Arcadis trading update Q3 2016
(Thomson Reuters ONE) -
· ?797 million in gross revenues, organically -4%. Net revenues ?596
million, organically -5% due to lower revenues in Emerging Markets and North
America, and a negative currency effect
· EBITA of ?38.6 million (Q3 2015: ?57.5 million). Non-operating costs
?4.7 million (Q3 2015: ?8.5 million)
· Operating EBITA margin 7.3% (Q3 2015: 10.3%), due to lower revenues,
Brexit impact, price pressure and capacity imbalances in parts of our business
· Free cash flow Q3 ?39.7 million (Q3 2015: ?37.2 million). Free cash
flow in the year-to-date minus ?22.4 million, below last year due to lower EBITA
· Working capital 20.9% (Q3 2015: 19.3%), higher due to the Middle East
· Backlog year-to-date ?2.2 billion representing 11 months of revenues,
developed markets (6%-11%) partly compensating for Emerging Markets decline
(17%)
· Renier Vree appointed interim CEO replacing Neil McArthur
· Outlook: Arcadis expects similar business conditions in the fourth
quarter as experienced in the previous quarters of 2016 and has accelerated
initiatives to improve financial performance
Key figures
-----------------------------------------------------+--------------------
Third Change|Year to date Change
in ? millions quarter |
Period ended 30 September |
2016 2015 | 2016 2015
-----------------------------------------------------+--------------------
Gross revenues 797 854 -7% |2,475 2,547 -3%
|
Organic growth -4% | -1%
|
Net revenues 596 643 -7% |1,860 1,961 -5%
|
Organic growth -5% | -4%
|
EBITA 38.6 57.5 -33% |126.6 149.0 -15%
|
EBITA margin 6.5% 8.9% | 6.8% 7.6%
|
Operating EBITA(1)) 43.3 66.0 -34% |140.8 181.8 -23%
|
Operating EBITA margin 7.3% 10.3% | 7.6% 9.3%
|
Free cash flow 39.7 37.2 |-22.4 7.4
|
Net working capital % 20.9% 19.3% |20.9% 19.3%
|
Backlog (organic growth)/ months |-3%/11 -2%/11
-----------------------------------------------------+--------------------
(1) )Excluding acquisition, restructuring and integration-related costs
Renier Vree, CEO: "As indicated earlier, the third quarter was challenging,
comparable with the previous quarters of 2016. We experienced continuing tough
conditions in Emerging Markets and our North American business. As such, the
addition of Mary Ann Hopkins as Executive for the Americas to our leadership was
an important development in the quarter. Whilst we are not satisfied with the
results, our business priorities are clear. We will continue to focus on winning
work with our clients and cash collection. Furthermore we will step up the pace
in aligning our cost structure to the new market realities and simplify the
organization. The strategy process remains ongoing and we will disclose our
strategy update at the beginning of 2017."
Review of performance
Continental Europe, the UK, and Australia all recorded net revenue growth during
the quarter. Emerging Markets faced continued significant macro-economic
headwinds and reported a revenue decline, whilst North America also recorded
lower revenues as a result of intense competition. Overall, net revenues
decreased by 7%, and organically by 5%. EBITA decreased by 33% to ?38.6 million
with an EBITA margin of 6.5%. Operating EBITA was ?43.3 million (Q2 2016: ?46.2
million) and 34% lower than in the same quarter last year (Q3 2015: ?66.0
million). The operating EBITA margin was 7.3% (Q3 2015: 10.3%), due to lower
revenues, Brexit impact, price pressure and capacity imbalances in parts of our
business.
Year-to-date net revenue declined -5%. The organic decline was 4%, related to
lower revenues in Brazil, North America and Asia. EBITA decreased 15% and
included ?14.2 million in restructuring charges (2015: ?32.8 million also
including integration charges).
To adapt to weaker markets and improve our cost position we reduced our global
workforce by ~800 FTEs versus September 2015 by reducing the number of employees
in the regions by ~1,450 FTEs (-5.5%), and growing Global Design by ~650 FTEs
(+50%). This led to an overall labour cost decrease of approximately 3%.
Operating EBITA decreased by 23% to ?140.8 million (2015: ?181.8 million). The
operating EBITA margin of 7.6% (2015: 9.3%) reflects the lower contribution from
North America, Brazil, Continental Europe and the Middle East.
Review of performance for Q3 year-to-date by region
* North America (34% of net revenues)
Net revenues in North America declined organically by 6%, driven by Environment,
Water and Architecture, offsetting good growth in Infrastructure and Buildings.
Operating EBITA margin declined due to a competitive market in Water and
Environment.
* Emerging Markets (29% of net revenues)
The decrease in net revenues was mainly due to a 38% organic decline in Brazil.
In Asia revenues declined by 12% mainly related to lower revenues in Hong Kong
and Singapore.
In the Middle East, revenues were flat, but low oil prices continue to impact
backlog and payments. Net working capital in this region continues to receive
strong attention and as highlighted earlier, will have an impact through the
middle of 2017. Australia Pacific realized a strong profitable organic growth,
particularly in Infrastructure. The operating EBITA margin decreased due to an
operating loss in Brazil and a lower margin in the Middle East that was partly
compensated by an increase in Australia Pacific. The operating EBITA margin in
Asia was stable.
* Continental Europe (20% of net revenues)
Net revenues in Continental Europe were 3% higher than in the same period in
2015, mainly due to growth in Buildings. Revenues in Infrastructure and
Environment were in line with last year and revenues decreased in Water. The
operating EBITA margin declined due to capacity imbalances in France and
Belgium.
* United Kingdom (17% of net revenues)
Net revenues decreased mainly due to a 9% currency effect as a result of the
decline of the British Pound. Net revenues grew organically with 3% due to good
growth in Infrastructure and Water and to a lesser extent in Environment. In
Buildings, revenue decline continued due to Brexit-related delays in investment
decisions. A large architecture contract partly compensated for this decline.
The operating EBITA margin was slightly lower.
Backlog
Current backlog is ?2.2 billion, representing a stable 11 months of revenues.
Backlog at the end of September decreased by 3% compared with December 2015,
reflecting cancellations in Brazil, Qatar and China. Overall backlog in Emerging
Markets declined by 17%, whilst backlog grew 11% in the UK and 6% in Continental
Europe and North America.
----------
For further information please contact:
Arcadis Investor Relations
Jurgen Pullens
Telephone: +31 20 2011083
Mobile: +31 6 51599483
E-mail: jurgen.pullens(at)arcadis.com
Arcadis Group Communications
Jeremy Cohen
Mobile: +31 6 21639411
E-mail: jeremy.cohen(at)arcadis.com
Conference Call
A conference call for analysts will be held at 10.00 hours CET today. The call
can also be followed via the webcast link on our website:
https://www.arcadis.com/en/global/investors/.
About Arcadis
Arcadis is the leading global Design & Consultancy firm for natural and built
assets. Applying our deep market sector insights and collective design,
consultancy, engineering, project and management services we work in partnership
with our clients to deliver exceptional and sustainable outcomes throughout the
lifecycle of their natural and built assets. We are 27,000 people active in over
70 countries that generate ?3.4 billion in revenues. We support UN-Habitat with
knowledge and expertise to improve the quality of life in rapidly growing cities
around the world. www.arcadis.com
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Arcadis trading update Q3 2016 - Analyst Presentation:
http://hugin.info/132839/R/2051947/767886.pdf
Arcadis trading update Q3 2016 - Press Release:
http://hugin.info/132839/R/2051947/767884.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Arcadis N.V. via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 27.10.2016 - 07:00 Uhr
Sprache: Deutsch
News-ID 503097
Anzahl Zeichen: 12171
contact information:
Town:
Amsterdam
Kategorie:
Business News
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