Arcadis Nv S/Adr

Ladies and gentlemen, thank you for standing by. I am Gailie, your chorus call operator. Welcome and thank you for joining the Arcadies conference call and live webcast to present and discuss the first quarter 2026 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, Gailie. Good day, everyone, and welcome to our 2026 first quarter trading updates. My name is Christine Dish, and I'm the Investor Relations Director at Arcadies. With me on this call are our CEO nominee, Heather Polinski, and Simon Crowe, our CFO. As usual, we will start with a presentation, which will be followed by Q&A. We would like to draw 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 that the risks are more fully described in the press release and on the company's websites. Now, please, over to you, Heather.

Thank you, Christine, and good day, everyone. Welcome to our first quarter 2026 trading update. When I spoke to you at the full year results in February, I set out a clear plan focused on three priorities in 2026. In 2026, we are building a simple future proof model. We are focusing on growth. directing capital and talent to water, energy and power, technology, and major infrastructure projects where demand provides long-term visibility. Our executive leadership team has continued to meet regularly with our key clients who value Arcadis and tell us they want to do more with us. Deepening those relationships and expanding our share of wallet with existing clients remains our clearest pathway to stronger growth. We have continued our restructuring program and our rigorous overhead cost out program is well underway, improving our competitiveness. Simon will talk about this later in the call. As I said in February, 2026 is about execution. And that is exactly what we are doing. Since publishing our full year results, we have made good progress in implementing our plan. And while there is still more to do, we have positive momentum. We are mobilizing and energizing every Arcadian in the same direction. This progress allows us to bring forward our capital markets day to the 29th of September, 2026, where we will provide a comprehensive update on our strategy and medium term financial targets. Turning now to our first quarter results, we have delivered a positive start to the year with strong order intake and margin expansion. Performance was positive in mobility and resilience, while places remains challenging. Our net revenues were 93 million euro with organic growth of 0.8%. The order intake was 1.1 billion euro with organic growth of 7.3%. Net revenue growth was driven by our key markets in the US, Canada, and Europe. partly offset by ongoing challenges in property and investment, particularly in Canada and China. In mobility, the acceleration of work on large projects positively impacted our performance. Operating EBITDA margin was 11%, up 10 basis points year on year, demonstrating that our focus on cost discipline and operational improvement is starting to take effect. We are systematically executing our strategic plan to drive growth and profitability, and our actions are on track. Moving on to backlog growth and order intake developments in the quarter, our backlog organic growth in the quarter was 4.6%, and this step-up was driven by all of our GBAs. Resilience backlog grew 5.1% quarter to date with a book to bill of 1.16. Order intake was driven by water and climate in the US and Netherlands and environmental programs in Brazil. We are also seeing good pipeline opportunities building in water and energy in the UK. In places, we saw a backlog growth of 3.1% quarter to date, with a book to bill of 1.18. Data centers in the UK and US continue to be strong drivers of order intake, and we are seeing good momentum with government clients across the US and Europe. Property and investment in Canada remains challenging, and we are continuing to address that directly. In mobility, we had a backlog growth of 6.9% quarter-to-date with a strong book-to-bill of 1.25. With order intake in the quarter driven by project extensions in the US, Canada, and UK, Metrolix in Canada, where we secured a 39 million euro three-year extension to our contract, And California high-speed rail are good examples of the client relationships driving that momentum. The pipeline of significant opportunities in the US, Canada, and Germany also continues to grow. Resilience has benefited from strong tailwinds and a clear right to win in the market. There are considerable opportunities for us, and we are focused on continuing to drive growth and profitability in the solutions where we've historically been strong, and on gaining traction through building a stronger pipeline and growing our team in alignment with our backlog growth. Water in the US remains a star performer with 15% growth in the first quarter. One win this quarter is a five-year contract encompassing three key stormwater initiatives for the City of Los Angeles through their Clean Water Program, replenishing groundwater, alleviating and mitigating flooding, and improving water quality. In energy transition and advisory, we continue to grow strong in Europe and the Netherlands. Where we were awarded a contract to deliver construction design for grid operator tenant in the UK, we have improved visibility in our water and energy projects with amp a related water work moving forward now. In addition, strong nuclear new builds are creating significant pipeline opportunities. In environmental restoration a large US contract continues to wind down as planned. Encouragingly, larger opportunities are progressing through the US pipeline, and we are working to strengthen our backlog in our target sectors of power, energy, and government. We are also seeing an increase in PFAS-related opportunities. Finally, we have invested in strengthened account leadership to reinforce sales with targeted hires. We've also introduced account leader training across our key client accounts. Places had an organic revenue decline of 6% in the quarter, and we are addressing the underperformance in property and investment. We have taken strong action in Canada to refocus the business towards growth markets and reduce headcount to preserve margin while investing in areas of stronger demand. With improved backlog and billing, we recorded strong order intake in almost all markets outside of property investment in Canada and China. Our discipline is translating into stronger delivery cadence and improved pricing and pursuit quality. To give some examples of the prioritized actions we've taken, we have exited around 150 people since January. We have reorganized toward growing markets. For example, we have four new senior leaders joining us to drive sales in high-growth technology and manufacturing sectors. And in March, we launched a recruitment campaign with referral incentives to fill over 1,000 roles in key markets, such as data centers and life sciences. We have scaled our global excellence centers and are embedding fast starts for recent wins to support our Q2 performance. Industrial manufacturing showed good performance this quarter, driven by U.S. pharma, supported by government onshoring investments. In technology, our data center business delivered 36% growth year on year, while our semiconductor solutions were impacted by large contract wind downs. In government and public facilities, we are seeing good growth in the UK and have been awarded a 250 million pound framework in the quarter. Mobility was our strongest performing GBA this quarter, delivering 6.5% organic growth. This result was driven by an acceleration of large projects and continuation awards on large contracts, including Metrolinks in Canada, California High Speed Rail, and Westport in Australia. At the same time, continuous focus on improved profitability through strong project management and discipline produced a very positive project performance. Major infrastructure projects are critical to our strategy. We have worked to get a greater line of sight on backlog phasing and execution. We are using this visibility to confidently invest in large opportunities in the US and Canada, diversify in locations like Australia, and continue to capture performance in the UK to replace project wind downs of HS2. An example of our commission to deliver an end-to-end program, risk and construction management for the Trans-Pennine Route upgrade, a 50 million pound framework over five years to modernize major rail corridors in the UK. In Europe, Both the Netherlands and Germany delivered strong growth in the quarter, and our continued relationship with ProRail led us to an award to deliver safer and more efficient train services in the Netherlands. Going forward, we will continue to focus on diversifying our business in Australia while hiring in the U.S. and Canada to support our backlog and pipeline for major infrastructure projects. Building on the momentum you've seen across the business, This next example shows where we're gaining real traction, delivering tangible results in a key growth market. In water and climate, we are combining market focus, AI at scale, and measurable client outcomes. Across our water sector, we are deploying digital solutions, such as enterprise data analytics in a partnership with Voda AI, now live across 22 utilities in the U.S., By applying AI to risk prioritization and field execution, we are delivering 50% to 60% reductions in excavation costs while accelerating regulatory compliance for our clients. At the same time, the Climate Risk Nexus platform uses AI-driven hydrologic modeling to assess risks across large asset portfolios. For a major North American freight rail operator, this has shown that just 2% of assets drive around 80% of total risks, enabling targeted investments and informing asset management, insurance, and long-term resilience planning. Alongside this, we are supporting clients in shaping their AI data strategies with over 50 workshops delivered since mid-2025, mainly directly with Utility C-Suite. All of this translates into growth, specifically around $100 million in water project revenue where AI-enabled advisory and solutions have been applied. This is not experimentation. This is scaled delivery. And it is a clear example of how AI is enhancing how we work, strengthening our differentiation, and sharpening our competitive edge. I spoke earlier about the three strategic priorities. Let me now walk you through our progress and how we'll execute our plan in 2026. In Q1, our focus was on high growth markets. We moved decisively to invest where we win. That includes targeted hiring and priority markets, strengthening leadership and launching the AI studio, a dedicated capability that brings together data, digital, and domain expertise to develop scalable client-facing AI solutions that enhance productivity, insight, and delivery for our clients. Initial use cases were focused on environmental planning and permitting, including stormwater programs, such as the City of Los Angeles' Clean Water Program. At the same time, we have completed detailed pricing diagnostics and are now advancing a more disciplined value-based pricing strategy, ensuring we move both win rate and early qualities forward. Our account leadership model is now fully in place with over 60 leaders actively building pipelines, and we are continuing to strengthen our position in high market growth sectors, including recent senior hires in water, technology, and life sciences. Looking ahead to the rest of 2026, our focus is clear. Complete a portfolio review, concentrate investment in high growth areas, scale digitally-enabled services, and embed pricing as a core commercial capability. Second, we are creating a simple and future-proof operation. We are reshaping the business to improve agility, efficiency, and client closeness. We have made progress in Q1 on rightsizing, simplifying our decision authorities while also transforming core processes to include our project pursuit workflows through AI and automation. We are now starting to see the first benefits from restructuring and cost out actions that we began last year. This quarter, we exited another 250 roles and we are continuing to proactively address underutilization across the business while intensifying our cost out actions. As we move through 2026, we are reorienting the organization around sectors with a new sector leadership team now in place. Alongside this, we are simplifying how we operate and accelerating digitization of the processes to drive productivity. Third, driving cultural change. Cultural is a personal priority for me. And in Q1, we began embedding a more commercial performance driven mindset across the organization. This includes targeted leadership changes, strengthened commercial discipline and controls, and more focused sales incentives. Aligned to our priority clients, in addition, we have launched a new short term leadership incentive program for our top 2000 leaders directly aligned to individual contributions commercial outcomes and performance. Looking ahead, we will continue to invest in talent, sharpen incentives and performance management, and empower leaders to operate with greater accountability, entrepreneurial focus, and a client-centric mindset. So as you have all heard, we have clear priorities, we are taking decisive action, and execution is firmly underway. I will now hand over to Simon to take you through the financial results.