Takeovers of EC Harris and Davis Langdon & Seah drive growth

Neil McArthur

Source: Jon Enoch

Arcadis’ acquisitions of EC Harris and Davis Langdon & Seah helped boost the firm’s revenue by 26% in its full-year results to 31 December 2012.

Revenue grew to €2.54bn (£2.19bn), up from €2.01bn (£1.74bn) the previous year.

Just 3% of the growth in revenue was accounted for by organic growth at Arcadis. The lion’s share was accounted for by acquisitions, including last April’s acquisition of Davis Langdon & Seah, now trading as Langdon Seah, and the November 2011 takeover of EC Harris.

EC Harris revenue counted towards acquisitive growth until October 2012 and thereafter as organic growth.

The acquisitions also helped the firm achieve a 15% growth in profit before interest, tax, depreciation and debt amortization (Ebitda) to €166.4m (£143.4m), up from €144.4m (£124.5m).

Arcadis said its revenue in emerging markets doubled during the year. Revenue overall grew strongest in the building and property markets in the UK, Asia and the Middle East, while the strongest organic growth was in infrastructure, particularly in South America.

EC Harris grew its operating margin from 5% in the first quarter to 9% for the full year, helping Arcadis overall achieve a 10% margin.

EC Harris’ margin growth put it “on track” to achieve 10% margin this year, one year ahead of the plan set out at the time of the acquisition, Arcadis said.

The firm said it secured €70m (£60m) of “synergy wins”, which would not have been won without its acquisitions, of which €58m (£50m) were thanks to EC Harris.

Arcadis chief executive Neil McArthur said: “Our results reflect the success of the design and implementation of our strategy.

“Our timely switch to emerging markets and rebalancing towards private sector and multinational clients while focusing on performance improvement and organic growth are beginning to pay off.

“In emerging markets we have captured strong organic growth in South America and created strong growth on the back of acquisitions in the Middle East and Asia.

“This helped to offset lower organic growth in mature regions such as Europe and the US, where market conditions remained difficult due to government austerity and market uncertainties.

“With EC Harris, Langdon & Seah, BMG and ETEP we have added companies that offer broad synergy potential, which we have already partly capitalized on in 2012.”