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2020-10-29

Arcadis Trading Update Q3 2020

ARCADIS trading update Q3 2020

Strong operational performance and excellent free cash flow

  • Increase of Operating EBITA with 22% to €66 million (Q3 2019: €54 million), resulting in operating margin of 10.9% (Q3 2019: 8.4%)
  • Excellent free cash flow of €119 million (Q3 2019: €4 million)
  • Strengthened balance sheet and successfully completed €150 million re-financing
  • Grown backlog with 4% compared to Q2 2020 and year-to-date 6%
  • Arcadis organization and business continues to proof resilience
  • Decision to significantly reduce footprint in the Middle East
  • Non-cash goodwill/intangibles impairment for Middle East and CallisonRTKL of €126 million

Amsterdam, 29 October 2020 – Arcadis (EURONEXT: ARCAD), the leading global Design & Consultancy organization for natural and built assets, reports a significantly improved operating margin of 10.9% and free cash flow of €119 million for the third quarter. The company further reduced its net debt and increased its backlog by 4%. As part of the strategic effort to further focus the organization, Arcadis decided to significantly reduce its presence in the Middle East.

Peter Oosterveer, CEO Arcadis, comments: “Against the backdrop of the ongoing COVID-19 pandemic, we have continued with a very strong focus on the safety of everyone we work with, while at the same time further strengthening our financial position. Our business has thus far proven to be resilient and we continue to be impressed with the adaptability and flexibility of all Arcadians, which have contributed to the strong operational performance during these still unprecedented times. The series of actions we initiated at the end of the 1st quarter to reduce our costs and preserve our cash continue to pay off and resulted in our solid financial position. This also facilitated the successful refinancing of €150 million debt in a transaction that was oversubscribed multiple times.

As part of our continuous reorientation to focus on regions which support our strategic framework, we have decided to reduce our footprint in the Middle East. We will continue to satisfy the contractual obligations we have committed to, as well as balancing our employees’ interests, which means that we expect this process to take several years to complete.

Notwithstanding the strong performance, we do see the impact of COVID-19 in some parts of our business, in particular in our work for private sector clients as well in the retail sector of CallisonRTKL, which led to a non-cash goodwill impairment for this business. At the same time, our strong focus on our public clients has allowed us to win a large number of projects and enabled the growth of our backlog especially in infrastructure and environment.

The quality of our people, our well diversified project portfolio, improved predictable performance and strong financial position gives us confidence for the coming years and we look forward to presenting our strategy update on 19 November 2020.”

Review of Performance

KEY FIGURES

in € millions
Period ended 30 September
THIRD QUARTER YEAR-TO-DATE 
20202019change20202019change
Gross revenues781836-7%2,4842,544-2%
Net revenues604642-6%1,8901,917-1%
Organic growth-3%3% -1%2% 
EBITDA928114%246230 
EBITDA margin15.2%12.6% 13.0%12.0% 
Adjusted EBITDA1)746317%1871748%
EBITA635124%1551438%
EBITA margin10.5%8.0% 8.2%7.4% 
Operating EBITA2)665422%1631527%
Operating EBITA margin10.9%8.4% 8.6%
Författare Arcadis N.V.

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