ARNHEM, The Netherlands, March 2 /PRNewswire-FirstCall/ -- - Net
Income From Operations up 12% to EUR 70 Million; per Share to EUR
1.16 - Proposal to Increase Dividend by 10% to EUR 0.45 per Share -
Gross Revenue 15% Higher to EUR 1.7 Billion, Organic Growth 6% -
Margin Improved Further to 11.3% (2007: 10.5%) - All Three Business
Lines Contribute to Growth of Revenue and Profit - Short Term
Outlook is Mixed; Longer Term Positive ARCADIS (EURONEXT: ARCAD),
the international design, consulting, engineering and management
services company, today announced that in 2008, despite more
difficult market conditions, it again performed well. Net income
from operations rose 12% to EUR 70.0 million. Per share, this is
EUR 1.16 against EUR 1.02 in 2007. Gross revenue rose 15% to EUR
1.7 billion, while organic growth was 6%. All three business lines
contributed to the revenue and profit increase. The infrastructure
market remained strong across the board, with solid margin
improvement, also from the sale of some energy projects in Brazil.
In the environmental market, a slight margin increase was realized,
but growth weakened in the second half as industrial clients,
particularly in the U.S., were affected by the economic crisis. In
the buildings market, organic growth remained at a good level, but
margins were under pressure as commercial real estate was hit by
the recession. It is proposed to raise the dividend by 10% to EUR
0.45 (2007: EUR 0.41) per share, to be distributed in cash. This
represents 39% of net income from operations. In 2008, six
acquisitions were completed, adding 660 people and EUR 100 million
in revenues. American environmental firm LFR was the largest with
480 employees. The other, smaller acquisitions added special skills
in local markets. They were Meander (water Netherlands), Elekol
(rail experts Poland), VDS (infrastructure Belgium), SET
(environmental consultancy Italy) and TGH Habitat (engineers
Romania). CEO Harrie Noy said: "Despite the more difficult market
conditions, we have achieved almost all of our financial goals,
while the margin improved for the fifth consecutive year. These
excellent results were achieved by the strong commitment of our
employees, focus on markets with growth opportunities, a strong
client-focused approach and internal cooperation aimed at synergy.
Early in 2008 we implemented stricter cost controls, especially in
the U.S., in anticipation of changing markets. This created room
for more intense market development activities and also contributed
to margin improvement. Moreover, acquisitions performed well,
especially RTKL and LFR." Key figures Amounts in EUR millions,
Fourth Quarter Full year unless otherwise stated 2008 2007 Change
2008 2007 Change Gross revenue 485 422 15% 1,740 1,510 15% Net
revenue 312 271 15% 1.162 1.004 16% EBITA 44.6 32.7 36% 131.8 107.2
23% EBITA recurring 44.6 31.4 42% 131.8 105.9 25% Net income from
operations(1) 22.2 19.2 16% 70.0 62.3 12% Ditto, per share (in
EUR)(1) 0.37 0.31 17% 1.16 1.02 13% Average shares outstanding
(millions) 60.2 60.7 60.5 61.0 (1) Before amortization and
non-operational items Fourth Quarter Gross revenue increased by
15%. Acquisitions contributed 7%, especially through the addition
of LFR in early 2008. As a result of the strengthened U.S. dollar,
the currency effect was 2% positive. At 6% organic growth was at a
good level. Net revenue (revenue produced by ARCADIS staff) grew
15%, of which 6% was from acquisitions. The currency effect was 3%
positive, with organic growth at 6%. In Central Europe, Brazil and
Chile the high level of organic growth continued. In Brazil,
ARCADIS Logos develops a portfolio of smaller energy projects of
which two were sold in the quarter. Excluding this sale, organic
growth was between 3 and 4%. In the U.S., growth recovered to 7%
especially through an increase in Infrastructure and, to a lesser
extent, Environment. RTKL also performed well, although the order
intake declined due to the crisis. Activities in the U.K. real
estate market declined. In the Netherlands, the municipal market
weakened somewhat, but project management and consultancy services
did well. EBITA increased 36%. In last year's fourth quarter, real
estate was sold in France. Excluding the effect of that
transaction, EBITA on a recurring basis rose 42%. Acquisitions
contributed 11%; the currency effect was 3%. The organic increase
was 28%. This includes EUR 6.8 million from the sale of energy
projects in Brazil. Excluding this contribution EBITA organically
rose by 6%. The contribution from the sale of carbon credits in
Brazil was EUR 0.6 million (2007: - EUR 0.1 million). The margin
(recurring EBITA as percentage of net revenue) rose to 14.3%,
excluding the sale of energy projects to 12.5%, versus 11.6% last
year. Excluding the effects of derivatives that are used to hedge
interest and currency risks, financing charges rose to EUR 5.5
million (2007: EUR 2.9 million). This was the result of investments
in acquisitions, slightly higher market interest rates, and
currency differences on loans in Brazil. Net income from operations
rose 16%. Excluding the sale of energy projects of EUR 2.2 million,
the increase was 4%. This lagged the development in EBITA because
of higher financing charges and higher taxes. Full year Gross
revenue rose 15%. The contribution from acquisitions was 12%; the
currency effect was 3% negative. Organic growth amounted to 6%. The
development of net revenue was similar. The increase was 16%, of
which 7% was organic. Despite the more difficult market, organic
growth was close to our strategic goal of 7.5%. In the Netherlands,
Central Europe, South America and RTKL we overachieved our target.
The U.K. was the only country where revenue declined as a result of
the worsened market for commercial property. In the U.S., organic
growth was 4%, with a weaker second half year. Recurring EBITA rose
by 25% to EUR 131.8 million (2007: EUR 105.9 million). The
contribution from acquisitions was 14%, the currency effect minus
3%. The organic increase was 14%, and without the sale of energy
projects in the fourth quarter, 8%. Main contributors were France,
Central Europe, South America, the United States and RTKL. The
contribution from carbon credits of EUR 3.5 million was similar to
last year (EUR 2.6 million). The margin (on a recurring basis)
increased to 11.3% and without the sale of energy projects, to
10.8% (2007: 10.5%). The strongest improvement took place in
Infrastructure: growing to 11.4% and without the sale of energy
projects increasing to 10.1% (2007: 8.8%). Also in Environment the
margin improved to 13.7% (2007: 13.5%). In Buildings, the margin
declined to 8.7% (2007: 9.9%) as a result of the bad U.K. property
market and Dutch project losses. Excluding the effects of
derivatives, financing charges rose to EUR 17.7 million (2007: EUR
8.1 million). The causes were comparable with those mentioned for
the fourth quarter. At 34.3% the tax pressure was considerably
higher than the 32.8% in 2007, mainly due to geographic shifts in
taxable income. The contribution from associated companies was
better on the back of improvements in Brazilian energy projects.
Minority interest saw a strong increase, especially as a result of
the sale of two energy projects in Brazil in the fourth quarter
(ARCADIS owns 50.01% of ARCADIS Logos). Net income from operations
rose 12%. Excluding the sale of energy projects it increased 9%.
Cash flow, investments and balance sheet The cash flow from
operating activities was at a good level at EUR 81 million and was
slightly higher than in 2007 (EUR 79 million). Investments in
acquisitions amounted to EUR 74 million, of which EUR 35 million
was for deferred payments on earlier takeovers. Goodwill amounted
to EUR 29 million and identifiable intangible assets amounted to
EUR 10 million. Balance sheet total increased to EUR 1,058 million
(2007: EUR 922 million). Despite the growth in activities, working
capital as a percentage of gross revenue decreased to 11.2% (2007:
11.9%). Mainly as a result of investments in acquisitions, net debt
increased to EUR 184 million (2007: EUR 155 million). The balance
sheet ratios remained solid. The ratio of net debt versus EBITDA
was 1.2 (2007: 1.0); the interest coverage ratio was 7 (2007: 14).
The first redemption of long term debt is due in 2011. Developments
per business line Figures noted below concern gross revenue for the
full year 2008 compared to 2007, unless otherwise noted. -
Infrastructure Gross revenue grew 4%. The contribution from
acquisitions and divestments on balance was zero. The currency
effect was minus 2%. The organic growth of 6% was negatively
impacted by the earlier decline in U.S. land development. Against
this stood comparable gross revenue from the sale of energy
projects in Brazil. Organic growth mainly originated from the
Netherlands, Poland, Czech Republic, Brazil and Chile. Investments
in rail, roads, water and energy are the drivers behind the
activity growth. In the U.S., growth in the water market
accelerated, mainly from work under the New Orleans contract. -
Environment Gross revenue grew 19%. The currency effect was minus
6%, the contribution from acquisitions (LFR, SET and Vectra) 17%
and the organic growth 8%. After the high growth level in 2007 and
the first half of 2008, organic growth declined in the second half,
especially in the U.S. where some large projects were completed and
companies were hit by the economic crisis. Net revenue growth in
the second half amounted to 3 - 4%. In most European countries and
Brazil organic growth stayed at a good level. Demand for
environmental due diligence declined as merger and acquisition
activity waned. In the U.S. $74 million worth of GRiP(R) work was
won. - Buildings Gross revenue increased 28%, of which 26% from the
acquisitions of RTKL and APS mid 2007. The currency effect was
minus 3%. The organic growth of 5% mainly came from Belgium,
Germany and France, while in the Netherlands project management and
consultancy grew. RTKL also had a solid contribution, resulting
from growth in non commercial projects and in international
markets. In the U.K., gross revenue declined due to the poor
commercial property market. This was partly offset by work pursued
in infrastructure and the Middle East. In the Netherlands two
five-year facility management contracts were signed, with Philips
(extension) and with Van Lanschot Bankers. Outlook The rapid
deterioration of economic conditions is unprecedented. The extent
to which this affects our activities is uncertain and differs for
each of the markets in which we are active. The infrastructure
market is solid. Budgets are often based on long term investment
programs. Moreover, governments in the United States and Europe
intend to accelerate infrastructure investments to stimulate the
economy. The stimulus package of the U.S. government is estimated
to generate more than $125 billion in investments in our field of
business. Due to climate change, attention for water management is
growing, as is shown by the new Dutch Delta Plan. The New Orleans
contract with more than $70 million in task orders provided a good
basis in the rapidly expanding water market. In the Netherlands EUR
4.5 billion will be invested in the further improvement of rail in
the coming years, while at the same time the capacity of the road
network will be expanded. In Central Europe, investments in
infrastructure are expected to remain high, supported by European
financing. The strong growth in South America may soften somewhat.
In the environmental market regulation and the drive towards
sustainability provide a healthy foundation. In the short term the
economic crisis may negatively affect demand for environmental
services from private industry. Many of our environmental
remediation projects are long term, based on regulation, and add
value to assets. Starting early 2008 we switched focus to sectors
where demand remains at a good level, like oil and gas industries
and utility companies. Demand for cost effective solutions based on
our advanced technology, as well as vendor reduction and
outsourcing of environmental work by companies, provide an
opportunity to increase our market share. Interest in GRiP(R) is on
the rise, with the U.S. DOD but also with industrial clients in the
U.S. and Europe. Energy is an important theme: carbon emission
reduction, energy efficiency and (green) energy projects generate
work. The buildings market has been affected most by the credit
crisis, especially the commercial property market. RTKL and the
project management services in the U.K. were hit most. RTKL
continues its focus on non-commercial projects in the U.S. and
projects in international markets, while in the U.K. services are
directed towards infrastructure and the Middle East. While
successful, these initiatives may not be enough to compensate
entirely for the decline in commercial property. The market for
government buildings, schools, hospitals etc. continues to offer
ample opportunities, also because stimulus programs contain
considerable amounts for these areas. We may benefit from this in
multiple countries, most certainly in the Netherlands and the U.S.
where our project management services are mainly aimed at (semi-)
public clients. As many organizations are looking for cost
reductions, demand for facility management will increase. In 2008
derivatives used for hedging interest rate and currency risks had a
negative effect on financing charges of EUR 5.9 million. Early
January 2009 these derivatives were unwound. This yielded a book
profit of EUR 7.5 million which will be included in the first
quarter 2009 results. CEO Harrie Noy concludes: "ARCADIS has a
robust portfolio of activities with a good spread geographically
and towards market segments and clients. The backlog is healthy and
grew slightly in 2008 especially as a result of high order intake
in infrastructure. In all three business lines we benefit from
government stimulus packages. The focus on further cost savings,
intensified market development efforts and preserving our margins
remains in place. We continue to look for acquisition opportunities
to realize our strategic goals. Even though the short term outlook
is mixed, themes like sustainability, climate change, urban
renewal, mobility and energy offer good longer term prospects.
Given the uncertainties in the market, it is too early to provide a
tangible outlook for 2009." About us: ARCADIS is an international
company providing consultancy, design, engineering and management
services in the field of infrastructure, environment and buildings.
We aim to enhance mobility, sustainability and quality of life by
creating balance in the built and natural environment. ARCADIS
develops, designs, implements, maintains and operates projects for
companies and governments. With more than 14,000 employees and over
EUR 1.7 billion in gross revenue, the company has an extensive
international network that is supported by strong local market
positions. This press release has been drafted in the period
between preparation and approval of the annual accounts of ARCADIS
NV. The figures in this press release for the full year 2008 have
been derived from the annual accounts of ARCADIS NV which were not
yet public at the moment this press release is issued. These annual
results were audited and the auditor has issued an unqualified
report. The annual accounts have not yet been adopted by the
General Meeting of Shareholders. The figures related to the fourth
quarter 2008 in this press release are unaudited. - - - Tables
follow - - - ARCADIS NV CONSOLIDATED STATEMENT OF INCOME Amounts in
EUR millions, Fourth quarter Full year unless otherwise stated 2008
2007 2008 2007 Gross revenue 485.4 422.3 1,739.9 1,510.2 Materials,
services of third parties and subcontractors (173.1) (151.3)
(578.0) (505.7) Net revenue 312.3 271.0 1,161.9 1,004.5 Operational
cost (261.4) (233.4) (1,008.7) (878.5) Depreciation (6.3) (6.5)
(23.3) (20.4) Other income - 1.6 1.9 1.6 EBITA 44.6 32.7 131.8
107.2 Amortization identifiable intangible assets (4.0) (4.1)
(12.2) (12.2) Operating income 40.6 28.6 119.6 95.0 Net finance
expense (8.7) (2.3) (23.6) (8.6) Income from associates (0.2) (0.2)
(0.1) (0.8) Profit before taxes 31.7 26.1 95.9 85.6 Income taxes
(11.6) (8.5) (32.9) (28.1) Profit for the period 20.1 17.6 63.0
57.5 Attributable to: Net income (Equity holders of the Company)
17.3 17.8 57.3 54.9 Minority interest 2.8 (0.2) 5.7 2.6 Net income
17.3 17.8 57.3 54.9 Amortization identifiable intangible assets
after taxes 2.5 2.7 8.1 7.9 Non-recurring income, net of taxes
(1.0) (1.0) Option costs UK share save scheme - 0.1 0.2 0.1 Net
effects of financial instruments 2.4 (0.4) 4.4 0.4 Net income from
operations 22.2 19.2 70.0 62.3 Net income per share (in euros)(1)
0.29 0.29 0.95 0.90 Net income from operations per share (in
euros)(1) 0.37 0.31 1.16 1.02 Weighted average number of shares (in
thousands)(1) 60,197 60,732 60,519 60,990 (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 December 31, 2008 December
31, 2007 Assets Non-current assets 362.5 332.9 Current assets 695.9
588.8 Total 1,058.4 921.7 Equity and Liabilities Shareholders'
equity 207.6 187.7 Minority interest 12.3 11.5 Total equity 219.9
199.2 Non-current liabilities 316.4 216.7 Current liabilities 522.1
505.8 Total 1,058.4 921.7 ARCADIS NV CHANGES IN SHAREHOLDERS'
EQUITY Total Amounts in Cumulative share- EUR Share Share
translation Retained holders' Minority Total millions capital
premium reserve earnings equity interest equity Balance at December
31, 2006 1.0 36.4 (7.6) 159.1 188.9 11.8 200.7 Exchange rate
differences (22.2) (22.2) 0.7 (21.5) Taxes related to share-based
compensation (0.1) (0.1) (0.1) Income directly recognized in equity
(22.2) (0.1) (22.3) 0.7 (21.6) Profit for the period 54.9 54.9 2.6
57.5 Total income / (expenses) for the period (22.2) 54.8 32.6 3.3
35.9 Dividends to shareholders (20.4) (20.4) (2.0) (22.4) Own
shares purchased for granted options (19.8) (19.8) (19.8)
Share-based compensation 4.2 4.2 4.2 Options exercised 2.2 2.2 2.2
Expansion ownership (1.6) (1.6) December 31, 2007 1.0 36.4 (29.8)
180.1 187.7 11.5 199.2 Balance at December 31, 2007 1.0 36.4 (29.8)
180.1 187.7 11.5 199.2 Exchange rate differences (10.4) (10.4)
(2.8)(13.2) Taxes related to share-based compensation (0.7) (0.7)
(0.7) Income directly recognized in equity (10.4) (0.7) (11.1)
(2.8)(13.9) Profit for the period 57.3 57.3 5.7 63.0 Total income /
(expenses) for the period (10.4) 56.6 46.2 2.9 49.1 Dividends to
shareholders (24.8) (24.8) (1.2)(26.0) Stock split 0.2 (0.2) - -
Own shares purchased for granted options (9.1) (9.1) (9.1)
Share-based compensation 6.0 6.0 6.0 Options exercised 1.6 1.6 1.6
Expansion ownership (0.9) (0.9) Balance at December 31, 2008 1.2
36.2 (40.2) 210.4 207.6 12.3 219.9 ARCADIS NV CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS Amounts in EUR millions Full
year 2008 2007 Net income 57.3 54.9 Depreciation and amortization
35.5 32.6 Gross cash flow 92.8 87.5 Net working capital (15.9)
(0.8) Other changes 3.6 (7.8) Net cash provided/(used) by operating
activities 80.5 78.9 Investments/divestments (net) in: (In)tangible
fixed assets (26.6) (19.1) Acquisitions/divestments (73.2) (87.7)
Financial assets (0.5) (8.7) Net cash used in investing activities
(100.3) (115.5) Net cash provided by financing activities 60.4 34.2
Change in cash and equivalents less bank overdrafts 40.6 (2.4)
Exchange rate differences (0.6) (4.3) Cash and cash equivalents
less bank overdrafts at January 1 71.7 78.4 Cash and cash
equivalents less bank overdrafts at December 31 111.7 71.7
ATTACHMENT TO PRESS RELEASE ANNUAL RESULTS 2008 OF ARCADIS NV
Geographical information Amounts in EUR millions or % Gross revenue
Geographic mix (gross revenue) 2008 2007 2008 2007 Netherlands 404
374 Netherlands 23% 25% Other European Other European countries 378
342 countries 22% 23% United States 791 656 United States 45% 43%
Rest of world 167 138 Rest of world 10% 9% Total 1,740 1,510 Total
100% 100% EBITA, recurring Margin, recurring 2008 2007 2008 2007
Netherlands 24.5 26.2 Netherlands 8.9% 10.3% Other European Other
European countries 28.3 22.6 countries 9.5% 8.2% United States 56.0
44.6 United States 11.3% 10.9% Rest of world 23.0 12.5 Rest of
world 25.0% 19.6% Total 131.8 105.9 Total 11.3% 10.5% Information
about business lines Gross revenue Activity mix (gross revenue)
2008 2007 2008 2007 Infrastructure 646 622 Infrastructure 37% 41%
Environment 643 537 Environment 37% 36% Buildings 451 351 Buildings
26% 23% Total 1,740 1,510 Total 100% 100% Margin, recurring 2008
2007 Infrastructure 11.4% 8.8% Environment 13.7% 13.5% Buildings
8.7% 9.9% Total 11.3% 10.5% Visit us on the internet at:
http://www.arcadis-global.com/ DATASOURCE: ARCADIS NV CONTACT: For
more information contact: Joost Slooten of ARCADIS at
+31-26-3778604 or outside office hours at +31-6-2706-1880 or e-mail
at .
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