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Results third quarter 2007 Harrie Noy, CEOConference call, November 15, 2007 16:00 hrs CET
Excellent performance continued
Gross revenue up 31% of which 17% organic
Net income from operations rises 33%
Margin improved considerably, 10% goal reached over 9 months
New acquisitions contribute well, especially RTKL
Outlook remains good
Performance reflects strong position in all three service areas
2006
311
19.6
12.3
0.61
_ _
31%
43%
33%
32%
Income third quarter 2007: € 16.3 million
2007
408
28.0
16.3
0.81
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
892
54.9
33.5
1.65
_ _
22%
36%
29%
28%
Income first nine months 2007: € 43.1 million
2007
1,088
74.4
43.1
2.12
Currency effect 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%
30%
35%
2004 2005 2006 Q1 2007 Q2 2007 Q3 2007
Organic
Acquisitions
Total (excl.Currency effect)
Currency -3% +1% 0% -5% -3% -3%
Selling prices +1% -0% 0% 0% 0% 0%
Organic growth continues a high level
Solid market conditions offer room for growth
No signs of weakness in the U.S., except land development
Strong increase in Brazil, Chile due to mining and energy demand
Rapid growth in Dutch market at 17% organic
European growth mostly U.K. and Belgium, Germany improving
Margin in the quarter improved to 10.8% versus 9.6% last year
Major acquisition of US based RTKL (design & planning)
Niche acquisitions: Alkyon (NL); APS and Vectra (U.K.)
Q3YTD geomix: NL 25%, US 45%, other Europe 22%, ROW 8%
Merger with RTKL strengthens facilities World leader in design and planning
Architectural design, master planning, specialized engineering
• Revenues $ 195 million, 1050 staff in US, Europe, Asia
• Operating margin meets target in facilities
• Strong brand and reputation
RTKL fits very well in ARCADIS strategy
• Next step in moving up the value chain
• Towards building leadership in facilities
• Stronger in China, closer to top 10 in US
Ample opportunities for synergies
EBITA increases considerably with 36%
0 10 20 30 40 50 60 70 80
EBITA Q3 2007 YTD
Rest organic
Carbon credits organic
Acquisitions/divestments
Currency
EBITA Q3 2006 YTD
In € millions
17%
-/- 4%
5%
54.9
74.4
Organic increases mainly from the Netherlands, U.S. and South America
18%
Acquisitions strengthen our market positions
Acquisitions 2007
• Cost management NL
• Facility consulting GER
• Environment Belgium
• Water management NL
• Design, planning US
• Project management UK
• Environment UK
Total
BFB
HL-S
Aeolus
Alkyon
RTKL
APS
Vectra
Staff
65
20
30
45
1050
70
110
1390
GR in €
6
2
3
5
144
13
15
187
Cons. from
1.1.07
1.1.07
1.4.07
1.7.07
6.7.07
10.8.07
14.11.07
Some financial details
Carbon credits contribute € 2.7 million to EBITA (Q3YTD)
Financing charges: - higher through growth / acquisitions
- impact derivatives in Q3 € 1.5 million
YTD 2006 included an interest gain of € 0.5 million (Q206)
Minority interest higher due to good operational performance Brazil
Tax rate will come out in full year to 32-33%
The service areas InfrastructureEnvironment Facilities
Strong organic growth in all service areasFigures relate to first nine months 2007; (..) = organic growthOverall currency effect for the period was minus 4%
Facilities +62% (+12%)
0
100
200
300
400
500
2003 2004 2005 2006 2007
Infrastructure 10% (+12%)
0
100
200
300
400
500
2003 2004 2005 2006 2007
Environment +19% (24%)
0
100
200
300
400
500
2003 2004 2005 2006 2007
Infrastructure41%
Facilities22%
Environment37%
Infrastructure +10% (+12%)
Hydropower project Brazil
• Dutch market strong in road/rail and municipal work• Other European countries also doing well• Downturn land development U.S. compensated by water work• Brazil and Chile expand on mining and energy projects
Environment +19% (+24%)
• At 24% organic growth very strong, particularly in the U.S. • Client focused business model increases market share• Brazil: more services for multinationals, Chile also strong• Europe: growth in almost all countries • Vectra expands capabilities in growing health and safety market
Facilities +62% (+12%)
Palladium Prague PM job with RTKL
• 50% from acquisitions, particularly RTKL, but also P1 in US• Organic 12%: mainly management & consultancy services • Germany, U.K. Belgium and Netherlands are doing well• NXP FM contract renewal/expansion also contributes to growth
Outlook
Financial markets underline U.S. sector strength
Development share price ARCADIS and competitors July - November 2007
70
80
90
100
110
120
130
140
150
02 Ju
ly
09 Ju
ly
16 Ju
ly
23 Ju
ly
30 Ju
ly
06 A
ugust
13 A
ugust
20 A
ugust
27 A
ugust
03 S
eptem
ber
10 S
eptem
ber
17 S
eptem
ber
24 S
eptem
ber
01 O
ctob
er
08 O
ctob
er
15 O
ctob
er
22 O
ctob
er
29 O
ctob
er
05 N
ovem
ber
Ind
ex (
2 Ju
ly 2
007
= 1
00)
Jacobs Engineering
Fluor
URS
Pöyry
WS Atkins
Tetra Tech
RPS Group
WSP
White Young Green
Sweco
ARCADIS
Solid outlook in US buildings market
PinnacleOne
• Mostly active for public sector clients
RTKL
• High end planning & design work
• Good position in federal market, home land security
• Exposure to residential limited
• Backlog up > 40% compared to January 1, 07
• Shift towards government, healthcare and international
ARCADIS has strong position in labor market
Most popular employers among high level graduates according to Intermediair (Dutch magazine)
ARCADIS position on the list rose from 72 to 29
We far outrank the Dutch competition:
ARCADIS position 29 overall, first in industryDHV position 106Royal Haskoning position 118Oranjewoud position 119Grontmij position 174
Outlook per service area
Infrastructure• Strong need to improve and expand infrastructure • Government investment stable basis with additional PPP funding • U.S.: land development now <2% of total, downside risk limited
Environment • Climate change & sustainability drive demand• Multinationals actively reduce vendors gain in market share• Federal GRiP ® expected to pick up in 2008
Facilities• Growth in project management / cost consulting also through AWwPC• RTKL offers ample opportunity for top line synergy• Benefiting from Middle East investments through APS & RTKL
Outlook for 2007 is good
Markets offer plenty of opportunity
Acquisitions remain high on our priority list
Favorable operational development will carry through
Margin goal of 10% to be reached this year
Tax pressure higher; minority interest also higher
Increase net income from operations of 20-25% for full year 2007
(barring unforeseen circumstances)
ARCADIS stays well on track
Imagine the result
Thank you