Arcadis N.V. : ARCADIS STRONGLY GROWS REVENUE AND PROFIT IN 2012

       Arcadis N.V. : ARCADIS STRONGLY GROWS REVENUE AND PROFIT IN 2012



  *Gross revenues were a record €2.5 billion, up 26% 

  *Net revenues, €1.9 billion, were up 30%; organic growth reaches 4% 

  *Strong growth from Acquisitions, Emerging Markets and Multinational
    Clients 

  *Operational margin improved again, achieving 10% target for year

  *Net income from operations was a record €105.1 million, up 29%

  *Dividend proposal €0.52 per share, an increase of 11% over last year 

  *For 2013 a further increase of revenues and profit expected

ARCADIS (NYSE EURONEXT: ARCAD), a leading international consultancy, design,
engineering and management services company, saw record revenue and profit
growth in 2012. Net income from operations increased 29% to €105.1 million or
on a per share basis €1.49, against €1.23 in 2011. The operational margin at
10.0% (2011: 9.7%) met target driven in part by strong margin performance of
our US business, while cash flow from operations at €158.0 million (2011:
€79.6 million) significantly improved. Our Leadership Balance Growth strategy
targeted growth in emerging markets and in 2012 ARCADIS doubled its business
in those geographies. This was achieved by a combination of acquisitions,
accounting for almost two-thirds of the growth, and strong organic growth. The
strongest overall growth was in the buildings business in property markets in
the UK, Asia and the Middle East, while the strongest organic growth was
achieved in infrastructure in especially South America. In developed markets
in Europe and the US, market conditions remained challenging, mostly affecting
our public sector clients in infrastructure and water business lines, partly
compensated by growth from Multinational Clients in environment, water and
buildings business lines.

It is proposed to the Annual Meeting of Shareholders to offer a dividend in
cash or in shares of €0.52 per share, 11% above the level of last year. This
represents a payout of 35% of net income from operations, in line with our
dividend policy.

Strategically, several important steps were made. Our merger process with EC
Harris was completed during the course of 2012 in an accelerated timeframe
creating significant revenue and cost synergies. In April, our merger with
Langdon & Seah was completed (2800 employees in 10 Asian countries; US$125
million in revenues), providing us with a strong foothold in the fast-growing
Asian market. In July we made a step into Switzerland with the addition of BMG
(50 people; €8 million in revenues), which has excellent client relationships
with a number of global pharmaceutical and chemical firms. In August, we
acquired ETEP in Brazil (300 people; €20 million in revenues), and became the
largest provider of water consulting services in Brazil by a wide margin.

ARCADIS CEO Neil McArthur said: "Our results reflect the success of the design
and implementation of our strategy. Our timely switch to emerging markets and
rebalancing towards private sector and multinational clients while focusing on
performance improvement and organic growth are beginning to pay off. In
emerging markets we have captured strong organic growth in South America and
created strong growth on the back of acquisitions in the Middle East and Asia.
This helped to offset lower organic growth in mature regions such as Europe
and the US, where market conditions remained difficult due to government
austerity and market uncertainties. With EC Harris, Langdon & Seah, BMG and
ETEP we have added companies that offer broad synergy potential, which we have
already partly capitalized on in 2012."

Key figures

Amounts in € millions unless otherwise noted Fourth quarter     Full year
                                              2012  2011   D  2012  2011   D
Gross revenues                                 667   576 16% 2,544 2,017 26%
Organic gross revenue growth                    2%              3%
Net revenues                                   489   402 22% 1,878 1,443 30%
Organic net revenue growth                      4%              4%
EBITA                                         52.4  36.9 42% 166.4 144.4 15%
EBITA recurring ^ 1)                          52.4  41.7 26% 170.6 141.8 20%
EBITA operational^2)                          59.3  40.0 48% 188.8 139.0 36%
Operational EBITA margin                     12.1% 10.0%     10.0%  9.7%
Net income                                    28.0  20.6 36%  89.0  79.5 12%
Ditto per share (in €)                        0.39  0.30 30%  1.26  1.20  6%
Net income from operations ^3)                31.4  26.4 19% 105.1  81.6 29%
Ditto per share (in €) ^3)                    0.44  0.39 14%  1.49  1.23 22%
Average number of shares outstanding          71.3  68.1  5%  70.4  66.5  6%

1.Excluding € 4.2 million acquisition cost Langdon & Seah (Q1 2012), €4.8
    million acquisition cost EC Harris (Q4 2011), €7.4 million gain from
    divestment of AAFM (Q2 2011) 

2.Excluding restructuring & integration costs and impact energy projects
    Brazil

3.Before amortization and non-operational items 

Fourth quarter

In the fourth quarter, gross revenues rose 16% of which 12% came from
acquisitions. Organic growth in the quarter amounted to 2%. The currency
effect was 2%.

Net revenues rose 22%, with the contribution from acquisitions being 16%, and
a currency effect of 2%. Organic growth was 4%, mainly from South America and
the Middle East. The lower organic growth of gross revenue can be explained by
the completion of the Floriade project in the Netherlands, which included
significant subcontracting. In Europe, German and French activities grew, but
were offset by declines elsewhere in the region. Overall the US was flat, but
did see an increase in water revenues as a result of the emergency support
work which followed Hurricane Sandy on the East Coast. EC Harris as well as
multinational clients contributed to organic growth.

Recurring EBITA was €52.4 million, a 26% increase. The currency effect was 2%,
while the contribution from acquisitions was 37% fuelled by profits from EC
Harris and Langdon & Seah. Higher profits from Brazil, Chile, EC Harris,
Belgium and RTKL were insufficient to offset lower results in other European
countries leading to an organic EBITA decline of 13%. This also includes
reorganization- and integration costs of €6.9 million (2011: €2.1 million)
related to the integration of EC Harris. Corrected for these, organic EBITA
declined 1%. 

The operational margin (operational EBITA as a percentage of net revenues)
reached 12.1% (2011: 10.0%). Results in Q4 benefited from lower management
costs at EC Harris due to the benefits from continuing its partnership
structure. The impact on EBITA was a gain of €7 million, of which €5 million
relates to the first three quarters. It is expected that the annual gain in
future years will be around €4 million. At €6.3 million financing charges were
above last year (€5.0 million) due to the investments in acquisitions. The tax
rate came out at 28.2% compared to 31.1% last year. Net income from operations
increased 19% to €31.4 million.

Full year

Gross revenues grew by 26%, reaching more than €2.5 billion, while net
revenues increased by 30% to €1.9 billion. After the merger with EC Harris in
November 2011, another important merger was realized in April 2012 with
Langdon & Seah in Asia. The acquisitions of BMG in Switzerland and ETEP in
Brazil also contributed to the revenue increase from acquisitions and the
overall growth of 26%. Organic gross revenue growth was 3% and for net revenue
4%. The organic growth was driven mainly by growth in South America, where in
addition to continued demand from the private sector, public sector work is
also increasing. In developed markets in Europe, revenues declined due to
challenging market conditions for public sector clients. Nevertheless, France
and Germany realized revenue growth on the back of a strong performance in
respectively rail work and environmental consulting. US revenues were 1%
higher with growth for private sector clients at strong margins, being partly
offset by environmental and water services to public sector clients.

On a recurring basis, EBITA increased 20% to € 170.6 million (2011: €141.8
million). The currency effect was 6%, while acquisitions contributed on
balance 16%. Organically EBITA declined 2%. EBITA was impacted by
organizational adjustments due to reduced market demand, and integration of
activities due to recent mergers. This resulted in €18.2 million of costs for
reorganization and integration (2011: €12.7 million). Excluding these costs,
operational EBITA was €188.8 million (2011: €139.0 million), an increase of
36%.

The margin (recurring EBITA as % of net revenue) was 9.1% (2011: 9.8%).
Excluding reorganization and integration costs, the underlying operational
margin was 10.0%. This compares to 9.7% in 2011 and reflects the business
shift to more profitable emerging markets.

Financing charges were lower than last year at €21.8 million (2011: €23.4
million). On balance they were €2.4 million higher as last year's amount
included €3.9 million one-off costs for the refinancing of loans. This
increase was mainly caused by investments in acquisitions and somewhat higher
interest rates on the debt that was refinanced in 2011. The effective tax rate
was 28.1%, at the same level as 2011 (28.0%). In 2011 the tax rate was
supported by the favorable impact of the non-taxable profit related to the
divestment of AAFM. In 2012 the change in geographical spread, as well as the
positive impact of taxes related to share based payments supported a lower tax
rate.

Net income from operations was €105.1 million or €1.49 per share (2011: €81.6
million or €1.23 per share). The increase in net income from operations of 29%
was higher than in recurring EBITA (+20%) due to a lower effective tax rate
and lower minority interests following the acquisition of Arcadis Logos.

Cash flow, investments and balance sheet

At €158.0 million (2011: €79.6 million) net cash from operating activities was
much stronger. The improvement stems from lower financing costs and tax
charges paid, as well as an improvement in working capital from 15.1% in 2011
to 14.9% in 2012. Free cash flow, after regular investments in ongoing
businesses, was €124.0 million (2011: €44.9 million).

Balance sheet total rose to €1,771 million (2012: €1,559 million), mainly
resulting from acquisitions and exchange rate differences. Net debt (cash and
cash equivalents minus interest-bearing debt) rose to €282 million (2011: €268
million). Balance sheet ratios remained strong at year-end 2012. Average net
debt to EBITDA (calculated according to bank covenants was 1.5 (2011: 1.4),
while the interest coverage ratio was 8 (2011: 7).

Developments per business line

Figures noted below concern gross revenues for the full year 2012, compared to
the same period last year, unless otherwise mentioned. Operational margin is
based on recurring EBITA, excluding restructuring & integration charges and
the impact from energy projects in Brazil.

  *Infrastructure (26% of revenues) 

Gross revenues grew by 18%, of which the contribution from acquisitions was
10%. Organic gross revenues increased by 9% and net revenues by 16%, the
difference explained by reduced subcontracting in Brazil. Our strategy to grow
in emerging markets paid off, with strong organic growth in Brazil and Chile
from ongoing work in energy and mining, and new public infrastructure
projects. This offset declines in most European countries. Our operational
margin declined to 8.1% (2011: 9.2%) due to lower margins in continental
Europe, which were in part compensated by improvements in EC Harris.

  *Water (15% of revenues)

Gross revenues increased by 16%. The contribution of acquisitions (EC Harris,
ETEP) was 6%. The currency effect was 6%. Organically, gross revenues were
flat, while net revenues declined 2%. The difference can be explained by
higher subcontracting in the US. Compared to last year, the US market is
stabilizing, supported by industrial water projects and new opportunities for
local municipalities. Organic growth was strong in Chile and Brazil. The
Middle East, UK and the Netherlands also generated growth in water treatment.
The water management market saw lack of public funding although in the fourth
quarter, ARCADIS became involved in emergency water projects triggered by
Hurricane Sandy. The operational margin was 9.3% (2011: 9.4%).

  *Environment (33% of revenues)

Gross revenues grew 11% of which 4% from organic growth and 7% as a result of
currency effects. Net revenues increased organically by 2%. The year started
off strong with growth in private sector environmental work in the US, and
South America, offsetting declines in US government markets. As economic
uncertainty prevailed during the year, clients slowed investments in
environmental issues and private sector growth decelerated. Oil and gas
clients, our biggest client sector in environment, continued to contribute to
growth. As a result of strong cost management, the operational margin improved
to 12.6% (2011: 12.2%).

  *Buildings (26% of revenues)

Overall gross revenue growth was 78% and for net revenue 82%. Two strategic
mergers contributed to the very strong growth. EC Harris and Langdon & Seah
each grew their revenues, in part as a result of synergies. - Total synergy
bookings were approximately €70 million during the year. EC Harris improved
its margin through the year, delivering more than 9% EBITA for the year,
putting us on track to achieve the 10% margin target already by 2013, one year
ahead of plan. Langdon & Seah retained its high margin at well above average
levels. In Europe and the US, revenues were under pressure, with the notable
exception of London, where demand for high-end residential property increased.
RTKL had a strong performance in the Middle East and Asia. Organically, gross
revenues declined by 5%, the currency impact was 5% and net revenue declined
organically by 4%. The contribution from performance improvement and
successful acquisitions helped to increase the operational margin to 9.9%
(2011: 7.0%).

Outlook

In the Infrastructure market, our involvement in many multi-year large
projects, and our strong position in Brazil and Chile provide a good basis for
continued growth. Although mining clients pace their investments in these
countries, public sector work is on the rise. Government budget cuts in
continental Europe are likely to also impact investments in large projects,
which may affect our growth. Projects using alternative financing and delivery
concepts, like PPP, and increased government outsourcing provide opportunities
to combat this.

In the water market tight government budgets are causing revenue pressure,
although in some markets, such as the US, we are able to offset this with
private sector work and projects for network improvements. Flood protection
work, such as related to Hurricane Sandy may offer additional opportunities.
In addition, we target further expansion in selected markets in Europe and are
capitalizing on opportunities in the Middle East. In South America, especially
in Brazil and Chile, recent investments in water companies have considerably
strengthened our position and create new avenues for growth.

The environmental market is growing slightly, driven by the private sector. In
the US, we benefit from the trend that private sector firms outsource non-core
activities, but we still face challenging public sector conditions. Our
advanced technology allows us to bring contaminated sites to closure quicker
and at lower cost. We believe that we are gaining market share, especially in
complex projects and portfolios of sites and our Guaranteed Outcomes offering
should help us maintain a strong position in these markets. Mining, energy
and manufacturing projects drive demand for environmental services in Brazil
and Chile. In Europe, demand from the private sector is picking up,
compensating for a decline in government work.

In the buildings market, we now have a strong position with excellent
opportunities for synergies and global growth. The commercial real estate
market in Europe is in decline while the US market is starting to recover. In
London, Asia and the Middle East we have a strong position where we see
significant growth potential. We are well positioned to help our clients with
large investment programs and provide built asset consultancy to maximize
value throughout an asset's lifecycle.

Europe

ARCADIS announced the introduction of a new pan-European operating model that
is directed at better serving our multinational, large national and local
clients, by leveraging our best practices and capabilities. The model combines
client proximity at the country level with a pan-European leadership team and
shared services in support functions. These initiatives are expected to
generate annual cost savings of €25 million, which should bring Continental
Europe to an EBITA margin of 10% by the fourth quarter of 2014 (compared with
5% in 2012). Total restructuring charges in 2013/2014 are expected to be
approximately €20 million.

CEO Neil McArthur concluded: "We have excellent potential for continued
synergies with newly acquired companies and stronger positions in key growth
markets. Our backlog developed in line with revenue growth and is steady at 11
months of revenue. We expect continued growth in infrastructure and buildings,
a stable market in environment, and a further recovery in water. Maintaining,
and where possible, improving our margin is an important priority. We have
developed a clear path for margin improvement in Europe, which should help us
achieve overall target levels, also in 2013. Further strengthening our
position through acquisitions remains on the agenda. For full year 2013 we
expect a further increase of revenues and profit. This is barring unforeseen
circumstances."

For more information, please contact Joost Slooten of ARCADIS at +31-202011083
or outside office hours at +31-627061880 or e-mail joost.slooten@arcadis.com.

About ARCADIS:
ARCADIS is an international company providing consultancy, design, engineering
and management services in infrastructure, water, environment and buildings.
We 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 22,000
employees and more than EUR 2.5 billion in revenues, the company has an
extensive global network supported by strong local market positions. ARCADIS
supports UN-HABITAT with knowledge and expertise to improve the quality of
life in rapidly growing cities around the world. Visit us at: www.arcadis.com

This press release has been drafted in the period between the preparation and
adoption of the annual accounts of ARCADIS NV. The figures in this press
release for the full year 2012 have been derived from the annual accounts of
ARCADIS NV which are not yet public at the moment this press release is
issued. These annual accounts were audited and the auditor has issued an
unqualified report. The annual accounts have not yet been adopted by the
General Meeting of Shareholders. The figures related to the fourth quarter
2012 in this press release are unaudited.



This press release contains forward looking statements, which are predictions
only and not guarantees. The forward looking statements are based upon our
current expectations, plans, estimates, assumptions and beliefs that involve
risks and uncertainties. Assumptions relating to the foregoing involve
judgments on matters and circumstances 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.

            - - - Tables are included in the pdf attachment - - -

Click here for pdf of press release including tables

------------------------------------------------------------------------------

This announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of
the
information contained therein.

Source: Arcadis N.V. via Thomson Reuters ONE
HUG#1681322