Arcadis NV

AEX:ARCAD

Earnings Call Transcript 2018-Q2

[Jurgen Pullens, Director of Investor Relations]

Good morning, everyone. My name is Jurgen Pullens, Director, Investor Relations, of Arcadis. I'd like to welcome you to the Arcadis analyst conference meeting, analyst meeting and webcast. We are here to discuss the company results for the second quarter and the first half-year results for 2018, and they were released this morning. With us are Peter Oosterveer; and our new CFO, Sarah Kuijlaars. We will start with a short presentation by Peter and Sarah, and then we will open up for Q&A. You all received the presentation this morning, but it is also available through the Arcadis website.And just a few words about procedures before we start. We will begin with formal remarks. We call your attention to the fact that, in today's session, management may reiterate forward-looking statements, which were made in the press release. We'd like to call your attention to the risks related to these statements, which are more fully described in the press release and on the company's website. With these formalities out of the way, I'd like to hand over to Peter.

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes, thanks, Jurgen, and good morning, everyone, including the people on the webcast. Thanks for your interest in Arcadis. I'm going to provide some brief context for today's discussion. I'm going to also describe some of the highlights out of the first half-year, and then I'm going to turn it over to Sarah. And of course, as Jurgen said, thereafter, we'll open it up for questions.We're talking here about the first half-year, but I thought it would be good to take you back a little bit further in time, back to November of last year, when we showed this particular slide to you, at least those of you who were in the Capital Markets Day presentation in London. And I thought it would be good to provide that context, because it is the foundation of some of the things we're going to share here momentarily. So during the Capital Markets Day back in November last year, we introduced our new strategy. We shared with you that we had simplified the strategy. We also shared with you that we have developed the 3 strategic pillars: people and culture, innovation and growth, and focus and performance. And I'm not going to take you through all of what I took you through in November, but just a couple of highlights, because they form the preface for the subsequent explanation on where we are as a company.We did mention at that time that we wanted to have a stronger focus on the one and only asset we have in our company, which is our people. We felt that the best way to measure that for us is through a lower voluntary turnover and a higher engagement. We spoke about innovation and growth during the Capital Markets Day and how innovation in our space is going to change the space, is going to change the role of service providers like us, and how quickly that is likely going to happen. We also spoke about the growth we expect to get from our key clients, and we committed ourselves to a growth from our key clients which would be twice the growth we would generate by non-key clients. And that is largely in line with the GDP in the places we operate.And last but not least, we also spoke to you about the last pillar, focus and performance. And that one had a number of dimensions. One is to have a stronger operational focus on what we do for a living. Second one is to make the choices needed to make to generate the higher margins we have committed to you. And in that context, we also spoke about project delivery, project execution, and the levers we have in project execution to improve our performance. I at that time mentioned that we had too many projects not meeting our expectations, and if we could improve that, we would have an immediate opportunity to improve the bottom line.You might also recall that, at that time, we spoke about the GECs, our Global Excellence Centers we have in India and the Philippines, which give us another opportunity to improve our financial performance. So I thought I'd just provide this as a gentle reminder, and since it's not too far back in time, I thought it was still relevant for today's discussion. So that was back in November of last year when we had the Capital Markets Day.Then, the next thing we did, and that's more relevant to the first half of the year, because on 12 March, we introduced our new organizational structure. And again, I'm not going through this in great detail, but I thought it would be relevant to just pick out a couple of the highlights. Because the intent, the prime intent of this structure was to make our organizational structure operationally more focused; and secondly, to bring it more in alignment with our strategy so that there was almost like a one-on-one relationship between our strategy, particularly our strategic pillars, our strategic goals, and the organizational structure we have in place.Just going from left to right, well, of course, we're very pleased to have Sarah Kuijlaars here now with us, our new CFO, and she will talk to you here momentarily. Then you might recall, for those of you who were in London, that actually Mary Ann Hopkins presented. She had a responsibility which is somewhat similar to what she has at this point in time. She's responsible for the Americas, North America, Latin America, and now also responsible for CallisonRTKL. You might also recall Alan Brooks, who at that time was the CEO of the U.K., and has, with the new structure, assumed a bigger responsibility to now be responsible for the U.K., for Continental Europe and the Middle East. And then, lastly, you might also recall that Greg Steele was one of the presenters during the Capital Markets Day, at that time in the capacity as CEO of Australia. And as of a couple of weeks ago, more specifically 2 weeks ago, he has assumed the responsibility for Australia and Asia.And then, quickly going through the others, Rob Mooren, a long-time Arcadis veteran, has assumed responsibility predominantly for 3 areas: first of all, Health and Safety; secondly, to help us drive that improved project performance we need to see. And for someone who has come up through projects and lived projects most of his Arcadis life, it just seemed like the right candidate to drive that. And then, lastly, Rob's responsibility is also to optimize the profitability and optimize the performance we can get out of our Global Excellence Centers.Then Stephen Ritter, who might be familiar to most of you, as well, has now a stronger focus and a responsibility at the most senior level for Innovation and Transformation, for Digital, and for Marketing and Communication, and for Sustainability. We also, in London, spoke about the need to be more selective, selective in terms of picking the right clients. And therefore, we also felt like it was relevant and important that we had someone at this level responsible for client development, for sales and, indeed, for the selectivity in making sure that we pick the right clients. And then, last but certainly not least, Lia Belilos, who was already with Arcadis and is the Chief People Officer, to emphasize the importance of the people component in what we do.This team has been in place since early March, largely been in place. Sarah joined in late April, and then Greg Steele joined us just a couple of weeks ago. And I'm really pleased with the momentum we've created, the teamwork we have created, and the quality and the capability we have in this team. I'm extremely pleased and extremely confident, as well.So with that being said, let's just quickly go over the highlights as we see them for the first half-year. And some of them will be discussed in more detail by Sarah, so I'm not going to go into great detail. But I thought it would be appropriate to just summarize the main highlights: organic net revenue growth, operating margin improvement, and strong cash flow, as some of you already observed as we were coming into the room, and others have observed early this morning.The improved results, in particular in North America, are extremely positive. It builds on what we have signaled for a couple of quarters now, that we've seen improvements in North America. But I would say that the improvements we've seen lately not only confirm that it is a trend, but in terms of absolute numbers, are actually really compelling. On top of the Americas, we've also seen really good performance in other markets, such as the U.K., Continental Europe, and Australia in particular. And then, clearly, also extremely relevant for many of us is the substantial amount of money we collected in the Middle East, something which has been on many people's radar screen for a long time, a total of EUR25 million out of Saudi Arabia, EUR6 million in the first quarter and another EUR19 million in the second quarter. So really positive developments on something which was definitely overdue.We have the new executive leadership team in place. I told you about it. We continue to significantly invest in our digital capabilities, both through partnerships as well as in terms of improving our people skills. We have signaled before that we wanted to use the first half of the year, amongst others, to also perform a portfolio analysis on the Middle East. I can now say that we've completed that portfolio analysis, and I'm sure that, later on in the conversation, we'll get into some more detail there.With the introduction of the executive leadership team, and more specifically with the [ identification ] of Rob Mooren, we now have that focus anchored in the executive leadership team, the focus on disciplined project management. And with Erik Blokhuis, we have it anchored in terms of client selection. And we're starting to see the early signs of improvements there. People are more aware of selecting the right clients, the right opportunities, and staying away from opportunities which are not yielding us the return which we are looking for.As we've announced 2 weeks ago, we have completed the strategic review of CallisonRTKL. And we have concluded that the best value, the most value, is being derived from keeping it within Arcadis.And then, last but not least, and I suspect that also there we will have further conversation later on, the large gas-to-gas plant, which is part of the ALEN joint venture, is technically operational. We are now in the process of negotiating sales contracts for the gas plant. And as we've said in a press release, the intent is for us to still sell all the assets in 2019.So with that, turning it over to Sarah. Sarah, please?

[Sarah Kuijlaars, CFO & Member of the Executive Board]

Thank you, Peter. Good morning, everyone. It's great to be here.Well, so I thought I'd start in Sydney. You can imagine that, my first 90 days, I've really made the effort to get to know the business a bit better. And while in Sydney, I visited this project to site visit a really material transport infrastructure project in Sydney with WestConnex. And it really gave me a feel for the passion and the technical expertise of my fellow Arcadians, really working closely together in close collaboration on a really successful project.Now if we turn to the numbers, so for Q2, net revenues of EUR602 million on a 1% organic growth. Of course, there was a currency translation effect of 5% due to the stronger euro. And I think we've got really good, solid organic growth, particularly in North America, Europe and Australia. There has been revenue decline Middle East, Asia, and CallisonRTKL.When we look at the operating EBITDA for Q2, EUR45 million, an organic improvement of 6%, and also a currency translation effect of minus 5%. I think it's very pleasing to see this operating EBITDA margin improve by 7.4%, which of course is higher than the 7% we achieved in Q2 '17. The main driver for this, Americas, Europe, and Australia. In Q2, both our revenues and the EBITDA has been impacted by an average of 1 working day. If we look at these figures more in detail, there we see the EUR45 million for the operating EBITDA for second quarter, which means, for the half-year, we achieved EUR88 million. The pleasing 7.4% in operating EBITDA margin for the quarter we see for the half-year at 7.3%. And this then translates to a EBIT for the first half-year of EUR68 million and net income of EUR35 million, and a net income from operations for EUR44 million.The NIFO per share is at .51, and that has been impacted by increased financing charges, the loss from associates for 4.5. We have an effective tax rate of 26%, lower than the first half-year [ into ] 30%.If we then look at backlog, we see our organic backlog is flat. We've got good improvement in Europe, Australia, and Callison, in Callison particularly in the Q2, and this compensates for the 20% decline we see in the Middle East. Where I think this connects with Peter's point about being really selective with the clients that we work with.I'm really pleased to say that there's incredible focus with organization on the net working capital. And at Q2, we stood at EUR615 million, showing a significant improvement from EUR640 in Q2 '17 and a percentage of 18.8% compared to the 19.3%. Of course, this was driven significantly by an improvement in our receivables in the Middle East, particularly in Saudi for EUR19 million, and the first half-year a total of EUR25 million. I think it's also worth highlighting that our accounts payable has reduced EUR23 million this quarter versus EUR34 million in Q2 -- sorry, in Q4 2017. If we then look at our daily sales outstanding, this also shows an improvement. We're now sitting at 91 days compared to 95 days in Q2 '17, and I think a very good trajectory, in line with our strategic framework.Now targeting our overdue receivables. So as we see here, we've got the reduction to EUR605 million, which demonstrates our progress, significant cash collection in Saudi, also a payment in the U.S. related to the oil and gas project there, but absolutely acknowledging we've got more work to do. So absolutely acknowledging we've really got to continue the focus in the organization to ensure that we are really looking at our overdues, and really addressing those and making sure that we continue to track downwards in the coming quarters.Cash. I think it's great to report a free cash flow in Q2 of EUR54 million, which is significantly higher than our Q2 2017 position of EUR34 million and brings our first half-year free cash flow to minus EUR6 million, which of course is better than this time last year. We're demonstrating improved working capital, but also acknowledging that our cash tax payment is higher than last year, mainly due to timing effects. Our CapEx stays broadly flat, as I say, culminating in a minus EUR6 million for the first half-year, well set to increase our positive free cash flow for the year as a whole.So really bring that all together in context, talked about the strong cash flow improvement. That's really enabled us to manage our debt downwards, so EUR468 million net debt for the half-year position, [ tangible ] improvement from this time last year. And of course, that's [ then ] translated into an average net debt/EBITDA ratio of 2.2.So let's now look at the regions. So in Americas, we've got a really strong margin improvement. So here, we see the organic growth, growth in North America, a decline in Latin America. But again, I think this is really strong focus on the operating margin improvement of 7.7%, particularly strong in North America at 8.8%. We've got strong results for Water and continued solid results for Environment and Infrastructure. If we recall this time last year, Latin America was struggling a bit. They've improved by some EUR5 million, which allows them to get close to a breakeven result.If we look at backlog, organic growth is flat. However, we've got good improvement in Water, and I think there's confidence in the Americas team in terms of project in their pipeline.Now looking at Europe and Middle East. Of course, it's a broad region with many different parts. But I think it's great, again, that the revenue growth, growth in continental Europe, very strong growth in the U.K., predominantly the large infrastructure projects, and then acknowledging 8% decline in the Middle East, very consistent with our strategy of selective bidding.The operating EBITDA has declined slightly, and this is driven by our continued focus in investment in people, digitization, and the Arcadis Way. The margins in Europe and U.K. are strong, compensating for the lower margin in the Middle East. Again, we've got substantial cash collection in overdue receivables, particularly in Saudi, and that really has helped drive the improved DSO, 95 days for Europe/Middle East.The backlog is down slightly, but mainly impacted by the 20% decline in the Middle East due to our continued selective bidding.Asia-Pacific, here we're showing an organic growth of 5%, very strong growth in Australia, driven by some of the infrastructure projects, and a 3% decline in Asia. Our operating EBITDA is strong. It's at 11.1%, but there has been some decline. And I'm sure you'll recall the write-off that we took in Q1 of EUR2 million in Asia. Australia continues to be a very strong market for us, and has improved year-on-year. And as Peter mentioned, colleague Greg has now taken over the broad region, and we look forward to his continued focus and performance across Asia-Pacific.Callison RTKL, there has been a decline in the revenues by some 7%. But I think it's really pleasing to see that, although there was a slow start at the beginning of the year, we had much stronger results in Q2, an operating EBITDA margin of 11%, and a really strong order intake in the second quarter, mainly driven by commercial and workplace practices.I started my story in Australia. I will close it in Brazil. As you're aware, we've got an associate there, Alan, and I also visited the plant in Seropedica. And it's good to report that this now is technically operational. We know that the next step is the natural gas off-take contracts, which are currently being negotiated. And it's worth remembering that, in addition to the gas-to-gas plant, there are a couple of gas-to-power plants where we do have the delivery contracts in place.We recorded a loss in the first half-year of EUR4.7 million, and I'll repeat our intention that we do intend to divest these plants. And the process will be initiated in the second half of this year.At this point, I'll hand it back to Peter.

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Thanks a lot. Just to wrap it up, and then, of course, open it up for questions, a couple of proof points on where we are in addition, of course, to the obvious proof points, which are the financial metrics. And I'm not going to go through all of them in detail, but I spoke about the investments we're making in digital and people. Part of that investment is so-called Expedition DNA, which is to make all of our Arcadis workforce familiar with what digital is going to do. Now occasionally, people believe that, if you move to a more digitized environment, that means that most of your workforce cannot be utilized anymore. That is not our belief. We believe that we can maintain our workforce, but we also realize that we need to train them and get them ready for what the future will look like. So we're very excited to see that people have latched on aggressively, I should say, make use of the available training, which we have in Arcadis, to improve their digital capabilities.We have signaled to you before, I referenced back the Capital Markets Day, that our expectation is that we will continue to grow the business with our key clients at twice the rate we expect to grow other clients. And I'm glad to report that we have exceeded that in the first half-year. So we continue to really do well with our key clients, and it sort of emphasizes, again, and reinforces that focus that picking the right clients is really important. And I really think that the organization is getting that message.And last but not least, Sarah already hit most of the financial criteria, which are obviously important. And there, we're also pleased to report improvements.So in summary, and then provide a little bit of outlook as to what we expect in the second half of this year, I'm really pleased with the actions we're taking, the actions which are related to our strategy. I'm really, really pleased, as I said before, with the momentum we've created with a really strong executive leadership team, which is really mirroring where we have defined ourselves in our strategy. We have great momentum in the U.S., and we are definitely planning to continue that momentum, as you will appreciate. We have great momentum in Continental Europe. In spite of all the uncertainty, we still have great momentum in the U.K., and we have great momentum in Australia, as well. And we plan to continue to expand on that momentum. And then, at the same time, of course, our expectation is also that there, where we are lagging that momentum, that we will build that up, as well.Probably one comment here on the Middle East. In fact, it is already in the fourth bullet. In the Middle East, we have completed our portfolio analysis. We've signaled over the last couple of quarters that the drop in revenue in the Middle East is solely because of us being more selective. And I can tell you, that will likely continue for some time. But the expectation is that, throughout next year, we will see a pick-up in revenue and see a pick-up in margin contribution, as well. So it is a deliberate decision on our end to be more selective, pick the right clients, and the result of that is a drop in revenue. But at the end of the day, the ultimate outcome will be an improvement in our overall performance.Needless to say that we will continue to focus on cash collection. I can't think of a single word in Arcadis I've heard more than the word “cash”; over the last couple of months. And I can assure that that word is going to continue to be front, left and center.We spoke about the need to be more disciplined [ at ] project management, the role Rob Mooren has as well as being selective in picking the right clients, which is directly related to the role Erik Blokhuis has. We are going to do the same in Asia as we did in the Middle East in the first half-year, which is to critically look at our portfolio. And sometimes, people interpret that as, “Well, that must mean a reduction of your workforce. It must mean a reduction of your revenue.” That is not what we expect to do in Asia. In fact, in Asia, we see plenty of opportunities for us to grow the business. And with the leadership Greg Steele is going to provide, and a new CEO in Asia, who is going to join us on 1 September, we believe that we have the foundation in place to do that.As reported, we will initiate the divestment process of all our clean energy assets in Brazil. And the expectation is that, throughout 2019, we will divest all these assets. And last but not least, I can confirm that revenue growth and improved operating margin is still in our plan for 2018. And you might ask yourselves, “Well, why are you willing to say that?” I'm willing to say that because; a, we have a market; b, I think we have a focused strategy. We are executing that strategy in an even more focused way. And last but not least, I also say that because I'm extremely confident with the management team we have in place. That builds and creates that optimism I have for the remainder of the year.So with that, we are ready to take your questions.

[Unknown Analyst]

Question on [indiscernible]. Yes, so the negotiations are going on with potential companies that can use this gas. Is that, say, a selective group, or is that only one potential interested company? And are these also potentially the buyers of the assets?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes. That's a great question. Just to put all of this in perspective, we have -- when we embarked on the current plan back in the July-August time frame of last year, said that we had a couple of really important steps to take. First is to finish the facilities. That is largely done, and certainly completely done for the gas-to-gas plant. On the gas-to-power, we still have some work to do. The next big step is, indeed, to secure the off-take contracts, and then the last step would be the sale of the assets. As Sarah said, we have the off-take contracts for the gas-to-power in place. We are negotiating with multiple parties on the gas-to-gas, and multiple parties not because the multiple parties, at the end of the day, are all required to be secured to get rid of the gas. One party in particular, the party we have the most advanced negotiations with, is the party who would take all of the gas. But we don't want to just be dependent on one party, which is why we are kind of hedging our bets and are talking to other parties, as well. Are these parties likely also the buyers of the assets? Most likely not. In fact, we expect that the ultimate sale will probably break in 2 parts, one buyer for the gas-to-gas, and potentially other buyers for the gas-to-power. It's not a given, but that's kind of our expectation. But they will likely be different from the parties we are talking to, at this point in time, for the off-take of the gas.

[Unknown Analyst]

A question on Callison. So there was continued organic decline of 7% in the first and second quarter, but with a excellent order intake at the end of the second quarter. It's only 2 weeks since you've announced that it will not be sold. But has the momentum of this order intake been reinforced by the disappearance of the uncertainty? Or has this slowed down in the last couple of weeks?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

No. There's no doubt that going through a process like we've gone through creates a degree of ambiguity and uncertainty, and it sure did. But I would probably not claim to say that, since we've indeed only announced 2 weeks ago that we've decided to keep CallisonRTKL, that the improvement in order intake in the second quarter is because of that announcement. That happened sort of at the same time, but not necessarily caused by the announcement, per se. Part of the process we followed over the last 9 months was also to invite an external party to work with us to develop a strategic plan for CallisonRTKL. That plan was the basis for looking at all the options, including a sale. And now that we've decided to keep CallisonRTKL, that plan is going to be the basis for executing it. Now that we have eliminated the uncertainty, eliminated the ambiguity, now that we have Tim Neal as the leader of CallisonRTKL in place for some time now, but at least someone who really wants to take this venture to the next level, we believe that we can take CallisonRTKL to where it was before and beyond that. But it will take some time.

[Unknown Analyst]

And then the margin was very strong in the second quarter now, 11%. Is this a sustainable margin, or should we see it as a positive outlier for this quarter?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Well, CallisonRTKL always had really healthy margins. And our expectation is that we will continue to generate healthy margins out of CallisonRTKL.

[Philip Ngotho, Analyst]

Philip Ngotho, ABN AMRO. I have a number of questions. I'll start with 3. Maybe the first one, on the working capital. So you indicated during the presentation that the payables are down EUR30 million also versus year-end. But if I look at the financial statements, where you disclose the line payables, other liabilities, and I think accrued expenses, I see it being stable versus year-end. So it seems that there's quite a large movement in one of the other items. Could you maybe explain what is causing that and what is really the reason for that? Then on the overdue receivables, we see indeed improvement in the bucket of over 120 days. But in the bucket of 30 days to 120 days, there's quite a large deterioration. I think it's an increase of around EUR20 million. Could you also give a bit of color on that, what is driving that? It seems that there's maybe a little bit less focus on that, or maybe there's some contract on the line that any color would be helpful. And then my last question is on ALEN. So you indicated that there is a loss of -- so the loss in the first half of the year was EUR4.5 million. What do you expect for the second half of this year? And also, once these assets are fully ramped up, what cash generation profile are you looking at? What are we talking about? And also, maybe can you give an indication of how far, especially the gas-to-gas plants, how far it is in the ramp-up, so in the production ramp-up?

[Sarah Kuijlaars, CFO & Member of the Executive Board]

Yes. You've delved deep into our balance sheet there. So I think why we made that point about the payables was just to reiterate the point that we are making payments reliably to our suppliers. So we're not using that to buoy up [indiscernible] we have to. So I think [indiscernible] we're pretty stable in terms of accounts payable compared to the year-end. So that's the point we're trying to make, that it's conservative, and [ constructive ] management across the [indiscernible]. With respect to the more than 30 days, [indiscernible], yes, I find that disappointing. So clearly, the focus has been on the really overdues. That's improved. But I think it just reiterates the point that this is -- we need diligent discipline across all regions to ensure that we manage those receivables. And I think that really fits in well with Rob Mooren's focus on make every project count, and a project is really only successful once not only the client is satisfied with our work, but also the cash is in.

[Philip Ngotho, Analyst]

Can I just have 2 follow-up questions on that? So maybe the first one on, indeed, the overdue receivables, so the bucket of 30 to 120 days. So are those specific regions that are now a bit lagging in your performance? Can you maybe pinpoint where it's coming from, that bucket, the [indiscernible]?

[Sarah Kuijlaars, CFO & Member of the Executive Board]

So it's actually quite spread. So yes, it's the Middle East, but there's also, unfortunately, Asia has deteriorated, and maybe Callison have taken their eye off the ball. But there's nothing underlying there. It's just lack of discipline that we need to clearly focus on in the coming months.

[Philip Ngotho, Analyst]

And then, the first question that I raised, the fact that, like you indicate, that line item, the accrued of accounts payables, accrued expenses, other current liabilities, has remained stable versus year-end. But as you indicated, payables are down EUR30 million, so that is -- well, I mean, you show that you're paying your suppliers. But somewhere else in those line items, there's an increase of EUR30 million. So that is -- actually, if you would look at your working capital, I guess it helps your working capital by around EUR30 million. And I'm just wondering what is it? What has happened there?

[Sarah Kuijlaars, CFO & Member of the Executive Board]

Yes. Well, that one, Philip, I'll get back to you.

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

And maybe on the ALEN one, Philip, so your question was, since we recorded the loss of EUR4.7 million in the first half-year, what is it going to be in the second half year. We're taking somewhat of a conservative stance there in lieu of -- in a view of being in negotiations on the gas contract. So we're expecting that the second half would roughly be the same in that regard. Your question is also then how quickly, or how much have you ramped up the facility. We are really not ramping up the facility at this point in time, because all we could do, if we ramp it up, is to [ fly all ] gas. And that makes very little commercial sense, other than the minimum you have to unavoidably do. So we have obviously commissioned the plant. The plant is fully operational if we wanted it to be operational, but it wouldn't make sense because you would just [ fly all ] the gas.

[Philip Ngotho, Analyst]

But I mean, you know that it actually will be working?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes. We have, of course -- as you commission a plant, part of commissioning a plant means that you test the full capacity. So we know that the plant can run at full capacity, but again, it wouldn't make sense to run it now because you would [ flare ] it.

[Philip Ngotho, Analyst]

And you expect to do that starting next year, or what is?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Well, the expectation is that we would, first of all, close out, of course, under [ contracts ] on the gas off-take. And as soon as we have that in place, we have all the infrastructure in place to start delivering the gas then. So it depends on when we will be able to close those contracts.

[Philip Ngotho, Analyst]

Okay. And something -- can you maybe share some thoughts about what the cash profile looks like for these plants?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

For the rest of this year?

[Philip Ngotho, Analyst]

No, no, once it's really up and running.

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

You have the data available?

[Sarah Kuijlaars, CFO & Member of the Executive Board]

I think, as part of the assessment of the plant, [ they're ] forward-looking and re-looking at the business case, which obviously we'll be looking at in Q3 as we finalize the contract.

[Quirijn Mulder, Research Analyst]

Quirijn Mulder from ING. Couple of questions. First, on the ALEN story. Let me say, with regard to the buyers, what do you expect? There are maybe 3 or 4 players who are interested in to [ take off ], and what's the reason that you are not starting up this facility and to sell this on the spot market, this gas? Because there must be some demand behind for the product anyway, even if you put it in some cylinders, or whatever. So I'm interested in that. And with regard to the DSO, I'm somewhat surprised that the DSO improves mainly because of the Middle East, but Asia was quite weak. And maybe you can explain there what's going on, why that's [ closer ] by, I think, 7 days.

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Let me take the first question, Quirijn, and I'll ask Sarah to address the second one. So the buyers we're looking at include fundamentally 3 categories. One is the gas company, and that would most likely be our preferred buyer for, I guess, largely obvious reasons, and one being that, if we come to closure with the gas company, it would mean a 10-year contract, and that would be extremely attractive, of course. Then there is 2 industrial buyers who would still be a attractive alternative in case we don't come to closure with the gas company, because they would basically sign 5-year contracts. And the last one would indeed be to sell in the spot market. But if you look at the infrastructure there, it's not necessarily very easy to sell at the spot market, because the gas off-take is not going by pipeline. The gas off-take is actually going by trucks. And that makes it just a little bit more complicated. So yes, we have it as an option. And in fact, we are pursuing that option, the third one. But our preference would be, obviously, to just sell it to the gas company. So we don't want to, again, be just depending on that opportunity. That's why we're looking at the alternatives. But given where we are with the gas company, we don't want to necessarily go too far with some of the others at this point in time.

[Quirijn Mulder, Research Analyst]

Okay, so it does mean that you need to adapt your infrastructure somewhat if you're going to sell it on the spot market? Because if you don't do that, if you don't have to do that, then you would be able to sell the gas as long as no contract.

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes. And we are looking at that option in the meantime, but that will be at volumes which would be not necessarily the same volumes as you could sell to the gas company. So it is the option, the third option we're looking at. And in the absence of having a contract, that option becomes more and more viable. In fact, there's a fourth party, in addition to the 3 I just mentioned, or a fourth category of party who is interested in testing the infrastructure, testing the gas for 30 days. And that might be an option we will [ pull ] relatively soon, as well.

[Quirijn Mulder, Research Analyst]

Okay. Is it correct, my assumption that you are the responsible for the gas, given the fact that you are giving answers? Or is that Ann Hopkins?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

We as in Arcadis, you mean?

[Quirijn Mulder, Research Analyst]

Yes, yes, within Arcadis. Let me say, who runs the [ file ]?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Oh, so the whole ALEN venture is under Mary Ann Hopkins since she is responsible for the Americas, including LatAm. So Mary Ann Hopkins is managing this on a, I can almost day, day-to-day basis.

[Quirijn Mulder, Research Analyst]

Okay, my other question about the DSO?

[Sarah Kuijlaars, CFO & Member of the Executive Board]

So on the DSO, so I think it's -- so I'm still learning about this industry, but I think it's -- so it comes down to disciplined collection across the globe. And it's great to see the progress in Middle East, but when the focus is there, unfortunately, it has slipped a little, and indeed Asia was part of the slippage. So I think it comes down to how do we instill that discipline in all parts of the organization, focusing on cash and cash collection.

[Quirijn Mulder, Research Analyst]

My final question is about Brazil then. Can you give me an outlook for second half? Are you going to cross the breakeven level after 2.5 years?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes. So just to put it in context, we are now at about 850 people in Brazil, down from the 3,000 we had at the peak. Looking at the market and the opportunities we're seeing, which for us are largely in Environment Infrastructure and to a lesser extent in Water, we believe that we can keep the 850 people busy. That being said, there is, as always in countries like Brazil, a bit of an uncertainty in that elections are coming up, and that tends to have an impact in the country. I will not tell you that that impact is already felt at this point in time, but generally speaking, it does introduce a degree of uncertainty with some of the potential clients. But notwithstanding that uncertainty with the 850 people, we believe that we have the right foundation in place to completely turn the corner.

[Unknown Analyst]

[indiscernible] Middle East, you made an assessment over there. Could you more or less indicate, let's say, Middle East was 100% last year to what kind of level it will drop on the basis of your analysis? And will this also have implications for your workforce reductions, or whatever?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes. So we've also said in our -- to that last point, we've said in an announcement that we are adjusting the organizational structure to the new portfolio we're pursuing. But if the question was really, “Are you expecting restructuring, or substantial restructuring costs out of that assessment,” then the answer is no, the reason being that, in the Middle East, we to a large extent already use the Global Excellence Centers. 30% of the work was already done in a Global Excellence Center. So it could have an impact there, but that work will get replaced by work from other regions. So no expectation of any negative impact there. Where is the bottom? I think the bottom will be in 2018. The expectation is that, as we get further into 2019, we will see an improvement again. It is something we have planned. As I said before, we knew that, as we started to tighten the screws on the number of clients we wanted to work with, that we would see an initial drop. But the greater [sell] activity and an opportunity to do more for the clients we already have, plus trying to gain some additional clients, we expect that in 2019 we will see the revenue start to go back up again.

[Unknown Analyst]

But could you provide some kind of indication to what level it will drop? Is it 20% less or 40%?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Well, I think I'll probably stay by saying that 2018 will probably be the bottom.

[Unknown Analyst]

Secondly, coming back to [indiscernible], with the strong improvement in operating margin in Q2, it more or less implies that Q1 was at 4%, whilst in both quarters you had a organic sales decline of 7%. So what was so much different between Q1 and Q2?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

You know what the difference is between 2 quarters? I think it's probably -- I would imagine, but I'll have to validate it, that the nature of the order intake we had in the 2 quarters. But that's probably something we need to validate.

[Sarah Kuijlaars, CFO & Member of the Executive Board]

Yes. So definitely there is a much stronger Q2, is that a standard seasonal approach, but I think it comes back to it's really comforting to see the focus on the backlog, which gives us real confidence for the coming months and quarters.

[Unknown Analyst]

And then lastly from me, you mentioned your oil and gas project with the insurance claim. You mentioned a partial payment. How much has been obtained? And how much is still there to be received?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes. Just to provide context here as well, this is a project we've been talking about before. This is a project for which we have an insurance taken out, and the dispute is with the insurer. I had mentioned before that the dispute, more specifically, is about the application of inflation over a certain part of the outstanding receivable, or a certain part of the revenue, I should say. We have used a number of avenues to put additional pressure on the insurer, including threatening with legal action, including using relationships we have at a high level to impose additional pressure. And that has yielded the result we were hoping for in that the money, which was not disputed, has now largely been released. And to give you perspective, that is about becoming close to 30% or thereabout of the total sum. What this action has also resulted in is that, in return for the insurer paying us that amount of money, they wanted to have a second round of mediation done on the still-outstanding monies, which is exactly what we wanted, and that actually asked for before, which they at that time turned down. And so now we're actually in an even better position, because we wanted that second around of mediation. That is going to take place. If that doesn't yield the result, and that's expected to come to a closure in the September timeframe, then we will go ahead and pull the trigger on the legal action.

[Unknown Analyst]

So it will not be a binding outcome.

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

No.

[Unknown Analyst]

[ Albert Parner ], Kempen. Just 2 short follow-up questions, one on Callison. As you finalize your strategic review, I was wondering, can you share with us some of the steps you expect to take in the coming year or 2 on how to turn the tide within Callison? And 2, on ALEN, I was wondering whether you could share some detail on the historic business plan. Back in the day when you took on the project, what kind of EBITDA contribution or generation did you expect at the asset level? And in light of current contract negotiations, do you expect to get anywhere near those old numbers?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes, let me take that first question. So what steps are we expecting to take on CallisonRTKL? We've already taken a number of steps, of course, as we came to a closure on the strategic review, which was to meet with the most senior management in CallisonRTKL, to have really constructive and open conversations about the degree of integration we wanted to see, going forward. I'll give you an example. In the past, we were still planning to, also in CallisonRTKL, deploy the Oracle system. We are now looking at it to see if that really generates the value we would expect to get out of it. So we're looking critically at all the touchpoints we have between CallisonRTKL and Arcadis to optimize the leverage we can create and optimize the return. I think with the decision, as I said before, we've taken the ambiguity away, the uncertainty away. I think that will also actually result in a further drop of the voluntary turnover. In fact, the voluntary turnover may be surprising, was below what we expected it to be. We've lost a couple of key people, but in total, the goal we set for this year we haven't met, and -- we haven't met the goal because we [ under-run ] the voluntary turnover. And so it will be an ongoing dialogue between ourselves and the CallisonRTKL leadership to increase the engagement and use that time to identify opportunities to still drive synergy between Arcadis and CallisonRTKL. We've always said that, even if we would go as far as selling CallisonRTKL, we would still work with CallisonRTKL, because what we do does need architects, not in all cases, but in many case it does. And we work with various architects, and we will continue to do so. So it will have a number of steps. Most of these steps are actually described in the business plan, which was made as part of the whole strategic review.

[Unknown Analyst]

And then the question on ALEN?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes. Where we are right now on the business plan on ALEN is we developed a business plan when we embarked on the project, which was back in the summer of last year. In the meantime, of course, we have seen further developments. We have incurred some delay in completing the facilities. So we are actually at the point in time right now, also with an eye on potential off-takers of the gas, to update the business plan. So I can't give you any specifics at this point in time. We're in the process of updating the business plan.

[Bart Cuypers, Financial Analyst]

Bart Cuypers, KBC Securities. Maybe a follow-up question on Asia. There was a small impairment of about EUR2 million in the first quarter, apparently no additional impairments taken in the second quarter. Based on the information that you have today with the receivables going up in Asia, do you expect additional impairments for the rest of the year?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes. I had an opportunity to look at that business more closely, because as we said before, as I said before, Greg Steele now has assumed responsibility as of 16 July for Asia and Australia. I had that role for 4 months, from the time that we introduced the new executive leadership team until Greg took over that role, and it was always, obviously, my intention for that to be a temporary role. But it did allow me to take a closer look at our business in Asia and where we are and where we can grow. You can probably also say, [ please ], some of the part of that was also the impairment we took in the first quarter on some of the D&E work in Hong Kong, and China in particular. We are using this opportunity to take a much closer look at all of the projects there. I can't tell you at this point in time whether that will result in any more impairment. My expectation is not, but we haven't cleaned it up entirely. But I will be very surprised, based on the fact that of course, as you will appreciate, we started with the bigger ones first, if it will be extremely substantial.

[Bart Cuypers, Financial Analyst]

And then maybe a smaller question. You mentioned the Excellence Centers. It's still a potential leverage to further increase the margin, going forward. Has the share of the Global Excellence Centers increased over the last half year, or is it still relatively stable compared to the last year?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes, it has increased a little bit, but not as much as I would like it to increase. And the expectation is that it will increase in 2 ways. It will have to increase on, say, the principal work we do, so the engineering design work we do, but it's also going to increase on the so-called shared services, so more of the, let's say, enabling functions. And to that extent, we have hired a new leader for shared services part of it, so make a distinction between what we do in engineering design versus what we could do in finance and in HR and in IT. Some of it is already in [ the ] GECs, but there's clearly a larger opportunity which is going to simply make us, again, more competitive. It will reduce our overhead costs. So on 2 fronts, I'm expecting to see an increase in the use of the Global Excellence Centers.

[Bart Cuypers, Financial Analyst]

[ To ] which level do you think is [indiscernible]?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Well, I've said before that, based on my own experience, I think that 30% is very feasible. In fact, some regions, including Australia and the Middle East, as I mentioned before, are already using global excellence centers for 30%. But across Arcadis as a whole, it is still around 10%. And so 30% in the not-too-distant future is absolutely possible.

[Philip Ngotho, Analyst]

Phil Ngotho, ABN AMRO. A few follow-up questions. First of all, I see that you have used different definitions for restricted cash, and also I see a restatement, I think, on corporate guarantees. Can you explain what is the reason for that? And also, I believe that these are unaudited statements, but have the accountants actually agreed on the definitions that you now use for those items? The second question is, again, a little bit on working capital. What I find -- we discussed the DSOs and the [indiscernible] receivables, but if you look at the unbilled receivables, they're actually up quite significantly as well versus last year. What is causing that? And then also, if I look at the work in progress, you see a very strong delta year-on-year, which is working in your favor. It appears to me that perhaps you're using more prepayments, or you have been prepaid more on contracts. Is that correct? Is it something that's sustainable? And also, can you maybe indicate what you expect in terms of cash generation in the second half of the year? Historically, [ there had ] always been a kind of inflow of around EUR100 million in the second half of the year. Can you indicate whether we should expect something similar for the second half of this year? Because it's quite important to know where -- well, to get a feeling of where the net cash position, net debt position would be at year-end.

[Sarah Kuijlaars, CFO & Member of the Executive Board]

Okay, so if we look at, firstly, on restricted cash and guarantees, so of course, the way it was stated at year-end was before my arrival. But we have reviewed how we analyze both these and compare it to market practice. And on the cash side, we brought the definition in to much more in line with market practice. And I think that gives a much more transparent and fair view of where we're at. And I think also, given the focus on cash, we've also taken steps to ensure that where we have had cash isolated in certain locations, that we've brought it back so that the NV can access it. Similarly, on guarantees, the information that we shared, we've provided more transparency, and there was a interpretation that could have double-counted some of the guarantees. So again, we've tried to be very transparent about what's out there. And absolutely this has been done in dialogue with our auditors, so yes, they're not audited, but they absolutely -- regular [ connection ] with auditors, and they are very comfortable with the new approach. So working capital, as you're well aware, there are many elements of working capital. There's nothing that's in there that's sort of undermining the performance. I think it comes back to this focus and how, as all the companies now focusing [ on ] really the release and the generation of cash. That then, I think, allows everybody beyond the finance organization, the project managers, to understand the power of getting that cash and utilizing the cash. So the focus on cash will absolutely continue. And as you've seen, the second half of the year is always much stronger than the first, and we hope to deliver that this second half, as well.

[Philip Ngotho, Analyst]

But then maybe just focusing on, in this case then, just the billing [ in ] excess of costs, because that's actually, if you look at the cash flow statement, that's a positive delta of EUR35 million. Can you explain what is -- is that something that's really structural that we can actually now expect that it will remain at these levels, or is it something that we saw in the past, maybe in the second half of the year, that had a positive impact but that won't have a positive impact this year? It seems to me like quite a large movement, so I'm wondering what is causing that. Has there been different practices in maybe getting more prepayments in?

[Sarah Kuijlaars, CFO & Member of the Executive Board]

So there's no different practices and no excessive prepayments in there.

[Quirijn Mulder, Research Analyst]

Quirijn Mulder again from ING. Two additional questions. One is your remark on U.S. with regard to -- and we haven't discussed any segments with Water. You're quite positive on it. I think that it was one of the smaller concerns in this organization, that Water was not growing at all. So maybe you can give some idea about the order intake, or order book, and what's going on, and what sort of margin do you know foresee for Water? Is it one-off, or is it structural changing there in that market? And my second question about Far East, about Asia. As I remember, China is an important part. Singapore is an important part. Hong Kong was important, especially issues where in Singapore and Hong Kong because of the flaws in the markets. How do you look at the rest of the Asian business and that are small markets like India, Indonesia, Vietnam, Philippines, I think? Are you considering to say, “Okay, we don't have the economy to scale, and we might trim the business there, or even close the offices in these sort of places where we don't have serious revenues?”

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes, let me take the first question first, Quirijn. The improvement in the U.S. I think now is substantial and significant enough to not call it a one-off. In fact, as you've probably noticed in the recent past, we've become maybe a little bit more cautious to claim victory before we see that it is sustained victory. And I think what we are seeing in Water right now is the result of us being cautious in the last couple of quarters, but signaling that we started to see an improvement in Water. And I think we are now at the point comfortable enough to say, just like we've been saying for the U.S. as a whole, that that's going to sustain. What's the result, or what has caused it? Just as with other things as well, leadership change in Water has also helped us here to refocus, to re-energize an organization which probably wasn't as sharp and energized as they should have been. And the results are there. And you're talking to our leader in Water. It's not his expectation that it is a one-off. His expectation is that capitalizing on what he describes is a very healthy pipeline of opportunities that we will sustain that improvement in Water. To your second question, you're sort of getting a little bit ahead of the portfolio analysis, which we wanted to do, but at the same time, though, I really don't want to duck the question altogether. The 4 big countries for us, you mentioned 3 of them, are India, China, Singapore, Hong Kong, and Malaysia, which is actually also a big country. And they together create about 80% of our revenue. Now one of the things which we didn't mention so far, but has impacted our order intake and our revenue in Asia in the second quarter, is the result of the elections in Malaysia. And more specifically, the somewhat surprising outcome of the election caused us some heartburn in that all the big projects we are working on in Malaysia, and some of them actually we're working on in Singapore as well, such as the high-speed line between Kuala Lumpur and Singapore, have all been canceled by the new Prime Minister who was also the Prime Minister many years ago. So that has impacted us quite a bit. But still, these 4 countries altogether have about 80% of the revenue. And so the rest of the 20% is then obviously being made up by lots of not necessarily small countries, but at least countries which provide only limited contribution. And that is going to be exactly the focus of our portfolio and emphasis. Do we have to be in all these places? If so, what is the right business plan? What are the right services we are going to provide? And whereas I don't want to be specific, I will be very surprised, but I don't want to preempt the outcome, if, at the end of the day, we will still be in as many places as we are today.

[Quirijn Mulder, Research Analyst]

My final question is about CallisonRTKL. It's, let me say, more at distance from the group. At the same time, you want to integrate, let me say you want to do more together. What does it mean for the remuneration of [indiscernible] from CallisonRTKL, for example? Are they more independent from the group? Or how is the situation there? And what is the strategic -- yes, you have already made the strategy for them, but you haven't elaborated that much on CallisonRTKL.

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

The devil is always in the details. And remuneration is not unimportant, but it's still something we need to work through, because we want to first get the big pieces in place, see what degree is integration still required. And then, we need to, of course, have the remuneration of the most senior management in particular being aligned with what we are trying to accomplish. We haven't really gotten to that level of detail.

[Unknown Analyst]

[indiscernible], 2 follow-ups. Firstly, on ALEN, you mentioned we have gas-to-gas and gas-to-power, and also mentioned 70 million. Could you break it down between the 2? And you had already off-take contracts for gas-to-power. What's the duration of these contracts? And secondly, Mary Ann Hopkins is now responsible for U.S. ALEN, and also for CallisonRTKL. Shouldn't you have somebody else being responsible, a new guy for CallisonRTKL? Because I think it's a lot of work for her.

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes, let me start with the last part. She's pretty busy, but that's what we want people to be. I don't think it's too much for her, and the reason being that her location, her physical location and the center of gravity, if you like, for CallisonRTKL happened to be in the U.S. And so it is a relatively logical choice. With ALEN and our desire to drive that to conclusion, her plate is indeed pretty full. And she didn't use the same words when I spoke with her yesterday, but words which are similar. So where necessary, and where relevant, we will, of course, provide additional support. But since she has been involved in it for a couple of months now, and in ALENs case actually longer, we feel that trying to get someone else involved in it now with all the history is probably not the most efficient part of the ultimate solution. So we think that she will be able to handle it, also because the U.S. organization is solid, if not rock solid. And therefore, it can probably do, for some time at least, with some less attention, if that was actually the case. Another question was on the length of the gas-to-power contracts. Let me check my notes real quick. I think it is 5 years. 3 years, sorry, 3 years.

[Unknown Analyst]

Could you provide an indicative breakdown of the 2, of the 70 million you intend to produce now?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Of the 70 million?

[Unknown Analyst]

I think you're going to produce 70 million cubes of gas?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Oh, no, the 70 million cubic gas is all on the gas-to-gas plant.

[Philip Ngotho, Analyst]

One last question from my side. On CallisonRTKL, I was a bit surprised with the announcement that you are keeping it, of course, within your portfolio. And now you also indicate that you are actually also, at the same time, looking at making a new strategic plan. We haven't really received any new information or how that looks like. But I wonder, when exactly did you start this? Because back in -- I think it was February, you actually indicated that you were undertaking market consultation process, and that sounds very much like looking for interested buyers. So this comes to me a little bit as a surprise also that apparently you are looking for just a new plan for the business. So maybe if you can run us through a little bit on what happened during the time? And also wondering, did you actually receive any firm offer on Callison?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Yes. If I suggested that we are going to make a strategic plan, then I misquoted. I said we developed a strategic plan as part of the review process. That was one of the first activities, actually. So when we started the review process back in, say, August-September of last year or thereabout, the very first thing we did was, with the help of an outside party, to develop a strategic review -- a strategic plan. So that has been developed. And obviously, that was necessary for any prospective buyer if we were going down the path of selling it. So that's done, and that plan is the plan we're going to now execute ourselves. At a high level, what are the steps? Largely, the latter part of last year was used for the development of that strategic plan, of the vendor due diligence, and we had external parties helping us with that. And then, we started approaching a significant number of parties in the early part of this year. We then brought it down to 5 who appeared to be very serious, and we had serious discussions and negotiations with 2. So that's kind of at a high level the steps we went through during that roughly 9 months or so.

[Philip Ngotho, Analyst]

And with the strategic plan, are there items that we -- are you going to refocus the business? Are there particular angles that you're looking to undertake in the coming period to turn it around? Can you give us details on that?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

We don't expect, Philip, that as a result of the plan, we would refocus the business on different business, per se, so we believe that the businesses we serve are sound. Could we potentially be looking at a different structure to execute the work? That's always possible. But there's no fundamental shift in the markets we plan to serve at CallisonRTKL, going forward.

[Philip Ngotho, Analyst]

And just a last question. What do you mean with a different structure to execute the work [indiscernible]?

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Organizational structure.

[Jurgen Pullens, Director of Investor Relations]

Are there no further questions? When there are no further questions anymore, I would like to thank you for your contribution and your presence here, and I want to end this analyst meeting. Thank you.

[Peter W. B. Oosterveer, CEO & Chairman of the Executive Board]

Thanks, everyone.