Overview results 2000 and First quarter 2001 results By Harrie L.J. Noy Chairman of the Executive Board of ARCADIS NV General Meeting of Shareholders Arnhem, May 23, 2001
Results full year 2000
ARCADIS on track with new strategy Net income +18% Results in line with strategic goals Gross revenue Growth 18% of which 7% autonomous Operational margin Operating income +26% EBIT margin from 6.1 to 6.4% Net income per share 16% higher at € 1.04
Net income FY 2000: EUR 20.7 mln Gross revenue Net revenue Operating income Net income Net income per share Growth 18% 20% 26% 18% 16%
Higher autonomous growth Autonomous Acquisitions Dollar Gross revenue % 6% Gross revenue Q4 11% -6% 6% Operating income % 8% 6%
Major developments Strategic review New financial targets Strong autonomous growth in United States Solid contribution acquisitions Sale of Dutch environmental contracting activities Integration of operations in Germany, United States, The Netherlands
Development operating income +19% +4% +2%+26%
Development net income (excl. extraordinary items) +15% +6% +14%+18%
Cash flow and balance sheet Sharp decline in working capital Balance sheet stronger: solvency to >37% Operational cash flow doubled
Gross revenue: Market segments
Infrastructure +17% Major projects Netherlands Business parks through PPP TEA-21 fuels U.S. growth Relocation greenhouses
Environment +20% MNC program successful GRiP distinguishing feature Integrated approach Strong growth in U.S.
Buildings +30% Olympia stadium Berlin Acquisition Giffels in U.S. Turnkey projects in Spain Facility management
Communications +18% Glass fiber networks, last mile GSM networks Real estate dataTele hotels
Gross revenue: Regions
Geographical spread
EBITA: Regions
Strategic review Strong position: Stable growth of revenues and income Europe top 3 / worldwide no. 9 Strongest international network in the business However: Not reflected in share price Organic growth limited In short: strategic review
Market developments Globalization of clients Consolidation in the sector Governments pull back Industry: outsourcing and vendor reduction Changing roles Changing labor markets
More focus on value creation Profitable growth is key ClientsEmployees - more added value- project management - expansion services- training & development - new clients- performance based pay Profitable growth Shareholder value More emphasis on organic growth Focus on existing home markets
Four strategic pillars Accelerate profitable growth Organic growth existing core business Strong growth in specific segments Expansion services to industry Acquisitions
New ambitious goals 1 Growth gross revenue -Autonomous -Acquisitions -Dollar-effect 2 Margin -EBIT/net revenue 3 Growth net income per share Result % 7% 6% 5% 6.4% 16% % 3% 7% 3% % 8% New goal 13% 1/2 - In % 15%
The following conditions apply: Excluding the effects of goodwill write-offs Excluding changes in exchange rate dollar - euro Market conditions show no major changes Growth rate in part depends on acquisitions And : no change in pay-out ratio dividend
Results first quarter 2001 and outlook full year 2001
Net income 1st quarter 2001: EUR 3.6 mln
Highlights first quarter 2001 The Netherlands: Growth in infrastructure Divestment Dutch environmental contracting activities Decline in demand real estate information services North- and South-America: Good order intake infra + environment in U.S. Acquisition WSBC generates growth Buildings, communications weaker Strong growth Brazil Europe: Healthy organic growth
Outlook market Infrastructure market remains good Netherlands: growing investment volume United States: TEA-21 continues Brazil: strong growth power-infrastructure Telecommunications grows, but slower Growth in Germany and Spain Private sector: stronger tendency outsourcing Opportunity for facility management Uncertainty American economy
Outlook 2001 NL: infrastructure compensates real estate information USA: growth in infrastructure and environment Extraordinary gain approx. EUR 2 million Net income approx. 10% higher Premise: American economy remains level Unforeseen circumstances Excluding extraordinary gain and new acquisitions ARCADIS on track to realize strategic goals
ARCADIS: from engineering firm … to professional service provider for: infrastructure, environment, buildings and communications Broad range of services Higher in the value chain More added value More fixed relationships/ partnerships Long term contracts Realization Engineering Design Fin., Legal, Permitting Maintain Project Development Feasibility Studies Program Consultancy