Arcadis NV · EURONEXT:ARCAD
Arcadis NV — FY2018 Earnings Presentation
26 slides from Arcadis NV's earnings presentation, Feb 14, 2019
Slide 1: Full Year Results 2018
FULL YEAR RESULTS 2018 Peter Oosterveer – CEO Sarah Kuijlaars – CFO Amsterdam, 14 February 2019
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 there to) are forward-looking stat
Slide 3: Peter Oosterveer, Chief Executive Officer
PETER OOSTERVEER NEW YORK CITY | UNITED STATES Chief Executive Officer HELP THE CITY OF NEW YORK REDUCE WASTE COLLECTION TRAFFIC BY 63%
Slide 4: Our Performance at a Glance
OUR PERFORMANCE AT A GLANCE • Strong performance in key markets North America, Continental Europe, the UK and Australia − Organic net revenue growth of 3% to €2.4 billion (gross revenues: €3.3 billion) − Operating EBITA margin of 7.3% (2017: 7.6%); including project write-offs and provisions related
Slide 5: Focus & Selectivity to Improve Performance
FOCUS & SELECTIVITY TO IMPROVE PERFORMANCE Total Net Revenues Key markets 83% of the business • North America Org. NR growth Op. EBITA % DSO • Continental Europe • The UK 6% 8.7% 67 17% • Australia • CallisonRTKL 83% Improvement areas 17% of the business Org. NR growth Op. EBITA % DSO Key markets •
Slide 6: Strong Performance in Key Markets
STRONG PERFORMANCE IN KEY MARKETS Organic NR % Op. EBITA % DSO 6% 8.7% 67 North Continental United Australia CallisonRTKL America Europe Kingdom • Strong positions in • Strong position in • Strong growth in • Strong Infrastructure • Streamlined Environment and Water Infrastructure and Infrastructure
Slide 7: Firm Measures to Turnaround Lagging Performance Middle East & Asia
FIRM MEASURES TO TURNAROUND LAGGING PERFORMANCE MIDDLE EAST & ASIA Middle East Asia Latin America Org. NR % Op. EBITA % DSO Org. NR % Op. EBITA % DSO Org. NR % Op. EBITA % DSO -16% -3% 265 -3% 5% 125 -2% -2% 120 • Phase out fixed price design • Leadership changes • Organization structure & engineeri
Slide 8: Non-Core Clean Energy Assets Brazil
NON-CORE CLEAN ENERGY ASSETS BRAZIL Process update Financial update Gas Verde (gas-to-gas plant) • Net exposure €59 million: • Certified and operational, 35% of - Provision: €28 million for ECL volume signed, a further 35% under - Off balance guarantee: €87 million negotiation, remaining volume off-
Slide 9: 2018 Delivery upon 2020 Strategic Priorities
2018 DELIVERY UPON 2020 STRATEGIC PRIORITIES PEOPLE & INNOVATION FOCUS & CULTURE & GROWTH PERFORMANCE Slight increase, North • Voluntary staff turnover America improved • Organic Revenue Growth 3% • Margin 7.3% Voluntary staff turnover < market Surpass GDP growth in our markets Operating EBITA: 8.5%
Slide 10: Sarah Kuijlaars, Chief Financial Officer
SARAH KUIJLAARS UTRECHT | THE NETHERLANDS Chief Financial Officer CONCEPT & DETAILED DESIGN OF A VERTICAL FOREST: THE WONDERWOODS BUILDING 14 February 2019 | FY 2018 Results Presentation | © Arcadis 2019 10
Slide 11: Full Year 2018 Key Metrics
FULL YEAR 2018 KEY METRICS Key metrics FULL YEAR In € millions 2018 2017 change Gross Revenues 3,256 3,219 1% • EBITA in line with last year despite -€6 million currency Net revenues 2,440 2,437 0% impact Organic growth % 3% EBITA 162 161 0% • Operating EBITA impacted by project write-offs and Opera
Slide 12: Quarterly Revenues and Operating EBITA (Margin)
QUARTERLY REVENUES AND OPERATING EBITA (MARGIN) Net Revenues and organic growth € millions, % 3% 3% 3% 4% 4% 700 2% • Strong growth and solid margins in key markets 680 660 640 • Q4 growth and margins impacted by project write-offs and 620 600 provisions in the Middle East and Asia (impact of 1.8%)
Slide 13: Full Year 2018 EBITDA Slightly Up; Dividend Maintained at €0.47
FULL YEAR 2018 EBITDA SLIGHTLY UP; DIVIDEND MAINTAINED AT €0.47 FULL YEAR In € millions 2018 2017 change EBITDA 204 200 2% • EBITDA +2% at €204 million Depreciation (43) (40) EBITA 162 161 0% • Net income for the year of -€27 million due to: Amortization & impairment (63) (31) EBIT 98 130 -24% − ALE
Slide 14: Improvement in Net Working Capital (%)
IMPROVEMENT IN NET WORKING CAPITAL (%) Ageing of Receivables and NWC (%) Period end, in € millions 2018 % of total 2017 % of total • NWC % improvement driven by cash collection from Not past due 324 50% 298 47% reduction overdue receivables (>120 days), WIP Past due 0-30 days 106 17% 109 17% convers
Slide 15: Quarterly Net Working Capital and DSO Improvement
QUARTERLY NET WORKING CAPITAL AND DSO IMPROVEMENT Net Working Capital % 19.8% 19.5% 640 18.8% 18.1% • Improvement vs. Q3 from strong WIP conversion and 620 16.9% 600 15.1% subsequent collection efforts, and accounts payables 580 560 • Outperforming our 2020 strategic targets of: 540 520 500 − NWC <1
Slide 16: Strong Cash Flow Generation
STRONG CASH FLOW GENERATION Cash Flow statement (€ million) In € millions 2018 2017 • Improved net working capital from collection efforts EBITDA 204 200 Changes in net working capital 31 2 • Changes other working capital of €38 million: Changes in other working capital 38 2 − Less prepayments on IT
Slide 17: Strong Free Cash Flow Lower Net Debt
STRONG FREE CASH FLOW LOWER NET DEBT Free Cash Flow 160 149 EBITDA (€ millions) 140 (€ millions) 110 120 98 105 104 100 80 100 100 100 100 80 100 60 40 95 20 90 0 -20 85 -6 -40 -28 80 FY'16 H1'17 FY'17 H1'18 FY'18 H2'16 H1'17 H2'17 H1'18 H2'18 Net Debt Average net debt / EBITDA (€ millions) Calculat
Slide 18: Successful Refinancing of €200 Million Maturity Profile Extended
SUCCESSFUL REFINANCING OF €200 MILLION MATURITY PROFILE EXTENDED Maturity profile after refinancing (€ millions) 450 • €200 million of syndicated committed credit facilities refinanced with six core relationship banks 400 • Maturity of two Term loans and a Revolving Credit Facility 350 (RCF) extende
Slide 19: Americas Stronger Across All Metrics
AMERICAS STRONGER ACROSS ALL METRICS WASTE WATER MANAGEMENT (31% of net revenues) FULL YEAR FOURTH QUARTER FOR GENERAL MOTORS | 2018 2017 change 2018 2017 change US Gross revenues 1,186 1,175 1% 334 293 14% Net revenues 755 751 1% 199 175 14% Organic growth 5% 11% EBITA 52 36 44% Operating EBITA 55
Slide 20: EME Europe Improves Across the Board; Middle East Turnaround Measures Taken
EME EUROPE IMPROVES ACROSS THE BOARD; MIDDLE EAST: TURNAROUND MEASURES TAKEN DIGITAL DATA CAPTURE (46% of net revenues) FULL YEAR FOURTH QUARTER ON LOWER THAMES 2018 2017 change 2018 2017 change CROSSING | UK Gross revenues 1,392 1,337 4% 349 340 3% Net revenues 1,133 1,113 2% 267 282 -6% Organic gr
Slide 21: Asia Pacific Firm Actions to Improve Performance Asia; Australia Outstanding
ASIA PACIFIC FIRM ACTIONS TO IMPROVE PERFORMANCE ASIA; AUSTRALIA OUTSTANDING DETAILED DESIGN FOR METRO TUNNEL PROJECT (14% of net revenues) FULL YEAR FOURTH QUARTER 2018 2017 change 2018 2017 change MELBOURNE | AUSTRALIA Gross revenues 375 387 -3% 97 98 -1% Net revenues 331 344 -4% 82 85 -4% Organic
Slide 22: CallisonRTKL New Organizational Set-up; Back to Growth
CALLISONRTKL NEW ORGANIZATIONAL SET-UP; BACK TO GROWTH ARCHITECTURAL DESIGN (9% of net revenues) FULL YEAR FOURTH QUARTER FOR MERCEDES-PLATZ | 2018 2017 change 2018 2017 change BERLIN Gross revenues 301 320 -6% 81 73 11% Net revenues 220 229 -4% 59 53 12% Organic growth 0% 10% EBITA 17 21 -17% Opera
Slide 23: Peter Oosterveer, Chief Executive Officer
PETER OOSTERVEER ALAMEDA CREEK | SAN FRANSISCO Chief Executive Officer STRENGTHEN BAY AREA’S RESILIENCE TO CHANGING WEATHER CONDITIONS 14 February 2019 | FY 2018 Results Presentation | © Arcadis 2019 23
Slide 24: Delivering Sustainable Value
DELIVERING SUSTAINABLE VALUE Net Revenues & Organic growth Operating EBITA (margin) NWC% and DSO € billioon and % € millions and % % and days Surpass GDP 8.5% - 9.5% 3% 17.5% 1% 16.9% <17.0% 7.6% 7.3% 7.1% 15.1% -4% 91 2.5 88 2.4 2.4 186 175 177 80 2016 2017 2018 Target 2016 2017 2018 Target 2016 20
Slide 25: Strategic Priorities 2019
STRATEGIC PRIORITIES 2019 • Revenue growth − Build on growth momentum North America, Continental Europe, the UK, Australia and CallisonRTKL − Leverage streamlined client portfolio and digital solutions • Further margin improvement − Rigorous adherence to actions identified for the Middle East and As
Slide 26: Arcadis. Improving quality of life.
Arcadis. Improving quality of life. 14 February 2019 | FY 2018 Results Presentation | © Arcadis 2019 26