Arcadis Nv · EURONEXT:ARCAD
Arcadis Nv — H1 2018 Earnings Presentation
21 slides from Arcadis Nv's earnings presentation, Jul 26, 2018
Slide 1: First Half Year Results 2018
FIRST HALF YEAR RESULTS 2018 Amsterdam, 26 July 2018 IMPROVING QUALITY OF LIFE
Slide 2: Disclaimer
DISCLAIMER Statements included in this presentation 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 state
Slide 3: Peter Oosterveer, Chief Executive Officer
PETER OOSTERVEER BRUSSELS METRO Chief Executive Officer Arcadis has been commissioned by Beliris to supervise the expansion of the Brussels metro 26 July 2018 | H1 2018 Results | © Arcadis 2018 3
Slide 4: Our Strategic Framework 2018-2020
OUR STRATEGIC FRAMEWORK 2018 - 2020 PEOPLE & INNOVATION FOCUS & CULTURE & GROWTH PERFORMANCE • Voluntary staff turnover • Organic Revenue Growth • Margin Voluntary staff turnover < Market • Surpass GDP growth in our Operating EBITA trending to 8.5% - markets 9.5% of net revenues in 2020 • Staff enga
Slide 5: Change of leadership structure to accelerate progress on implementation strategy
CHANGE OF LEADERSHIP STRUCTURE TO ACCELERATE PROGRESS ON IMPLEMENTATION STRATEGY EXECUTIVE LEADERSHIP TEAM Alan Stephan Erik Peter Sarah Mary Ann Brookes Greg Rob Ritter Blokhuis Lia Oosterveer* Kuijlaars* Hopkins Group Executive Steele Mooren Group Executive Group Executive Belilos Chief Executive
Slide 6: Highlights First Half Year 2018
HIGHLIGHTS FIRST HALF YEAR 2018 • Organic net revenue growth, operating margin improvement and strong cash flow • Improved results Americas • Cash collection Middle East (KSA) • New Executive Leadership Team in place • Significant investments in digital capabilities and skills • Middle East portfoli
Slide 7: Sarah Kuijlaars, Chief Financial Officer
SARAH KUIJLAARS WESTCONNEX, SYDNEY Chief Financial Officer Arcadis providing detailed design services and independent verification services on different stages 26 July 2018 | H1 2018 Results | © Arcadis 2018 7
Slide 8: Quarterly Revenue and Operating EBITA
QUARTERLY REVENUE AND OPERATING EBITA Net Revenues and organic growth € millions, % • Net revenues at €602 million for Q2, resulting in 1% 700 3% 3% 3% organic growth. Currency translation effect was -5% due to 0% 1% 680 -1% 660 a stronger Euro 640 620 600 • North America, Continental Europe, the UK
Slide 9: First Half Year 2018 Revenues, Net Income and Backlog
FIRST HALF YEAR 2018 REVENUES, NET INCOME AND BACKLOG • Organic net revenue growth at 2%; driven by HALF YEAR SECOND QUARTER In € millions 2018 2017 change 2018 2017 change North America, Continental Europe, the UK Net revenues 1,202 1,256 -4% 602 628 -4% and Australia Organic growth 2% 1% EBITDA 10
Slide 10: Improvement Working Capital and Days Sales Outstanding
IMPROVEMENT WORKING CAPITAL AND DAYS SALES OUTSTANDING Net working capital € millions & as % of gross revenues • Collection of €19 million of overdue receivables in the 25% 730 19.9% 19.3% 19.8% 19.5% 18.8% Middle East (KSA) in the second quarter (H1: €25 million) 16.9% 20% 660 • Improvement in Net
Slide 11: Reduction in Long Overdue Receivables
REDUCTION IN LONG OVERDUE RECEIVABLES Gross & Net receivables € millions • 5% lower gross receivables at €605 million, due to focus on collection 700 Total: € 635M Total: • Decrease in overdue receivables more 600 € 605M than 120 days driven by: 147 131 o Cash collection KSA 500 Past due >120 days 8
Slide 12: Cash Flow Statement
CASH FLOW STATEMENT • Free cash flow in second quarter of +€54 in € millions 2018 2017 million (Q2 2017: +€34 million) EBITDA 100 100 • Free cash flow of €-6 million (H1 2017: -€28 Changes in net working capital -61 -70 million) Changes in other working capital 15 -5 Tax paid -21 -11 • Improved work
Slide 13: Strong Free Cash Flow, Lower Net Debt
STRONG FREE CASH FLOW LOWER NET DEBT Free Cash Flow 125 EBITDA (€ millions) 98 (€ millions) 80 140 75 120 107 100 100 100 100 100 25 80 60 -25 -6 40 -28 20 -75 -62 0 H1'16 FY'16 H1'17 FY'17 H1'18 H1'16 H2'16 H1'17 H2'17 H1'18 Net Debt Average net debt / EBITDA (€ millions) Calculated using bank cove
Slide 14: Americas Strong Margin Improvement
AMERICAS STRONG MARGIN IMPROVEMENT COASTAL RESILIENCE (31% of net revenues) HALF YEAR SECOND QUARTER BRIDGEPORT, CONNECTICUT 2018 2017 change 2018 2017 change Gross revenues 551 599 -8% 288 302 -5% Net revenues 365 394 -7% 189 198 -5% Organic growth 2% 2% EBITA 25.9 17.5 48% Operating EBITA 28.2 23.
Slide 15: Europe & Middle East: Growth in Europe, Selectivity in Middle East
EUROPE & MIDDLE EAST GROWTH IN EUROPE, SELECTIVITY IN MIDDLE EAST INTELLIGENT INFRASTRUCTURE FOR (46% of net revenues) HALF YEAR SECOND QUARTER NETWORK RAIL 2018 2017 change 2018 2017 change UK Gross revenues 708 685 3% 360 335 7% Net revenues 567 566 0% 275 278 -1% Organic growth 3% 1% EBITA 33.7 3
Slide 16: Asia Pacific: Diversification in Australia and Focus in Asia
ASIA PACIFIC DIVERSIFICATION IN AUSTRALIA AND FOCUS IN ASIA ARCADIS ONE OF FIRST COMPANIES TO PIONEER DRONES IN (14% of net revenues) HALF YEAR SECOND QUARTER CONSTRUCTION SECTOR SINGAPORE 2018 2017 change 2018 2017 change Gross revenues 186 196 -5% 98 105 -7% Net revenues 164 172 -5% 84 89 -6% Orga
Slide 17: CallisonRTKL Focus on Execution Strategic Plan
CALLISONRTKL FOCUS ON EXECUTION STRATEGIC PLAN CREATE NEW DOWNTOWN (9% of net revenues) HALF YEAR SECOND QUARTER SALT LAKE CITY 2018 2017 change 2018 2017 change Gross revenues 141 168 -16% 73 88 -17% Net revenues 105 124 -15% 54 63 -14% Organic growth -7% -7% EBITA 8.0 12.3 -35% Operating EBITA 9.3
Slide 18: Non-Core Clean Energy Assets Brazil (ALEN)
NON-CORE CLEAN ENERGY ASSETS BRAZIL (ALEN) Seropédica plant producing renewable natural gas • The renewable gas plant at Seropédica (Rio de Janeiro) is now technically operational • This plant is estimated to produce approximately 70 million m3 of renewable natural gas annually • Long term renewable
Slide 19: On Track to Deliver on Our 2018-2020 Strategic Priorities
ON TRACK TO DELIVER ON OUR 2018-2020 STRATEGIC PRIORITIES STRATEGIC PRIORITIES PROOF POINTS H1 2018 People & • Executive Leadership Team aligned with strategic framework Culture • 4,500 Arcadians onboarded for Expedition DNA basecamp (Digital capabilities) • Brand recognition; Superbrand status in t
Slide 20: Summary and Outlook
SUMMARY AND OUTLOOK • Strong executive leadership team in place in full alignment with strategic framework • Build on growth momentum Americas, Continental Europe, the UK and Australia • Continued focus on cash collection, disciplined project management and client selection • Perform portfolio analy
Slide 21: Arcadis. Improving quality of life.
Arcadis. Improving quality of life. © Arcadis 2018