. Return to organic growth and improved financial results

- Strong fourth quarter: organic net revenue growth 3% and operating EBITA margin 8.5%
- Full year gross revenues €3.2 billion. Net revenues €2.4 billion, organic growth 1%
- Full year operating EBITA +6% €186 million; operating margin improved to 7.6%
- Net income from operations +11% to €101 million
- Net working capital improved to 16.9% versus 17.5% in 2016
- Net debt/EBITDA at year-end 2.1, primarily from €98 million free cash flow
- Market consultation process for CallisonRTKL started to assess viability of sale
- Proposed dividend €0.47 per share (2016: €0.43); pay-out ratio unchanged at 40%
- Confirms revenue growth and improved operating margin in 2018

Amsterdam, 15 February 2018 - Arcadis (EURONEXT: ARCAD), the leading global Design & Consultancy firm for natural and built assets, reports full year results 2017. Net revenues totaled €2,437 million and increased organically by 1%. Net income from operations increased 11% to €101 million (2016: €91 million).

CEO STATEMENT
Peter Oosterveer, CEO Arcadis comments: "In 2017, we focused strongly on organic growth and on reducing our cost and working capital. I am pleased that we improved our financial performance as the year progressed. Our fourth quarter results were strong, with organic net revenue growth of 3% and a higher operating EBITA. This led to solid cash flow generation and reduced debt.

While our primary focus is on organic growth, we will continue to look for opportunities to further expand our digital and data expertise as evidenced by the recent acquisitions of E2 ManageTech and SEAMS. As a next step in the strategic review of CallisonRTKL, our architectural business representing approximately 10% of our global revenues, we started a market consultation to assess the viability of a sale.

In the coming years we expect to see the benefits from our updated strategy "Creating a sustainable future", which we presented end of November 2017. Our strategy is based on three pillars: people & culture, innovation & growth, and focus & performance. Global trends like climate change, sustainable industries and expanding cities are creating opportunities for Arcadis.

Our strategic priorities are clear:
Invest in people to build the workforce of the future
Become a digital frontrunner in the industry
Focus on selecting profitable clients and on improvements in project delivery
Choose geographies, businesses and projects where we can lead

We see a positive outlook for most of our markets, and I am convinced that the execution of our strategy will deliver further revenue growth and operating margin improvement in the years ahead."

REVIEW OF PERFORMANCE
Key Figuresin € millions
Period ended December 31 FULL YEAR FOURTH QUARTER
2017 2016 change 2017 2016 change
Gross revenues 3,219 3,329 -3% 805 854 -6%
Organic growth -1% 0%
Net revenues 2,437 2,468 -1% 595 608 -2%
Organic growth 1% 3%
EBITDA 200 207 -3% 51 50 1%
EBITA 161 166 -3% 41 40 2%
EBITA margin 6.6% 6.7% 6.8% 6.5%
Operating EBITA1) 186 175 6% 51 35 46%
Operating EBITA margin 7.6% 7.1% 8.5% 5.7%
Net income 71 64 10%
Net income per share (in €) 0.82 0.76 8%
Net income from operations 101 91 11%
NIfO per share (in €) 1.18 1.08 9%
Dividend (proposal) per share (in €) 0.47 0.43 9%

Avg. number of shares (millions) 85.9 84.1 2%
Net working capital % 16.9% 17.5%
Days sales outstanding 88 91

Free cash flow 2) 98 80 22% 85 102 -17%
Net debt 416 494 -16%
Backlog net revenues (billions) 2.1 2.2 -7%
Backlog organic growth 2% 1%

1) Excluding acquisition, restructuring and integration-related costs and excluding the release of Hyder related litigation provisions of €19.4 million in 2016
2) Cash flow from operating activities minus investments in (in)tangible assets

REVIEW OF PERFORMANCE in 2017
Net revenues totaled €2,437 million and increased organically by 1%. North America, Continental Europe, the UK, and Australia delivered organic growth, compensating for a decrease in other regions.

Operating EBITA increased by 6% to €186 million (2016: €175 million), as higher results in North America and Continental Europe compensated for lower results mainly related to the Middle-East. The operating EBITA margin was 7.6% (2016: 7.1%). Non-operating costs were €25 million (2016: €29 million), of which €20 million is mainly related to restructuring in Brazil and Continental Europe, and €5 million to acquisitions & divestments. EBITA decreased by 3% to €161 million compared to €166 million in 2016, the latter including a €19 million litigation provision release.

The income tax rate was 19.7% (2016: 19.3%). The main reason for the reduced effective tax rate, which was 29.9% in the first half of 2017, was the US tax reform resulting in a one-time gain of €13 million from revaluation of deferred tax positions. Financing charges decreased to €26 million (2016: €29 million) due to a weaker US dollar and lower debt. Income from associated companies was a loss of €12 million (2016: loss of €3 million), related to non-core clean energy assets in Brazil. Arcadis is investing up to €20 million to optimize asset value, ahead of a future divestment.

Net income improved 11% to €71 million (2016: €64 million) or €0.82 per share (2016: €0.76). Net income from operations increased 11% to €101 million (2016: €91 million) or €1.18 per share (2016: €1.08).

CASH FLOW, WORKING CAPITAL AND BALANCE SHEET

Working capital as a percentage of gross revenues was 16.9% (Q4 2016: 17.5%). The days sales outstanding decreased to 88 days (2016: 91 days). Free cash flow improved to €98 million (2016: €80 million). Net debt at the end of December was €416 million (2016: €494 million), resulting in an improved covenant leverage ratio of 2.3 (2016: 2.5). The leverage ratio at year-end improved to 2.1 (2016: 2.3)

BACKLOG
Backlog at the end of December 2017 stood at €2.1 billion (2016: €2.2 billion), representing 10 months of net revenues. The backlog increased organically in 2017 by 2% compared to a 1% decline in 2016. The currency impact was -9% mainly related to the US dollar. Backlog grew especially in North America, the UK, Continental Europe, Asia and Australia.

STRATEGIC REVIEW CALLISONRTKL

In September 2017 we announced the decision to perform a strategic review of CallisonRTKL, our architectural business. This review is part of our effort to sharpen our strategic focus. We evaluated a range of strategic options to optimize the value of CallisonRTKL, within or outside of Arcadis, and to provide the best prospects for our people, clients and shareholders. While a final decision has not been made yet, the process is on track, and we have started a market consultation to assess the viability of a sale.

REVIEW OF PERFORMANCE FOR THE FOURTH QUARTER
Net revenues were €595 million. Organic growth was 3% and all regions except for Latin America and the Middle East contributed to this growth. The currency effect was -6% due to weaker US Dollar, Australian Dollar and British Pound.

Operating EBITA was €51 million, 46% higher (Q4 2016: €35 million, which included €10 million additional provisions). The operating EBITA margin improved to 8.5% (Q4 2016: 5.7%) as a result of organic revenue growth and higher margins in North America, Continental Europe, and improved results in Latin America.

EBITA of €41 million was in line with prior year (Q4 2016: €40 million, which included the €19 million release of a litigation provision). Non-operating costs were €10 million (Q4 2016: €14 million), consisting of €6 million restructuring in Brazil and Continental Europe, and €4 million in acquisitions & divestments.

REVIEW BY SEGMENT
AMERICAS (31% of net revenues)
in € millions FULL YEAR FOURTH QUARTER
Period ended 31 December 2017 2016 change 2017 2016 change
Gross revenues 1,175 1,227 -4% 293 323 -9%
Net revenues 751 768 -2% 175 187 -7%
Organic growth -2% 1%
EBITA 36.0 26.3 37%
Operating EBITA1) 47.5 36.1 31%
Operating EBITA margin 6.3% 4.7%

1) Excluding acquisition, restructuring and integration-related costs

The organic net revenue decline of 2% consists of 2% growth in North America and a 26% decrease in Latin America due to Brazil. The operating EBITA improved 31% mainly due to the return to organic growth in North America. Operating EBITA margin in North America increased to 8.1% (2016: 7.1%). Latin America recorded an operating loss of €6 million (2016: -€8 million).

NORTH AMERICA
Higher net revenues were driven by Environment, Buildings and Infrastructure. Organic revenue growth in the fourth quarter was 3%, from all business lines. Backlog increased by 5% due to overall good order intake. A strong performance was delivered by E2 ManageTech, which was acquired earlier in 2017.

Environment: revenue growth and margin improvement through better project delivery
Water: return to organic growth in the fourth quarter
Infrastructure: significant revenue growth at higher margins
Buildings: higher margins with good revenue growth

LATIN AMERICA
Net revenues in the fourth quarter were in line with the third quarter, 24% below last year. The operating results in Q4 were close to break-even.

Brazil: further restructuring caused headcount reduction of ~400 to ~850 at year end
Brazil: economy gaining traction, evidenced by good order intake in Q4
Chile: stable performance; Peru: profit improvement

EUROPE & MIDDLE EAST (46% of net revenues)
in € millions FULL YEAR FOURTH QUARTER
Period ended 31 December 2017 2016 change 2017 2016 change
Gross revenues 1,337 1,398 -4% 340 353 -4%
Net revenues 1,113 1,117 0% 282 279 1%
Organic growth 4% 4%
EBITA 74.0 67.0 10%
Operating EBITA1) 84.3 83.9 0%
Operating EBITA margin 7.6% 7.5%

1) Excluding acquisition, restructuring and integration-related costs

Organic net revenue growth of 4% included an increase of 6% in Continental Europe and 7% in the UK, which more than compensated for a 10% decrease in the Middle East. Higher operating EBITA in Continental Europe was offset by lower results in the Middle East and a weaker British Pound, causing the operating EBITA to stay flat.

CONTINENTAL EUROPE
Net revenues increased organically by 6% to which all countries contributed, and operating margin improved to 7.3% (2016: 6.8%). The private sector drove growth in revenues and order intake.

Buildings: strong revenue growth from project wins in the Netherlands and Germany
Infrastructure: slightly higher revenues; rail work compensated for highways slowdown
Environment: solid growth and better order intake for remediation and consultancy
Water: limited growth with increased backlog especially in conveyance

UNITED KINGDOM
Organic net revenue growth at 7%. The win of many strategic pursuits contributed to backlog growth. Operating margin was 9.2% (2016: 10.0%), and declined due to a high level of bidding activity.

Infrastructure: strong, as rail investments continue
Buildings: revenue growth, supported by automotive clients and commercial developers
Water: good growth following earlier wins with large utilities
Environment: higher revenues driven by strategic environmental consultancy

MIDDLE EAST
Organic net revenue declined 10% and operating margin decreased to 4.7% (2016: 8.6%). Revenue and backlog came down due to selective bidding and lower demand.

UAE: revenue growth from large commercial development projects
Qatar: revenue decline; key milestones reached, significant cash payments received
KSA: significant revenue decline; contractual obligations for a few completed projects expected to be honored

ASIA PACIFIC (14% of net revenues)
in € millions FULL YEAR FOURTH QUARTER
Period ended 31 December 2017 2016 change 2017 2016 change
Gross revenues 387 378 2% 98 97 2%
Net revenues 344 338 2% 85 84 1%
Organic growth 2% 8%
EBITA 30.1 30.7 -2%
Operating EBITA1) 30.7 31.3 -2%
Operating EBITA margin 8.9% 9.3%

1) Excluding acquisition, restructuring and integration-related costs

Organic net revenue growth in Asia Pacific was 2%, as 12% organic growth in Australia more than offset the 2% decline in Asia. Operating margin declined somewhat.

ASIA
Net revenues declined organically earlier in the year, while in the fourth quarter Asia returned to organic growth and increased backlog. The operating margin improved to 8.8% (2016: 8.6%).

China: revenues slightly lower while order intake was strong
Hong Kong: growth and stronger backlog in Buildings and Infrastructure
Singapore: better Q4 performance did not fully compensate slow start of the year
Brunei: business divested

AUSTRALIA PACIFIC
Organic net revenue growth was 12%, fueled by major Infrastructure project wins. Higher revenues from delivering large Infrastructure, Buildings and Environmental projects across major urban areas
Operating margin lower at 10.3% (2016: 11.0%) due to underperforming projects in the first half of 2017

CALLISONRTKL (9% of net revenues)
in € millions FULL YEAR FOURTH QUARTER
Period ended 31 December 2017 2016 change 2017 2016 change
Gross revenues 320 326 -2% 73 81 -10%
Net revenues 229 244 -6% 53 58 -8%
Organic growth -3% 0%
EBITA 20.8 22.9 -9%
Operating EBITA1) 23.9 24.3 -2%
Operating EBITA margin 10.4% 9.9%

1) Excluding acquisition, restructuring and integration-related costs

Net revenues declined organically by 3% largely driven by adverse developments in US commercial real estate and healthcare markets.

Q4: stable organic revenue after a weak Q3, supported by China
Operating EBITA margin improved after cost reductions earlier in the year

PRIORITIES 2018
We will execute our strategy against the background of a positive market outlook. Considering the progress made in 2017 we expect to grow revenues and improve operating margin in line with our financial objectives as communicated in our strategic update.

Our priorities are:
Deliver financial objectives as per the strategic framework 2018-2020
Select projects, businesses and geographies where we can lead
Improve project delivery
Continue to invest in people and culture to build the workforce of the future
Innovate to become a digital frontrunner in the industry
Contribute significantly to the United Nations Sustainable Development Goals
Conclude the strategic review process of CallisonRTKL

FINANCIAL CALENDAR 2018
19 April 2018
Trading update Q1 2018
24 April 2018
Annual General Meeting of Shareholders
26 July 2018
First half year results 2018
24 October 2018
Trading update Q3 2018

tijd 09.04
De Midcap 805,01 +6,60 +0,83% Arcadis EUR 18,19 +55ct vol. 5.000