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2016-10-27

Arcadis N.V.: Arcadis trading update Q3 2016

· €797 million in gross revenues, organically -4%. Net revenues €596
million, organically -5% due to lower revenues in Emerging Markets and North
America, and a negative currency effect

· EBITA of €38.6 million (Q3 2015: €57.5 million). Non-operating costs
€4.7 million (Q3 2015: €8.5 million)

· Operating EBITA margin 7.3% (Q3 2015: 10.3%), due to lower revenues,
Brexit impact, price pressure and capacity imbalances in parts of our
business

· Free cash flow Q3 €39.7 million (Q3 2015: €37.2 million). Free cash
flow in the year-to-date minus €22.4 million, below last year due to lower
EBITA

· Working capital 20.9% (Q3 2015: 19.3%), higher due to the Middle East

· Backlog year-to-date €2.2 billion representing 11 months of revenues,
developed markets (6%-11%) partly compensating for Emerging Markets decline
(17%)

· Renier Vree appointed interim CEO replacing Neil McArthur

· Outlook: Arcadis expects similar business conditions in the fourth
quarter as experienced in the previous quarters of 2016 and has accelerated
initiatives to improve financial performance

Key figures

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| in € millions Third quarter Change Year to date Change |
|Period ended 30 September |
| 2016 2015 2016 2015 |
| Gross revenues 797 854 -7% 2,475 2,547 -3% |
| Organic growth -4% -1% |
| Net revenues 596 643 -7% 1,860 1,961 -5% |
| Organic growth -5% -4% |
| EBITA 38.6 57.5 -33% 126.6 149.0 -15% |
| EBITA margin 6.5% 8.9% 6.8% 7.6% |
| Operating EBITA1) 43.3 66.0 -34% 140.8 181.8 -23% |
| Operating EBITA margin 7.3% 10.3% 7.6% 9.3% |
| Free cash flow 39.7 37.2 -22.4 7.4 |
| Net working capital % 20.9% 19.3% 20.9% 19.3% |
| Backlog (organic growth)/ months -3%/11 -2%/11 |
---------------------------------------------------------------------------------
1)Excluding acquisition, restructuring and integration-related costs

Renier Vree, CEO:
"As indicated earlier, the third quarter was challenging, comparable with the
previous quarters of 2016. We experienced continuing tough conditions in
Emerging Markets and our North American business. As such, the addition of
Mary Ann Hopkins as Executive for the Americas to our leadership was an
important development in the quarter. Whilst we are not satisfied with the
results, our business priorities are clear. We will continue to focus on
winning work with our clients and cash collection. Furthermore we will step
up the pace in aligning our cost structure to the new market realities and
simplify the organization. The strategy process remains ongoing and we will
disclose our strategy update at the beginning of 2017."

Review of performance

Continental Europe, the UK, and Australia all recorded net revenue growth
during the quarter. Emerging Markets faced continued significant
macro-economic headwinds and reported a revenue decline, whilst North America
also recorded lower revenues as a result of intense competition. Overall, net
revenues decreased by 7%, and organically by 5%. EBITA decreased by 33% to
€38.6 million with an EBITA margin of 6.5%. Operating EBITA was €43.3 million
(Q2 2016: €46.2 million) and 34% lower than in the same quarter last year (Q3
2015: €66.0 million). The operating EBITA margin was 7.3% (Q3 2015: 10.3%),
due to lower revenues, Brexit impact, price pressure and capacity imbalances
in parts of our business.

Year-to-date net revenue declined -5%. The organic decline was 4%, related to
lower revenues in Brazil, North America and Asia. EBITA decreased 15% and
included €14.2 million in restructuring charges (2015: €32.8 million also
including integration charges).

To adapt to weaker markets and improve our cost position we reduced our global
workforce by ~800 FTEs versus September 2015 by reducing the number of
employees in the regions by ~1,450 FTEs (-5.5%), and growing Global Design by
~650 FTEs (+50%). This led to an overall labour cost decrease of
approximately 3%.

Operating EBITA decreased by 23% to €140.8 million (2015: €181.8 million). The
operating EBITA margin of 7.6% (2015: 9.3%) reflects the lower contribution
from North America, Brazil, Continental Europe and the Middle East.

Review of performance for Q3 year-to-date by region

* North America (34% of net revenues)

Net revenues in North America declined organically by 6%, driven by
Environment, Water and Architecture, offsetting good growth in Infrastructure
and Buildings. Operating EBITA margin declined due to a competitive market in
Water and Environment.

* Emerging Markets (29% of net revenues)

The decrease in net revenues was mainly due to a 38% organic decline in
Brazil. In Asia revenues declined by 12% mainly related to lower revenues in
Hong Kong and Singapore.

In the Middle East, revenues were flat, but low oil prices continue to impact
backlog and payments. Net working capital in this region continues to receive
strong attention and as highlighted earlier, will have an impact through the
middle of 2017. Australia Pacific realized a strong profitable organic
growth, particularly in Infrastructure. The operating EBITA margin decreased
due to an operating loss in Brazil and a lower margin in the Middle East that
was partly compensated by an increase in Australia Pacific. The operating
EBITA margin in Asia was stable.

* Continental Europe (20% of net revenues)

Net revenues in Continental Europe were 3% higher than in the same period in
2015, mainly due to growth in Buildings. Revenues in Infrastructure and
Environment were in line with last year and revenues decreased in Water. The
operating EBITA margin declined due to capacity imbalances in France and
Belgium.

* United Kingdom (17% of net revenues)

Net revenues decreased mainly due to a 9% currency effect as a result of the
decline of the British Pound. Net revenues grew organically with 3% due to
good growth in Infrastructure and Water and to a lesser extent in
Environment. In Buildings, revenue decline continued due to Brexit-related
delays in investment decisions. A large architecture contract partly
compensated for this decline. The operating EBITA margin was slightly lower.

Backlog

Current backlog is €2.2 billion, representing a stable 11 months of revenues.
Backlog at the end of September decreased by 3% compared with December 2015,
reflecting cancellations in Brazil, Qatar and China. Overall backlog in
Emerging Markets declined by 17%, whilst backlog grew 11% in the UK and 6% in
Continental Europe and North America.

----------

For further information please contact:

Arcadis Investor Relations
Jurgen Pullens
Telephone: +31 20 2011083
Mobile: +31 6 51599483
E-mail: jurgen.pullens@arcadis.com

Arcadis Group Communications
Jeremy Cohen
Mobile: +31 6 21639411
E-mail: jeremy.cohen@arcadis.com

Conference Call

A conference call for analysts will be held at 10.00 hours CET today. The call
can also be followed via the webcast link on our website:
https://www.arcadis.com/en/global/investors/.

About Arcadis

Arcadis is the leadingglobal Design&Consultancy firm for natural and built
assets

. Applying our deep market sector insights and collective design, consultancy,
engineering, project and management services we work in partnership with our
clients to deliverexceptional and sustainable outcomes

throughout the lifecycle of their natural and built assets. We are 27,000
people active in over 70 countries that generate €3.4 billion in revenues. We
support UN-Habitat with knowledge and expertise to improve the quality of
life in rapidly growing cities around the world. www.arcadis.com

This press release contains information that qualifies, or may qualify as
inside information within the meaning of Article 7(1) of the EU Market Abuse
Regulation. Statements included in this press release that are not historical
facts (including any statements concerning investment objectives, other plans
and objectives of management for future operations or economic performance,
or assumptions or forecasts related thereto) are forward looking statements.
These statements are only predictions and are not guarantees. Actual events
or the results of our operations could differ materially from those expressed
or implied in the forward looking statements. Forward looking statements are
typically identified by the use of terms such as "may," "will," "should,"
"expect," "could," "intend," "plan," "anticipate," "estimate," "believe,"
"continue," "predict," "potential" or the negative of such terms and other
comparable terminology. The forward looking statements are based upon our
current expectations, plans, estimates, assumptions and beliefs that involve
numerous risks and uncertainties. Assumptions relating to the foregoing
involve judgments with respect to, among other things, future economic,
competitive and market conditions and future business decisions, all of which
are difficult or impossible to predict accurately and many of which are
beyond our control. Although we believe that the expectations reflected in
such forward looking statements are based on reasonable assumptions, our
actual results and performance could differ materially from those set forth
in the forward looking statements.

Arcadis trading update Q3 2016 - Analyst Presentation
http://hugin.info/132839/R/2051947/767886.pdf
Arcadis trading update Q3 2016 - Press Release
http://hugin.info/132839/R/2051947/767884.pdf

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This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Arcadis N.V. via Globenewswire

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