Eurofins Sets New Mid-Term Objective to Reach EUR 4bn of Revenues by 2020 and Should Exceed EUR 2.2bn Pro-Forma Revenues in 2...
19 October 2015 - 4:30PM
Business Wire
Regulatory News:
Eurofins (Paris:ERF):
- Following completion of the acquisition
of Biomnis on the 14th of October, Eurofins has reviewed its
mid-term objectives.
- Consistently strong organic growth and
an acceleration in acquisitions should allow the Group to achieve
more than EUR 2.2bn in revenues and close to EUR 400m of adjusted
EBITDA on a pro-forma basis in 2015, implying that Eurofins should
be able to outperform its 2017 EUR 2bn revenue objective more than
one year earlier than planned as previously announced, and two
years earlier than planned on a pro-forma basis. Thus, on a
pro-forma basis, Eurofins will have reached its objective of
doubling in size from EUR 1bn of revenues in 2012 to EUR 2bn in
only 3 years.
- For 2016, Eurofins’ management has set
the revenue objective at EUR 2.5bn.
- From then on, in line with continued
strength in underlying trends across its businesses, and the
outlook for further consolidation opportunities in many of
Eurofins’ markets, the management is positive that the Group should
be able to continue to generate sustainable growth and achieve
revenues of EUR 4bn in 2020, at constant currency exchange
rates.
- After over 30% growth in 2015 and 2016,
this objective implies annual growth expectation of about 12.5%
over the following 4 years (2017 to 2020). This is based on
achieving an annual organic growth objective of 5% on average over
the period, with the remainder to be achieved through acquisitions
of about EUR 1bn over the period 2016-2020, an average of ca. EUR
200m per year if spread evenly between 2016 and 2020.
- As previously communicated, Eurofins
plans to continue investing in many start-up laboratories (35
between 2014 and 2016, of which 21 already opened as of mid-2015)
and in innovative testing technologies.
- Given the scale and the profitability
of its mature businesses, the objective is for the Group to double
in size again from EUR 2bn to EUR 4bn whilst continuing to deliver
substantial profit improvements, as the proportion of the mature
businesses which has EBITDA margin above 20% continue to expand.
Over time, steady reduction in dilution from start-ups and
businesses in restructuring should allow adjusted EBITDA margin of
the mature businesses and the Group as a whole to converge.
- The investment program in very large
state of the art sites and IT solutions on the 2013 perimeter is on
track to be completed as planned by 2017. The objective is thus
that capex should gradually normalize to 6% of sales (which still
includes significant growth capex), effectively boosting further
the Group’s cash flow generation going forward.
Following the multiple successful bond and hybrid capital
funding exercises in the first 7 months of 2015, the Group is
already well-funded for at least the first phase of its new
mid-term plan. The timing and magnitude of funding exercises
required to reach the Group’s EUR 4bn revenue objective and
repayment of existing debt instruments when they come due will
depend on when the EUR 1bn revenues to be acquired as part of the
2016-2020 5-year plan will be completed. If acquisitions
materialize linearly over 5 years (ca. EUR 200m of additional
revenues per year), and the Group reaches its organic growth and
profitability objectives, the achievement of EUR 4bn of revenues by
2020 should be possible without additional equity and while staying
within Eurofins’ current financial covenants. Only very large
single acquisitions or a faster ramp up of acquisitions above EUR
200m/year early in the cycle should require additional equity
(hybrid or otherwise). Going forward, the Group intends to maintain
a strong balance sheet with sufficient headroom at all times to be
able to respond to opportunities swiftly. Furthermore, earnings
impact from interest expense should be increasingly offset by
growing contributions from newly-acquired businesses after their
full consolidation.
Comments from the CEO, Dr. Gilles Martin: “The expected
early achievement of our 2017 EUR 2bn revenue objective in 2016
(and already in 2015 on a pro-forma basis) reflects the successful
execution of our strategy to pursue sustainable growth. Our ability
to grow earnings despite temporary dilution from heavy investments
including our multiple start-ups or from new acquisitions that are
not yet at Group profitability level demonstrate the strong
inherent profitability of our business as a whole. The
bioanalytical testing industry is at the threshold of exciting
developments, where science, medicine and technology are
converging. Eurofins is very well-positioned to lead, and benefit
from these developments. In light of this, we are confident in
setting the objective to achieve EUR 2.5bn of revenues in 2016, and
from then on, to grow by about 12.5% per year over the medium term
to reach revenues of EUR 4bn by 2020, whilst delivering significant
earnings growth over that period. We intend to remain focused and
committed to securing leadership in markets where we can make a
difference while being conservatively financed, and maintaining our
leadership in our existing markets. This disciplined and long-term
oriented approach to the exciting markets we operate in has proven
to be key in creating significant shareholder value over the years,
and we intend to pursue it with the same focus on quality and
innovation to continue offering unparalleled services to our
clients.”
Notes for the editor:
Eurofins – a global leader in bio-analysis
Eurofins Scientific is the world leader in food, environment and
pharmaceutical products testing. It is also one of the global
market leaders in agroscience, genomics, discovery pharmacology and
central laboratory services. In addition, Eurofins is one of the
key emerging players in specialty clinical diagnostic testing in
Europe and the USA.
With 20,000 staff in around 200 laboratories across 38
countries, Eurofins offers a portfolio of over 130,000 reliable
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 provides 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).
Important disclaimer
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.
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For more information, please visit
www.eurofins.com or contact:Eurofins Investor
RelationsPhone: +32-2-766 1620E-mail: ir@eurofins.com
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