Arcadis Nv S/Adr

Ladies and gentlemen, thank you for standing by. I am Gail, your caller's call operator. Welcome and thank you for joining the archive of this conference call and live webcast to present and discuss the first quarter 2024 trading update. At this time, I would like to turn the conference over to Ms. Christine Dish, Investor Relations Director. Ms. Dish, you may now proceed.

Thank you, Gail. Good morning and good afternoon, everyone, and welcome to our webcast. My name is Christina Dis, Investor Relations Director at Arcadis. We are here to discuss Arcadis' first quarter 2024 results, which were released this morning. With us on the call are Alan Brooks, CEO, and Virginie Duprat, CFO. We will start with the presentation by Alan and Virginie, which will be followed by Q&A. We would like to call your attention to the fact that in today's session, management may reiterate forward-looking statements which were made in the press release. Please note any of these risks on the company's website and at the end of today's presentation. With these formalities out of the way, Alan, over to you.

Thank you, Christine, and good morning, good afternoon, everybody, and a warm welcome to everyone joining us on the call today. Arcadis has delivered another strong quarter, driven by significant project wins and continued client demand, particularly for our sustainable and digitally enabled solutions, which are driving collaboration across our GBAs. Net revenues continue to increase year on year, up 4.4% organically to €968 million. We also saw significant wins from our Key Client Programme, Driven by investment programmes, particularly in North America and in Europe, our oil intake for the quarter was up 6% year-on-year to €1.1 billion. Our organic backlog was up 4.9% year-on-year to a record high of €3.3 billion, and our operating margin increased to 10.7% for the quarter, up from 9.8% last year. Increased selectivity in our project choices as part of our strategy is already materializing in improved margin performance and backlog quality, while our significant project wins provide greater visibility of our future performance. Now let us turn to our GBAs. Starting with resilience, we continue to see strong momentum. Our market leading position, particularly around environmental restoration, water and energy transition is driving order intake in line with growing demand for more sustainable and climate resilient solutions across our global markets we are seeing significant water winds driving growth notably in the uk with the start of the new amp 8 or asset management plan cycle which provides frameworks from 2025 to 2030 This signals an influx of new investments across the UK's water industry. As we already have long term relationships with nine out of the 11 UK water and wastewater companies, AMP8 is likely to secure many years of future revenues. For example, recent wins in the UK include Thames Water and Southwest Water, where through the use of digital tools and cutting edge design solutions, we will support the delivery of new capital investment programmes. This includes water treatment works and reservoirs that will help address scarcity challenges and ensure the quality of supply of clean drinking water to millions of people across the UK. Across all sectors, our clients are tackling environmental and regulatory challenges, including the need to attain net zero and minimise the effects of climate change. These are critical focus areas for investments, and we are seeing a strong pipeline of demand for our water optimization solutions to help address these challenges. Equally, the tightening of U.S. lead and copper legislation is also contributing to ongoing demand for our water optimization solutions. And with stricter regulation from the US Environmental Protection Agency driving enforced investments into avoiding PFAS liabilities, client demand for our environmental remediation solutions continues to rise, benefiting our pipeline. Finally, when it comes to the energy transition, we are meeting the EU Green Deal targets and expansion of grid infrastructure is critical. So we are focused on aligning to these targets and driving demand for our smart grid solutions, which are helping to pave the way to a green transition through offshore wind and renewable energy solutions. Our work with clients such as the transmission operator Amprion in Germany is critical to achieving this goal. So moving on to places. Government stimulus packages in Europe and North America are contributing to significant opportunities in our pipelines. Despite some market headwinds in Q1, with uncertainties around interest rates and forthcoming elections, we did see numerous investment programs ramping up through the quarter. Under the CHIPS Act, €8.5 billion was funded directly to one of our key clients, Intel, and only last week, U.S. chipmaker Micron Technology announced it is set to receive more than $13 billion in government funding and loans to help build memory chip factories in New York and Idaho. Our technology clients are also ramping up investments on the back of growth in generative AI, which resulted in data center wins in the quarter in France and in Germany. Changing regulations and shifting customer priorities are also driving sustained global demand for our net zero solutions, as clients look to create efficiencies and maximize the potential opportunity of their built assets. The US government has announced more than $104 million in funding to advance net zero projects at federal facilities. We are seeing similar activity in the EU. where a recently announced energy performance of buildings directive mandates a 22% reduction in energy use from buildings by 2035. This underscores the imperative on both sides of the Atlantic towards achieving clean energy and climate goals. In line with this, we are working closely with our clients globally to deliver solutions focused on reducing harmful emissions through the decarbonisation of buildings. One such example of this work is the UK Government Property Agency. We have recently been appointed as part of a three-year framework to support a major programme of activity around retrofitting government workplaces, driving net zero and cost-effective design across its entire workplace estate. This new contract reinforces not only our commitment to making more sustainable project choices, but also aligns with our places strategy to obtain more strategic partnerships with local governments. marking the start of a solid pipeline of opportunities for the second half of the year. Given the diversity of our places portfolio and range of complementary services, we are well-placed to capitalize on the numerous opportunities presented by the government's investment programs. Next, if we look to mobility, again, we are seeing large investment programs driving national funding allocations for many of our key clients, with large project wins, particularly in North America, contributing to strong first quarter results. Here, we are leveraging our global expertise to grow market share in the design and engineering of major highway, rail, and transit projects. One such example is our win as delivery partner for the $60 billion Hudson Tunnel project. As the largest infrastructure project in the US, It is expected to receive nearly $12 billion of federal funding, the largest investment in mass transit projects in modern history. The Hudson Tunnel will improve capacity, reliability and resiliency of rail transit along one of the busiest sections of the North East Corridor. And we will be bringing our extensive global tunnelling, rail and transit expertise to support the delivery of this nation-shaping megaproject. Another large key client investment programme which will have a positive impact on our pipeline over the coming years includes Network Rail's £45 billion five-year Control Period 7 Rail Improvement Plan for the UK. This puts climate change high on the agenda. and will build on our expertise in delivering cost-effective, efficient, and safe rail and transit solutions. And in Canada, Ontario is investing more than $70 billion over the next decade to transform public transit in the province. This includes the largest subway expansion in Canadian history, where Arcadis is working as lead designer on critical projects, including the Ontario Line, the Eglinton Crosstown West extension, on the Yonge and North subway extension. These are game-changing projects and mark another milestone in the delivery of reliable, rapid transit to communities across the Greater Toronto Area. And finally, turning to our fourth global business area, intelligence. Our comprehensive digital products and solutions are increasingly maximising value for clients as they look to us to help build efficiencies and improve the performance of their asset portfolio. The digitization of infrastructure has marked a transformative shift in how we work with clients to design, build, manage, and maintain the transport network. This digital transformation enhances efficiency, sustainability, and safety, and will enable real-time data monitoring to manage mobility. Our strong market propositions are helping to position us firmly in this space. Our diverse portfolio of products, such as Curb IQ and Enterprise Decision Analytics, or EDA, offer our clients ongoing support in asset operations. They provide us with an opportunity to tap into the large operational expenditure of our clients, offering long-term visibility on our revenue streams. We continue to expand market share with new, large client wins, In North America, recent wins include the cities of West Hollywood and Kirkland in Washington. Here, the rollout of our Curb High Q solution is continuing to reinforce our position as a global digital leader in providing smart curbside management solutions. And major EDA wins are driving revenue growth and securing our pipeline into the second half of the year. A notable example is our most recent win in the Ontario Ministry of Transport. A five-year deal where we will be working with the MTO to consolidate numerous assets into one centralised asset management system, including highways and bridges, lighting, traffic signals, overhead signs, northern airports and intelligent transport systems. This marks the largest EDA contract for Arcadia to date. It will help the MTO uphold the safety and performance of Ontario's transport system and help streamline and optimise investment planning, improve operational efficiencies and reduce environmental impact. It is a great example of how Arcadis is combining digital and human intelligence to consistently deliver value to our clients. As I have touched on already, the materialization of large investment programs is driving significant project wins for Arcadis. These are large, multi-year contracts and are improving our long-term performance visibility. Recorded order intake into date corresponds to the initial milestones only of these projects, as indicated on the slide here. Whether it is funding from the Infrastructure Investment Act to accelerate the Gateway Programme in New York and New Jersey, or in the UK's AMPATE water cycle, prioritising funding to Southwest Water to tackle climate change, Arcadis is in a leading position to benefit and provide solutions for clients. Let's take Canada for example. Our deep asset management capabilities combined with ready-to-deploy digital tools are proving a major advantage for clients, including in Infrastructure Ontario. They are investing more than 180 billion euros over the next 10 years in highways, transits, and other infrastructure. This is the most ambitious capital program in Ontario's history, and Arcadis, through the acquisition of IBI, is in a prime position to capitalize on the opportunity. And with that, I would now like to hand over to Virginie to talk through the financial results in a little more detail.