Download - Results 2001 and First Quarter 2002 Explanation by Harrie L.J. Noy, Chairman Executive Board
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Results 2001 and First Quarter 2002
Explanation by Harrie L.J. Noy, Chairman Executive Board
General Meeting of Shareholders
Arnhem, the Netherlands, May 16, 2002
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ARCADIS is on course
•Income per share 2001: +10%In line with financial goals
•Good progress in implementing strategyNew initiatives in stead of telecom
•Net income Q1 2002: +9%Continued growth infra and environment
•Outlook 2002: net income +5 to 10%Despite economic uncertainty
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Gross revenue
Operating income
Net income (excl. extraordinary, excl. goodwill)
EPS (excl. extraordinary, excl. goodwill)
Extraodinary income
Net income (incl. extraordinary, incl. goodwill*)
EPS (incl. extraordinary, incl. goodwill*) *) Goodwill: € 0.1 mln
2000
776
35.2
20.7
1.04
-
20.7
1.04
2001
797
38.8
23.2
1.14
2.0
25.1
1.24
Growth
3%
11%
12%
10%
21%
19%
ARCADIS continues profit growth 2001: +12%
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Sources of growth 2001
Total
- Autonomous
- Acquisitions
- Currency-effect
*)Excluding effect real estate valuation
2001 adj.*
5%
5%
0%
0%
2001
3%
3%
0%
0%
Gross revenue
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Results versus goals
1 Growth gross revenue- Autonomous- Acquisitions- Currency-effect
2 Margin- EBIT/net revenue
3 EPS growth
*)Excluding effect property valuations (Netherlands)
2001
5%* 5%*0%0%
6.9%
10%
1995-99
13%3%7%3%
19996.1%
8%
Goal
13%6.5%6.5%
-
In 20058%
15%
2000
18%7%6%5%
6.4%
16%
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Important developments •Netherlands: good results infrastructure outweighed for strong decline in property valuations
•U.S.: growth in infrastructure and environment compensates for decline in buildings and telecom
•Growth telecom substantially lags expectations
•Further decline in less profitable activities - Reduction in buildings segment Germany, Netherlands - Sale of composting activities Netherlands
•Integration Netherlands operations
•Sale of 35%-stake in SAGEOS France
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Development operating income
26.2 27.2 27.8
35.238.8
0.0
10.0
20.0
30.0
40.0
1997 1998 1999 2000 2001
+19% +4% +2% +26% +11%
In millions of euros
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Development net income and EPS(excl. extraordinary and excl. goodwill)
14.6 15.517.6
20.723.2
0.0
5.0
10.0
15.0
20.0
25.0
1997 1998 1999 2000 2001
+15% +6% +14% +18% +12%
In mln euro
Net income
1.50
1.00
0.50
0.00
In euro
0.77 0.810.90
1.041.14
0.75
0.25
1.25
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Cash flow
0
10
20
30
40
50
60
Cash flow Operational cash flow1999 2000 2001
In millions of euros
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Balance sheet and returns
1.3
0.7
0.6
0.0
0.5
1.0
1.5
2.0
1999 2000 2001
Debt to EBITDA
13.8%15.6%
17.6%
0%
5%
10%
15%
20%
1999 2000 2001
20.1% 20.6% 21.6%
0%
5%
10%
15%
20%
25%
1999 2000 2001
Return on equity
32.8% 37.4% 42.2%
0%
10%
20%
30%
40%
50%
1999 2000 2001
Solvency
Return on invested capital
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Gross revenue by market segment
0
100
200
300
400
2000 2001
Buildings -/-20%
0
100
200
300
400
2000 2001
Infrastructure +13%
0
100
200
300
400
2000 2001
Environment +8%
0
100
200
300
400
2000 2001
Communications -/-12%
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Infrastructure +13%
Major projects Netherlands
Strong growth United States
Recovery Chile: synergy
Wind energy Germany
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Environment +8%
MNC program works well
Composting sold
Acquisition Hidro Ambiente Brazil
GRiPTM successful in the U.S.
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Buildings –20%
Outsourcing in Belgium
Strong decline United States
NL: higher value added
Turnkey in Spain
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Communications –12%
Telecom: strong decline U.S. in Q4
Telecom: growth Germany
GIS market grows well
First mile in the Netherlands
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Gross revenue by region
0
100
200
300
2000 2001
Other Europe +4%
0
100
200
300
2000 2001
Other countries -/- 13%
0
100
200
300
2000 2001
NL contracting +7%
0
100
200
300
2000 2001
North- and South-America +5%
0
100
200
300
2000 2001
NL consulting 0% (+11% excluding property valuations)
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EBITA by region
0
5
10
15
20
2000 2001
North- and South-America +18%
0
5
10
15
20
2000 2001
Netherlands +4%
-1
0
1
2
2000 2001
Other countries
0
5
10
15
20
2000 2001
Other Europe +1%
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Geographical spread
Netherlands39%
Other European countries
18%
North and South
America38%
Other countries
5%
2000
Netherlands38%
Oher European countries
18%
North and South
America39%
Other countries
5%
2001
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Strategy: more focus on value creation
Enhanced profit growth
Organic growth in existing core activities
Strong growth in specific segments
Expansion of services to industry
Acquisitions
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Better utilization of network •Leveraging expertise and client contacts•Investments in web enabling
Margin improvement •Reduction/sale less profitable activities
- buildings, composting, Euroconsult
•Integration Netherlands operations
•Outsourcing detailed engineering
Organic profit growth in existing core activities
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Strong growth in specific segments
Telecommunications
•Growth lags expectations
Infrastructure•Strong market in Europe, U.S. and Latin
America
New growth-initiatives
•New business initiatives (DBFO)•Program to strengthen commercial skills •New local growth impulses
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•Account management - MNC program successful- Broadening services towards existing client base
•Outsourcing offers opportunities
•Facilities Management started - Grabs strong attention in the market place - Developing alliances - First assignments
Expansion of services to industry
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Acquisitions
•2001: focus on margin improvement
•2002: acquisitions high priority
•Goal:- Strengthening portfolio - Additional growth through network
•Priority for expansion in the United States - in infrastructure market - Goal: improve client mix and portfolio
•Targeted acquisitions in Europe
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Implementation
•Measurement and steering drives strategy- Balanced score cards per opco
Financial performanceContribution to strategic initiativesHuman resources managementValue creation initiatives
•Option plan and bonus program•Employee participation w/ Lovinklaan Found.
- Netherlands: 700 participants - Per July 2002 in United States, Germany and Belgium
•Intensifying investor relations
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0
50
100
150
200
250
2001 2002
Gross revenue +7%
0
2
4
6
8
10
2001 2002
Operating income +15%
0
1
2
3
4
5
2001 2002
Net income +9%
0
50
100
150
200
2001 2002
Net revenue +3%
Net income Q1- 2002: EUR 3.9 mln
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Headlines Q1-2002
•Growth was mainly organic
•Infrastructure strong globally
•Environment mainly growth in U.S.
•Buildings/communications at level Q4-2001
•Geographically strong: Spain, Belgium, Latin-
America
•Net income lower than EBITA through:Higher taxes, larger minority interest, lower contribution
NCC’s
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Market outlook • Infrastructure
Stable growth, possible shift in priorities Need for investments remains high
• Environment Growth in market share GRiPTM also for DOD
• Buildings Recovery U.S. second half Outsourcing to improve competitive position
• Telecommunications Recovery takes time, long term prospects good Short term opportunities for niche growth
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Outlook 2002
Further growth infrastructure and environment
Additional growth initiatives
Also priority for acquisitions
Further margin improvement
Net income 5-10% higher (excluding extraordinary)
Barring: Unforeseen circumstances
Excluding new acquisitions
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Peer group: EBITA-margin
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
1997 1998 1999 2000 2001
Jaakko Pöyry
Grontmij
Tetratech
URS (*gross revenue)
WS-Atkins
ARCADIS
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Peer group: Stock Price Developments
50%
75%
100%
125%
150%
July2000
Jan2001
Mar2001
May2001
July2001
Sept2001
Nov2001
Jan2002
Mar2002
May2002
URS
ARCADIS
Grontmij
Jaakko Pöyry
Tetratech
WS-Atkins
AEX
NASDAQ
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