ARNHEM, The Netherlands, August 7 /PRNewswire-FirstCall/ -- - Gross
Revenues Increase by More Than 20% - Organic Growth Remains at Good
Level, With Strongest Performance in Environment - Second Quarter
Net Income From Operations Increased 16%, in the First Half Year by
18% - Strong Increases in Revenues and Profit Despite Negative
Currency Effect of 6% to 7% - Further Margin Improvement Realized -
Expected Increase of Net Income From Operations for Full Year 2008:
10% to 15% ARCADIS (Euronext: ARCAD) the international consulting,
design, engineering and management services company, continued its
good performance into the second quarter of 2008. Gross revenues
rose by 23% to EUR 427 million. At 8%, organic growth remained at a
good level. The environmental market was again a major contributor
to growth, while in most European countries, growth in buildings
activities strengthened. Net income from operations rose 16% to EUR
16.3 million. The decline of the U.S. dollar and the British pound
had a negative impact on revenues and profit of 6% to 7%. In the
first half year of 2008, gross revenues rose 22% to EUR 827
million. The organic growth was 9% and at 15% was especially strong
in the environmental market. Environment is now the biggest
business line within ARCADIS. Net income from operations increased
18% to EUR 31.6 million. This was the result of a growth in
activities, a good contribution from acquisitions and an
improvement in profitability, particularly in the United States.
The margin improved to 10.1% against 9.8% last year. The currency
effect was 6% to 7% negative. After the acquisition of
environmental consultancy LFR (gross revenues $127 million, 480
people) in January 2008, two smaller acquisitions followed in the
quarter: Elekol in Poland (gross revenues EUR 3 million, 40
people), specialized in rail infrastructure, and VDS in Belgium
(gross revenues EUR 3.5 million, 35 people), active in the
infrastructure market. After the second quarter, the Italian
environmental consultancy SET (gross revenues EUR 9 million, 35
people) was acquired, particularly to serve multinational clients
in Italy. CEO Harrie Noy about the half year results: "Our focus on
markets with growth potential, strong client focused approach and
internal cooperation aimed at synergies, forms the basis for these
good results. By expanding our market share, growth in the
environmental market remains at a high level. In the United States,
the strong results were continued, partly due to intensified sales
efforts and costs controls. RTKL benefits from its leading position
in architectural design and planning and delivered results that
were better than expected due to timely anticipation of the changes
in the real estate market." Key figures Amounts in EUR millions,
Second First half unless otherwise noted quarter year 2008 2007
Change 2008 2007 Change Gross revenues 427 348 23% 827 680 22%
EBITA 29.5 23.8 24% 57.0 46.4 23% Net income 17.0 13.2 28% 28.6
24.8 15% Net income per share (in EUR) 1) 0.28 0.22 28% 0.47 0.41
15% Net income from operations 2) 16.3 14.0 16% 31.6 26.8 18% Ditto
per share (in EUR) 1,2) 0.27 0.23 17% 0.52 0.44 18% 1) In 2008
based on 60.6 million shares outstanding (in 2007: 61.3 million) 2)
Before amortization and non operational items Analysis Second
quarter The increase of gross revenues of 23% was impacted
negatively by 6% as a result of currency declines. Through the
takeover of RTKL, LFR and some smaller companies, the contribution
from acquisitions was 21%. Organic growth amounted to 8% and was
strongest in the Netherlands, Brazil and Chile. In the other
European countries organic growth increased to 7%, despite a
decline in the English real estate market. In the United States,
organic growth weakened due to less third party work in the
environmental market and temporary delays in the start up of new
infrastructure projects. Net revenues, the part of revenues
produced by our own staff, increased 22%; excluding currency effect
by 28%. Acquisitions contributed 21%. The organic growth of 7% was
higher than in the first quarter. Due to shifts in the mix of
projects, net revenues in the environmental market increased much
stronger than gross revenues. EBITA rose by 24%, and excluding
currency effect by 31%. Of this, 20% resulted from acquisitions.
The organic increase was 11%. This includes a contribution from the
sale of carbon credits from the biogas production in Brazil of EUR
1.3 million, versus EUR 0.2 million last year. Excluding this
effect the organic EBITA increase was 6%. Financing charges were
strongly influenced by the effect of financial derivatives used to
hedge interest rate and currency risks. Excluding this effect,
financing charges rose to EUR 3.1 million (2007: EUR 1.7 million),
mainly caused by through investments for acquisitions. Net income
from operations rose 16% to EUR 16.3 million. This is lower than
the increase of EBITA as a result of a larger minority interest
resulting from growth in Brazil, higher financing charges and
somewhat higher taxes. First half year Gross revenues rose 22%,
excluding currency effect by 28%. The contribution from
acquisitions was 19%. The organic growth amounted to 9%. The
Netherlands continued to develop favorably with organic growth of
13%, while Belgium, France, Central Europe, Brazil and Chile also
delivered solid contributions. The 9% organic growth in the United
States was entirely achieved in the environmental market, where our
performance remains strong. Net revenues increased by 20%,
excluding currency effect by 26%. Of this, 19% was the result of
acquisitions, while organic growth was 7%. EBITA increased by 23%,
excluding currency effect by 30%. The contribution from
acquisitions was 22% while the organic increase amounted to 8%. The
contribution from the sale of carbon credits was slightly below
last year. Nevertheless, the margin (EBITA as a percentage of net
revenues) improved to 10.1% versus 9.8% in 2007. Net income from
operations increased by 18%. This is somewhat less than the
increase in EBITA, especially due to higher financing charges and
higher taxes. Excluding the derivatives which are used to hedge
interest rate and currency risks, financing charges rose to EUR 6.8
million (2007: EUR 2.6 million), mainly as a result of investments
in acquisitions. Taxes increased because of lower deductability of
option costs and a larger profit share from the United States.
Developments per business line Figures noted below concern gross
revenues for the first half year of 2008 compared to the same
period last year, unless otherwise noted. Infrastructure Gross
revenues increased 2%. The contribution from acquisitions and
divestments on balance was 1% negative. The currency effect was
minus 2%. The organic growth of 5% was negatively affected by the
earlier decline in land development in the United States. Excluding
this effect, organic growth amounted to 7%. In Europe, especially
the Netherlands, France and Central Europe contributed to this,
while in Brazil and Chile, mining and energy generated growth. In
the second quarter, organic growth weakened because in the United
States some delays occurred in the start up of projects, although
the backlog in especially water increased considerably. Environment
Gross revenues grew 19%, despite a negative currency effect of 12%.
The contribution from acquisitions (LFR and Vectra) was 15%,
organic growth was also 15%. In the United States, organic growth
remained at a high level at 17%, despite a shift in the project mix
leading to less third party work. In the Netherlands and Belgium
activities also saw strong growth, among other things in
environmental impact assessments in which we have a strong
position. In England and Brazil, growth was mainly the result of an
expansion of our services to multinational clients, including the
oil- and gas industry. Buildings Gross revenues increased by 74%,
of which 72% as a result of the acquisitions of RTKL and APS. The
currency effect was minus 4%. The 6% organic growth was mainly the
result of an increase in activities in most European countries in
the second quarter, while in the United States, project management
activities grew again. Mainly in England, our project management
business was affected by delays in (commercial) real estate
projects, with a negative effect on revenues. Even though RTKL has
also experienced that financing of some projects appears to be
somewhat more challenging, activities increased as a result of
growth in non-commercial projects and the international market.
Outlook The infrastructure market offers ample opportunities with
often longer term investment programs in Europe and private
financing to accelerate implementation. In Central Europe, high
investment levels are maintained due to European Union funding;
Brazil and Chile grow in mining and energy. In Brazil, ARCADIS
Logos continues to develop a portfolio of energy projects,
especially small hydro power plants. In the United States, the
transportation market appears stable, while the framework contract
for New Orleans, with already more than $45 million in task orders
this year, provides a solid basis in the water market.
Sustainability and regulation generate continued high demand in the
environmental market. An increasing number of multinationals want
to work with a limited number of international service providers,
as a result of which our market share can grow. The strong demand
from the oil- and gas industry and utilities, more GRiP(R)
contracts from the U.S. Army, the application of GRiP(R) in Europe
and the synergy with LFR offer growth opportunities. Climate change
leads to a diversification of our services to industrial clients,
such as carbon footprinting and emission reduction. In the
buildings market the credit crisis causes delays in commercial real
estate projects, especially in England and the United States. RTKL
has successfully opted to go after non-commercial projects in the
U.S. and projects in Asia, Central and Eastern Europe and the
Middle East. For project management we see opportunities in
infrastructure, but also in the Middle East. The new facility
management contract with Philips is an excellent basis for further
expansion of this service. CEO Noy concludes: "The markets in which
we operate offer many opportunities. Sustainability, climate
change, urban renewal, mobility and energy are important drivers
for growth. With our strong home market positions and
distinguishing service offering, we are well positioned to benefit
from these developments. Our backlog is strong. Still, the economic
uncertainty demands cautiousness. That is why we give high priority
to cost controls and intensified sales efforts in attractive areas.
Further expansion through acquisitions remains high on the priority
list. Barring unforeseen circumstances, we expect for 2008 a
further increase of net income from operations of 10% to 15%."
ARCADIS is an international company providing consultancy, design
and engineering and management services in infrastructure,
environment and buildings, to enhance mobility, sustainability and
quality of life. ARCADIS develops, designs, implements, maintains
and operates projects for companies and governments. With more than
13,500 employees and EUR 1.5 billion in gross revenue, the company
has an extensive international network that is supported by strong
local market positions. The information provided in this press
release is derived from the Interim Financial Statements 2008,
which are available on the ARCADIS website
http://www.arcadis-global.com/ ARCADIS NV CONSOLIDATED STATEMENT OF
INCOME Amounts in EUR millions, Second quarter First half year
unless otherwise stated 2008 2007 2008 2007 Gross revenue 427.4
348.0 827.3 680.1 Materials, services of third parties and
subcontractors (138.5) (111.7) (261.5) (206.8) Net revenue 288.9
236.3 565.8 473.3 Operational cost (253.9) (208.0) (497.9) (418.2)
Depreciation (5.8) (4.5) (11.4) (8.7) Other income 0.3 0.5 EBITA
29.5 23.8 57.0 46.4 Amortization identifiable intangible assets
(3.5) (1.7) (5.6) (3.5) Operating income 26.0 22.1 51.4 42.9 Net
finance expense 1.0 (1.4) (5.5) (2.2) Income from associates (0.1)
(0.2) 0.1 (0.7) Profit before taxes 26.9 20.5 46.0 40.0 Income
taxes (8.7) (6.8) (15.4) (13.4) Profit for the period 18.2 13.7
30.6 26.6 Attributable to: Net income (Equity holders of the
Company) 17.0 13.2 28.6 24.8 1.2 Minority interest 0.5 2.0 1.8 Net
income 17.0 13.2 28.6 24.8 Amortization identifiable intangible
assets after taxes 2.4 1.1 3.8 2.3 Option costs UK share save
scheme 0.1 0.2 Net effects of financial instruments (3.2) (0.3)
(1.0) (0.3) Net income from operations 16.3 14.0 31.6 26.8 Net
income per share (in euro's)(1) 0.28 0.22 0.47 0.41 Net income from
operations per share (in euro's) (1) 0.27 0.23 0.52 0.44 Weighted
average number of shares (in thousands) (1) 60,636 61,287 60,614
61,194 (1) The comparison figures have been adjusted to reflect the
3:1 stock split as effectuated in the 2nd quarter. ARCADIS NV
CONDENSED CONSOLIDATED BALANCE SHEET Amounts in EUR millions June
30, 2008 December 31, 2007 Assets Non-current assets 350.9 332.9
Current assets 687.1 588.8 Total 1,038.0 921.7 Equity and
Liabilities Shareholders' equity 179.5 187.7 Minority interest 11.9
11.5 Total equity 191.4 199.2 Non-current liabilities 312.1 216.7
Current liabilities 534.5 505.8 Total 1,038.0 921.7 ARCADIS NV
CHANGES IN SHAREHOLDERS' EQUITY Amounts in Share Share Cumulative
Retained Total Minority Total EUR millions capital premium
translation earnings share- interest equity reserve holders' equity
Balance at 1.0 44.2 (7.6) 151.3 188.9 11.8 200.7 December 31, 2006
Exchange (2.9) (2.9) 0.6 (2.3) rate differences Taxes 4.9 4.9 4.9
related to share-based compensation Income directly recognized in
equity (2.9) 4.9 2.0 0.6 2.6 Profit for the period 24.8 24.8 1.8
26.6 Total income / (expenses) for the period (2.9) 29.7 26.8 2.4
29.2 Dividends to shareholders (20.4) (20.4) (1.1) (21.5) Own
shares purchased for granted options (1.2) (1.2) (1.2) Share-based
compensation 1.2 1.2 1.2 Options exercised 1.4 1.4 1.4 Expansion
ownership (1.8) (1.8) Balance at June 30, 2007 1.0 44.2 (10.5)
162.0 196.7 11.3 208.0 Balance at December 31, 2007 1.0 44.2 (29.8)
172.3 187.7 11.5 199.2 Exchange rate differences (16.8) (16.8) 0.4
(16.4) Taxes related to share-based compensation 1.1 1.1 1.1 Income
directly recognized in equity (16.8) 1.1 (15.7) 0.4 (15.3) Profit
for the period 28.6 28.6 2.0 30.6 Total income / (expenses) for the
period (16.8) 29.7 12.9 2.4 15.3 Dividends to shareholders (24.8)
(24.8) (1.2) (26.0) Stock split 0.2 (0.2) Own shares purchased for
granted options - - - Share-based compensation 2.9 2.9 2.9 Options
exercised 0.8 0.8 0.8 Expansion ownership (0.8) (0.8) Balance at
June 30, 2008 1.2 44.0 (46.6) 180.9 179.5 11.9 191.4 ARCADIS NV
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS First half year 2008
2007 Net income 28.6 24.8 Depreciation and amortization 17.0 12.2
Gross cash flow 45.6 37.0 Net working capital (97.2) (60.0) Other
changes 8.2 4.3 Net cash provided/(used) by operating activities
(43.4) (18.7) Investments/divestments (net) in: (In)tangible fixed
assets (13.5) (0.1) Acquisitions/divestments (34.5) (14.4)
Financial assets (2.4) (8.6) Net cash used in investing activities
(50.4) (23.1) Net cash provided by financing activities 73.8 42.6
Change in cash and equivalents less bank overdrafts (20.0) 0.8
Exchange rate differences (2.9) (0.8) Cash and cash equivalents
less bank overdrafts at January 1 71.7 78.4 Cash and cash
equivalents less bank overdrafts at 48.8 78.4 June 30 SEGMENT
INFORMATION (First half year) Gross revenue external EBITA 2008
2007 2008 2007 The Netherlands 195.1 170.7 12.1 11.9 Europe,
excluding the Netherlands 175.8 158.7 10.2 8.2 United States 389.2
288.3 28.3 19.8 Rest of World 67.2 62.3 6.4 6.5 Eliminations and
others - 0.1 827.3 680.1 57.0 46.4 Inter segment revenue Total
Consolidated 827.3 680.1 57.0 46.4 The reconciliation of recurring
EBITA to total profit before income tax is as follows: 2008 2007
EBITA, recurring 57.0 46.4 Amortization (5.6) (3.5) Net finance
expense (5.5) (2.2) Income from associates 0.1 (0.7) Profit before
taxes 46.0 40.0 Geographical information only differs from the
segment information above as a result of the activities in RTKL and
APS, which geographically also are represented in Europe and Rest
of World. The geographical information is as follows: Gross Revenue
by origin 2008 2007 The Netherlands 195.1 170.7 Europe, excluding
the Netherlands 183.9 158.6 United States 377.3 288.4 Rest of World
71.0 62.3 Eliminations and others - 0.1 Total Consolidated 827.3
680.1 http://www.arcadis-global.com/ DATASOURCE: ARCADIS NV
CONTACT: For more information, contact: Joost Slooten of ARCADIS NV
at +31-26-3778604, outside regular office hours please call
+31-6-2706-1880; email: ; ARCADIS NV, Nieuwe Stationsstraat 10,
P.O. Box 33, 6800 LE Arnhem, The Netherlands, Tel +31-26-3778-292,
Fax +31-26-4438-381
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