First half year results 2019 Organic growth, continued solid results and sustained cash flow improvement Peter Oosterveer CEO Sarah Kuijlaars CFO Amsterdam, 25 July 2019
FIRST HALF YEAR RESULTS 2019 Disclaimer Statements included in this presentation The forward-looking statements are based that are not historical facts (including any upon our current expectations, plans, statements concerning investment estimates, assumptions and beliefs that objectives, other plans and objectives of involve numerous risks and uncertainties. management for future operations or Assumptions relating to the foregoing economic performance, or assumptions or involve judgments with respect to, among forecasts related there to) are forward- other things, future economic, competitive looking statements. These statements are and market conditions and future business only predictions and are not guarantees. decisions, all of which are difficult or Actual events or the results of our impossible to predict accurately and many operations could differ materially from of which are beyond our control. Although those expressed or implied in the forward we believe that the expectations reflected looking statements. Forward-looking in such forward-looking statements are statements are typically identified by the based on reasonable assumptions, our use of terms such as “may,” “will”, “should”, actual results and performance could differ “expect”, “could”, “intend”, “plan”, materially from those set forth in the “anticipate”, “estimate”, “believe”, forward-looking statements. “continue”, “predict”, “potential” or the negative of such terms and other comparable terminology. 25 July 2019 2
CITY OF LOS ANGELES| U.S.A. Improving stormwater quality and creating recreational space in Los Angeles Peter Oosterveer CEO
FIRST HALF YEAR RESULTS 2019 Another solid quarter ▪ Continued solid results led by strong performance in North America ▪ Europe & Middle East: strong performance Netherlands, one less working day, lower results France ▪ Measures to improve results in Asia, Middle East and Latin America start to yield results ▪ Continued investments in people and digital offerings to capitalize on opportunities in: ▪ Sustainable cities & smart mobility ▪ Future proof industries ▪ Environmental consultancy ▪ Water management ▪ Strategic priorities clear - on track to deliver on 2020 targets
FIRST HALF YEAR RESULTS 2019 Improvement on all key financial metrics ▪ Organic net revenue growth of 2% ▪ Operating EBITA margin improved to 7.6% (7.2%*) ▪ EBITDA up 12% to €112 million (€100 million*) ▪ NWC% improved to 16.2% (18.8%*) ▪ Sustained free cash flow improvement leading to a leverage ratio of 1.6 (2.2*) ▪ Organic backlog growth at 3% year-to-date * Half year 2018 figures. 2019 and 2018 figures based on IAS 17
FIRST HALF YEAR RESULTS 2019 Non-core clean energy assets Brazil (ALEN) Divestment process Operational performance Divestment ▪ Information memorandum ▪ Gas Verde (gas-to-gas process led by prepared and shared with plant) certified and potential buyers operational, 70% of volume Itaú Bank contracted with NEOgas ▪ Intention to divest assets in and Ternium 2019 ▪ Gas deliveries initiated, further increase in coming Financial update months ▪ Successful refinancing by ALEN of €50 million bank Gas-to-power plants loans ▪ Nova Iguaçu plant ▪ Loss for Arcadis in Q2 of completed and operational €2 million at maximum capacity ▪ Operational result expected to ▪ São Gonçalo plant being be break-even towards the assembled, completion end of the year scheduled for Q4 2019 25 July 2019 6
UKGOVERNMENT Creating a simulation environment, including A.I. models, to test autonomous vehicles Sarah Kuijlaars CFO
FIRST HALF YEAR RESULTS 2019 Improved metrics ▪ Organic net revenues growth Half year Second quarter in € millions * 2019 2018 change 2019 2018 change driven by North America Gross revenues 1,707 1,586 8% 878 819 7% ▪ Impact of one less working day Net revenues 1,275 1,220 5% 647 621 4% Organic growth % 2% 2% ▪ Financing charges flat at €14 EBITDA 112 100 12% 56 53 5% million EBITDA margin % 8.8% 8.2% 8.7% 8.5% Operating EBITA 97 88 10% 49 45 10% ▪ Tax rate at 35%; expected full year Organic grow th % 5% 6% tax rate ~29% Operating EBITA margin % 7.6% 7.2% 7.6% 7.2% Net income 38 35 9% ▪ Credit loss on ALEN at €5 million Net income from operations 49 44 10% (H1 2019) NIfO per share 0.55 0.51 8% Backlog net revenues (bn) 2.1 2.1 Backlog organic growth % (YtD) 3% *Figures are based on IAS 17. Interim financial statements are based on IFRS 16. 25 July 2019 8
FIRST HALF YEAR RESULTS 2019 Sustained improvement Net Revenues and organic growth Days Sales Outstanding € millions, % Days 4% 4% 3% 2% 2% 2% 700 100 680 95 660 640 90 620 600 85 580 560 80 540 75 599 621 613 607 628 647 520 94 91 89 80 86 82 500 -20% 70 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Operating EBITA (margin) Net Working Capital (%) € millions, % € millions, % 60 19.5% 18.8% 7.6% 7.5% 18.1% 620 55 7.4% 17.4% 7.2% 7.2% 7.2% 600 16.2% 50 580 15.1% 45 560 540 40 520 35 43 45 45 44 47 49 500 597 615 585 521 576 569 30 06% 480 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 25 July 2019 9
FIRST HALF YEAR RESULTS 2019 Strong cash flow generation ▪ Strong cash flow second quarter 2019 of €60 million in € millions 2019 2018 (Q2 2018: €54 million) EBITDA 112 100 ▪ Seasonal pattern in net working capital development Changes in net working capital -45 -61 Changes in other working capital -8 15 ▪ Lower capex Tax paid -20 -21 Net interest paid -13 -11 Other 2 -3 Cash flow from operations 28 19 Capital expenditures -20 -25 Free cash flow 8 -6 25 July 2019 10
FIRST HALF YEAR RESULTS 2019 Continued strengthening of the balance sheet Free cash flow EBITDA (%) € millions € millions, % 8.8% 160 120 8.5% 8.5% 140 115 8.2% 149 09% 120 110 7.9% 100 112 105 08% 80 98 100 104 60 08% 95 100 100 100 40 90 8 20 07% 85 0 80 07% -28 -6 -20 75 -40 70 06% H1'17 FY'17 H1'18 FY'18 H1'19 H1'17 H2 '17 H1'18 H2'18 H1'19 Net debt Average net debt / EBITDA € millions Calculated using bank covenant methology 3,00 500 514 2,500 2.5 450 468 2,00 2.3 2.2 2.0 400 1,500 416 1.6 1,00 378 350 ,500 342 300 ,00 H1'17 FY'17 H1'18 FY'18 H1'19 H1'17 FY'17 H1'18 FY'18 H1'19 25 July 2019 11
FIRST HALF YEAR RESULTS 2019 Americas - stronger across all metrics Half year Second quarter LOS ANGELES | U.S.A. Getting L.A. 33% of net revenues 2019 2018 change 2019 2018 change Metro ready for Gross revenues 679 551 23% 360 288 25% the 2028 Net revenues 426 365 17% 222 189 18% Summer Organic growth % 10% 11% Olympics EBITA 35 26 36% Operating EBITA 37 28 32% Operating EBITA margin % 8.7% 7.7% Backlog organic growth % (YtD) 6% DSO 76 88 ▪ Strong results in environmental consultancy, and continued solid results in Water and Infrastructure ▪ Operating EBITA in Latin America improved by €2 million ▪ Organic Backlog growth at 6%, year-on-year at 13%, strong pipeline 25 July 2019 12
FIRST HALF YEAR RESULTS 2019 Europe & Middle East - strong performance in the Netherlands RIJKSWATERSTAAT | Half year Second quarter THE NETHERLANDS 45% of net revenues 2019 2018 change 2019 2018 change Widening of the Gross revenues 692 708 -2% 345 360 -4% T wente Net revenues 574 586 -2% 283 294 -4% channels Organic growth % -2% -2% EBITA 35 34 5% Operating EBITA 38 39 -3% Operating EBITA margin % 6.6% 6.7% Backlog organic growth % (YtD) 4% DSO 85 95 ▪ Results impacted by one less working day, and lower results in France ▪ Strong performance Netherlands, lingering Brexit impacting timing of infrastructure spending ▪ Middle East: margin improved and lower DSO as a result of sustained discipline on cash collection 25 July 2019 13
FIRST HALF YEAR RESULTS 2019 Asia Pacific - improvement in Asia and strong margins Australia HONG KONG Half year Second quarter Consulting at the 13% of net revenues 2019 2018 change 2019 2018 change world's longest Gross revenues 188 186 1% 98 98 -1% sea crossing Net revenues 165 164 1% 86 84 2% Organic growth % -1% 0% EBITA 11 12 -8% Operating EBITA 12 11 12% Operating EBITA margin % 7.6% 6.8% Backlog organic growth % (YtD) 1% DSO 97 93 ▪ Organic net revenue growth Australia impacted by timing of large projects’ ramp -up ▪ Measures Asia resulted in greater selectivity, increased business transparency and improved margin Q2 2019 ▪ Share purchase agreement signed for sale of Design & Engineering activities in mainland China 25 July 2019 14
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