Arcadis NV (ARCAD) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and everyone who's following us online today. My name is Christine Disch, and it is my pleasure to welcome all of you here on the Capital Markets Day in the [indiscernible] building. Arcadis designers help shape this innovative approach to materials, energy and water, making this one of the most sustainable buildings in Europe. At Arcadis, every internal meeting begins with a health and safety moment, reflecting our commitment to a safe and healthy workplace. So we're doing the same today. So please familiarize yourself to the nearest emergency exit. Let me turn to today's agenda and an investment case that we will set out for you. Today, we will tell you all about why clients choose Arcadis, where are we prioritizing growth? How a simpler operating model will strengthen execution and accountability and how AI and digital will enhance productivity, scalability and client outcomes. We will explain to you how these actions will translate into higher quality revenue growth, margin expansion, strong cash generation and disciplined capital allocation, ultimately driving attractive shareholder returns. Now who will we hear from today? Our executive team, Heather, Simon, Jana and Hans will set out strategic priorities, execution road map and the financial framework. We also have our industry leaders with us here today, and they will outline market opportunities, competitive positioning, strategic priorities, driving the real growth behind their businesses. And you will also hear from our clients through recorded testimonials, which will demonstrate how our capabilities translate into long-term partnerships. And with that, let me hand it over to Heather.

Arcadis was founded in 1888, not to build things, to protect them. The founding engineers were asked to solve problems that had been defeating this country for centuries. How do you stop the land from flooding? How do you hold back the sea that is, by nature, always rising? For almost 140 years, that question has shaped everything we do. Not just in Water, in the way we think about every project, every asset and every client challenge. What is the risk? What could fail and what needs to last? Last year, our teams responded to about 50 climate related events across 19 countries. Wildfires in Canada, flooding in Central Europe, and drought in the Southeast of the U.S. Over the last few decades, we have evolved into a much more diverse company, enabling the transport of goods and people, supporting energy, water and power assets, meeting demand for digital infrastructure and designing pharmaceutical facilities to manufacture weight loss drugs to just name a few. In all of these instances, our clients chose us not because we were the largest firm available. But because they trusted us to care as much about the outcomes as they did. This is not a marketing line. It is 138 years of proof. It is a foundation of everything you will hear today. We are not reinventing Arcadis. We are resetting it to be more focused, more consistent and more valuable without losing a single day of that heritage. I'm Heather Polinsky, the CEO of Arcadis. Today, we are unpacking new strategy, the reset of Arcadis, focused growth, sustainable value. A strategy, our new leadership team and I are fully committed to and already delivering. We are here to explain what this means how we will reset Arcadis and what needs to be done to drive value creation and attractive shareholder returns. The opportunity is huge, the demand is strong, and the market drivers are clear. The challenge has not been the opportunity. It's been execution. I've been with Arcadis for 27 years, and one thing has never changed. The greatest strength of Arcadis is our people. When we combine deep expertise with commitment to clients and communities, we do our best work. My career has been focused on three things: growth through establishing and expanding client relationships, performance through building winning teams and mobilizing and energizing their passions and talent to deliver and strategy implementation by making choices and the right investment decisions, all to drive value creation. I joined Arcadis through an acquisition and understand how to drive value through successful integration. I have been central to driving the most successful parts of Arcadis. For example, as President of our Resilience business from 2021 to 2025, I was responsible for a net revenue CAGR of [ 8% ] and margin improvement of more than 350 basis points. I have seen what great looks like inside of Arcadis. Our opportunity is to make that the standard everywhere. Now turning to my reflections more broadly on the Arcadis history. What have we learned? And what have we already actioned? We have been looking carefully and recognizing what worked well, but also what needs to be done differently. Let me share the diagnosis. Some of our larger capital allocations and subsequent acquisition integrations have been poor and eroded value. Our structure was too complex, causing inefficiencies through duplication. We had become too inwardly focused without clear accountability. We also lacked a consistent commercial mindset and locked clear incentives to drive performance, reinforcing accountabilities and also recognizing results. Arcadis has never lacked heart. Now we must match it with greater focus, accountability and disciplined execution to deliver industry-leading results. So what actions have we taken so far? We've assessed our portfolio, focusing on what we do well. This is already translating into growth and momentum. We are transforming our organization. This began at the end of 2025, a shift towards a more client-centric organization with a stronger commercial mindset, having successfully launched the model already in Australia in July and now completing the rollout across the rest of the business. We have made significant remuneration changes to reinforce behaviors that we want to see, sharpened our organization, elevated client-facing leaders and empowered them by bringing them closer to decision-making. These actions are gaining traction. We are accelerating growth as reflected in our backlog, all of this with improved voluntary turnover and industry-leading satisfaction of our employees. There is a strong and straightforward investment case for Arcadis. First, we operate in attractive markets where clients seek our expertise to solve complex challenges. Second, our ability to deliver is grounded in our status as a trusted adviser, underpinned by the quality of our people our sector knowledge, client relationships and our heritage. What differentiates us is not the markets that we serve, our ability to win in them. This starts with over a century of experience. Our clients consistently tell me that they believe our people care as much or more about their problems as they do. We are taking this further, building deeper sector knowledge, getting closer to our clients and attracting new talent. Third, we have a very attractive business model. Our business is capital light, highly cash generative, and we have a strong balance sheet. And our client relationships and market positions, support repeat high-quality revenue growth. This means we can invest in our business. We can maintain shareholder distributions, and we can pursue bolt-on disciplined acquisitions that strengthen our competitive position. We have not consistently converted the advantages that I just spoke to you about into the financial performance that they should produce. This reset is about closing that gap. And today, in line with the focused pillar of our strategy, we are announcing targeted portfolio actions to unlock value. Focus means concentrating our capital, talent and resources on areas where we are differentiated, where we see strongest growth opportunities and where we can create the greatest value. We will exit activities that do not align with these priorities or do not generate the level of returns that we expect. Taken together, these assets that we are divesting represent 13% of our workforce, 10% of our net revenues but very little margin. First, we are divesting the majority of our Architectural business, where we see limited synergies with our activities that are core. Second action that we're taking relates to our operations in China, where we will divest and enter into a local partnership with the local management. Third, we are reviewing other activities that are not core to our strategy and where we see limited future opportunities. Importantly, this is not a onetime exercise. Portfolio discipline will remain a part of an ongoing way that we manage this business. As a result of these actions, and our continued focus on efficiency, we expect to reduce overhead positions by 1,000 FTE. Now on to our financial targets, we have a strong business, a clear strategy and some significant opportunities ahead. We are moving with urgency, and we are seeing strong growth momentum. The leadership team and I will deliver these targets, mid-single-digit growth to mid to high-teen EBITDA margin through disciplined execution, underpinned by relentless client focus and strong sector knowledge. Every action must and will translate into value creation, value for our shareholders, value for our clients and value for Arcadians. With that, over to Simon to explain what the financial prospects of Arcadis are so compelling.

Thank you, Heather. It's a pleasure to be here today. Thank you, everybody, for coming. Let me briefly introduce myself. I joined Arcadis a year ago with a mission to deliver a step change in financial performance and a shift towards a culture of accountability. My background spans financial management and strategic leadership of both listed and private equity businesses. And this is my fifth CFO role. I really love being a CFO. I brought that private equity mindset to Arcadis to transform the business with a firm focus on driving financial rigor, operational discipline whilst retaining the things that make Arcadis attractive to our customers and our employees. My name is Simon Crowe, and I'm the Arcadis CFO. I'm here to get the commercial and financial muscles fit up. So a lot has happened over the last year. It's been busy. It's been a reset year with changes in leadership, as Heather has mentioned, a focus on sales, cost control, transformation, capital allocation discipline. I've developed a very deep appreciation for our people, the strength of our client relationships and the realization that many of our businesses are already performing and outperforming the market. We have a great team, many of them here today, and I'm determined to focus on value creation. I understand what drives value in our sector as much of my career has been focused on transformation and execution helping organizations turn strategy into tangible, measurable, valued results. As CFO, I am focused on disciplined capital allocation, balancing investment in talent and growth with delivering attractive returns for shareholders. As Heather has said, we have a very clear strategy now, a strong market position, and a well-defined road map to deliver on our ambitions, the people, the customers and the [indiscernible], that's exactly what excites me about Arcadis today. Together with the executive team, my priority is very simple: drive consistent execution, improve performance and create long-term shareholder value. As Heather said, we looked very carefully at the past, recognizing what worked well, but also what needed to be done differently. We have a clear diagnosis and have acted. She talked about the strategic elements, and I will talk about some of the financial elements. First, a renewed focus. We've updated our strategy to focus on areas where we are strong, such as Rail, Highways, Energy and Water, investing in accelerating markets such as Life Sciences and Digital Infrastructure. And as we've announced today, we're divesting of noncore businesses in China and the majority of our Architecture business and other noncore businesses. These businesses represent around 10% of net revenues, approximately EUR 400 million of net revenue with little or no associated EBITDA. We expect China to complete early next year, and we'll provide a regular progress update on the disposal of our Architecture business and reduction in associated overhead. Then simplifying the organization. We've already reduced complexity, removed layers and created a leaner, a much leaner overhead that has allowed us to make decisions faster and operate more efficiently. We're moving to a sector and service model. Profit will now follow the project, not the person. We are now budgeting by client for the first time in Arcadis history. Finally, embedding a stronger performance culture and a consistent commercial mindset. We've rightsized some of the low billability areas and we've taken actions that have impacted around 1,200 FTEs over the last 12 months. We will continue this rightsizing. These steps demonstrate our focused and more disciplined approach to capital allocation, driving value creation. And we will continue to carefully analyze the most value accretive use of excess cash, including proactive approach to share buybacks. These actions are delivering results. In the first half of '26, we improved margin. Net working capital and increased our growth guidance for the year of 2026. This reinforces our confidence that we are moving in the right direction. And with that, I'll hand back to Heather.

Thanks, Simon. Now let's take a step back. and explain what Arcadis does in a simplified way, who we work for, what services we provide and how our business model enables us to generate strong revenue streams. We are a global design, engineering and consultancy company, focused on improving quality of life through our clients and in support of the communities. 90% of our revenues are generated in North America and Europe. We are the #1 design and engineering firm in Europe, with 34,000 employees worldwide. Our services are complex and our skilled technical specialists advise clients across the full asset life cycle. We help determine what should be built, secure approvals and funding, ensure compliance and in many cases, improve asset performance and lifespan for years afterwards. We are recognized leaders in environmental restoration, consistently reducing liability and allowing for safe reuse of properties. We do not build assets ourselves, and we do not take on construction risk. We have an asset-light relationship-based business model and are highly cash generative. What do we mean by asset Life Cycle. Let's take a transmission line project in Germany, for example. We help clients identify the need, manage the environmental constraints, secure permits and design their route for cables. We support delivery, oversee construction and help clients operate and optimize the line over its life. When the transmission line reaches the end of its life, we help re-purpose retrofit or decommission it responsibly. Our opportunity does not end when the asset is built. The most value is created over the decades that follow. Cost to maintain infrastructure far outweighs the construction costs by 20% to 40%. That is where Arcadis' life cycle expertise creates value for clients, and growth for our business. We are a well-diversified business with a balanced project portfolio delivering around 40,000 projects a year with limited revenue concentration. Public and private clients are equally represented and 65% of our work is for Key Clients, at least in 2025, and we see that growing. Those are where we have larger, more profitable and repeat work. A few of these, you'll see on the slides today. Our contract structures are balanced between fixed price and time and materials, and equally important, our people are fully engaged in our journey and our mission as is evidenced by our employee engagement and our Sustainalytics statistics. Now let's move from who we are and what we do to how I, alongside 34,000 Arcadians create value for our clients. The engineering and consulting industry creates significant value to society and the impact we leave is massive. We don't just deliver projects. We help clients across their entire portfolio, reducing risk, designing fit-for-purpose infrastructure, improving safety and environmental outcomes, meeting regulatory requirements, ensuring projects are on budget and on time and making better long-term investment decisions. We support our clients on their assets from planning and construction through to operation, improving performance and extending the asset's life. Examples of our work include the repair and replacement of aging water infrastructures in the Chicago area, improving access to safe drinking water for 5 million people. In another case, using our enterprise decision analytics capabilities, we have assessed more than 150 capital projects and helped unlock over $52 million in funding for critical infrastructure upgrades. We also reduced water loss for utilities by 20% to 50%, that is impact beyond engineering. It's accelerating infrastructure renewal. It's delivering client missions and its improving quality of life for communities. We focus on the natural and built assets across transportation, energy, water, life sciences and digital infrastructure. This includes rail networks, highways, electrical grids, water and wastewater systems, pharmaceutical facilities and data centers. Our markets are growing powerful change driven by trends that are shaping where our clients and how they invest. But that investment has become more complex. Clients need to navigate permitting, regulation, capital prioritization and increasing costs. While still delivering at pace. That creates greater demand for integrated partners who can help them make the right investment decisions and then deliver across that life cycle. That's where our strategy is designed. We designed it around our clients and where Arcadis is uniquely positioned to win. I'm excited that our global industry executives are here today with you, and we'll bring this to life shortly. So why do clients choose Arcadis? And how do we differentiate? First, experience matters. We bring heritage and deep engineering expertise sector and asset knowledge in some of the world's most complex infrastructure and environmental challenges. When clients make major infrastructure investments, they choose partners with proven experience, a track record of delivery, and the knowledge and foresight to anticipate their needs with innovative and efficient solutions. This is what Arcadis does. Second, we are the #1 global leader in environmental services. environment and climate expertise are part of our DNA, reducing client risk, building resilience, protecting their right to operate and protecting their supply chains. This is part of who we are. Third, because we bring the right expertise across the full asset life cycle that I've talked about, utilizing the best global and local talent. As I said, our clients consistently tell me that they believe our people care as much or more about their problems as they do. Our client base is broad, and we serve 9,000 clients every year with 95% of revenues coming from repeat clients. So the beginning of 2026, my team and I have met over 200 key clients. And they tell us they choose Arcadis because when the stakes are at their highest, our expertise and more importantly, our commitment to them is what they trust. I'd like you to hear directly from our clients and see our strategy is aligned to their needs and how they view us is a critical part of their future. [Presentation]

I get a lot of pride from hearing from our clients and a big thanks to them for putting their trust in Arcadis. It was honestly hard to select just a few. Now for the details of our strategic plan for 2027 to 2029. We are delivering a reset for Arcadis. First, we are focusing on our strengths to bring sharper discipline to our portfolio. At our second quarter results, we have set out how we have segmented our industries into 3 distinct buckets, without similarly thinking not just where do we want to invest. It's about where will we create the greatest value for our clients and best differentiator Arcadis to drive market growth. First is core. And these are large, structurally growing low cyclicality markets where we already hold a leading position. Here, we will drive organic growth by expanding our services to capture both CapEx and OpEx spending from our key clients, grow our share of wallet and expand our leading position in key geographies. Second is Accelerate. These are fast-growing sectors where we already have a strong hold. Here, we will invest heavily in our people, capabilities, innovation and brand to grow global key clients and expand our delivery. This includes targeted capability building and up-skilling programs. And for both Core and Accelerate, we will implement select bolt-on M&A. The third bucket is Optimized. These represent more cyclical businesses where we participate selectively and only where we can do so profitably. China and the majority of our Architecture business fall in this industry. And they will -- as we mentioned, they will be divested. Here, we will focus on the services we provide already today. We will maintain strict pricing discipline and margin discipline, and we will redirect M&A to higher-return opportunities. We are moving away from our solution-based model. In other words, moving away from the Places, Mobility and Resilience business areas and aligning our organization around the clients we serve, bringing us closer to their needs and closer to our clients. Transportation, Energy and Water are in core with Transportation expected to deliver mid- to high single-digit growth, and Energy & Water to deliver high single-digit growth. Industrial Manufacturing & Technology sit in Accelerate and will grow at a mid- to high single-digit rate. And our fourth industry, Real Estate & Development is optimized. This is where we will focus on margin improvement and taking decisive action. Our industries include sectors reflecting how our clients operate. This will allow us to leverage experience, best practices and trends from one client to another inside each sector. It will also create greater transparency, accountability and discipline, which Simon will talk about shortly. With that, we are also simplifying around our clients. When we say simplify, we don't mean offering less. We mean making more of Arcadis easier for our clients to benefit from. Our ability to support the full asset life cycle as one integrated solution is one of the things that sets us apart and drives value. Delivering this effectively requires a different way of working. We will increasingly staff projects with the combination of local, global and global excellence center talent, bringing the right expertise regardless of location. This will also allow a shift of revenue follows the individual model, as Simon mentioned, to revenue follows the client and project model. This incentivizes our leaders to consistently deploy the best talent across Arcadis to deliver the greatest value for Arcadis and for our clients. We are being selective and where we will deliver our integrated service offering, focusing on core and accelerate industries where we are best positioned to drive value. While all of these capabilities are critical I want to highlight one specifically, our Environmental Services. It remains one of our strongest differentiators. We integrate environmental expertise across the asset life cycle from land use planning to permitting and compliance, PFOS solutions, risk management, remediation and long-term stewardship, PFAS or forever chemicals is a powerful example of our leadership. For more than 20 years, we have helped hundreds of clients address complex PFOS challenges through a combination of proprietary solutions and technologies, de-scientific expertise and delivery capacity and capability. This enables clients to navigate complex regulatory situations, manage risk and accelerate critical investment decisions. Our Environmental Services is a capability unmatched in the industry and one, we are going to continue to scale to meet growing client demand I mentioned, we are already empowering our organization to deliver the strategy. So what have we changed? Increased transparency is going to allow us to accelerate our growth and more efficiently manage our teams, creating more agile deployment of resources, better collaboration and a more seamless client experience. Specifically, we are moving to a client-led operating model to better share sector knowledge and leverage best practices. It will also increase accountability transparency and visibility of profitability across our accounts. We've also created one global delivery team organized to replace our past solution-based staffing. We are also assigning one accountable team per client, called client success teams and they will bring together sales and delivery, creating a single point of contact our clients and a single point of responsibility for Arcadis. We will continue to improve delivery through scaling automation and standardization and our Global Excellence Centers will move from an outsourced model to an integrated part of our services, freeing our local experts to spend more time with clients to strengthen relationship and co-create solutions. Third, we are driving forward a performance culture to bring out the potential for our deep technical expertise and client relationships -- and I'm really happy to hand it over to Jana to explain more about this.

Thank you, Heather. 30 years of transformation has taught me one simple truth. Structures don't move [indiscernible], it's leaders that sets standards of excellence every day they do. It's cultures where performance feels normal every day they do. People who turn ambition into results they do. I spent my career in value creation, enlisted and last 12 years in private equity environment. I've learned to be impatient with two things: speed of decision-making and the link between effort and impact. I've learned that transformation only matter when they show up in the results and that results can only last when they build into culture that sustain them. And that's the lens that I bring to Arcadis today. I've been here almost 6 weeks, long enough to see what's real and short enough to still call it out plainly. On my first day, I met with the AI team and the CEO of Nomic, our AI partner. And I asked him why did he choose Arcadis to partner with. And he gave me two reasons, the strength connection between theirs and our engineers. And Arcadis leadership that was ready to back up the partnership all the way. This story reveals two significant strengths to me, three. Trusted client relationship, Heather referred to it in her speech. 40,000 projects in 36 countries. What struck me when I go through the organization is that people don't talk about accounts. They talk about clients, they talk about their partnerships that they've held for decades. Arcadis is #2 firm for engagement in our entire industry. And when you join, you really see why. From day 1, I've experienced people that are passionate about what they do. They are generous with sharing their knowledge, and they are quite open to new ideas and new ways. Almost 0.25 million years of combined engineering experience. Our engineer choose to stay with Arcadis because they are surrounded by people they learn from and who will help them grow. I also see some of the things that are holding Arcadis back, too many layers, narrow span of controls, decisions that sometimes take longer than they should. And sometimes accountability that is a little hard to pinpoint. So why does it matter now? Performance culture becoming a competitive advantage. Arcadis already has a strong people culture. The next step is sharper accountability, clear priorities and faster execution. High-performing culture is not harder or colder. It's fairer, clear and much more focused on driving impact. It requires leaders who create clarity, make timely decisions and translate strategy into execution. It also requires honesty and transparency with our people about what's changing and how they fit into our future. By getting this right, our people agenda becomes a driver of growth, margin and client impact. In other words, high-performance culture. High-performance culture in my vast experience is built around three core principles. First, clarity. We've moved to simpler operating model with clear focus and P&L ownership. Complexity always has a cost attached to it. Every extra layer slows decisions and blurs accountability in the organization. The new model brings decisions closer to clients and make us much more entrepreneurial. We've also appointed more than 200 leaders close to clients and to drive growth. Secondly, accountability. We've aligned our objectives to our strategy. We've launched sales incentives and increased reward upside for over-performance by 25%. And we will continue to invest in developing accountable leaders that can help us turn strategy into execution every single day. We are saying out loud that exceptional work is worth more and that accountability turns both ways, high standards, matched with genuine care for the people delivering them. Finally, consistency. Our job is to make excellence the standards. We've rightsized the management from 6,000 to 4,000 and reduced overhead. Next comes the capability to sustain it. Performance scorecard, strategic workforce planning and AI and data literacy embedded across and throughout Arcadis. And we are also building skills for tomorrow. We've launched a Data Center Growth Lab funded by Loving Clan, connecting skill building directly to client impact. We've also launched succession programs for the next generation of Arcadis leaders. Arcadis has always invested in its people, and that does not change. It sharpens more mobility, more pathways and more opportunities to build great careers. And that's how we will continue to unlock the talent and the imagination of all Arcadians. We have tremendous assets, talented people, deep expertise and sense of purpose. That is the heart, and we don't plan to change it. It is something you cannot manufacture, though many competitors would like to. What we will build on top is a sharper focus on clarity, accountability and consistent execution. It is far easier to build a performance muscle then to grow a heart and soul. So we built the muscle and we keep the heart. One last point. performance isn't just financial, how we support people contribute to our communities and reduce our environmental footprint, is part of the same scorecard. It is not a separate conversation. Our nonfinancial targets, which are behind me, make those commitments measurable with clear accountability for delivering them. Heather, back to you to talk about AI.

Thank you, Jana. Let me explain now how we're embedding AI and digital across Arcadis to enable our strategy of focus, simplify and perform. It will help strengthen our role as trusted advisers to clients while becoming more efficient and effective as an organization, winning more and focusing on the outcomes that we deliver. Our industry has always evolved through technology, allowing us to accomplish more and create greater value. What is different today is the speed at which new tools are becoming available. The important role of data, the leadership play -- the role that leadership plays in this transition. When we bring the human together with the technology, these developments enable us to solve more client challenges faster and better. This matters because today's infrastructure, environmental and societal challenges far exceed the capital that's available or the resources, meaning engineering talent capabilities that are available. We believe that AI helps us close that gap. For us, AI is creating value across 5 dimensions. Helping us know more, operate better, win more work, deliver more efficiently and grow by opening up more uses for our skills and data. Ultimately, AI will allow us to solve more client challenges from enabling better decisions through data to operating more efficiently and effectively, winning more and delivering with greater quality and creating new opportunities. But the key to all of that is leadership and scaling. Now we do not believe AI is a scale game in the traditional sense. AI creates value when organizations can effectively scale proven workflows and deploy them consistently across their businesses. That is why our focus is on structured data, partnerships, building in-house capabilities and disciplined scaling. These are the foundations that will allow us to scale the best ideas across projects, sectors and clients. Let me show you what this looks like for our clients and in practice. In water, it means finding the highest risk lead service line without digging everywhere, helping reduce excavation costs spiked to 50%. In Highways and Roads, it means helping clients inspect to 10x more highway kilometers per day while reducing inspection costs by 25% to 30%. And in data centers, it means reducing campus planning from 12 weeks to 3 days, helping clients assess more options and move faster from concept to decision. It provides greater visibility of options, risks and trade-offs and identifies them early, helping clients to reduce development risk skip projects to construction faster and bring critical infrastructure online sooner. You would have seen some of the showcases outside before this event. And if not, please stop by, they're worth seeing after the Q&A session. This is how we approach AI, solving real problems, proving real value and scaling the best solutions across our sectors and services. We are embedding AI directly into how we deliver projects, how we win work and how we operate the business. Here are three examples of how value is being created. One, our partnership with Nomic, our AI partner that is purpose-built for engineering. More than 400 engineers across 17 countries are now using over 700 automated engineer built workflows to analyze drawings and specifications and process complex project information. The power of this is scale. Once an engineer captures how they conduct a review, that expertise can be applied anywhere. Increasingly, engineering standards sit in the workflow, not in one country, not in one office, not in one head. Nomic connects directly to the tools and the teams are already using, improving quality, creating greater consistency and supporting our productivity on our lump sum projects. It has already supported $50 million in project wins and is being deployed across our pursuits, representing approximately $450 million in our pipeline. Another example of how we are scaling AI is our industry-leading partnership with Autodesk. Embedding it directly into the design and engineering workflows that a majority of our people are already using. We combine Autodesk technology with Arcadis' data, knowledge and engineering expertise to improve productivity and most importantly, quality, ultimately delivering better outcomes for our clients. This is not about replacing technical expertise. It is about helping our people do more of what they do best, reducing internal activities like RFP reviews, and pursuit preparation and allowing our teams to spend more time with our clients, delivering better outcomes. I'm excited to turn the conversation to Hans Dekker, our Chief Operating Officer, to facilitate our industry deep dive session with our industry executives who will bring our strategy, focus simplify and perform to life.

Thank you, Heather. I'm Hans Dekker, Chief Operating Officer of Arcadis. And coming in, you would have seen that our brand says imagination is how. My role is the how. Turning strategy into results for our clients and our shareholders. I'm an engineer from [indiscernible] and for more than 30 years, I've led large businesses, global businesses and complex projects, from the Dutch high-speed rail line, San Francisco Oakland Bay Bridge up to offshore wind farms in the U.K. I've lived and worked across Europe, the Middle East, Australia and North America. I've grown [indiscernible] global infrastructure business by more than 30% and have transformed [indiscernible] $6 million operations into a more scalable and profitable one and let recovery for a $2 billion fixed price project. Along the way, I've learned that strategy only creates value when it's executed well and backed by the right controls. Today, and responsible for how Arcadis delivers our services capabilities, sales and marketing, technology, data and the AI that supports them. My focus is simple, excellent in execution, transforming delivery and building the global capabilities that allow Arcadis to grow. That's what I'm accountable for, and that's what you should hold to me. So what's driving that focus that I mentioned and how are we going to execute brilliantly to tap into those opportunities. I'd like to introduce Ramin first to bring that to life.

Thank you, Hans, and good afternoon, everybody. My career has spanned more than 30 years in Transportation. I serve on the Board of Intelligent Transportation Society of America, where I also had served as Chair and have led some of the most innovative and complex projects deploying sensor-enabled asset management solutions. Clients trust Arcadis to deliver some of the world's largest projects and integrate advanced technologies that optimize critical infrastructure performance, generating repeatable revenue and expanded margins. My name is Ramin Massoumi, and I lead Transportation globally for Arcadis. Transportation at Arcadis is a EUR 1 billion business and a core industry for us. Making up approximately 27% of our revenue. We are seen as a top-tier trusted adviser, designer and integrator by many clients as you see here on the diagrams, such as Georgia Department and Transportation in the United States, Metrolinks in Canada and Deutsche Bahn in Germany. These relationships with the world's largest and leading infrastructure organizations give us a focused platform to grow with purpose. So where do we see the market growth. In North America, growth is about infrastructure and expansion and modernization. In the U.S., owners and operators are adding capacity through major capital programs, and public private partnerships, which require a one connected system approach. Canada is seeing massive investment in high-speed rail trade corridors and ports through their nation-building programs. In Europe, the story is about renewal. Networks are aging and face rising demand and climate stress Germany, for example, is making record investments in transportation infrastructure. Defense is also creating infrastructure demand as moving heavy equipment depends on roads, bridges, rail and ports Clients need to modernize, add capacity and unlock more value from existing assets, all at the same time. Transportation is one connected system. Creating opportunities for services throughout the asset life cycle. Arcadis is one of the few firms that can really credibly work across that full life cycle. We work on some of the most complex projects across the globe. Fraser River in Canada, high-speed rail in the United States and work we do locally here at [indiscernible]. Through these, we have developed repeatable delivery playbook that can be scaled effectively with local deep expertise to optimize, replace and modernize critical infrastructure, in high-growth sectors. So how are we taking that a step further. We are prioritizing high-growth geographies where we are strong in, such as U.S. Canada and Germany. And moving beyond single projects to long-term programs with significant revenue and margin expansion potential. The opportunities to expand our client base are in rail and highways where we have the largest scale today, expanding our leadership in modernization and optimization programs. On Hudson Tunnel in New York, our delivery partnership was extended by nearly EUR 100 million drawing on our Dutch tunneling expertise and global major programs delivery capabilities. Ports is one of our fastest-growing sectors for us where we see double-digit growth. Arcadis is the lead designer of Canada's largest Container Terminal Project providing multidisciplinary services, including design and environmental. Once completed, it will increase capacity at the port of Vancouver by over 50%. In addition to focusing on high-growth markets, we will grow our margins through increased integrated selling, expanding our portfolio towards the full life cycle and higher-value services. This is further enhanced by targeted bolt-on acquisitions such as the one we did in Germany, where we have added 160 rail specialists with experience and prequalifications with Deutsche Bahn. And we are focused on accelerating innovation through key hires and partnerships to strengthen our work in the OpEx space, which has proven to create higher margin revenue. In the Netherlands, [indiscernible], we won ProRail's EUR 12 million rail traffic management system modernization project. Our connections with clients are deep. We offer a wider life cycle set of services across traditional and innovative solutions. And we have a proven delivery platform. I am confident in our ability to execute our strategy, focus on growth and sustainable value. I stand committed to delivering mid- to high single-digit growth.

Thank you, Ramin. Some strong opportunities across our major programs many where we already have a leading position. I'd like now to invite Karin, who have had conversations with about this being a generational moment. And Karin, where are we seeing how connected these challenges are and how does that put Arcadis in a strong position given our experience?

Thank you, Hans, and thank you, Ramin. And I will start leaning into what Ramin just shared about integrated selling. Nothing gets filled, made, move it or computed without power and water. In more than 20 years with Arcadis, I've learned that this is an industry that is critical to and connects across all the industries on stage today. And during my 30 years of professional experience, leading teams across Latin America to deliver iconic projects in that industry from green hydrogen to transmission lines, water infrastructure to climate adaptation programs, from sustainable mining to remediation work. I've been leading on board with our clients. And through this, I have brought new thinking to how we create commercial and generational value in these critical industries. That approach has been recognized in awards like Women in Global Energy Transition and Built Words Global Innovator. I am Karin Formigoni, and I proudly lead Energy & Water, our core industry. Energy & Water is already a EUR 1 billion growth engine, representing 26% of Arcadi's net revenue. It brings together 4 connected sectors with major key clients across all. We entered the next strategy cycle, building with a strong track record of organic growth and significant margin step-up with growth driven by U.S. water, sustainable mining and German grid expansion. For decades, this industry has talked about cycles. But the opportunity in front of us is structural, not cyclical. The figures on the screen show the scale. Sustained investment in global power, major water needs in the U.S., the energy transition in Europe and data center electricity demand that is expected to double in 2030. But the real point is not the size of each one of the market in isolation. As Heather mentioned, AI, electrification, energy and water security, industrial investment and climate pressure are pulling these systems harder at the same time. Power depends on water. Water depends on power and energy intensive developments only move when land, grid capacity, water, permitting and climate resilience all line up together. That is our powered land proposition where we see opportunities across all industries. That is why integration at the interfaces is becoming valuable. And this is why Arcadis is well positioned to capture that value. This is one connected client problem. We bring our imagination to solve and that fuels our focused profitable growth. And this is what excites me most about our industry. So now you should be asking why Arcadis in such structural sectors. First, our differentiation starts with scale and relevance. We are embedded in the world's most important water systems, touching 100% of the U.S. water supply in all 22 water sheds, and we work in 9 out of 11 water companies in U.K., giving us unmatched data insights into the challenges facing utilities, regulators and investors. And we take that further to protect cost lines, communities and economies. In New York, we are protecting Manhattan shorelines and critical infrastructure from climate impacts combining climate risk analysis and resilience planning, engineering and design and environmental expertise at scale. Together with our deep technical expertise and intelligent solutions, this enables us not only to design assets but to help clients make better investment, regulatory and operational decisions throughout the life cycle. Second, our decades of experience in critical power infrastructure, longstanding relationships and multiyear frameworks with some of the world's leading energy investors and operators, such as Tenet, National Grid and international energy companies. Through global account relationships and local delivery excellence, we help clients modernize grids expand capacity and build the secure and resilient energy systems needed for the future. Positioning us for our clients' most strategic decisions rather than simply delivering individual projects. Third, our integrated model allows us to enter earlier and stay longer with clients like Ambient and many water utilities we engage when investment decisions are still being shaped, bringing together engineering, sustainability, environmental and digital expertise to improve outcomes, enhance competitiveness and unlock greater long-term value. That is what integrated selling means for us. So our focus is clear, to maintain high single-digit growth and continuous performance improvement. We will pursue that through three priorities: being excellent in the places where we have the strongest client relationships. First, strengthen our leading water position by moving further upstream into advisory and further downstream into operations and asset management. In the second quarter, our Water teams won 373 projects globally. This is amazing. The priority now is to convert that reach into more life cycle work, recurring revenue while accelerating digital solutions; second, expand power capability globally through specialized talent and selective investments, such as through the preparation of our professionals in Arcadis Energy Transition Academy and our recent acquisition of SATEL in Spain. In the U.S. We will accelerate recruitment selectively where our existing client relationships and ability to integrate complex infrastructure give us an edge. Third, cross-sell Power and Water into energy-intensive industries. In sustainable mining, critical minerals are a key resource for the energy transition and the AI boom. For example, at Vales Ponta da Madeira in the Northeast of Brazil, our environmental and sustainability capabilities open the door permitting, water management, decarbonization, biodiversity, social legacy and closure plans. And innovation [indiscernible] brings all three priorities to ensure speed, consistency and scalability. We provide expert judgment with AI tools co-creating with clients like we are doing in our AI for water innovation challenge, where we receive it over 40 innovation ideas, 5 of which we have co-funded and are piloting with our clients. We are now scaling this to the energy space. So focus also means choices. We are not pursuing heavy EPC exposure. We concentrate on high-value consulting, engineering, environmental and program work, scaling delivery through our global excellence centers, which carried 14.4% of ours in the first half of this year, up from 10.5%, 3 years ago. With this discipline, we are creating repeatable profitable growth. So the market is structural. Our differentiation is proven. And we are investing in the people, innovation and capabilities to deliver high single-digit growth and generational impact. That is the opportunity and the execution standard I am committed to.

Thanks, Karin. The delivery standard is indeed critical. Once we standardize how we work, we can automate it, and scale it through our global excellence centers. AI supported technical reviews are already up to 70% faster. This is freeing our senior experts to take those opportunities you mentioned, further with our clients, as Heather mentioned. I now like to invite David, who leads Industrial Manufacturing and Technology, our accelerate industry to show how we're helping clients build their plans, fabs and data centers behind AI and new medicine.

Thank you, Hans. Good afternoon, everybody. So my [indiscernible] is global experience. Design and delivering complex manufacturing facilities, has really taught me how the specialist expertise sets you apart. It creates sustainable growth. I'm David Aimable-Lina. I've built my career in some of the world's most demanding industrial manufacturing facilities and infrastructure environments across the U.S., Europe, Latin America, Japan, South Africa, to name a few. So while my foundation is within engineering, my career has really been about leadership, building capability, delivering results in complex environments. I lead the Manufacturing & Technology, our accelerate industry. So it's part of our business that plans and designs and delivers facilities from pharmaceutical to semiconductor fabs to data centers and advanced manufacturing facility. The sector is about 21% of our net revenue, and it's driven by three things. First, clients are looking for a single trusted adviser across their program with a deep understanding of their business, with the capacity and the capability to deliver at speed and of certainty. Second, they are all highly regulated and I have complex manufacturing and production requirements. Thirdly, specialist expertise is a common thread across all three sectors. So what's driving accelerated growth that we are seeing. AI is driving digital infrastructure. And with that, semiconductors [indiscernible]. Medicine is moving towards advanced therapies, manufacturing is invested in automation and technology-enabled services. Numbers on the slide show the scale. The important point here is to understand what's behind them. We are seeing significant client investment in CapEx. And now we're also seeing significant client investment in OpEx simultaneously. We are also seeing a greater dependence on our core industry that Karin touched upon earlier: water for cooling and power to fuel these energy-intensive solutions sustainably. That's a massive integrated selling opportunity, and it makes this a capacity race as well as a market race. So why do clients choose Arcadis? All of these require a scarce expertise which we have. From process engineering in clean rooms to commissioning and validation, then add the utilities and those challenges of [indiscernible] power and water. We really encourage sector movement in our insights, knowledge from our subject matter experts. And also, we combine that with advisory, with engineering and digital capability, which we already see within Arcadis. It all fits together. And the real important point here is one sector innovation becomes another sector standard of [indiscernible] procedure. This is how and where we scale and why we transfer our capabilities from one sector to the other. It's also enabled by some of the proprietary digital tools that Heather mentioned earlier. We also have deliberately invested in bolt-on acquisitions, acquisitions such as KUA, which has really strengthened our data center planning, our engineering and our permitting capability. And it's with all these moves that we're now seen as an industry leader within the industry. So let me now touch on how we'll accelerate growth within the next strategic cycle. First, we're going to start simultaneously upskilling and investing in talent to scale our capability. As Jana has said earlier, we've recently launched a Data Center Growth Lab funded by the [indiscernible] Foundation, which will equip over 1,500 of the Arcadis engineers over the next 3 years. Second, we're going to start expanding our work beyond CapEx, advisory at intelligence. That's going to help clients decide where and how to invest. Also, we're then going to look into commissioning, operational readiness, asset performance and optimization. We're doing this already. So at Lilly, at [indiscernible] -- we're already continuing [indiscernible] to commissioning. We're looking at validation, we do qualification. We've supported their start-up in their first batch of drugs. So we don't end up design and we don't stop at project handover, we continue into the OpEx element of the project. That's integrating selling, integrated selling, building the client relationship beyond the capital program and into the operating life of the asset. Revenue growth will come from expanding our project work through long-term client relationships, not one-off projects. We won more than 280 data center projects with large-scale clients globally over the last year. So our strategy is really focused on bringing services to those clients, expanding our share of the wallet with them. And then finally, we're also partnering with some of the world's leading companies within life science, digital infrastructure with hyperscale and then on to semiconductors, to helping them shape the programs. So we have some really strong opportunities. We're invested in strong expertise and I'm personally committed to accelerating growth within these two sectors. Thank you very much.

Thank you, David. Our transformation is what makes that expertise globally. We're already moving capacity to stronger markets and into priority programs. One global delivery team, fully integrated excellence centers that are home to 15% of our people. I'd like now to invite Bill to share how we are creating greater focus and being deliberate about the choices we make in Real Estate & Development.

Well, good afternoon, everybody. I'm Bill Teberg, Global Industry Executive for Real Estate & Development. I joined Arcadis approximately 18 months ago, having spent around 35 years in the real estate industry, both working for owners and service providers. The story I'd like to leave you with is a simple one. As you heard from Heather, we are making deliberate choices about where we compete, where we divest, where we optimize for greater portfolio performance. This is exciting for me, because I have experienced the divestiture of a noncore service and understand how this success helps create business focus, optimization, improves margins and at the end of the day, it creates better value for your clients. So let me start with the business itself. Real Estate & Development is 26% of the net revenues in 2025. Within our portfolio optimization, let me focus on how we create the strongest business across our three key markets. Defense and security, public and institutional and then property investors and occupiers. These markets are all experiencing different dynamics, but they have one thing in common, and capital is becoming more selective. Clients and investors are placing greater emphasis on resilience, performance and long-term value creation. We are concentrating where the market is growing, where Arcadis already has a credible path to pursue and remain involved across the asset life cycle that can create higher value and repeatable growth. The figures on this slide are not simply indicators of market size. They point to areas where capital investment is increasing and where we believe Arcadis capabilities will create value for our clients. Taken together, defense spending across Europe, the U.K. and Ireland, Republic and regional properties and global commercial, the state market creates attractive opportunities for sustainable growth. As an example, defense spending in the Western world is on track for the biggest surge since the cold war. Many companies that we work with see record funding and defense-related manufacturing, engineering and research facilities. Approximately 61% of this is in North America and approximately 34% in Europe. This will include delivering integrated services with our industrial manufacturing industry to bring One Arcadis to our common clients. So what gives us confidence how we have differentiated our offering with many long-term clients supporting their portfolio cycle. We are involved earlier. We're helping shape investment decisions before capital is committed. And through a strategic advisory group, we help define the problem and the investment approach for our clients. That early involvement allows us to remain relevant, supporting clients across their asset -- their life cycle of assets rather than just through isolated projects. In the U.K., we have a strategic partnership with Cornwall Council, which is a single provider partnership and arrangement that is collaborative. Our relationship here has spanned over 20 years, providing program management and site supervision. So the overarching priority for real estate and development industry is very straightforward. We're going to optimize the core business. We're going to grow through disciplined account growth, and we're going to create stronger execution. The three priorities on this slide show how we're going to do that. First, defense and security. As I shared earlier, we see the strongest alignment here between client demand, market investment and Arcadis capabilities. We're expanding our position in the U.S. Federal Military facilities. We're growing our U.K. Ministry of Defense presence, and we're building a broader NATO portfolio. We already have a strong foundation supporting the United States Army Corps of Engineers across nearly 30 districts in the U.S. and in Europe. And we continue to see opportunities to expand long-standing relationships into broader mandates and services. Another example is our continued environmental work with the Department of Defense, deploying our HRX well technology, which is cleaning up contaminated water on military installations. Second, our public and institutional Here, advisory is our gateway to growth, particularly in the Americas. Government and public bodies are increasingly looking for partners who can help them prioritize investment modernize aging estates and improved resilience. Our objective is to secure more of those advisory positions and convert them into downstream planning design, engineering and program delivery work. And finally, property investors and occupiers. Our focus is scaling integrated mandates rather than individual services. We're expanding our transaction and independent advisory capabilities in the U.S. We're expanding full-service design opportunities. We're divesting noncore services and we're strengthening our position across -- with investors across Europe and Australia. So in closing, the opportunity isn't simply winning new work. It's expanding trusted relationships into broader long-term mandates. Growth in real estate and development isn't dependent on any single market, client or capability. I'm committed to creating focus and multiple pathways to sustainable growth across the portfolio.

Thanks, Karin, Bill, David and Ramin. So what I'm hearing is that we're bringing together stronger client relationships differentiated expertise and more disciplined delivery. That combination helps us win the right opportunities and create value for our clients and shareholders. I'm now handing it over to Simon to talk about the financial performance.

Thanks, Hans. And well, how do you follow that? That was incredible. All four of them. Thank you. Another round of applause for those four guys. And thanks to Hans, the whole team for bringing the strategy to life and really brought it to life, I think, for us today. So look, I know this is the bit you've all been waiting for or some of you anyway. We are fully focused on delivering attractive shareholder returns through a focused strategy incorporating mid-single top line growth, margin expansion, disciplined capital allocation, and I'll now step you through each of those elements. Turning now to the top line. We'll deliver our mid-single-digit target by focusing investment and capital on our strongest markets, shown here as Core and Accelerate. We expect each of these to deliver mid- and high single-digit organic growth, as you've heard from some of my colleagues with further inorganic growth from bolt-on M&A. In our core Transportation market, we're increasingly involved in larger and more complex programs. Today, we're pursuing several large multimillion euro opportunities in North America, supporting our expected high single-digit growth outlook. Our Energy team, as you've heard, is successfully expanding our business portfolio particularly in Europe and is evident in high single digit to low teens growth, this business has shown recently. We're now looking to expand further within the U.S. In Water, we've consistently outperformed particularly in the U.S. with mid-teens growth for the last couple of years. Within Accelerate, we see significant opportunities to increase market share, by adding new large pursuits to our portfolio, driving mid- to high single-digit organic growth. And in industrial manufacturing and technology, we already have sectors performing at high growth rates. For example, in Digital Infrastructure or Data Centers, we already have 40% plus growth rates, representing net revenues of over EUR 200 million. And in our Life Sciences sector, we come from a lower growth base last year, but are now seeing improving momentum through strong order intake with our U.S. pharma client base. And in the Semiconductor sector, we anticipate a step-up in revenues from opportunities with both new and existing clients. Together, these trends will give us confidence in the growth outlook for our Core and Accelerate industries. In Optimize, the growth trajectory will be a balance of disciplined investments, as you heard from Bill, in growth areas, as we outlined in the industry discussion. This will be offset by the noncore disposals that we have announced today. We will continue to review our portfolio for underperforming sectors. And as Heather mentioned, we continue to review the portfolio and to take very decisive action, to turn around or dispose of assets where appropriate. Overall, we will significantly increase our exposure to higher-growth sectors from 74% of net revenue to 85% by 2029. Turning now to our target margin. We confirmed that our Q2 results that we're moving away from reporting operating EBITA to operating EBITDA from 2027. This is in line with industry norms and hopefully, is not confusing. We are focused on margin expansion with clear pathway towards our mid-high-teens target, and let me walk you through the key levers to deliver on this ambition. First, we're focusing on the portfolio, reducing exposure to lower-margin sectors by either selling or winding down some of our noncore businesses. And this includes around a pro forma 1% margin step-up from the divestments announced today. I'm sure that as we rightsize the associated overhead, we will see additional benefits. Second, we'll continue to drive top line growth and operating leverage by focusing on our strengths, our goals here include improving our win rates by operating a new simplified model based on sector and service. We'll have 10 to 15 sectors and provide 6 services to our customers. It becomes very simple. This will make it easier for track our sales performance by client and drive billability by service. In addition, the majority of our clients currently take only 1 of our 6 services, and we aim to improve cross-selling. We're also applying more targeted sales incentives as well as differentiated pricing. We're driving improved billability by optimizing resource allocation supported by our new sector service model, must be a client. We are changing from profit following people to profit following projects. This will mean that project managers are incentivized to use the best and the most cost-effective resources wherever they are. We're incentivizing our service teams to improve our billability and we're targeting a 2 to 3 percentage point increase in the coming quarters. Third, our cost-cutting program has already removed layers in the organization. We have an ongoing program to reduce overhead relating to around 1,000 FTEs, and fourthly, our investment -- disciplined investment program, which I'll outline in the next slide. These levers enable us to achieve our mid-high teens 2029 margin target. And I want to emphasize, this is not a cap on our ambition. And we anticipate nonoperating costs to achieve our reset strategy of around EUR 75 million to EUR 85 million in 2026 and EUR 70 million in 2027, GBP 40 million to GBP 50 million of that associated with exit and the balance associated with transformation and investment in the business. We expect to complete our reset by the end of 2027. So over this period, we'll make disciplined investments in people, we're implementing a performance framework and scorecards. We're hiring top talent, which takes time to ramp up and become billable. We're being very mindful about nonbillable time and how this is directed into business development activities to improve our win rates, and we're simplifying our operating model. As Heather mentioned, we will continue to scale delivery through automation, standardization and our GECs, freeing up our people to deliver more value. This includes driving value-based pricing and bringing a sharper commercial focus using globally recognized pricing consultants and implementing strategic workforce planning. In Digital and AI, we are being very mindful about where we're investing, by improving the quality, speed and client outcomes such as through our new Autodesk partnership. Driving efficiency in our support functions growing faster by using our in-house AI studio to develop new services and build new capabilities. Strong cash generation and growing EPS are core components of delivering attractive shareholder returns. And our model delivers high cash conversion. By excluding nonoperating costs, we can examine normal performance of our business. We typically expect approximately 50% of our operating EBITDA to convert to net income, and 95% of that converts to free cash flow. So we're capital light and highly cash generative. We've got to defined priorities for how we deploy that cash through our disciplined capital allocation approach. So moving on to that capital allocation approach. These priorities for me are very, very clear. We're focused on driving growth, investing in our business and key markets and delivering returns to our shareholders. We'll deploy this capital to drive growth to provide an attractive return for our shareholders in the following framework. First, the first priority, as I just outlined, we'll invest in our business. Much of this investment is in operating expense and is embedded in our operating margin objectives. Our model is capital-light, as you can see here on the slide, at EUR 20 million to EUR 30 million per year. Second, we're committed to a progressive dividend for our shareholders. We aim to pay out 30% to 40% of net income from operations annually well above our peer average. Through this, we've been able to deliver an annually increasing dividend per share to our shareholders at around 12% CAGR over the last 3 years. Third, we'll continue to invest in value-accretive bolt-ons, bolt-on acquisitions that support our strategy with the acquisition last year of KUA and a Rail business in Germany last year. Lastly, whilst we will -- whilst maintaining our investment-grade rating profile, we'll proactively look to return any surplus capital to shareholders. We'll update our cash generation, including the opportunity for share buybacks at our full year results in February. Our balance sheet is healthy at a net debt to operating EBITDA ratio of 2x as of second quarter, and we remain committed to keeping our leverage within our target range of 1.5x to 2.5x and retaining our investment-grade credit rating. So let me close. We've acted with urgency and we continue to do so. We've reduced costs. We've strengthened cash discipline. We've resized the business and embedded a relentless focus on capital allocation. And we have a clear strategy with clear targets to drive growth, margin expansion and cash generation. We're targeting mid-single-digit organic net revenue growth through the cycle and an operating EBITDA margin in the mid- to high teens. In the near term, we remain on track to deliver our 2026 guidance of low single-digit organic growth and an operating EBITA margin of 11.7% to 12%. Today, I'm also setting out an ambition beyond our 2029 strategic targets. We believe Arcadis has the potential to more than double EBITDA over the next 5 years. We will achieve that through sustainable growth, margin expansion strong cash generation and disciplined capital allocation. Ultimately, success for us is simple, delivering attractive shareholder returns through consistent growth improving profitability, strong cash conversion and disciplined deployment of capital. We stand at the start of a new era for Arcadis. The world needs solutions we provide our clients need the expertise we bring, and our people are ready to deliver. So today is more than a presentation. It's a call to believe I call to believe in our strategy and our capabilities, in our people and in our future because we are convinced that the best of Arcadis is still to come. And with that, I'll hand back over to Heather.

I'm standing here today 7 months into my role as CEO. And in those 7 months, we haven't waited for today. We have already acted. We have already made hard portfolio [indiscernible]. We have simplified the organization. We have put new leaders in place, and we have aligned our leadership team around a clear strategy and clear accountabilities. We are building a more focused and simplified company that will deliver for our shareholders, for our people and for our clients. And by the end of this year, every Arcadian will understand where we are going, what matters most and their role in delivering it. When you align 34,000 talented people behind the same clients, the same priorities, the same ambition. And they bring their imagination to clients. That is incredibly powerful. And what unites us is something that is all ready here. Our culture, our commitment to our clients and the pride we share in being Arcadians. One Arcadis, 34,000 people moving in the same direction. That makes us stronger. We are a powerful organization, and we are just getting started. That makes us unstoppable. And with that, I'll hand it back to Christine for your questions.

So we'd like to open up for Q&A. And I would like to invite the analysts in the room, to raise some questions. Senan will come over with the mic. Please limit yourself to two questions. No A,B,C,Ds. Martin?

Martijn den Drijver for ABN MRO. The word focus, accountability. They've been mentioned a number of times. But for us to track your performance would also be nice if you actually introduced metrics like billability, tariffs and the likes. Do you intend to -- and if not, why not?

I think you raised great questions. We look to our peers, we look to see what the market norms are we look to disclose as much as we can, and we feel is appropriate. So we obviously track all those metrics internally. Our new model will make life very much easier to do that and much simpler for us. So we just want to make sure that we're reporting along the lines of our peers. That's exactly what we do. And we've obviously studied that. We see some people do some slightly different things, but we will consistently report along the lines of our peers.

Okay. And you've talked about your new executive leadership team, fresh blood, new ideas, more energy. But I can't help but see that in line with the previous organization, you're the new leaders of the divisions are spread out over the world. How do you think about that span of control relative to the issues that you previously had and how to solve that now going forward?

Yes, I can speak to that. So our full executive leadership team is located here in Amsterdam. So Jana, Hans, Barbara, Simon and I are spending time in a corner. We love you to come see us over the cube house just down the street. And we believe, one, we're having a lot of fun. And two, it's a lot better way to run the business. The second part about our industry executives. Bill is located in the U.S. David has relocated to the U.S. Karen is also relocating to the East Coast of the U.S., all three and Ramin is on the West Coast of the U.S. So all of our leaders are representing the largest regions that we have.

Next question, Derek, go ahead.

Yes, Dirk Verbiesen, ING. On the growth ambition, so we now have some more input on the different, let's say, the key segments. But adding those up -- and we -- of course, we're here to challenge a little bit on the new ambitions. But the -- let's say, adding the key growth areas, I think you arrived at 6%, 7%. And on the group level in the new composition with 10% of revenues to be sold. The presentation by -- on the Property business didn't sound like a shrinking business, at least for the business that will stay within Arcadis. So the 5% group ambition, so the mid-single-digit organic growth is that could be at least before the 5%? Or is it -- am I missing something in adding the key ingredients?

So first of all, Simon mentioned this on EBITDA that we don't see this as a cap. So we're absolutely not stopping our leaders from growing and driving growth. We talked about Transportation being mid to high. We talked about Water and Energy being high single digit. We talked about Industrial Manufacturing being mid- to high because we have a way to go there. And we talked about Real Estate and we didn't talk about Estate and Development, but you can imagine that what we're really doing is focusing on margin there, and we're going to be really selective. So we'd like to see some growth on that side, but we're not committing to it right now.

And we're being quite measured about it. It's all around our new strategy around focus, simplify and perform. So you heard from the 4 leaders there's nothing stopping them, but it is making sure that we allocate our capital, allocate the talent do a bolt-on in the right sector and in the right service. So we're not limiting ourselves. You can do the math either way, and I don't disagree with your math at all, but we've been quite measured in our proposals today.

And just each one of these industries is made up of multiple sectors. Some will have greater growth than others. And I think you probably heard that tone in Bill's presentation as well.

Yes. On the -- let's say, on the timing and on the -- through the cycle mid-single digits, maybe on the pipeline and also the conversion we've seen so far, which is actually looking very encouraging in the first 2 quarters.

Yes. We have over 7% backlog growth.

So when -- let's say, on '27, '28, '29, what is the path that we analysts should model, let's say, in terms of still staying a bit cautious maybe. But is it 3%, 4%, 7%, 4%, 5%, 6%?

We would love to think of, Dirk, about a linear path, but life is not linear. We've got a great pipeline, as you say, a great backlog. Some of that pipeline doesn't necessarily -- or backlog doesn't convert in a linear way because it's a large rail project or a large road project that can be lumpy, but we see a good positive trajectory in front of us. I'm sorry, I can't write your model for you, but I think you're going in the right direction.

Yes. And last question on -- because you mentioned [indiscernible] in the press release. Are they going to play a different role going forward because they were, I think, already involved in educational or, let's say, training purposes within the group?

Well, first of all, we don't speak for [indiscernible]. And -- but we engage with [indiscernible] on making investments that are aligned with the strategy. So we have these conversions all the time. We're having the discussions. We talked about the data center lab that was just launched. We -- you may have seen on the Zatastock when you came along, for those of you who took a train, our brand launch, you saw the video here today. [indiscernible] helped us with that. they will continue to be a part of the discussions of our strategy development and they represent our employee organization, and that will continue.

It's David Kerstens from Jefferies in London. Two questions, please. First, on your rightsizing, you indicated now another 1,000 people for 2027, I think it brings a total to over 3,000, around 10% of your workforce. What is the impact on your top line growth and on the potential for margins? The potential for margins seems quite high, right, based on that? And to what extent will it be offset by new hiring?

Top line growth just -- it's mainly overhead and non-billable. So it's not really any one cash who's generating billable hour but we're trying to encourage them to do more as the client demands that. So yes, and if you sort of do the math, the margin could could be quite interesting as you say. However, it does take time. You have hiring going on. You have other investments going on, so it's not always one for one. But yes, the ambition is to have all of that overhead savings drop through to the margin and to drop through the bottom line. But David, doesn't quite work like that and timing is off, and it does get -- sometimes get overtaken by some of the investments that we're making in maybe we're hiring top talent that's not billable in data centers or in pharma, and it just takes a bit longer for those people to get billable.

And Simon, just as we divest certain parts of the business, we want to make sure we don't have stranded costs. And so part of those 1,000 are really looking at that as well.

And maybe a second question on the potential for cross-selling. You highlight most customers only take 1 of your services. What is the maximum number they can take, not all 6, I assume, what are the most important ones?

All 6. Yes. We work through the entire life cycle, and we do have projects that take all 6. It's going to be a lot more transparent for us now to see how we can bring our best capabilities to our leaders. The environment planning design and engineering. We want to be able to, as our leaders talked about get in, get with our clients. They trust us and let's support them across that complex situation they're dealing with, with their full asset life cycle.

Yes. So I think you heard from David and Karin around sort of data centers, power and water and industrial manufacturing and pharma and semi, it's -- everything we do speaks to the life cycle, as Heather said. So we think there's -- now we've got a clearer structure, a clear incentive clearer, clearer focus. It's clear what we actually do, and I think it will be a really good opportunity to cross-sell.

For me, it's really about that focus, simplify and perform its culture. All of that is going to encourage our account leadership as well as the transparency Simon just spoke about, to bring the full capability to our clients for each one of our people and make it simpler to do that. And that's what we're really excited about is being able to do that. And then also have a line of sight. It is something that we haven't set a specific target on, but we will be able to talk to you about the progress that we're making in that area.

Kristof Samoy, KBC Securities. Thank you for the insightful presentation. you've talked quite a bit about the opportunities and to echo Heather. You said it's not about the opportunity, it's about the execution. So I can only second what my colleague said. We heard a lot of talk about driving billability. It would be great if you could share that with the analyst community. And then secondly, on the divestments. Could you disclose how far along you are in the process? Did I understand correctly during the part of Simon, that you aim to close by end '27 with the divestments? And yes, this a sizable amount of goodwill on your balance sheet. Is there any -- can you disclose how much goodwill or carrying value is associated with the activities that you intend to divest?

So look, on billability, understood, we hear you. Thank you for that. On the divestments, so let me just say a couple of things. China, we've signed some terms with our management for a partnership. We are moving that along. China, as you know, has various regulatory hurdles to jump over and hoops to jump through, so that will take us some time. But I'm optimistic by the end of this year, early next year, we'll get a relation there, and our architecture business, we're just really getting going now. As you can imagine, it's had a number of years to spread its tentacles through the organization. We're gathering the data, gathering the information, we're mandating some advisers to help us to do that. So that will take us a little bit of time, but we thought it was absolutely the right thing to make the announcement today. It's our intention. It's stating a clear decision. It's a clear break with the past, a clear intention to move forward with that divestiture. So I will commit to updating you very regularly on progress there, and we will step through that as quickly as we can, as you heard from all of us as an urgency to put those things behind us and move forward. I can't disclose to you the goodwill today. Again, we'll update you there. We are aware of what went on in the past and all the goodwill on our balance sheet, and we'll do a full analysis and work with our accountants and our advisers and update you as and when. But I think when you think about goodwill, you sort of think about what went on in the past, and we've acknowledged and as Heather and I and others have said today, we've diagnosed that past. We faced up to that past and we've admitted that some of those capital allocation decisions where, quite frankly, not the best capital allocation decisions that one could have made. And we're sorry for that, but we're determined not to make those mistakes again. We're determined to make those divestments and move forward.