strategy and Transformation Officer and Chief Human Resources Officer roles. These are leaders who have dived into the business with passion, accountability and discipline — leaders who are quickly creating real value.
- We also began driving some significant, specific cross-segment initiatives, including, in part, launching a key account management program, enhancing the marketing of our success stories, creating more disciplined approaches to mergers and acquisitions and looking for ways to build new businesses by leveraging the most innovative thinking within our organization.
Notwithstanding this progress, let me underscore our view that our 2014 adjusted earnings of $1.64 per share are not an acceptable performance for this company. Though in line with the estimates provided at our investor day, we recognize the need to translate the great work our professionals do and the key initiatives we are driving into sustained growth in earnings and stockholder value. 2014 was a rebuilding year and we have more to come, but I also want to underscore that we believe that the activity in 2014 will begin to show fruit in 2015 and beyond.
I hope as you look at the short summary above and the rest of this annual report you see the commitment we have undertaken and the progress we are making. For these reasons, I am looking to 2015 and beyond with excitement.
I have enjoyed meeting many of you this past year, and hope to meet many more of you in the coming year. We have tremendous work and opportunities ahead and the management team and I look forward to continuing on this journey with you. Thank you for your continued support.
Steven H. Gunby
President & Chief Executive Officer of FTI Consulting, Inc.