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JUL 27, 2023 | Press Release

Arcadis Second Quarter and Half Year Results 2023

Continued strong client demand and improved operational performance


  • Record net revenue of €945 million, with strong organic growth of 9.0%1)
  • Improved operating EBITA margin2) of 9.8% (Q2‘22: 9.3%)
  • Integration of Arcadis IBI and Arcadis DPS on track, revenue and cost synergies materializing
  • Order intake of €976 million resulted in record net backlog of €3.2 billion. Organic backlog growth at 1.1% quarter-to-date (Q2’22: -0.9%)
  • Successfully placed €225 million sustainability linked Schuldschein, concluding refinancing
  • Free Cash Flow of €-26 million (Q2‘22: €41m), Net Working Capital % of 12.4%, (Q2‘22: 13.3%)
  • On track to achieve strategic targets set for 2021-2023

Amsterdam, 27 July 2023 – Arcadis, the leading global Design & Consultancy organization for natural and built assets, sees continued growing client demand across all of its Global Business Areas, resulting in record Q2 Net Revenue of €945 million with an organic growth of 9.0% and improved operating EBITA margin of 9.8% (Q2’22: 9.3%).

Alan Brookes, CEO Arcadis, said: “Arcadis delivered another strong quarter driven by high client demand particularly in industrial manufacturing, environmental remediation, and innovative mobility solutions. The integration of Arcadis IBI and Arcadis DPS is progressing well and will be finalized before year end, with significant project wins from our combined complementary expertise. Cost synergies are also expected to exceed our initial expectations. The company's focus on digital innovation and operational discipline has led to significant order intake and opportunities to further scale and standardize ensuring we remain on track to meet our 2021 – 2023 strategic targets by the end of this year. In my first two months as CEO, I have remained close to the business and strengthened my executive leadership team by bringing in the GBA leads. The need for sustainable and digitally enabled solutions remains high on our clients’ agenda, and I am convinced that with the talent and expertise within the organization, we are well positioned to capitalize on these future growth opportunities.”


Net revenues totaled €945 million, increasing organically by 9.0%, driven by all Global Business Areas (GBAs). Growth was particularly strong in America and UK & Ireland, with Continental Europe and Australia also contributing, slightly offset by a decline in the Greater China region, as a result of a continued challenging business environment. A -2.6% currency impact was driven by a weakening US and Canadian Dollar against the Euro. Operating EBITA improved to 9.8% (Q2’22: 9.3%).

Order intake increased by 36% year on year to €976 million, outperforming total revenue growth of 30% and resulting in a Book to Bill of 1.03. The net revenue organic backlog growth was 1.1% quarter to date, in line with the seasonal pattern and well above last year’s -0.9%.


Net revenues totaled €1,886 million, increasing organically by 10.6% (currency impact -1.1%), driven by all GBAs. Non-operating costs were €16 million, driven by restructuring costs from the wind-down of Middle East operations, integration costs and the impact of a non-cash liquidation of assets sold last year. The operating EBITA margin increased to 9.8% (HY’22: 9.3%) driven by a step up in Resilience and Places. The effective income tax rate of 35% (HY’22: 28%) was impacted by non-deductible items and de-recognition of deferred tax assets. The weighted average annual income tax rate for the full financial year is expected to be between 28% and 30%. Net finance expenses were €27 million (HY’22: €6 million), driven by a higher debt position. Net Income from Operations increased by 11% to €103 million (HY’22: €93 million), or €1.15 per share (HY’22: €1.04), driven by higher revenues.

Order intake increased by 36% year on year to a record level of €2,039 million, outperforming total revenue growth of 33% and resulting in a Book to Bill of 1.08. The net revenue organic backlog growth of 5.0% year to date, is in line with the seasonal pattern and well above last year’s 3.6%.

Resilience showed solid revenue and backlog growth driven by public and private clients in all large markets. Strong client demand, especially in environmental restoration, water optimization and energy transition, continued to drive a very solid pipeline of opportunities. Our digital innovation and product offering coupled with our focus on sustainability continued to differentiate Arcadis in the market. A solid operating margin for the half year was driven by good performance in North America. We continued to invest in digital products and partnerships to tap the wide range of opportunities in the growing markets, such as water optimization.

Good revenue and backlog growth in Places was driven by North America, UK and Continental Europe, while we increased selectivity in project intake at Arcadis DPS, and continued to refocus towards project, rather than cost, management in China. Industrial manufacturing onshoring clients were supported from construction through to the production phase, providing support in navigating the complexities when planning, processes, people and plants come together. In order to address the increased client demand for creating Net Zero Facilities and Sustainable Communities, we engaged in ecosystem partnership opportunities, especially on energy optimization. Margin improvement was driven by strong performance of Arcadis IBI in North America and Industrial Manufacturing performance in Continental Europe, while slightly hampered by the Middle East performance. When excluding Middle East, Operating margin would have been 9.9% for the first half year.

Revenue growth continued to be very strong driven by North America, UK and Continental Europe. Highways and Rail clients increasingly looked for data-driven solutions as the infrastructure market was marked by growing innovation and complexity. The demand for New Mobility services accelerated as clients benefitted from federal funding, especially in North America and Australia. GBA cross-selling and revenue synergies materialized. The margin was strong in North America, Continental Europe and Australia, while the year-on-year margin decline was driven by losses related to the winding down of activities in the Middle East. When excluding Middle East, Operating margin would have been 10.3% for the first half year.

Good revenue growth was complemented by new order intake from large, key clients, mostly in North America and the UK. Mature software products in traffic and travel management, such as TravelIQ combined with emerging transit software products CurbIQ and HotSpot resulted in good revenues from key clients in major US cities. Enterprise Decision Analytics products drove synergy wins in combination with existing GBA’s for port authorities, urban utilities and other infrastructure sectors. Our priority remained investing in product development, integration and organizational set-up. This resulted in an improved margin of 9.6% versus 2022 year-end of 9.1%.


Net working capital as a percentage of annualized gross revenues improved to 12.4% (Q2 2022: 13.3%) and Days Sales Outstanding (DSO) was 66 days (Q2 2022: 69 days), as a result of disciplined working capital management - both well within the strategic targets set for 2021-2023. A €225 million sustainability linked Schuldschein loan was successfully placed in July, completing the refinancing process of the bridge loan. Net debt increased to €1,186 million, leading to a Net Debt / Pro Forma Operating EBITDA ratio of 2.4x and for full year within the strategic target range of 1.5-2.5x. Free cash flow was €-134 million for the first half year (Q2’22: €-10 million), in line with seasonality, and impacted by a €-74 million cash out related to a change in US tax law. The Free Cash Flow in the second quarter of €-26 million, was fully in line with last year’s €41 million, excluding this tax cash out.


The Integration of Arcadis IBI and Arcadis DPS is on track with both cost and revenue synergies wins materializing. €20 million in cost synergies have already been identified, exceeding our initial target of €18 million, to be delivered by end 2024. We expect to deliver €4 million by the end of 2023 to be generated through the integration and rationalisation in workplace; IT integration and platform improvements within technology; as well as the rationalisation of overheads, insurance and support driving operational synergies.


Schuldschein loan

Arcadis successfully placed a €225 million sustainability linked Schuldschein loan to be used towards repaying the outstanding bridge loan of 2022. The facility has a maturity of three years with two tranches: €40 million at a fixed interest rate of 5.1% and €185 million at a floating interest rate at six-month Euribor with a margin of 135bps. p.a. Refinancing process of the bridge loan, initially placed at €750 million for the acquisitions of Arcadis IBI and Arcadis DPS, is therefore completed, following the successful issuance of an inaugural Eurobond of €500 million in February 2023.

Change in US Tax and Jobs Act Section 174

In 2022, the US Tax Cuts and Jobs Act of 2017 eliminated the option to deduct expense research and development expenditures immediately in the year incurred and requires taxpayers to amortize such expenditures over five years for tax purposes. Total cash out in full year 2023 will approximately be €97 million.


  • 16 October 2023, 2023 Q3 Trading Update
  • 16 November 2023, Capital Markets Day
  • 22 February 2024, 2023 Q4 & Full Year Results

Christine Disch | +31 6 15376020 |

Tanno Massar | +31 6 11589121 |

Today at 14.00 hours CET:

Arcadis is a leading global Design & Consultancy organization for natural and built assets. Applying our deep market sector insights and collective design, consultancy, engineering, project and management services we work in partnership with our clients to deliver exceptional and sustainable outcomes throughout the lifecycle of their natural and built assets. We are 36,000 people, active in over 70 countries that generate €4.0 billion in revenues. We support UN-Habitat with knowledge and expertise to improve the quality of life in rapidly growing cities around the world.

This 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.

Statements included in this press release 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.

Christine Disch

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Christine Disch, Global Investor Relations Director

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