Download ARCADIS NV Annual Results 2007

CONFERENCE CALL, NOVEMBER 12, 2008, 16:00 CET
Results Third
Quarter 2008
Harrie Noy
Chief Executive Officer
Imagine the result
Higher
revenues
Profitability
stable
Gross revenues Q3 +5%
Good organic growth despite slowing
growth U.S. and U.K. markets
EBITA up 8%, high margin maintained
Net income from operations stable
despite currencies and higher financing
charges
Outlook FY2008: +10%
Focus on cost control and sales,
anticipating changing conditions
Income
Q3 2008
€ 16.3 million
2008
2007
__
Gross revenues 427
408
5%
Ebita
30.3
28.0
8%
Income1)
16.3
16.3
0%
EPS1,2)
0.27
0.27
0%
Currency -5%, especially decline of US
dollar, British pound
1) Net income from operations before amortization and nonoperational items
2) In 2008 based on 60.6 million shares outstanding (2007:
61.1 million)
Income
9 months 2008
€ 47.8 million
2008
2007
__
Gross revenues 1,255
1,088
15%
Ebita
87.2
74.4
17%
Income1)
47.8
43.1
11%
EPS1,2)
0.79
0.71
12%
Currency -6%, especially decline of US
dollar, British pound
1) Net income from operations before amortization and nonoperational items
2) In 2008 based op 60.5 million shares outstanding (2007:
61.2 million)
Organic growth NR stays at good level
30%
12%
25%
10%
20%
8%
15%
6%
10%
4%
5%
2%
0%
0%
2007
Organic
Q108
Acquisitions
Q208
Q308
Q3YTD
Total (excl. currency effect)
Q108
Q208
Gross revenues
Q308
Net revenues
Q3YTD
Main facts
 Till now impact credit crisis limited
 UK property market remains difficult
 Slowing growth in U.S. environmental market,
partly due to completion large projects
 Nevertheless organic growth NR 8%
 Margin maintained at 10.7% (Q32007: 10.8% )
 Dutch infra solid; Poland, Czech strong
 Brazil and Chile continue strong growth
 SET (Italy) acquired, Copijn divested
Figures relate to third quarter
EBITA Q3YTD and margin
Margin
In € millions
100
Margin
improved
further
12%
10.3%
10.1%
8.9%
75
87,2
7.8%
50
74,4
6%
5.5%
54,9
25
38,5
22,8
0%
0
2004
Increase
2005
2006
2007
2008
69%
43%
36%
17%
EBITA advanced 17% Q3YTD
In € millions
74.4
EBITA 9M 2007
Currency
-/- 6%
Acquisitions
+15%
Organic
+ 8%
EBITA 9M 2008
87.2
0
10
20
30
40
50
60
70
80
90
Organic increase mainly coming from U.S. en other Europe (excl UK project management)
Some
financial
details
Q3
Carbon credits contribute € 1.0
million to EBITA (2007: € 0.6 million)
Carbon credits from two landfills in
Brazil; approx. 750K ton per year
price 10-20 EUR; 1/3 for Logos
Again large impact derivatives on
financing charges
Excl this impact financing charges
increase to € 5.4 million (2007: € 2.6
million) as a result of acquisitions,
higher interest rates and impact
from Brazilian loans
ARCADIS
financially
healthy
Balance sheet healthy:
Net debt/Ebitda end 08 approx. 1.3
USD 350 million long term financing;
repayment March 2011 – Jan 2015
End Q3 working capital up to 16.3%
(Q307: 13.7%) due to reorganization
billing in US and Poland
Cash flow expected to recover in Q4
The business lines
Infrastructure
Environment
Buildings
Growth in all business lines
Figures relate to first nine months 2008; (..) = organic growth
Environment +15% (+9%)
Infrastructure +3% (+5%)
500
500
400
400
300
300
200
200
100
100
0
0
2004
2005
2006
2007
2008
2004
2005
2006
Buildings +39% (+6%)
500
400
Environment
37%
300
Infrastructure
37%
200
100
Buildings
26%
0
2004
2005
2006
2007
2008
2007
2008
INFRASTRUCTURE
9 MONTHS 2008: +3%
organic:+5%; acquisitions:0%; currency:-2%
 Organic growth negatively impacted by earlier
decline land development in U.S.
 Excluding this effect organic growth 7%
 Netherlands, Poland, Czech strong
 Brazil and Chile driven by mining and energy
 In Q3 accelerated growth in U.S. water market;
this year $60 million orders from New Orleans
 Project management contributed in U.K.
ENVIRONMENT
9 MONTHS 2008: +15%
organic:+9%; acquisitions:+16%; currency:-10%
 Contribution acquisitions from LFR & Vectra
 In Q3 slowing growth in the U.S. due to
industrial clients economic woes
 Combined with completion of projects with
large subcontracting: light organic decline
 Net revenue saw organic increase
 Already $55 million in new GRiP® work YTD
 In most of Europe and Brazil solid growth
BUILDINGS
9 MONTHS 2008: +39%
organic:+6%; acquisitions:+38%; currency:-5%
 Acquisitions: RTKL and APS mid 2007
 Continued strong growth in most European
countries in management services
 RTKL: solid growth from non-commercial and
international work
 U.K. lower due to decline in commercial real
estate market, partly offset by infra & ME
 Five year facility management contract with
Van Lanschot – the first bank contract
Outlook
Outlook per business line
Infrastructure – relatively stable
• Government investments in Europe & U.S. to boost economy
• Long term investment programs, e.g. Central Europe
• Climate change fuels water management: e.g. Dutch Delta plan
• New Orleans solid basis for growth in US water market
Environment – a healthy foundation by sustainability and regulations
• Focus on sectors with continued high demand: oil & gas, utilities
• Cost effective solutions, vendor reduction and outsourcing: > market share
• Interest in GRiP® increases, both in US and Europe
• In US, environment & climate change on political agenda
Buildings – refocusing sales efforts
• Delays and postponements in commercial projects in UK and US
• RTKL focuses on US non-commercial and on international
• Project management for infra and Middle East
• Demand for FM is expected to grow
Outlook 2008
Economic conditions deteriorate
Sustainability, climate change, urban renewal, mobility and energy offer
ample opportunity
Well positioned with a strong backlog and intensified sales efforts
Cost control and focus on higher added value to maintain margin
Looking for acquisitions with more prudence
Expected increase net income from operations 2008: 10%
(Barring unforeseen circumstances)
ARCADIS Building Global Leadership
Thank you