Arcadis Continues Excellent Performance
15 Noviembre 2007 - 12:30AM
PR Newswire (US)
ARNHEM, The Netherlands, November 15 /PRNewswire-FirstCall/ -- -
Gross Revenue in the Third Quarter Up 31%, of Which 17% Organic -
Net Income From Operations Rises 33% - Margin Improves
Considerably; Goal of 10% Achieved Over the First Nine Months - New
Acquisitions Contribute Well, Especially RTKL - Outlook Good:
Expected Increase of Net Income From Operations 2007 20 to 25%
ARCADIS (EURONEXT: ARCAD), the international consultancy, design
and engineering company for the built and natural environment, has
continued its excellent performance in the third quarter of 2007.
Gross revenue rose 31% to EUR 408 million. Net income from
operations was 33% higher at EUR 16.3 million. Organic growth was
17% on par with the level in the first half year. All service areas
contributed to this, with environment continuing as the best at
more than 25% growth. Geographically, organic growth was strongest
in the United States, the Netherlands and Brazil. Acquisitions also
contributed 17% growth, mainly through RTKL which was consolidated
as of the third quarter. The currency effect was 3% negative. The
margin improved to 10.8% (2006: 9.6%). In the first nine months of
2007 gross revenue increased 22%, of which 17% organic. Net income
from operations was 29% higher at EUR 43.1 million. The margin was
10.1% (2006: 8.9%) with which the 10% goal that was introduced last
year, was achieved. Early July, U.S.-based RTKL was acquired (gross
revenue $ 195 million, 1050 employees), a global player in
architectural design and planning services. In the Netherlands, the
acquisition of Alkyon (EUR 4.5 million, 45 employees) early July
strengthens our position in the climate change driven, growing
market for water management. In the U.K., our project management
activities were expanded mid-August with APS Group (EUR 13 million,
70 employees), while in October the acquisition of environmental
services company Vectra (EUR 14.5 million, 110 employees)
specialized in health, safety and risk management, was announced.
CEO Harrie Noy about the results: "The excellent performance is a
result of strong growth, further margin improvement and a good
contribution from acquisitions. The continued high organic growth
reflects our strong position in all three service areas. Optimally
applying our knowledge and focusing on customers are core to our
strategy. As a result we are able to increase our market share,
especially in the environmental market for multinational clients.
The focus on activities with more added value yields higher
margins. The acquisition of RTKL is another expansion high in the
value chain, through which we can create a leading position in the
service area facilities." Key figures Amounts in EUR millions,
Third First nine unless otherwise stated quarter months 2007 2006
2007 2006 Gross revenue 408 311 31% 1.088 892 22% EBITA 28.0 19.6
43% 74.4 54.9 36% Net income 12.3 10.7 14% 37.1 30.3 22% Net income
per share (in EUR) 1) 0.60 0.53 14% 1.82 1.50 21% Net income from
operations 2) 16.3 12.3 33% 43.1 33.5 29% Ditto, per share (in EUR)
1,2) 0.81 0.61 32% 2.12 1.65 28% 1) In 2007 based on 20.4 million
shares outstanding (in 2006: 20.2 million) 2) Excluding
amortization and non-operational items Analysis Third quarter
Organic growth and acquisitions each contributed 17% to the gross
revenue growth of 31%. As a result of the lower U.S. dollar, the
currency effect was minus 3%. In the United States and Brazil,
organic growth remained at a high level, while in the Netherlands
organic growth increased further to more than 17%. In other
European countries, activities grew mostly in the U.K. and Belgium
but also in Germany where market conditions are slowly improving.
Net revenue, that part of gross revenue produced by our own
employees, increased by 28%, of which 20% came as a result of
acquisitions. Organic growth continued at the high level of 11%,
but was lower than growth in gross revenue as a result of a strong
increase in activities with a lot of third party work. The currency
effect was minus 3%. EBITA increased 43% to 28.0 million.
Acquisitions resulted in an increase of 27%; the currency effect
was minus 3%. The organic growth of 19% mainly came from the
Netherlands, United Kingdom, Belgium, the United States and Brazil.
The contribution from the sale of carbon credits form the biogas
activities in Brazil was EUR 0.6 million. Net income from
operations increased by 33% to EUR 16.3 million. This is less than
the increase in EBITA, as a result of higher financing charges, a
somewhat higher tax pressure and an increase in minority interest
through strong growth in Brazil, where ARCADIS owns a little over
50%. Financing charges are higher as a result of the growth -
partly as a result of acquisitions - and for EUR 1.5 million as a
result of the use of financial instruments. Net income from
operations has been corrected for the latter. First nine months Of
the 22% increase in gross revenue, 9% resulted from acquisitions.
The currency effect was 4% negative. All regions contributed to the
17% organic growth, mostly the United States and South America, but
also the Netherlands and other European countries experienced solid
growth. Net revenue increased 20%, of which 12% organic and 11%
from acquisitions. The currency effect was 3% negative. EBITA rose
36%, of which 17% as a result of acquisitions. The currency effect
was 4% negative. The organic increase was 23%, including a
contribution of EUR 2.7 million from the sale of carbon credits.
Without this contribution the organic EBITA increase was 18%. This
is clearly more than the increase of net revenue, an indication of
the strong operational margin improvement. Net income from
operations came out to EUR 43.1 million, an increase of 29%. This
is less than the increase in EBITA as a result of higher financing
charges, and a larger minority interest through rapid growth in
Brazil. 2006 figures included a non-recurring interest gain of EUR
0.5 million. Developments per service area Figures noted below
concern gross revenues and refer to the first nine months of 2007
compared to the same period last year, unless otherwise stated. -
Infrastructure Gross revenue increased 10%, with a currency effect
of minus 2% and a contribution from acquisitions which was
effectively nil as a result of the divestment of Euroconsult at the
end of March. Organic growth was 12%. In the Netherlands activities
saw strong growth as a result of the expansion and improvement of
(rail) infrastructure and a favorable municipal market. In most
other European countries, gross revenue also increased. As
expected, the poor U.S. housing market led to a stronger decline in
land development, but this was compensated for by growth in the
water market. In Brazil and Chile the strong expansion of
activities was driven by investments in mining and energy projects.
- Environment Gross revenue rose 19%. The contribution from
acquisitions was 2%; the currency effect was minus 7%. The very
strong organic growth of 24% mainly came from the United States.
Here, the introduction of a client focused business model helped us
increase market share, especially among industrial clients. In
Brazil activities grew strongly, especially for multinationals,
while also in most European countries and Chile healthy growth was
achieved. With the acquisition of Vectra we can capitalize on the
strong growth in demand in the area of health and safety. -
Facilities Gross revenue grew 62%, of which 50% came from
acquisitions. This mainly concerns RTKL, which was acquired early
July, but also PinnacleOne in the United States and some smaller
acquisitions. The currency effect was nil. The organic growth of
12% resulted from the expansion of management and consulting
services. Particularly Germany saw strong growth, followed by the
United Kingdom, Belgium and the Netherlands. In the Netherlands,
facility management also grew, partly as a result of the renewal
and expansion of the contract with NXP. Outlook In all of the
countries in which ARCADIS is active, there is an urgent need to
improve and expand infrastructure. Government investments provide a
stable basis in this market. In addition, private sector money is
coming into the market through PPP initiatives to speed up the pace
with which bottlenecks are tackled. Because meanwhile less than 2%
of total revenues come from the U.S. market for land development,
the impact of a further decline will be limited. The threat of
climate change drives demand in water management and environmental
services. Many multinationals want international service providers
as a result of which our market share in the environmental market
can further increase. With RTKL new opportunities are developing in
the facilities market and in urban restructuring, while the newly
added APS will allow us to benefit from the high investment level
in the Middle East. CEO Noy concludes: "The markets in which
ARCADIS operates offer plenty of opportunity. Further expansion
through acquisitions remains a high priority. The outlook for full
year 2007 is good. The favourable operational development is
expected to carry through to the end of the year, as a result of
which we expect to meet our margin target of 10% already this year.
As noted previously, the tax pressure will be substantially higher
than last year, particularly as a result of tax benefits in the
fourth quarter of last year, while the strong growth in Brazil
pushes up the minority interest. Taking these factors into account,
we expect an increase in net income from operations for 2007 of 20
to 25%. This is barring unforeseen circumstances." ARCADIS is an
international company providing consultancy, design, engineering
and management services in infrastructure, environment and
facilities, to enhance mobility, sustainability and quality of
life. ARCADIS develops, designs, implements, maintains and operates
projects for companies and governments. With more than 12,000
employees and over EUR1.5 billion in gross revenue, the company has
an extensive international network that is supported by strong
local market positions. Except for historical information contained
herein, the statements in this release are forward-looking
statements that are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and
uncertainties that may cause the company's actual results in future
periods to differ materially from forecasted results. Those risks
include, among others, risks associated with possible changes in
environmental legislation and risks with regard to the Company's
ability to acquire and execute projects. These and other risks are
described in ARCADIS' filings with the Securities and Exchange
Commission over the last 12 months, copies of which will be
available from the SEC or may be obtained upon request from the
Company. Visit us on the internet: http://www.arcadis-global.com/.
ARCADIS NV CONDENSED CONSOLIDATED STATEMENT OF INCOME Amounts in
EUR millions, except per share amounts Third quarter Nine months
2007 2006 2007 2006 Gross revenue 407.8 310.9 1,087.9 891.5
Materials, services of third parties and subcontractors 147.6 107.2
354.4 278.0 Net revenue 260.2 203.7 733.5 613.5 Operational cost
227.0 180.4 645.2 545.7 Depreciation 5.2 3.7 13.9 12.9 EBITA 28.0
19.6 74.4 54.9 Amortization identifiable intangible assets 4.5 2.0
8.0 5.1 Operating income 23.5 17.6 66.4 49.8 Financing items (4.1)
(1.1) (6.3) (2.0) Income from associates 0.1 (0.2) (0.6) (0.4)
Income before taxes 19.5 16.3 59.5 47.4 Income taxes (6.2) (5.1)
(19.6) (15.7) Profit for the period 13.3 11.2 39.9 31.7
Attributable to: Net income (Equity holders of the Company) 12.3
10.7 37.1 30.3 Minority interest 1.0 0.5 2.8 1.4 Net income 12.3
10.7 37.1 30.3 Amortization identifiable intangible assets after
taxes 2.9 1.5 5.2 3.8 Net effects of financial instruments 1.1 0.1
0.8 (0.6) Net income from operations 16.3 12.3 43.1 33.5 Net income
per share 0.60 0.53 1.82 1.50 Net income from operations per share
0.81 0.61 2.12 1.65 Shares outstanding (in thousands) 20,375 20,244
20,390 20,245 ARCADIS NV CONDENSED CONSOLIDATED BALANCE SHEET
Amounts in EUR millions ASSETS September 30, 2007 December 31, 2006
Non-current assets 335.0 234.7 Current assets 638.4 501.8 TOTAL
973.4 736.5 EQUITY AND LIABILITIES Shareholders' equity 189.5 188.9
Minority interest 12.3 11.8 Total equity 201.8 200.7 Non-current
liabilities 260.2 165.5 Current liabilities 511.4 370.3 TOTAL 973.4
736.5 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Amounts
in EUR millions Share Additional Reserve Retained Shareholders'
capital paid-in exchange rate earnings equity capital differences
Balance at 1-1-2006 1.0 44.2 6.4 124.6 176.2 Exchange rate
differences (8.8) (8.8) Income directly recognized in equity (8.8)
(8.8) Profit for the period 30.3 30.3 Comprehensive income net of
tax (8.8) 30.3 21.5 Share-based compensation 1.2 1.2 Dividends to
shareholders (13.4) (13.4) Own shares purchased for granted options
(15.7) (15.7) Options exercised 2.9 2.9 Other changes 0.1 0.1
Expansion ownership Balance at 9-30-2006 1.0 44.2 (2.4) 130.0 172.8
Balance at 1-1-2007 1.0 44.2 (7.6) 151.3 188.9 Exchange rate
differences (12.7) (12.7) Taxes related to share-based compensation
2.2 2.2 Income directly recognized in equity (12.7) 2.2 (10.5)
Profit for the period 37.1 37.1 Comprehensive income net of tax
(12.7) 39.3 26.6 Share-based compensation 2.5 2.5 Dividends to
shareholders (20.4) (20.4) Own shares purchased for granted options
(9.9) (9.9) Options exercised 1.8 1.8 Expansion ownership Balance
at 9-30-2007 1.0 44.2 (20.3) 164.6 189.5 Continued Amounts in EUR
millions Minority Total interest equity Balance at 1-1-2006 11.9
188.1 Exchange rate differences (0.3) (9.1) Income directly
recognized in equity (0.3) (9.1) Profit for the period 1.4 31.7
Comprehensive income net of tax 1.1 22.6 Share-based compensation
1.2 Dividends to shareholders (0.3) (13.7) Own shares purchased for
granted options (15.7) Options exercised 2.9 Other changes 0.1
Expansion ownership (0.7) (0.7) Balance at 9-30-2006 12.0 184.8
Balance at 1-1-2007 11.8 200.7 Exchange rate differences 0.6 (12.1)
Taxes related to share-based compensation 2.2 Income directly
recognized in equity 0.6 (9.9) Profit for the period 2.8 39.9
Comprehensive income net of tax 3.4 30.0 Share-based compensation
2.5 Dividends to shareholders (1.2) (21.6) Own shares purchased for
granted options (9.9) Options exercised 1.8 Expansion ownership
(1.7) (1.7) Balance at 9-30-2007 12.3 201.8 ARCADIS NV CONDENSED
CONSOLIDATED CASH FLOW STATEMENT Amounts in EUR millions Nine
months Nine months 2007 2006 Net income 37.1 30.3 Depreciation and
amortization 21.9 18.1 Gross cash flow 59.0 48.4 Net working
capital (36.2) (27.3) Other changes 2.2 2.5 Net cash
provided/(used) by operating activities 25.0 23.6
Investments/divestments (net) in: (In)tangible fixed assets (6.6)
(12.3) Acquisitions/divestments (76.4) (15.0) Financial assets
(12.1) (2.5) Net cash used in investing activities (95.1) (29.8)
Net cash provided by financing activities 81.5 (3.0) Exchange rate
differences (6.0) (6.3) Change in cash and equivalents 5.4 (15.5)
Cash and cash equivalents at January 1 101.5 73.9 Cash and cash
equivalents at September 30 106.9 58.4 DATASOURCE: ARCADIS NV
CONTACT: For more information contact: Joost Slooten of ARCADIS at
+31-26-3778604, or e-mail at .
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