Dutch firm reports 8% revenue growth after two major acquisitions of its own
The built environment sector has 鈥減lenty of room for consolidation鈥�, the boss of Arcadis has said after rival consultant Turner & Townsend snapped up Alinea.
The acquisition of the London QS caught many off guard last week but Peter Oosterveer, global chief executive of the consultancy giant, was not among them.
He said: 鈥淚 can鈥檛 say I am surprised 鈥� if you look at our space, it is extremely fragmented and it has plenty of room for consolidation, whether that鈥檚 in building or infrastructure or environmental work, this business will continue to be marked by further consolidation.鈥�
Oosterveer was speaking to 黑洞社区 after Arcadis published its full-year results this morning, which showed global net revenue growth of 8.1%.
Alinea was formed by a group of former Davis Langdon and EC Harris partners after the pair were bought by Aecom and Arcadis and had been seen as industry flag-bearers for independent QSs and a British business success story.
Oosterveer told 黑洞社区 that concerns at the loss of independence were understandable but said joining forces with global businesses offered small firms opportunities and capabilities they would not otherwise have.
He said: 鈥淭he pride in the company that you are part of, and the perspective that you might lose some of it, that I can understand 鈥� If there wasn鈥檛 pride and passion for what they do, why would you even be interested in a company.鈥�
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He added people鈥檚 feelings can 鈥渟hift quite quickly鈥�, referencing Arcadis鈥� own recent acquisitions of Canadian-based engineering firm IBI Group and life sciences and semiconductor specialist DPS.
鈥淚nitially people think about the roadblocks, the barriers, but quickly they begin thinking about the opportunities,鈥� he said.
Oosterveer, who is retiring in May, would not be drawn on long-term acquisition strategy but said 鈥渨e have our hands quite full鈥� with IBI and DPS and that in the short term, purchases on this scale are 鈥渘ot what we expect to do鈥�.
Arcadis鈥� results for the year to December show operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased to 鈧�400m (拢355m) from 鈧�347m (拢308m) the previous year, while net revenue increased from 鈧�2.6bn (拢2.31bn) to 鈧�3bn (拢2.66bn) over the same period.
While the firm did not quantify its performance in the UK 鈥� its second biggest market in staffing terms with 5,263 employees 鈥� it said growth had been 鈥減articularly strong鈥� in the area, as well as in North America and Australia.
Continental Europe and Brazil also contributed but protracted lockdowns in China, under that country鈥檚 now abandoned zero-covid strategy, hampered growth there.
The consultant reported strong market conditions in the infrastructure sector, with revenue up 15% from 鈧�645m (拢573m) to 鈧�743m (拢660m). In the UK, this was driven by investments in rail and road upgrades, which led to a 鈥渟ignificant order intake on large projects鈥�.
Oosterveer said the 鈥渏ury is still out鈥� on the new Sunak government, adding that he 鈥渄oes not envy鈥� the challenges faced by the prime minister after his predecessor鈥檚 disastrous mini-Budget but urged him not to cut infrastructure or levelling up spending.
He said the government had provided 鈥渘ot enough鈥� certainty on its spending and regulation intentions and said that the rapid changes in government leadership 鈥渄idn鈥檛 help鈥�.
鈥淲hat the UK needs more than anything is stability, clarity [and] regulation 鈥� the things that businesses are always looking for before they pull the trigger,鈥� he added.
鈥淲e are ready to support levelling up [鈥 we have offices in quite a number of places, but I would quite like the government to accelerate.鈥�
Non-operating costs at Arcadis were significantly higher last year 鈥� 鈧�62m (拢55m) compared with 鈧�9m (拢8m) the previous year 鈥� which was blamed on transaction costs relating to the acquisitions as well as non-cash losses on divestments from several parts of the world.
The firm recently pulled out of a range of countries, including Singapore, Malaysia, the Hong Kong design and engineering business, Vietnam, Thailand, Switzerland, Slovakia and its environmental restoration business in France, in order to focus on core markets.
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