ARCADIS today announced that net income from operations (before goodwill amortization) in 2004 totaled ⬠22.7 million, 1% higher than in 2003. Per share, this is ⬠1.13, the same as in 2003. The performance in the environmental market was especially excellent. Market conditions forced a considerable restructuring in the Netherlands.
Excluding the non-recurring effects of this restructuring, net income from operations increased 7% to ⬠24.1 million, or ⬠1.19 per share. The decrease of the dollar had a negative effect on gross revenue and income of 3%. Excluding non-recurring items and excluding currency effects, net income from operations rose 10%, or 9% per share.
Gross revenue increased by 7% to ⬠901 million. Excluding currency effect, growth totaled 10%, in line with ARCADIS´ growth goal.
It is proposed to maintain the dividend (in cash) at ⬠0.48 per share. This equals almost 43% of net income from operations.
The restructuring in the Netherlands is almost complete. It consisted of the sale of non-core activities and streamlining of the organization through efficiency improvement and overhead reduction. The non-recurring effect on operating income was on balance ⬠4.4 million and on net income from operations ⬠1.4 million.
Acquisitions served to strengthen home market positions. In the United States, the presence in Florida was expanded, adding program and construction management capabilities. In Poland, a company was acquired in the rapidly growing infrastructure market; while in the United Kingdom and the Netherlands, smaller acquisitions added specific expertise and skills. These acquisitions have a total gross revenue of ⬠48 million and 440 employees.
Commenting on results, CEO Harrie L.J. Noy said: 'Despite a considerable restructuring charge and difficult market conditions in some of our home markets, income remained at a good level. It is encouraging that we were able to meet our organic gross revenue growth goal of 5%. This was achieved through a good performance in the environmental market, the expansion of facility management and market recovery in Latin America. The infrastructure market also developed favorably in most countries. As a result of divestments, we are now concentrating on three market segments and are more focused on core activities. The restructuring in the Netherlands forms the basis for improvement in margins and profitability. Developments in 2004 indicate that ARCADIS is well positioned in markets that offer good opportunities.'
Fourth quarter
Gross revenue grew 3%; excluding currency effect, 6%. The lower growth compared to the third quarter was fully attributable to the lower contribution of acquisitions. The contribution of acquired companies was largely offset by divestments, as a result of which acquisitions contributed 1% to growth. Organic growth was 5%. The Dutch market appears to be recovering slowly; while in other European countries, growth is slowing somewhat. In North and South America, growth remained at a solid level.
Operating income (before goodwill amortization) declined 3%, entirely because of currency effects. Acquisition costs and divestments limited the contribution of acquisitions. Organically, operating income declined slightly. Net income from operations rose 3%, primarily reflecting organic growth.
Full year
Excluding the currency effect, gross revenue rose 10%, 1% of which came from the sale of divested operations in the Netherlands. Of the remaining of 9%, 4% came from acquisitions and divestments, resulting in an organic growth of 5%. Except for the Netherlands and Germany, all countries contributed to growth.
Excluding the non-recurring effects from the Dutch restructuring, operating income (before goodwill amortization) totaled ⬠39.6 million. This is a 10% increase; excluding currency effect, 13%. Acquisitions contributed 11%. Organic growth, excluding non-recurring effects, was 2%. The strong increase in North and South America was almost entirely offset by the decline in results in the Netherl
