Strategy 2011 - 2013: Leadership, Balance, Growth

Current strategy successful

   ARCADIS has a planning process in which the strategy is reviewed every three years. This was done again in 2010. In doing so it was concluded that the current strategy is successful. Over the past five years gross revenues saw a compounded annual growth of 15%, and net income from operations of more than 25%. Despite the economic crisis which started in 2008, we realized an average annual organic growth of more than 6% for the 2005-2009 period, while the margin remained above our goal of at least 10%. The main factors which contributed to this success are: a good spread in geographies, clients and business lines; solid organic growth through client focus and internal synergy; a shift towards activities higher in the value chain; acquisitions which add value; reduction of working capital; strong management and talented people throughout the organization. These will also remain key elements for the updated strategy.

Growth and margin targets maintained

   Given the results that were achieved, the strategy for the period 2011-2013 is a logical continuation of the current strategy. Despite the aftermath of the economic crisis, the outlook for the coming period is positive. For the more mature markets in Europe and North America the growth expectation is 4-5%, while for emerging markets this is 5-10%. With our updated strategy we want to achieve at least a level of organic growth that surpasses market growth. We want to realize this by:

• Further implementing a client focused business model in which a client oriented attitude, (international) account management and cross selling to existing clients are core elements.
• Leveraging our specialist knowledge and experience to enter new markets or enlarge our market share in countries where we already have a position.
• Expanding in emerging markets. This includes further growth in Brazil and Chile and strengthening positions in Asia and the Middle East.

   The growth goal is maintained at 15% per year, while the margin target remains at least 10%. The goal for return on invested capital of 15% is retained. Taking into account the possible effects of government austerity programs, the goal for organic growth in the period 2011- 2013 has been set at 5-7% per year. In addition, acquisitions will fulfill an important role in realizing our strategic goals. The consolidation in our industry offers good opportunities for this. ARCADIS has extensive experience in creating synergy through acquisitions, has a strong international network and a healthy balance sheet. These factors position us excellently for active participation in the consolidation process.

Leading positions in four market segments

   It is our ambition to further build and strengthen leading positions in each of the business lines in which ARCADIS is active. In Infrastructure our ambition is a leading position in providing integrated solutions based on strong home market positions. In Water we strive for a leading position in selected geographical markets based on our integral approach of the entire water cycle. In Environment our ambition is to be the leading global service provider of high value-added environmental services to key multinational, national and local clients. In Buildings we want to be a global partner based on a top position in design, consulting and project management. The goals per business line are: