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
+/-
%AdjustedResults
In EUR m except otherwise stated
Adjusted1Results
Separatelydiscloseditems2
StatutoryResults
AdjustedResults
Separatelydiscloseditems
StatutoryResults
Revenues 2,536.6 - 2,536.6
1,950.1 - 1,950.1 30.1% EBITDA3 479.6
-18.5 461.1 360.8 -15.8 345.0
32.9% EBITDA Margin (%) 18.9%
18.2% 18.5% 17.7% 40 bp EBITAS4
357.6 -38.2 319.4 264.3 -30.3
234.0 35.3% EBITAS Margin (%) 14.1%
12.6% 13.6% 12.0%
50 bp Net Profit5 221.6 -47.6 174.0
163.9 -76.6 87.3 35.2% 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% Capex
194.1 163.8 18.5%
Net Debt 557.8
916.3 -39.1% 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
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 North America
803.6 31.7% 643.2 33.0% France 625.9
24.7% 369.6 19.0% Germany 279.4
11.0% 250.4 12.8% Benelux 191.2 7.5%
158.1 8.1% Nordic Countries 172.4 6.8%
163.3 8.4% UK & Ireland 122.0 4.8%
96.2 4.9% Others 342.1 13.5%
269.2 13.8%
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.
Profitability
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.
Business Developments
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.
Infrastructure
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
+/- %AdjustedResults
In EUR m except otherwise stated
Adjusted1Results
Separatelydisclosed items2
StatutoryResults
AdjustedResults
Separatelydiscloseditems
StatutoryResults
Revenues 1,328.2 - 1,328.2
1,108.2 - 1,108.2 19.9% EBITDA3 263.0
-13.0 250.1 218.6 -5.6 213.0
20.3% EBITDA Margin (%) 19.8%
18.8% 19.7% 19.2% 10 bp EBITAS4
199.5 -24.0 175.5 166.1 -13.9
152.2 20.1% EBITAS Margin (%) 15.0%
13.2% 15.0% 13.7%
0 bp Net Profit5 128.2 -15.1 113.2
102.3 -45.3 57.0 25.3% Basic EPS6 7.80
-0.87 6.93 6.68 -2.95 3.73
16.8%
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 EBITDA3 impact 5.6 13.0
18.5 10.1 5.6
15.8 Depreciation
costs specific to start-ups and new acquisitions in significant
restructuring 8.7 11.0
19.7 6.3
8.2
14.6 EBITAS4 impact 14.2
24.0
38.2 16.5 13.8
30.3
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
holders6 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 capex9 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:http://www.eurofins.com/investor-relations/reports-presentations/
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).
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 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.
i
https://ec.europa.eu/food/sites/food/files/safety/docs/rasff_annual_report_2015.pdfii
http://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/DrugInnovation/UCM536693.pdfiii
http://www.fiercepharma.com/sales-and-marketing/drug-sales-expected-to-top-1-3t-2018?utm_medium=nl&utm_source=internaliv
Matrix Assisted Laser Desorption Ionization Time-of-Flightv
Association Nationale des Expéditeurs et Exportateurs de Fruits et
Légumesvi 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/legislationvii Compared to
2015 level adjusted for the impact of derivative financial
instrumentsix including earn-out payments on acquisitions completed
in previous years
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version on businesswire.com: http://www.businesswire.com/news/home/20170227006094/en/
Eurofins ScientificInvestor RelationsPhone:
+32-2-769 1620E-mail: ir@eurofins.com
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