Arcadis (ARCAD) CMD 2026 summary

Strategic reset and portfolio

• The 2027–2029 reset centers on focus, simplification and performance, shifting to a client-led sector and service model.

• Markets are grouped as Core, Accelerate and Optimize: invest in structurally growing markets, build faster-growing sectors and participate selectively in cyclical activities.

• Divest most of Architecture and China operations, representing ~€400m of net revenue (~10%) with little or no EBITDA and ~13% of FTEs; review other non-core activities.

• Divestments are expected to lift operating EBITDA margin by ~100bps; the China disposal is targeted for early 2027, with regular Architecture updates planned.

• Core and Accelerate sectors are targeted to rise from 74% to 85% of net revenue by 2029; environmental services, 20% of net revenue, will be scaled across industries.

Financial targets and capital allocation

• 2027–2029 targets: mid-single-digit organic net revenue growth and mid- to high-teens operating EBITDA margin; 2026 guidance: low-single-digit growth, 11.7%–12.0% operating EBITA margin and 14.3%–14.6% operating EBITDA margin.

• Ambition to more than double EBITDA over five years through growth, margin expansion, cash generation and disciplined capital allocation.

• Margin levers include portfolio mix, growth and operating leverage, win rates, cross-selling, resource allocation and a 2–3 percentage-point billability increase; reset costs are €75m–€85m in 2026 and €70m in 2027, with completion expected by end-2027.

• Capital priorities include €20m–€30m annual business investment, progressive dividends targeting 30%–40% of net income from operations, value-accretive bolt-ons and surplus-capital returns; leverage target is 1.5x–2.5x.

• Typically, ~50% of operating EBITDA converts to net income and 95% of net income to free cash flow; reported cash conversion is ~95%.

Operating model and people

• Client Success Teams unite sales and delivery with one accountable team per client; sector leaders own P&L, and budgets and profit follow client projects rather than people.

• A single global services and delivery business, supported by Global Excellence Centers (GECs), allocates local, global and GEC talent to projects; GEC share of delivery rose to 14.4% in H1 from 10.5% three years earlier.

• Actions affected ~1,200 FTEs over 12 months; management fell from 6,000 to 4,000, with ~1,000 further overhead positions targeted for reduction.

• More than 200 leaders were appointed in 2026 to support a simpler, flatter organization.

• Sales incentives reward over-performance with 25% greater upside; performance scorecards, workforce planning, career development and AI/data literacy are being embedded.