• Press Release
  • February 15, 2018

Arcadis reports full year results 2017

Return to organic growth and improved financial results

  • Strong fourth quarter: organic net revenue growth 3% and operating EBITA margin 8.5%
  • Full year gross revenues €3.2 billion. Net revenues €2.4 billion, organic growth 1%
  • Full year operating EBITA +6% €186 million; operating margin improved to 7.6%
  • Net income from operations +11% to €101 million
  • Net working capital improved to 16.9% versus 17.5% in 2016
  • Net debt/EBITDA at year-end 2.1, primarily from €98 million free cash flow
  • Market consultation process for CallisonRTKL started to assess viability of sale
  • Proposed dividend €0.47 per share (2016: €0.43); pay-out ratio unchanged at 40%
  • Confirms revenue growth and improved operating margin in 2018

Amsterdam, 15 February 2018 - Arcadis (EURONEXT: ARCAD), the leading global Design & Consultancy firm for natural and built assets, reports full year results 2017. Net revenues totaled €2,437 million and increased organically by 1%. Net income from operations increased 11% to €101 million (2016: €91 million).

Peter Oosterveer, CEO Arcadis comments: "In 2017, we focused strongly on organic growth and on reducing our cost and working capital. I am pleased that we improved our financial performance as the year progressed. Our fourth quarter results were strong, with organic net revenue growth of 3% and a higher operating EBITA. This led to solid cash flow generation and reduced debt.
While our primary focus is on organic growth, we will continue to look for opportunities to further expand our digital and data expertise as evidenced by the recent acquisitions of E2 ManageTech and SEAMS. As a next step in the strategic review of CallisonRTKL, our architectural business representing approximately 10% of our global revenues, we started a market consultation to assess the viability of a sale.
In the coming years we expect to see the benefits from our updated strategy "Creating a sustainable future", which we presented end of November 2017. Our strategy is based on three pillars: people & culture, innovation & growth, and focus & performance. Global trends like climate change, sustainable industries and expanding cities are creating opportunities for Arcadis.

Our strategic priorities are clear:
  • Invest in people to build the workforce of the future
  • Become a digital frontrunner in the industry
  • Focus on selecting profitable clients and on improvements in project delivery
  • Choose geographies, businesses and projects where we can lead

We see a positive outlook for most of our markets, and I am convinced that the execution of our strategy will deliver further revenue growth and operating margin improvement in the years ahead."


Key Figures

in € millions
Period ended December 31
2017 2016 change 2017 2016 change
Gross revenues 3,219 3,329 -3% 805 854 -6%
Organic growth -1%     0%    
Net revenues 2,437   2,468 -1% 595 608 -2%
Organic growth 1%     3%    
EBITDA 200 207 -3% 51 50 1%
EBITA 161 166 -3% 41 40 2%
EBITA margin 6.6% 6.7%   6.8% 6.5%  
Operating EBITA1) 186 175 6% 51 35 46%
Operating EBITA margin 7.6% 7.1%   8.5% 5.7%  
Net income 71 64 10%      
Net income per share (in €) 0.82 0.76 8%      
Net income from operations 101 91 11%      
NIfO per share (in €) 1.18 1.08 9%      
Dividend (proposal) per share (in €) 0.47 0.43 9%      
Avg. number of shares (millions) 85.9 84.1 2%      
Net working capital % 16.9% 17.5%        
Days sales outstanding 88 91        
Free cash flow 2) 98 80 22% 85 102 -17%
Net debt 416 494 -16%      
Backlog net revenues (billions) 2.1 2.2 -7%      
Backlog organic growth 2%     1%    

1) Excluding acquisition, restructuring and integration-related costs and excluding the release of Hyder related litigation provisions of €19.4 million in 2016
2) Cash flow from operating activities minus investments in (in)tangible assets

Net revenues totaled €2,437 million and increased organically by 1%. North America, Continental Europe, the UK, and Australia delivered organic growth, compensating for a decrease in other regions.
Operating EBITA increased by 6% to €186 million (2016: €175 million), as higher results in North America and Continental Europe compensated for lower results mainly related to the Middle-East. The operating EBITA margin was 7.6% (2016: 7.1%). Non-operating costs were €25 million (2016: €29 million), of which €20 million is mainly related to restructuring in Brazil and Continental Europe, and €5 million to acquisitions & divestments. EBITA decreased by 3% to €161 million compared to €166 million in 2016, the latter including a €19 million litigation provision release.

The income tax rate was 19.7% (2016: 19.3%). The main reason for the reduced effective tax rate, which was 29.9% in the first half of 2017, was the US tax reform resulting in a one-time gain of €13 million from revaluation of deferred tax positions. Financing charges decreased to €26 million (2016: €29 million) due to a weaker US dollar and lower debt. Income from associated companies was a loss of €12 million (2016: loss of €3 million), related to non-core clean energy assets in Brazil. Arcadis is investing up to €20 million to optimize asset value, ahead of a future divestment.

Net income improved 11% to €71 million (2016: €64 million) or €0.82 per share (2016: €0.76). Net income from operations increased 11% to €101 million (2016: €91 million) or €1.18 per share (2016: €1.08).

Working capital as a percentage of gross revenues was 16.9% (Q4 2016: 17.5%). The days sales outstanding decreased to 88 days (2016: 91 days). Free cash flow improved to €98 million (2016: €80 million). Net debt at the end of December was €416 million (2016: €494 million), resulting in an improved covenant leverage ratio of 2.3 (2016: 2.5). The leverage ratio at year-end improved to 2.1 (2016: 2.3)

Backlog at the end of December 2017 stood at €2.1 billion (2016: €2.2 billion), representing 10 months of net revenues. The backlog increased organically in 2017 by 2% compared to a 1% decline in 2016. The currency impact was -9% mainly related to the US dollar. Backlog grew   especially in North America, the UK, Continental Europe, Asia and Australia.

In September 2017 we announced the decision to perform a strategic review of CallisonRTKL, our architectural business. This review is part of our effort to sharpen our strategic focus. We evaluated a range of strategic options to optimize the value of CallisonRTKL, within or outside of Arcadis, and to provide the best prospects for our people, clients and shareholders. While a final decision has not been made yet, the process is on track, and we have started a market consultation to assess the viability of a sale.

Net revenues were €595 million. Organic growth was 3% and all regions except for Latin America and the Middle East contributed to this growth. The currency effect was -6% due to weaker US Dollar, Australian Dollar and British Pound.

Operating EBITA was €51 million, 46% higher (Q4 2016: €35 million, which included €10 million additional provisions). The operating EBITA margin improved to 8.5% (Q4 2016: 5.7%) as a result of organic revenue growth and higher margins in North America, Continental Europe, and improved results in Latin America.

EBITA of €41 million was in line with prior year (Q4 2016: €40 million, which included the €19 million release of a litigation provision). Non-operating costs were €10 million (Q4 2016: €14 million), consisting of €6 million restructuring in Brazil and Continental Europe, and €4 million in acquisitions & divestments.


(31% of net revenues)

Period ended 31 December  2017 2016 change 2017 2016 change
Gross revenues 1,175 1,227 -4% 293 323 -9%
Net revenues 751 768 -2% 175 187 -7%
Organic growth -2%     1%    
EBITA 36.0 26.3 37%      
Operating EBITA1) 47.5 36.1 31%      
Operating EBITA margin 6.3% 4.7%        

1) Excluding acquisition, restructuring and integration-related costs

The organic net revenue decline of 2% consists of 2% growth in North America and a 26% decrease in Latin America due to Brazil. The operating EBITA improved 31% mainly due to the return to organic growth in North America. Operating EBITA margin in North America increased to 8.1% (2016: 7.1%). Latin America recorded an operating loss of €6 million (2016: -€8 million).

Higher net revenues were driven by Environment, Buildings and Infrastructure. Organic revenue growth in the fourth quarter was 3%, from all business lines. Backlog increased by 5% due to overall good order intake. A strong performance was delivered by E2 ManageTech, which was acquired earlier in 2017.

  • Environment: revenue growth and margin improvement through better project delivery
  • Water: return to organic growth in the fourth quarter
  • Infrastructure: significant revenue growth at higher margins
  • Buildings: higher margins with good revenue growth

Net revenues in the fourth quarter were in line with the third quarter, 24% below last year. The operating results in Q4 were close to break-even.

  • Brazil: further restructuring caused headcount reduction of ~400 to ~850 at year end
  • Brazil: economy gaining traction, evidenced by good order intake in Q4
  • Chile: stable performance; Peru: profit improvement

(46% of net revenues)

Period ended 31 December  2017 2016 change 2017 2016 change
Gross revenues 1,337 1,398 -4% 340 353 -4%
Net revenues 1,113 1,117 0% 282 279 1%
Organic growth 4%     4%    
EBITA 74.0 67.0 10%      
Operating EBITA1) 84.3 83.9 0%      
Operating EBITA margin 7.6% 7.5%        

1) Excluding acquisition, restructuring and integration-related costs

Organic net revenue growth of 4% included an increase of 6% in Continental Europe and 7% in the UK, which more than compensated for a 10% decrease in the Middle East. Higher operating EBITA in Continental Europe was offset by lower results in the Middle East and a weaker British Pound, causing the operating EBITA to stay flat.

Net revenues increased organically by 6% to which all countries contributed, and operating margin improved to 7.3% (2016: 6.8%). The private sector drove growth in revenues and order intake.  

  • Buildings: strong revenue growth from project wins in the Netherlands and Germany
  • Infrastructure: slightly higher revenues; rail work compensated for highways slowdown 
  • Environment: solid growth and better order intake for remediation and consultancy
  • Water: limited growth with increased backlog especially in conveyance

Organic net revenue growth at 7%. The win of many strategic pursuits contributed to backlog growth. Operating margin was 9.2% (2016: 10.0%), and declined due to a high level of bidding activity.

  • Infrastructure: strong, as rail investments continue
  • Buildings: revenue growth, supported by automotive clients and commercial developers
  • Water: good growth following earlier wins with large utilities
  • Environment: higher revenues driven by strategic environmental consultancy

Organic net revenue declined 10% and operating margin decreased to 4.7% (2016: 8.6%). Revenue and backlog came down due to selective bidding and lower demand.

  • UAE: revenue growth from large commercial development projects
  • Qatar: revenue decline; key milestones reached, significant cash payments received
  • KSA: significant revenue decline; contractual obligations for a few completed projects expected to be honored

(14% of net revenues)

Period ended 31 December  2017 2016 change 2017 2016 change
Gross revenues 387 378 2% 98 97 2%
Net revenues 344 338 2% 85 84 1%
Organic growth 2%     8%    
EBITA 30.1 30.7 -2%      
Operating EBITA1) 30.7 31.3 -2%      
Operating EBITA margin 8.9% 9.3%        

1) Excluding acquisition, restructuring and integration-related costs

Organic net revenue growth in Asia Pacific was 2%, as 12% organic growth in Australia more than offset the 2% decline in Asia. Operating margin declined somewhat.

Net revenues declined organically earlier in the year, while in the fourth quarter Asia returned to organic growth and increased backlog. The operating margin improved to 8.8% (2016: 8.6%).

  • China: revenues slightly lower while order intake was strong
  • Hong Kong: growth and stronger backlog in Buildings and Infrastructure
  • Singapore: better Q4 performance did not fully compensate slow start of the year
  • Brunei: business divested


  • Organic net revenue growth was 12%, fueled by major Infrastructure project wins. Higher revenues from delivering large Infrastructure, Buildings and Environmental projects across major urban areas
  • Operating margin lower at 10.3% (2016: 11.0%) due to underperforming projects in the first half of 2017

(9% of net revenues)

Period ended 31 December  2017 2016 change 2017 2016 change
Gross revenues 320 326 -2% 73 81 -10%
Net revenues 229 244 -6% 53 58 -8%
Organic growth -3%     0%    
EBITA 20.8 22.9 -9%      
Operating EBITA1) 23.9 24.3 -2%      
Operating EBITA margin 10.4% 9.9%        

1) Excluding acquisition, restructuring and integration-related costs

Net revenues declined organically by 3% largely driven by adverse developments in US commercial real estate and healthcare markets.

  • Q4: stable organic revenue after a weak Q3, supported by China
  • Operating EBITA margin improved after cost reductions earlier in the year


We will execute our strategy against the background of a positive market outlook. Considering the progress made in 2017 we expect to grow revenues and improve operating margin in line with our financial objectives as communicated in our strategic update.

Our priorities are:

  • Deliver financial objectives as per the strategic framework 2018-2020
  • Select projects, businesses and geographies where we can lead
  • Improve project delivery
  • Continue to invest in people and culture to build the workforce of the future
  • Innovate to become a digital frontrunner in the industry
  • Contribute significantly to the United Nations Sustainable Development Goals
  • Conclude the strategic review process of CallisonRTKL


19 April 2018  Trading update Q1 2018
24 April 2018  Annual General Meeting of Shareholders
26 July 2018  First half year results 2018
24 October 2018  Trading update Q3 2018

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

Joost Slooten
Mobile: +31 6 27061880
E-mail: joost.slooten@arcadis.com

Arcadis will hold an analyst meeting and webcast to discuss the full year results for 2017. The analyst meeting will be held at 10.00 hours CET today. The webcast can be accessed via the investor relations section on the company's website at https://www.arcadis.com/en/global/investors/.

Arcadis is the leading global 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 deliver exceptional and sustainable outcomes throughout the lifecycle of their natural and built assets. We are 27,000 people, active in over 70 countries that generate €3.2 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.


Jurgen Pullens

Director of Investor Relations +31 20 2011083 / +31 6 51599483 Ask me a question