Arcadis adjusts profit outlook for 2015 while reporting strong cash flow
GlobeNewswire
Outlook for full year net income from operations adjusted from a previously expected approximate 20% increase to approximately 10% compared to 2014 due to:
Lower revenues and €5 million additional restructuring costs in North-America and Emerging Markets in the fourth quarter
Delay in divesting Brazilian non-core energy assets that was expected to generate a gain of approximately €6 million
Annual net revenue growth in 2015 in line with expectation at approximately +30%
Free cash flow in 2015 was strong, contributing to net working capital as percentage of gross revenues below year-end 2014
Purchase price allocation of 2014 acquisitions as per IFRS 3 completed, resulting in restated 2014 balance sheet positions, and subsequent 2015 quarterly financials. Year-end 2014 ratio of net working capital as percentage of gross revenues adjusted to 17.4% (from 18.8%). Working capital at year-end 2015 was 17.1%.
Full year audited results 2015 will be published as scheduled on February 18, 2016
January 25, 2016 - Arcadis (ARCAD.AS), the leading global Design & Consultancy firm for natural and built assets, today announced that it expects net income from operations for full year 2015 to be approximately 10% higher than in 2014. In the fourth quarter of 2015, market conditions in North America and in Emerging Markets further deteriorated, resulting in lower revenues and order intake, which required additional restructuring measures amounting to €5 million. Furthermore in order to secure an optimal financial outcome, the signing of the planned divestment of non-core energy assets in Brazil could not yet be realized and continues to be actively pursued. Free cash flow in the fourth quarter was strong and resulted in a lower net working capital ratio compared to year-end 2014.
Update to purchase price allocations of Hyder and Callison In October 2014, Arcadis acquired Hyder and Callison. These acquisitions were made as part of the Company`s strategy to strengthen its position as the leading global Design & Consultancy firm for natural and built assets. Both acquisitions have been accounted for using the mandatory IFRS 3 method. At the end of 2014, the purchase price allocation was included on a provisional basis, in line with common market and accounting practice. In 2015, the balance sheet positions were thoroughly reviewed, during which it became clear that the Arcadis approach for revenue recognition and valuing debtors was more prudent than within Hyder and Callison.
A full review of projects, debtors and possible legal claims, led to an update of the provisional purchase price allocations, referred to under IFRS 3 as measurement-period adjustments. These adjustments resulted in restated consolidated balance sheet positions as at 31 December 2014, the impact of which is summarized in the table below:
Reported
Restated
12/31/2014
adjustments
12/31/2014
Assets
Goodwill
901.6
80.7
982.3
Intangible assets
212.1
16.3
228.4
Deferred tax assets
50.4
1.2
51.6
(un) billed receivables
1,026.0
-48.6
977.4
49.6
Total assets
2,608.0
49.6
2,657.6
Equity & liabilities
Equity
895.8
0.1
895.9
Provisions for other liabilities and charges
22.4
49.9
72.3
Deferred tax liabilities
97.3
-0.4
96.9
49.6
Total equity and liabilities
2,608.0
49.6
2,657.6
These adjustments also impacted the ratio of net working capital as percentage of gross revenues. Based on the updated purchase price allocations net working capital as percentage of gross revenues at year-end 2014 is 17.4%, instead of 18.8% reported last year.
A table with the restated figures for December 2014 as well as the first three quarters of 2015, is added to this press release.
A full disclosure of the final purchase price allocations will be provided in the notes to the consolidated financial statements in the Arcadis Annual Report 2015.
Publication full year results 2015 All figures in this press release are preliminary and unaudited. Arcadis will provide more details on the 2015 performance in the publication of the full year audited results 2015, as scheduled on February 18, 2016. # # #
For more information, please contact Joost Slooten of Arcadis at +31-202011083 or outside office hours at +31-627061880 or e-mail joost.slooten@arcadis.com.
About Arcadis Arcadis is the leading global Design & Consultancy firm for natural and built assets. Applying our deep market sector insights and collective design, consultancy, engineering, project and management services we work in partnership with our clients to deliver exceptional and sustainable outcomes throughout the lifecycle of their natural and built assets. We are 28,000 people active in over 70 countries that generate more than €3 billion in revenues. We support UN-Habitat with knowledge and expertise to improve the quality of life in rapidly growing cities around the world. www.arcadis.com.
Statements included in this press release that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are forward looking statements. These statements are only predictions and are not guarantees. Actual events or the results of our operations could differ materially from those expressed or implied in the forward looking statements. Forward looking statements are typically identified by the use of terms such as "may," "will," "should," "expect," "could," "intend," "plan," "anticipate," "estimate," "believe," "continue," "predict," "potential" or the negative of such terms and other comparable terminology. The forward looking statements are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward looking statements.
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Arcadis N.V. via GlobeNewswire HUG#1980916
