Full Year Revenues up 38%, EBITDA up
50%
Organic Growth over 9.5% in Q4, Almost 7.5%
for the Full Year
Regulatory News:
Eurofins Scientific (Paris:ERF):
- Q4 2015 organic growth9 over 9.5%, and
almost 7.5% for the full year, well above 5% objective
- In Q4, revenues grew 52% to EUR 603m
versus the EUR 593m implied by the last upgraded full year
objective of EUR 1.94bn published on 24 November 2015
- For 2015, revenues were EUR 1.95bn,
representing growth of 38%, the highest growth rate since 2006,
with consistent sequential growth acceleration during the year (Q1
29%, Q2 32%, Q3 37%, Q4 52%)
- Achieved 2017 revenue objective 2 years
early with pro-forma revenues of EUR 2.24bn versus the EUR 2.20bn
announced on 26 October 2015
- Adjusted1 EBITDA3 was up 39% to EUR
361m, versus the EUR 300m adjusted EBITDA objective announced in
March 2015. Margin was stable at 18.5% despite inclusion of
businesses that had only recently become profitable, and
acquisitions that are not yet at Group profitability level
- 2017 adjusted EBITDA objective was also
achieved two years early with 2015 pro-forma adjusted EBITDA of EUR
404m
- Losses from start-ups and companies in
significant restructuring and associated costs as contained in the
separately disclosed items2 (SDI), were nearly halved, narrowing
from 11.7% of EBITDA generated by the mature businesses in 2014 to
just 4.4% in 2015
- EBITDA increased 50% to EUR 345m, a
140bp margin expansion to 17.7% as losses from start-ups and
businesses undergoing significant restructuring decreased
significantly, and operating leverage drives profits to grow faster
than the top line. On a pro-forma basis, 2015 EBITDA was EUR
386m
- Adjusted net profit5 of EUR 164m
represents 24% growth versus 2014
- 95% increase in free cash flow8 (FCF)
to EUR 100m despite higher interest expense and absolute CAPEX
amount, as operating cash flow7 expanded by 37% on the back of the
significant profit improvements and successful management of
working capital to below 4% of sales
- 21 acquisitions with total annualized
revenue contribution of over EUR 570m completed in 2015. Entered 3
new countries, added 55,000m2 of world class laboratory surface,
and completed 10 start-ups during the year, bringing total
start-ups completed to date to 21 out of the 35 planned by
2017
- Continued rapid expansion in the US
(+80% in 2015), which now makes up a third of total Group
revenues
- Having taken only 3 years to double in
size for the third time in 10 years, Eurofins began the
preparations for its next 5-year growth plan by:
- expanding into specialty/genomics
clinical testing as a fourth growth leg for the Group
- investing heavily in large, efficient
sites; as well as start-up labs in the Group’s fast-growing
markets
- continued investment in development and
deployment of its new generation of IT solutions
- raising EUR 1.3bn of funds for growth
before the markets turned volatile
- EUR 794m of unused cash on balance
sheet at year end. Although carrying this unused cash represented a
cost of EUR 1.43 on Basic EPS6 in 2015, it provides the Group
flexibility to respond swiftly to compelling opportunities
- Proposed 10% increase in dividends to
EUR 1.45 per share
- 2016 Outlook: The Group has set
an objective to achieve revenues in excess of EUR 2.5bn and
adjusted EBITDA above EUR 460m (at constant currency)
Comment from Dr. Gilles Martin, CEO:
“After the best year in Eurofins’ history, I am pleased to
confirm the achievement of our previous mid-term (2017) financial
objectives two years ahead of schedule with pro-forma revenues and
adjusted EBITDA in excess of EUR 2.2bn and EUR 400m respectively
for 2015. The early achievement of our objectives reflects the
successful execution of our strategy to pursue sustainable
growth.
Given the positive trends in the markets where we operate,
Eurofins’ leaders believe that organic growth in 2016 could once
again be higher than 5% in spite of the lower growth profile of
certain new clinical assets. Therefore, including only a modest
level of acquisitions, the Group objective is to achieve revenues
in excess of EUR 2.5bn and adjusted EBITDA above EUR 460m (at
constant currency) this year. Furthermore, beyond geographic
expansion, innovation, start-ups, IT and operational excellence
programs, one of the priorities in 2016-2020 will be a more tax
optimum structuring of the Group’s newly acquired businesses, as
well as the management of finance costs, to ensure that the rapid
growth in revenues and operating profits is more fully reflected in
EPS. Eurofins’ management is committed to deploying the cash it has
gathered on its balance sheet in preparation of its new 5 year plan
to generate high rates of return, and plans to pursue more flexible
funding in the future after it repays some of its existing older,
more expensive instruments.
After doubling in size for the third time in 10 years, and
having taken only 3 years to double from EUR 1bn to EUR 2bn,
Eurofins’ management believes that the continued strength in
underlying fundamentals of its business and markets, in addition to
its ongoing investments, should allow the Group to double in size
again to reach EUR 4bn of revenues and EUR 800m of adjusted EBITDA
by 2020. As communicated previously, we believe that the Group
should be able to continue generating at least 5% organic growth
and acquire about EUR 200m of external revenues per year to
progress towards these 2020 objectives. If this growth plan is
executed in this manner, Eurofins should not need additional equity
and already has sufficient funding to execute on the first phase of
this 5 year plan. Equity issuance would only be considered should
compelling larger opportunities materialize, or become likely,
which could significantly accelerate the achievement of Eurofins’
new mid-term objectives.”
Table 1: Full Year 2015 Results Highlights
FY 2015 FY 2014 +/- % Adjusted Results
In EUR m except otherwise stated
Adjusted1
Results Separately disclosed items2 Statutory Results
Adjusted Results Separately disclosed items Statutory Results
Revenues 1,950.1 1,950.1 1,410.2 1,410.2 +38.3%
EBITDA3 360.8 -15.8 345.0 260.4 -30.4 230.0 +38.5% EBITDA Margin
(%) 18.5% 18.5% - EBITAS4 264.3 -30.3
234.0 189.9 -41.2 148.7 +39.2% EBITAS Margin (%) 13.6%
13.5% +10 bp Net Profit5 163.9 -76.6 87.3
132.1* -53.0 79.1 +24.1% Basic EPS6 (EUR) 10.72 -5.01 5.71 8.73*
-3.50 5.23 +22.8%
Operating Cash Flow7 291.1 212.2
37.2% Free Cash Flow8 99.9 51.1 +95.4%
Capex 163.8 131.2 +24.8% Net Debt
916.2 493.6 +85.6% Leverage Ratio (net
debt/adjusted EBITDA) 2.54x 1.90x
Leverage Ratio (net debt/pro-forma adjusted EBITDA) 2.27x
N.B. H2 2015 results can be found on page 7 of this press
release
*Re-stated for impact of net finance costs related to borrowing
and investing excess cash and one-off financial effects and the
related tax effects.
Revenues
Revenues in the fourth quarter grew 52.1% to EUR 603.1m, on
organic growth of over 9.5%. For the full year 2015, revenues stood
at EUR 1,950.1m, representing year-on-year increase of 38.3%, of
which nearly 7.5% was organic. Currency translation had a positive
impact of 5.5%. Taking the annualized revenues of all the
acquisitions completed during the year, 2015 pro-forma revenues
were EUR 2.24bn.
The stronger organic growth generated by the Group compared to
its 5% annual growth objective was driven mainly by a ramp-up in
volumes, and supported by continued strength in the underlying
trends across many of its businesses. In 2015, Eurofins’ food
testing laboratories continued to generate solid organic growth.
Growth in the food testing business continues to be robust,
supported by the food manufacturers’ and retailers’ ever-increasing
efforts to increase safety of their products, as well as regulatory
developments to ensure consumer safety by improving transparency
and increasing accountability in the food supply chain. In
addition, technological innovations such as new tests enabled by
genome sequencingi, provide additional support to the food
industry, as well as additional volume for testing. Incidents of
fatal food contamination, as well as product recallsii continue to
highlight the need for more effective food testing.
Results from Eurofins’ environment testing business in 2015
demonstrate both the scale of the network, and the benefits of the
completed restructuring of the Group’s French water testing
business, partially offsetting some of the impact of slower
economic activity in Europe. Although organic growth generated by
the environment testing business in 2015 was slightly below its
mid-term objective, the Group is positive that the business is now
positioned for growth following the completion of several
restructuring and reorganization programmes.
The pharmaceutical testing business achieved organic growth
above the Group’s 5% objective during the year, as continued
strength in pharma products testing, as well as stabilization in
the central laboratory business following the completion of its
relocation to the Group’s Lancaster campus in the US, offset the
impact of the ongoing reorganization in the discovery services
business. Record FDA drug applications and approvals again in
2015iii, in addition to strong growth in drug salesiv, point to
strong underlying fundamentals for the pharma testing business in
the medium term.
In 2015, Eurofins continued its expansion into the specialty
clinical diagnostics area with the acquisition of Boston Heart
Diagnostics (BHD), Diatherix, and Emory Genetics Lab (EGL) in the
US, BioAccess in France, and Biomnis in France and Ireland,
following its entry into the space with the acquisition of ViraCor
IBT in 2014. These strategic acquisitions firmly establish
Eurofins’ footprint in this fast-growing niche testing area to
leverage its expertise in genomics, and more broadly in
pharmaceutical testing.
Table 2: Geographical Revenue Breakdown
(EUR m) 2015 As % of total 2014 As %
of total North America 643.2 33.0% 356.9 25.3% France 369.6
19.0% 226.5 16.1% Germany 250.4 12.8% 236.1 16.7% Nordic Countries
163.3 8.4% 160.9 11.4% Benelux 158.1 8.1% 144.3 10.2% UK &
Ireland 96.2 4.9% 77.8 5.5% Others 269.2 13.8% 207.7 14.7%
Total 1,950.1 100% 1,410.2
100.0%
Revenues in North America grew 80.2% to EUR 643.2m (+50.4% at
constant currency), and now make up a third of total Group
revenues, as underlying trends continue to be supportive of the
business, and certain tailwinds accelerated, resulting in high
single-digit organic growth. Positive developments in the US food
testing market, driven by regulatory developments as the FDA moves
closer to partial implementation of the FSMA in late 2016-early
2017, as well as ongoing food contamination scandals, are reflected
in the high single-digit organic growth generated by the Group’s US
food testing business. Organic growth in environment testing was
somewhat below Group objective as the market continues to be driven
largely by consolidation, with Eurofins’ footprint further boosted
by the acquisition of Spectrum Analytical and QC Labs. The pharma
testing business delivered another solid performance in 2015, as
strong organic growth in biopharma products testing on the back of
rising drug sales and new drug approvals offset the continued drag
from the site reorganization programme in the Group’s discovery
services business, expected to be completed at the end of 2016.
In France, Eurofins’ second largest market bringing-in 19.0% of
total Group sales, revenues increased 63.2% to EUR 369.6m on
organic growth well above the annual objective as the Group
continues to benefit from scale in all of its businesses. The
French food testing business performed strongly during the year on
the back of market share gains and contract wins such as the
long-term partnership agreed with SODEXO. Eurofins has also once
again been selected by the National Food Safety Agency (ANSES) to
conduct nutritional analysis for the Table Ciqualv, underscoring
the Group’s strong reputation in the industry. Likewise, Eurofins’
environment testing business delivered organic growth well above
Group objective driven by market share gains and strong trends
especially in indoor air testing. Furthermore, the removal of the
performance overhang following the completion of the restructuring
of the Group’s water-testing business (IPL), provides Eurofins with
a solid spring board to win new contracts, such as the recently-won
long-term contracts from 2 of the 6 national water agencies (both
contracts commencing in 2016).
Revenue contribution from Germany, which makes up 12.8% of Group
revenues, was EUR 250.4m in 2015, as acceleration in the second
half of the year resulted in ca. 6.0% organic growth for the full
year. Growth acceleration in food microbiology and successful
launch of new tests resulted in volume ramp-up in the third and
fourth quarters, more than compensating for the slower start of the
year, when the legionella trough was reflected in lower volumes
compared to previous years.
Revenues from Eurofins’ businesses in the Nordic region, which
generated 8.4% of total Group revenues, grew to EUR 163.3m. The
modest growth despite a 2% negative currency impact reflects the
scale and efficiency gains from the completed site consolidation in
Denmark in 2014, providing the Group greater capacity to win market
share. The food and environment businesses in the Benelux generated
revenues of EUR 158.1m, up 9.6% versus 2014. The Group expects that
once completed, its site consolidation program in the region will
result in further efficiency and market share gains. In 2015, the
temporary impact of this program and the absence of revenues from
soil derogation activities in the Netherlands which will recur only
in 2018, are reflected in lower organic growth than the Group’s
annual objective.
In the UK & Ireland, revenues grew 23.6% to EUR 96.2m on
organic growth above Group objective, and positive currency impact
of 8.5%. The strong performance of the food and pharma testing
businesses offset some of the weakness in environment testing.
Elsewhere, Eurofins’ continues to expand its footprint in emerging
markets and the Asia Pacific region, where revenues increased 29.6%
to EUR 269.2m on strong organic growth and selective
acquisitions.
In summary, 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.
Profitability
Group adjusted EBITDA rose 38.5% to EUR 360.8m, with adjusted
EBITDA margin stable at 18.5% despite the inclusion of start-ups
which only recently became profitable, and of recent acquisitions
that are not yet at the Group’s profitability level. The mature
businesses of the Group, i.e. excluding start-ups and acquisitions
in significant restructuring, achieved an EBITDA margin of 21.1% on
revenues of EUR 1,706.8m for the full year 2015. In 2014, the
Group’s mature businesses had generated an EBITDA margin of 20.9%
on revenues of EUR 1,243.5m. The margin expansion of the mature
businesses in 2015 is notable given that the companies that have
recently been upgraded to the mature perimeter (start-ups and
acquisitions made over the past two years that are no longer in
restructuring) are still diluting the margin of that perimeter.
Start-up losses and restructuring costs as disclosed in the
separately disclosed items (SDI) were almost halved to EUR 15.8m in
2015 (EUR 30.4m in 2014, EUR 30.2m in 2013) despite the roll-out of
multiple start-up laboratories in rapidly-growing markets. The
significant reduction in SDI was due to a faster ramp-up in
profitability of some of the Group’s start-up businesses, as well
as the completion of significant restructuring or reorganization
programs (IPL, Denmark site consolidation and central lab
relocation). For the full year 2015, SDI narrowed to 4.4% of the
EBITDA generated by the mature businesses of the Group, compared to
11.7% in 2014.
Strong top line growth, continued profit expansion in the
Group’s mature businesses, and reduction in start-up losses and
restructuring costs resulted in a 140bp expansion in the Group
EBITDA margin to 17.7% as EBITDA increased by 50% to EUR 345m.
Despite the 36.6% increase in depreciation and amortization charges
due to the steady growth in capital expenditures in recent years,
EBITAS4 still increased 57.3% due to the strong growth in
EBITDA.
Non-cash stock option charge and net acquisition-related
expenses increased 112.4% due to employee stock optionsvi related
to the appreciation of Eurofins’ share price and the issuance of 2
new plans in 2015, in addition to the accounting treatment of
amortization of intangible assets related to acquisitionsvii, as
well as the increase in transaction costs due to the increased
volume of acquisitions, resulting in a negative impact of EUR 19m
versus 2014. Profit before tax still shows a 30.6% increase to EUR
132.4m despite a significant increase in financial expense to EUR
66.1m. This increase comes on the back of carrying record excess
cash following multiple debt and hybrid capital issuances during
the year to secure financing at favourable rates in preparation for
the Group’s next growth plan of doubling in size again over the
next 5 years. Although a large part of this excess cash should be
deployed to generate high rates of return and repay older, more
expensive instruments during the next few quarters, the cost of
borrowing and investing this unused cash not required for the
existing business was EUR 28.1m in 2015 at the net profit level,
versus the EUR 4.2m cost of carrying excess cash in 2014 (average
month end excess cash was EUR 585m in 2015 versus EUR 183m in
2014). Month end excess cash is defined as month end cash above 5%
of the annualized revenues of the last 3 months.
In 2015, Eurofins’ effective tax rate stood at 31.9%, versus
21.9% in 2014, driving Group tax expense to EUR 42.2m. The
significant uptick in tax expense is driven largely by the strong
ramp-up in profits in the Group’s businesses in the US, where the
nominal tax rate is much higher at 39%. More generally, the
increase in tax expense was also related to the recently acquired
businesses not yet integrated in Eurofins’ IP/central services
franchise model. The management has initiated a review of the tax
optimum structuring of its new businesses with the objective to
define measures appropriate for the Group’s new weighted
geographical footprint, and make use of its large tax NOLs (net
operating losses carry forward), which stood at EUR 470m at the end
of 2015. Also noteworthy is that in 2014, the Group was able to
utilize some of its tax NOLS, resulting in a negative comparable
impact in 2015.
Adjusted net profit for FY 2015 increased 24.1% to EUR 164.0m,
and adjusted EPS stood at EUR 10.72. Despite the significant
non-operating charges, and the limited earnings contribution from
acquisitions due to the timing of consolidation, reported net
profit5 still grew 10.4% to EUR 87.3m, and basic EPS6 was up 9.2%
to EUR 5.71 on the back of the strong growth in revenues and
operating profits.
Cash Flow and Financing
The 30.6% increase in pre-tax profit to EUR 132.4m, in addition
to the successful management of net working capital to 3.6% of
sales (versus 4.3% in 2014, and against 5% NWC/Sales annual
objective), resulted in a 37.2% increase in operating cash flow for
the Group, to EUR 291.1m in 2015.
Capital expenditures in 2015 stood at EUR 163.8m. Although the
absolute amount represents a 24.8% increase from the previous year,
capex/sales declined by 90bp to 8.4%, compared to 9.3% in 2014.
Capital expenditures during the year were, among others, related to
55,000m2 of additional state-of-the-art lab surface, 10 of its 35
start-up laboratory programme for 2014-2017 delivered, as well as
continued development and deployment of the Group’s new generation
of IT solutions. Despite the Group’s high capex spend and higher
interest payments, the stronger increase in operating cash flow
resulted in Free Cash Flow of EUR 99.9m in 2015, 95.4% higher than
in 2014. Even adjusting for the timing of certain interest payments
(only paid in January 2016 for some), Free Cash Flow would have
been EUR 80.1m, still representing a 56.7% increase over the
previous year.
During the year, Eurofins further strengthened its balance sheet
and overall capital structure. In January, the Group issued a EUR
500m 7-yr Eurobond at an annual interest of 2.25%. In April, the
Group further optimized its funding position with the issuance of a
second hybrid instrument of EUR 300m at an annual coupon of 4.875%.
In July, another Eurobond was issued for EUR 500m with a maturity
of 7.5 years at an annual interest of 3.375%. At the end of
December 2015, the Group’s net debt stood at EUR 916.3m, with a
strong cash balance of EUR 793.8m. Despite the record volume of
acquisitions completed during the year, capital expenditures and
SDI remaining high in absolute amount, Eurofins’ leverage ratio at
the end of 2015 remained well below its limit at 2.54x net
debt/adjusted EBITDA, versus its debt covenant limit of 3.5x. Net
debt/pro-forma adjusted EBITDA was 2.27x.
Business Developments
Acquisitions & Outsourcing
Eurofins completed 21 acquisitions in 2015 to strengthen its
leadership in existing markets or enter new segments within the
Group’s areas of competency. In February, Eurofins announced that
it successfully closed the transaction to acquire Boston Heart
Diagnostics (BHD), expanding the Group’s footprint in specialty
clinical diagnostics for prevention of cardiovascular diseases.
Shortly thereafter, the Group acquired BioDiagnostics Inc. (BDI), a
renowned laboratory for genetic testing of seeds and plants,
securing the Group’s leadership in agricultural testing in the US.
In March, Eurofins acquired NUA GmbH in Austria, and CEBAT (France)
was acquired in April, strengthening the Group’s leadership in the
environment testing market in Europe. Eurofins also acquired a
product testing laboratory in Belgium to leverage its existing
competencies and technical know-how. In May, the Group acquired QC
Labs to reinforce its food and environment testing footprint in the
US. In the same month, Eurofins entered 2 new geographies with the
acquisition of Experchem in Canada, and Sắc Ký Hải Đăng (EDC-HD) in
Vietnam. In June, the Group reinforced its leading footprint in
agrosciences with the acquisition of Trialcamp in Spain.
In July, Eurofins acquired Diatherix, a highly-specialised
laboratory providing cutting-edge molecular diagnostic testing
services in the US using proprietary technology for precise, highly
parallel detection of a large range of infectious disease agents.
Shortly thereafter, Eurofins acquired Nihon Soken in Japan, one of
the country's leading environmental testing service providers with
a strong focus in pollution analysis, and the largest laboratory
serving the Fukushima prefecture. At the end of July, Eurofins
completed the transaction to take control of BioAccess, a leading
group of clinical diagnostic laboratories in France, providing
Eurofins entry into the European clinical diagnostic market. In
September, the Group acquired Emory Genetics Laboratory (EGL), a
specialty diagnostics laboratory providing high-complexity
molecular, biochemical and cytogenetic testing for rare and common
genetic diseases and disorders, further advancing Eurofins’
footprint in the genetics and genomic segment of the specialty
clinical diagnostic testing market. In October, the Group acquired
the Biomnis Group, one of the largest independent laboratories in
Europe focusing on specialty diagnostic testing. In November,
Eurofins entered the Malaysian testing market with the acquisition
of the NM Group. Before the close of the year, the Group acquired
Water & Waste laboratory, providing Eurofins leadership in the
Austrian environmental testing market, and Radonlab, the premier
radon testing laboratory in Norway.
Total acquisition spend in 2015 was ca. EUR 627mviii for
combined total annualized revenues of over EUR 570m.
Infrastructure
Eurofins is currently engaged in several site rationalization
projects that involve constructing new laboratories in growth
markets, or 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. In 2015, the Group added 55,000m2 of
additional modern laboratory surface, versus 40,000m2 originally
planned for the year, and following the 60,000m2 delivered in 2014.
This brings total state-of-the-art lab surface added or modernized
since 2005 to 350,000m2.
As previously communicated, Eurofins has launched its second
start-up programme to support its next growth cycle. Out of the 35
start-up laboratories that the Group plans for 2014-2017, 10 were
completed in 2015, bringing total completed to 21. In the US,
Eurofins is accelerating its network expansion program to reinforce
its footprint in the rapidly-growing domestic food testing
market.
In Asia Pacific, the Group is continuing its network expansion
program to develop its footprint to become the leading food and
environment testing service provider in the region. In Hong Kong,
the Group’s newly-opened laboratory, which will perform
time-sensitive bacteriology tests, is expected to increase the
Group’s penetration of the local food testing market. Eurofins is
also expanding its main Chinese food testing laboratory in Suzhou,
to support the growth in testing. In India, Eurofins opened a food
testing laboratory in New Delhi, its second laboratory in the
country. During the year, the Group also opened a new laboratory in
Coimbatore, in Southern India, housing the Group’s agrosciences
expertise to support the country’s vast agricultural services
sector.
In France, Eurofins launched 6 start-up laboratories in 2015,
taking the Group’s nationwide coverage to 13 satellite
laboratories, complementing the large, regional central laboratory
for water testing in Maxéville. Furthermore, the Group has also
opened 3 laboratories in Nantes, Bordeaux and Vergèze to reinforce
its market leadership in ambient air and building materials
testing.
In addition to the new laboratory surface to add capacity or
network/client reach, the Group is continuously investing in site
rationalization programmes to optimize network efficiency. For
example, Eurofins is shifting several multi-building or
multi-location laboratories in Germany into our large, single-site
campus in Hamburg. The Group is also undertaking a site
consolidation project in the Benelux to bring several small
laboratories into 2 large sites in The Netherlands. In Sweden,
Eurofins is combining 2 laboratories into 1 larger site in Uppsala.
In the US, the programme to integrate Eurofins drug discovery
services business which includes site rationalization is well
underway.
Between 2016 and 2017, the Group has plans for another 120,000m2
of modern laboratory surface, of which over 75,000m2 is expected to
come on stream in 2016. These programs include both upgrade and
modernization of laboratory surface to consolidate smaller
laboratories into large, industrial facilities with higher
automation, greater efficiencies and ultimately higher
profitability, as well as construction of new facilities in
high-growth markets or expansion of Eurofins’ existing large
sites.
Post-closing events:
In January 2016, Eurofins completed 3 further acquisitions:
Biotech Germande, an environmental testing laboratory focusing on
the healthcare and hospital hygiene in France, Sinensis Life
Sciences B.V., the leading provider of pharmaceutical product
testing and cGMP Quality Control (QC) services in the Netherlands,
and SCEC, an agrosciences laboratory in Australia.
Table 3: H2 2015 Results Highlights
H2 2015 H2 2014 +/- % Adjusted Results In EUR
m except otherwise stated Adjusted1 Results Separately disclosed
items2 Statutory Results Adjusted Results Separately disclosed
items Statutory Results Revenues 1,108.2 1,108.2 766.7
766.7 +44.5% EBITDA3 218.6 -5.6 213.0 151.4 -12.4 139.0
+44.3% EBITDA Margin (%) 19.7% 19.8%
-10 bp EBITAS4 166.0 -13.8 152.2 113.6 -18.2 95.5 +46.1% EBITAS
Margin (%) 15.0% 14.8% +20 bp Net
Profit5 102.3 -45.3 57.0 80.8 -24.3 56.5 +26.6% Basic EPS6 6.69
-2.95 3.73 5.34 -1.60 3.74 +25.3%
Table 4: Separately disclosed items
FY & HY Separately disclosed items2: H1 2015 H2 2015
FY
2015 H1 2014 H2 2014
FY 2014 One-off costs from
integrations, reorganizations and discontinued operations, and
other non-recurring costs 5.9 10.4
16.3 8.8 12.0
20.8
Temporary losses related to network expansion, Start-ups and new
acquisitions in significant restructuring 4.2 -4.7
-0.5 9.2
0.4
9.6 EBITDA3 impact 10.1 5.6
15.8 18.0 12.4
30.4 Depreciation costs specific to start-ups and new
acquisitions in significant restructuring 6.3 8.2
14.6 5.0
5.7
10.7 EBITAS4 impact 16.5 13.8
30.3 23.0 18.2
41.2 Amortisation of intangible assets related to
acquisitions, goodwill impairment, transaction costs related to
acquisitions and non-cash accounting charges for stock options 15.8
20.0
35.9 7.1 9.7
16.9 Net finance costs related to
borrowing and investing excess cash and one-off financial effects
(net of finance income) 4.3 23.8
28.1 2.5 1.6
4.2 Tax
effect from the adjustment of all separately disclosed items -5.4
-12.0
-17.3 -3.8 -5.4
-9.2 Non controlling interest
on separately disclosed items 0.1 -0.5
-0.3 -0.1 0.1
0.0 Total impact on Net Profit5 31.4 45.3
76.6 28.7
24.3
53.0 Impact on Basic EPS6 2.06 2.95
5.01 1.90
1.60
3.50
1 Adjusted – reflect 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, impairment of goodwill, amortisation of acquired
intangible assets, negative goodwill 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 Annual Report)
3 EBITDA – Earnings before interest, taxes, depreciation and
amortisation, non-cash accounting charges for stock options,
impairment of goodwill, amortisation of acquired intangible assets,
negative goodwill 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, impairment of goodwill, amortisation of
acquired intangible assets, negative goodwill, 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 holders
6 Basic EPS – earnings per share (basic) total (to equity
holders before payment of dividends to hybrid bond holders)
7 Operating Cash Flow – Net cash provided by operating
activities (after tax)
8 Free Cash (Out)Flow –Operating Cash Flow, less interest paid
and net cash used in investing activities other than for
acquisitions of subsidiaries net of cash acquired and for
derivative financial instruments
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 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.
For details of the FY 2015 results, including consolidated
financial statements and related notes, please visit:
http://www.eurofins.com/en/investor-relations/reports-presentations.aspx
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 over 22,000 staff in over 225 laboratories across 39
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.
Eurofins provides in the Income Statement certain non-IFRS
information (“Adjusted Results and Separately Disclosed Items”)
that excludes 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,
impairment of goodwill, amortisation of acquired intangible assets,
negative goodwill 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, impairment of goodwill, amortisation of
acquired intangible assets, negative goodwill 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 this information 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.
i http://fortune.com/2015/09/25/food-industry-contamination/
ii
http://fortune.com/2015/09/25/food-industry-contamination/
iii
http://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/DrugInnovation/UCM481709.pdf
iv
http://www.fiercepharma.com/story/drug-sales-expected-top-13-trillion-2018/2015-08-04?utm_medium=nl&utm_source=internal
v Ciqual : French food composition database run by the French
Data Centre on Food Quality (CIQUAL).
vi According to IFRS 2
vii According to IFRS 3 and IAS36R
viii Including earn-out payments on acquisitions completed in
previous years
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160228005040/en/
For Eurofins Scientific:Investor Relations,
+32-2-769 1620ir@eurofins.com
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