Arcadis delivered a robust first-half performance in 2026, reporting earnings per share (EPS) of $1.52, a 2.7% increase from $1.48 in the prior year period. The company’s total sales reached $2.225 billion, up 5.1% year-on-year from $2.117 billion. This top-line expansion was driven by an acceleration in organic net revenue growth to 2.2% in the second quarter, up from 0.8% in Q1, signaling recovering momentum across key markets.

The Board approved unaudited half-year results showing gross revenues of €2,479 million, a 1% rise over the previous year. Net revenues stood at €1,907 million, down 2% due to foreign exchange headwinds, though organic growth remained positive at 1.5%. Operating EBITA margin improved slightly to 11.4% from 11.3% last year, supported by disciplined cost management and rightsizing initiatives. A record backlog of €4.0 billion provides strong visibility for future revenue streams.

Segment Performance

Growth was primarily led by the Resilience segment, which contributes 38% of net revenues. Resilience posted organic net revenue growth of 5.2% in H1, fueled by US water infrastructure investments, UK AMP8 programs, and German grid expansion projects. Order intake in this segment surged 24% in Q2 to €407 million. The Mobility segment, representing 27% of net revenues, grew organically by 3.8% in H1. Conversely, the Places segment declined 3.9% organically due to weakness in Canadian and Chinese property businesses.

Strategic Outlook

Arcadis has set strategic targets for 2027-2029, aiming for mid-single-digit organic net revenue growth and mid- to high-teens operating EBITDA margins by 2029. The company is scaling its Environmental Services offerings and simplifying its organizational structure. Recent strategic investments include the acquisition of SATEL, a Spanish power and data center engineering firm, and a stake in Nomic, an AI engineering workflow tool provider.

What the Numbers Show

The divergence between currency-impacted net revenues and strong organic growth highlights the impact of foreign exchange on reported figures. While net revenues fell 2% in euros, the 5.1% rise in USD sales reflects underlying business strength. The acceleration in Q2 organic growth to 2.2%, combined with a book-to-bill ratio of 1.13x, suggests improving demand generation. However, free cash flow remained negative at €-149 million for H1, indicating continued capital expenditures and lease liabilities despite stable net debt of €1,042 million.

Arcadis Executive Board and Supervisory Board have unanimously rejected a second unsolicited, conditional, and non-binding proposal from WSP Global Inc. to acquire the entire issued and outstanding ordinary share capital of Arcadis. The revised proposal offered a consideration of €51.50 per ordinary share in cash and WSP stock, representing an increase from the earlier unsolicited proposal at €48.50 per ordinary share, which was also unanimously rejected. This decision signals a firm commitment by Arcadis leadership to pursue its standalone strategy rather than accept what they deem an inadequate valuation from the Canadian engineering consultancy.

The Boards concluded that the Revised Proposal continues to fundamentally undervalue Arcadis’ intrinsic value, strategic position, and future prospects after a thorough review with financial and legal advisers. Consequently, the Boards determined that accepting the offer is not in the best interest of the Company’s shareholders, employees, clients, and other stakeholders. The rejection follows the release of Arcadis' Q2 and Half Year 2026 Results, alongside new medium-term financial targets that management believes support the company's standalone value creation potential.

Key Reasons for Rejection

The Boards outlined three primary reasons for rejecting the WSP Global Inc. proposal:

Heather Polinsky, CEO of Arcadis, emphasized the company's strong performance trajectory. "Our H1 2026 performance demonstrates that our growth trajectory is moving in the right direction," Polinsky stated. "With a record backlog and clear momentum in our key markets, we are confident that our standalone strategy is the most effective path to creating value for our shareholders and stakeholders as we deliver on our stated medium-term financial targets."

What the Numbers Show

The rejection highlights a significant divergence between WSP Global Inc.'s valuation assumptions and Arcadis' internal assessment of its worth. By rejecting an offer that increased by €3.00 per share (from €48.50 to €51.50), Arcadis implies its intrinsic value lies substantially above €51.50 per share. Furthermore, the concern over the 50% stock component suggests that Arcadis management views WSP's equity as carrying higher leverage and lower dividend yield characteristics than Arcadis' own shares, thereby transferring additional financial risk to Arcadis shareholders rather than mitigating it through a premium cash offer.