Good day and welcome to Arcadis Q4 and Full Year 2023 Results Conference Call. Please note this call is being recorded, and for the duration, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. Only two questions allowed per time. If you require assistance at any time, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Christine Disch, to begin today's conference. Thank you. Thank you, and good morning and good afternoon, everyone, and welcome to this analyst meeting. We are here to discuss Arcadis' fourth quarter and full year 2023 results, which were released this morning and are also made available on our website. With us on the call are Alan Brookes, our CEO, and Virginie Dupérat-Vergne, our CFO. We will start with a presentation by Alan and Virginie, which will be followed by Q&A. We would like to call your attention to the fact that in today's session, management may reiterate forward-looking statements which were made in the press release. Please note that any of these risks related to the statements are more fully described in the press release and on the company's website. Now let's go over to you, Alan. Thank you, Christine. Yes, good morning, good afternoon, everybody, and welcome to our full year and fourth quarter results call. Arcadis has delivered a record quarter and full year performance, delivering gross revenues of over EUR 5 billion. Our net revenue for the full year reached a record high of EUR 3.8 billion, a 25% increase year-over-year, driven by strong performance of the acquired businesses, IBI and DPS, but also strong performance of the remaining business, which is reflected in an organic growth of 9% for the year. Net revenue was exceeded by order intake of EUR 3.9 billion, setting us up well for the future, and we still see continued strong client demand across our key markets with an outstanding result in North America. Our operating EBITDA margin improved to 10.4%, up to 9.8% in 2022, and in line with our strategic target of being over 10%. We now have successfully completed the integration of Arcadis IBI and Arcadis DPS. These were both finalised by the end of last year. This is driving revenue and cost synergies for the group and, again, resulted in significant project wins over the quarter. I am pleased to report that we have successfully delivered on all the key targets we set out in our 2021-2023 strategy cycle, maximizing impact. Last November, we launched our new strategy for 2024-2026, accelerating a planet-positive future. I will share more on this shortly. First, I'd like to take a look at some of our most important growth end markets and the areas where we are seeing Arcadis truly stand and differentiate from our competitors. The first of these is climate adaptation, where there is an urgent need to make communities more resilient to rising sea levels and flooding. We have a long history of designing and delivering flood alleviation schemes globally, and in both Europe and North America, we are working with government agencies and local municipalities using data to help model risk and demonstrate the economic and environmental benefits of flood protection. In the UK, for example, we are helping the Environment Agency demonstrate value for money from England's GBP 5 billion flood and coastal risk management program. Combining our sector knowledge with detailed analysis of past Arcadis projects, we have modelled a benefits register aligned with the UN Sustainable Development Goals. This serves a dual-purpose and reporting mechanism for sustainability and flood alleviation. The results are impressive. For example, we identified a 500% increase in the benefits that would result from one project alone. This use of data not only improves project delivery but also provides a compelling evidence base to target future funding and build stakeholder support. The second project I'd like to talk to you about, you can see here, is water optimization. In North America, for example, we have a longstanding relationship with the U.S. Army Corps of Engineers, providing environmental remediation services spanning safe water and land use. In 2023, this work included our appointment as part of a $200 million shared capacity framework to provide architecture and engineering works on several projects across the Great Lakes and Ohio River Division. Our scope of works covers nature-based solutions such as ecological restoration and the design of both water management and transportation infrastructure. It also includes digitally enhanced water management services, which will be implemented alongside flood reduction and dam safety engineering. This will bolster long-term resiliency for communities across the region. Finally, as well as cementing our position in the two growth markets I've just discussed, the integration of our acquired businesses has helped to reposition Arcadis in new future-proof markets, including semiconductors and life science manufacturing facilities. Let's have a closer look. Over the last 12 months, we have focused on integrating Arcadis IBI and Arcadis DPS, both operationally and commercially, into Arcadis. In May, we combined Arcadis IBI's buildings business with our architecture firm to create a 2,000-strong Architecture and Urbanism division, a global leader in urban planning, design, and building of resilient communities and spaces of tomorrow. By connecting talented professionals across multiple disciplines with our Places GBA experts, we are diversifying our services to our clients and securing new opportunities. This growing talent and expertise is why last month, Arcadis debuted at number two in the 2024 World Architecture 100 list, a remarkable achievement for the business and a direct outcome of our successful M&A strategy. Our Intelligence GBA is now fully established with a team of over 1,000 colleagues, many of them highly experienced technologists and digital advisors. We are starting to see new synergy wins already, most notably through the cross-selling of Intelligence digital products like Travel- IQ with our Mobility clients in North America. One example, which you can see here on the slide, is our ongoing transport management work for the Nevada Department of Transportation, where we are working on several multi-year advisory contracts combining Mobility and digital solutions that will improve accessibility, safety, and sustainability on highways across the state. We have also fully integrated IBI's infrastructure team into our GBAs and, in Q4, completed the integration of DPS into our Places GBA for advanced industry sector. We now have a 3,000-strong team with design, process engineering, and construction management expertise across multiple markets, including pharmaceutical, novel therapies, and medical technology facilities. This team brings a wealth of new capabilities to Arcadis and limitless synergy opportunities. One example of our work here is with large blue-chip clients across both the U.S. and Europe to drive sustainable outcomes in advanced industrial facilities. This brings together our Mobility, architecture, Resilience, and Places expertise, and our teams are currently working with 8 of the top 25 semiconductor companies in the world, including projects in Albany, Texas, Ireland, and Malaysia. Taken together, the scale of these wins and new offerings demonstrates just how transformational the last few years have been for Arcadis. The transformation is also evident in our strong set of results for 2021 to 2023. As you can see here, we have achieved what we set out to do, and this has been reflected in our net revenue CAGR of 7.6% and operating margin of 10.4%. We have delivered all our key financial targets and made significant progress against our non-financial targets, including our commitment to achieve net-zero greenhouse gas emissions within our global operations by 2035. As I mentioned on Capital Markets Day in November, Arcadis is now a stronger business than it was back in 2020 when we announced our previous strategy. We now have in place an attractive range of market-leading positions, an efficient global business model, growing our existing global excellence centers in the Philippines, India, and Romania, and a service offering that spans the full asset life cycle from concept and design to decommissioning or retrofit and reuse. This is all underpinned by 36,000 highly talented people. They are our greatest strength. And this platform positions us well for the future and is the foundation to take our business forward over the next three years' strategy from 2024 to 2026. Our new strategy is focused on one mission: to accelerate a planet-positive future by addressing our clients' needs and making a profound impact on the world. You'll remember that I spoke about this during our Capital Markets Day, but in summary, our strategy is centered on three strategic focus areas. Firstly, partnering with our clients on sustainable project choices. Second, creating value through digital and human innovation. And finally, investing in future-focused skills and an inclusive workplace powered by our people. Let me just take a moment to describe what these mean. Starting with sustainable project choices, we will deliberately focus on projects that align with our strategy to accelerate a planet-positive future. At the same time, we will enhance our profitability by prioritizing higher-margin projects. Our key clients will be an important driver of growth here, often representing larger and more profitable projects where clients expect the same service and quality in different parts of the world, something we are very well positioned for. Throughout 2024, we will build on the success of our key client program and develop it further. This will allow us to target a broader group of clients, including those from the new growth markets, and introduce a more tailored and target-driven approach. We will broaden and deepen these client relationships across our GBAs. We are also developing new commercial models that will enable us to participate in shared value creation with our clients, for instance, through incentive-based pricing or upside-sharing models. When it comes to digital and human innovation, Arcadis is a smart, digitally-enabled organization. We combine deep asset knowledge with cutting-edge innovation, data, and technology to anticipate and advise clients on the best solutions. Our Intelligence GBA is critical here, primed to leverage these capabilities to support clients across the entire project life cycle. Over this new strategy cycle, we will invest in digital products to support smart cities and advance the energy transition, foster greater GBA collaboration, and expand our offering to provide greater value and cost savings to our clients. Within our own operations, we will double down on digitalization, standardization, and automation of our operating procedures, driving efficiencies both internally and for our clients. Finally, if we are serious about our commitment to accelerating a planet-positive future, we can't do it without the ingenuity of our people. My commitment is to empower our people to shape their future and advance their careers. In 2024, we are investing in becoming a skills-powered organization. This will prioritize our people's expertise, continuous learning, and adaptability over traditional structures. It will ensure the long-term Resilience of our people while enabling us as a business to future-proof and attract and retain the best talent. We will know where our skills are and align them to our projects wherever our clients need us. Our GECs will also be crucial to our success. We will expand their reach, improve the quality and speed of service delivery, and whilst at the same time create efficiencies. Over the next three years, we will be doubling the GEC's relative contribution to our projects, integrate them further into our business, and increase recruitment and explore new locations for growth. I've shared our strategic objectives, and now I'm just going to take a moment to discuss how these translate into targets for 2026. We expect to deliver an organic net revenue growth of mid- to high- single- digits over the cycle, an operating EBITDA margin of at least 12.5% in 2026. For our leverage ratio, we maintain the same range of between 1.5x-2.5x net debt over operating EBITDA. Our shareholder returns profile will remain stable as well. On the right of the chart, you can see a summary of our non-financial targets. We will reduce our Scope 1 and 2 emissions by 70% by the end of 2026 and reduce our Scope 3 emissions by 45% by the end of 2029. Other top priorities include our Net Promoter Score with our employees to remain in the top quartile and increasing our gender diversity to more than 40% of women in the workforce. Our goal is to build on the strong foundations of the last strategy cycle and focus on new growth accelerator markets. With a collective mission of accelerating a planet-positive future, together with our own ESG commitments, we're already well underway towards achieving our targets, partnering with our clients on sustainable project choices, combining digital and human innovation, and harnessing the power of our people to deliver our clients' aims and ambitions. And with that, I will hand over to Virginie, who will take you through our financial results for Q4 and the full year 2023 in a little more detail. Thank you. Thank you, Alan. Good morning. Good afternoon, everyone. Let's start maybe with our results for the fourth quarter of 2023. Net revenues increased 9% year-on-year to EUR 941 million driven by all GBAs, with currency effects of -3.2% from weakening U.S. and Canadian dollars against the euro. Organic growth was 6.5% driven by all GBAs. Growth was particularly strong in key markets U.S. and Europe. However, it also reflects increased activity in product choices in Arcadis DPS, and China. Order intake showed a significant step up from the third quarter and reached a record level of over EUR 1 billion for Q4 with an 18% increase, outperforming the total revenue growth of 9%, resulting in a book-to-bill of 1.09 versus the 1.01 in Q4 2022. Organic backlog growth of 4% reflects good order intake across all key markets, well balanced between our three biggest businesses and including a growing share of Intelligence. Operating EBITDA increased 25% year-on-year to EUR 107 million for a record Q4 margin of 11.4%, 140 basis points higher than Q4 last year, driven by operational leverage and an optimized portfolio. For the full year 2023, Arcadis delivered a strong set of results with improved performance across key metrics. Our net revenue increased 25% year-on-year to EUR 3.8 billion, with 9% organic growth driven by the strong performance across all our GBAs. We recorded an operating EBITDA margin of 10.4% driven by the performances of the acquired businesses, operating leverage, and materialized cost synergies, while we continued to invest in operational efficiency, people development, and digital product and skills. In 2023, we successfully integrated IBI and DPS. Please note that one month of DPS and three months of IBI were consolidated in 2022 financials. We continue to show financial strength and discipline, significantly reducing our DSO to only 56 days versus 60 days in Q4 of 2022. This marks a significant improvement and a strong performance in our industry. Our improved performance, combined with our disciplined working capital management, resulted in a free cash flow generation of EUR 190 million for the year. This is after having covered the financing costs for growing our business by 25% following the two acquisitions and an organic growth of 9%. We have also reduced our leverage ratio to 1.7x versus 2.2x at the end of 2022, well within our target range. Now, let's take a closer look at the drivers of the margin improvement. It's first very important to notice that all our GBAs contributed positively to the full year margin improvement in 2023. Resilience margin was driven by the excellent performance in North America. In this region, already above group-level margins showed further improvement, and the region continued to represent the largest contribution to the total Resilience business. Places showed good margin expansion, with margins improving at our acquired business DPS as well as in Architecture and Urbanism divisions. In Mobility, margin improvement was driven by strong operating leverage coming from high performance on large projects, which even in some cases benefited from the contribution of variation orders. In Intelligence, the year-on-year margin improvement at the GBA was strong. However, given its current share of 3% of the total business, its contribution shown here is small but promising given the pro forma 25% revenue growth of Intelligence this year, with more exciting growth to come. Then the Middle East softened our margins with an incremental impact of 40 basis points from 2022 to 2023, and mainly resulting from a receivable provision taken on a project overdue. We plan to finalize winding down activities in the Middle East by the end of 2024 and have now only a few design activities to conclude and site supervision activities to execute on a small number of projects. Finally, in 2023, cost synergies of EUR 5 million had a positive impact of 10 basis points on full-year margin. I will come back on cost synergies with a bit more detail later. If we move to our GBAs now, first, let's go to Resilience. In Resilience, we delivered an excellent year, especially very strong in North America and Europe. Market demand continued to be robust, with strong market momentum for solutions in water optimization, climate adaptation, and energy transition, with increasing tailwinds on the PFAS regulatory front both in the U.S. and in Europe. Water optimization offerings have been particularly strong, with additional framework contracts in the U.K. and significant water programme projects in North America. In climate adaptation, we continued to differentiate with our digitally driven, multi-asset-based climate risk assessments. In 2023, Resilience operating margin expanded to 11.8%, while we grew our backlog organically by 11.5%. We continue to invest in our people to be able to meet the challenges faced by our clients in our high-growth markets. With our recently launched Arcadis Energy Transition Academy, we aim to reskill and upskill our employees as well as those in industry. Moving on to Places, we delivered good revenue growth and improved underlying margin. The U.S. and most of Europe experienced positive momentum in the quarter from clients across government, advanced industrial facilities, and technology. We also started to see positive trends in the U.K. Our backlog improved in Q4 2023 with significant recovery in order intake and continued momentum in January, albeit organic backlog growth for the full year was impacted by our increased diligence over project choices. Pipeline continues to be strong in advanced industrial facilities in North America and Europe on the back of government stimulus. Arcadis focuses on differentiating with its collaborative capacity across regions and its agility to address fast-evolving needs of those clients. Margin improvement was driven by strong performance at the acquired businesses, with DPS margin catching up faster than expected to align with the average Places margin and strong performance from Architecture and Urbanism business. The underlying margin improvement was very strong at Places when excluding Middle East, operating margin stood at 10.6% for the full year compared to 9.9% in 2022. Turning now to Mobility, we experienced continued strong client demand and delivered underlying margin improvement. We recorded strong revenue growth across all of our key markets and grew our backlog by 9.5% organically. This included multiple larger wins such as upgrading North East Link in Australia in the fourth quarter. Collaboration between Intelligence and Mobility had to drive revenue synergies. We see sustainability and climate impact continues to grow as a relevant part of Mobility solutions. Electrification trends, alternative fuels, new Mobility modes, and the ongoing growth of transportation challenges across the large cities we operate continue to provide ample opportunities for our global capabilities. Our operating margin improved in the US, the Netherlands, and Australia, helped by some sizable variation orders on large Mobility projects. When excluding Middle East, operating margin stood at 11.8% for the full year versus 10.4% in 2022. Finally, our fourth GBA, Intelligence. Intelligence delivered EUR 94 million in net revenues in 2023 for their third year, with a pro forma organic growth of 25% and an order intake of EUR 104 million. Our strong suite of software and digital products, enhanced by our profound engineering knowledge, was the driving force behind this. We achieved good synergy wins through cross-selling and continued to invest in product development, integration, and setup. Our operating margin improved significantly to 11.6% in 2023 versus 9.1% in 2022, with first cost synergies being extracted. With 9% organic backlog growth, we saw a strong pipeline of opportunities through cross-collaboration across our GBAs. Let's have a look now to our progress in cost synergies with identifying and delivering these cost synergies resulting from both our acquisitions. As we communicated during the first half 2022 results, we identified a total EUR 20 million of cost synergies. These are to be generated through rationalization of overhead, insurance, and support-driving operational IT integration and platform improvements within technology, as well as through integration and rationalization in the workplace. Synergy implementation is ongoing and expected to be fully delivered by the end of 2024. In 2023, we already realized the positive impact of EUR 5 million in our full year P&L, and we will go on extracting additional efficiencies as we progress in the process. Now, we can provide our clients with a full asset life cycle of services and solutions. With our combined capabilities and expertise, we booked significant synergy wins in the first year of the acquisition, with a total net order intake exceeding EUR 100 million, and we see an additional EUR 300 million in the order pipeline. As an example, in the UK, we are seeing greater collaboration between our Places and Architecture Urbanism teams on the UK government's New Hospital Programme to build 40 new hospitals by 2030, leading to new commissions and opportunities. In line with our balanced capital allocation framework, we will propose to our shareholders to increase our cash dividend up to EUR 0.85, 15% higher than last year, and representing 34% of our net income from operations, well within our target range. Our leverage significantly improved at 1.7x at the end of 2023, at the lower end of our target range of 1.5x-2.5x, having successfully deleveraged from 2.2 end of 2022. Our capital expenditure for the year came in at EUR 40 million, again at the lower end of our target range of EUR 40- 60 million, and mainly composed of technology investments. Now, a reminder of what we set out at our capital market days back in November. For 2024/2026, we confirm our commitment to a dividend payout ratio of 30%-40% of net income from operation for the strategic cycle, complemented by additional shareholder return when appropriate. Secondly, this will be achieved while further strengthening our balance sheet, keeping our leverage within our target range of 1.5x-2.5x, and retaining our investment grade rating. Then, with regards to CapEx, we will invest EUR 40- 60 million a year, mainly in technology infrastructure and development costs, as well as in further development of new style collaborating working environments. And finally, we will continue to pursue value-additive M&A opportunities in line with our strategic priorities, focusing on the targets that complement our businesses and accelerate the delivery of our strategic plans for revenue synergies. And with this, I'd like to thank you and then back to Alan. Thank you, Virginie. So, just to summarize, I think it's fair to say that the last strategy cycle has been truly transformational for Arcadis, and 2023 has been a record year. We've achieved all our key strategic targets, including finalizing the integration of Arcadis IBI and DPS, with some important operational synergies now materializing. Looking ahead, we have a positive outlook and clear priorities for the business. Strong market conditions had resulted in high-quality pipeline. With a launch of our new three-year strategy resonating strongly with our clients and our people, I am confident that we are well-positioned to capitalize on significant opportunities in our key growth markets as we move forward. So I'd like to thank our people for a remarkable year and our clients for their continued partnership with us on many fantastic projects in 2023 and over the last strategy cycle. Over the next three years, we have a great opportunity to lead our industry, driving innovation and sustainability while delivering value-added solutions that address the evolving needs of clients and communities worldwide. And with that, I'd like to open the call for any questions, please, that come from those who have joined us. Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad. Only two questions allowed per time. Please rejoin the queue for more questions. If you change your mind and wish to withdraw your question, please press star two. Please ensure your lines are unmuted locally as you'll be advised when to ask your question. We'll pause for just a quick moment to allow everyone an opportunity to signal for questions. We will take our first question from David Kerstens, Jefferies. Your line is open. Please go ahead. Hi, everybody. Thank you for taking my questions. So two questions. The first question is on China. So you single out China as a factor in the slowdown in organic revenue growth in Q4 market conditions. Can you elaborate exactly what is happening there and what is your remaining exposure to China? I think a year ago, you said it was 10% of Places, including the Philippines. And related to that, the second question then is regarding the US market and the exposure of Places. I think the US is 30% or so of Places. What are you seeing there in the commercial real estate market and in the office market in particular? Is that any potential downside risk similar to what you're currently seeing in China for 2024? Thank you very much. Thank you, David. Maybe to start with China. First of all, our exposure is less than 3% of our revenues now, and I think, therefore, not as material as it was previously. We have been repositioning ourselves, and that's been really quite important for us. We've been looking, firstly, to our global clients from China, our tier one clients, as we call them, so that we are well-positioned there with clients who understand the global markets. Secondly, we've been moving our service delivery from the sort of quantity surveying into the much more respected and higher-margin project and program management. And so these are choices we've been making. With those choices has come a drop in our revenues in China, which we think is sensible at this stage and reducing our exposure there, really, to those global operating clients. In terms of the U.S. market, most of our business in the U.S. market in Places is not really connected so much with the commercial real estate. We are doing architectural work with our IBI. I said on the call, we are number two in the world now. The market for us is good in terms of those key clients, both in Canada and the U.S., where we're doing the architectural urban planning work. In terms of the Places business otherwise, we've really been focusing on the semiconductor work, the actual high-technology industrial work there. So we don't feel exposed in the sense of our client base, which is more blue chip, large-scale, industrial technology-driven clients. So not feeling worried at this stage about a U.S. market exposure to offices. Great. Thank you very much. Okay. We will take our next question from Sangita Jain, KeyBanc Capital Markets. Your line is open. Please go ahead. Yes. Thank you so much for taking my question. So I have a question on margins and then a follow-up. So you obviously ended 2023 on a very strong note and ahead of your earlier three-year targets. So to get to that 12.5% in 2026, should we think of it more of a ratable cadence, or is it more backend-loaded? Thank you, Sangita. Maybe I will take this one. Definitely, we ended 2023 on a strong foot. 10.4% is, yes, already quite ahead of 10%. So that's a good achievement. It will be a progressive step up year after year. I wouldn't want to see us having to do something very much backend-loaded. If you think about the indications we have been given, it's super clear that we are going to extract a large part of our growth in margin next year from the realization of the cost synergies. We have already EUR 5 million that got up in our 2023 P&L, but the rest of the EUR 20 million is to be extracted and to profit to our 2024 P&L. If you think about Middle East also, the moment we are fully rid of Middle East and that, I agree with you, will not only happen before the end of the cycle. In the bridge that I showed earlier, there is an incremental 0.4% compared to the traditional 0.3% that we had on the Middle East margin. So if you remove that from our performance of the year, that's an 0.7% that mechanically will disappear the day we are completely released with Middle East. We still have 10 offices over there, around 50 projects that are going on, and that goes with engineering licenses and some costs and such. We want to be, as soon as we can, out of it by the end of 2024. Hence, we might make the decision of keeping some licenses in 2025 if there is still some cash to collect because once we have closed offices and licenses, we can't get the cash back. So that's, I would say, the biggest indication. The rest of the levers will progressively contribute. The project portfolio is already there, but I would rather think about gradual and steady progression of the margin around the cycle. Great. Thank you. That's very helpful. And if I can ask you a follow-up on the CHIPS Act and the IIJA in the US, we're starting to see some CHIPS Act funding getting loosened up. So just want to see what your thoughts are and what you're seeing in terms of your Places backlog going into 2024. Yeah. Thank you for that. I think, probably like you, we're seeing the early signs of the sort of CHIPS Act coming through. Most notably, I think we've had our sort of really first proper project coming through with the University of Albany, and that was really good project there, which is the nanotech complex near the university. What we've also seen now is more projects starting to look like they will develop. But these are blue chip clients, and we expect, really, for us, H1 will start to secure some of the funding. We're already working with the clients, and H2 will see the real drive into our performance there. So some wins already. We're positioned well with clients. We're talking in detail to quite a few clients now, and we expect the funding to land in the U.S. and, as I say, the projects to move in H2. So yeah, we're very well-focused on that and think it will be a good uplift in the second half of this year. Great. Thank you so much for answering my questions. Appreciate it. Okay. Thank you. We will take our next question from Quirijn Mulder from ING. Your line is open. Please go ahead. Yeah. Good afternoon, everyone, and good morning for the U.S. people. My questions are a couple of with regard to the extraordinary charge you took. As you estimated or you reminded us of EUR 48 million at the end of full year 2023. So can you maybe elaborate for what the non-current results was there and how do you see the split? And then with regard to the cash flow, what was the impact of the effect of the taxes with regard to the intangibles in the U.S.? Thank you, Quirijn. So I'll start with the non-operating cost that we have taken, which amounts to EUR 48 million this year. A large part of that, a bit more than half of it, is about restructuring cost. That's coming, obviously, from the integration of the acquisitions, but also some restructuring costs in China, as you could expect. So that's part of that. Part of it is not costs that have been already executed. It's provision for some departures that will happen rather or plan that will be executed in 2024 in that respect. We have also some technical, I would say, integration costs such as IT harmonization, things like this, which we have over there. That's probably the vast majority of the costs that we have. The second question was about the free cash flow. So then I'll go back to the free cash flow and the impact of tax across the years. Section 174 probably represented something like $50-60 million equivalents in dollars that we pushed out. We recently followed the news about the fact that it might be potentially cancelled or suspended up to 2026. We'll see what's going to happen in the coming year. Okay. Thank you. Thank you, Quirijn. Once again, ladies and gentlemen, please press star one to ask for a question. We will take our next question from Chase Coughlan. Your line is open. Please go ahead. Hi. Good afternoon, all, and thank you for taking my question. Yeah. Firstly, on your capital allocation plans, so obviously, your leverage is quite comfortable right now given your targeted range. And I know you mentioned that you plan to continue your value-add creative M&A strategy. And I'm just wondering, should we expect any more sort of larger M&A deals like we saw with IBI and DPS, or is your strategy more to do the smaller bolt-on acquisitions, mainly in the Intelligence unit? Just some more color on your M&A strategy there. Yeah. Thank you. I think on this one, we're very much focused now on looking at how to connect digital into our clients. And obviously, as you say, that'll be part of the Intelligence unit. We're really focused now on looking at how this would align with our three-year strategy, particularly around sort of the asset lifecycle management and really helping our clients on decarbonization and things in this area. I think what you could expect is that we will be looking at these areas to supplement and accelerate our offering there. And I think this is probably where we will focus. These, by definition, are usually sort of small to mid-sized businesses, and we'd want to do something that is really getting us into our clients with strong margin and connecting us to good cash generation. I think this is where we are focused right now, and this is what we'll be looking at in the year ahead. Okay. No, that's very clear. Maybe a follow-up on that then because obviously, this whole digital push is a real theme not only for Arcadis but also for a lot of the other players in the space, both in Europe and in the US. But I'm just curious if you're seeing quite a lot of competition for M&A now in that digital space. I'm wondering how you're seeing the multiples respond there and if that might become increasingly expensive in 2024 and 2025 or if you have any more views on that. Yeah. I think I'll start off by saying I think we're seeing this as an attractive business, quite honestly, because of the way that we operate. And obviously, in creating the Intelligence unit, we've got good visibility, and people like that in terms of attractive for us. Maybe I'll ask Virginie just to maybe comment on what she's seeing in terms of the multiples and so on. Yes. I think that it's very diverse. It really, really depends on who you are talking to. I think we've seen exactly the example in the recent acquisition that we did. When you are in a direct discussion with someone for a very long time, I would say that you can be also quite outside the market. It's a very different mode of discussion. And when you are doing a listed deal, for example, it can be super, super different. The market is still very, very fragmented, be it directly in our space, in the engineering and consulting space. And then that also reflects in the potential target, even in the digital world, that we could get into. Some of the targets we are discussing can also look very much about some niches and such and do complement some people but not everyone. So that, I think, is the thing we could try to play on. Then definitely, there's a lot of focus of private equity in our space. We see consolidation happening in the market, and that definitely has an impact on the average multiples of some of the operations that we see happening. Okay. Thank you. That's very helpful. I'll jump back and queue. We will take our next question from Maarten Verbeek, The Idea. Your line is open. Please go ahead. Good afternoon. It's Maarten Verbeek of The Idea. Yeah. I I would like to get back to the exceptional restructuring charge not specifically for the full year but for the fourth quarter because full year was EUR 48 million but a very high number for Q4, EUR 24 million. You also stated that you completed so more or less the last remains of your integration of DPS and IBI. And I can't imagine that that was a very costly exercise to do the last bits and pieces. So could you give a bit more color on what happened over there, what kind of charges you took? So the charges that we took is because when you make the decision, you need to book the charges. It doesn't mean that it is executed. So as I stated in my earlier answer, large part of it is provision for restructuring operation to be happening in the course of the next year. As we finalize the integration, obviously, we have a very clear idea of how we will be structured and notably in the internal back-office functions once we have integrated everyone. We know once we have a single system and things like this, what we need to keep in terms of support in all the regions. So that's why, and then that's how you happen to have all that being booked the moment it is fully finalized and announced. Could you give some guidance what kind of regular restructuring charge you expect for this fiscal year? For 2024, you mean? Yes. So we don't give any guidance on that. But I would say we stated that we need to be out of the Middle East by the end of next year. That's our intent. If we get into, let's say, the realization of this plan, there might be additional elements of restructuring to be booked in the P&L as we make the decision and engage the operations in Q4 on that front, vast majority of that being potentially onerous contract in terms of offices and workplace when you have to get out of this contract. That's probably a very lower amount compared to what we have this year, except if we happen getting again in new types of operations that would change the decision-making. Okay. Thanks. Then Middle East is still weighing on your results. By the information you provided, it seems that it depressed your EBITDA by some EUR 25 - 30 million. Firstly, do you expect that to come down considerably this year and then more or less what you say, "We have wound down everything by the end of this year." So in 2025, virtually, there will be no losses from the Middle East anymore? Ideally, yes. As I stated, so long as I need to keep some licenses and operating, I might decide to keep a little bit of cost. If you think about Middle East over the last three years, the achievement in terms of reduction of working capital by getting the cash in has been very, very significant, meaning that the decision we have taken to progressively wind down rather than doing something super large has proven to be really successful in terms of cash management and sound management of our P&L on top of the relationship with our clients. So that's the reason why we are not going to try to accelerate anything. Now, we are reaching the end but make sure that we are doing the right thing. One of the nice things that we've been able to do is that when we acquired IBI, there was some footprint in the Middle East. And within one year, we have almost managed to get that down back to zero. So then the additional Middle East elements that we added to ourselves is something that we have managed to address as a priority. Okay. We will take our next question from Sabahat Khan. RBC, your line is open. Please go ahead. Okay. Great. Thanks, and good morning and good afternoon. I guess there was earlier a bit of discussion on the margin kind of progression recently. Can you maybe just talk about this just remind us of the targets around the 12.5% target by 2026? Maybe just how we should think about the cadence over the next three years, including 2024, to kind of get to that target. Yeah. Hi, Sabahat. Yes, sure. I think it's going to be a progressive margin incremental progression, as I stated earlier. Think about 2024 is about execution of cost synergies. That's the first element that should shoot additionally to the P&L. Middle East is weighing 0.7% this year. I would expect it to be a bit lower next year and then progressively disappear. And in parallel, all the three levers that we are working on, be it the sustainable project lever or the digital and the human one or the powered by people, should progressively bring their fruit. So that, I think, the way I would see it, I would have a tendency of thinking that the GEC part might be quite back-loaded because of the need of deciding and opening of an additional centre. And obviously, I would expect us to have to open that during 2025 or work on it in 2024, open it at the beginning of 2025, and then progressively ramp up and help us accelerate in our capability of moving faster with Global Excellence Centre. But the way we have built it and the fact that we really tried to shift very early on the sustainable project choice and as we stated during Capital Markets Day, we now already have more than 50% of our portfolio, which is already at or above this 12.5% margin, really makes us confident that we can take progressive steps to increase our margin. You know me a little bit from the years now, and I hate having to have stomach problems by the end of a year or other cycle. So we'll try to make sure that we rather capitalize progressively on the steps we take. Oh, that's helpful color. And then is this one. We will take our next question from David Kerstens. Jefferies, your line is open. Please go ahead. Hi. Thank you for taking my follow-up. I just wanted to go back to the significant project events and pipeline opportunities. Did I hear correct that you said that the project events have now increased to EUR 100 million and the pipeline to more than EUR 300 million? So my question would be, when will that pipeline be converted into orders and revenue? And what does that do to your returns on invested capital on the acquisitions of IBI and DPS? Then I had a question on data-driven that you added to your company description. Okay. Maybe I'll do the technical part of the order intake conversion, and I'll let Alan rather comment on the business. It's probably better. We have EUR 107 million in order intake, meaning that we have sometimes signed a firm that we can take and execute. When we say we have EUR 300 million in the pipeline, it's rather projects that are in framework agreements, for example, that are going to be converted. Doesn't mean that everything is going to be converting in a single year or in two years and such. That can be very, very different. That's the way we see the pipeline. But for example, if we come back on our Q1 announcement, in Q1, we had in mind EUR 100 million of pipeline for revenue synergies, and we managed it to convert just above EUR 100 million in a single year in terms of order intake. Having EUR 300 million at the moment in the pipeline gives us quite a strong confidence that we can go on, sizeably sustain a sharp progression, a sharp increase in our net revenue growth. And maybe just to give a bit of color to that, sometimes what you'll see is individual projects coming through. So you'll get a single project such as the semiconductor manufacturing, which will convert quite quickly as soon as the client has agreed the funding and established it. And we've seen several of those coming through. We expect, for example, five awards in the U.S. administration announcements to come through. So they would be pipeline. They'll convert as soon as that announcement is made and confirmed. Others might be multi-sort of framework contracts where Nevada Department of Transportation, I think I mentioned, we were awarded multiple contracts there. And therefore, you'll see those coming through in stages over some period of time. Or Infrastructure Ontario and Canada where we've just won a five-year sort of deal, which will come through over time again. So they will convert, and some of the revenue will land almost through the year immediately. Others will be progressively over several years, potentially. So it depends on the size and the type of contract we're winning. But we're seeing good, healthy pipeline, as we said. Really pleased with our year-end position and our order book at the year-end, which bodes well as well for 2024. Yeah. That sounds good. Great. Thank you very much. There was one point in the press release that I noticed there where you added data-driven to your company description. Is that just a clarification, or is it a change in the way you sell solutions to customers? I'd say it's trying to make it clear that increasingly, we are using data with our clients to inform how we operate and the recommendations that we make. Secondly, as we develop more software products and we are starting to see now clients really liking the idea of looking at data-driven solutions around managing their assets through the asset life cycle. We want to make it clear that we have products, and we're using data to advise clients. Increasingly, that will become important to us. That's why we've added that. Just to be clear, that's what we are doing as we move forward. It's an integral part of our offering. Understood. Sounds good. Thank you. Thank you. That is all the time we have for question-and-answer session today. I would like to turn the call back over to Alan Brookes for closing remarks. Thank you. And briefly, as I said, I think it's been a privilege to be able to announce a record year for Arcadis on behalf of all my Arcadis colleagues who've worked really hard in the last year, and particularly in Q4, and to our new colleagues joining us from IBI and DPS in the year who've made a difference. And I'd just like to say we look forward to the next three years, the great opportunities ahead of us in driving that innovation and sustainability in the way that we operate and meeting our next three-year strategy goals as well as we've made the last three years. Thank you all for listening and your questions. Thank you all very much. Thank you for joining today's call. You may now disconnect.