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Second Quarter 2010. Harrie Noy, Chief Executive Officer Renier Vree, Chief Financial Officer August 4, 2010. DISCLAIMER.

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second quarter 2010
Second Quarter 2010

Harrie Noy, Chief Executive Officer

Renier Vree, Chief Financial Officer

August 4, 2010

disclaimer
DISCLAIMER
  • Statements included in this presentation 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.
operationally good second quarter
Operationally good second quarter

Improved profit on back of strong revenue growth

No further organic revenue decline

Infrastructure and Water remain solid

Environment and Buildings are improving

Especially U.S. private environmental market increases

Margin at good level excl. non-recurring items

Integration Malcolm Pirnie on schedule, extensive synergy

For full year 2010 slight profit increase expected

Well positioned to benefit from economic recovery

results second quarter 2010
Results Second Quarter 2010

Renier Vree, Chief Financial Officer

August 4, 2010

slide5

Gross revenue

Net revenue

EBITA

Income1)

Ditto per share1,2)

2009

415

287

28.5

17.1

0.28

_  _

23%

23%

12%

8%

0%

Income Q2 2010 € 18.5 million

2010

512

353

31.8

18.5

0.28

Positive currency effect of 5% from stronger US$, Brazilian real

1) Net income from operations before amortization and non-operational items

2) In 2010 based on 66.1 million shares outstanding (2009: 60.2 million)

slide6

Gross revenue

Net revenue

EBITA

Income1)

Ditto per share1,2)

2009

833

577

56.3

32.6

0.54

_  _

15%

18%

9%

9%

0%

Income H1 2010 € 35.6 million

2010

960

679

61.1

35.6

0.54

Positive currency effect of 2% from stronger US$, Brazilian real

1) Net income from operations before amortization and non-operational items

2) In 2010 based on 66.3 million shares outstanding (2009: 60.2 million)

organic gross revenue development improved
Organic gross revenuedevelopment improved

Currency

effect

0%

-4%

-3%

1%

-1%

5%

ebita recurring h1
EBITARecurringH1

In € million

Increase

51%

31%

23%

-1%

9%

slide9

Modest organic improvement EBITA in Q2-2010

In € million

28.5

5%

14%

-/- 9%

2%

+12%

31.8

  • Q2: better results in U.S., Brazil, RTKL and England, less profit western Europe (including NL) due to price pressure
in h1 ebita organically flat excluding energy project
In H1 EBITA organically flat excluding energy project

In € miljoen

56.3

1%

14%

-/- 8%

1%

+9%

61.1

slide11

Margin stays at good level

Q1

Q2

Q3

Q4

year

2010

9.5%3)

9.7%3)

2008

9.9%

10.2%

10.7%

12.5%2)

10.8%2)

2009

9.6%

9.9%

10.1%1)

11.0%

10.2%1)

  • Reorganization and integration costs:
  • H1 2009: € 5.3 million; H1 2010 € 3.3 million

Margin: recurring EBITA as % of net revenue

1) Recurring EBITA excludes one-off impact share participation program of Lovinklaan

2) Excluding impact sale hydropower plants Brazil

3) Excluding loss on energy project Brazil

slide12

Some financial details

  • As last year limited contribution from carbon credits
  • Contribution from carbon credits expected to increase in fourth quarter
  • Financing charges excluding derivatives:
    • H1-09: € 3.7 million
    • H1-10: € 8.7 million
  • Increase mainly resulted from financing for acquisitions
  • Tax pressure H1 2% lower
  • Income from associates higher (Brazil)
slide13

In € millions

Net income from operations and EPS H1-2010

0.54

0.54

0.52

0.44

0.35

Increase

+3%

+18%

+60%

+26%

+9%

Earnings per share (in €)

In 2010 10% more shares outstanding

balance sheet stays healthy
Balance sheet stays healthy
  • Net debt June 30, 2010 € 273 million (December 31, 2009: € 174 million)
  • Increase debt € 50 million due to currency
  • Net debt/EBITDA: 1.4 calculated conform bank covenants

1) 2008, 2009 and 2010 calculated conform bank covenants

business lines
Business lines
  • INFRASTRUCTURE
  • WATER
  • ENVIRONMENT
  • BUILDINGS
infrastructure h1 2010 0 organic 5 acquisitions 0 currency 5
Infrastructure H1-2010: 0% organic: -5%; acquisitions: 0%; currency: +5%
  • Gross revenue lower after completion projects with substantial subcontracting (Brazil)
  • Organic net revenue growth was 2%
  • Growth from central governments in NL, Belgium, France and Central Europe
  • Pressure in local markets slows growth
  • U.S. declines due to lower state/city budgets
  • Mining Brazil and Chile contributes to growth

Connecting Central Europe

water h1 2010 128 organic 0 acquisitions 125 currency 2
Water H1-2010: +128% organic: 0%; acquisitions: +125%; currency: +2%
  • Gross revenue more than doubled by merger with Malcolm Pirnie
  • Organic net revenue growth was 5%
  • Demand water management grew in all markets
  • Brazil large waste water system contract
  • Pressure in local markets impacts water less
  • Malcolm Pirnie compensates decline in western and southern U.S. with growth in northeast

Water treatment, U.S.

environment h1 2010 13 organic 0 acquisitions 11 currency 2
Environment H1-2010: +13% organic: 0%; acquisitions: +11%; currency: +2%
  • Contribution acquisitions is environmental business Malcolm Pirnie
  • Organic gross revenue decline Q1 turned around in 7% increase in Q2
  • Environmental market U.S. picks up: large remediation contracts with lot of subcontracting
  • Increase in net revenue offset by delays in some European countries
  • Organic net revenue decline 1%
  • Environmental market Brazil also shows improvement

Measuring carbon footprint for the city of Gent in Belgium

buildings h1 2010 9 organic 9 acquisitions 1 currency 0
Buildings H1-2010: -9% organic: -9%; acquisitions: +1%; currency: 0%

Designed and delivered the Shell new Technology Center in Amsterdam

  • Net revenue declined 11%
  • Decline in Q2 less than Q1
  • Commercial property market has stabilized
  • RTKL compensates decline in U.S. and Europe with growth in Asia and Middle East
  • Pressure on activities in Belgium
  • Growth in public projects in U.S. and Germany
outlook
Outlook

Harrie Noy, Chief Executive Officer

August 4, 2010

slide21

Well diversified portfolio

Figures H1-2010

Geographic

Business lines

Provides robustness versus economic cycles

In markets with long term growth potential

infrastructure market stays healthy but growth weakens
InfrastructureMarket stays healthy, but growth weakens
  • In Europe many projects for which financing is committed
  • Investments in Dutch rail and road network
  • In NL financing form natural gas (FES fund)
  • Also large projects Central Europe with European funding
  • Demand for infrastructure drives PPP-initiatives in Europe and the U.S.
  • Brazil: large projects basis for growth and World Cup (2014) and Olympics (2016)
slide24

WaterStrong drivers for growth

  • Climate change and increasing threat of flooding drive water management
  • Demand for clean drinking water and waste water treatment increasing, globally
  • Financing from specific water charges: water is a utility
  • Specialist know how globally applicable
  • Synergy with Malcolm Pirnie offers many chances also internationally (Chile, Brazil, Middle East)
slide25

EnvironmentGradual recovery from increasing demand

  • Regulation and sustainability provide solid basis
  • Economic recovery drives demand from business
  • Large contracts because companies focus on core business and outsource portfolios
  • Vendor reduction increases
  • Growth market share due to strong competitive position
  • Growing demand for energy savings and carbon footprint reduction
slide26

Buildings

Bottom reached, revenue advance in H2

  • Commercial property stable at low level, no recovery in sight
  • New legislation U.S. causes delays in healthcare
  • Backlog RTKL healthy due to Asia and ME: commercial and healthcare projects
  • Demand (semi) public sector continues
  • New contracts in Facility Management
outlook 2010
Outlook 2010
  • Backlog healthy and up 8% from year-end 2009
  • Growth in Q2 came from Infrastructure and to a lesser extent water and environment, buildings weakened somewhat
  • Modest organic growth in second half
  • Maintaining margins remains priority
  • Synergy with Malcolm Pirnie and in 2011 operational benefits
  • Further expansion through acquisitions is on the agenda
  • For full year 2010 slight increase of 0-5% of net income from operations (barring unforeseen circumstances)

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