Arcades: Decreased business volume and increased operating profit
Arcadis’ net sales saw net sales decline 9% in the last quarter, but the engineering company compensates for this with an increase in operating profit of 38%, from 50 to 69 million. “Our business model works,” says CEO Peter Oosterwasser.
According to Oosterveer, the company is now dealing with changing conditions for three quarters and the fourth quarter is “ a continuation of the third and second, as we’ve already shown good results. It just shows that our business model works with the conditions we’re dealing with right now.
The engineering firm’s good results are largely due to cost savings. We travel much less, and do more than home. This is the biggest savings and we will continue to do so in the future. So Oosterveer sees future savings in a different way “how we think about offices” and the fact that people will partially continue working from home. Oosterveer sees further performance improvement for 2021. The first half will be the same. Business will grow, and performance will improve.
Early last year, the company’s Chinese buildings branch was particularly affected by the Corona crisis. Arkadis has also been affected by the epidemic in several European countries, with some pressure on orders. In addition, revenue from the Middle East has decreased, but that’s also because Arkadis has indicated it will stop in the region.
In other regions where Arkadis is active, business has boomed precisely because of measures taken against the epidemic, such as the United States. Hence, according to Arcadis, clients are starting to see the importance of climate and sustainability. Activities in the United States account for a third of the turnover. Results also improved in the Netherlands, Germany and Belgium. In the United Kingdom, the company closed a major new infrastructure deal for a railroad. In addition, governments in Europe have continued to invest in infrastructure development, energy transfers and government programs to counter Corona.
Arcadis’ sales volume decreased by 3 percent to 2.5 billion euros. A year ago that was 2.6 billion euros. Profits were 22 million euros in 2020, compared to 12 million a year earlier. The 2019 result was still disappointing due to write-offs.
In his presentation of the annual figures, Arkadis emphasized that global trends provide opportunities for the company. For example, more urbanization will mean an increased demand for sustainable transportation and affordable housing. Arcades believes that sustainability is becoming more and more important in all of its areas of interest, such as the environment, water, infrastructure and consulting for buildings.
Despite the impact of the Corona crisis, the company says it is on the right track with the goals it has set for profitability. The company proposes to its shareholders a dividend of 0.60 euros per share.
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