Clear choices with focus on people, innovation, and performance, driving profitable growth
Global trends like climate change, sustainable industries and expanding cities create opportunities for Arcadis
Sharp focus on selection of profitable clients and improvements in project delivery
Clear choice for projects, businesses and geographies where we can lead
Invest in people to build the workforce of the future
Become a digital frontrunner in the industry
Organic revenue growth to surpass GDP in Arcadis' markets
Operating margin trending towards a range of 8.5% to 9.5% in 2020
Amsterdam, 21 November 2017 - Arcadis (EURONEXT: ARCAD), today presents its strategy 'Creating a Sustainable Future' in which it fully capitalizes on global trends like climate change, sustainable industries and expanding cities. Arcadis makes clear choices and will focus where it can lead and invest where it can win. The company is well positioned to realize revenue growth and operating margin improvements in the period 2018-2020. Arcadis guidance includes organic revenue growth to surpass GDP growth in its markets and operating margin trending to 8.5% to 9.5% in 2020.
The strategy update for the period 2018-2020 will be presented during a Capital Markets Day in London and contains three strategic pillars.
1. People & Culture
Arcadis is convinced that creating an environment for people to grow, perform and succeed will be vital to retain and attract the workforce of the future. We will be the employer of choice through continued investment in our people and by attracting capabilities for future needs.
2. Innovation & Growth
To capture the opportunities provided by global megatrends, Arcadis will step up investments in digitization to become a digital frontrunner in our industry. In addition, we will further leverage our global experience and deep client relationships to create organic growth.
3. Focus & Performance
Arcadis will focus where it can lead based on relevance for clients, local markets and global positions and will de-prioritize businesses that fail to meet our criteria for profitable growth.
Disciplined client and project selection and improved project delivery will be created through the consistent use of the 'Arcadis Way'. Our competitiveness will be further improved by expanding the Global Excellence Centers.
Peter Oosterveer, CEO Arcadis, comments: "Today, we introduce our updated strategy, which builds on our strong legacy in Water, Infrastructure, Environment and Buildings and further advances Arcadis towards a highly innovative industry-leading Design & Consultancy. We are convinced that global megatrends like urbanization, mobility, sustainability, climate change, and digitization, provide us with ample opportunities to develop sustainable and resilient cities, offer smart infrastructural solutions and make industries future-proof.
I look forward to leading Arcadis into an exciting era. During my first half-year at Arcadis I have seen many great projects improving quality of live for people around the world and I have gained tremendous admiration for the capabilities, knowledge and passion of our people. Through our strategic initiatives, we will focus where we can lead and invest where we can win. Improvements resulting from better project selection and delivery, digital innovation, and expanded use of Global Excellence Centers will create profitable growth for Arcadis."
Financial Guidance 2018-2020
The update of Arcadis' strategy has subsequently led to a new framework of targets.
The new financial guidance is:
Organic revenue growth to surpass GDP growth in our markets
Operating margin trending to 8.5% - 9.5% of net revenues in 2020 (2016: 7.1%)
Net working capital as percentage of gross revenues <17.0% (2016: 17.5%) and DSO (days sales outstanding) < 85 days (2016: 91 days).
Return on invested capital to exceed 10% (2016: 6.8%)
Leverage: Net debt/EBITDA approximately between 1.0 and 2.0 (2016: 2.5)
Arcadis will execute the strategy with an efficient and robust capital structure and has fully embedded risk management in its operations. Arcadis' strategy also entails that it will review its portfolio of activities regularly. Because sustainability lies at the heart of Arcadis business it aims to significantly contribute to the United Nations Sustainable Development Goals.
Stragic review CallisonRTKL
The strategic review process of CallisonRTKL is progressing well and there are no further updates during the presentations on the Capital Markets Day.
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