Arcadis NV (ARCAD) Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. I am Gillie, your Chorus Call operator. Welcome, and thank you for joining the Arcadis conference call and live webcast to present and discuss the second quarter and first half 2026 results. At this time, I would like to turn the conference over to Ms. Christine Disch, Investor Relations Director. Ms. Disch, you may now proceed.

Thank you, Gilie. Good day, everyone, and welcome to our Half Year and Second Quarter 2026 Results Conference Call. My name is Christine Disch, and I'm the Investor Relations Director here at Arcadis. With me on this call our CEO, Heather Polinsky; and our CFO, Simon Crowe. We would like to start with the presentation. And as usual, this will be followed by Q&A. We would like to draw 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 the risks to these statements are described on the press release itself and on the company's website. Now let's start. Please, over to you, Heather.

Thank you, Christine, and hello, everyone. Welcome to our half year and second quarter 2026 results. You will have seen our results, medium-term guidance and rejection of the WSP proposal this morning. I will focus on our half year results and second quarter results in this presentation as well as our medium-term guidance, and we are happy to take questions on those. As it relates to the rejection, we have elaborated on our Board's reasoning in our press release, and there is nothing more to say. So turning to the momentum we are creating through our results. We have delivered strong quarter results. The actions we have taken to improve performance together with our strategic investments are increasingly reflected in our results. We are seeing growth accelerate, order intake strengthen and margin improvement continue. Given this progress and the momentum across the business, we have upgraded our 2026 growth outlook. We are also pleased to provide our midterm guidance and introduce our 2027 to 2029 strategy, setting out the next phase of value creation and growth for Arcadis, I'll take you through this shortly. But first, let me turn to the Q2 results. We are executing our strategic priorities at pace and seeing tangible results across the business. Net order intake increased 13.5% year-on-year, reflecting our renewed sales focus, capitalizing on strong client demand and accelerating growth momentum compared to Q1. Margin improved year-on-year, driven by disciplined performance actions and a shift in business mix, while we continue to invest in the capabilities needed to deliver sustainable, profitable growth. Our strategy is gaining traction. We are winning where clients need us most and delivering with greater speed, consistency and impact, enabling us to create better outcomes and greater values for our clients and as a result, our shareholders. Our first half results have been supported by sustained momentum that we built throughout Q2. Margin performance slightly improved to [ 11.2 ], reflecting the benefit of our operational focus while we continue to invest in growth and strategic priorities. Order intake is up more than 10% and resulting in record high backlog. We're proud to show green areas across the board. Our backlog also gives us confidence in our future trajectory. Our strong employee engagement and talent metrics further reinforce our confidence in the ability to execute and deliver on our strategy. At Arcadis, our success comes through the knowledge, innovative spirit and passion of our people. It is critical we bring our people with us and we are proud to recognize that we score in the top 10% of professional services firms on employee satisfaction. As I said at the full year and Q1, we've only just begun. We are fully committed to unlocking further value and driving improved performance in the periods ahead. Now let's take a closer look at our business areas. Resilience continues to be a strong star performer with sustained momentum in H1. There was notable strength in water in the U.S., where the business grew 15% year-on-year in the first half with record-breaking backlog. While we are also amping up our AMP programs in the U.K. Our German business delivered exceptional performance, double-digit year-on-year growth driven by large multiyear energy grid, biogas pipelines and substation projects with tenant Amprion and Gasunie. In environmental restoration, order intake is improving across our geographies with key wins with large energy, mining and chemical companies. Now turning to places. There was some momentum improvement in the quarter, demonstrating progress against our strategic priorities. Data centers in U.S. Pharma continued to perform strongly, and we are reversing the decline in places with a strong book-to-bill. We continue to expand our leading data center position in Europe with new hyperscaler wins. And as have we shared over the last 6 months, we are reshaping our Property and Investments business towards higher growth opportunities. This enables us to strengthen our portfolio and redeploy architectural resources to areas of sustained client demand, including transit, mission-critical facilities and workplace solutions. I'll return to how these actions support our longer-term growth strategy later in the presentation. Mobility delivered sustained performance in the first half, supported by continued strength in rail and highways across Canada, the U.S., Germany and the Netherlands. In the U.K., we are seeing encouraging progress with improved order intake including a EUR 90 million commission for design and program management services for the new HS2 Washwood Heath Depot, helping us to offset the wind down of other large projects. major infrastructure programs remain critical to our strategy, and we continue to leverage our global expertise to secure important new wins. A clear example is our appointment as the lead designer for Roberts Bank Terminal 2 in Vancouver. The win demonstrates the strength of our global expertise, bringing together teams from Canada and the Netherlands and building on decades of experience delivering complex port infrastructure around the world. We are encouraged by the strength of our pipeline in Germany and North America, which together with our backlog supports our confidence in stronger growth momentum in the second half. As you've heard today, we are seeing the benefits of our management actions. Most importantly, we are seeing the impact in our order intake. Clients are increasingly choosing Arcadis for critical programs where our sector expertise integrated capabilities and innovation make a difference. Reflecting this progress and continued momentum, we are upgrading our 2026 growth outlook to low single digit while reaffirming our margin outlook of 11.7% to 12%. Over to Simon for more details about the second quarter.

Thank you, Heather. Good morning and afternoon to you all. As you've just heard, we've achieved a strong first half with a step-up in growth margin, good cash collection and a very strong order intake. I'm pleased with the progress we're making this year. When we last spoke, we told you that we were focused on building a strong performance culture growing the sales capability and growing the top line. That started to come through with a growth acceleration. It's early days, but the momentum is there and the backlog is growing. We continue to invest in growth through targeted recruitment and increased business development. It's about putting the client and our talented people at the center of everything we do. We are also continuing to cut nonbillable costs, tightly control what we spend and drive the high-performing teams to expand our margin. We have a laser focus on cash collection, and we've learned from the past, we are making growth margin expansion and cash collection, the rallying call for all Arcadians as we continue to deliver great work for great clients in a strong market. As you will hear from Heather later, we've been really busy over the last few months, resetting our strategy, and I'm very excited that she's going to share some of the details today. This is key to rightsizing the cost base that is well underway and we're making good progress in cutting out unnecessary expenditure. Everything that I've been talking to you about since my first earnings call at the back end of last year is starting to show signs of positive progress. We still have a long way to go, but we've recruited some great people, reorganized ourselves to differentiate Arcadis and focus on our growth sectors and services and simplified the way we work to ensure we get the margin accretion. Our teams are responding really well, and there is a palpable buzz in the air. We have upgraded our '26 growth guidance while maintaining our margin guidance as we continue to invest for growth. I'll now expand on selected key highlights of our Q2 '26 and half 1 '26 performance. Order intake was strong for the quarter and has developed positively over the half year, with broad-based momentum across all business areas, supporting a 1.1x book-to-bill. Contributions from resilience in Germany and Brazil, mobility in the U.K. and Germany and data centers in places has helped us grow. The sales pipeline is healthy and continues to grow and is driven both by larger pursuits and project wins. We're pivoting towards higher growth and higher value areas where we can differentiate and have a strong track record. Backlog represents a significant opportunity, and we're investing in our people, sales capacity and incentive programs needed to deliver it. Turning now to resilience. We're very strong in resilience as evidenced by our Q2 performance, which was led by the U.S., Germany and Netherlands. We love this business and continue to invest and encourage our teams to excel in every way. We're increasingly focused on this market and concentrating our resources across key growth markets, where Arcadis has a strong track record, can deliver differentiated value and is a trusted adviser. Our clients are responding well. Margin expansion reflects our progress in delivering our strategy with 90 basis points expansion year-on-year. Water remains particularly strong, driven by our leading position in the U.S. And we then [ unpaid ] and the U.K. finally ramping up as planned. delivering double-digit growth. Strong contributions are also seen from the energy transition in Germany and environmental restoration in Lat Am. Resilience is a business that is a key part of our strategy and is driving growth, margin expansion and good cash collection. Turning now to places decline in net revenue is finally decelerating. The business is turning around. We've replaced the leadership and pivoted towards growth areas such as pharma and data centers. This is starting to slow the decline and ensure that we return to growth as soon as possible. Property and investment work continues to be a drag on places growth and margin performance and we're working hard to get back to growth and profitability by working on the attractive projects with the repositioning and rightsizing starting to kick in. A further 200 people left the business in Q2. Strong performance such as data centers are further stepping up growth. Turning now to mobility. This delivered some growth while we were ramping up some major projects and working to convert our pipeline. Margin step-up was driven by pricing discipline, good margin on large infrastructure programs and GEC utilization, while partly being offset by the pursuit costs of major infrastructure opportunities in the U.S. Order intake was strong, and our confidence in H2 is supported by pipeline and backlog. Some of the projects that we'll continue to deliver and step up in revenue H2, a Washwood Heath, Fraser River Tunnel, Torrance to Darlington and the Hudson tunnel. Turning now to cash flow. Our half year cash flow was in line with seasonality, and we remain sharply focused on cash generation. Our working capital percentage as a percentage of annualized gross revenue came in at 12.2%, well below last year's 13.4%. We are confident on our trajectory as we move into the second half of the year. On capital allocation, our framework remains consistent with previous cycles, focused on driving growth and investing in our key markets and delivering returns to our shareholders. First, we confirm our commitment to a dividend payout ratio of 30% to 40% of net income, complemented by additional shareholder returns where appropriate. Second, we will continue to strengthen our balance sheet, keeping our leverage within our target range of 1.5 to 2.5x and retaining our investment-grade credit rating. We are investing in our business, and we'll continue to pursue value-accretive M&A in line with our strategic priorities, while keeping CapEx spend light versus previous years. That includes our recent acquisition of SATEL Iberia, which will strengthen our power infrastructure capabilities in one of Europe's fastest-growing markets. It also includes our investment in Nomic, an AI tool built specifically for engineering document workflows. Nomic will help us deliver better outcomes for our clients while further driving up our productivity. We'll continue to monitor and assess the opportunity for share buybacks. Turning now to our margin levers and rightsizing measures that are supporting our objective to have an increasingly simple client-focused operating model. Rightsizing of people of under forming areas continues while investing in our key growth areas. Our cost-out program is progressing well, with corporate overhead reductions and operating expense reductions expected to contribute to 40 to 50 basis points margin uplift. Improved project margins through centralization, automation, and standardization in the GEC with the use of AI as well as strategic investments have also supported profitability. Taken together, these actions to continue to give us confidence in our ability to deliver the margin progression targeted to '26. In summary, I'm pleased with the work we started at the end of last year. This is now starting to show in our results. we're just getting going, and I'm excited about the opportunities ahead for us to get closer to our clients, grow in our high-performing markets and move away from some of the less attractive areas. The strategy and work we have done makes it easier for us to do that, and I'm confident that our results will continue to come through. I'll now hand back to Heather to take you through the strategy update.

Thanks, Simon. Since the start of the year, I have been clear about where we're heading, focusing on growth markets, simplifying our business around our clients and building a high-performance culture that delivers stronger returns. We're making good progress. Our foundation is stronger. Momentum is building, and there is no reason to wait. So let me take you through our strategy, the changes we're making and what they mean for the future growth and performance. We operate in a large changing market, underpinned by powerful trends, and we are tailoring our strategy to the trends we are seeing. From rapid investment in data centers and energy transition to urgent needs to modernize aging and inadequate infrastructure, demand for our expertise continues to grow. Clients are increasingly looking for trusted partners who can help them manage this complexity across the entire asset life cycle from planning and design through delivery, operation and renewal. This is where Arcadis is uniquely positioned. In the last 6 months alone, my executive team and I have met with more than 80 clients. Their message has been clear. They value Arcadis for our technical expertise sector knowledge and ability to solve complex challenges. Increasingly, they are asking us to do more across more assets, programs and geographies. We see that as a strong endorsement of our strategy and a meaningful opportunity for future growth. Let me explain more. Our strategy for 2027 to 2029 is built on 3 simple principles to drive profitable growth and lasting results. We are focusing on our strengths, reshaping our portfolio and investing in high-growth industries and sectors where we are best positioned to deliver for our clients. We are simplifying our model, including reducing management layers, overhead cost reduction through automation and back-office AI efficiencies, we are aligning our model to combine data, talent and the right delivery mechanisms to streamline how we work. We are driving forward a performance culture, increasing commerciality and empowering our talent to own and deliver world-class outcomes. AI and digital underpin each of these pillars. Our investments are already helping us deliver greater client value, unlock the power of our local know-how and scale expertise across our global network to improve productivity. This is not just a future opportunity. It is something we are delivering today. A great example is Nomic that Simon mentioned earlier. We aren't just talking about AI. For the last 6 months, we have been transforming knowledge gained through hundreds of projects into scalable data-driven insights on lump sum projects for our clients. We are confident that disciplined execution against these 3 strategic pillars supported by AI and digital will deliver profitable growth and lasting value for all of our clients, people and investors. We are bringing sharper discipline to our portfolio. As we assessed our strengths, we have characterized our target industries into 3 distinct strategic buckets. One is core, and these are large, structurally growing low cyclicality markets where we already hold a leading position. Here, we will drive organic growth, implement select bolt-on M&A and expand our end-to-end services. Two, we'll accelerate. These are fast-growing sectors where we have a strong foothold. Here, we will invest heavily in our people and brands, grow key global clients and increase our wallet share. The third bucket is optimized. These represent more cyclical businesses where we will participate selectively and only where we can do that profitably. Here, we will apply strict pricing hurdles maintain margin discipline and divert investment to higher-yield areas. Across all of our industries, our differentiation in environmental services is well recognized by our clients. scaling our environmental capabilities to meet client demand is where we will see and will remain a top priority for us. To simplify how we work we are stepping away from our GBA model and organizing our business and focusing our people around end markets where our clients are to better align our organization with our clients' needs. These sectors will be structured within 4 industries: transportation, power and water, industrial manufacturing and tech and real estate and development. Transportation and power and water represent our largest industries where we have leading positions, and they are core strategic focuses for us. Our accelerate efforts are on high-value sectors like digital infrastructure, data centers and semiconductor facilities. Life sciences and pharmaceuticals and general manufacturing. This is where we'll look to scale our position. Real estate and development fits into our optimized category, where we will follow a disciplined and selective pursuit of projects to ensure they meet our strict margin criteria. Across our 4 primary industries, our service offering will be centered around our clients. We can provide a fully integrated offering. By managing the entire life cycle of an asset, we eliminate friction for our clients, drive higher-margin advisory work and secure long-term revenue streams. Our ability to offer end-to-end services as 1 integrated solution is what sets us apart. At the same time, we are being selective in where we offer these end-to-end solutions. Focusing on the sectors where we're best positioned to deliver for our clients. Now turning to our people and driving a performance culture. We are embedding a more commercial performance-driven mindset across our people that is client-centric and entrepreneurial while also driving efficiencies. As you heard in our previous results, this is well underway. We have already conducted targeted leadership changes, strengthened our commercial discipline, and aligned our sales incentive with our priority clients, and this will continue. We are investing in our talent, sharpening our incentive structures around growth, margin and value. and resetting our talent strategy to attract and develop the next generation of Arcadians. So why do our clients choose Arcadis? First, because experience matters. We bring a long heritage and deep expertise in some of the world's most complex sectors. When clients are making major investments, they want a partner who has done it before and can get it right. Second, because we are #1 globally in environmental services, it is not an add-on for us. Simply, environmental expertise is built into the way we work. Third, because the world is becoming more complex, not blast, clients need partners who can bring everything together and turn complexity into progress. That's where Arcadis is at its strongest. And finally, because we support clients across the entire asset life cycle from the earliest planning decisions to renewal and everything in between, We help clients maximize value at every stage rather than just solving for one moment in time. And crucially, all of this shows up in the numbers. 5% of our revenue comes from repeat clients. Very simply, our clients like us and they keep choosing Arcadis. So let me hand it over to Simon to discuss our targets for '27 to '29.

Thanks, Heather. The combination of attractive market opportunities, the strength of our client relationships and the differentiated capabilities gives us confidence in the next phase of our strategy. For 2027 to 2029, we're targeting mid-single-digit organic net revenue growth, while also expanding profitability to our mid- to high teens operating EBITDA margin by 2029. To support that next stage of our evolution, we were also transitioning to operating EBITDA as our primary guidance metric from the first of January 2027. Our mid-single-digit 2027 to 2029 organic growth outlook is underpinned by strategic prioritization to reshape our revenue mix around high-growth end markets. As Heather said, we're dropping the GBA from the first of January '27 and moving to 4 industries: power and water, transportation, industrial manufacturing and tech and real estate and development. This is how we will manage and report our financials going forward. Our focus will result in us concentrating 85% of our revenues in the industries we've identified as core and accelerate by 2029 compared to 74% today. We're already seeing our targeted level of growth in our core and accelerate sectors. More focus will allow us to deliver this more consistently. As mentioned, we are reiterating our 2026 operating EBITDA margin guidance of 11.7% to 12%. This implies an operating EBITDA margin of 14.3% to 14.6%. By 2029, we expect to reach mid high teens operating EBITDA. This margin is underpinned by the 3 pillars of our strategy, focusing on our strengths, including reshaping the portfolio and driving operating leverage from growth as we can grow our top line faster than our overhead structure, simplifying our model around clients, including reducing management layers, overhead cost reduction through automation and back-office AI efficiencies and continuing to embed GECs into how we work to overall reduce the cost of delivery and raising the utilization rates. And thirdly, driving performance culture by aligning performance with incentives as well as investing in training as well as stimulating entrepreneurship and commercial acumen to drive growth and profits. I'll now hand back to Heather just to wrap up.

Thanks, Simon. In conclusion, our H1 performance showcases the actions we are taking. We are focusing on our strengths, simplifying around our clients and driving a performance culture that is going to support our growth trajectory, and we are moving in the right direction. This gives us the confidence to upgrade our guidance for this year as well as present our medium-term financial objectives. We are staying focused on our strategy, focusing on what we can control and making strong progress in delivering on our top priorities. And with that, I'll open it up for Q&A.

The first question is from the line of Martijn de Drijver with ABN AMRO.

Yes. Thank you, operator. Good afternoon, or good afternoon, Simon. My first question comes in 2 parts. If you'll allow me. What have you baked into your EBITDA margin guidance in the medium term? Because if I look at what WSP, Tetra Tech Stantec AECOM has for their current strategic period. It's roughly at 19%. If you take your midpoint, it's slightly lower. It's trailing that. Can you explain why that difference exists? And my second part of the question is, you mentioned in the presentation that on 2026 on average, your EBITDA margin is 14.5%. If you exclude property and investments, it would already be 15%. Now is that included in that guidance? Is that portfolio management element also included in your guidance? That would be question one.

Great questions, Martijn. I'll start, and I'm sure Heather will -- listen, we're not limiting our ambition here. We've set out our strategy and our guidance today, but we're not limiting our ambition at all. we're reshaping the portfolio. We've got operating leverage. We've got greater selectivity. We're reducing management layers. We've got overhead cost reduction, AI efficiencies -- we've got our GECs. We've got higher utilization rates embedded in those targets. So there's a massive amount that we're doing, and we've been talking about this for months, and you and I have talked about it during the investor meeting. So this is just a natural extension. We're not limiting ourselves to what we've put out today. But obviously, we're coming from a place that we are today. We've seen some momentum with Q2. We've got a lot of positives that we've talked about, great backlog, great order intake, but we are definitely not limiting ourselves.

And Simon, in addition to that, we are also investing for growth for the future, and that's a key component of reshaping our portfolio and really pivoting towards larger projects and larger pursuits. And hiring people to really help us in changing the overall culture of the organization. In addition to that, investments in automation and standardization as well as additional sales capacity and incentive programs are part of our investment strategy.

This back a short follow-up because you didn't answer the question about is portfolio management included in targets?

We are absolutely looking at that portfolio. and that's included in our targets as we go forward.

Okay. Great. And my second question is with regards to mobility. You had very strong order intake in Q1 that did not fully materialize in organic growth in Q2. Would it be fair to say that delay in mobilization of large projects, which will probably occur in H2 hampered your EBITA margin a little bit because of lower utilization of those people that are waiting for those projects to start. Is that the right way to think about it?

Yes, absolutely. We are ramping up on several projects, and you know that there's a great benefit with some of the larger projects because they create a much more stable backlog for us. But sometimes, they take a little bit of time to, one, be selected and two, to ramp up on. But we feel confident about H2, yes.

The next question is from the line of Luuk Van Beek with Degroof Petercam.

Yes. Well, first of all, a question about your upgraded organic growth target in combination with the stable margin target. If I listen well to your presentation, then the additional revenues are mainly in, say, high-value types of projects, and there should be some operational leverage. So you don't raise your margin target. Is that because you do additional investments in future growth? And if so, in what areas? And my second question is about the target percentage for real estate and development. Is that purely organic? Or also include divestments because if it's purely organic, then you would need to continue to adjust your capacity over the coming years because it implies an absolute decrease in revenues. So can you comment on that?

Yes. Luuk, we are investing in growth. That's absolutely right. So our organic growth targets, we've raised those today for 2026. We're maintaining our margin guidance that we gave out, and we are investing in the business. And obviously, we're very pleased with the growth, and we'll continue to invest in the growth. Yes, on P&I, look, we're looking at the portfolio. We're looking at where we should invest and where we should not invest as we've laid out in our strategy, we're looking to optimize. So we are very focused on turning that business around. You've seen some positive signs of that business turning around already. We've changed a lot of the team there. We focus the markets that we actually delivering, and we have exited some people there, and that's showing its results already.

And Simon, we're not waiting until 2027 to start implementing this focus. So in 2026, the investments that we're making are very much focused around the core and accelerate industries that we've talked about so far.

The next question is from the line of Natasha Brilliant with UBS.

My first question is just thinking about your midterm organic growth guidance. So you're now targeting single-digit growth, whereas previously, it was mid- to high single-digit growth. having talked about kind of the structural drivers and the market. My question is really how fast do you expect the relevant underlying markets to grow just to give us some context to your growth? And why have you moderated your target down slightly versus the last strategic cycle? And then my second question, which is partly related to that is just to talk about the pricing environment. How have you thought about the evolution of pricing versus volume within your top line guidance? I know previously, you've talked about historic pricing, perhaps not being as competitive or not being competitive enough. So is that changing? And how should we think about sort of AI and how that might impact pricing as well? So 2 big questions, but it's 2-part.

Let me start with the first one on the organic growth. We aren't limiting our ambitions here, but we are recognizing that, 2 things, as you point out, we have a strong momentum. We have strong markets, and we are continuing to drive that growth. But we also want to be realistic of where we've been, where we're coming from, and we want to make sure that we achieve our growth targets within these areas. So what we're proposing has really been achieved in many of the sectors that we have a strong right to win. And we have the strong ability to drive growth. Simon, anything else on the growth.

Yes. I mean we're focusing on the areas we can accelerate and our core to us and where we've been really successful. So Power and Water will naturally have higher growth rates than other areas, data centers, industrial manufacturing, our pharma business will have higher growth rates. Transport and mobility, again, will have higher growth rates. So we're investing in those business. We're pivoting to that. We want to gain market share, deepen our relationships with clients, deliver consistent the growth and improve our margin through better execution. And we can see that today. I mean our resilience business is doing brilliantly. It's absolutely fantastic. All of our my businesses were doing so like that. I'd be a happy guy. Unfortunately, they're not. There's some drag. We're looking to prune the portfolio. And coming on to your second question, it's price and volume. Look, we're looking to drive the market, drive the volume, but also not at the expense of price. I think, we're getting better at pricing. We're getting better at commercial reality. We're getting better at sales. We're recruiting salespeople. We're training the salespeople. We've got some people in helping us who know about pricing, know about value pricing. We're looking for more lump some work where we can drive the efficiencies from AI from the GECs through into the margin. So that's all of the things that I've been talking about and Heather has been talking about for a couple of months now. So we're just continuing along that journey. We're telling you about that today. We've been working on it for many, many months, and it's all come together to drive that forward.

And Simon, this also gets with our performance metrics for our people being around both growth and profitability. So generating overall value is a really key component of that to make sure that we are really having profitable growth as we go forward. And also, I would say that what we're seeing is a real entrepreneurial shift in the culture of the organization, looking at more co-creation and really working with our clients to explore outcome-based contracts. Where we have a strong technical capability and where that makes sense.

And we're looking to move much closer to the clients. We were always close to the clients. We had relationships. But now it's about forecasting budgeting client by client, making sure we've got the account leads in place, and those accounts are driven by incentives. They've got training and they're driven to grow the business across all of our services, if appropriate, in that particular sector.

Yes. And part of that is what is behind the focus in the key sectors. So the closer and the more focus that we can get, the closer we can spend time with our clients. And the more we can truly get that intimate relationship to understand the pricing points, to understand the projects and to really be able to move into that trusted adviser status. Now Simon mentioned a couple of our businesses that are doing really well and part of the reason is that they fall into that category. They understand the market. They have the commerciality and they sit in a trusted adviser status. And we want to be really deliberate about where we make the investments to have those types of relationships and deliver that kind of results.

The next question is from the line of Simon Van Oppen with Kepler Cheuvreux.

I have a question, first of all, on CapEx. It seems to be quite a low level if you compare to prior years. And I was just wondering, why can you now to sustain lower CapEx levels? And what we -- what should we anticipate going forward? That's my first question.

Yes. I think the sort of EUR 20 million to EUR 30 million is around the right level. We've pruned our offices and our portfolio there. We've focused on our tech spend, and we're leasing the laptops. So we're not buying the laptops anymore. So that's spread over a few years. And we've got a real discipline on our office spend. So it's CapEx like going forward.

All right. That's helpful. And maybe secondly, you secured a roughly GBP 250 million U.K. government framework. I was wondering if it's already reflected in the order intake and backlog of today's results.

No, we do not book master services agreements until we have a specific order and a specific contract.

Okay. And maybe lastly on Germany, I noticed that the revenues increased by roughly 20% year-over-year. And that, of course, includes the 2 acquisitions done last year, but it's still seems, yes, quite strong -- quite a strong level of organic growth, and Germany seems now to be your fourth largest market. Can you please comment on your organic growth in Germany? And also curious to hear your M&A agenda here.

The infrastructure spend that we see in Germany is increasing. It's part of the reason that we made an acquisition last year of WSP's rail business. And it's also related to our energy-related services, another acquisition that we made gift of 2 years ago. is really helping us in capitalizing on that expenditure that we're seeing within Germany and specifically as it relates to the example I gave earlier on Tenet, Amprion and Gasunie and the work that we're doing there.

That's helpful. And on M&A, in Germany, any comments?

Well, we continue to look around all of our markets where we can see a complementary acquisition, a small bolt-on, -- of course, nothing too big. Just as we've done with SATEL. It's that kind of acquisition that we're looking for. So we'll continue to look in all of our markets.

Next question is from the line of Kristof Samoy with KBC Securities.

Yes. I have to, first, an operational question on resilience. We've seen a nice uptick in the second quarter growth. The quarterly order intake did not materially differ from the past 2 quarters. Is that the uptick in growth? Is that like proof of a lasting return of the profitable book and burn business that we saw in the past? Or is it mainly the result of a ramp-up of AMP in the U.K.? So that's the first. And then maybe we can go one by one.

Sure. The resilience growth is always low in Q2. Order intake is seasonal for us. And so that's where we tend to see that happen. So no, there's no structural changes or rationale for it other than that's typically the trends that we see.

But does that mean that -- I mean the uptick in the organic growth rates in the second quarter that we just reported, I mean they can become a base for the next quarters?