Arcadis continues organic net revenue growth of 3%

Net revenues at €599 million (Q1 2017: €628 million); organically +3%, currency impact -8%
Operating EBITA of €43 million (Q1 2017: €47 million), currency impact -6%
Operating margin at 7.2% (Q1 2017: 7.4%); impacted by fewer working days in Europe and a decline in other segments, offset by margin improvement in the Americas
Net working capital improved to 19.5% (Q1 2017: 19.9%)
Net debt at €474 million (Q1 2017: €556 million)
Good progress in market consultation process for CallisonRTKL
Plan for divestment of clean energy assets in Brazil is on track
Sarah Kuijlaars nominated as new CFO; subject to appointment at AGM (24 April '18)
Confirms revenue growth and improved operating margin in 2018

Amsterdam, 19 April 2018 - Arcadis (EURONEXT: ARCAD), the leading global Design & Consultancy firm for natural and built assets, reported a 3% organic increase in net revenues for Q1 2018. Operating margin at 7.2% (Q1 2017: 7.4%); impacted by fewer working days in Europe and a decline in other segments, offset by margin improvement in the Americas

Peter Oosterveer, CEO Arcadis, comments: "Our focus on clients allowed us to win more work and deliver on the growth pillar of our strategy, and I am therefore pleased with the 3% organic net revenue growth in Q1 2018. The change in our leadership structure, announced in March 2018, creates a stronger alignment with our strategic priorities, and will help us to further improve on project delivery and financial performance. I look forward to working with our new CFO Sarah Kuijlaars to advance our strategic objectives and strengthen our financial discipline. I am convinced that Arcadis has a strong foundation to deliver revenue growth and operating margin improvement in the years ahead."

KEY FIGURES
in € millions
Period ended March 31 FIRST QUARTER
2018 2017 change
Gross revenues 767 818 -6%
Net revenues 599 628 -5%
Organic growth 3% -1%
EBITDA 47 52 -10%
EBITA 37 42 -12%
EBITA margin 6.2% 6.7%
Operating EBITA1) 43 47 -8%
Operating EBITA margin 7.2% 7.4%
Net working capital % 19.5% 19.9%
Free cash flow -60 -63 -4%
Net debt 474 556 -15%
Backlog net revenues (billions) 2.1 2.3 -8%
Backlog organic growth (year-to-date) 2% 5%

1) Excluding restructuring, acquisitions & divestments costs

REVIEW OF PERFORMANCE
Americas (30% of net revenues)

in € millions
Period ended March 31 FIRST QUARTER
2018 2017 change
Gross revenues 263 297 -11%
Net revenues 177 196 -10%
Organic growth 2% -6%

Organic net revenue growth of 2% included 3% growth in North America and 3% decrease in Latin America. North America achieved an improvement in the water business and continued solid results in environment, infrastructure and buildings. Latin America's operating result was break-even for the first time in six quarters.

Europe & Middle East (49% of net revenues)
in € millions
Period ended March 31 FIRST QUARTER
2018 2017 change
Gross revenues 348 350 -1%
Net revenues 292 288 1%
Organic growth 4% 3%

Organic net revenue growth of 4% included an increase of 3% in Continental Europe and 14% in the UK, which more than compensated for an 11% decrease in the Middle East. The strong revenue increase in the UK was mainly driven by large infrastructure projects.

Asia Pacific (13% of net revenues)
in € millions
Period ended March 31 FIRST QUARTER
2018 2017 Change
Gross revenues 88 91 -4%
Net revenues 80 83 -4%
Organic growth 7% -2%

Organic net revenue growth in Asia Pacific of 7%, driven by continued strong growth in Australia (21%), due to ramp up of large metro projects. Flat revenue development in Asia, with growth across the region, offset by project write-downs.

CallisonRTKL (8% of net revenues)
in € millions
Period ended March 31 FIRST QUARTER
2018 2017 change
Gross revenues 68 80 -15%
Net revenues 50 61 -17%
Organic growth -7% -6%

Organic net revenues declined by -7% driven by lower activity levels in the retail, workplace and healthcare practices. The results in the commercial business improved compared to last year.

Operating EBITA
Operating EBITA decreased by 8% to €43 million (Q1 2017: €47 million), negatively impacted by currency effects (-6%). Operating margin was 7.2% (Q1 2017: 7.4%); impacted by fewer working days in Europe, selective bidding in Middle East and project write-downs in Asia, were almost offset by margin improvement in the Americas. Latin America achieved break-even results, continuing a positive trend. Non-operating costs amounted to €6 million (Q1 2017: €5 million), relating to restructuring and acquisitions & divestments. EBITA at €37 million (Q1 2017: €42 million).

CASH FLOW and WORKING CAPITAL
EBITDA in Q1 was €47 million (Q1 2017: €52 million). Net working capital as a percentage of gross revenues improved to 19.5% (Q1 2017: 19.9%), days of sales outstanding decreased to 94 days (Q1 2017: 96 days). Net debt of €474 million showed the seasonal increase during the quarter, but was sharply lower year-on-year (Q1 2017: €556 million) due to cash generation and a lower US Dollar. In Q1 2018 Arcadis collected €6 million on overdue receivables in KSA.

Backlog
Backlog at the end of Q1 2018 stood at €2.1 billion (Q1 2017: €2.3 billion), representing 10 months of net revenues, including a currency impact of -9%. Backlog increased organically year-to-date by 2%, and was flat year-on-year.

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 are making good progress in the market consultation process to assess the viability of a sale.

Brazilian clean energy assets
Plan for divestment of clean energy assets in Brazil is on track. The largest gas-to-gas plant has been relocated and will enter into operation by the end of April. Two gas-to-power plants are scheduled to be in operation in August and September. The loss from associates in Q1 was €2 million. The intention is to divest all six plants once in operation, this process will be initiated in the second half of 2018.

priorities 2018
We will execute our strategy against the background of a positive market outlook. We confirm our expectation 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
Initiate the divestment of all clean energy assets in the second half of 2018

Financial Calendar 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 09.08
De Midcap 807,59 -1,63 -0,20% Arcadis EUR 16,06 -1,26 vol. 93.000