ARCADIS REPORTS FIRST HALF YEAR RESULTS 2017
(Thomson Reuters ONE) -
* Gross revenues ?1,648 million. Net revenues ?1,256 million, organically -1%
* EBITDA ?100 million, -8%; operating EBITA ?90 million, -7%
* Net income from operations ?47 million (H1 2016: ?55 million)
* Net working capital 19.3% (Q2 2016: 19.9%)
* Free cash flow of +?34 million in Q2 leading to lower year-over-year net
debt of ?514 million
* Net debt/EBITDA covenant leverage ratio 2.5
* Strategy update 21 November 2017
KEY FIGURES
in ? millions HALF YEAR SECOND QUARTER
Period ended 30 June
2017 2016 change 2017 2016 change
-------------------------------------------------------------------------------
Gross revenues 1,648 1,678 -2% 830 832 0%
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Net revenues 1,256 1,263 -1% 628 630 0%
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Organic growth -1% 0%
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EBITDA 100 108 -8% 48 52 -8%
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Operating EBITA 90 98 -7% 44 46 -5%
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Operating EBITA margin 7.2% 7.7% 7.0% 7.3%
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Net income from operations 47 55 -14%
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Free cash flow -28 -62 34 -10
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Net working capital % 19.3% 19.9%
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Net debt 514 587
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Amsterdam, 27 July 2017 - Arcadis (EURONEXT: ARCAD), the leading global Design &
Consultancy firm for natural and built assets, reports half year results 2017.
CEO STATEMENT
Peter Oosterveer CEO Arcadis comments: "We start to see the benefits of the
initiatives to position Arcadis for profitable growth that were launched under
interim CEO Renier Vree. This included more focus on clients and on reducing
working capital, while the simplified operating model helped to reduce costs. We
are pleased that we created momentum in our North American business, which
returned to growth after three years of decline. We see positive business
sentiment and higher backlog in most of our businesses, whilst we remain
cautious about market developments in Brazil and in the Middle East. In the
Middle East, we received cash payments on overdue receivables and reached
important milestones on multiple contracts. The results and developments in the
first half year give us confidence that we will continue to make progress in the
second half year.
Since joining at the end of April, I have visited most regions to get a good
perspective on our clients, people, and performance. I was impressed by our
people's passion to improve quality of life and their commitment. The client
meetings convinced me that we have many opportunities to grow our business. I
also see room for improvement in our project delivery and in utilizing the
Global Excellence Centers in India, the Philippines and Romania. Furthermore, we
are making strides in digital, working with clients and partners to create smart
and sustainable urban areas that address the needs of society. I believe Arcadis
is well positioned to capture profitable growth in the years ahead. We will
provide a strategy update on 21 November 2017."
REVIEW OF PERFORMANCE
HALF YEAR SECOND
in ? millions QUARTER
Period ended 30 June
2017 2016 change 2017 2016 change
--------------------------------------------------------------------------------
Gross revenues 1,648 1,678 -2% 830 832 0%
--------------------------------------------------------------------------------
Organic growth -2% 0%
--------------------------------------------------------------------------------
Net revenues 1,256 1,263 -1% 628 630 0%
--------------------------------------------------------------------------------
Organic growth -1% 0%
--------------------------------------------------------------------------------
EBITDA 100 108 -8% 48 52 -8%
--------------------------------------------------------------------------------
EBITA 80 88 -9% 38 41 -8%
--------------------------------------------------------------------------------
EBITA margin 6.4% 7.0% 6.1% 6.6%
--------------------------------------------------------------------------------
Operating EBITA(1)) 90 98 -7% 44 46 -5%
--------------------------------------------------------------------------------
Operating EBITA margin 7.2% 7.7% 7.0% 7.3%
--------------------------------------------------------------------------------
Net income 34 40 -15%
--------------------------------------------------------------------------------
Net income per share (in ?) 0.40 0.48 -17%
--------------------------------------------------------------------------------
Net income from operations 47 55 -14%
--------------------------------------------------------------------------------
Net income from operations per share (in
?) 0.55 0.66 -17%
--------------------------------------------------------------------------------
Net working capital % 19.3% 19.9%
--------------------------------------------------------------------------------
Free cash flow (2)) -28 -62 34 -10
--------------------------------------------------------------------------------
Net debt 514 587
--------------------------------------------------------------------------------
Backlog net revenues (billions) 2.2 2.3
--------------------------------------------------------------------------------
(1) )Excluding acquisition, restructuring and integration-related costs
(2) )Cash flow from operating activities minus investments in (in)tangible
assets
Revenues and Income
Organic growth was flat in the second quarter, trending positively after the
decline in the first quarter. This resulted in an organic decline of 1% in net
revenues for the first half year. North America, Continental Europe, the UK, and
Australia delivered organic growth. Net revenues declined in Latin America and
the Middle East. Revenues in CallisonRTKL and in Asia also declined but turned
to growth in the second quarter.
EBITA decreased by 9% to ?80 million (H1 2016: ?88 million), mainly due to a
loss in Brazil of ?11 million (H1 2016: -?3 million). Operating EBITA decreased
by 7% to ?90 million (H1 2016: ?98 million), as improvements in North America
were offset by a ?6 million operating loss in Latin America and lower results in
the Middle East. The operating EBITA margin was 7.2% (H1 2016: 7.7%). Non-
operating costs were ?10 million (H1 2016: ?10 million), mainly related to
restructuring in Brazil and Continental Europe.
The income tax rate was 29.9% (H1 2016: 25.0%). Financing charges were 8% lower
at ?12.3 million (H1 2016: ?13.3 million). Income from associated companies was
a loss of ?2.4 million (H1 2016: -?1.6 million), related to non-core energy
assets in Brazil.
Net income from operations decreased 14% to ?47 million (H1 2016: ?55 million)
or ?0.55 per share (H1 2016: ?0.66). Net income declined 15% to ?34 million or
?0.40 per share, compared to ?40 million or ?0.48 per share in the first half of
2016.
CASH FLOW, WORKING CAPITAL AND BALANCE SHEET
Working capital as a percentage of gross revenues was 19.3% (Q2 2016: 19.9%).
Free cash inflow in the second quarter from higher cash collections improved
this ratio. The days sales outstanding decreased to 95 days (Q2 2016: 97 days).
Free cash flow in the second quarter was ?34 million (Q2 2016: -?10 million) due
to higher cash collections and focus on cash management. Net debt at the end of
June was ?514 million (H1 2016: ?587 million), leading to a covenant leverage
ratio of 2.5 (FY 2016: 2.5).
Backlog
Backlog at the end of June 2017 stood at ?2.2 billion, representing stable 11
months of net revenues. The backlog increased organically by 3% to date versus a
-1% decline in H1 2016. Compared to June 2016, backlog declined -4% due to
cancellations in the second half of 2016.
In the first half-year, backlog grew especially in North America, the UK,
Continental Europe, Asia and Australia, while Latin America, the Middle East and
CallisonRTKL saw a declining order book.
ACQUISITION
While our focus is on organic growth, we continue to look to opportunities to
further expand our service offering. Today we announced the acquisition of E2
ManageTech, an enterprise technology solutions firm providing IT and business
services for the Environmental, Health and Safety (EHS) information market. E2
was established in 1998 and employs more than 50 people, located in the United
States and Canada.
REVIEW OF PERFORMANCE FOR THE second QUARTER
Net revenues were ?628 million, while organic growth was flat. North America,
Continental Europe, the UK, CallisonRTKL, and Australia delivered organic
revenue growth. Net revenues were lower in Latin America and the Middle East.
The currency effect was flat due to a stronger USD offsetting a weaker British
Pound.
Operating EBITA was ?44 million, 5% lower than in the same quarter last year (Q2
2016: ?46 million). The operating EBITA margin was 7.0% (Q2 2016: 7.3%), mainly
due to an operating loss in Brazil and lower results in the Middle East.
EBITA decreased by 8% to ?38 million. Non-operating costs were -?6 million (Q2:
2016: -?5 million), mainly related to restructuring in Brazil and Continental
Europe.
Review by segment
Americas
(31% of net revenues)
in ? millions HALF YEAR SECOND QUARTER
Period ended 30 June
2017 2016 change 2017 2016 change
------------------------------------------------------------------------------
Gross revenues 599 606 -1% 302 296 2%
Net revenues 394 391 1% 198 194 2%
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Organic growth -3% -1%
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EBITA 17.5 20.1 -13%
Operating EBITA(1)) 23.4 24.0 -3%
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Operating EBITA margin 5.9% 6.1%
(1) )Excluding acquisition, restructuring and integration-related costs
The organic change in net revenues of -3% consists of 1% growth in North America
and 32% decline in Latin America due to the recession in Brazil. EBITA in Latin
America decreased by ?7 million due to an operating loss of ?6 million (H1
2016: -?1 million) and ?4 million restructuring charges (H1 2016: ?2 million).
Operating EBITA in North America was ?3 million higher.
NORTH AMERICA
In North America revenues increased organically by 1% driven by environment, and
infrastructure. Organic revenue growth in the second quarter was 3%. Overall
good order intake lead to a higher backlog.
* Environment: strong order intake and margin improvement supported by
profitable growth of Arcadis FieldTech Solutions
* Water: revenue declining. Hiring staff after recent project wins and
improved outlook
* Infrastructure: significant revenue growth with improved margin
* Buildings: higher margins with modest revenue growth
LATIN AMERICA
Net revenues in the second quarter in line with the first quarter, still 32%
below last year.
* Clients in Brazil continue to delay investment decisions, impacting our
infrastructure business. The environmental business is more stable
* Further restructuring measures were taken and planned for Brazil to bring
down costs in line with market reality
* Chile revenues lower with improved margin
Europe & Middle East
(45% of net revenues)
in ? millions HALF YEAR SECOND QUARTER
Period ended 30 June
2017 2016 change 2017 2016 change
-----------------------------------------------------------------------------
Gross revenues 685 725 -5% 335 361 -7%
Net revenues 566 581 -3% 278 289 -4%
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Organic growth 1% -1%
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EBITA 36.6 41.5 -12%
Operating EBITA(1)) 39.8 46.7 -15%
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Operating EBITA margin 7.0% 8.0%
(1) )Excluding acquisition, restructuring and integration-related costs
Organic growth in net revenues of 1% consists of 4% growth in Continental
Europe, 5% increase in the UK, compensating a 13% decrease in the Middle East.
EBITA decreased mainly due to the Middle East and the weaker British Pound.
Operating EBITA improved in Continental Europe.
Continental Europe
Net revenues increased organically by 4% to which all countries contributed.
Improved market conditions in the private sector supported a strong order
intake.
* Buildings generated strong revenue growth due to project wins in the
Netherlands and Germany
* Infrastructure had slightly lower revenues as more work for rail projects
could not compensate for a slowdown in highway activities
* Environment realized solid revenue growth driven by the Netherlands, Germany
and Belgium, with better order intake for remediation activities and
consultancy services
* Water revenues were slightly higher, with increased backlog for especially
conveyance
United Kingdom
Organic net revenue growth was 5%, while backlog improved after winning many
strategic pursuits.
* Buildings revenues were up supported by automotive and commercial
development. Margin improved after costs actions were taken
* Infrastructure grew as rail investments continue. High level of bidding
activity impacted profit margin
* Good growth in water following earlier wins with water utilities for the
Asset Management Period cycle
* Higher revenues in environment driven by strategic environmental consultancy
Middle East
Net revenues decreased by 13%. Backlog came down due to selective bidding and
lower demand.
* The UAE was the most active market with a stable performance
* Revenues were lower in Qatar. Important milestones on multiple contracts
were approved. Significant cash collection expected in Q3/Q4.
* In Saudi Arabia revenues came down. Partial cash payments for projects
completed in 2016 were received
Asia Pacific
(14% of net revenues)
in ? millions HALF YEAR SECOND QUARTER
Period ended 30 June
2017 2016 change 2017 2016 change
----------------------------------------------------------------------------
Gross revenues 196 183 7% 105 95 10%
Net revenues 172 166 4% 89 86 4%
----------------------------------------------------------------------------
Organic growth 0% 1%
----------------------------------------------------------------------------
EBITA 14.1 14.4 -2%
Operating EBITA(1)) 14.2 14.4 -1%
----------------------------------------------------------------------------
Operating EBITA margin 8.3% 8.7%
(1) )Excluding acquisition, restructuring and integration-related costs
Organic revenue growth in Asia Pacific was flat as growth in Australia
compensated for a decline in Asia in the first quarter. Margins were almost
flat.
Asia
Net revenues declined organically by 5%, while in the second quarter the
business returned to growth and backlog improved.
* Singapore generated lower revenues due to a slower buildings market and from
exiting low margin services
* Revenues in China started growing again in the second quarter
* Diversification toward Infrastructure contributed to revenues
Australia Pacific
Organic net revenue growth was 8%, fueled by major projects wins like Sydney
Metro.
· Higher revenues from delivering major infrastructure, buildings and
environmental projects across major urban areas of Australia
CallisonRTKL
(10% of net revenues)
HALF YEAR SECOND
in ? millions QUARTER
Period ended 30 June
2017 2016 change 2017 2016 change
-------------------------------------------------------------------
Gross revenues 168 164 3% 88 80 11%
Net revenues 124 125 -2% 63 61 2%
-------------------------------------------------------------------
Organic growth -3% 1%
-------------------------------------------------------------------
EBITA 12.3 12.1 1%
Operating EBITA(1)) 13.1 12.4 5%
-------------------------------------------------------------------
Operating EBITA margin 10.6% 9.9%
(1) )Excluding acquisition, restructuring and integration-related costs
Due to a weak Q1, net revenues declined organically by 3% mainly due to lower
activity levels in US commercial real estate.
* In Q2, momentum improved with an organic growth of 1%, supported by the
Retail and Workplace practices
* EBITA margin improved due to cost measures
outlook 2017
* In general, positive business sentiment in most regions
* Increased infrastructure spending in many countries
* Uncertainty around Brazil and the Middle East remains
* Strong pipeline and cost reductions supporting profitable growth
Leadership priorities 2017
* Focusing on clients, leading to growth in backlog and revenues
* Reducing costs by simplifying organization structure, strengthening project
management and expanding Global Excellence Centers
* Reducing working capital
* Driving innovation through digitalization
* Finalizing the strategy update
Financial Calendar 2017
25 October 2017 Third quarter results 2017
21 November 201 7 Capital Markets Day, including strategy update
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
Joost Slooten
Mobile: +31 6 27061880
E-mail: joost.slooten(at)arcadis.com
Conference Call
Arcadis will hold an analyst meeting and webcast to discuss the half year 2017
results on 27 July 2017. The analyst meeting will be held at 10.00 hours CET
today. The webcast can be accessed via the investor relations section on the
company's website at www.arcadis.com.
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 ?3.3 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.
REGULATED INFORMATION
This press release contains information that qualifies, or may qualify as inside
information within the meaning of Article 7(1) of the EU Market Abuse
Regulation.
FORWARD LOOKING STATEMENTS
Statements included in this press release that are not historical facts
(including any statements concerning investment objectives, other plans and
objectives of management for future operations or economic performance, or
assumptions or forecasts related thereto) are forward looking statements. These
statements are only predictions and are not guarantees. Actual events or the
results of our operations could differ materially from those expressed or
implied in the forward looking statements. Forward looking statements are
typically identified by the use of terms such as "may," "will," "should,"
"expect," "could," "intend," "plan," "anticipate," "estimate," "believe,"
"continue," "predict," "potential" or the negative of such terms and other
comparable terminology. The forward looking statements are based upon our
current expectations, plans, estimates, assumptions and beliefs that involve
numerous risks and uncertainties. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our control.
Although we believe that the expectations reflected in such forward looking
statements are based on reasonable assumptions, our actual results and
performance could differ materially from those set forth in the forward looking
statements.
-TABLES FOLLOW-
Arcadis - Interim Financial Statements 2017:
http://hugin.info/132839/R/2123369/809865.pdf
Arcadis First Half Year Results - Analyst presentation :
http://hugin.info/132839/R/2123369/809879.pdf
Arcadis First Half Year results - Tables:
http://hugin.info/132839/R/2123369/809864.pdf
ARCADIS REPORTS FIRST HALF YEAR RESULTS 2017 - Press Release:
http://hugin.info/132839/R/2123369/809863.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: 27.07.2017 - 07:00 Uhr
Sprache: Deutsch
News-ID 554093
Anzahl Zeichen: 26170
contact information:
Town:
Amsterdam
Kategorie:
Business News
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