Second Quarter Results 2013

Transcription

1 Second Quarter Results 2013 Neil McArthur, Chief Executive Officer Renier Vree, Chief Financial Officer Amsterdam, the Netherlands, 31 July 2013 Gardens by the Bay, Singapore. (photo courtesy of Gardens by the Bay Andy Kwek) Imagine the result

2 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 statements. These statements are only predictions and are not guarantees. Actual events or the results of our operations could differ materially from those expressed or implied in the forward looking statements. Forward looking statements are typically identified by the use of terms such as may, will, should, expect, could, intend, plan, anticipate, estimate, believe, continue, predict, potential or the negative of such terms and other comparable terminology. The forward looking statements are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward looking statements July 2013

3 COFCO Joy City Tianjin, China Agenda ARCADIS NV Results Second Quarter and First Half 2013 Neil McArthur, CEO Q2/H1 overview Strategic progress Outlook Renier Vree, CFO Financial results Q2/H Q&A Mathew Riley EC Harris ARCADIS in Sustainable Urban Development Q&A 31 July

4 ARCADIS improves organic growth Organic net revenue growth at 4% in Q2, driven by all regions except Continental Europe Operating margin comparable to last year despite margin decline in Continental Europe Net income from operations up 2% in Q2 and 5% for H1, reflecting growth of revenues and margin in H1 US$90 million US private placement completed to replace maturing bank debt; average net debt to EBITDA ratio improved to 1.5 Project Europe achieved cost savings of 5.1 million in the first half year and is at annual run rate of 12.9 million with cost actions ahead of schedule 2013 outlook updated: a further increase of revenues, and a profit growth of 0% to 5%, barring unforeseen circumstances 4 31 July 2013

5 Strategic progress continues Merger with EC Harris and Langdon & Seah At 70 million, synergy wins H equal FY 2012 Implementation new operating model Continental Europe on schedule Growth initiatives ongoing, backlog growth of 7% in H1 Cost actions accelerated Positive margin effect expected in H Major wins include frameworks with multinational clients and Amsterdam Zuidas project and several multimillion dollar environmental projects for oil majors in the US Geohydrología and SENES integrations progressing as planned, first synergy results visible with growing pipeline M&A focus remains strengthening our market leadership positions 5 31 July 2013

6 Continental Europe: implementation on track Growth initiatives and process improvements underway, cost actions ahead of schedule Savings realized total 5.1 million, annual run rate at 12.9 million Restructuring charges year to date are 6.5 million EUR M Cost savings EUR M Restructuring charges Target Realized Target Realized 0 Savings target YTD Q Annual run rate 0 Expected 2013/2014 YTD Q July 2013

7 Examples European Collaboration BNP Paribas Fortis, New headquarters, in Brussels, Belgium (A.BE, A.FR, A.UK and A.NL) Flood risk assessment for logistics centers in Poland and recent flood support in Poland, Germany, Czech Republic (A.PL, A.SP, A.NL, A.DE) Site closure and remediation for major automotive manufacturer (A.UK, A.NV, A.NL, A.DE) Philips - New Build of Headquarters Hamburg, Germany (A.NV, A.NL, A.DE)

8 Strong organic growth, double digit in Emerging Markets Gross Revenue H1 (EUR M) CAGR 1 =+14% 1,225 1,240 CAGR 1) 12% 12% United Kingdom +108% 956 3% 24% 21% Continental Europe -5% 30% 46% 44% North America +3% 54% 13% 19% 24% Emerging Markets +55% H H H ) Compound Annual Growth Rate 8 31 July 2013

9 making Emerging Markets our largest region by headcount Headcount at June 30 CAGR =+18% 21,300 10% 22,000 10% CAGR United Kingdom +83% 15,900 4% 27% 25% Continental Europe -2% 37% 29% 28% North America -1% 39% 35% 37% Emerging Markets +61% 20% July 2013

10 Second Quarter Results 2013 Renier Vree, Chief Financial Officer Amsterdam, the Netherlands, 31 July 2013 Gardens by the Bay, Singapore. (photo courtesy of Gardens by the Bay Andy Kwek) Imagine the result

11 Income Q EUR 24.1 M, up 2% Currency effect: Gross revenue -/- 2%; Net revenue -/- 2%; EBITA -/- 3% Q Q ) Gross revenues % Net revenues % EBITA % Operating EBITA % Operating margin 9.0% 9.1% Net income from Ops 2) % EPS (in ) 2,3) % 1) Results 2012 adjusted for IFRS 2013 (deconsolidation of joint-ventures) 2) Before amortization and non-operational items 3) In 2013 based on 71.9 M shares outstanding (2012: 70.6 M) July 2013

12 Income H EUR 49.5 M, up 5% Currency effect: Gross revenue -/- 2%; Net revenue -/- 2%; EBITA -/- 3% Q Q ) Gross revenues 1,240 1,225 1% Net revenues % EBITA % Operating EBITA % Operating margin 9.1% 9.0% Net income from Ops 2) % EPS (in ) 2,3) % 1) Results 2012 adjusted for IFRS 2013 (deconsolidation of joint-ventures) 2) Before amortization and non-operational items 3) In 2013 based on 71.5 M shares outstanding (2012: 69.7 M) July 2013

13 Organic growth net revenue +4% with strong growth in Environment and Buildings Organic growth (NR) 25% 20% 15% 10% 5% 0% -5% -10% -15% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Infrastructure Water Environment Buildings Total July 2013

14 Operating EBITA Q2 2013, up 3% In EUR M Operating EBITA Q Currency -3% Acquisitions +5% Organic +1% Operating EBITA Q Higher profit contributions from acquisitions and Emerging Markets Restructuring and integration charges EUR 5.6 M (Q2 2012: EUR 5.2 M) Acquisition related charges EUR 1.1 M (Q2 2012: EUR 4.2 M) July 2013

15 Operating EBITA H1 2013, up 6% In EUR M Operating EBITA H Currency -3% Acquisitions +9% Organic 0% Operating EBITA H Restructuring and integration charges EUR 8.7 M (H1 2012: EUR 6.7 M) Acquisition related charges EUR 1.1 M (H1 2012: EUR 4.2 M) Higher profit contributions from acquisitions, UK and Emerging Markets Continental Europe weighs on profitability July 2013

16 Margin in H1 excluding Continental Europe 10.8% ) ) 2013 Q1 9.4% 8.8% 9.2% Q2 9.6% 9.1% 9.0% Q3 10.0% 9.9% Q4 10.8% 12.1% 2) year 9.7% 10.0% Operating margin: EBITA as % of net revenue, adjusted for reorganization & integration charges 1) Operating margin 2011 and 2012 adjusted for IFRS 2013 (deconsolidation of joint-ventures.) 2) Excluding impact lower overhead costs EC Harris related to Q1/Q3, margin in Q4 would have been 11.1% July 2013

17 Net income from operations up 5% First Half Year Net Income from Ops (in EUR M) EPS (in EUR) Increase Net income from +3% +9% +4% +28% +5% operations July 2013

18 Seasonal cash flow lower EUR M Profit for the period Depreciation & amortization Working Capital (4.6) 24.5 Other Net cash from Operations Net working capital as % of gross revenue: 18.4% (Q2 2012: 17.9%). Improvement from 19.9% of first quarter. Cash flow affected by timing differences in salary and tax payments and payment of obligations related to prior year acquisitions Working capital reduction program continues July 2013

19 EUR millions Balance sheet remains healthy Net Debt / EBITDA 1) 1,4 1,4 1,5 1,5 1, Q Net debt EUR 401 M (year-end 2012: EUR 283 M) Net debt/ebitda: 1.5 (year-end 2012: 1.5) 1) Average Net Debt Dec & June, conform bank covenants Maturity Profile of Committed Facilities Facility EUR 25m USPP USD 90m USPP USD 110m RCF EUR 150m Term Loans USD 270m July 2013 Diversified sources of funding Improved spread of maturity of loans $90 million US private placement completed to replace maturing bank debt

20 Business lines INFRASTRUCTURE WATER ENVIRONMENT BUILDINGS July 2013

21 Growth across all business lines Gross Revenue H1 (EUR M) CAGR 1 =+14% 1,225 1,240 CAGR % 27% Buildings +42% 18% 33% 33% Environment +6% 38% 17% 14% 15% Water +8% 28% 27% 25% Infrastructure +7% ) Compound Annual Growth Rate July 2013

22 Infrastructure World class intelligent and integrated road and rail transport solutions Specialties: ports, airports, tunnels, bridges, large projects Metro line expansion 22 Santiago, 31 July 2013 Chile

23 Infrastructure (25% of revenues) Q2 Gross revenues YTD in EUR M Gross revenue 1) -8% Organic -5% Acquisitions 0% Currency - 3% Net revenue 1) 0% Organic 3% Lower subcontracting in Continental Europe Emerging Markets and UK largest contributors to growth Also achieved growth in North America for transport planning Margin at 7.0%, below 2012 due to fierce competition in Continental Europe Won Zuidas project in Amsterdam, the Netherlands Los Angeles County Metro project, US Backlog 2) +4% 23 1) Rounding and reclassifications may impact totals 2) Organic development compared to year-end July 2013

24 Water Strong World class water water supply supply and waste and waste water water treatment treatment system system know-how, consultancy also for and industry design, also for industry Excellent and growing heritage in water management Leading heritage in water management Water for industry program 31 July

25 Water (15% of revenues) Q2 Gross revenues YTD in EUR M Gross revenue 1) +5% Organic -2% Acquisitions +6% Currency -1% Net revenue 1) +6% Organic -2% Acquisition ETEP in Brazil drives most of the revenue increase Organic growth in UK Austerity impacts business environment in Continental Europe Margins at 8.3% lower due to lower utilization Texas General Land Office: first water management project in Texas São Lourenço Water System for PPP client in Sao Paulo Backlog 2) -5% 25 1) Rounding and reclassifications may impact totals 2) Organic development compared to year-end July 2013

26 Environment World class remediation consulting and technologies Compliance management, impact assessments, climate adaptation Climate change 26 adaptation 31 July 2013 consulting

27 Environment (33% of revenues) Q2 Gross revenues YTD in EUR M Gross revenue 1) +1% Organic -1% Acquisitions +3% Currency -1% Net revenue 1) +5% Organic +3% Backlog 2) 0% Reduced subcontracting in the US impacts gross revenue Growth in Emerging Markets and parts of Continental Europe Organic net revenue growth improved versus the prior year Acquisitions of SENES and BMG also contributed to growth Margin at 11.8% flat with last year. Down in North America, up in Emerging markets Global frameworks won for BP Several multimillion dollar remediation projects won in US 27 1) Rounding and reclassifications may impact totals 2) Organic development compared to year-end July 2013

28 Buildings Design, Plan, design, plan, create, operate and regenerate buildings Sustainability by Design, Built Asset Consultancy, focus large scale on positive Program, outcomes Project and Cost Management Hospital design, 28 Middle 31 July East 2013

29 Buildings (27% of revenues) Q2 Gross revenues YTD in EUR M Gross revenue 1) +10% Organic +4% Acquisitions +9% Currency -1% Net revenue 1) +9% Organic +2% Backlog 2) +12% 1) Rounding and reclassifications may impact totals 2) Organic development compared to year-end July 2013 Strong revenue growth in Emerging Markets RTKL improved commercial revenues in North America and Asia Declines in Continental Europe and the US Acquisition growth is Langdon & Seah in Q1 Margin improved to 8.8% especially in Emerging Markets and at EC Harris Multiple large education projects won in UK Expansion King Faisal hospital project - KSA

30 Priorities and Outlook July 2013

31 Leadership priorities for 2013 Implement pan-european operating model, accelerate cost actions Stimulate improved organic growth and capture revenue synergies from recent acquisitions Evolve performance culture: margin improvement; working capital; project management Acquisitions to strengthen our positions both in emerging and selected mature markets Strategic review and target setting for period July 2013

32 32 Outlook per business line Infrastructure growth continues Good potential Emerging Markets; public spending up in North America and UK Europe will stabilize; Chile to decline Water improvement anticipated North America to pick up; growth in Emerging Markets; launched in Asia Continental Europe lower, flood opportunities; Water for Industry with MNC clients Environment maintain momentum Driven by private sector demand, especially MNC clients Mining opportunities - pipeline SENES; N America, UK and Emerging Markets up Buildings solid organic growth BAC creates global growth, synergy sales 70 million Growth in Emerging Markets and UK, further decline in Continental Europe Overall Backlog flat despite higher revenues and up 5% since year-end 2012 Higher margin from cost improvements Continental Europe and rate increases North America Outlook 2013: further increase of revenues and profit up 0% - 5% (barring unforeseen circumstances) 31 July 2013

33 Imagine the result July 2013