ARNHEM, The Netherlands, November 12 /PRNewswire-FirstCall/ -- - Gross Revenues 5% Higher in the Third Quarter - Organic Growth Remains at Level, Despite Slowing Growth in U.K. and U.S - EBITA Rises 8%, High Margin Maintained - Net Income From Operations Stable, Despite a -5% Currency Effect and Higher Financing Charges - In First Nine Months, Revenues 15% Higher and net Income From Operations 11% Higher - Expected Increase in net Income From Operations for Full Year 2008: About 10% ARCADIS (EURONEXT: ARCAD), the international consulting, design, engineering and management services company, announced today that in the third quarter of 2008 it generated growing revenues and maintained profitability at a strong level. Gross revenues amounted to EUR 427 million, an increase of 5% of which 3% was organic. Net revenues (revenues produced by ARCADIS employees) grew 8% organically. EBITA rose 8% to EUR 30.3 million. Net income from operations at EUR 16.3 million remained at the same level as last year, despite negative exchange rate effects and increased financing charges. The decline of the U.S. dollar and British pound had a negative effect on revenues and results of 5%. In the first nine months gross revenues grew 15%. Gross and net revenues both increased organically by 7%. All business lines contributed to the increase. EBITA increased by 17%, net income from operations by 11%. This resulted from growth in services, a good contribution from acquisitions and a slight margin improvement to 10.3% from 10.1% last year. The currency effect was 6% negative. Early in the third quarter, the Italian environmental consultancy SET (revenues EUR 9 million, 35 employees) was acquired. With this step the services for our (multinational) clients and those of SET can be expanded. Early in August, Copijn (gross revenue EUR 6 million, 60 employees) which is a designer and contractor of landscaping projects in the Netherlands, was divested because it no longer represented a core activity. CEO Harrie Noy about the results: "To date, the influence of the credit crisis for ARCADIS has been limited. In the English real estate market there is pressure on our services, while in the U.S. environmental market the growth rate is slowing, partly as a result of the completion of a number of large projects with a significant amount of subcontracted services. Nevertheless the organic growth of our own activities remained high at 8%, while the margin was maintained. By focussing early on cost controls and intensifying marketing efforts in areas that offer good opportunity, we have anticipated market changes. The strong commitment of our employees and internal cooperation aimed at synergy helps us capitalize on market opportunities." Key figures Amounts in EUR millions, unless otherwise noted Third First nine quarter months 2008 2007 variation 2008 2007 variation Gross revenues 427 408 5% 1.255 1.088 15% EBITA 30.3 28.0 8% 87.2 74.4 17% - Net income 11.4 12.3 -7% 40.0 37.1 8% Ditto, per share (in EUR) 0.19 0.20 -6% 0.66 0.61 9% Net income from operations(1) 16.3 16.3 0% 47.8 43.1 11% Ditto, per share (in EUR)(1) 0.27 0.27 0% 0.79 0.71 12% Shares outstanding 60.6 61.1 60.5 61.2 (in millions) (1) Before amortization and non-operational items Analysis Third quarter Excluding currency effect gross revenues increased 10%. Acquisitions contributed 7%, mainly the acquisition of U.S.-based LFR earlier this year. Organically, gross revenues increased 3%. Net revenues rose 9%, excluding currency effect by 14%. Of this 6% was the result of acquisitions. At 8% the organic growth in net revenues was considerably higher than for gross revenues. This was caused by less subcontracting, particularly in the environmental market, where a shift in the project mix took place. Organic growth mainly came from Brazil and Chile, while Central Europe, Belgium and Germany also contributed well. As a result of the worsened English real estate market, project management in that country saw an organic decline. Compared to the first half year, organic growth of gross revenues in the Netherlands and the United States weakened somewhat, although the organic growth in net revenues remained solid. EBITA rose 8%; excluding currency effect by 13%. The contribution from acquisitions of 3% was negatively affected by write-downs of acquisition costs. The organic increase was 10%. This includes a contribution from the sale of carbon credits in Brazil of EUR 1.0 million, compared to EUR 0.6 million last year. The margin (EBITA as a percentage of net revenues) was with 10.7% at the same level as last year. Excluding the effects of derivatives to hedge interest and currency risks, financing charges rose to EUR 5.4 million (2007: EUR 2.6 million). This increase is the result of investments in acquisitions, slightly higher interest rates and exchange rate differences on loans in Brazil. Net income from operations equalled last year at EUR 16.3 million. The reason this lags behind EBITA growth is only the result of higher financing charges. First nine months Gross revenues rose 15%, excluding currency by 21%. Acquisitions contributed 14%, while organic growth was 7%. The growth figures for net revenues are almost equal to those for gross revenues. EBITA increased 17%, excluding currency impact by 23%. Acquisitions contributed 15%, organic growth was 8%. The contribution from carbon credits was almost equal with last year. The margin improved to 10.3% compared to 10.1% in 2007. Net income from operations rose 11%. This is less than the increase in EBITA as a result of higher financing charges. Excluding the effects of derivatives to hedge interest rate and currency risks, financing charges rose to EUR 12.2 million (2007: EUR 5.2 million). Developments per business line Figures noted below concern gross revenues for the first nine months of 2008 compared to the same period last year, unless otherwise noted. - Infrastructure Gross revenues increased 3%. Acquisitions and divestments on balance contributed zero. The currency effect was minus 2%. Organic growth of 5% was negatively impacted by earlier declines in land development in the United States. Excluding this effect, organic growth was 7%. In Europe especially the Netherlands, Poland and the Czech Republic contributed, while in Brazil and Chile activities also grew strongly. In the quarter, the pace of growth in the U.S. water market increased mainly through work under the Corps of Engineers New Orleans contract, while in the U.K., a shift of project management to infrastructure projects generated growth. - Environment Gross revenues increased 15%. The currency effect was minus 10%, the contribution from acquisitions (LFR and Vectra) 16%, and organic growth 9%. In the quarter, growth slowed in the United States, where a number of companies experienced difficulties because of the worsened economy. Combined with the completion of some large projects with considerable amounts of subcontracting, this resulted in a slight organic decrease of gross revenues. Net revenues, however, did grow organically. This year, already $55 million in new GRiP(R) work was won. In most of Europe and in Brazil, organic growth remained solid. - Buildings Gross revenues increased 39%, of which 38% through the acquisitions of RTKL and APS mid 2007. The currency effect was 5% negative. Organic growth of 6% came from the expansion of management services in almost all European countries, while RTKL also contributed well as a result of growth from non-commercial projects and the international market. In England gross revenues decreased as a result of a decline in the commercial real estate market. This was partly offset by shifting capacity to infrastructure and expansion of activities in the Middle East. In the Netherlands a five year facility management contract was signed with Van Lanschot Bankiers, the first with a bank. Outlook The extent to which the worsening economy will impact ARCADIS' markets is uncertain. The infrastructure market is relatively stable. It is expected that governments in both Europe and the United States will speed up infrastructure investments to stimulate the economy. Climate change has sparked interest in water management, as exemplified by the new Dutch Deltaplan. In the United States the contract for New Orleans which has so far this year generated more than $60 million in task orders, is a solid basis in the growing water market. In Brazil, ARCADIS Logos is developing a portfolio of small energy projects, of which we expect to sell two in the fourth quarter. In the environmental market, sustainability and regulation provide a healthy foundation. In market development, we are focussing on sectors with continued high demand such as oil and gas companies and utilities. Demand for cost effective solutions on the basis of our advanced technology, as well as vendor reduction and the outsourcing of environmental work by companies can increase market share. Interest in GRiP(R) is on the rise, not only with the U.S. Army, but also with private sector clients in the U.S. and in Europe. It is expected that environment and climate change will be put higher on the political agenda in United States. In the buildings market, the credit crisis causes delays and postponements of commercial real estate projects especially in England and the United States. RTKL has successfully focussed on American projects outside of the commercial segment and on international projects. Project management can be utilized in the infrastructure market, but also in Middle East. The new facility management contracts provide a solid basis for further growth in this service type. CEO Noy concludes: "Although the economy is rapidly deteriorating, themes like sustainability, climate change, urban renewal, mobility and energy offer ample opportunities. With our strong local presence, long-term client relationships and in depth know-how, we are well positioned to benefit from these developments. Our backlog is strong and our sales efforts have been intensified. Maintaining our margin by controlling costs and focusing on higher value added activities has priority. We continue to look for acquisitions albeit with prudence. Barring unforeseen circumstances, we expect for 2008 an increase of net income from operations of about 10%." ARCADIS is an international company providing consultancy, design, engineering and management services in the field of infrastructure, environment and buildings. We aim to enhance mobility, sustainability and quality of life by creating balance in the built and natural environment. ARCADIS develops, designs, implements, maintains and operates projects for companies and governments. With more than13,500 employees and more than EUR 1.5 billion in gross revenue, the company has an extensive international network that is supported by strong local market positions. - - Tables follow - - - ARCADIS NV CONSOLIDATED STATEMENT OF INCOME Amounts in EUR millions, Third quarter First nine months unless otherwise stated 2008 2007 2008 2007 Gross revenue 427.2 407.8 1,254.5 1,087.9 Materials, services of third parties and subcontractors (143.4) (147.6) (404.9) (354.4) Net revenue 283.8 260.2 849.6 733.5 Operational cost (249.3) (227.0) (747.3) (645.2) Depreciation (5.6) (5.2) (17.0) (13.9) Other income 1.4 - 1.9 - EBITA 30.3 28.0 87.2 74.4 Amortization identifiable intangible assets (2.6) (4.5) (8.2) (8.0) Operating income 27.7 23.5 79.0 66.4 Net finance expense (9.5) (4.1) (14.9) (6.3) Income from associates - 0.1 0.1 (0.6) Profit before taxes 18.2 19.5 64.2 59.5 Income taxes (5.9) (6.2) (21.3) (19.6) Profit for the period 12.3 13.3 42.9 39.9 Attributable to: Net income (Equity holders of the Company) 11.4 12.3 40.0 37.1 Minority interest 0.9 1.0 2.9 2.8 Net income 11.4 12.3 40.0 37.1 Amortization identifiable intangible assets after taxes 1.8 2.9 5.6 5.2 Option costs UK share save scheme 0.1 - 0.2 - Net effects of financial instruments 3.0 1.1 2.0 0.8 Net income from operations 16.3 16.3 47.8 43.1 Net income per share (in euros)(1) 0.19 0.20 0.66 0.61 Net income from operations per share (in euros)(1) 0.27 0.27 0.79 0.71 Weighted average number of shares (in thousands)(1) 60,613 61,125 60,501 61,170 (1)The comparison figures have been adjusted to reflect the 3:1 stock split as effectuated in the 2nd quarter. ARCADIS NV CONDENSED CONSOLIDATED BALANCE SHEET Amounts in EUR millions September 30, 2008 December 31, 2007 Assets Non-current assets 371.0 332.9 Current assets 690.4 588.8 Total 1,061.4 921.7 Equity and Liabilities Shareholders' equity 211.6 187.7 Minority interest 12.2 11.5 Total equity 223.8 199.2 Non-current liabilities 310.5 216.7 Current liabilities 527.1 505.8 Total 1,061.4 921.7 ARCADIS NV CHANGES IN SHAREHOLDERS' EQUITY Cumu- lative Total Amounts in trans- share- EUR millions Share Share lation Retained holders' Minority Total capital premium reserve earnings equity interest equity Balance at December 31, 2006 1.0 44.2 (7.6) 151.3 188.9 11.8 200.7 Exchange rate differences (12.7) (12.7) 0.6 (12.1) Taxes related to share-based compensation 2.2 2.2 2.2 Income directly recognized in equity (12.7) 2.2 (10.5) 0.6 (9.9) Profit for the period 37.1 37.1 2.8 39.9 Total income / (expenses) for the period (12.7) 39.3 26.6 3.4 30.0 Dividends to shareholders (20.4) (20.4) (1.2) (21.6) Own shares purchased for granted options (9.9) (9.9) (9.9) Share-based compensation 2.5 2.5 2.5 Options exercised 1.8 1.8 1.8 Expansion ownership (1.7) (1.7) Balance at September 30, 2007 1.0 44.2 (20.3) 164.6 189.5 12.3 201.8 Balance at December 31, 2007 1.0 44.2 (29.8) 172.3 187.7 11.5 199.2 Exchange rate differences 7.2 7.2 (0.4) 6.8 Taxes related to share-based compensation 0.2 0.2 0.2 Income directly recognized in equity 7.2 0.2 7.4 (0.4) 7.0 Profit for the period 40.0 40.0 2.9 42.9 Total income / (expenses) for the period 7.2 40.2 47.4 2.5 49.9 Dividends to shareholders (24.8) (24.8) (1.2) (26.0) Stock split 0.2 (0.2) - - Own shares purchased for granted options (4.5) (4.5) (4.5) Share-based compensation 4.6 4.6 4.6 Options exercised 1.2 1.2 1.2 Expansion ownership (0.6) (0.6) Balance at September 30, 2008 1.2 44.0 (22.6) 189.0 211.6 12.2 223.8 ARCADIS NV CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS First nine months 2008 2007 Net income 40.0 37.1 Depreciation and amortization 25.3 21.9 Gross cash flow 65.3 59.0 Net working capital (88.3) (36.2) Other changes 6.2 2.2 Net cash provided/(used) by operating activities (16.8) 25.0 Investments/divestments (net) in: (In)tangible fixed assets (18.3) (6.6) Acquisitions/divestments (54.7) (76.4) Financial assets (2.5) (12.1) Net cash used in investing activities (75.5) (95.1) Net cash provided by financing activities 68.5 38.2 Change in cash and equivalents less bank overdrafts (23.8) (31.9) Exchange rate differences 1.3 (6.0) Cash and cash equivalents less bank overdrafts at January 1 71.7 78.4 Cash and cash equivalents less bank overdrafts at 49.2 40.5 September 30 http://www.arcadis-global.com/ DATASOURCE: ARCADIS NV CONTACT: ARCADIS NV, Nieuwe Stationsstraat 10, P.O. Box 33, 6800 LE Arnhem, The Netherlands, Tel +31-26-3778-292, Fax +31-26-4438-381; For more information, contact: Joost Slooten of ARCADIS NV at +31-26-3778604 outside regular office hours please call +31-6-2706-1880; email:

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