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Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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Page 1: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

Results third quarter 2007 Harrie Noy, CEOConference call, November 15, 2007 16:00 hrs CET

Page 2: Results third quarter 2007 Harrie Noy, CEO Conference 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

Page 3: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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)

Page 4: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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)

Page 5: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 6: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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%

Page 7: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 8: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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%

Page 9: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 10: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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%

Page 11: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

The service areas InfrastructureEnvironment Facilities

Page 12: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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%

Page 13: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 14: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 15: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 16: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

Outlook

Page 17: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 18: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 19: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 20: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 21: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

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

Page 22: Results third quarter 2007 Harrie Noy, CEO Conference call, November 15, 2007 16:00 hrs CET

Imagine the result

Thank you