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Investing.com -- Arcadis (AS:ARDS) on Thursday reported second-quarter operating EBITA of €109 million, a 4% decrease that aligned with consensus estimates of €110 million, as the company positions itself for growth in the second half of 2025.
The engineering and consulting firm posted essentially flat organic net revenue growth at -0.2% compared to consensus expectations of 0.0%, while its operating EBITA margin contracted by 20 basis points to 11.3%, slightly above the 11.2% consensus forecast.
Growth varied across business segments, with Resilience growing 1.5% and Mobility increasing 1.8%, while the Places segment declined by 3.2%.
Geographically, Arcadis highlighted strong performance in the United States, Canada, and the Netherlands, driven by high demand for Energy Transition, Water, and Technology solutions.
These gains were offset by an 8% revenue decline in the UK and a slowdown in Australia’s infrastructure market.
When adjusted for a €6.6 million provision release in the second quarter of 2024, the company’s operating EBITA margin actually improved by 50 basis points.
This improvement reflected expansion of the Key Clients Program and increased Global Excellence Center contribution, despite ongoing strategic investments in productivity.
Net income rose 17% to €63 million, exceeding consensus estimates of €55.7 million. Free cash flow stood at €2 million for the quarter, resulting in a cash usage of €136 million for the first half of 2025, compared to €88 million in the same period last year.
This was primarily due to a 70 basis point increase in working capital to 13.4% of sales, which contributed to a 2% rise in net debt to €1,039 million.
The company’s backlog increased 8% to €3,647 million, with organic growth of 2.6% in the first half of 2025.
This growth was supported by significant order intake in Pharmaceuticals, Data Centers, Energy Transition, US Water, and Rail sectors, which offset declining contracts in US Environmental Restoration, Semiconductors, and Mobility clients in the UK and Australia.
Arcadis confirmed it remains on track to meet its fiscal year 2026 targets under its "Accelerating A Planet Positive Future" strategy, which includes mid to high single-digit organic net revenue growth over the cycle and an operating EBITA margin of 12.5% by 2026.
The company expressed confidence in its growth prospects for the second half of 2025, citing large contracts ramping up, a concluded UK Spending Review, and the start of the water cycle AMP8.
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