AMSTERDAM, November 11 /PRNewswire-FirstCall/ --

    - Net income from operations in third quarter 12% higher
    - Gross revenues increase 10%, organic decline stable at 7%
    - Continued growth in infrastructure, environment stabilizes, buildings
      weak
    - Margin remains above 10% due to cost savings
    - Malcolm Pirnie merger contributes positively to revenues and profit
    - Outlook for full year 2009 adjusted upwards: from slight decline to
      slight increase in net income from operations

ARCADIS (EURONEXT: ARCAD), the international design, consulting, engineering and management services company, in the third quarter of 2009 produced net income from operations of EUR 18.2 million, 12% more than last year. Gross revenues increased 10% to EUR 470 million, also as a result of the merger with Malcolm Pirnie early in July. Organic gross revenue decline stabilized at 7%. Continued infrastructure growth was offset by an increased decline in buildings and a clearly reduced decline in environment. The better than expected results were achieved by excellent performance in infrastructure and environment, keeping the margin above 10%, while Malcolm Pirnie also contributed well. As a result of a weaker U.S. dollar the currency effect on revenues and profits was limited.

In the first nine months, gross revenues increased by 4% to EUR 1.3 billion aided by a positive currency effect of 3%. Due to the recession, gross revenues declined organically by 5%. The decline in environment and buildings was partially compensated by growth in infrastructure. Net income from operations increased 6% to EUR 50.8 million, despite restructuring charges of EUR 7.6 million. Good working capital management resulted in strong cash flow.

Malcolm Pirnie, a leading U.S. consultancy and engineering company in the water and environmental markets (1700 people, gross revenues $392 million), with whom we merged early July, was consolidated as of the third quarter. This merger provides us with a leading position in the fast growing water market and a top 10 position in the U.S.

CEO Harrie Noy said: "The positive results can be attributed to our strong market positions, strict cost controls and a strong focus by our staff on clients. Government investments are keeping the infrastructure market at a good level. In the third quarter we won some large GRiP(R) contracts indicating stabilization in the environmental activities. The buildings market remains very challenging, especially since private sector investments have declined strongly. The merger with Malcolm Pirnie is already starting to bear fruit in the form of numerous initiatives for top line synergy."

    Key figures

    Amounts in EUR million, unless                 Third       First nine
    otherwise noted                               quarter        months
                                              2009 2008   D  2009  2008   D
    Gross revenue                              470  427 10% 1,302 1,254  4%
    Net revenue                                318  284 12%   895   850  5%
                                                          -               -
    EBITA                                     29.8 30.3  2%  86.1  87.2  1%
    EBITA recurring 1)                        32.0 30.3  6%  88.3  87.2  1%
    Net income                                13.9 11.4 22%  50.7  40.0 27%
    Net income per share (in EUR)             0.21 0.19 11%  0.82  0.66 24%
    Net income from operations 2)             18.2 16.3 12%  50.8  47.8  6%
    Ditto per share (in EUR) 2)               0.28 0.27  4%  0.82  0.79  4%
    Average shares outstanding (in millions)  65.6 60.6      62.1  60.5

1) Excluding effect share participation plan Lovinklaan Foundation; see analysis under third quarter

2) Before amortization and non-operational items

Third quarter

Gross revenues increased 10%. The currency effect was 1%, while acquisitions contributed 16%, driven primarily by the merger with Malcolm Pirnie at the beginning of the third quarter. The organic gross revenue decline stabilized at 7%.

Net revenues (revenues produced by our own staff) increased by 12%. The currency effect was 1%, the contribution from acquisitions was 17%. Due to less subcontracting organic decline was 6%

Organic revenue growth was mainly seen in the Netherlands, Poland and to a lesser extent France. Due to the poor conditions in the real estate market, especially in England and with RTKL activities declined. In the United States, revenues increased as a result of the merger with Malcolm Pirnie, but organically revenues declined, albeit less than in previous quarters due to a pick up in environmental activities.

EBITA is impacted by EUR 2.2 million in costs related to the share participation program of the Lovinklaan Foundation, a main shareholder in ARCADIS. Under this program, employees can buy shares in ARCADIS at a discount. In 2009 participants have also received one-off bonus shares. Although the costs of this program are entirely paid for by the Foundation, IFRS requires these to be included in the profit and loss account of the Company. This results in the earlier noted amount of EUR 2.2 million, which has been earmarked as non-recurring. The regular cost of the current Lovinklaan program amounts to approximately EUR 0.1 million per quarter. There is no effect on cash flow or on the equity of the Company.

Recurring EBITA rose 6% to EUR 32.0 million. Acquisitions contributed 16%, the currency effect was limited. The organic decline of 10% was the same as in the first half year and was partly an effect of the reduced contribution from carbon credits due to slow procedures. Without this effect the organic decline was 8%. This was mainly the result of profit declines in England and in RTKL caused by poor conditions in the buildings market and a restructuring charge of EUR 2.3 million for further adjustment of our organization. This was offset by the continued good performance in the Netherlands and the United States. The margin (recurring EBITA as a percentage of net revenues) at 10.1% remained at a good level (2008: 10.7%). Excluding the impact from carbon credits the margin was 10.3%.

Financing charges amounted to EUR 3.3 million. This is higher than in the previous quarter due to the Malcolm Pirnie merger, but lower than the EUR 5.4 million (excluding the effect of derivatives) in 2008. This results from a lower working capital, while in 2008 exchange rate losses on loans in Brazil had a negative effect. The tax pressure is somewhat distorted by the cost of the Lovinklaan program. Excluding this impact, tax pressure was at 34.6%, slightly higher than the 32.4% of last year.

Net income from operations (which excludes the cost of the Lovinklaan program) rose 12% to EUR 18.2 million. This is better than the development of EBITA due to lower financing charges and a reduced minority interest due to lower profits from Brazil.

First nine months

Gross revenues increased 4%, while net revenues were 5% higher. The currency effect was 3%, the contribution from acquisitions 6%. Organically gross revenue declined 5%. Due to less subcontracting, the organic decline in net revenue was limited to 4%.

Recurring EBITA rose 1% to EUR 88.3 million. Acquisitions contributed 7%, the currency effect was 4%. Organically a decline of 10% occurred, in part due to a lower contribution from carbon credits. Excluding this effect the organic decline was 7%, also caused by a restructuring charge of EUR 7.6 million. The margin (recurring EBITA as a percentage of net revenue) was 9.9%, excluding the impact of carbon credits 10.2%, comparable with the 10.3% in 2008.

The unwinding of derivatives early in 2009 had a positive effect on financing charges of EUR 7.5 million. Excluding the effect of derivatives, financing charges declined to EUR 7.0 million (2008: EUR 12.2 million). This was a result of lower market interest rates, less working capital and an exchange rate gain on loans in Brazil which in 2008 still generated an exchange rate loss.

Net income from operations rose 6% to EUR 50.8 million and developed more favorably than EBITA. A higher tax pressure was offset by lower financing charges and a reduced minority interest due to a lower profit contribution from Brazil.

Developments per business line

Figures noted below concern gross revenues for the first nine months of 2009 compared to the same period last year, unless otherwise noted.

- Infrastructure

Gross revenues rose 17%. The currency effect was minus 1%. The contribution from acquisitions was 10% and mainly came from the water activities from Malcolm Pirnie, to be included in a separate business line next year. Gross revenue organically grew 9%, net revenue 5%. The difference results from strong subcontracting in Brazilian energy projects. Organic growth weakened somewhat because in the United States the municipal market is under pressure and the stimulus package is not yet showing a notable effect. In Brazil and Chile growth slowed due to less private investments. In Europe, government investments resulted in strong growth in the Netherlands, Poland, Belgium and France.

- Environment

Gross revenues were level with last year. The currency effect was 6%, the contribution from acquisitions 7% (LFR, SET and the environmental activities of Malcolm Pirnie). The organic decline was 13%, but in net revenues limited to 4% due to less subcontracting. In the quarter net revenues only declined by 1% which points to stabilization of the environmental activities. This partly resulted from two large GRiP(R) contract wins in the United States with a total value of $170 million. In Europe gross revenue increased, especially as a result of more government work. In Brazil, revenues for industrial clients declined, while in Chile mining sector work grew.

- Buildings

Gross revenues were 10% lower with a currency effect of 3%. Organically, gross revenues declined 13%, net revenues by 15%. The difference results from growth in facility management in the Netherlands with a significant amount of subcontracting. In the quarter the revenue decline accelerated, also because last year still saw growth. The commercial real estate market is depressed globally with the largest effects for ARCADIS in England and with RTKL where activities declined strongly. Services for industrial clients in Belgium also suffered from the recession. In addition to facility management, growth was realized in U.S. project management for education and government buildings.

Outlook

Although the first signals of an economic recovery are visible especially in the United States, it may take a while before the effects thereof are noticed in markets relevant to ARCADIS. This means that the uncertainty concerning market developments continues.

The infrastructure market is robust because governments continue to invest to speed up economic recovery. In Europe large programs are active to improve infrastructure. In the Netherlands this includes investments to upgrade rail infrastructure and increase road capacity. In Poland ARCADIS is involved in large cross country connections, while in Belgium and France large design-build projects are planned. In the United States the stimulus package is expected to produce effects as of 2010. Demand for water services is growing, also due to climate change. In South America the strong growth seen in recent years is weakening. The Olympic Games in 2016 in Brazil offer new opportunities.

In the environmental market regulation and sustainability provide a solid base. Although the recession has led to reduced demand for environmental services from private clients, activities in the United States appear to be stabilizing. The recent GRiP(R) contracts demonstrate that clients are using the downturn to refocus on their core business. ARCADIS was also recently selected as one of the prime contractors for the worldwide environmental program of the U.S. Air Force of $3 billion. Due to our advanced technologies, vendor reduction and outsourcing of environmental work by companies, we can increase our market share. Energy efficiency and reduction in carbon dioxide emissions are new themes that generate work.

The buildings market was hit hardest by the crisis. Both in England as well as for RTKL, market conditions are challenging and a recovery is not foreseen in the short term. RTKL partially compensates for the decline in the U.S. and English commercial market through projects in Asia (mainly China) and in the Middle East. In the U.S. the discussion about health care is leading to delays in hospital projects. For all of our services the emphasis remains on non-commercial segments, which benefit from stimulus funds. Facility management appears to be a growth market, as it fills a demand for cost savings.

CEO Harrie Noy concludes: "As a result of our timely adjustment we have been able to reasonably weather the recession until now. Our backlog is stable compared to the end of 2008 thanks to a good order intake across the board, partially offset by contract cancellations in buildings. In all three business lines we benefit from government stimulus programs. Because our capacity has been adjusted, revenues will also be lower in the coming quarters. Maintaining margins has priority, absorbing price pressure through cost reductions and a strong client focused approach. This year there is no contribution from the sale of energy projects, which last year generated EUR 2.2 million in net income in the fourth quarter. Because of the favorable results in the third quarter, the outlook for full year 2009 has been adjusted upwards: from a slight decline to a slight increase of 0 - 5% of net income from operations. This is barring unforeseen circumstances."

About ARCADIS:

ARCADIS is an international company providing consultancy, design, engineering and management services in infrastructure, environment and buildings. We aim to enhance mobility, sustainability and quality of life by creating balance in the built and natural environment. ARCADIS develops, designs, implements, maintains and operates projects for companies and governments. With more than 15,000 employees and over EUR 2.0 billion in revenues, the company has an extensive international network that is supported by strong local market positions. Visit us on the internet at: http://www.arcadis-global.com

    ARCADIS NV

    CONDENSED CONSOLIDATED STATEMENT OF INCOME

    Amounts in EUR millions,         Third quarter      First nine months
    unless otherwise stated
                                     2009    2008      2009         2008

    Gross revenue                     469.6   427.2      1,302.3     1,254.5
    Materials, services of third
    parties and subcontractors      (151.6) (143.4)      (407.1)     (404.9)
    Net revenue                       318.0   283.8        895.2       849.6
    Operational cost                (282.0) (249.3)      (792.0)     (747.3)
    Depreciation                      (6.3)   (5.6)       (17.9)      (17.0)
    Other income                        0.1     1.4          0.8         1.9
    EBITA                              29.8    30.3         86.1        87.2
    Amortization identifiable
    intangible assets                 (3.3)   (2.6)        (5.3)       (8.2)
    Operating income                   26.5    27.7         80.8        79.0
    Net finance expense               (3.3)   (9.5)          0.5      (14.9)
    Income from associates                -       -            -         0.1
    Profit before taxes                23.2    18.2         81.3        64.2
    Income taxes                      (8.8)   (5.9)       (29.7)      (21.3)
    Profit for the period              14.4    12.3         51.6        42.9

    Attributable to:
    Net income (Equity holders
    of the Company)                    13.9    11.4         50.7        40.0
    Minority interest                   0.5     0.9          0.9         2.9

    Net income                         13.9    11.4         50.7        40.0
    Amortization identifiable
    intangible assets after
    taxes                               2.1     1.8          3.4         5.6
    Lovinklaan employee share
    purchase plan                       2.2     0.1          2.3         0.2
    Net effects of financial
    instruments                                 3.0        (5.6)         2.0
    Net income from operations         18.2    16.3         50.8        47.8

    Net income per share (in
    euros)                             0.21    0.19         0.82        0.66
    Net income from operations
    per share (in euros)               0.28    0.27         0.82        0.79
    Weighted average number of
    shares (in thousands)            65,606  60,613       62,093      60,501


    ARCADIS NV

    CONDENSED CONSOLIDATED BALANCE SHEET
    Amounts in EUR millions              September 30, 2009 December 31, 2008
    Assets
    Non-current assets
    Intangible assets                                  335.6            249.3
    Property, plant & equipment                         77.3             66.5
    Investments in associates                           22.7             15.7
    Other investments                                    0.4              0.2
    Other non-current assets                            16.9             14.8
    Derivatives                                            -              3.8
    Deferred tax assets                                 13.8             12.2
    Total non-current assets                           466.7            362.5
    Current assets
    Inventories                                          0.6              0.8
    Derivatives                                          0.1              0.2
    (Un)billed receivables                             588.6            538.5
    Other current assets                                42.2             32.0
    Corporate tax assets                                11.7              6.5
    Cash and cash equivalents                          129.6            117.9
    Total current assets                               772.8            695.9
    Total assets                                     1,239.5          1,058.4
    Equity and Liabilities
    Shareholders' equity                               318.6            207.6
    Minority interest                                   15.9             12.3
    Total equity                                       334.5            219.9
    Non-current liabilities
    Provisions                                          28.7             26.7
    Deferred tax liabilities                            10.6              6.0
    Loans and borrowings                               341.0            266.8
    Derivatives                                          0.8             16.9
    Total non-current liabilities                      381.1            316.4
    Current liabilities
    Billing in excess of cost                          167.6            182.7
    Corporate tax liabilities                            5.3             18.7
    Current portion of loans and
    borrowings                                           5.5              4.9
    Current portion of provisions                        3.7              4.4
    Derivatives                                            -              0.1
    Accounts payable                                   119.2            133.2
    Accrued expenses                                    23.0             12.3
    Bankoverdrafts                                       7.1              6.2
    Short term borrowings                               11.0              3.6
    Other current liabilities                          181.5            156.0
    Total current liabilities                          523.9            522.1
    Total equity and liabilities                     1,239.5          1,058.4


    ARCADIS NV

    CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
    EQUITY

    Amounts in EUR millions   Share    Share    Hedging   Cumulative
                             Capital   Premium  Reserve   Translation
                                                            Reserve


    Balance at December 31
    2007                       1.0      36.4               (29.8)
    Exchange rate
    differences                                              7.2
    Taxes related to
    share-based compensation
    Other comprehensive
    income                                                   7.2
    Profit for the period
    Total comprehensive
    income for the period                                    7.2
    Dividends to
    shareholders
    Stock split                0.2     (0.2)
    Own shares purchased for
    granted options
    Share-based compensation
    Options exercised
    Expansion ownership
    Balance at September 30
    2008                       1.2      36.2                (22.6)

    Balance at December 31
    2008                       1.2      36.2                (40.2)
    Exchange rate
    differences                                               8.0
    Effective portion of
    changes in fair value of
    cash flow hedges                              (1.0)
    Taxes related to
    share-based compensation
    Other comprehensive
    income                                        (1.0)       8.0
    Profit for the period
    Total comprehensive
    income for the period                         (1.0)       8.0
    Dividends to
    shareholders
    Share-based compensation
    Additional paid in
    capital                    0.1      70.6
    Options exercised
    Balance at September 30
    2009                       1.3     106.8      (1.0)     (32.2)

    (Table continued below)

    Amounts in EUR millions     Retained    Total       Minority  Total
                                Earnings Shareholders'  Interest Equity
                                            Equity
    Balance at December 31
    2007                          180.1     187.7          11.5  199.2
    Exchange rate
    differences                               7.2         (0.4)    6.8
    Taxes related to
    share-based compensation        0.2       0.2                  0.2
    Other comprehensive
    income                          0.2       7.4         (0.4)    7.0
    Profit for the period          40.0      40.0           2.9   42.9
    Total comprehensive
    income for the period          40.2      47.4           2.5   49.9
    Dividends to
    shareholders                  (24.8)   (24.8)         (1.2) (26.0)
    Stock split                                 -             -
    Own shares purchased for
    granted options                (4.5)    (4.5)                (4.5)
    Share-based compensation        4.6       4.6                  4.6
    Options exercised               1.2       1.2                  1.2
    Expansion ownership                                   (0.6)  (0.6)
    Balance at September 30
    2008                          196.8     211.6          12.2  223.8

    Balance at December 31
    2008                          210.4     207.6          12.3  219.9
    Exchange rate
    differences                               8.0           2.8   10.8
    Effective portion of
    changes in fair value of
    cash flow hedges                        (1.0)                (1.0)
    Taxes related to
    share-based compensation        1.3       1.3                  1.3
    Other comprehensive
    income                          1.3       8.3           2.8   11.1
    Profit for the period          50.7      50.7           0.9   51.6
    Total comprehensive
    income for the period          52.0      59.0           3.7   62.7
    Dividends to
    shareholders                  (27.1)   (27.1)         (0.1) (27.2)
    Share-based compensation        6.9       6.9                  6.9
    Additional paid in
    capital                                  70.7                 70.7
    Options exercised               1.5       1.5                  1.5
    Balance at September 30
    2009                          243.7     318.6          15.9  334.5

    ARCADIS NV

    CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
    Amounts in EUR millions                               First nine months
                                                           2009      2008
    Cash flow from operating activities
    Profit for the period                                     51.6      42.9
    Adjustments for:
    Depreciation and amortization                             23.2      25.3
    Taxes on income                                           29.7      21.3
    Net finance expense                                      (0.5)      14.9
    Income from associates                                       -     (0.1)
                                                             104.0     104.3
    Share-based compensation                                   6.9       4.8
    Sale of activities and assets, net of cost               (0.8)     (1.1)
    Change in fair value of derivatives                      (0.2)
    Dividend received                                          0.2       0.5
    Interest received                                          4.1       4.1
    Interest paid                                           (12.8)    (17.8)
    Corporate tax paid                                      (37.3)    (27.0)
    Change in working capital                                (9.9)    (83.9)
    Change in deferred taxes and provisions                    7.5     (0.7)
    Net cash from operating activities                        61.7    (16.8)

    Cash flow from investing activities
    Net change in (in)tangible fixed assets                 (17.5)    (18.3)
    Acquisitions/divestments                                (78.5)    (54.7)
    Net change in associates and other investments           (6.8)     (7.6)
    Net change in other non-current assets                     1.2       5.1
    Net cash used in investing activities                  (101.6)    (75.5)

    Cash flow from financing activities
    Options exercised                                          1.5       1.2
    Issued shares                                              5.8
    Purchase own shares                                                (4.5)
    Change in borrowings                                      73.3      96.7
    Dividends paid                                          (27.2)    (24.9)
    Net cash from financing activities                        53.4      68.5
    Net change in cash and cash equivalents less bank
    overdrafts                                                13.5    (23.8)
    Exchange rate differences                                (2.7)       1.3
    Cash and cash equivalents less bank overdrafts at
    January 1                                                111.7      71.7
    Cash and cash equivalents less bank overdrafts at
    September 30                                             122.5      49.2

SOURCE ARCADIS NV

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