Arcadis Trading Update Q1 2024: Continued client demand driving
strong pipeline while delivering significant margin expansion
Arcadis First Quarter 2024 Trading
UpdateContinued client demand driving strong
pipeline while delivering significant margin expansion
- Significant multi-year project wins resulted in an order intake
of €1,129 million, organically up by 6.0%, with investment programs
increasingly contributing
- Record backlog net revenues at €3,316 million
- Net revenues of €968 million, organically up by 4.4% despite
1.2 fewer working days
- Operating EBITA margin increased to 10.7% (Q1 ‘23: 9.8%)
Amsterdam, 30 April 2024
– Arcadis, the world’s leading company delivering
data-driven sustainable design, engineering, and consultancy
solutions for natural and built assets, secured significant
multi-year project wins and delivers continued profitable growth in
the first quarter of 2024; with Net Revenues of
€968 million and an improved operating
EBITA of 10.7% (Q1‘23: 9.8%).
Alan Brookes, CEO Arcadis, said: “Arcadis
delivered another strong quarter with significant multi-year
project wins and continued margin expansion. Client demand was
particularly strong in environmental remediation, energy
transition, rail and highways, with projects funded by large
investment programs increasingly contributing to our backlog and
securing revenues for years to come. The need for our complementary
and integrated set of sustainable and digitally enabled services
continues to drive increased levels of business collaboration. Our
long-standing relationships, global expertise and complementary
services allow us to enhance our leading market positions. I am
convinced that with the talent and expertise within the
organization, we are well positioned to seize the market momentum
and deliver profitable growth.”
KEY FIGURES
in €
millions |
First Quarter |
Period ended 31 March 2024 |
2024 |
2023 |
change |
Net revenues |
968 |
940 |
3% |
Organic growth (%)1) |
4.4% |
12.3% |
|
Operating EBITDA2) |
131 |
120 |
8% |
Operating EBITDA margin (%) |
13.5% |
12.8% |
|
EBITA |
97 |
87 |
11% |
EBITA margin (%) |
10.0% |
9.2% |
|
Operating EBITA2) |
104 |
92 |
12% |
Operating EBITA margin (%) |
10.7% |
9.8% |
|
Net Working Capital (%)3) |
11.6% |
12.1% |
|
Days Sales Outstanding (days)3) |
64 |
67 |
|
Free Cash Flow4) |
-97 |
-108 |
|
Net Debt |
963 |
1,072 |
-10% |
Order intake |
1,129 |
1,062 |
6% |
Organic order intake (%)1) |
6.0% |
10.5% |
|
Book-to-Bill5) |
1.17 |
1.13 |
3% |
Backlog net revenues |
3,316 |
3,192 |
4% |
Backlog organic growth (%, qtd)1) |
4.8% |
3.9% |
|
Backlog organic growth (%, yoy)1) |
4.9% |
4.3% |
|
INCOME STATEMENTNet revenues totaled €968 million and increased
organically by 4.4%, despite 1.2 fewer working days in the quarter
compared to last year. Growth was solid in most markets while North
American growth was outstanding. We saw continued strong momentum
in Resilience, Mobility and Intelligence, while project choices at
Places during 2023 resulted in lower growth for this quarter. The
operating EBITA margin improved to 10.7% (Q1‘23: 9.8%) driven by
operating leverage, cost synergies, and the Middle East
winddown.
ORDER INTAKE & BACKLOGOrder intake was strong in the
quarter, growing organically by 6.0% to €1,129 million, resulting
in a strong book-to-bill of 1.17x, and a record backlog of €3,316
million (Q1‘23: €3,192 million). The strong order intake reflected
continued solid client demand for Resilience and Mobility
solutions, offsetting lower intake at Places due to project
selectivity. We continue to see ample opportunities in our project
pipeline or “soft” backlog, while we enhance the positions in our
high-growth end markets and seize the opportunities from
stimulus-driven investments.
BALANCE SHEET & CASH FLOWNet working capital as a percentage
of annualized gross revenues improved to 11.6% (Q1‘23:
12.1%) and Days Sales Outstanding (DSO) was 64 days (Q1‘23:
67 days1)). As a result of disciplined working capital
management, free cash flow in the quarter was €-97 million
(Q1‘23: €-108 million), in line with seasonal trends, despite
the first interest payment of €24 million on our Eurobond issued
February 2023.
PERFORMANCE BY GLOBAL BUSINESS AREAS
RESILIENCE
(37% of net
revenues) |
|
|
|
in € millions |
First Quarter |
Period ended 31 March 2024 |
2024 |
2023 |
change |
Net revenues |
354 |
332 |
7% |
Organic growth1) |
8.2% |
13.0% |
|
Order intake |
449 |
423 |
6% |
Backlog net revenues |
1,063 |
980 |
8% |
Backlog organic growth (%, qtd)1) |
9.7% |
10.0% |
|
Backlog organic growth (%, yoy)1) |
10.8% |
10.6% |
|
Resilience performed strongly across the board, with continued
solid results in our largest markets, North America and the UK.
Multiple significant wins in Water relating to AMP8 in UK,
Environmental Restoration and Energy Transition have substantially
contributed to the quarter’s order intake and provide revenue
visibility for the remainder of the year.
PLACES
(39% of net
revenues) |
|
|
|
in € millions |
First Quarter |
Period ended 31 March 2024 |
2024 |
2023 |
change |
Net revenues |
374 |
388 |
-3% |
Organic growth (%)1) |
-1.1% |
8.7% |
|
Order intake |
383 |
407 |
-6% |
Backlog net revenues |
1,493 |
1,555 |
-4% |
Backlog organic growth (%, qtd)1) |
0.0% |
1.3% |
|
Backlog organic growth (%, yoy)1) |
-4.0% |
-2.5% |
|
Good revenue growth in North America and Europe was offset by
the effects of strategic refocus on core competencies at Arcadis
DPS and repositioning of China towards project management for
international clients. We saw good order intake in the quarter in
Continental Europe, in particular in data center design for
technology clients and retrofitting of federal client’s assets such
as national hospitals and universities. The pipeline is solid on
the back of tightening regulation and investment programs, such as
the EU Directive on Energy for Buildings and the US Chips Act.
MOBILITY
(22% of net
revenues) |
|
|
|
in € millions |
First Quarter |
Period ended 31 March 2024 |
2024 |
2023 |
change |
Net revenues |
216 |
200 |
8% |
Organic growth1) |
8.2% |
15.3% |
|
Order intake |
273 |
211 |
30% |
Backlog net revenues |
637 |
545 |
17% |
Backlog organic growth (%, qtd)1) |
10.3% |
1.8% |
|
Backlog organic growth (%, yoy)1) |
18.5% |
4.7% |
|
Mobility revenue growth continued to be strong across solutions
with outstanding results for the US. Stellar backlog growth was
driven by large wins in all key markets on the back of large
government investment programs such as Hudson Tunnel Project of the
Gateway Development Commission and California High-speed Rail in
the US, and Ontario’s Pape Tunnel Underground Stations in Canada.
The pipeline remains strong driven by the need for efficient
transportation systems and our sustainable, data-driven offerings.
Global collaboration and the utilization of Global Excellence
Centers (GECs) is positioning Arcadis well to win large
projects. INTELLIGENCE
(2% of net
revenues) |
|
|
|
in € millions |
First Quarter |
Period ended 31 March 2024 |
2024 |
2023 |
change |
Net revenues |
23 |
21 |
8% |
Organic growth1) |
7.2% |
|
|
Order intake |
24 |
21 |
14% |
Backlog net revenues |
123 |
111 |
11% |
Backlog organic growth (%, qtd)1) |
0.3% |
0.0% |
|
Backlog organic growth (%, yoy)1) |
9.4% |
|
|
Good revenue growth was achieved especially in North America.
Backlog growth was driven by order intake from large Key Clients,
such as Ontario Ministry of Department for our Enterprise Decision
Analytics (EDA) solution and Nevada Department of Transportation
for multiple digital solutions including Travel-IQ. We continue to
invest in collaboration with our other businesses, to leverage
existing relationships and deliver a wide range of digital
solutions and services to our clients.
2024-2026 STRATEGY "ACCELERATING A PLANET POSITIVE FUTURE"On 16
November 2023 Arcadis presented its 2024-2026 Strategy
“Accelerating a planet positive future” and its 2026 financial
targets; these include: organic net revenue growth of mid to high
single digits over the cycle, operating EBITA margin of 12.5% in
2026, Net Debt / Operating EBITDA of 1.5-2.5x with an
Investment Grade credit rating and a dividend payout ratio of
30-40% of Net Income from Operations.
1)Underlying growth excl. impact of FX, acquisitions, footprint
reductions, winddowns or divestments2)EBIT(D)A excluding
restructuring, integration, acquisition, and divestment costs3)2023
revised to reflect the adjustments to the provisional opening
balances of acquired entities recognized 31 Dec. 2022 (in
accordance with IFRS 3.49)4)Free Cash Flow: Cash Flow from
Operations adjusted for Capex and Lease liabilities5)Order Intake /
Net Revenue
FINANCIAL CALENDAR
- 8 May 2024 – Annual General Meeting of Shareholders
- 25 July 2024 – Second quarter and half year 2024 results
- 31 October 2024 – Third quarter 2024 trading update
Please visit
https://www.arcadis.com/en/investors/investor-calendar for more
information on the upcoming investor events.
ARCADIS INVESTOR RELATIONSChristine Disch | +31 (0)615376020 |
christine.disch@arcadis.com
ANALSYT WEBCASTToday at 14:00 CEST:
https://www.arcadis.com/en/investors/investor-calendar/2024/trading-update-q1-2024
ABOUT ARCADISArcadis is the world’s leading company delivering
data-driven sustainable design, engineering, and consultancy
solutions for natural and built assets. We are more than 36,000
architects, data analysts, designers, engineers, project planners,
water management and sustainability experts, all driven by our
passion for improving quality of life. As part of our
commitment to accelerating a planet positive future, we work with
our clients to make sustainable project choices, combining digital
and human innovation, and embracing future-focused skills across
the environment, energy and water, buildings, transport, and
infrastructure sectors. We operate in over 30 countries, and in
2023 reported €5.0 billion in gross revenues.
www.arcadis.com REGULATED INFORMATIONThis 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.
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objectives, other plans and objectives of management for future
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related thereto) are forward-looking statements. These statements
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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 Q1 2024 Trading Update Press Release
- Arcadis Q1 2024 Trading Update Presentation
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