Arcadis Nv S/Adr

Ladies and gentlemen, thank you for standing by. I am Gaye, your chorus call operator. Welcome and thank you for joining the Arcadies conference call and live webcast to present and discuss the third quarter 2025 trading update. All participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone anytime during the call. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. 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, and good day, everyone, and welcome to our 2025 third quarter trading updates. My name is Christina Dish, and I am the Investor Relations Director. With me on this call are Alan Brooks, Arcadia's CEO, and Simon Crowe, our CFO. We will start with the presentation to 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 from the press release. Please note the risks related to these statements are more fully described in the press release and on the company's website. Now, please, over to you, Alan.

Thank you, Christine. Hello and welcome everybody to our trading update for the third quarter of 2025. I'm delighted to welcome our new Chief Financial Officer, Simon Crowe, to Arcadis. Simon joined us on September 15th, bringing more than 30 years of international experience as a Group CFO across the New York Stock Exchange listed and private equity-backed businesses. You'll hear more from Simon later in the call. Arcadis has returned to organic growth this quarter, as we committed in our half-year results, and has delivered a steady margin improvement quarter by quarter, reflecting consistent, stable performance. We have increased our net revenues year on year by 1%, driven by continued strong demand for our services in North America and continental Europe, with Germany and the Netherlands delivering particularly strong results. Leading positions in high-growth markets such as energy, water, climate and technology continued to perform well, with a continuous shift of our portfolio to these solutions, while revenues were still somewhat impacted by softer market conditions in the UK and Australia. Our net backlog totalled €3.5 billion, with organic growth of 2% year-on-year. This was driven by strong order intake from water, energy, government and technology clients, compensating for the winding down of some large projects in environmental restoration in the US, industrial manufacturing in Europe and mobility in the UK. We saw some positive order intake in the UK during the quarter, hinting at early signs of recovery. Our backlog quality has been reinforced by our discipline and project selectivity at the pursuit stage, with an increased focus on key clients, margin accretive solutions and high growth markets. Margin this quarter was again strong, expanding year on year as a result of improved solutions from strategic initiatives, as well as earlier rightsizing actions. while we continue to invest strategically to support future growth and drive additional cost efficiencies, investing in AI and GEC resources to support delivery. Now let's focus on our global business areas. First, resilience. We saw continued positive momentum with 7% backlog growth year on year, driven by our leading market positions in water, climate, and energy. We have continued considerable demand in North America, Germany, and the Netherlands. The water market continued to deliver strong performance, most notably in the US. In water in the US, we were awarded a contract to develop a management system for the New York City's water and sewer operations, which includes managing data on installations, maintenance, and identification of water service lines across the entire water distribution system. In the UK, the AMP8 cycle is ramping up slowly, while we have secured additional notable wins that I will touch on later. In energy, our well-recognized expertise in grid reinforcement and expansion is delivering multiple sizable wins from electricity transmission and distribution clients. These include Tenet in the Netherlands, Pico in the US, and National Grid in the UK. Building on an already significant backlog, largely driven by Germany, our global efforts are now delivering further wins across our key markets. We are well positioned to capture growing opportunities in nuclear. This currently remains a relatively small share of our portfolio. The environmental restoration portfolio was affected by some contracts phasing down in the US. However, we expect to see recovery by H1 in 2026, as large projects for existing key clients have recently entered the pipeline. Overall, the solutions mix and composition of our backlog has materially improved over the last year. And as a result, we have strengthened our position in strategic growth sectors and are driving a higher margin project portfolio. Turning now to places. In places we have continued to pivot towards the higher growth markets and delivered 5% year-on-year backlog growth. Our integrated design and engineering solutions have seen their share of backlog expand to 16% for technology clients. For our government and public facilities, we have witnessed signs of gradual recovery in the UK and strong healthcare wins across the portfolio. Pivoting to the growth areas, These have helped us to offset slowdown in industrial manufacturing that has been driven mostly by European clients taking longer to finalize large CapEx decisions, alongside overall softness in the property and investment markets in Canada and the UK. In industrial manufacturing, we are positioned to take advantage of a major opportunity in the life sciences sector in the US. Additionally, in Ireland, we have secured a significant life sciences project in Dublin, reflecting our growing track record in biotech and pharmaceutical facilities. The €14 million award covers the commissioning, qualification and validation scope for a major site upgrade and expansion. This builds on the recent €5 million design and data construction management success at the same site. Momentum in data center remains strong, resulting in steady increase in technology client share in our total backlog. Globally, we are now involved in 225 data center projects, delivering 15 gigawatts of energy. The total data center market is estimated to be worth around 300 billion euros. The design and engineering firms typically taking 10 to 15% of the investments. which translates to around a multi-billion market for us. This is a clear demonstration of the buoyancy of this market and the bespoke solutions we are pioneering and why we are now adding sales capability to this important sector. The public sector continues to deliver steady results, driven by sustained demand in healthcare and education. The contract with the UK government to deliver their prisons estate expansion programme is also ramping up. We have also seen notable success with a large oil and gas client as we have been appointed to lead the architecture and design services across the global real estate portfolio covering EMEA, the Americas and Asia Pacific. This strategic focus on high potential sectors is driving steady progress in our places performance despite the ongoing headwinds. Turning now to mobility, The market here remains strong, with increased policy clarity driving some investments and pipeline opportunities for us. The negative backlog development of minus 9% was driven by a very strong order intake in the third quarter last year. At that time, we secured a number of major multi-year project wins, such as the Hudson Tunnel in New York and the Fraser River in Canada. leading to a significant step up in our total backlog at that time. Furthermore, the mobility order intake is typically showing some lumpiness over the quarters, with the first and last quarters typically being the strongest. Looking at our global portfolio, some major infrastructure projects in the UK and Australia have been ramping down, while we have significantly invested in our positions in North America and Germany. During this last quarter, we have seen substantial opportunities with clients such as Deutsche Bahn and multiple US departments of transportation entering a growing pipeline. At the same time, we invested in resource alignment earlier in the year and continuous GEC expansion, which has given us the right foundation for further growth expansion in the years to come. One major project in highways was in Belgium, where we have been commissioned to carry out the full study assessment to improve the transport infrastructure between the port of Antwerp and the R2 motorway north of the city, with the goal of stimulating economic growth, mobility and quality of life in the region. In Germany, we were appointed to lead the electrification and modernisation of the Marschbahn line between Hamburg and Sintz, as well as providing geotechnical and tunnel construction consulting services for approximately 30 kilometers of tunnel route in Berlin, as well as installing digital signal boxes on the Haas-Weiser network. These successes demonstrate the value the increased capability of our enhanced rail business in Germany provides. Another sector showing renewed momentum is aviation. where our backlog has doubled in the past year from a modest base. Arcadis is supporting CAPEX and transformation programs across major airports through a cross-GBA collaboration approach. We are particularly well positioned in the UK, where we are working with three of London's major airports, including the Gatwick expansion projects. And we also see projects across continental Europe. Turning to our intelligence business, our digital solutions in intelligence underpin all the GBAs and enhance our propositions to our clients. These continue to drive solid revenue growth. Enterprise asset management continued to see strong demand in both the US and the UK, although we saw a decline in backlog due to the timing of new contract awards. Our digital capabilities were highlighted by a significant win in the US, where we were appointed to deliver a technology blueprint for the Georgia Department of Transportation. There we will evaluate, prioritize, fund, and deploy innovative technologies aimed at enhancing safety, operational efficiency, and workforce development. The two-year project will focus on addressing key challenges, including developing an adaptive strategy for the client to identify and adopt current and emerging technologies. Demand for our travel IQ in North America remains strong. EDA Light continued to gain traction across the water, government, technology, and property and investment sectors. And last week, we launched Climate Risk Nexus, a digital platform that helps organizations move beyond exposure analysis to plan, prioritize, and invest in climate resiliency. Our resilience-focused digital solutions, including Climate Risk Nexus and Net Zero Catalyst, are seeing growing demand with our clients. We continue to enhance the value we deliver to clients through our expanding digital product suites. These are not standalone capabilities, but a core component part of our wider offer across our GBAs and continue to evolve as part of how we deliver smarter, integrated solutions for our clients. Turning now to the UK and Ireland, last quarter I spoke about the state of the UK market and how in particular the freeing up of funds for public spending had slowed as the government finalised its spending review in June. Since then, we are seeing good order intake developments and a gradual increase in activity starting to take place, with a number of projects in rail and public transport, housing, nuclear, highways and healthcare all coming to the market. However, despite these promising shoots of recovery, we remain cautious on the outlook, given the economic uncertainty the UK continues to experience. The impact of the UK slowdown on the business is significant, a 2% reduction on total global Arcadis net revenue organic growth. Healthcare is one of the sectors where we are starting to see considerable demand for our services and we secured a wide range of successes in hospitals. The AMP8 cycle is another funding stream that is now gradually starting to accelerate. We have secured two major wins with Thames Water and Scottish and Southern Electric. Across the UK, we are carrying out projects with 11 water companies, enabling the delivery of a record-breaking AMPATE investment cycle of some £96 billion. Evidence of our range of expert services across the sector. Our UK business advisory team is playing an increasingly important role in some of the UK's most significant infrastructure projects, advising on major nuclear projects such as Sizewell Sea and other national programmes, in addition to our work with the UK Atomic Energy Authority. These projects reflect a stabilising policy environment in the UK and a gradual increase in public sector investment. We are winning work, but continue to be cautious about the UK outlook. With the annual budget approaching and broader economic conditions remaining subdued, we expect that most of the revenue will be realised later in 2026. With that, I would now like to hand over to Simon, our CFO, to take us through the financial results from Q3.