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First half year results 2007 Harrie Noy, CEOAnalyst meeting, August 8, 2007, Amsterdam, the Netherlands
Infrastructure, environment, facilities
Strong results continued in second quarter
Organic gross revenue growth to record of 19%
Strong growth in all regions and service areas
Net income from operations rose 19%, in the first half year 26%
Considerable margin improvement
Acquisition RTKL milestone for ARCADIS
Outlook remains good
Stronger focus on growth and margins is successful
2006
293
19.2
11.8
0.58
_ _
19%
25%
19%
18%
Income second quarter 2007: € 14.0 million
2007
348
23.8
14.0
0.68
1) Before amortization and non operational items
2) In 2007 based on 20.4 million shares outstanding (2006: 20.2 million)
Currency effect minus 3%, mainly as a result of US dollar decline
Gross revenue
EBITA
Net income from operations1)
Ditto per share1,2)
2006
581
35.3
21.2
1.05
_ _
17%
31%
26%
25%
Income first half year 2007: € 26.8 million
2007
680
46.4
26.8
1.31
Currency effect approx. minus 4%, mainly as a result of US dollar decline
Gross revenue
EBITA
Net income from operations1)
Ditto per share1,2)
1) Before amortization and non operational items
2) In 2007 based on 20.4 million shares outstanding (2006: 20.2 million)
0%
5%
10%
15%
20%
25%
2004 2005 2006 Q1 2007 Q2 2007
Organic
Acquisitions
Total (excl.Currency effect)
Currency -3% +1% 0% -5% -3%
Selling prices +1% -0% 0% 0% 0%
Organic growth accelerates
ARCADIS benefits from good market conditions
No signs of weakness in the U.S.: organic growth 19%
Strong increase in activities in Brazil and Chile
Dutch market remains solid with 11% organic growth
Market in other European countries improved: organic growth 11%
Margin improved to 9.8% versus 8.6% last year
Smaller acquisitions in home markets (GR €11 million, 115 staff)
Euroconsult (GR €33 million, 125 staff) sold
All percentages related to the first half year
46,435,3
23,418,6
14,8
0,0
10,0
20,0
30,0
40,0
50,0
2003 2004 2005 2006 2007
In € millions
-/-27% 25% 26%Increase
5,2%5,6%
7,0%
Margin
10%
5%
0%
8,6%
51%
9,8%
31%
Development EBITA first half year
EBITA increases considerably with 31%
0 5 10 15 20 25 30 35 40 45 50
EBITA H1 2007
Rest organic
Carbon credits organic
Acquisitions/divestments
Currency
EBITA H1 2006
In € millions
11%
-/- 5%
6%
35.3
46.4
Organic increases mainly from the Netherlands, U.S., Poland and South America
19%
Some financial details
Carbon credits contribute € 2.1 million to EBITA– Generated at landfills in Brazil by Biogas (33.3% ALogos)
– Sold in 2006/2007: 1 million carbon credits
– Delivered Q406: 180m; Q107: 570m; Q207: 70m; expected H207: 180m
– Contract with KfW price range € 10 - € 20
– Total amount expected 2006-2012: 5 million carbon credits
– ARCADIS owns 50.01% of Alogos
Financing charges higher through growth and one-off gain Q206
Associated companies slightly negative: energy project Brazil
Minority interest higher due to good operational performance Brazil
Net income from operations and EPS H-1
-/-10%
Earnings per share (in €)
+12% +24% +60% +26%
26.8
21.2
13.310.79.6
0,0
5,0
10,0
15,0
20,0
25,0
30,0
2003 2004 2005 2006 2007
In € millions
0.47 0.530.65
1.05
1.31
The service areas InfrastructureEnvironment Facilities
Strong organic growth in all service areas
Facilities +29% (+13%)
0
50
100
150
200
2003 2004 2005 2006 2007
Infrastructure +12% (+12%)
0
50
100
150
200
250
300
2003 2004 2005 2006 2007
Environment +18% (+23%)
0
50
100
150
200
250
300
2003 2004 2005 2006 2007
Infrastructure44%
Facilities18%
Environment38%
• Brazil and Chile strong through mining and energy projects• Land development in U.S. compensated with water work • Very strong growth in Poland, somewhat less in Belgium• Dutch organic growth at a good level of 9% • Preferred bidder for PPP project second Coentunnel
Infrastructure +12% (+12%)
Waterposition strengthened with Alkyon
• At 23% organic growth very strong, particularly in the U.S. • Market share grows through combination with BBL• Brazil: more services for multinationals• Europe: growth in almost all countries – especially private sector• Consistent Health & Safety policy: stronger competitive position
Environment +18% (+23%)
REACH: more work for multinationals
• 16% from acquisitions, P1 + smaller in NL, Belgium, Germany• Organic 13%: mainly management services and consulting• Netherlands, U.K. and Germany are performing well• Real estate investment climate is favorable
Facilities +29% (+13%)
AWwPC: Multi Vastgoed contract
Outlook
Outlook per service area
Infrastructure• Strong economy has positive effect on investments • Market expansion through PPP initiatives • U.S.: land development soft; growth in water and transportation
Environment • Attention for sustainability and climate change drives demand• Remediation (GRiP®) with redevelopment growth market• Further expansion of market share with multinational clients
Facilities• Solid investment climate for real estate• Growth in project management / cost consulting also through AWwPC• RTKL offers ample opportunity for top line synergy
Outlook for 2007 is good
Market conditions are favorable
Ample opportunity for growth, also through synergy
Margin goal of 10% to be reached this year
Acquisitions remain high on our priority list
Increase net income from operations of 20-25% for full year 2007
(barring unforeseen circumstances)
ARCADIS is well on track
Thank you
The merger with RTKLStrategic considerations
Infrastructuur, milieu, gebouwen
ARCADIS strategy is focused on growthin high added value services by building leadership positions in three segments:
InfrastructureEnvironment Facilities
RTKL, world leader in design and planning
Gross revenues $ 195, net revenues $ 142 million
1050 staff in 6 offices in U.S. and 4 in Europe/Asia
Architectural design, master planning, specialized engineering
Well diversified international portfolio
In commercial, health, workplace/civic
Operating margin meets our target in facilities
Strong brand and reputation
Among top 10 firms in its field
RTKL fits well in ARCADIS strategy
Next step in moving up the value chain
Towards building leadership in facilities
More involvement in property investments
Full service offering – integrated approach
Master planning for early entry into urban regeneration
Expanded position in China
Closer to top 10 position in U.S.
RTKL will change distribution of revenuesService areas
Infrastructure45%
Facilities17%
Environment38%
Environment35%
Facilities27%
Infrastructure38%
2006 Including RTKL
Netherlands26% ROW
9%Europe ex.
NL23%
U.S.42%
Netherlands23% ROW
8%Europe ex.
NL23%
U.S.46%
2006 Including RTKL
RTKL will change distribution of revenuesGeography
Ample opportunities for synergies
Focus on top line synergies
Design/planning project and program management
Brownfields: remediation + redevelopment
ARCADIS footprint to expand RTKL’s business
Sustainability: environment + design/planning
China, Middle East
Synergy plans to capitalize on selected opportunities
Global reach• Global and seamless services
• In a local style and practice
Design excellence
ARCADIS’ ambition in facilities Leadership by delivering differentiating value
Successful delivery
• Creativity
• Providing buildings that work
• Smart solutions
• Making it happen
• Tailored solutions
ARCADIS differentiating value Through
AWwPC
PM/CM
RTKL
Imagine the result
Thank you