Arcadis NV — Audit Report / Information 2020

Feb 18, 2021

Consolidated Income statement

for the year ended 31 December

In € thousands	2020	2019
Gross revenues	3,303,208	3,473,370
Materials, services of third parties and subcontractors	(809,644)	(896,768)
Net revenues1	2,493,564	2,576,602
Personnel costs	(1,925,126)	(1,995,787)
Other operational costs	(228,955)	(281,168)
Depreciation and amortization	(124,705)	(116,641)
Amortization other intangible assets	(21,889)	(16,609)
Impairment charges	(118,881)	–
Other income	9,295	9,053
Total Operational costs	(2,410,261)	(2,401,152)
Operating income	83,303	175,450
Finance income	3,591	5,306
Finance expenses	(38,363)	(47,740)
Fair value change of derivatives	7,326	2,914
Net finance expense	(27,446)	(39,520)
Expected Credit Loss on shareholder loans and corporate guarantees	19,707	(82,431)
Result from investments accounted for using the equity method	967	1,251
Profit before income tax	76,531	54,750
Income taxes	(55,378)	(39,898)
Result for the period	21,153	14,852
Result attributable to:
Equity holders of the Company (net income)	21,859	12,302
Non-controlling interests	(706)	2,550
Result for the period	21,153	14,852
Earnings per share (in €)
Basic earnings per share	0.24	0.14
Diluted earnings per share	0.24	0.14
1 Non-GAAP performance measure

Consolidated Statement of comprehensive income

for the year ended 31 December

In € thousands	2020	2019
Other comprehensive income, net of income tax
Result for the period	21,153	14,852
Items that may be subsequently reclassified to profit or loss:
Exchange rate differences for foreign operations	(65,789)	34,143
Exchange rate differences for equity accounted investees	(117)	(1,215)
Effective portion of changes in fair value of cash flow hedges	739	886
Items that will not be reclassified to profit or loss:
Changes related to post-employment benefit obligations	(16,834)	(3,354)
Other comprehensive income, net of income tax	(82,001)	30,460
Total Comprehensive income for the period	(60,848)	45,312

Total comprehensive income attributable to:

Equity holders of the Company	(60,155)	42,778
Non-controlling interests	(693)	2,534
Total Comprehensive income for the period	(60,848)	45,312

Non-GAAP performance measure

In € thousands	2020	2019
Net income from operations1
Result for the period attributable to equity holders (net income)	21,859	12,302
Amortization identifiable intangible assets, net of taxes	19,313	13,950
Goodwill impairment charges, net of taxes	118,881	–
Valuation changes of acquisition-related provisions, net of taxes	–	(364)
M&A&D costs	(7,961)	10,159
Expected Credit loss on shareholder loans and corporate guarantees	(19,707)	82,431
Lovinklaan employee share purchase plan 2	1,055	1,303
Net income from operations	133,440	119,781

Net income from operations per share1 (in €)

Basic earnings per share	1.49	1.36
Diluted earnings per share	1.48	1.34

¹ Non-GAAP performance measure, to provide transparency on the underlying performance of our business

² The Lovinklaan employee share purchase plan is controlled by the Lovinklaan Foundation, and the Company has no influence on this scheme. Accordingly, the Company treats the related share-based expense as non-operational

Consolidated Balance sheet

as at 31 December

In € thousands	2020	2019
Assets
Non-current assets
Intangible assets and goodwill	886,448	1,079,793
Property, plant & equipment	84,338	100,735
Right-of-use assets	255,950	266,769
Investments accounted for using the equity method	7,900	7,528
Other investments	2,048	2,280
Deferred tax assets	20,141	22,892
Pension assets for funded schemes in surplus	–	3,706
Derivatives	4,624	1,240
Other non-current assets	22,581	27,595
Total Non-current assets	1,284,030	1,512,538
Current assets
Inventories	251	201
Derivatives	5,923	6,252
Trade receivables	468,479	602,900
Contract assets (unbilled receivables)	466,290	669,849
Corporate tax receivables	14,835	23,189
Other current assets	74,766	51,453
Assets classified as held for sale	71	–
Cash and cash equivalents	449,158	296,895
Total Current assets	1,479,773	1,650,739

	2020	2019
Equity and liabilities
Shareholders' equity
Total equity attributable to equity holders of the Company	911,383	962,511
Non-controlling interests	(1,237)	2,876
Total Equity	910,146	965,387
Non-current liabilities
Provisions for employee benefits	60,153	49,493
Provisions for other liabilities and charges	27,748	23,057
Deferred tax liabilities	42,543	39,386
Loans and borrowings	400,964	460,583
Lease liabilities	208,980	215,461
Derivatives	545	822
Total Non-current liabilities	740,933	788,802
Current liabilities
Contract liabilities (billing in excess of revenue)	295,740	285,044
Provision for onerous contracts (loss provisions)	40,401	90,545
Current portion of provisions	15,225	23,306
Corporate tax liabilities	25,902	42,349
Current portion of loans and short-term borrowings	99,402	150,206
Current portion of lease liabilities	69,377	75,661
Derivatives	5,351	4,657
Bank overdrafts	291	472
Accounts payable, accrued expenses and other current liabilities	561,035	736,848
Total Current liabilities	1,112,724	1,409,088
Total Liabilities	1,853,657	2,197,890
Total Equity and liabilities	2,763,803	3,163,277

Total Assets 2,763,803 3,163,277

Consolidated Cash flow statement

for the year ended 31 December

In € thousands	2020	2019
Cash flows from operating activities
Result for the period	21,153	14,852
Adjustments for:
Depreciation and amortization	124,705	116,641
Amortization other identifiable intangible assets	21,889	16,609
Impairment charges	118,881	–
Income taxes	55,378	39,898
Net finance expense	27,446	39,520
Expected Credit Loss on shareholder loans and corporate guarantees	(19,707)	82,431
Result from Investments accounted for using the equity method	(967)	(1,251)
Adjusted profit for the period (EBITDA)1	348,778	308,700
Change in Inventories	(53)	20
Change in Contract assets and liabilities, provision for onerous contracts	146,150	(117,482)
Change in Trade receivables	104,703	(5,979)
Change in Accounts payable	(82,788)	38,016
Change in Net working capital	168,012	(85,425)
Change in Other receivables	(27,056)	1,321
Change in Current liabilities	33,399	35,865
Change in Other working capital	6,343	37,186
Change in Provisions	(19,792)	3,361
Share-based compensation	8,501	11,545
Gains/losses on derecognition of leases	761	(96)
Change in operational derivatives	2,658	16
Settlement of operational derivatives	(2,138)	(77)
Dividend received	494	1,531
Interest received	3,565	5,612
Interest paid	(23,582)	(30,547)
Corporate tax paid	(52,517)	(34,046)
Net cash from operating activities	441,083	217,760

	2020	2019
Cash flows from investing activities
Investments in (in)tangible assets	(37,275)	(48,461)
Proceeds from sale of (in)tangible assets	2,577	2,726
Investments in consolidated companies - acquisitions	(7,369)	(7,299)
Investments in consolidated companies - consolidation	15,006	–
Investments in/loans to associates and joint ventures	(64,669)	(17,511)
Proceeds from (sale of) associates and joint ventures	–	–
Investments in other non-current assets and other investments	(3,956)	(7,000)
Proceeds from (sale of) other non-current assets and other investments	6,267	4,714
Net cash (used in)/from investing activities	(89,419)	(72,831)
Cash flows from financing activities
Transactions with non-controlling interest	–	(7,952)
Proceeds from exercise of options	8,365	10,826
Purchase of own shares	(7,954)	(13,613)
Settlement of financing derivatives	4,628	1,487
New long-term loans and borrowings	220,247	265,974
Repayment of long-term loans and borrowings	(305,156)	(266,455)
New short-term borrowings	41,500	267,000
Repayment of short-term borrowings	(49,824)	(250,000)
Payment of lease liabilities	(82,888)	(74,808)
Dividends paid/received	(3,498)	(19,019)
Net cash (used in)/from financing activities	(174,580)	(86,560)
Net change in Cash and cash equivalents less Bank overdrafts	177,084	58,370
Exchange rate differences	(24,640)	(2,627)
Cash and cash equivalents less Bank overdrafts at 1 January	296,423	240,680
Cash and cash equivalents less Bank overdrafts at 31 December	448,867	296,423

¹ Non-GAAP performance measure, to provide transparency on the underlying performance of our business

Segment information

Amounts in € millions (rounding may impact totals)	2020	2019
Gross revenues
Europe & Middle East	1,339	1,390
Americas	1,370	1,394
Asia Pacific	358	388
CallisonRTKL	236	301
Total	3,303	3,473
Net revenues
Europe & Middle East	1,119	1,145
Americas	876	860
Asia Pacific	323	350
CallisonRTKL	176	222
Total	2,494	2,577
EBITA
Europe & Middle East	86.2	85.0
Americas	105.1	57.3
Asia Pacific	33.0	31.5
CallisonRTKL	(0.2)	18.3
Total EBITA	224.1	192.1
Non-recurring1	4.9	20.5
Total operating EBITA	229.0	212.6
Operating EBITA2
Europe & Middle East	91.8	87.5

Americas 101.7 71.4 Asia Pacific 34.1 35.1 CallisonRTKL 1.4 18.6 Total 229.0 212.6

Amounts in %	2020	2019
Segment mix (gross revenues)
Europe & Middle East	41	40
Americas	41	40
Asia Pacific	11	11
CallisonRTKL	7	9
Total	100	100

Segment mix (net revenues)
Europe & Middle East	45	44
Americas	35	33
Asia Pacific	13	14
CallisonRTKL	7	9
Total	100	100

EBITA margin
Europe & Middle East	7.7%	7.4%
Americas	12.0%	6.7%
Asia Pacific	10.2%	9.0%
CallisonRTKL	(0.1%)	8.3%
Total	9.0%	7.5%

Operating EBITA margin
Europe & Middle East	8.2%	7.6%
Americas	11.6%	8.3%
Asia Pacific	10.6%	10.0%
CallisonRTKL	0.8%	8.4%
Total	9.2%	8.2%

¹ Acquisition, restructuring, integration-related costs and changes in acquisition-related litigation provisions

² Operating EBITA is EBITA adjusted for non-recurring costs