Arcadis NV — Interim / Quarterly Report 2019

Apr 18, 2019

FIRST QUARTER 2019 TRADING UPDATE

Amsterdam, 18 April 2019

18 April 2019 | 2019 Q1 Trading Update | © Arcadis 2019 1

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 there to) 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.

Operational

• Continued solid results in majority of the business, particularly strong performance in North America
• Good progress made in the improvement areas
• Further strengthening digital capabilities by continued investments and acquisition of EAMS

Financial1)

• Operating EBITA margin improved to 7.5% (Q1 2018: 7.2%)
• Organic net revenue growth of 2% to €628 million (gross revenues: €829 million)
• EBITDA increased 20% to €56 million (Q1 2018: €47 million)
• Net working capital improved to 17.4% (Q1 2018: 19.5%)
• Net debt reduced to €409 million (Q1 2018: €474 million)
• Organic backlog growth at 4% quarter-to-date

1) 2019 Trading Update figures based on IAS 17, excluding the impact of IFRS16 "Leases"

• EAMS Group delivers digitally-enabled asset and safety management frameworks
• 70 employees and revenues of ~€10 million
• Headquarter in UK, with offices in the US and Australia
• Customer base: rail, transportation, airports, aviation, infrastructure
• Acquisition follows other investments:
  • Techstars with "Arcadis City of 2030 Accelerator"
  • SEAMS (2018)
  • E2 ManageTech (2017)
• Launch of Digital Innovation Hub in Amsterdam

Net Revenues and organic growth
In € millions and %	Q1 2019	Q1 2018	Organic NR growth %
Americas	204	177	8%
Europe & Middle East	290	292	-1%
Asia Pacific	79	80	-1%
CallisonRTKL	54	50	1%
Total	628	599	2%

Americas	North America: 8% Latin America: 5%	Growth across all businesses, and especially in Environment Increase from order intake last year and slightly improved business conditions
Europe & Middle East	Cont. Europe: 0% UK: 3% Middle East: -15%	Impacted by one working day less in the Netherlands, strong order intake in Q1 Strong growth in Buildings offsets a slowdown in Infrastructure Lower revenues due to more selectivity contributed to a higher margin
Asia Pacific	Australia: -5% Asia: 2%	Impacted by timing of large projects' ramp-up, while the order intake in the quarter was strong Good performance in China
CallisonRTKL	1%	Driven by higher revenues in Europe, compensating for lower revenues in Asia

QUARTERLY KEY FINANCIAL METRICS

Net Revenues and organic growth

Operating EBITA (margin) € millions, %

€ millions

SIGNIFICANT IMPROVEMENT IN QUALITY OF TRADE RECEIVABLES

1) Excluding receivables from associates

• receivables in last 12 months

  • 120 days: reduction of €38 million (-26%)

  • 31-120 days: reduction of €17 million (-18%)

• NWC % improvement driven by sharpened process and transparency:
  • Strengthened working capital management discipline
  • Enforced accountability on cash collection

• Further margin improvement

• − Rigorous adherence to actions identified for the Middle East and Asia to improve performance
• − Leverage of "Make Every Project Count", growth of the Global Excellence Centers

• Revenue growth

• − Build on growth momentum North America, Continental Europe, the UK, Australia and CallisonRTKL
• − Leverage streamlined client portfolio and digital solutions
• Further cost optimization
• Non-core clean energy assets Brazil
  • − Complete last gas-to-power facility, finalize remaining gas off-take contracts, intend to divest all assets in 2019
• Continue strong cash collection and further strengthen the balance sheet

Arcadis. Improving quality of life.

IFRS 16 APPROACH AND IMPACT

Accounting impact only, no net cash impact

Approach

• "Modified retrospective approach" applied; no restatement of 2018 comparative figures
• 2019 Trading Update figures based on IAS 17
• 2019 Interim and Full year statements: figures based on IAS 17 and IFRS16, including transition disclosures
• Bank covenants are lease-adjusted (hence based on IAS 17)

Impact

Material impact but accounting change only, no net cash impact

2019 Q1 impact:

• EBITDA and FCF: +€19 million
• EBITA: +€1 million
• Net finance expense: +€3 million
• Balance sheet: +€280 million