. Strategy 2014 - 2016: sustainable growth | performance | collaboration
New strategy to focus on delivering sustainable growth, performance and enhanced global collaboration
Growth to be achieved by a combination of expanding the core business, focused growth in specific areas and value enhancing acquisitions
Organic revenue growth target set at more than 5% (CAGR)
Inorganic revenue growth target set at more than 5% (CAGR)
Margin target (operational EBITA over net revenue) to reach more than 11%
New target to generate free cash flow higher than net income
Sustain Return on Invested Capital at more than 13%

December 4, 2013 - ARCADIS (EURONEXT: ARCAD), the world's leading natural and built asset design and consultancy firm, announced the launch of its 2014-2016 strategy today entitled: sustainable growth | performance | collaboration. Starting from a strong, well-balanced, global market position, the new strategy aims to maintain ARCADIS' long term track record of consistent performance delivery with strong revenue growth, double digit margins and cash discipline. It also seeks to deliver on shareholder value creation with continued quality earnings, a consistent dividend policy and a prudent capital structure.

Commenting on the new strategy, Neil McArthur, CEO of ARCADIS said: "We have designed our new strategy to deliver on our mission to create exceptional and sustainable outcomes for our clients in natural and built asset environments. Our talented people, their expertise, passion and entrepreneurship combined with our leading edge capabilities and global reach will make this a reality. To achieve Sustainable Growth we will further expand our core business, create focused growth in seven priority areas and continue making value enhancing acquisitions. Performance - our goal is continuous improvement and being recognized as the best in everything we do. We will identify and share global best practices to better serve our clients, help our people realize their potential while improving effectiveness and efficiency. Collaboration centers on bringing the best of ARCADIS to our local, national and global clients, solving their most complex challenges, wherever they are in the world. At the same time it serves to strengthen our culture and for our staff, the new strategy offers exciting development opportunities. Combined, we believe these choices will result in industry leading returns to our shareholders over the coming years."

The new strategy
ARCADIS differentiates through its talented and passionate people and its unique combination of capabilities covering the whole asset life cycle, its deep market sector insights and its ability to integrate health & safety and sustainability into the design and delivery of solutions across the globe. ARCADIS' new strategy comprises three elements, each of which will contribute to a stronger performance of the company going forward. These elements are Sustainable Growth, Performance and Collaboration.

Sustainable Growth: ARCADIS will expand its core business by investing to extend current successful client relationships including Multi-National Clients, and growing its core value propositions in the four Global Business Lines: Infrastructure, Environment, Water and Buildings. ARCADIS will accelerate growth by investing in seven strategic priorities.

Three priority market sectors:
Four value propositions:

Emerging markets
Big urban clients
Natural resources
Environment and water for industry
Program Management
Business Advisory
Design

We will win in our chosen markets by using client and sector insights, our unique combination of capabilities covering the whole asset life cycle across natural and built environments, and seamless global capabilities delivered locally.

Mergers & acquisitions remain an important part of our strategy and we will continue to bring in high quality companies to further strengthen our capabilities and geographical reach.

Performance: ARCADIS aims to be recognized as the best in the industry in everything that we do. We will endeavor to continuously improve across all dimensions of our business from health & safety to our people and client development, to how we innovate and deliver our value propositions, to how we manage our projects and operate our day to day business. By doing so we will be recognized as the partner of choice for our clients, the employer of choice for our people and deliver industry top quartile returns.

Collaboration: Through greater collaboration we will leverage our capabilities and global footprint to bring the best of ARCADIS to better serve our local, national and global clients. We will evolve our operating model building on our strengths: the successful Multi-National Clients program will be expanded, and we will invest in the development of global market sectors where we see strong opportunities for growth. A new initiative, Big Urban Clients, will add focus on helping the leading cities around the world build and sustain their competitive advantage. Our four global business lines will enhance our core value propositions aligned to evolving market and client needs and drive growth on a global basis. In this way we will collaborate and leverage our capabilities and global footprint bringing the best of ARCADIS to our local, national and global clients.

Detailed strategies for each of our four Global Business Lines: Infrastructure, Water, Environment and Buildings have been developed aligned with our strategic priorities.

Financial steering and targets
Strong financial management has been essential for ARCADIS' success to date and will remain so going forward. Key elements of our financial management are a high attention to cost control, detailed tracking of performance across the dimensions of geographies, clients, and business lines, and a disciplined approach to working capital. The company will also remain prudent with regard to its capital structure, fund its debt using diversified sources and maintain its dividend policy at 30-40% of net income from operations.

In risk management, ARCADIS will continue to apply its go/no go policy when mitigating risks related to clients and projects, focus on hard and soft controls in auditing performance and will continue to be selective in investing in acquisitions and creating synergy through successful integration.

Financially, the company has set new targets for the 2014-2016 period which include an organic revenue growth target set at more than 5% (CAGR), an inorganic revenue growth target set at more than 5% (CAGR), a margin target (operational EBITA over net revenue) set at greater than 11%, and it introduced a new target to generate free cash flow higher than net income, while sustaining our Return on Invested Capital at more than 13%.

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