Arcadis NV — Management Reports 2018

Feb 15, 2018

FULL YEAR RESULTS 2017

Peter Oosterveer | CEO Renier Vree | CFO Amsterdam 15 February 2018 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.

PETER OOSTERVEER Chief Executive Officer

MELBOURNE METRO

Melbourne, Australia

PERFORMANCE IMPROVEMENT

ON TRACK TO DELIVER ON OUR 2018-2020 STRATEGIC PRIORITIES

STRATEGIC PRIORITIES	PROOF POINTS 2017
• Voluntary staff turnover • Staff engagement • Brand • Clients	• People first • Continued investment in Arcadis Academy • One brand, recognized thought leader • Focus on Global Key Clients (17% growth in 2017)
• Organic net revenue growth: • Surpass GDP growth in our markets • Revenue growth for key clients 2x overall growth • Innovation: digital adoption by our people and clients • Sustainability	• Revenue growth momentum • North America back to growth after 3 years of decline • • Major project wins in water resilience and green buildings
• Operating EBITA margin of 8.5%-9.5% • NWC < 17%, DSO < 85 days • ROIC >10% • Dividend: 30 - 40% of NIfO • Leverage: Net Debt / EBITDA between ~1.0 and 2.0	• Operating EBITA margin improved to 7.6% • NWC: 16.9%; DSO: 88 days • ROIC increased to 7.3% (2016: 6.8%) • Proposed dividend €0.47 / share, pay-out ratio: 40% • Leverage ratio at 2.1 (2017 year-end) • CallisonRTKL: market consultation process started

RENIER VREE

Chief Financial Officer NIKE DISTRIBUTION CENTER Belgium

In € millions	FY 2017	FY 2016	Change	Q4 2017	Q4 2016	Change
Gross revenues	3,219	3,329	-3%	805	854	-6%
Net revenues	2,437	2,468	-1%	595	608	-2%
Organic growth	1%			3%
EBITDA	200	207	-3%	51	50	1%
EBITA	161	166	-3%	41	40	2%
Operating EBITA1)	186	175	6%	51	35	46%
Operating EBITA margin	7.6%	7.1%		8.5%	5.7%
Free cash flow 2)	98	80	22%	85	102	-17%
Net working capital %	16.9%	17.5%
Net debt	416	494	-16%
Backlog net revenues (billions)	2.1	2.2	-7%
Backlog organic net revenues growth (%)	2%	-6%

1) Excluding acquisition, restructuring and integration-related costs and excluding the release of Hyder related litigation provisions of €19.4 million in 2016 2) Cash flow from operating activities minus investments in (in)tangible assets

• Operating EBITA margin improved to 7.6% (2016: 7.1%)
• Non-operating costs of €25 million (2016: €29 million); mainly restructuring in Brazil and Europe (€20 million), and M&A
• Net working capital improved to 16.9% (2016: 17.5%)
• Backlog increased organically by 2% (2016: -6%). Currency impact of -9% mainly related to the US Dollar

In € millions	FY 2017	FY2016	Change
EBITDA	200	207	-3%
Depreciation	-40	-41
EBITA	161	166	-3%
Amortization	-31	-53
EBIT	130	113	14%
Net financeexpenses	-26	-29
Incometaxes	-20	-16
Income tax rate	20%	19%
Income fromassociates	-12	-3
Non-controlling interests	-1	-1
Netincome	71	64	10%
Net income fromoperations1)	101	91	11%
EPS2) (€)	0.82	0.76	8%
EPS from operations2) (€)	1.18	1.08	9%
Dividend (proposal) per share (€)	0.47	0.43	9%

1) Excluding acquisition, restructuring and integration-related costs and excluding the release of Hyder related litigation provisions of €19.4M (2016)

2) Average number of shares 2017: €85.9 million (2016: €84.1 million)

• EBIT(D)(A): 2016 included a €19 million provision release
• Amortization 2016 included €15 million impairment
• Net finance expense decreased due to lower debt and weaker US Dollar
• Income tax rate supported by US tax reform; one-time gain of €13 million from revaluation of deferred tax positions
• Loss from associates is related to noncore clean energy assets in Brazil
• EPS up from improved business performance
• Dividend proposal €0.47 (2016: €0.43) pay-out ratio unchanged at 40%

REVENUE AND OPERATING EBITA

Operating EBITA (margin)

• Q4 organic net revenue growth 3%; all regions except for Latin America and the Middle-East contributed to this growth
• FY return to organic net revenue growth of 1%:
• North America back to organic growth of 2%
• Continued growth in Continental Europe, the UK and Australia
• Q4 operating EBITA margin improved to 8.5%, to which North America, Continental Europe and Latin America contributed most
• FY operating EBITA margin higher at 7.6%
• Improved margins in North America, Continental Europe and Asia
• Lower margin in Middle East

In € millions	FY 2017	FY2016
EBIT	130	113
Depreciation and amortization	71	94
EBITDA	200	207
Changes in net working capital	2	-1
Changes in other working capital	2	-6
Tax paid	-25	-25
Net interest paid	-24	-24
Other	-4	-12
Cash flow from operating activities	151	139
Capital expenditure	-53	-59
Free cash flow	98	80

• Free cash flow improved to €98 million (2016: €80 million) due to higher EBIT
• D&A: 2016 included €15 million impairment
• Other: 2016 impacted by €19 million litigation provision release
• Capital expenditure lower due to less office investments

STRONG FREE CASH FLOW IN 2017, NET DEBT SUBSTANTIALLY BELOW LAST YEAR

EBITDA € millions 107 100 100 100 H1'16 H2'16 H1'17 H2'17

Net Debt

587

€ millions

Calculated using bank covenants methodology

In € millions

Assets	31 Dec 2017	31 Dec 2016	Equity and liabilities	31 Dec 2017	31 Dec 2016
Intangible assets	1,074	1,170	Equity	981	1,002
Fixed assets	93	100	Loans & borrowings	474	700
Other non-current assets	91	87	Other non-current liabilities	146	176
Trade receivables	579	622	Billing in excess of cost	284	287
Work in progress	486	518	Short-term debt	214	56
Other current assets	116	111	Accounts payables	237	253
Cash and cash equivalents	268	260	Other current liabilities	371	394
Total	2,707	2,868	Total	2,707	2,868

• Balance sheet impacted by lower USD (-14%) and GBP (-4%)
• Portion of long term debt moved to short term as €197 million Bank Loan Terms and USPP's are due to expire in 2018
• Net debt / EBITDA covenant leverage ratio improved to 2.3 (2016: 2.5), the year-end ratio improved to 2.1 (2016: 2.3)

REDUCTION WORKING CAPITAL AND DSO REMAINS PRIORITY

Working capital 2016/2017

€ millions & as % of gross revenues

DSO 2016/2017

number of days

• NWC of 16.9% at a 3 year low, driven by Continental Europe

• Cash collection KSA and Qatar remains priority

• DSO at 88 days from 91 days in Q4 2016
• DSO improved in Continental Europe and Latin America

AGEING RECEIVABLES

	31 December 2017	31 December 2016
In € millions	Gross receivable	As %	Gross receivable	As %
Not past due	298	47%	341	50%
Past due 0-30 days	109	17%	121	18%
Past due 31-120 days	81	13%	79	12%
More than 120 day due	147	23%	137	20%
Total	635	100%	678	100%
Provision receivables	-57		-58
Provision %	8.9%		8.6%
Net Receivables1)	578		620

1) Excluding receivables from associates

• Overdue receivables include two large items:
• KSA: projects completed in 2016
• US: Oil & Gas project involving insurance
• Provision movement due to utilization of €11 million, net addition of €11 million (P&L charge) and FX impact of -€1 million

MATURITY PROFILE OF FINANCING

• In 2018 €197 million of debt is expiring for which various options are considered
• Average interest expense at 3.2% (2016: 3.0%) of gross debt

31%

OUR CLIENTS

Georgia DoT, USACE, Chevron, PG&E, GE, Sabesp, Vale, Vinci, Brookfield, GE, Codelco, Embraer

% OF ARCADIS NET REVENUE

In € millions	FY 2017	FY 2016	Change	Q4 2017	Q4 2016	Change
Gross revenues	1,175	1,227	-4%	293	323	-9%
Netrevenues	751	769	-2%	175	187	-7%
Organic growth	-2%			1%
EBITA	36.0	26.3	37%
OperatingEBITA1)	47.5	36.1	31%
Operating EBITA margin	6.3%	4.7%
Backlog organic growth	-4%
DSO	84	86

1) Operating EBITA excludes acquisitions, restructuring and integration-related costs

• Organic growth of 2% in North America and -26% in Latin America. Q4 organic growth in North America of 3%, supported by all business lines
• Operating EBITA improved 31% as organic growth returned and operating EBITA margins improved from 7.1% to 8.1% in North America
• Q4 operating results in Latin America close to break-even. Brazilian economy is gaining traction
• Backlog North America organic increase of 5% due to overall good order intake. Positive momentum in Brazilian order intake in Q4
• DSO improved by 2 days

BRAZIL CLEAN ENERGY ASSETS

• Arcadis Logos Energia (associate, 49.99% owned by Arcadis) has equity stakes in 6 biogas plants in Brazil that convert landfill gas into bio-methane (natural gas substitute) and power, thereby significantly reducing greenhouse gas emissions
• In 2017 we re-assessed the business to optimize value, resulting in an investment plan which is on track. Arcadis will invest up to €20 million
• In 2017 a loss of €12 million was recorded, mainly caused by the loss of production due to relocation of the largest biogas plant
• In the second half of 2018 the divestment of all biogas plants will be initiated

EUROPE AND MIDDLE EAST

13,100

46%

OUR CLIENTS

Southern Water, HS2, Cross Rail 2, ProRail, Rijkswaterstaat, Societe du Grand Paris, Nike, Opel, Emaar, Vinci

% OF ARCADIS NET REVENUE

In €millions	FY 2017	FY 2016	Change	Q4 2017	Q4 2016	Change
Gross revenues	1,337	1,398	-4%	340	353	-4%
Netrevenues	1,113	1,117	0%	282	279	1%
Organic growth	4%			4%
EBITA	74.0	67.0	10%
OperatingEBITA1)	84.3	83.9	0%
Operating EBITA margin	7.6%	7.5%
Backlog organic growth	10%
DSO	96	100

1) Operating EBITA excludes acquisitions, restructuring and integration-related costs

• Organic growth of 4% consists of 6% increase in Continental Europe, 7% in the UK, compensating a 10% decrease in the Middle East
• Operating margin in Continental Europe improved to 7.3% (2016: 6.8%). The private sector drove growth in revenues and order intake
• UK operating margin at 9.2% (2016: 10.0%) due to a high level of bidding activity. Backlog up 36% after winning many strategic pursuits
• Middle East operating margin declined to 4.7% (2016: 8.6%). Backlog came down due to selective bidding and lower demand
• DSO improved by 4 days with Continental Europe and the UK around 70 days. Middle East DSO of ~250 days remains a priority

14%

OUR CLIENTS

Sung Hung Kai, China Resources, HSBC, Citi, Adidas, BMW, Huawei, Alibaba, LendLease, CPB, Acciona

% OF ARCADIS NET REVENUE

28% 68% 4% Infrastructure Environment Buildings 32% 66% 2% Public Regulated Private 10% 60% 30% Consulting Program, project & cost mgmt Design & Engineering

In € millions	FY 2017	FY 2016	Change	Q4 2017	Q4 2016	Change
Gross revenues	387	378	2%	98	97	2%
Netrevenues	344	338	2%	85	84	1%
Organic growth	2%			8%
EBITA	30.1	30.7	-2%
OperatingEBITA1)	30.7	31.3	-2%
Operating EBITA margin	8.9%	9.3%
Backlog organic growth	6%
DSO	85	84

1) Operating EBITA excludes acquisitions, restructuring and integration-related costs

• Australia organic growth at 12%, fueled by major projects wins like Sydney and Melbourne Metro
• Revenues in Asia declined earlier in the year, and returned to growth in the fourth quarter. Brunei business divested
• Operating margin in Asia slightly improved to 8.8% (2016: 8.6%), in Australia lower at 10.3% (2016: 11.0%) due to underperforming projects in the first half of 2017
• Backlog growth in Asia due to good order intake in second half of the year. Strong backlog growth Australia

CALLISONRTKL

OUR CLIENTS

Nordstrom, AT&T, Emaar, Primark, Capital One, Stanford Healthcare

% OF ARCADIS NET REVENUE 9%

In € millions	FY 2017	FY 2016	Change	Q4 2017	Q4 2016	Change
Gross revenues	320	326	-2%	73	81	-10%
Netrevenues	229	244	-6%	53	58	-8%
Organic growth	-3%			0%
EBITA	20.8	22.9	-9%
OperatingEBITA1)	23.9	24.3	-2%
Operating EBITA margin	10.4%	9.9%
Backlog organic growth	-13%
DSO	73	78

1) Operating EBITA excludes acquisitions, restructuring and integration-related costs

• Organic decline of 3% largely driven by adverse developments in US commercial real estate and healthcare markets
• Organic revenues flat in Q4 after a weak Q3, supported by China
• Operating EBITA margin improved to 10.4% after cost measures taken earlier in the year
• DSO improved by 5 days
• Market consultation process for CallisonRTKL started to assess viability of sale

PETER OOSTERVEER Chief Executive Officer

EAST SIDE COASTAL RESILIENCY New York, US

OUR STRATEGIC CONTEXT

STAKEHOLDER DIALOGUE

Employees Clients Suppliers/subcontractors Civil society Investors

SUSTAINABLE DEVELOPMENT GOALS RELEVANT FOR ARCADIS

COMPETITIVE LANDSCAPE

Changing client patterns

Shift to digital

Industry consolidation

Scarcity of qualified people

OUR POSITIONING

LEADING DESIGN AND CONSULTANCY FOR: SUSTAINABLE AND RESILIENT CITIES SMART INFRASTRUCTURAL SOLUTIONS FUTURE-PROOF INDUSTRIES

A SUSTAINABLE FUTURE THROUGH OUR STRATEGIC PILLARS

• Create an environment where our people can be at their best

• Recruit, develop and retain the workforce of the future

• Grow through providing integrated and sustainable solutions to our clients

• Be a digital frontrunner

• Focus on where we can lead

• Deliver client and project excellence

DELIVERING SUSTAINABLE VALUE

• Deliver financial objectives as per the strategic framework 2018-2020
• Select projects, businesses and geographies where we can lead
• Improve project delivery
• Invest in people and culture to build the workforce of the future
• Innovate to become a digital frontrunner in the industry
• Contribute significantly to the UN Sustainable Development Goals
• Conclude the strategic review process of a

Arcadis. Improving quality of life.