Regulatory News:
Eurofins (Paris:ERF):
- H1 2017 revenues up 15.6% to EUR
1,397m.
- H1 2017 organic growth10 of about 6%,
despite tough comparables (H1 2016 organic growth of over 11% was
the highest since 2008) and French clinical testing business being
impacted by a 3% average price reduction from April 2017, as
announced at the end of 2016. Adjusted for public working days
impact, Q2 organic growth (+6.3%) further strengthened vs Q1
organic growth (+5.7%).
- Net profit to equity holders up 22.4%
vs. H1 2016.
- As announced on February 28th, 2017,
strong acceleration of laboratories start-up program with 30
launched in the first half of 2017 alone, bringing the total number
of start-up laboratories opened since 2014 to 87. Overall 130
laboratories have been created since 2000. Of the 87 start-ups of
this third program (covering the period 2014-2017), 57 had sales
still under EUR 100k in H1 2017 with associated significant
start-up losses, and represent a large investment for future
growth. The 18 start-ups of the second program (covering 2010-2013)
had an EBITDA margin at Group level in H1 2017.
- H1 2017 Adjusted1 EBITDA3 grew 15.5% to
EUR 250.1m, 17.9% of revenue, as in H1 2016, in spite of
lower-margin companies entering that perimeter.
- H1 2017 EBITDA grew 3.8% to EUR 219.1m,
impacted by high investments in separately disclosed items (SDI) of
EUR 31.0m, mainly due to costs associated with reorganizations in
recent acquisitions, to the acceleration of our start-up program,
as well as sites consolidation, especially in the UK and North
America.
- Net profit6 increased by 22.4% to EUR
74.5m, driven by a significant decrease in finance costs (from EUR
33.2m in H1 2016 to EUR 24.3m in H1 2017) and a lower income tax
expense in percentage of revenues (2.4% vs 2.7% in H1 2016).
- Continued revenue growth and profit
improvements have translated into a 19.5% uplift to EUR 3.34 in
EPS7 attributable to Equity holders.
- As of 30 June 2017, Eurofins had signed
and/or closed 29 acquisitions in 2017 (22 closed) representing an
aggregate amount of expected annual pro forma revenues of c. EUR
200m in 2017, thereby achieving its annual M&A revenue target
(EUR 200m) in only six months; 22 of these 29 acquisitions were
consolidated in H1 2017 (for part of H1 only for most) and
contributed to H1 revenues for EUR 20m.
- Including deals signed since July 1st
2017, over EUR 300m pro forma annual revenues should be acquired
year-to-date.
- During the last 12 months, with the
acquisition of Villapharma and DiscoverX, Eurofins has strengthened
its global leadership in innovative drug discovery products and
services, a fast-growing segment of pharmaceutical research.
- Circa 27,000m2 of modern laboratory
surface delivered as of June 30, with a full year revised plan of
49,000m2.
- Capex for H1 2017 was EUR 97.4m,
representing a capex/sales ratio of 7.0% versus 6.7% in H1 2016 and
7.7% for FY 2016. This increase is linked to the acceleration in
the opening of start-up laboratories and investments in large
modern facilities to sustain future growth. Management’s objective
remains to gradually bring capital expenditures closer to 6% of
sales by 2020.
- Net operating cash flow8 amounted to
EUR 125.3m and Free Cash Flow to the Firm9 to EUR 28.0m, impacted
by our investments for future growth despite a good net working
capital (net working capital to sales improved by 20bps vs H1 2016,
at a bit less than 5%).
- Net debt at the end of June 2017
increased to EUR 758.7m (versus EUR 557.8m in December 2016)
following disbursements for capex and acquisitions. However the net
debt to adjusted EBITDA ratio stood at 1.48x only reflecting a
sound capital structure.
- Given attractive credit market
conditions in July, Eurofins successfully issued a new EUR 650m
seven year senior bond, strengthening its liquidity position for
corporate activity in the remainder of 2017 as well as extending
its debt maturity profile. It will also help refinance its EUR 300m
bond that matures in November 2018 and will enable the Group to
respond to potential growth opportunities swiftly and
efficiently.
- Outlook: Management remains confident
of achieving its FY 2017 objective of delivering close to EUR 2.9bn
of revenues and EUR 550m of adjusted EBITDA and its mid-term plan
of achieving EUR 4bn of revenues and EUR 800m of adjusted EBITDA by
2020 given continued positive trends across its businesses.
Comments from the CEO, Dr. Gilles Martin:
“In H1 2017, we have again made big strides towards creating the
best of breed operating platform in our industry. The progress made
in H1 2017 reflects the hard work that has been done to expand our
unique network of laboratories, both organically and through an
acceleration of M&A. I am particularly proud of our achievement
of opening 30 start-up laboratories during the half year, which
represents over one third of the 87 that we have now opened since
the beginning of our third start-up program in 2014.
Starting 30 new businesses, adding 27,000m2 of new laboratory
surface and closing 22 acquisitions in a six month period is
impressive and illustrates the Group’s commitment to keep investing
for future growth. It has also been encouraging to see the large
demand for our EUR 650m bond issue in July, with an order book
which was more than 4 times oversubscribed. The demand and the
attractive market conditions allowed us to price our bond issue at
a 2.125% coupon which is the lowest coupon achieved by Eurofins
since its debut senior Euro bond issuance in November 2013.
With acquisitions signed to date including DiscoverX, Alphora,
Advinus and Amatsi, we have also significantly strengthened our
fast growing pharma services business lines, while Genoma and
LifeCodexx bring unique innovative services to the global clinical
genetic laboratories network that we are setting up.
As a global network of world-class laboratories, we are creating
a unique portfolio of technologies and service delivery platforms
that is able to offer a market leading level of service to our
clients, and provides a solid base for our future growth. I believe
that in H1 2017 we have made decisive progress in building a
formidable highly innovative global laboratories platform to
deliver long-term sustainable growth.”
Business Review
The following figures are extracts from the Consolidated
Financial Statements and should be read in conjunction with the
Consolidated Financial Statements and the Notes.
Table 1: Half Year 2017 Results Summary
H1 2017 H1 2016 +/- %
Adjusted Results In EUR m except otherwise stated
Adjusted1 Results Separately disclosed
items2 Reported Results Adjusted Results
Separately disclosed items (*) Reported
Results
Revenues 1,396.9 1,396.9
1,208.4 1,208.4 15.6% EBITDA
250.1 -31.0 219.1 216.6 -5.6
211.0 15.5% EBITDA Margin (%) 17.9%
15.7% 17.9% 17.5% 0bp
EBITAS 179.1 -44.1 135.0 158.1
-14.2 143.9 13.3% Net Profit to equity holders
114.2 -39.7 74.5 93.4 -32.6 60.8
22.2% EPS to equity holders (EUR)
3.34
2.79 Capex
97.4 80.4 21.2% Operating
Cash Flow 125.3
128.6 -2.5% Net Debt
758.7 817.3
-7.2% Free Cash Flow to the Firm
28.0 48.2 -42.0%
Note: Definition of the terms used can be found at the end of
this section
Revenues
Revenues in the second quarter were EUR 712.3m, pushing Group
revenues for the first half of 2017 to EUR 1,396.9m, representing a
year-on-year increase of 15.6%. The revenue growth has been driven
by sustained organic growth, the acceleration of our start-ups
program, and an intense period of M&A activity, which will all
support continued future growth. Eurofins has benefited from the
continuing growth momentum in the testing market, acceleration in
market share gains in most regions, and increasing customer
penetration. Currency had a 1.3% positive impact during the
period.
Organic growth in North America (driven by BioPharma and Food
& Feed testing) and Northern Europe were particularly strong,
posting organic growth above Group average, whereas France was
below Group average in H1 2017 (mainly due to Clinical testing).
This good performance was achieved despite strong headwinds, as H1
2016 organic growth of 11% was the highest since 2008, and as the
French clinical testing business was impacted by a 3% average price
reduction from April 2017. Nonetheless, adjusting for working days,
the Q2 growth of 6.3% showed a strengthening over the 5.7% growth
rate of Q1.
Growth variations across geographies reflect the level of
acquisition activity in each region as well as dynamics specific to
certain countries, as described below.
Table 2: Geographical Revenue Breakdown
(EUR m)
H1 2017 As % of Total
H1
2016 As % of Total % change North America
445.4 31.9% 386.6 32.0% 15.2% France
328.7 23.5% 314.4 26.0% 4.6%
Germany 147.7 10.6% 130.4 10.8%
13.3% Benelux 98.4 7.0% 89.5 7.4%
10.0% Nordic Countries 97.0 6.9% 81.7
6.8% 18.7% UK & Ireland 68.6 4.9%
52.2 4.3% 31.4% Others 211.1
15.1% 153.7 12.7% 37.3% Total 1396.9
100.0% 1208.4 100.0% 15.6%
Eurofins’ businesses in North America continue to represent the
largest share of the Groups’ sales, generating total revenues of
EUR 445.4m in the first half of 2017. This represented 32% of total
Group revenues, and an increase of 15.2%, on organic growth of
close to double digits. The growth was derived from a blend of
expanding footprint, adding capacity, new start-ups and new
services and tests. The BioPharmaceutical and Food and Feed Testing
segments of the business were the largest drivers of growth in
North America. The Food and Feed Testing business achieved growth
despite a flat US dairy market; it signed a national contract that
will expand food testing into other Eurofins facilities. In
Environment, the 2014 water crisis (Flint, MI and Toledo, OH)
continue to generate an increasing nation-wide strict monitoring of
water supplies. The Clinical Diagnostics division expanded its
service-portfolio with new testing options: Eurofins NTD had an
important breakthrough in prenatal screening, with the launch of
the Maternal Fetal ScreenSM tests; additionally, Eurofins ViraCor
introduced two new testing options which help physicians optimize
outcomes of patients with Cytomegalovirus (CMV).
The European businesses showed growth across the board. In the
UK and Ireland, which represents 5% of revenues, the revenues grew
by 31% mainly thanks to acquisitions completed in 2016 (Exova &
ILS) and a strong organic growth. Eurofins’ clinical diagnostics
segment in the UK and Ireland has seen numerous developments over
the first half of the year. In March 2017, Biomnis became the first
medical pathology laboratory in Ireland to offer Direct Consumer
Access via an online shop for the Non-invasive Prenatal Test (NIPT)
‘Ninalia’. This illustrates Eurofins’ commitment of establishing
leadership positions in niche areas of the Clinical Testing market.
Furthermore, in January 2017 Eurofins completed the acquisition of
its first histopathology laboratory (MC Pathology), which is
operating within the Biomnis facility in Dublin and has provided
the Group with new services capable of processing up to 20,000
patient cases annually.
France remains the second largest market for Eurofins with
revenues of EUR 328.7m achieved in H1 2017, up approximately 5% on
H1 2016. BioAccess, acquired in 2015, continues to generate sales
in line with its objectives and has acquired three new laboratories
as well as two pathologists laboratories to expand its footprint
and range of services. In the Food testing sector, Eurofins
announced in March 2017, a new collaboration between its Nantes
Authenticity Competence Centre and the US Pharmacopeia Convention
(USP), in which Eurofins and USP will combine expertise to assist
the food sector with specific tools for combatting food fraud and
explore new testing methods that will address vulnerabilities of
supply chains based upon global analytical and food fraud data.
Germany makes up 11% of Group revenues, with EUR 147.7m
generated in H1 2017. Revenues were up 13.3% on H1 2016 (about half
of which was organic growth) continuing the progress over the 11.8%
growth achieved in H1 2016. Sustained growth in Food Testing was
driven by strength in the retail sector and success in a number of
global tenders. The third phase of expansion in the German Food
Testing business was started with the expansion of the Hamburg Food
Testing Campus, which will result in 12,000 m2 of additional
laboratory space by 2019.
The Group’s businesses in the Benelux delivered EUR 98.4m of
revenues, representing 7% of the Group total. The 10% growth in H1
2017 came mainly from the Food Testing and Central Laboratories
activities. Eurofins’ Nordic businesses generated EUR 97.0m of
revenues in H1 2017, making up 7% of total sales. The growth of
nearly 19% was underpinned by acquisitions across the region, but
in particular in Finland where the Environment Testing business was
strengthened by three acquisitions. This has taken Eurofins from a
company with practically no exposure to Environment Testing in
Finland to being the leading player in the country.
Eurofins continues to place emphasis on expansion opportunities
in emerging markets and Asia Pacific. This expanding footprint
resulted in revenue growth of 37% to EUR 211.1m. The Group pursued
its investments in this geographical area with Mechem in Singapore
and EcoPro in Japan in H1 2017. Success in the Australian
Environment business supported by the opening of a new Air Toxics
laboratory should position this business well for growth in H2
2017. In Latam, we started working in a new market: pesticide
residue analysis in honeybees, where Eurofins is the first company
in Brazil to offer such a service. In Turkey, Eurofins completed
the acquisition of G�zlem Gýda Kontrol ve Araþtýrma
Laboratuvarlarý, one of the leading food testing laboratories.
The combination of expanding laboratories, starting new
laboratories, and making acquisitions to extend and deepen the
network of services and locations has resulted in a strong positive
outcome in most of Eurofins’ markets.
Profitability
Group adjusted EBITDA increased 15.5% to EUR 250.1m in H1 2017
with a stable margin of 17.9% of revenues. Reported EBITDA grew
3.8% to EUR 219.1m, due to investments in separately disclosed
items of EUR 31.0m which were principally related to costs
associated with reorganizations in recent acquisitions and the
acceleration of our start-up program (EUR 20.1m), together with
discontinued operations and site consolidation costs (EUR 10.9m),
particularly in the UK and North America.
Laboratories in their start-up phase had a positive contribution
to Group revenues generating EUR 88.6m of the total in H1 2017.
EBITDA margins generated by start-up laboratories launched between
2010 and 2013 (Program 1) were in line with the average of the
Group. CAPEX and cash costs of the start-up program have a short
term dilutive impact on profits and cash flows, as most start-ups
of the second program are in very early phases (pre-accreditation).
Start-ups usually break-even within 2 to 3 years after receiving
their accreditation, and we believe the strong acceleration in our
start-up program, though having a short-term negative impact on
margins and Free Cash Flow, constitutes a solid base for future
growth and profitability.
Financial result was EUR -11.3m in H1 2017 (H1 2016: EUR
-31.0m), representing a sharp improvement to 0.8% of total revenues
from the 2.6% level in H1 2016. This improvement mainly resulted
from the repayment of older, more expensive, debt instruments.
These include 170m of Schuldschein debt and 58.7m of OBSAAR bonds
repaid in H2 2016.
Income tax expense was EUR 32.9m for H1 2017, the rate of income
tax expense to profit before income tax was 30%, an improvement in
comparison to the H1 2016 rate of 33.5%.
The reported net profit5 increased by 22.4% to EUR 74.5m in H1
2017, which represents a net profit margin of 5.3% (up from 5.0% in
H1 2016). Despite the impact of a higher weighted average number of
shares in issue increased by 10% between H1 2017 and H1 2016
following equity offerings in June and September 2016, the basic
earnings per share (EPS) increased by 11.2% (11.1% at the adjusted
EPS level).
Cash Flow & Financing
Net working capital (NWC) improved slightly from 5.1% of sales
in H1 2016 to 4.9% in H1 2017. However, despite this improvement,
Net cash provided by operating activities remained relatively
stable in absolute terms at EUR 125.3m due to an increase in profit
before tax (from EUR 95.6m to EUR 109.7m) fully offset by an
increase in NWC in value by EUR 8.4m, income taxes paid of EUR 4.6m
and other non-cash related items. Free Cash Flow to the Firm
decreased from EUR 48m in H1 2016 to EUR 28m in H1 2017 due to
higher Net capital expenditures (CAPEX) of EUR 97.4m, or 7.0% of
sales, versus 6.7% at the end of June 2016. The increase in CAPEX
during the first six months of 2017 is directly linked to
accelerating investments in new start-up laboratories (30 in H1
2017) as well as IT and infrastructure developments, which will
support Eurofins in its future growth. On an annual basis,
Eurofins’ management retains the objective of bringing CAPEX closer
to 6% of sales by 2020, as the Group’s site/infrastructure and IT
programs reach completion.
Net debt at the end of June 2017 increased to EUR 758.7m (versus
EUR 557.8m in December 2016) following disbursements for capex and
acquisitions. However the net debt to adjusted EBITDA ratio stood
at 1.48x only reflecting Eurofins’ sound capital structure, and
showing a positive improvement on the 1.88x level at the end of
June 2016. At the end of June 2017, Eurofins’ cash on hand stood at
EUR 575.2m (down from EUR 826.1m at 31 December 2016 due to
acquisitions closed in the first half). However this level does not
include post period events such as additional spend on acquisitions
signed but not closed during H1, the 2017 dividends of EUR 34m paid
early July and the buy-out of Bio-Access minority shareholders for
approximately EUR 100m paid in early August.
With this in mind, and recognizing the attractive state of the
credit market, Eurofins successfully issued a new EUR 650m seven
year senior bond in July 2017, strengthening its liquidity position
for corporate activity in the remainder of 2017 as well as
extending its debt maturity profile. The bond issue will also help
Eurofins refinance its EUR 300m bond that matures in November 2018
and enable the Group to respond to potential growth opportunities
swiftly and efficiently.
Acquisitions & Infrastructure
In H1 2017, Eurofins signed and/or closed acquisitions
representing an aggregate amount of expected annual pro forma
revenues of c. EUR 200m in 2017, thereby achieving its annual
M&A revenue target (EUR 200m) in only six months. 22
acquisitions were closed in H1 2017, which contributed EUR 20m to
consolidated revenues in H1. This is a significant increase in
comparison to the 12 acquisitions closed in the first half of 2016.
By August 25th, including the DiscoverX and Amatsi transactions,
the number of deals signed and/or closed had increased to over 35,
with expected annual pro forma revenues in excess of EUR 300m in
2017.
Some of Eurofins’ acquisitions completed in the first half of
2017 are discussed below.
In February, Eurofins acquired Ahma Ymparisto Oy (“Ahma”), the
second-largest environment testing laboratory in Finland. Founded
in 1977, Ahma has built a solid reputation in the domestic
environment testing market, with a strong footprint in the northern
and western parts of the country, and with some strong competencies
in the fields of water, hydrobiology and bio-fuels testing in
particular.
In March, Eurofins acquired Mechem Laboratories, one of the
leading laboratory service providers in Singapore, accelerating
Eurofins’ roll-out of its world-leading capabilities to serve the
food and beverage industry in Singapore, as well as providing
Eurofins with a strong entry platform in the local environment
testing market. Also in March, Eurofins acquired G�zlem Gýda
Kontrol ve Araþtýrma Laboratuvarlarý (“G�zlem”), one of the leading
food testing laboratories in Turkey, providing Eurofins with a
strong platform to accelerate the roll-out of its capabilities in
the food and beverage industry. Eurofins also reinforced its market
leadership in environment testing with the acquisition of VBM
Laboratories in Denmark.
In March, Eurofins acquired Villapharma Research SL
(“Villapharma”) in Spain. Villapharma provides organic synthesis
and medicinal chemistry services to global pharmaceutical and
biotech companies for the discovery and optimization of potential
new drug candidates.
It also acquired Nab Labs Group Oy (“Nab Labs”), one of the
largest independent environment testing laboratories in Finland.
Nab Labs provides a comprehensive range of environmental research
and testing services nationwide, with a strong competence in
industrial process analytics and forestry sectors. Also in June
2017, Eurofins acquired Alphora Research Inc. (“Alphora”), a full
service contract research, development and manufacturing
organization (CRDMO) for complex and niche small molecule active
pharmaceutical ingredients (APIs), based in Mississauga, Ontario,
Canada. Alphora employs over 100 staff and expects to generate
strong organic growth in 2017 and 2018.
It also expanded into Estonia through the acquisition of Ramboll
Finish laboratory (“Ramboll”) that also operates a satellite
laboratory in Tallinn, Estonia. Eurofins is also deepening its
exposure to existing territories as demonstrated by the acquisition
of four clinical laboratories in France since the beginning of 2017
in order to better serve the patients and healthcare practitioners
in that country, and the announcement of £4 million investments to
build a new BioPharma facility in Scotland.
During 2016 Eurofins added 46,000m2 of state-of-the-art
laboratory surface and this ongoing network investment program has
continued through the first half of 2017 with an additional
27,000m2 added. The company has recently revised its full year plan
upwards with a target of adding 49,000m2 of laboratory surface, up
6.5% on the 2016 achievement. Examples of these new investments
include a brand new 9,500m2 food testing laboratory next to the
Company’s first-ever laboratory in Nantes, France. The construction
start of a 15,500m2 extension to the Group’s laboratory campus in
Lancaster, US. Expansions in Asia included a new state-of-the-art
food testing laboratory in Ho Chi Minh City, Vietnam delivered in
April 2017, the opening of a new laboratory in New Delhi, India in
March 2017, and a new advanced laboratory opened in Hanghzou,
China.
Post-closing events
In July:
Eurofins acquired MVZ für Laboratoriumsmedizin am
Hygiene-Institut GmbH (“Hygel”), a group of clinical diagnostic
laboratories headquartered in Gelsenkirchen, Germany. The company
employs 370 staff across its 3 main sites as well as in
laboratories that it operates for 4 local hospitals, and generated
revenues in excess of EUR 35m in 2016.
Eurofins acquired GATC Biotech AG (“GATC”), one of Europe’s
specialists in DNA sequencing. Founded in 1990, GATC has achieved a
strong recognition for DNA and RNA sequencing, as well as
bioinformatics in Europe. The company employs 140 staff across 2
sites, and serves over 10,000 institutional and academic customers,
generating annual revenues of about EUR 20m.
In the same time, Eurofins acquired of 62.63% of the shares
owned by GATC in LifeCodexx AG (“LifeCodexx”), one of Europe’s
specialists in non-invasive prenatal testing (NIPT). LifeCodexx,
headquartered in Constance, Germany, has been developing innovative
and clinically validated non-invasive diagnostic tests based on the
newest molecular analytical methods since 2010. The company
generated revenues of about EUR 7m in 2016.
Eurofins acquired Genoma Group Srl (“Genoma”), one of the
leading specialty diagnostics testing providers in Italy. With 20
years of clinical testing innovation, Genoma offers a wide range of
specialty diagnostic testing services, and has developed a strong
reputation in molecular biology and cytogenetics. Specifically, the
company is a pioneer in non-invasive prenatal testing (NIPT) in
Italy, and leads the industry in innovative diagnostic tests in
oncology. Genoma employs about 100 staff across its 2 main sites in
Rome and Milan, and generates annual revenues in excess of EUR
20m.
Eurofins acquired Environmental Research & Industrial
Co-operation (“ERICo”), the leading independent laboratory for
environment testing services in Slovenia. Founded 25 years ago, the
company employs 46 staff at its laboratory in Velenje, northeast
Slovenia.
Eurofins acquired Ana Laboratories, Inc. (“ANA”), one of the
largest laboratory networks specialized in fluid and tribology
analyses serving the public mass transit sector in the USA. The
company employs 48 staff in 7 laboratories serving 75 of the
largest city transit agencies (such as the New York City Transit),
several statewide Departments of Transportation including Texas and
Connecticut, as well as the largest railway companies
nationwide.
On July 10th, Eurofins announced the exclusive agreement signed
with Ekkio Capital to acquire the Amatsigroup for a price of
approximately EUR 130m plus some residual debt at closing.
Amatsigroup is one of the largest independent multi-specialist
platforms in Europe with a unique proposal for specialty and
biopharma clients, including biopharmaceutical analysis,
formulation development and manufacturing, biological research
& development, among other services. The company employs about
450 staff and plans to generate over EUR 60m revenues in 2017 on a
pro forma basis.
Also in July, Eurofins announced that it had signed an exclusive
agreement with Tata Group to acquire Advinus Therapeutics
(“Advinus”), a leading preclinical and clinical phase contract
research company for Safety Assessment, DMPK, CMC services, and
Analytical R&D Services. The company generated revenues of EUR
17m in the Fiscal Year ending 31 March 2017 with over 300
staff.
Eurofins signed an agreement to acquire DiscoverX, a leader in
drug discovery products and services across all stages of discovery
from target identification and lead discovery to preclinical and
beyond. The company employs 137 staff in four locations in Fremont,
San Diego, San Francisco (California) and Birmingham (England) and
generated over USD 37m of revenues in 2016.
During the summer Eurofins also acquired a few more small
laboratories in Asia Pacific and in Europe.
As discussed above, post period end, Eurofins announced that it
had successfully raised EUR 650m in a senior unsecured Euro bond
public issuance. The bonds have a 7-year maturity (due 25 July
2024) and will bear an annual rate of 2.125%, the lowest coupon
achieved by Eurofins since its debut senior Euro bond issuance in
November 2013. The issue was more than 4x times over-subscribed.
The proceeds of the issuance will be used for general corporate
purposes, including refinancing some of Eurofins’ existing debt
instruments, as well as to fund any further growth opportunity
in-line with the Group’s strategy and objectives.
Table 3: Separately disclosed items2
In EUR m except otherwise stated
H1 2017 H1
2016 One-off costs from integrations, reorganizations and
discontinued operations, and other non-recurring costs 10.9
5.4 Temporary losses related to network expansion, Start-ups
and new acquisitions in significant restructuring 20.1
0.2 EBITDA3 impact 31.0 5.6 Depreciation costs
specific to start-ups and new acquisitions in significant
restructuring 13.1 8.7 EBITAS4 impact 44.1
14.2 Share-based payment charge and acquisition-related
expenses, net5 14.3 17.6 Net finance costs related to
borrowing and investing excess cash and one-off financial effects
(net of finance income) -8.2 6.0 Tax effect from the
adjustment of all separately disclosed items -9.5
-4.6 Non controlling interest on separately disclosed items
-1.0 -0.7 Total impact on Net Profit6 39.7
32.6 Impact on Basic EPS7 (EUR) 2.34 2.11
1 Adjusted - reflect the ongoing performance of the mature and
recurring activities excluding “separately disclosed items2”.
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, share-based payment charge,
impairment of goodwill, amortisation of acquired intangible assets,
negative goodwill, loss/gain on disposal 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 (net of finance income) and the related
tax effects.
3 EBITDA – Earnings before interest, taxes, depreciation and
amortisation, share-based payment charge, impairment of goodwill,
amortisation of acquired intangible assets, negative goodwill,
loss/gain on disposal and transaction costs related to acquisitions
as well as income from unused amounts due for business
acquisitions
4 EBITAS – Earnings before interest, taxes, share-based payment
charge, impairment of goodwill, amortisation of acquired intangible
assets, negative goodwill, loss/gain on disposal and transaction
costs related to acquisitions as well as income from unused amounts
due for business acquisitions.
5 Share-based payment charge and acquisition-related expenses,
net – Share-based payment charge, impairment of goodwill,
amortisation of acquired intangible assets, loss/gain on disposal,
negative goodwill and transaction costs related to acquisitions as
well as income from unused amounts due for business
acquisitions
6 Net Profit - Net profit for equity holders after
non-controlling interests but before payment to Hybrid holders.
7 Basic EPS – earnings per share (basic) total (to equity
holders before payment of dividends to hybrid bond holders)
8 Operating Cash Flow – Net cash provided by operating
activities (after tax)
9 Free Cash Flow to the Firm - Operating Cash Flow, less
capex
10 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 (of year Y)
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. Organic growth for the period is
derived from the following revenues as defined above: EUR 1,371.2m
in H1 2017 vs EUR 1,294.7m in H1 2016.
The First Half Year Report 2017 can be found on Eurofins website
at the following location:
https://www.eurofins.com/investor-relations/reports-presentations/
For more information, please visit www.eurofins.com
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 30,000
staff in 375 laboratories across 41 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 judgment of
Eurofins Scientific’s 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
Results1 and Separately Disclosed Items2”) 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.
In addition, Eurofins shows the following measures: “EBITDA4,
EBITAS5” in the Income Statement and “Organic growth9” 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.
Management believes that providing these APMs (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. These APMs
are described in more detail in the Consolidated Financial
Statements 2016 in Notes 1.28 and 1.29.
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version on businesswire.com: http://www.businesswire.com/news/home/20170829006267/en/
Eurofins Investor RelationsPhone: +32-2-766
1620ir@eurofins.com
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