Arcadis Nv · EURONEXT:ARCAD
Arcadis Nv — Investor Day (November 2020)
72 slides from Arcadis Nv's investor day presentation, Nov 19, 2020
Slide 1: Maximizing Impact
Maximizing Impact Arcadis Capital Markets Day 19 November 2020
Slide 2: Disclaimer
Disclaimer Statements included in this presentation that are not The forward-looking statements are based upon our current historical facts (including any statements concerning expectations, plans, estimates, assumptions and beliefs that investment objectives, other plans and objectives of involve n
Slide 3: Team and Agenda
Team Agenda Peter Oosterveer Chief Executive Officer 1 Arcadis at a glance Peter Oosterveer 5 Sustainability & Digital Leadership Stephan Ritter Virginie Duperat Chief Financial Officer 2 Strategic 2017-2020 progress 6 Strategy in action: Business Areas Peter Oosterveer Alan Brookes Mary Ann Hopkins
Slide 4: Our world has changed… but we continued to deliver
Continued strong focus on our clients and Health & Safety Our world has changed… but we Agility and Client focus and continued to deliver digital skillset culture of care allowed rapid adjustment created resilience 90% of our people working from home © Arcadis 2020 Capital Markets Day – November 202
Slide 5: Part 1: Arcadis at a glance
Part 1: Arcadis at a glance Peter Oosterveer | Chief Executive Officer
Slide 6: Arcadis at a glance – well diversified
Arcadis at a glance – well diversified Geographies Businesses Clients Services € 3.5 bn Gross Revenues 9% 44% 12% 40% 20% 55% 8% 34% ~ 28,000 Callison Europe & Water Buildings Regulated Private Architectural Program, 14% RTKL Middle East industrial 25% design project & cost management Asia Pacific C
Slide 7: Our solutions are delivered cross sector
Our solutions are delivered cross sector Infrastructure (24% net revenues) Water (12% net revenues) Airport Solutions Highways and Water Management Water for Industry Intelligent Transport Systems Ports and Industrial Infrastructure Rail and Urban Transport Water Conveyance Water Supply and Treatmen
Slide 8: Part 2: Strategic progress 2017–2020
Part 2: Strategic progress: 2017–2020 Peter Oosterveer | Chief Executive Officer
Slide 9: Creating a Sustainable Future Through our Strategic Pillars
Creating a Sustainable Future Through our Strategic Pillars People & Culture Innovation & Growth Focus & Performance • People First and be the employer of • Grow through providing integrated • Focus on where we can lead choice and sustainable solutions for our • Deliver client and project excellence
Slide 10: Results of Creating A Sustainable Future Strategy 2017–2020
Results of “Creating A Sustainable Future” Strategy 2017–2020 People & Culture* Innovation & Growth Focus & Performance* Voluntary staff turnover Organic Revenue Growth Margin Voluntary staff turnover < Market 9.4% >GDP growth in our markets | CAGR 2% Operating EBITA: 8.5% -9.5% 8.6% Key clients 2x
Slide 11: Created a solid foundation for growth
Created a solid foundation for Strengths Opportunities growth … …of a more • Legacy issues resolved, performance • Capitalize on global megatrends in core predictable and balance sheet markets: profitable, low risk strengthened • Urbanization business delivering • Strong focus on key businesses, lea
Slide 12: Part 3: Mega trends and Market impacts
Part 3: Mega trends and Market impacts Mary Ann Hopkins | Chief Growth Officer
Slide 13: Global Mega Trends Affecting our Markets
Urbanization Digitalization Global Mega Trends Affecting our Markets Climate Change Societal Expectations © Arcadis 2020 Capital Markets Day – November 2020 13
Slide 14: Urbanization puts tremendous pressure on city resources
Urbanization 3 million 70% of the 221 cities puts tremendous people world’s with >1 million population pressure on city Moving to cities every week citizens in China by 2023 will live in cities resources, its by 2050 citizens and the environment >60% $2.1 trillion Congestion of the land projected US
Slide 15: Urbanization is driving the need for sustainable and smart solutions
Urbanization The Mobility The Water The Buildings is driving the need for Market Market Market sustainable and smart will increasing demand for public in the US needs investments of $632B is increasingly relying on smart, inclusive solutions across our transit such as light rail and high-speed over
Slide 16: Climate Change is severely impacting our way of life
Climate Change Predicted Increase in average global is severely sea level rise temperatures and significant loss of impacting our coastal areas and severity of droughts affecting food supply way of life Increased severity of Water scarcity increasing in many parts storms and of the word, while prope
Slide 17: Climate Change is a global imperative
Climate Change Investing in Electrifying Protecting is a global imperative Energy Fleets Coastal Communities that requires Transition Bus, logistic, police fleets are being In the US will require >$1T committed in significant renewable power electrified creating demand for charging $400B in the next
Slide 18: Digitalization puts services directly in the hands of users
Digitalization puts Technology Retail Data services directly in the Companies ecommerce Center hands of users and represent 5 of the top 7 Global sales will increase by >50% towards 2023 demand and supporting green data at the center of companies in market cap requiring distribution centers and effi
Slide 19: Digitalization of clients' needs is spurring investments
Digitalization of Real time Advanced Enterprise clients’ needs is asset data Analytics approaches collection spurring investments to enable optimized of their enterprise data to provide with access anytime/ anywhere to their in digital services asset management strategies insights data and products
Slide 20: Societal Expectations
China’s intent to Societal Expectations European achieve carbon green deal Stakeholders are Provides funding for €1T neutrality by 2060 demanding companies in Sustainable investments in the next decade Creates the world's biggest market for low carbon and governments to act technology with integrity
Slide 21: Environmental and Sustainability Capabilities
Global Environmental Green Technology Societal expectations Remediation Market & Sustainability market will fuel the ESG $100B $29B agenda of governments and businesses and 7.5% CAGR (2020 – 2027) 27% CAGR (2019 – 2024) drive investments in the Environmental and Arcadis is a Innovators Leaders Susta
Slide 22: Part 4: Strategy 2021–2023: Maximizing Impact
Part 4: Strategy 2021–2023: Maximizing Impact Peter Oosterveer | Chief Executive Officer
Slide 23: Foundation of new strategy: building on our strengths
Foundation of new strategy: building on our strengths Mega trends will drive client’s demands toward the full strength of Arcadis’ resume and services © Arcadis 2020 Capital Markets Day – November 2020 23
Slide 24: Maximizing Impact: Accelerate ability to meet increasing demand
Maximizing Impact: Accelerate ability to meet increasing demand © Arcadis 2020 Capital Markets Day – November 2020 24
Slide 25: Impact through Sustainable Solutions
Impact through Sustainable Solutions • Provide as Integral part of all solutions to clients • Leveraging global wealth of expertise and skills • Creating resilient and effective assets • Maximizing the passion of all Arcadians © Arcadis 2020 Capital Markets Day – November 2020 25
Slide 26: Sustainable Solutions and Digital Leadership
Impact through Sustainable Solutions • Provide as Integral part of all solutions to clients • Leveraging global wealth of expertise and skills • Creating resilient and effective assets • Maximizing the passion of all Arcadians Impact through Digital Leadership • Provide products and services, buildi
Slide 27: Sustainable Solutions, Focus & Scale, Digital Leadership
Impact through Sustainable Solutions • Provide as Integral part of all solutions to clients • Leveraging global wealth of expertise and skills Impact through • Creating resilient and effective assets Focus & Scale • Maximizing the passion of all Arcadians • Provide expertise where we have a right to
Slide 28: Accelerate strategy to maximize impact
Accelerate strategy to maximize impact © Arcadis 2020 Capital Markets Day – November 2020 28
Slide 29: Maximizing Impact for all stakeholders
Maximizing Impact for all stakeholders Clients People Expectation Expectation Certainty of sustainable, resilient Variety of exciting, sustainable and effective solutions and impactful projects Society Shareholders Expectation Expectation Necessity to help solve major societal Delivery of predictabl
Slide 30: Break
Break | 10 minutes Life Improving
Slide 31: Part 5: Sustainability & Digital Leadership
Part 5: Sustainability & Digital Leadership Stephan Ritter | Chief Innovation Officer
Slide 32: Sustainability creates value across stakeholders
Sustainability creates value across stakeholders Shifting client and end Investors increasingly People choosing user expectations demand ESG progress sustainable companies Client requirements to drive Global sustainability & ESG A purpose-driven organization ESG in value chain present investment top
Slide 33: Our DNA is built on sustainability
Our DNA is built on sustainability In our roots In our logo In our name Our purpose Founded in 1888 as the Association The fire salamander requires a balance “Arcadis” is derived from Arcadia: for Wasteland Redevelopment. between clean water, healthy air and the finest place on earth to live. clean
Slide 34: How we deliver on our purpose
How we deliver on our purpose Business People & Client operations Communities Solutions We embed ESG best practices We cultivate a workforce that is We provide solutions that into our operations, demonstrate diverse, inclusive, and address our clients' greatest continuous improvements and empowered
Slide 35: Sustainable business operations
Sustainable business Lead in ESG Drive inclusion & Drive emissions rankings engagement reductions operations Ambassador of workplace Carbon footprint1) (MT CO2 per FTE) pride #1 in industry Voluntary staff turnover Down 33% to 2.55 MT 16% ESG Risk rating score: 15% 14% (2014-2019) 9% 17.9 “Leader” 2
Slide 36: People & Communities
People & Communities Active thought Empowering our people Inspiring passion Promoting conservation, leadership with Expedition DNA discovery health and resilience contributor since 2014 to accelerate sustainable in communities in communities Executive Committee development member since 2019 10-year
Slide 37: Maximizing impact through sustainability-driven solutions
Maximizing impact through sustainability-driven solutions Arcadis holding patent on Designing bicycle Designing sustainable sustainable soil remediation connections in one of the office for Triodos Bank “TISR” worlds most congested city Fact: Facts: 50% reduction in life bio-based, cycle costs vs. t
Slide 38: Part 5: Sustainability & Digital Leadership
Part 5: Sustainability & Digital Leadership Stephan Ritter | Chief Innovation Officer
Slide 39: Continuing Digital leadership
Continuing Digital leadership Building a Rethink the way Positive Technology we work disruption Platform We continue to invest in We develop and We build scalable Saas our technology engage our people products, connecting our foundation to digitalize and partners to asset knowledge with our core bus
Slide 40: Building a technology platform to deliver digital solutions & products
Building a technology platform to deliver digital solutions & products Foundation Acceleration Differentiation Investing into a common Enables Standardization Deliver Digital Solutions Digital Twins technology platform and Automation • Improved client experience • Digitized Service Delivery … to cap
Slide 41: Rethinking the way we work
Rethinking the way we work Growing our People Innovation Increasing efficiency and productivity • Creating a common framework and • Focus on three lenses: Desirability, • Standardize core services and functions language, so all our people can Viability, Feasibility • Global Excellence Centres leadin
Slide 42: Positive disruption
Positive disruption Develop new Harness a Act as a Position us Drive business common catalyst and closer to differentiated Recurring models platform to accelerate dual technology client and and scalable faster and deliver transformation and start-up shareholder revenue scale standardized ecosystems
Slide 43: Part 6: Strategy in action: Business Areas
Part 6: Strategy in action: Business Areas Alan Brookes | Chief Operating Officer
Slide 44: Business areas at a glance
Business areas at a glance Resilience Places Mobility Protecting our environment and water Creating and managing sustainable Developing sustainable and innovative resources and powering our world for places where people live, work solutions to transform the way we move future generations and thrive
Slide 45: Our global expertise
Our global expertise United Continental 23% Europe Kingdom 39% Total Net Revenues: Asia EUR 2.6BN Pacific 38% CallisonRTKL Americas Middle Resilience East Places Mobility Size of pie charts representable for 2019 Net Revenues © Arcadis 2020 Capital Markets Day – November 2020 45
Slide 46: Resilience
Business Areas Impact through Resilience The capacity to prepare and respond to change in the environment, technology and society. A unified, global approach allows us to better address challenges – across climate, water, energy, regulatory requirements, and other environmental matters: Resilience f
Slide 47: Resilience creating value through…
Resilience Strategic priorities creating value through… Energy transition in the EU and UK Trends Clients needs Climate Change Governments committing to Safe, reliable and sustainable net-zero emission goals energy (e.g., UK by 2050) Leverage US remediation expertise to grow Europe, UK, and Asia bus
Slide 48: Doubling-down on the Energy transition
Doubling-down on the Energy transition Developing a strategy and implementation program to transition Amsterdam from natural gas to renewables by 2040. Client: City of Amsterdam, Netherlands Services: Consultancy © Arcadis 2020 Capital Markets Day – November 2020 48
Slide 49: Leverage our remediation expertise globally
Leverage our remediation expertise globally Airport PFAS remediation. Cleaning sewer system and surface water after PFAS contamination from firefighting substrate. Client: Confidential, Brisbane, Australia Services: Consultancy © Arcadis 2020 Capital Markets Day – November 2020 49
Slide 50: Deliver digitally-enabled safe water supply
Support water district to optimize reliability and energy management. Client: Tarrant Regional Water Group, Texas, U.S. Services: Consultancy / Program, project & cost management Deliver digitally-enabled safe water supply © Arcadis 2020 Capital Markets Day – November 2020 50
Slide 51: Places
Business Areas Impact through Places Places are spaces or townscapes which people use or occupy.. They include facilities people live and work in, such as residential, schools, hospitals, data centres and distribution depots, and transportation hubs such as rail and bus station buildings. © Arcadis
Slide 52: Places creating value through…
Places Strategic priorities creating value through… Program management: reducing carbon over the life cycle Trends Clients needs Climate Change Buildings generate up to 40% Creation and operation of of annual global GHG spaces which comply with emissions and surpass regulations Smart building asset
Slide 53: Reduce waste and improve energy efficiency over the life cycle
Reduce waste and improve energy efficiency over the life cycle Developed strategies to reduce construction waste by 75% and applied sustainable energy sources to improve efficiency. Client: SRE Group, San Francisco, U.S. Services: Consultancy / Digital products & services © Arcadis 2020 Capital Mark
Slide 54: Optimize end user experience and improve cost certainty
Optimize end user experience and improve cost certainty Deployed integrated real-time data platform and provided services to support large scale refurbishment program. Client: Costa Coffee Services: Digital products & services / Program, project & cost management © Arcadis 2020 Capital Markets Day –
Slide 55: Digitalize existing assets to optimize lifecycle cost
Applied life cycle analysis and modelling to optimize asset management, reduce cost and improve end user experience. Client: University of Manchester, UK Services: Digital products & services / Consultancy Digitalize existing assets to optimize lifecycle cost © Arcadis 2020 Capital Markets Day – Nov
Slide 56: Mobility
Business Areas Impact through Mobility Business Areas Mobility seeks to design, realize and manage assets that optimize the mobility of people and goods (e.g. roads, heavy & light rail, airports and ports) © Arcadis 2020 Capital Markets Day – November 2020 56
Slide 57: Mobility focus; creating value through…
Mobility focus; Strategic priorities creating value through… Efficient delivery through standardizing & automating Trends Clients needs our design and engineering Climate Change Extreme weather conditions Efficient and fast delivery of require different and complex complex mobility assets through mo
Slide 58: Efficient delivery through standardizing & automating design and engineering
Efficient delivery through standardizing & automating our design and engineering Help Georgia to reduce congestion, cut commute times and improve safety. Client: Georgia Department of Transportation Services: Design & Engineering / Digital products & services © Arcadis 2020 Capital Markets Day – Nov
Slide 59: Improve availability, safety and sustainability of assets
Improve availability, safety and sustainability of assets Deployed our asset and safety management solution for all nine London Underground lines and London Tramlink to optimize asset management. Client: Transport for London, London, UK Services: Consultancy / Digital products & services © Arcadis 2
Slide 60: Provide sustainable mobility technologies and service
First MaaS (Mobility as a Service) app of the Netherlands: shared mobility services to reduce congestion in Amsterdam business area. Services: Digital products & services Provide sustainable mobility technologies and service © Arcadis 2020 Capital Markets Day – November 2020 60
Slide 61: Summary: Global Business Areas accelerated ability to address client needs
Summary Benefits Global Business Areas for… Clients • Optimum access to global skills, capabilities and experience Global Business • Delivery of best-in-class solutions • Efficient service and product delivery Areas: accelerated Arcadis ability to address • More focused delivery where we have a righ
Slide 62: Part 7: Financial Framework and Capital Allocation
Part 7: Financial Framework and Capital Allocation Virginie Duperat | Chief Financial Officer
Slide 63: Improved performance resulting from strategic priorities
Creating a sustainable future: 2017–2020 Improved performance resulting from strategic priorities Net Revenues and organic growth Operating EBITA (margin) Days Sales Outstanding and Net Working Capital € millions, % € millions, % days and % 3% 3% 8.6% 16.9% 1% 8.2% 16.6% 16.6% 7.6% 7.3% -1% 15.1% 2,
Slide 64: Cash generation used to strengthen the balance sheet
Creating a sustainable future: 2017–2020 Cash generation used to strengthen the balance sheet Cash flow from operations Usage of cash Net debt and Net debt / EBITDA * € millions € millions € millions 223 214 Free Dividend and 84 cash flow Share buy back 8 Capex ALEN 2.3 151 2.0 139 143 M&A 56 55 149
Slide 65: Margin increase driven by growth and further performance enhancements
Maximizing Impact: 2021–2023 Margin increase driven by growth and further performance enhancements Operating EBITA margin (%) Organic growth: • Growing client demand end markets • Continue successful key client program • Enhance value proposition with sustainable solutions, globally leveraged Operat
Slide 66: Sustainable cash generation
Maximizing Impact: 2021–2023 Continued focus on efficient working capital management and cash flow Revenue Margins Cash Days sales outstanding <75 days Organic Revenue Growth Operating EBITA Margin Net Working Capital <15% Mid-single digit >10% Return on net working capital 40-50% • Growing client d
Slide 67: Sustainable value creation
Maximizing Impact: 2021–2023 … with a clear vision on allocating our capital Organic growth M&A Return to shareholders Capabilities and investments in digital Bolt-on to medium size acquisitions Dividend €40-60 million per annum depending on opportunity Pay out ratio 30-40% • Increased investment in
Slide 68: Wrap up
Wrap up Peter Oosterveer | Chief Executive Officer
Slide 69: Maximizing Impact: Strategy 2021-2023 targets
Maximizing Impact: Financial targets Non-financial targets Strategy 2021-2023 Organic Net Margin Voluntary staff Staff Revenue Operating EBITA turnover engagement Growth margin >10% < 10% Improving annually Mid-single digit Net Working Return on Net Capital & DSO Working Brand Diversity Capital Top
Slide 70: Maximizing Impact
Maximizing Impact 1. We created a strong foundation and delivered on commitments 2. Megatrends drive increased Client demands 3. Accelerate our ability to meet increasing demands 4. Sustainability is the driver, Digitalization the enabler 5. Talent, focus and institutionalized operational efficienci
Slide 71: Q&A
Q&A
Slide 72: Arcadis. Improving quality of life.
Arcadis. Improving quality of life. © Arcadis 2020