LUXEMBOURG--(BUSINESS WIRE)--Regulatory News:
Eurofins Scientific (Paris:ERF):
- Over 9% organic growth9 for the full year 2016, representing the highest annual level since the 2008 recession.
- Group Adjusted1 EBITDA3 margin of 18.9% (+40bp) marks solid progress towards mid-term profitability objective.
- Strong cash generation with 40% growth in Free Cashflow to the Firm.
- Acquisitions program above EUR 200m objective: 27 acquisitions with total annualised revenues of above EUR 220m closed in 2016 at reasonable multiples well within historical average (ca. 1x EV/Sales).
- Increasing proficiency in start-up investments: 91 start-ups in 10 years (2007-2016), average of 20 start-ups launched per year since 2014. Laboratories from the last completed start-ups program (2010-2013) reached break-even in 2014 and generated 22% revenue growth and 19% EBITDA margin in 2016.
- 91% earnings uplift as reported EPS exceeds EUR 10 for the first time (EUR 10.88).
- Significant balance sheet strengthening with leverage down to 1.16x net debt/adjusted EBITDA at the end of 2016 compared to 2.54x at the end of 2015.
- Dividends raised by 38% to EUR 2 per share in view of the strong results
- Outlook: Management confirms the 2017 objectives initially announced in September 2016 of achieving revenues and adjusted EBITDA close to EUR 2.9bn and EUR 550m respectively, at current exchange rates, based on an objective of 5% organic growth and EUR 200m from acquisitions. Trends remain positive across the Group’s businesses, and Eurofins is on track for the achievement of its mid-term objectives of reaching EUR 4bn of revenues and EUR 800m of adjusted EBITDA by 2020.
Comment from Dr. Gilles Martin, CEO
“I am pleased to report another excellent set of results in 2016 from Eurofins, with organic growth nearly double our annual objective. In 2016, we made significant progress towards both our financial and operational objectives. With 89% of Group revenues now generating 21.3% EBITDA margin, Eurofins is able to continue investing for future growth such as the roll-out of multiple start-up laboratories in high-growth markets, as well as deliver profit improvements (+50bp expansion in reported EBITDA margin), and earnings expansion (+91% uplift in reported EPS).
Operationally, we continue to make steady progress on key initiatives including the addition of 46,000m2 of state-of-the-art laboratory surface in 2016 alone, development and commercialization of many innovative tests to better serve our clients, internal development of tailor-made IT solutions that should further elevate the Eurofins laboratory network ahead of its peers, and the roll-out of over 20 new start-up laboratories in 2016.
I would like to thank and compliment our teams in the 39 countries where we operate laboratories around the world for their outstanding dedication and performance in what was once again the best year ever for Eurofins as well as thank our clients and shareholders for their continued support.”
In view of the positive developments in our start-up investment program as detailed on page 7 of this press release, the Group has significantly accelerated the current program which commenced in 2014, to open 76 start-up laboratories by the end of 2017. Start-ups complement the Group’s acquisition strategy, and provide a compelling alternative in markets or segments where acquisition prices are too high. Start-up investments therefore allow the Group to enter or reinforce its leadership in high-growth markets without putting value creation at risk by overpaying for acquisitions.
In addition, despite investments to strengthen barriers to entry and secure future growth drivers, the Group continues to optimize its capital structure, successfully de-levering the balance sheet to 1.16x net debt to adjusted EBITDA, and deliver strong cash generation, with a 40% increase in free cash flow to the firm8 in 2016.
Therefore, whilst the strong growth outlook of the existing businesses allows the Group to be selective to ensure that we maintain financial discipline with regards to acquisitions, our strong balance sheet means that Eurofins is better-positioned than ever to respond to large, compelling opportunities as and when they arise.
Overall, the Group’s performance in the first of its 5-year plan bodes well for the achievement of our mid-term objectives. In light of these results and the continued positive outlook for the Group, the management will be proposing a 38% increase in dividends to EUR 2 per share.
Table 1: Full Year 2016 Results Highlights
|FY 2016||FY 2015||
|In EUR m except otherwise stated||
|EBITDA Margin (%)||18.9%||18.2%||18.5%||17.7%||40 bp|
|EBITAS Margin (%)||14.1%||12.6%||13.6%||12.0%||50 bp|
|Basic EPS6 (EUR)||13.86||-2.98||10.88||10.72||-5.01||5.71||29.3%|
|Operating Cash Flow7||371.8||291.1||27.7%|
|Free Cash Flow to the Firm8||177.7||127.4||39.5%|
|Leverage Ratio (net debt/adjusted EBITDA)||1.16x||2.54x|
N.B. H2 2016 results can be found in Table 3 on page 8 of this press release
Revenues grew 16.0% to EUR 699.3m in the fourth quarter, bringing revenues for the full year 2016 to EUR 2,536.6m, representing year-on-year increase of 30.1%, of which over 9% was organic. Acceleration in market share gains in most geographies, increased customer penetration, as well as continued growth in the testing market underpin the robust growth across the Group. Currency translation had a limited impact of -0.3% during the year. Taking the annualized revenues of all the acquisitions completed during the year, 2016 pro-forma revenues were EUR 2,658.6m.
In Q3 and Q4 2016, Eurofins once again exceeded its 5% organic growth objective despite very strong comparable level of almost 9% in H2 2015, and clinical testing bearing most of the annual impact of cost containment measures by payors in Q4. The stronger organic growth generated by the Group compared to its 5% annual growth objective continues to be driven by a ramp-up in volumes, and supported by continued strength in the underlying trends across many of its businesses.
During the year, Eurofins’ food testing business once again outperformed the Group’s organic growth objective, driven by rising awareness among consumers and across the food industry of the need for more systematic testingi, and the Group’s capability to often respond to the industry’s needs better than any other laboratory testing service provider. Strong performance from some of the Group’s environment testing businesses, notably air and water testing in France and Germany, partially offset some of the impact of slower economic activity in the rest of Europe, as well as the continued weakness in the US environment testing market. Although organic growth in environment testing for 2016 was lower than the Group average, the business is well-positioned for growth due to the scale of its network.
Organic growth generated by the Group’s pharmaceutical testing business remained well above the Group’s 5% objective in 2016, on the back of further growth acceleration in pharmaceutical products testing, and as the Group unwinds and starts to see the benefits of the reorganization of its discovery services business, as well as the steady build-up of the order book in the central laboratory business. In the broader industry, the steady number of applications for FDA approvalsii, and strong growth in drug salesiii, are supportive of the underlying fundamentals for the pharma testing business in the medium term. The Group’s clinical testing business continues to gain traction, following several acquisitions in the US and in Europe. Innovation continues to be a solid growth driver in US clinical testing, while in Europe, the Group continues to roll-out its strategic footprint. In both markets, Eurofins continues to leverage its expertise in genomics, and more broadly in pharmaceutical testing.
Table 2: Geographical Revenue Breakdown
|(EUR m)||2016||As % of total||2015||As % of total|
|UK & Ireland||122.0||4.8%||96.2||4.9%|
|Total||2 536.6||100 %||1 950.1||100%|
Positive trends continue to drive the growth in Eurofins’ businesses in North America, where revenues increased 24.9% to EUR 803.6m, comprising nearly 32% of total Group revenues. Regulatory catch-up remains a key growth driver for the food testing market, and Eurofins continues to gain market share, as reflected in the high single-digit organic growth generated by the Group’s US food testing business. Eurofins’ pharma testing businesses in the US delivered another solid performance in 2016, with strong organic growth in biopharma products testing driven by continued growth in drug sales and new drug applications, as well as strengthening central lab order book. The completion of the site reorganization programme in its discovery services business has also started to bear fruit, as reflected in the organic growth generated by the business in 2016 which was above Group objective. In addition, Eurofins has further expanded its footprint with the launch of medical device testing to add to its comprehensive pharma testing competencies, reinforce its market leadership, and secure additional growth driver. Organic growth in environment testing was somewhat below Group objective as market consolidation continues to be the main driver, which should purge oversupply in the market in due course. The Group’s specialty clinical diagnostics businesses contributed good organic growth in spite of strengthening reimbursement headwinds in H2 as the laboratories expand their sales forces to accelerate the commercialization of their tests and invest in further development of new innovative tests and services. Overall, trends are expected to continue to be supportive of Eurofins’ businesses in North America and the Group continues to invest in expanding its footprint in the region.
In France, Eurofins’ second largest market with nearly 25% of total Group sales, revenues increased 69.3% to EUR 625.9m. Organic growth was in-line with Group objective as the clinical testing businesses, which account for over half of revenues in France, generated better than expected growth despite the annual adjustments in reimbursements being fully applied in Q4, according to the French health authority budget. The food testing business performed strongly during the year on continued market share gains supported by capacity expansion driven by innovation, such as the launch of the Maldi-TOFiv technology which significantly reduces turn-around time and increases capacity for microbiology testing. In addition, Eurofins continues to leverage its international network to become the preferred laboratory partner for clients with equally wide footprint. For example, the Group’s flagship food laboratory in Nantes gained the German QS accreditation to test for pesticides in fruits and vegetables, allowing Eurofins to partner with customers whose products are shipped in markets requiring such certification. Likewise, the selection of Eurofins by the ANEEFELv as one of a handful of reference laboratories in France to serve the fruit and vegetable industry gives access to an important market, and is another demonstration of the Group’s capabilities. The Group’s environment testing business in France also generated organic growth above Group objective driven by market share gains and positive trends especially in indoor air testing. The water testing business also delivered solid performance on the back of recently-won public tenders (“Agence de l’Eau Seine Normandie” and “Agence de l’Eau Loire Bretagne”) as well as increased volumes from existing customers. The clinical diagnostics testing business also generated better than expected growth, validating the Group’s strategy of building a differentiated platform focused on building regional leadership and leading the market for specialized, highly-innovative diagnostic tests.
Revenue contribution from Germany, which makes up 11% of Group revenues, was EUR 279.4m in 2016, representing growth of 11.6%, most of which was organic. The food testing business continues to strengthen, generating the highest revenue growth in five years, with growing scale effect reflected in higher activities from cross-selling initiatives, as well as higher share of incremental market volumes driven by new regulations such as those addressing potential contaminants from packaging materialsvi. Increasingly harmonised service offering from different Eurofins laboratories was reflected in greater penetration and higher volumes from key global food customers. The Group’s environment testing business in Germany also delivered strong performance reflecting continued growth even in a mature market.
The Group’s businesses in the Benelux achieved revenues of EUR 191.2m, representing 7.5% of total Group revenues, and an increase of 20.9% compared to 2015, driven by new businesses won such as the new contract for groundwater analysis in Belgium. Eurofins’ Nordic businesses generated EUR 172.4m of revenues in 2016, making up nearly 7% of total sales. The Group continues to generate robust growth despite high market share across the region as it benefits from past investments which strengthened its ability to continually expand the services it can provide to clients, resulting in increased share of clients’ testing spend. Revenues from the UK & Ireland grew 26.8% to EUR 122.0m, as the strong performance from the pharmaceutical testing business offset the exit from some water testing segments. Eurofins continues to expand its footprint in emerging markets and Asia Pacific, which contributed revenues of EUR 342.1m, an increase of 27.1% versus 2015, as the Group continued to expand its Asian footprint both organically and through acquisitions.
Overall, the Group delivered strong performance across its businesses in 2016, supported both by positive underlying trends, and the benefits of past investments to build the best laboratory network infrastructure in its markets to serve the needs of its clients. The strong results achieved by Eurofins in most of its markets reflect the progress that the Group is making in securing leadership and strengthening its footprint in each of its areas of competence.
Group adjusted EBITDA increased 32.9% to EUR 479.6m in 2016 as margin expanded by 40bp to 18.9% driven by the strong revenue growth and profitability improvements in both the mature businesses and those that had been recently transferred out of the start-up/businesses in reorganization perimeter. The mature businesses of the Group, i.e. excluding start-ups and acquisitions in significant restructuring, generated EUR 2,254.3m of revenues during the period, implying that the margin for these businesses further expanded to 21.3%. Start-ups and businesses in restructuring or reorganization generated the remaining EUR 282.3m of revenues, which means that these businesses now account for 11.1% of total Group revenues, compared to 12.5% in 2015.
Start-up losses and restructuring costs as disclosed in the separately disclosed items2 (SDI) were EUR 18.5m in 2016, representing 3.9% of the total EBITDA generated by the mature businesses of the Group, a further reduction compared to the 4.4% level in 2015 despite the acceleration in the Group’s start-up investments and the finalization of some of the reorganization of its discovery services business in the US, the site consolidation programs in the UK and Benelux, and the relocation of its US genomics business to Louisville, KY. Even with multiple investments for future growth that are temporarily dilutive, reported EBITDA margin still expanded by 50bp to 18.2% as reported EBITDA increased by 33.6% to EUR 461.1m due to strong top line growth and economies of scale, allowing continued profit expansion in the Group’s mature businesses.
Adjusted EBITAS increased 35.3% to EUR 357.6m despite the 27.6% year-on-year increase in depreciation and amortization, due largely to the elevated capital expenditures in recent years. The strong growth in profitability resulted in a 36.5% growth in reported EBITAS to EUR 319.4m as EBITAS margin expanded by 60bp to 12.6% during the year. Non-cash stock option charge and net acquisition-related expenses grew only modestly by 4.3% resulting in a growth of 42.3% in reported EBIT for the Group to EUR 281.9m.
Finance costs in 2016 were EUR 70.8m, remaining stable at 2.8% of total revenuesvii, despite the cost of carrying more than EUR 820m of unused cash on the balance sheet at year-end and a similar amount throughout 2016. Adjusted Financial Result remained stable at -1.9% of Revenues.
The income tax expense has decreased by more than 500bps to 26.8% of the profit before income taxesviii. This is the result of some exceptional finance income and the measures put in place by management to achieve an optimum tax structure, including the recognition of deferred tax assets where applicable. Adjusted net profit stood at EUR 221.6m for 2016. Due to the strong revenue growth and profit improvement, and with finance costs stable relative to revenues, reported net profit nearly doubled to EUR 174.0m during the year, translating to a 90.6% uplift in the Group’s basic earnings per share (EPS), which exceeded EUR 10 for the first time, at EUR 10.88.
Cash Flow and Financing
The 83.3% increase in pre-tax profit to EUR 242.6m, in addition to the successful management of net working capital to 3.7% of sales at the end of December 2016 (versus 5.1% in June, and against 5% NWC/Sales annual objective), resulted in a 27.7% increase in operating cash flow for the Group, to EUR 371.8m in 2016.
Capital expenditures for 2016 were EUR 194.1m. Although the absolute amount represents an 18.5% increase from the previous year, capex/sales declined by 70bp to 7.7%, compared to 8.4% in 2015, demonstrating progress towards management’s commitment to its objective of managing capital expenditures program progressively closer to 6% of sales by 2020. Capital expenditures during the year were, among others, related to 46,000m2 of additional state-of-the-art lab surface, the launch of 22 new start-up laboratories during the year, as well as continued development and deployment of the Group’s new generation of IT solutions. The Group’s capital spending is consistent with its commitment to strengthening its long-term competitive advantage by building a state-of-the-art laboratory network and bespoke IT solutions.
Eurofins generated robust cash flows in 2016, with free cash flow to the firm growing 39.5% to EUR 177.7m as strong revenue and profit growth offset the increase in capex. Likewise, free cash flow to equity increased 26.1% to EUR 125.9m despite the increase in interest payments due to higher gross debt, and penalties for early repayment of the EUR 170m Schuldschein loan (of which the amount due in July 2018 was paid two years early in July 2016) and the remaining EUR 116m OBSAAR bonds (of which the amount due in June 2017 was paid 6 months early in December 2016).
At the end of December 2016, the Group’s leverage ratio stood at 1.16x net debt/adjusted EBITDA, well below the 3.5x limit, as net debt was reduced to EUR 557.8m, compared to EUR 916.3m in December 2015. The significant reduction was due to the higher cash generation, as well as the successful issuance of new shares in June and in September 2016, which raised total proceeds of EUR 496m.
Acquisitions & Outsourcing
In 2016, Eurofins completed 27 acquisitions that either strengthen Eurofins’ leadership in existing markets, or further develop the Group’s expanding footprint in its newer markets, such as in clinical diagnostics testing, or in Asia Pacific. Some of Eurofins’ acquisitions during the year are discussed below.
In January, Eurofins acquired Sinensis Life Sciences, a leading provider of pharmaceutical product testing and cGMP Quality Control (QC) services in the Netherlands, further reinforcing the Group’s global leadership in this area of pharmaceutical products testing. In the same month, Eurofins also acquired Biotech-Germande SAS, one of the leading players in the environmental clinical testing and hospital hygiene market, as well as in medical device evaluation in France. Biotech-Germande complements Eurofins' growing footprint in the testing market for the healthcare sector in France. In March, Eurofins further strengthened its pharmaceutical products testing footprint with the acquisition of ams Laboratories and Advantar, two leading independent analytical and cGMP Quality Control (QC) service providers in Australia, and the US West Coast respectively. In April, Eurofins acquired PerkinElmer, Inc.’s U.S. prenatal screening laboratory services business PerkinElmer Labs/NTD, a reference laboratory in the US for first and second trimester prenatal screening. The acquisition strengthens Eurofins’ growing footprint in the genetics segment of the specialty clinical diagnostic testing market.
Eurofins completed the acquisition of EAC Corporation from Asahi Industries in Japan in May. EAC should reinforce the Group’s local footprint as well as its platform to further deploy the Group’s analytical expertise especially in water and dioxin testing. As part of the acquisition, Asahi and Eurofins entered into an exclusive service contract for a period of 3 years. At the end of May, Eurofins strengthened its leadership in the French food testing market with the acquisition of Agro-Analyses SAS, one of the leading analytical service providers supporting the food retail and catering sectors in France. In June, Eurofins acquired Bureau de Wit BV, one of the main laboratory service providers focused on food and water safety testing for the food production, hotel and catering sectors in The Netherlands. In July, the Group successfully closed the acquisition of Exova’s food, water and pharmaceutical testing business in the UK & Ireland, reinforcing Eurofins’ existing footprint as well as expanding client reach in the UK and Ireland.
In September, Eurofins strengthened its footprint in the specialty clinical diagnostics market with the acquisition of VRL Laboratories, one of the leading laboratories in pre-transplant testing for the eligibility determination for Donors of Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps) in the US. In the same month, Eurofins further reinforced its clinical diagnostics footprint in Europe with the acquisition of Megalab, one of the top five clinical diagnostic laboratory groups in Spain. Towards the end of the year, the Group further expanded its presence in North America with the acquisition of Exova’s environment testing business in Eastern Canada, and in Latin America with the acquisition of ASL Análises Ambientais, one of the leading environment testing service providers in Brazil.
Total acquisition spend in 2016 was EUR 201mix for total annualized revenues in excess of EUR 220m. Including earn-outs for these newly acquired companies, this translates into an EV/sales multiple of ca 1x for the year 2016, which remains very reasonable and in line with our historical metrics.
Eurofins delivered 46,000m2 of the 106,000m2 of laboratory surface planned to come on stream by the end of 2017 as part of its ongoing investment program to build the largest and most efficient state-of-the-art laboratory network in its industry. Between 2005 and 2016, Eurofins has added or brought to the most modern standards over 380,000m2 of laboratory space.
In-line with the positive outlook in the US domestic testing market, the Group is further expanding its laboratory campus in Lancaster, already the largest independent single-site laboratory in the world, with a planned 17,200m2 extension to be completed by the end of 2018, of which 1,600m2 is expected to come on stream by the end of this year. Boston Heart Diagnostics (BHD) has also completed the extension of its testing facilities in Framingham, MA, which has increased its laboratory surface by over 40% to 9,300m2. In Asia Pacific, the Group is on track to complete the expansion of its main Chinese food testing laboratory in Suzhou, as well as the construction of new food testing laboratories in Australia and Singapore by the end of 2017. These projects follow the completion of the Group’s new laboratories in Hong Kong and India, as well as the multiple site upgrade and expansion projects in Australia and New Zealand in 2015. In addition to infrastructure expansion, the Group is also undertaking several site rationalization projects with part or full site upgrades, consolidating several small sites into fewer but larger industrialized sites, or simply moving some businesses into our large campuses to maximize synergies and optimize efficiencies across our businesses. The move to consolidate several small sites to a large campus in Hamburg is expected to be completed by 2019, as are the site consolidation programs in Benelux and Sweden.
Encouraged by the strong performance from its start-up laboratories, with the newly-opened laboratories from the latest start-up program (launched in 2014) generating 101% revenue growth in 2016, and the 18 laboratories from the previous program (launched in 2010) generating 22% revenue growth and 19% EBITDA margin in 2016, the Group has accelerated its current start-ups program. Between 2014 and the end of 2017, Eurofins plans to open 76 green-field laboratories (from the original 35 announced in 2015), which would mean an average of 20 start-ups launched per year during that period. This would take total start-ups launched by the Group to 110 laboratories between 2007 and 2017.
Table 3: H2 2016 Results Highlights
|H2 2016||H2 2015||
|In EUR m except otherwise stated||
|EBITDA Margin (%)||19.8%||18.8%||19.7%||19.2%||10 bp|
|EBITAS Margin (%)||15.0%||13.2%||15.0%||13.7%||0 bp|
Table 4: Separately disclosed items
|FY & HY Separately disclosed items2:||H1 2016||H2 2016||FY 2016||H1 2015||H2 2015||FY 2015|
|One-off costs from integrations, reorganizations and discontinued operations, and other non-recurring costs||5.4||9.3||14.7||5.9||10.4||16.3|
|Temporary losses related to network expansion, Start-ups and new acquisitions in significant restructuring||0.2||3.6||3.8||4.2||-4.7||-0.5|
|Depreciation costs specific to start-ups and new acquisitions in significant restructuring||8.7||11.0||19.7||6.3||8.2||14.6|
|Amortisation of intangible assets related to acquisitions, goodwill impairment, transaction costs related to acquisitions and non-cash accounting charges for stock options||17.6||19.8||37.4||15.8||20.0||35.9|
|Net finance costs related to borrowing and investing excess cash and one-off financial effects (net of finance income)||6.0||-15.4||-9.4||4.3||23.8||28.1|
|Tax effect from the adjustment of all separately disclosed items||-4.6||-11.7||-16.3||-5.4||-12.0||-17.3|
|Non controlling interest on separately disclosed items||-0.7||-1.6||-2.3||0.1||-0.5||-0.3|
|Total impact on Net Profit attributable to equity holders5||32.6||15.1||47.6||31.4||45.3||76.6|
|Impact on Basic EPS6||2.11||0.87||2.98||2.06||2.95||5.01|
1 Adjusted – reflects the ongoing performance of the mature
and recurring activities excluding “separately disclosed items”.
2 Separately disclosed items - includes one-off costs from integration, reorganisation, discontinued operations and other non-recurring income and costs, temporary losses and other costs related to network expansion, start-ups and new acquisitions undergoing significant restructuring, non-cash accounting charges for stock options and free shares, impairment of goodwill, amortisation of acquired intangible assets, negative goodwill, discontinued activities and transaction costs related to acquisitions as well as income from reversal of such costs and from unused amounts due for business acquisitions, net finance costs related to borrowing and investing excess cash and one-off financial effects and the related tax effects. (Details in Note 2.3 of the 2016 Consolidated Financial Statements).
3 EBITDA – Earnings before interest, taxes, depreciation and amortisation, non-cash accounting charges for stock options and free shares, impairment of goodwill, amortisation of acquired intangible assets, negative goodwill, discontinued activities and transaction costs related to acquisitions as well as income from unused amounts due for business acquisitions.
4 EBITAS – Earnings before interest, taxes, non-cash accounting charges for stock options and free shares, impairment of goodwill, amortisation of acquired intangible assets, negative goodwill, discontinued activities and transaction costs related to acquisitions as well as income from unused amounts due for business acquisitions.
5 Net Profit – Net profit for equity holders after non-controlling interests but before payment to Hybrid capital holders
6 Basic EPS – earnings per share (basic) total (to equity holders before payment of dividends to Hybrid capital holders)
7 Operating Cash Flow – Net cash provided by operating activities (after tax)
8 Free Cash Flow to the Firm –Operating Cash Flow, less Net capex
9 Organic growth for a given period (Q1, Q2, Q3, Half Year, Nine Months or Full Year) - non-IFRS measure calculating the growth in revenues during that period between 2 successive years for the same scope of businesses using the same exchange rates but excluding discontinued activities.
For the purpose of organic growth calculation for year Y, the relevant scope used is the scope of businesses that have been consolidated in the Group's income statement of the previous financial year (Y-1). Revenue contribution from companies acquired in the course of Y-1 but not consolidated for the full year are adjusted as if they had been consolidated as from 1st January Y-1. All revenues from businesses acquired since 1st January Y are excluded from the calculation.
For details of the FY 2016 results, including consolidated financial
statements and related notes, please visit:
Notes for the editor:
Eurofins – a global leader in bio-analysis
Eurofins Scientific through its subsidiaries (hereinafter sometimes “Eurofins” or “the Group”) believes it is the world leader in food, environment and pharmaceutical products testing and that it is also one of the global independent market leaders in certain testing and laboratory services for agroscience, genomics, discovery pharmacology and for supporting clinical studies. In addition, Eurofins is one of the key emerging players in specialty clinical diagnostic testing in Europe and the USA. With over 27,000 staff in 310 laboratories across 39 countries, Eurofins offers a portfolio of over 130,000 analytical methods for evaluating the safety, identity, composition, authenticity, origin and purity of biological substances and products, as well as for innovative clinical diagnostic. The Group objective is to provide its customers with high-quality services, accurate results on time and expert advice by its highly qualified staff.
Eurofins is committed to pursuing its dynamic growth strategy by expanding both its technology portfolio and its geographic reach. Through R&D and acquisitions, the Group draws on the latest developments in the field of biotechnology and analytical chemistry to offer its clients unique analytical solutions and the most comprehensive range of testing methods.
As one of the most innovative and quality oriented international players in its industry, Eurofins is ideally positioned to support its clients’ increasingly stringent quality and safety standards and the expanding demands of regulatory authorities around the world.
The shares of Eurofins Scientific are listed on the Euronext Paris Stock Exchange (ISIN FR0000038259, Reuters EUFI.PA, Bloomberg ERF FP).
This press release contains forward-looking statements and estimates that involve risks and uncertainties. The forward-looking statements and estimates contained herein represent the judgement of Eurofins Scientific’ management as of the date of this release. These forward-looking statements are not guarantees for future performance, and the forward-looking events discussed in this release may not occur. Eurofins Scientific disclaims any intent or obligation to update any of these forward-looking statements and estimates. All statements and estimates are made based on the information available to the Company’s management as of the date of publication, but no guarantee can be made as to their validity.
Eurofins provides in the Income Statement certain alternative performance measures (non-IFRS information such as “Adjusted Results and Separately Disclosed Items”) that exclude certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. (Refer to description of Separately Disclosed Items).
In addition, Eurofins shows the following two earnings measures in the Income Statement with the objective to be close and consistent with the information used in internal Group reporting to measure the performance of Group companies and information published by other companies in the sector:
EBITDA: Earnings before interest, taxes, depreciation and amortisation, non-cash accounting charges for stock options and free shares, impairment of goodwill, amortisation of acquired intangible assets, negative goodwill, discontinued activities and transaction costs related to acquisitions as well as income from unused amounts due for business acquisitions”
EBITAS: Earnings before interest, taxes, non-cash accounting charges for stock options and free shares, impairment of goodwill, amortisation of acquired intangible assets, negative goodwill, discontinued activities and transaction costs related to acquisitions as well as income from unused amounts due for business acquisitions”
Organic growth for a given period (Q1, Q2, Q3, Half Year, Nine Months or Full Year) - non-IFRS measure calculating the growth in revenues during that period between 2 successive years for the same scope of businesses using the same exchange rates but excluding discontinued operations. For the purpose of organic growth calculation for year Y, the relevant scope used is the scope of businesses that have been consolidated in the Group's income statement of the previous financial year (Y-1). Revenue contribution from companies acquired in the course of Y-1 but not consolidated for the full year are adjusted as if they had been consolidated as from 1st January Y-1. All revenues from businesses acquired since 1st January Y are excluded from the calculation.
Management believes that providing these alternative performance measures enhances investors' understanding of the company’s core operating results and future prospects, consistent with how management measures and forecasts the company’s performance, especially when comparing such results to previous periods or forecasts and to the performance of our competitors. This information should be considered in addition to, but not in lieu of, information prepared in accordance with IFRS.
iv Matrix Assisted Laser Desorption Ionization Time-of-Flight
v Association Nationale des Expéditeurs et Exportateurs de Fruits et Légumes
vi Regulation of mineral oil saturated hydrocarbons (MOSH) and mineral oil aromatic hydrocarbons (MOAH) http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+MOTION+B8-2016-0411+0+DOC+XML+V0//EN ; Legislation on Polycyclic Aromatic Hydrocarbons (PAHs) https://ec.europa.eu/jrc/en/eurl/pahs/legislation
vii Compared to 2015 level adjusted for the impact of derivative financial instruments
ix including earn-out payments on acquisitions completed in previous years