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Results Third Quarter 2008
CONFERENCE CALL, NOVEMBER 12, 2008, 16:00 CET
Harrie NoyChief Executive Officer
Imagine the result
Higher revenues
Profitability stable
Gross revenues Q3 +5%
Good organic growth despite slowing growth U.S. and U.K. markets
EBITA up 8%, high margin maintained
Net income from operations stable despite currencies and higher financing charges
Outlook FY2008: +10%
Focus on cost control and sales, anticipating changing conditions
Gross revenues
Ebita
Income1)
EPS1,2)
2008
427
30.3
16.3
0.27
_ _
5%
8%
0%
0%
Income Q3 2008
€ 16.3 million
2007
408
28.0
16.3
0.27
1) Net income from operations before amortization and non-operational items
2) In 2008 based on 60.6 million shares outstanding (2007: 61.1 million)
Currency -5%, especially decline of US dollar, British pound
Gross revenues
Ebita
Income1)
EPS1,2)
2008
1,255
87.2
47.8
0.79
_ _
15%
17%
11%
12%
Income 9 months 2008 € 47.8 million
2007
1,088
74.4
43.1
0.71
1) Net income from operations before amortization and non-operational items
2) In 2008 based op 60.5 million shares outstanding (2007: 61.2 million)
Currency -6%, especially decline of US dollar, British pound
0%
2%
4%
6%
8%
10%
12%
Q108 Q208 Q308 Q3YTD
Gross revenues Net revenues
Organic growth NR stays at good level
0%
5%
10%
15%
20%
25%
30%
2007 Q108 Q208 Q308 Q3YTD
Organic Acquisitions Total (excl. currency effect)
Main facts Till now impact credit crisis limited
UK property market remains difficult
Slowing growth in U.S. environmental market, partly due to completion large projects
Nevertheless organic growth NR 8%
Margin maintained at 10.7% (Q32007: 10.8% )
Dutch infra solid; Poland, Czech strong
Brazil and Chile continue strong growth
SET (Italy) acquired, Copijn divested
Figures relate to third quarter
87,2
74,4
54,9
38,5
22,8
0
25
50
75
100
2004 2005 2006 2007 2008
Margin improved
further
In € millions
69%Increase
7.8%
Margin
12%
6%
0%
8.9%
43%
10.1%
36%
10.3%
17%
EBITA Q3YTD and margin
5.5%
EBITA advanced 17% Q3YTD
0 10 20 30 40 50 60 70 80 90
EBITA 9M 2008
Organic
Acquisitions
Currency
EBITA 9M 2007
In € millions
+ 8%
-/- 6%
74.4
87.2
Organic increase mainly coming from U.S. en other Europe (excl UK project management)
+15%
Some financial
details Q3
Carbon credits contribute € 1.0 million to EBITA (2007: € 0.6 million)
Carbon credits from two landfills in Brazil; approx. 750K ton per year price 10-20 EUR; 1/3 for Logos
Again large impact derivatives on financing charges
Excl this impact financing charges increase to € 5.4 million (2007: € 2.6 million) as a result of acquisitions, higher interest rates and impact from Brazilian loans
ARCADIS
financially healthy
Balance sheet healthy: Net debt/Ebitda end 08 approx. 1.3
USD 350 million long term financing; repayment March 2011 – Jan 2015
End Q3 working capital up to 16.3% (Q307: 13.7%) due to reorganization billing in US and Poland
Cash flow expected to recover in Q4
Growth in all business linesFigures relate to first nine months 2008; (..) = organic growth
Buildings +39% (+6%)
0
100
200
300
400
500
2004 2005 2006 2007 2008
Infrastructure +3% (+5%)
0
100
200
300
400
500
2004 2005 2006 2007 2008
Environment +15% (+9%)
0
100
200
300
400
500
2004 2005 2006 2007 2008
Buildings26%
Environment37%
Infrastructure37%
INFRASTRUCTURE9 MONTHS 2008: +3% organic:+5%; acquisitions:0%; currency:-2%
Organic growth negatively impacted by earlier decline land development in U.S.
Excluding this effect organic growth 7%
Netherlands, Poland, Czech strong
Brazil and Chile driven by mining and energy
In Q3 accelerated growth in U.S. water market; this year $60 million orders from New Orleans
Project management contributed in U.K.
ENVIRONMENT9 MONTHS 2008: +15%organic:+9%; acquisitions:+16%; currency:-10%
Contribution acquisitions from LFR & Vectra
In Q3 slowing growth in the U.S. due to industrial clients economic woes
Combined with completion of projects with large subcontracting: light organic decline
Net revenue saw organic increase
Already $55 million in new GRiP® work YTD
In most of Europe and Brazil solid growth
BUILDINGS9 MONTHS 2008: +39%organic:+6%; acquisitions:+38%; currency:-5%
Acquisitions: RTKL and APS mid 2007
Continued strong growth in most European countries in management services
RTKL: solid growth from non-commercial and international work
U.K. lower due to decline in commercial real estate market, partly offset by infra & ME
Five year facility management contract with Van Lanschot – the first bank contract
Outlook per business line
Infrastructure – relatively stable• Government investments in Europe & U.S. to boost economy• Long term investment programs, e.g. Central Europe • Climate change fuels water management: e.g. Dutch Delta plan• New Orleans solid basis for growth in US water market
Environment – a healthy foundation by sustainability and regulations• Focus on sectors with continued high demand: oil & gas, utilities• Cost effective solutions, vendor reduction and outsourcing: > market share• Interest in GRiP® increases, both in US and Europe• In US, environment & climate change on political agenda
Buildings – refocusing sales efforts• Delays and postponements in commercial projects in UK and US• RTKL focuses on US non-commercial and on international• Project management for infra and Middle East• Demand for FM is expected to grow
Outlook 2008
Economic conditions deteriorate
Sustainability, climate change, urban renewal, mobility and energy offer ample opportunity
Well positioned with a strong backlog and intensified sales efforts
Cost control and focus on higher added value to maintain margin
Looking for acquisitions with more prudence
Expected increase net income from operations 2008: 10%
(Barring unforeseen circumstances)
ARCADIS Building Global Leadership