Regulatory News:
Eurofins Scientific SE (Paris:ERF):
Key highlights
H2 2023 represents the first period not affected by prior year
comparables including significant contributions from COVID-19
testing and reagents (less than €120m of revenues in H2 2022 vs
around €5m in H2 2023) and thus for the first time provides a
comparison mostly free from the one-time effects of the
pandemic.
- Revenues in H2 2023 of €3,305m increased year-on-year by 0.1%,
as organic growth in the Core Business (excluding COVID-19 testing
and reagent revenues) of 7.2% (adjusted for the impact of one
public working day fewer in H2 2023 vs H2 2022) and contributions
from acquisitions more than compensated for the loss of COVID-19
testing and reagent revenues generated in the comparable prior year
period as well as FX headwinds.
- The adjusted1 EBITDA3 margin increased 120bps to H2 2023
(21.9%) from H2 2022 (20.7%). This advancement resulted from
pricing initiatives and the first effects of a number of
innovation, productivity, digitalisation and automation
initiatives.
- Free Cash Flow to the Firm10 in H2 2023 (€400m) increased by
47.9% vs H2 2022 (€271m).
- Cash conversion (measured in terms of Free Cash Flow to the
Firm10 divided by Reported EBITDA3) increased substantially in H2
2023 (62%) vs H2 2022 (44%).
In €m except otherwise stated
H2 2023
H2 2022
+/- %
FY 2023
FY 2022
+/- %
Revenues
3,305
3,301
+0.1%
+7.2%*
6,515
6,712
-2.9%
+7.1%*
Adjusted1 EBITDA3
724
684
+5.9%
1,364
1,513
-9.9%
Adjusted1 EBITDA3 margin (%)
21.9%
20.7%
+120bps
20.9%
22.5%
-160bps
Reported EBITDA3
646
615
+5.0%
1,234
1,415
-12.8%
Reported EBITDA3 margin (%)
19.5%
18.6%
+90bps
18.9%
21.1%
-210bps
Free Cash Flow to the Firm before
investment in owned sites16
501
371
+35.2%
626
677
-7.6%
Free Cash Flow to the Firm10
400
271
+47.9%
474
491
-3.4%
Cash conversion (%)
62%
44%
+1,800bps
38%
35%
+300bps
* Organic13 growth in the Core Business
(excluding COVID-19 testing and reagents and adjusted for the
impact of one public working day fewer in H2 2023 vs H2 2022).
As a result of this strong improvement in profitability and cash
conversion in H2 2023, Eurofins delivered full year results in line
with its 2023 annual objectives in an environment that remained
challenging in Europe:
Financial highlights in FY 2023
- Revenues in FY 2023 of €6,515m declined year-on-year by -2.9%,
impacted by the sharp decrease in revenues from COVID-19 testing
and reagents (just over €20m in FY 2023 vs just under €600m in FY
2022) and FX headwinds (-1.9%).
-
Revenues in the Core Business (excluding COVID-19 testing and
reagents) increased organically13 by +7.1% in FY 2023 (adjusted for
the impact of one public working day fewer in FY 2023 vs FY
2022):
-
Resilient Core Business organic growth in Europe of +6.2% was
led by Environment Testing and a gradual improvement in Food
Testing.
-
In North America, strong Core Business organic growth of +8.7%
was supported by the continued development of Environment Testing,
Food Testing and BioPharma Services.
-
Core Business organic growth in Rest of the World of +6.0% was
driven by a strong performance in China, the steady expansion of
BioPharma Services in India as well as new start-up laboratories in
Australia and New Zealand.
-
Eurofins finalised the reorganisation of its network to the
post-pandemic situation in 2023 and can now put the costs and
disruptions of these reorganisations behind it and fully focus on
the growth and improvement of its Core Business in 2024.
-
Eurofins accelerated its pace of start-up activity, initiating
50 new start-up laboratories and 49 new blood collection points
(BCPs) in 2023. The 301 start-ups and 67 BCPs launched since 2000
have made material contributions to the overall growth of the
Group, accounting for €629m of revenues and contributing 0.6% of
organic growth in FY 2023.
-
In spite of unfavourable FX effects, adjusted1 EBITDA3 of
€1,364m (20.9% of revenues) in FY 2023 was in the upper end of
Eurofins objectives (€1.32bn to €1.37bn) though lower vs FY 2022
(€1,513m, 22.5% of revenues), mostly impacted by the significant
year-on-year decrease in COVID-19 testing and reagent revenues
(just over €20m in FY 2023 vs just under €600m in FY 2022).
-
Given the uncertain economic and geopolitical outlook, Eurofins
remained prudent in FY 2023 with its acquisition strategy,
focussing on reasonably valued bolt-on deals that will provide
appropriate accretion to return on capital employed. In FY 2023,
Eurofins closed 40 business combinations with FY 2023 pro-forma
revenues of €122m at a cost of €158m, reflecting an average sales
multiple of 1.3x.
-
Free Cash Flow to the Firm10 of €474m remained stable
year-on-year despite the decrease of EBITDA3:
-
Due to a strong H2 2023 performance, cash conversion increased
in FY 2023 (38%) vs FY 2022 (35%).
-
Net operating capex9 of €392m declined 15% year-on-year vs €459m
in FY 2022, reflecting improved capex discipline for programmes
related to capacity expansion.
-
Eurofins invested an additional €152m to own more of its
strategic sites, continuing its long-term strategy of completing
its global hub and spoke network including large high-throughput
campuses.
-
Net working capital12 intensity (net working capital divided by
4 times the last quarter’s sales) increased from 4.2% at the end of
FY 2022 to 5.1% at the end of FY 2023. Measures to improve net
working capital intensity are underway.
-
Net Profit7 amounted to €308m and Basic EPS8 was €1.33.
-
Adjusted1 Net Profit7 was €568m and adjusted1 Basic EPS8 was
€2.71.
-
Eurofins’ balance sheet remains very solid, with financial
leverage (net debt11 to adjusted pro-forma EBITDA3) of 2.0x at the
end of 2023, stable vs 1.9x at the end of 2022.
-
At the upcoming Annual General Meeting on 25 April 2024, the
Board of Directors intends to propose an annual dividend of €0.50
per share, an increase of 74% vs 2018 (€0.288), the last dividend
prior to the COVID-19 pandemic, and equivalent to a CAGR of
11.7%.
Strategic highlights
Eurofins continues to make important advances on its long-term
growth, sustainability and innovation initiatives:
-
Eurofins added 77,000 m2 of net surface area to expand its
network in 2023, with 78% of the added area owned by Eurofins.
Since the end of 2018, the net floor area of buildings owned by
Eurofins has more than doubled from 240,000 m² to 550,000 m²,
corresponding to an increase in the ownership proportion of the
total net floor area from 19% to 32%.
-
Further progress was made towards Eurofins’ objective of carbon
neutrality by 2025:
-
Total emissions were reduced by 8% from 497 ktCO2e in FY 2022 to
458 ktCO2e in FY 2023.
-
Carbon intensity (tCO2e/m€ revenues) was 70 in FY 2023, 28%
lower vs FY 2019.
-
In partnership with Thermo Fisher Scientific Inc., Eurofins is
investing in a virtual power purchase agreement (PPA) for a 36 MW
portion of the Serbal solar project, located in Spain. From 2025
onwards, the project is expected to deliver 76,000 megawatt-hours
of green energy per year to Eurofins, equivalent to over 15% of
Eurofins’ total worldwide electricity consumption.
-
Eurofins has committed to setting near-term science-based
emissions reduction targets in line with the Science Based Targets
initiative (SBTi) Criteria and Recommendations.
-
Eurofins made numerous meaningful contributions to Testing for
Life in 2023:
-
Eurofins Discovery LeadHunter® Services launched the obesityLITE
panel, a one-of-a-kind set of 25 assays for testing anti-obesity
therapies against multiple targets in one convenient screen.
-
Eurofins Discovery launched DiscoveryAI™, a tool that
accelerates drug discovery through artificial intelligence.
Leveraging Eurofins Discovery’s high-quality proprietary dataset of
>2,500 compounds and >1m records collected over 10+ years,
the DiscoveryAI™ tool provides valuable data analytics to Eurofins
Discovery’s clients with the potential to reduce drug-to-market
time by at least 20%.
-
Eurofins Viracor launched ExPeCT™, a ground-breaking test for
assessing expansion and persistence of CAR-T therapy in cancer
patients with pre-B cell acute lymphoblastic leukemia and B cell
lymphomas. It is expected to be a valuable tool in helping
clinicians to make more informed decisions about the best course of
treatment for their patients.
-
DNA Diagnostics Center (DDC), a global leader in genetic
relationship and consumer testing, and part of the Eurofins network
of companies, launched PeekabooTM Click, an exceptionally accurate
(99.5%) test utilising a comfortable and simple at-home collection
device that enables expecting parents to discover their baby's
gender very early in pregnancy.
2024 and 2027 Objectives
- Eurofins is providing its objectives for FY 2024 and confirming
its objectives for FY 2027:
€m
FY 2024
FY 2027
Revenues
€7.075bn – €7.175bn
Approaching €10bn
Adjusted1 EBITDA3
€1.525bn – €1.575bn
Margin: 24%
FCFF10 before investment in owned
sites16
€800m - €840m
Approaching €1.5bn
-
The FY 2024 and FY 2027 objectives assume same average exchange
rates as in FY 2023 and zero contribution from COVID-19 testing and
reagents. From FY 2024 to FY 2027, Eurofins targets average organic
growth of 6.5% p.a. and potential average revenues from
acquisitions of €250m p.a. over the period consolidated at
mid-year. As in 2023, Eurofins will remain prudent with its
acquisition strategy and only acquire businesses that meet its
objectives for return on capital employed.
-
Similar to how the improvement in adjusted1 EBITDA3 margin was
achieved in H2 2023 vs H2 2022, the anticipated further
improvements in adjusted1 EBITDA3 margin in FY 2024 and towards the
FY 2027 objective are underpinned by programmes that continue to
align pricing to cost inflation and include innovation,
productivity, digitalisation and automation initiatives as well as
better utilisation of its state-of-the-art laboratory network.
-
In 2024, Eurofins will also review some of its smaller
underperforming businesses.
-
In the coming year, Eurofins expects to continue its high
intensity of start-up activities, in particular in the areas of In
Vitro Diagnostics, Genomics and Clinical Diagnostics Testing.
Additionally, due to an unexpected billing article concerning
Medicare reimbursement for kidney transplant biomarker testing,
Eurofins Transplant Genomics plans to conduct clinical trials to
expand data on the medical benefits and applicability scope of its
tests. Due to temporary losses related to these start-ups,
Separately Disclosed Items2 (SDI) at the EBITDA3 level should
remain at an elevated level of about €125m in FY 2024. Thereafter,
as newly initiated start-ups ramp up and become profitable, SDI at
the EBITDA3 level should decline gradually towards about 0.5% of
revenues in 2027.
-
Capital allocation priorities in FY 2024 and in the mid-term
will continue to include site ownership of high-throughput campuses
to complete Eurofins’ global hub and spoke network, start-ups in
high growth/high return areas, development and deployment of
sector-leading proprietary IT solutions, and acquisitions.
Investments in these areas are key to our long-term value creation
strategy. To 2027, investment in owned sites is assumed to be
around €200m p.a., while net operating capex is expected to be ca.
€400m p.a. (total net capex9 of €600m p.a.).
-
Eurofins targets to maintain a financial leverage of 1.5-2.5x
throughout the period and less than 1.5x by FY 2027.
Comments from the CEO, Dr Gilles Martin:
“Thanks to the contributions and focus of Eurofins teams and
despite the dynamic and challenging operating environment,
especially in Europe, we were able to deliver results in line with
our 2023 objectives. Supported by the resilience of our end
markets, diverse regional portfolio and long-term investments in
infrastructure and innovation, organic growth of 7.1% in our Core
Business activities came in above our mid-term target of 6.5%.
Adjusted EBITDA came in at the upper end of our target range,
thanks to a year-on-year improvement in the adjusted EBITDA margin
of 120bps in H2 2023 vs H2 2022, the first comparable period with
limited revenues from COVID-19 testing and reagents. In addition,
solid operating cash flow and disciplined spending on capital
expenditures and acquisitions, together with conservative
management of our capital structure, helped to sustain our strong
balance sheet. In terms of sustainability, we continue to make
substantial improvements, as demonstrated by the absolute decline
in our carbon emissions of 8% vs 2022. In terms of carbon intensity
relative to revenues, we are now 28% below the 2019 level.
Looking ahead, having finalised in 2023 the readjustment of our
organisation to the post-pandemic situation, our keys to long-term
success remain unchanged: continue to invest in building out our
best-in-class hub and spoke laboratory network, excellence in
customer service, further development and deployment of our
sector-leading proprietary IT solutions and focus on scientific
innovation. We also remain committed to a prudent capital
allocation strategy centred on growth investments and reasonably
valued bolt-on deals that will provide appropriate accretion to
return on capital employed. In conjunction, we remain intently
focussed on delivering on our 2027 financial objectives. In 2024,
Eurofins teams will continue building on programmes initiated in
2023 and before, in particular those aiming to accelerate
digitalisation, productivity improvement, align pricing to cost
inflation and ramp up our start-up activities.
Despite the cloudy geopolitical and macro environment, I remain
very confident in our ability to continue expanding our market and
technological leadership, as well as our financial results and cash
flow, towards our 2027 objectives.”
Conference Call
Eurofins will hold a conference call with analysts and investors
today at 15:00 CET to discuss the results and the performance of
Eurofins, as well as its outlook, and will be followed by a
questions and answers (Q&A) session.
Click here to Join Call >>
From any device, click the link above to join the conference
call.
Business Review
The following figures are extracts from the Consolidated
Financial Statements and should be read in conjunction with the
Consolidated Financial Statements and Notes for the year ended 31
December 2023. The Annual Report 2023 can be found on Eurofins’
website at the following link:
https://www.eurofins.com/investors/reports-and-presentations/
Table 1: Full Year 2023 Results Summary
FY 2023
FY 2022
+/- % Adjusted results
+/- % Reported results
In €m except otherwise stated
Adjusted1 results
Separately disclosed items2
Reported results
Adjusted1 results
Separately disclosed items2
Reported results
Revenues
6,515
-
6,515
6,712
-
6,712
-3%
-3%
EBITDA3
1,364
-129
1,234
1,513
-98
1,415
-10%
-13%
EBITDA3 margin (%)
20.9%
-
18.9%
22.5%
-
21.1%
-160bps
-220bps
EBITAS4
842
-172
669
1,037
-126
911
-19%
-27%
Net profit7
568
-260
308
683
-77
606
-17%
-49%
Basic EPS8 (€)
2.71
-1.38
1.33
3.43
-0.41
3.02
-21%
-56%
Net cash provided by operating
activities
1,018
1,136
-10%
Net capex9
544
645
-16%
Net operating capex
392
459
-15%
Net capex for purchase and development of
owned sites
152
186
-18%
Free Cash Flow to the Firm before
investment in owned sites16
626
677
-8%
M&A spend
158
430
-63%
Net debt11
2,705
2,839
-5%
Leverage ratio (net debt/pro-forma
adjusted EBITDA)
2.0x
1.9x
+0.1x
Note: Definitions of the alternative
performance measures used can be found at the end of this press
release
Revenues declined year-on-year to €6,515m in FY 2023 vs €6,712m
in FY 2022 due primarily to the substantial decrease in revenues
from COVID-19 testing and reagents from just under €600m in FY 2022
to a negligible level in FY 2023. This decline was largely
compensated by strong organic growth in the Core Business
(excluding COVID-19 related clinical testing and reagents revenues)
of 6.6% (adjusted for public working days: +7.1%) vs FY 2022. A
year-on-year headwind of 1.9% from foreign currency also impacted
reported revenues. Eurofins has also been prudent with its
acquisition strategy, focussing on reasonably valued bolt-on deals
that will provide appropriate accretion to return on capital
employed. Due to this approach, the contribution to consolidated
revenues from acquisitions made in FY 2023 was only €59m. In FY
2022, the contribution to consolidated revenues from acquisitions
made in FY 2022 was €150m.
Table 2: Organic Growth Calculation and Revenue
Reconciliation
In €m except otherwise stated
2022 reported revenues
6,712
+ 2022 acquisitions - revenue part not
consolidated in 2022 at 2022 FX
118
- 2022 revenues of discontinued activities
/ disposals15
-81
= 2022 pro-forma revenues (at 2022 FX
rates)
6,749
+ 2023 FX impact on 2022 pro-forma
revenues
-128
= 2022 pro-forma revenues (at 2023 FX
rates) (a)
6,620
2023 organic scope13 revenues (at 2023
FX rates) (b)
6,453
2023 organic growth13 rate
(b/a-1)
-2.5%
2023 acquisitions - revenue part
consolidated in 2023 at 2023 FX
59
2023 revenues of discontinued activities /
disposals15
3
2023 reported revenues
6,515
Table 3: Breakdown of Revenue by Operating Segment
€m
FY 2023
As % of total
FY 2022
As % of total
Y-o-Y variation %
Organic growth in the Core
Business**
Europe
3,306
51%
3,507
52%
-5.7%*
+5.5%
North America
2,507
38%
2,494
37%
+0.5%
+8.3%
Rest of the World
701
11%
711
11%
-1.4%
+6.0%
Total
6,515
100%
6,712
100%
-2.9%
+6.6%
* Segments most impacted by the sharp
decline in revenues from COVID-19 testing and reagents
** Excluding COVID-19 related clinical
testing and reagents revenues
Europe
- Reported revenues decreased in FY 2023 vs FY 2022 by -5.7%,
primarily due to the substantial year-on-year decline in COVID-19
testing and reagents revenues. Excluding this impact, Core Business
revenues grew year-on-year by over 5%, with almost all areas of
activities demonstrating positive growth.
- Despite the elevated comparable base of H1 2022 from projects
supporting COVID-19 vaccines, Eurofins’ BioPharma Services business
in Europe recorded sound growth in 2023. Large clients from the
pharmaceutical industry continue to sustain a high level of
development activity for future biologics products as well as cell
and gene therapies. In France, a new site in Lyon was activated to
increase capacity to serve the market. In the meantime, nearshoring
programmes have also contributed to growth, especially in France,
due to an increase in testing requirements for traditional
synthesis API. Pricing attainment to compensate for the
inflationary environment also supported growth. On the other hand,
a limited number of Eurofins activities have experienced volume
development challenges. For example, a decline in the market for
early-stage research and development activities, most notably from
smaller biotech clients, has resulted in softer demand for services
from Eurofins Discovery.
- The business environment for Eurofins’ Food and Feed Testing
business in Europe remained challenging in 2023. Persisting high
inflation in consumer food prices and efforts by food producers and
retailers to control costs continue to restrain testing volume
growth. Eurofins has responded to the situation with the partial
transfer of cost inflation to clients as well as cost adaptations.
In addition, the Company continues to make investments to improve
productivity in its laboratories and in customer service, most
notably in digitalisation, automation and, where applicable,
artificial intelligence. Furthermore, Eurofins has invested in
innovations to improve its testing and service offering in order to
make a difference for its customer base.
- Growth in the Environment Testing business in Europe was driven
by market share gains from good quality service and turnaround
times, as well as healthy demand for asbestos and pesticide testing
related to new regulations concerning these substances. New
regulations are also a driver of increasing momentum in the PFAS
testing business, an area in which Eurofins companies are market
leaders both in terms of methods and capacity. Positive price
impacts across Europe also contributed to the strong growth of the
Environment Testing business. Further growth was achieved through
the launch of innovative digital services including a new web
customer portal for asbestos customers in France and new
direct-to-consumer businesses in Germany offering sampling kits for
the identification of PFAS in matrices such as water, construction
materials and soil.
- With the impacts of COVID-19 related disruptions having mostly
subsided throughout the course of 2022, the Clinical Diagnostics
business in Europe experienced a strong year-on-year recovery in
volumes in 2023. Due to an overall shortage of qualified nurses and
technicians in most countries, this recovery was served by
reassigning employees previously assigned to COVID-19 testing.
Sales growth was also supported through network expansion,
including the acceleration of efforts to open new blood collection
points (49 opened in 2023 vs 18 in 2022), the awarding of a new
outsourcing contract in the Netherlands, and new clinical genetics
services, most notably in the prenatal and In Vitro Fertilisation
(IVF) segments. Growth was also supported by Eurofins Belgium NV’s
biomonitoring project for PFAS in blood in Antwerp, the largest
such project in Europe. Recently, Eurofins also started offering
testing for PFAS in blood in Spain. On the other hand, reductions
in reimbursements for routine diagnostics in France that came into
effect in H1 2023 restrained sales developments. A change in this
trend is foreseen for the coming 3 years as tariff agreements in
France allow for slight year-on-year revenue increases in
diagnostics spending.
North America
- Reported revenues increased year-on-year by +0.5%, supported by
strong organic growth in the Core Business of +8.3% but restrained
by FX headwinds and the year-on-year decline in COVID-19 testing
and reagents revenues.
- Growth in Eurofins BioPharma Services in North America was
resilient in 2023. By area, BioPharma Product Testing (BPT)
recorded a strong development, sustained by robust demand for
mid-to-late phase biologics development by the large- and
medium-sized sponsors that make up the predominant share of this
business activity. The deployment of Eurofins’ proprietary
eLIMS-BPT and LabAccess IT solutions also further progressed, with
a high percentage of customers now utilising the platform’s
industry leading portal to manage the full life cycle of their
testing needs from online ordering to complete data deliverables.
Further collaboration with large global sponsors was also driven by
the Lab Access Web Services (LAWS) platform which enables fully
digital integration with the customer’s IT environment. Demand
growth has also been solid for mid-to-late phase clinical trials
served by Eurofins Central and Bioanalytical Laboratories,
supported by Eurofins’ extensive expertise in infectious disease
and vaccine trials. Additionally, Professional Scientific Services®
(PSS) continued expanding to meet increased client demand for
flexible outsourcing solutions for their laboratory and scientific
support operations. Eurofins Discovery, which experienced more
challenging market conditions starting in late 2022, has seen
stabilisation in overall market demand. In addition, demand has
increased for Discovery’s expanded biologics offering, while the
pipeline and interest is strong for the DiscoveryOne integrated
discovery solutions.
- The Food and Feed Testing business in North America continued
to set new monthly and annual sales records in 2023. In addition to
volume growth and pricing attainment in its existing business
areas, Eurofins also started numerous new initiatives to enhance
its market presence. Examples include new start-up laboratories in
California, Arizona and Idaho to address the stringent turnaround
time requirements of produce customers as well as capacities to tap
into the growing interest in testing for PFAS in food and food
packaging. The business continues to showcase its expertise by
sponsoring and facilitating numerous seminars attended by
manufacturers and regulatory agencies, especially in the botanical
and nutritional supplements industry. Furthermore, Eurofins Food
and Feed Testing also introduced significant operational
innovations in the period. For example, in Iowa, a new automation
line for weighing samples has been able to reduce labour intensity
in this process step by nearly 50%. In addition, reproducing a
fibre testing method from Eurofins’ Nantes laboratory resulted in a
doubling of capacity. The method transfer resulted in significant
time savings of more than 80%. New Heavy Metals Automation in
Madison has allowed for an increase to 180 samples per day,
reducing rework and improving TAT. Eurofins has also deployed new
modular laboratories, fully equipped and operational facilities
capable of performing all microbiology testing on site that can
also be quickly and easily relocated depending on market and
customer requirements. With these modular laboratories, Eurofins
can provide fast turnaround times to clients that produce
perishable products and/or are in remote areas away from major
cities and logistics routes.
- Against a backdrop of sector-wide increased demand, the
Environment Testing business in North America outperformed its
underlying market by delivering double-digit organic growth in
2023. Strategic investments targeted at both technology and
geographic expansion materially increased capacity, extended
service reach, improved turnaround time, and underpinned market
share growth. Strong service metrics facilitated customer
acceptance of some price increases to compensate for inflation.
Facility upgrades in California (2), Ohio, Colorado, Florida and
Texas contributed materially to capacity balancing across the
network. Whilst PFAS testing remains a significant contributor to
organic growth, the business has benefitted from growth across all
aspects of testing from traditional site investigation and
remediation work; ground, surface and reuse water and wastewater
monitoring, air testing programmes and Built Environment Testing.
The emergency response programme, placing all network laboratories
on notice to assist first responders in the event of spills or
accidents with immediate and ongoing testing, has also proven a
strong differentiator for the business. Eurofins operates a hybrid
hub and spoke and distributed model for PFAS testing with
comprehensive services offered from 8 locations, supported by major
East and West Coast hubs. Investment to add to the distributed
network as well as capacity upgrades at hubs is currently in
progress. Operationally, carbon footprint reduction efforts through
method innovation (e.g., sample miniaturisation and solvent
reduction programmes made possible through investment in advanced
detection techniques) and environmentally friendly investments
(e.g., solar panels, EV charging, LED lighting), productivity, and
health and safety are priorities. Digital technologies continue to
be enhanced and rolled out including eCOC (electronic chain of
custody) for field sample collection and AI tools to assist data
integrity checks and chromatographic integrations.
- In Clinical Diagnostics, Eurofins CellTx, a startup laboratory
in Arizona, began operations supporting critical testing for living
donor derived human tissue, including stem cells, bone marrow, cord
blood, birth tissues, oocytes, and sperm donations. At Eurofins
Viracor, two new notable tests were launched. ExPeCT™ CAR-T, a
multiplexed, real-time qPCR assay, provides a powerful diagnostic
tool to monitor and optimise CAR-T therapy involving patients with
pre-B cell acute lymphoblastic leukemia and B cell lymphomas.
Eurofins Viracor also introduced a new real-time PCR panel for the
rapid identification/detection of Candida species including Candida
auris, an emerging species of pathogenic fungus/yeast that has
caused outbreaks in healthcare settings in the United States and
which are often resistant to most common antifungal drugs.
Conversely, at Eurofins Transplant Genomics, volumes for kidney
transplant biomarker testing have been significantly impacted by an
unexpected billing article concerning Medicare reimbursement for
such tests which became effective on 31 March 2023. Consequently,
Eurofins has adapted the cost structure of this business to
compensate for the decrease in demand and is increasing its
investment in clinical trials to expand data on medical benefits
versus current standards of care and applicability scope.
Rest of the World
- Core Business revenues grew organically year-on-year by +6.0%
due to strong business development across most countries in the
region. On the other hand, sizable FX headwinds as well as the
year-on-year decline in COVID-19 testing and reagents revenues
resulted in a decline in reported revenues of -1.4%.
- Various countries contributed to the mid-single digit growth in
Asia Pacific in 2023. In China, the low comparable base related to
lockdowns, particularly in H1 2022, allowed Eurofins to record
sizable year-on-year growth in 2023, most notably in Consumer and
Technology Products Testing. The China Food Testing business
delivered double-digit growth through penetration of local testing
markets and expanding its start-up footprint. Food Testing demand
from the special foods segment, including food supplements, infant
formula food and special dietary foods, saw strong growth. Eurofins
successfully set up a BioPharma Product Testing - Biosafety
platform in Shanghai, Eurofins DiscoverX China increased its
penetration into the key China-based CROs. India delivered
double-digit growth, driven by robust demand in the BioPharma
Services and AgroSciences businesses. Eurofins continued to expand
its Biopharma Services presence in India through scale-up of
recently acquired fully equipped, state-of-the-art laboratory
campus in Genome Valley, Hyderabad. Food Testing and Environment
Testing businesses in Southeast Asia also delivered double-digit
growth through market penetration in Vietnam and Singapore,
scale-up of start-ups in Thailand and Philippines, as well as the
successful integration and strong performance of companies acquired
in 2022.
- In Japan, Environment Testing delivered healthy growth by
leveraging the strong market dynamics for asbestos testing as well
as emerging demand for PFAS testing. A new state-of-the-art
Environment Testing laboratory was established in Hamamatsu.
Eurofins is benefitting from the cross-functional collaboration
between the PFAS team and colleagues from Environment Testing, Food
Testing, Consumer Product Testing and Clinical Diagnostics
companies to become a total solutions provider in Japan. However,
the Clinical Diagnostics business in Japan was adversely affected
from a decline in NIPT pricing, lower demand from academia and
diminishing COVID-19 related revenue streams. Despite muted growth,
the Environment Testing business in Taiwan maintained its market
leadership position in certified tests as it continues to safeguard
the island’s air, water and soil. Similar to the US and Europe, a
decline in the market for early-stage research and development
activities, most notably from smaller biotech clients, has resulted
in softer demand for services from Eurofins Discovery in Asia.
- In Australia and New Zealand, growth was facilitated by
expansion of municipal water testing capabilities in New Zealand,
full operation of the multi business line Sydney campus that
increased processing capacity for Eurofins Environment, Biopharma
and Agrosciences Testing businesses, a new Food Testing facility in
Sydney and the introduction of Eurofins Professional Scientific
Services (PSS) to biopharma clients in the Australian market.
- In Latin America, Eurofins has driven automation projects,
expanded its service offering with PFAS testing, established mobile
Environment Testing laboratories in Brazil and made new Testing
methods available to clients from a Biopharma Testing laboratory in
Colombia and from a Food & Feed Testing laboratory in Chile.
This year marked the first anniversary of Eurofins’ Clinical
Diagnostics Testing in the Dominican Republic, with both strategic
and financial objectives being met.
- In the Middle East, Eurofins acquired its first Clinical
Diagnostics business in Saudi Arabia to serve the growing local
market, while Ajal Laboratories has further expanded its footprint
with the opening of a new laboratory in the country.
Table 4: Breakdown of Revenue by Area of Activity
Supplementing its disclosures on its three reportable segments
(Europe, North America and Rest of the World), Eurofins is
providing its revenues by activity.
€m
FY 2023
As % of total
Life
€2,607m
40%
BioPharma
€1,970m
30%
Diagnostic Services & Products
€1,276m
20%
Consumer & Technology Products
Testing
€661m
10%
Activities are defined as follows:
- Life, consisting of Food and Feed Testing, Agro Testing and
Environment Testing
- BioPharma, consisting of BioPharma Services, Agrosciences,
Genomics and Forensic Services
- Diagnostic Services and Products, consisting of Clinical
Diagnostics Testing and In Vitro Diagnostics (IVD) Solutions
- Consumer and Technology Products Testing, consisting of
Consumer Product Testing and Advanced Material Sciences
Infrastructure Programme
In 2023, Eurofins achieved a net surface increase of its
laboratory network of 77,000 m², reaching a total surface area of
1,734,000 m². A total of 43,000 m² of laboratory, office, and
storage space was added through the delivery of building projects
as well as building acquisitions, while leased surfaces decreased
by 15,000 m². Through acquisitions in the M&A scope, Eurofins
has added an additional surface area of 49,000 m².
As part of its strategy to lease less and own more of its
strategic sites in 2023, the net floor area of Eurofins-owned
premises has increased by 12% (60,000 m²) vs 2022 to reach 550,000
m², 78% of the building area added by Eurofins in 2023 is owned by
Eurofins (vs 62% for the period 2018-2022). Since 2018, the net
floor area of buildings owned by Eurofins has more than doubled
from 240,000 m² to 550,000 m². Out of the total net floor area
increase, 28% took place in the Asia Pacific region, expanding the
growth platform for a region that today represents only 9.6% of
Eurofins’ revenues.
In addition, in 2023, 23,000 m² of Eurofins’ current sites were
renovated to bring them to the highest standard.
In 2023, Eurofins maintained its focus on expanding its presence
in Asia Pacific.
- Significant developments included the completion of a new 3,000
m² facility in Hamamatsu, Japan. With this expansion, Eurofins aims
to tap into the rapidly growing asbestos testing market in Japan by
materially increasing its local testing capacity. This will enable
Eurofins to improve its market position and provide better and
faster support to its clients.
- Eurofins also completed the internal fit out of its new
facility in Shenzhen, China, which is part of the expansion plan
for cosmetics clinical testing in South China.
- Additionally, Eurofins completed the internal fit out of a new,
2,500 m² facility in Xiamen, China, which will cater to the local
food industry's needs for microbiology, chemistry and residue
testing.
- As a result of increased growth and the need for expansion, the
newly acquired (2022) Gentis Clinical Diagnostics laboratory in Ha
Noi, Vietnam, moved into a new upgraded facility of 1,600 m². To
meet the increased sample demand and to future-proof sustained
growth, an internal fit out of the new laboratory was completed,
improving sample flow and optimising volume capacity.
In Ishøj, Denmark, a 1,800 m² facility was purchased and fit out
for VBM Laboratoriet A/S so the laboratory can continue to best
serve its key clients with contaminated land testing services in
nearby Copenhagen.
In Spain, Eurofins Environment Testing successfully completed
the construction of a 5,000 m² laboratory campus in Castellon de la
Plana. This facility houses the reference laboratory for drinking
water in Spain, a Competence Centre for PFAS testing and a new
laboratory focussed on analysing contaminated soils and associated
waters. The laboratory employs state-of-the-art lean design and
accommodates the use of robots to optimise productivity and
transport samples and replenish deliverables. Additionally, the
facility is equipped with almost 1,000 m² of solar panels, as well
as air recirculation and thermal insulation systems to minimise its
carbon footprint. The site also comprises vacant land for potential
future expansion.
In Lentilly, France, Eurofins completed the construction of a
new 2,000 m² facility. This building serves as the third
differentiated Biopharma Product Testing campus in France,
specialising in biopharmaceutical large molecule testing such as
biochemistry, biology, microbiology, and virology. The site allows
for potential future expansion.
A 1,300 m² building was purchased at the end of June 2022 to
facilitate Eurofins Hydrologie Centre Est (EHCE) and Eurofins
Laboratoire de Microbiologie Rhône-Alpes (ELMRA) to consolidate
their operations in Lyon, France. The fit out of the new location
was completed in 2023.
In North America, Eurofins CEI, Inc. completed the acquisition
of its previously leased 1,120 m² building in Cary, North Carolina.
Simultaneously, Eurofins Lancaster Laboratories, Inc. acquired a
2,930 m² building situated at 2460 New Holland Pike in Lancaster,
Pennsylvania. Furthermore, Eurofins Environment Testing Northeast,
LLC completed the purchase of its previously leased 3,151 m²
building in Pittsburgh, Pennsylvania and Eurofins DQCI, LLC secured
a 5,179 m² building in Mounds View, Minnesota, where the company
was previously leasing 50% of the space. All acquired buildings are
strategically located and in excellent condition, offer ample space
for current operations and can accommodate future growth.
In 2024 and 2025, Eurofins plans to add laboratories and
operational space representing a total net floor area of ca.
160,000 m². Eurofins is committed to continuing to invest
significantly in its infrastructure to build the largest, most
modern and most efficient laboratory network in its industry.
Financial Review
Adjusted1 EBITDA3 was €1,364m in FY 2023, representing an
adjusted1 EBITDA3 margin of 20.9%, a decrease of €149m vs FY 2022
due to the significant decline in COVID-19 related activities and
inflationary headwinds that could not be fully compensated by price
increases and productivity measures.
Table 5: Separately Disclosed Items2
In €m except otherwise stated
FY 2023
FY 2022
One-off costs from integrations,
reorganisations and discontinued operations, and other
non-recurring income and costs
-48
-39
Temporary losses and other costs related
to network expansion, start-ups and new acquisitions in significant
restructuring
-81
-59
EBITDA impact
-129
-98
Separately Disclosed Items2 (SDI) at the EBITDA3 level increased
year-on-year to €129m and comprised:
- One-off costs from integrations, reorganisations and
discontinued operations, and other non-recurring income and costs
of €48m. The costs included the impact of network rationalisation
following the end of COVID-19 testing required during the pandemic,
disposals of machines related to discontinued operations,
relocations/reorganisations including the closure of the Tucker
clinical diagnostics site in the U.S. as well as restructuring
costs, including in The Netherlands, Germany and the U.S.
- Temporary losses and other costs related to network expansion,
start-ups and new acquisitions in significant restructuring of
€81m, significantly higher than in FY 2022 (€59m). This increase
was driven by:
- The continued acceleration of start-up launches undertaken in
FY 2023 and recent years, most notably in areas related to Clinical
Diagnostics (including the significant impact on Transplant
Genomics Inc. in the U.S. from a billing article concerning
Medicare reimbursement which became effective on 31 March 2023, and
the expansion of blood collection point (BCP) coverage in France),
BioPharma Services (including Eurofins Panlabs, Eurofins Clinical
Trial Supplies, development in China and a new laboratory in India)
and Food Testing (including laboratories in the U.S., Romania,
China, Philippines and France).
- Restructuring expenses for companies recently acquired, or
refocussed following the COVID-19 pandemic, in Clinical Diagnostics
in the U.S., In Vitro Diagnostics and Genomics in The Netherlands,
Brazil and Germany.
Reported EBITDA3 decreased 13% year-on-year to €1,234m in FY
2023, due to the strong decrease of COVID-19 related revenues,
inflationary headwinds and higher SDI impact. Reported EBITDA3
stood at 18.9% of revenues.
Table 6: Breakdown of Reported EBITDA by Operating
Segment
€m
FY 2023
Rep. EBITDA3 margin %
FY 2022
Rep. EBITDA3 margin %
Y-o-Y variation %
Europe
463
14.0%
680
19.4%
-32%
North America
655
26.1%
643
25.8%
+2%
Rest of the World
139
19.8%
143
20.2%
-3%
Other*
-22
-51
-57%
Total
1,234
18.9%
1,415
21.1%
-13%
*Other corresponds to Group service
functions
In Europe, Reported EBITDA3 was €463m, a decline of €217m vs FY
2022 mainly due to the sharp decrease in revenues from COVID-19
testing and reagents as well as cost inflation, in particular
related to energy. In contrast, EBITDA3 in North America increased
year-on-year to €655m, equivalent to 26.1% of its revenues over the
period. The Rest of the World posted an EBITDA3 of €139m,
equivalent to 19.8% of its revenues, on par with the level in FY
2022.
The Group’s mature scope14 represented 95% of the Group’s
revenues in FY 2023 vs 96% in FY 2022.
Depreciation and amortisation (D&A), including expenses
related to Right of Use, increased by 12% year-on-year to €565m. As
a percentage of revenues, D&A stood at 8.7% of Group revenues
in FY 2023 vs 7.5% in FY 2022, an increase of 120bps year-on-year.
This increase is due to higher levels of strategic investments over
the last few years including the owning and modernisation of
strategic sites, establishment of start-up laboratories and the
deployment of bespoke IT solutions.
Net finance costs amounted to €107m in FY 2023, a decline
compared to €137m in FY 2022 due to higher financial income from
cash deposit interests and a net foreign exchange rate gain of €11m
(vs net foreign exchange loss of €33m in FY 2022). In contrast,
interest expenses did increase year-on-year.
The loss on disposals was €2m in FY 2023, a substantial change
compared to the gain of €141m recorded in FY 2022. Whereas Eurofins
completed the disposal of its Digital Testing business in FY 2022,
no comparably significant disposals occurred in FY 2023.
The income tax rate increased to 27.3% of reported profit before
tax in FY 2023 from 22.3% in FY 2022. Please note that the tax rate
in FY 2022 benefitted from a tax-free capital gain related to the
sale of the Digital Testing business. Excluding this impact, the
tax rate remained stable year-on-year.
Reported net profit7 stood at €308m in FY 2023, equivalent to
4.7% of revenues and -49% compared to €606m in FY 2022, resulting
in a total reported Basic EPS8 of €1.33. Adjusted1 Net Profit7 was
€568m and adjusted1 Basic EPS8 was €2.71.
Cash Flow &
Financing
Table 7: Cash Flows Reconciliation
€m
FY 2023 reported
FY 2022 reported
Y-o-Y variation
Y-o-Y variation %
Net Cash provided by operating
activities
1,018
1,136
-118
-10%
Net capex9 (i)
-544
-645
+102
+16%
Net operating capex (includes LHI)
-392
-459
+67
+15%
Net capex for purchase and development of
owned sites
-152
-186
+34
+18%
Free Cash Flow to the Firm before
investment in owned sites16
626
677
-51
-8%
Free Cash Flow to the Firm10
474
491
-17
-3%
Acquisition of subsidiaries, net (ii)
-158
-430
+272
+63%
Proceeds from disposals of subsidiaries,
net (iii)
7
215
-208
-
Other (iv)
13
4
+9
-
Net Cash used in investing activities (i)
+ (ii) + (iii) + (iv)
-681
-856
+175
+20%
Net Cash provided by financing
activities
414
-311
+725
-
Net increase / (decrease) in Cash and
cash equivalents and bank overdrafts
738
-32
+770
-
Cash and cash equivalents at end of
period and bank overdrafts
1,221
483
+738
+153%
Net cash provided by operating activities declined to €1,018m in
FY 2023 vs €1,136m in FY 2022. The decrease is due to the decline
in EBITDA3 and increase in net working capital12 intensity, which
stood at 5.1% of 4 times Q4 2023 revenues at the end of 2023 vs
4.2% of 4 times Q4 2022 revenues at the end of 2022. The increase
in net working capital is related to a slight increase in days of
sales outstanding and a slight decrease in days of payables
outstanding, the latter of which is primarily due to the resolution
of outstanding payments related to the conclusion/closure of
COVID-19 testing businesses. Measures by Eurofins teams to improve
the net working capital intensity are underway.
On the other hand, taxes paid declined to €140m in FY 2023 from
€296m in FY 2022 as the previous year’s taxes paid included the
final payment of 2021 income taxes as well as advances on 2022
income taxes based on 2022 results.
Net capex9 for the period was €544m in FY 2023 vs €645m in FY
2022. The decrease was related to lower expenditures for both net
operating capex as well as the purchase and development of owned
sites. Free Cash Flow to the Firm before investment in owned
sites16 was €626m in FY 2023 vs €677m in FY 2022, a decrease of 8%
year-on-year. In contrast, Free Cash Flow to the Firm10 was €474m
in FY 2023 vs €491m in FY 2022, a decrease of only 3% year-on-year.
The minimal change was helped by a substantially stronger Free Cash
Flow to the Firm10 in H2 2023 (€400m) vs H2 2022 (€271m).
Over the course of FY 2023, Eurofins completed 40 acquisitions
vs 59 acquisitions in FY 2022. Net cash outflow on acquisitions
completed in FY 2023 and in previous years (in case of payment of
deferred considerations) amounted to €158m vs €430m in FY 2022. The
lower transaction volume and expenditures for acquisitions reflects
Eurofins’ focus on reasonably valued bolt-on deals that will
provide appropriate accretion to return on capital employed.
On the other hand, proceeds from divestments also decreased
substantially year-on-year. Whereas Eurofins completed the disposal
of its Digital Testing business in FY 2022, no comparably
significant disposals occurred in FY 2023.
During the period, Eurofins returned to its targeted capital
structure that includes an adequate level of hybrid capital of
€1bn. The first step towards this objective was made in January
2023, when Eurofins successfully raised €600m of hybrid capital.
This new series of hybrid capital has no specified maturity and is
accounted for as 100% equity according to the International
Financial Reporting Standards (IFRS) as adopted in the European
Union and 50% equity with the rating agencies Moody’s and Fitch. It
bears a fixed annual coupon of 6.75% for the first 5.5 years (until
24 July 2028), upon which date Eurofins can elect to repay. Later
in the period, Eurofins repaid the outstanding €183m of hybrid
capital callable on 29 April 2023.
In August 2023, Eurofins successfully raised €600m in a senior
unsecured Euro-denominated public bond issuance. The bonds have a
7-year maturity (due on 6 September 2030) and bear an annual fixed
rate coupon of 4.75%. The proceeds of these bonds will be used to
fund Eurofins’ general corporate purposes, including the
refinancing of the outstanding €448m Fixed Rate Bonds (ISIN:
XS1651444140) due in July 2024.
Eurofins’ gross corporate senior debt was €3,927m at the end of
FY 2023 vs €3,326m at the end of FY 2022. The increase was driven
by the aforementioned Eurobond issuance of €600m in August 2023.
Correspondingly, the total cash position increased from €483m at
the end of FY 2022 to €1,221m at the end of FY 2023. Adjusted for
the upcoming repayment of the outstanding €448m senior Eurobonds
due in July 2024, Eurofins held a very high cash position of €773m
at the end of FY 2023.
Eurofins has no major financing requirements in 2024, as the
outstanding €448m senior Eurobonds due in July 2024 were already
refinanced in August 2023 with the issuance of the €600m senior
Eurobonds maturing in September 2030. Additionally, 91% of
Eurofins’ current borrowings bear fixed interest rates.
The combination of Free Cash Flow to the Firm10 and acquisitions
as well as the aforementioned hybrid capital and bond issuances
resulted in a net debt11 figure of €2,705m at the end of December
2023, a decrease of €134m vs the level at the end of December 2022.
The corresponding financial leverage (net debt11 to adjusted1
pro-forma EBITDA3) was 2.0x, slightly higher than the 1.9x level at
the end of December 2022 but still well within the 1.5x-2.5x target
range.
Start-up Programme
Start-ups or green-field laboratory projects are generally
undertaken in new markets and, in particular, in emerging markets,
where there are often limited viable acquisition opportunities or
in developed markets where Eurofins transfers technology developed
by its R&D and Competence Centres abroad or expands
geographically to complete its national hub and spoke laboratories
network in an increasing number of countries.
In 2023, the Group initiated 50 new start-up laboratories
projects and 49 new start-up blood collection points (BCPs). The
301 start-ups and 67 BCPs launched since 2000 have made material
contributions to the overall organic growth of the Group,
accounting for 0.6% out of the 6.6% Core Business organic growth
achieved in FY 2023. Their EBITDA3 margin continued to progress
while remaining dilutive to the Group.
Of the 301 start-ups and 67 BCPs the Group has launched since
2000, 58% are located in Europe, 15% in North America and 27% in
the Rest of the World, of which a significant number are in high
growth regions in Asia. By activity, 37% are in Life (Food and Feed
Testing, Environment Testing), 17% in BioPharma, 37% in Diagnostic
Services & Products (including BCPs) and 9% in Consumer &
Technology Products Testing.
Acquisitions
During 2023, the Group completed 40 acquisitions consisting of
24 acquisitions of entities and 16 acquisitions of assets
representing full-year equivalent pro-forma revenues of €122m in FY
2023 and a total investment of €158m. These acquisitions had
approximately 1,000 FTEs on a full-year, pro-forma equivalent
basis.
Divestments
During 2023, the Group divested or discontinued some small
businesses that contributed consolidated revenues of €3m in FY
2023. The net proceeds from the divestments amounted to €7m.
Post-Closing Events
Business combinations
Since the beginning of 2024, the Group completed two business
combinations, including one acquisition of entity and one
acquisition of assets. The total annual revenues of these
acquisitions amounted to approximately €33m in 2023 for an
aggregate acquisition price of €65m including a building for
€4m.These acquisitions employ over 200 employees.
In December 2023, Eurofins signed an agreement to acquire the
operations of SGS Crop Science consisting of more than 480
employees and locations in Europe, North America, South Africa and
Brazil. The business generated revenues of approximately CHF 46m in
2022. The transaction is subject to consultation with SGS Crop
Science’s local stakeholders as required by the local jurisdictions
and is expected to close in 2024.
Summary financial statements:
Table 8: Summarised Income Statement
FY 2023
FY 2022
In €m except otherwise stated
Reported
Reported
Revenues
6,515
6,712
Operating costs, net
-5,280
-5,297
EBITDA3
1,234
1,415
EBITDA Margin
18.9%
21.1%
Depreciation and amortisation
-565
-504
EBITAS4
669
911
Share-based payment charge and
acquisition-related expenses, net5
-138
-136
Gain/(loss) on disposal
-2
141
EBIT6
530
916
Finance income
23
2
Finance costs
-130
-139
Share of profit of associates
0
1
Profit before income taxes
423
780
Income tax expense
-116
-174
Net profit7 for the year
308
606
Attributable to:
Owners of the Company and hybrid capital
investors
310
610
Non-controlling interests
-2
-4
Earnings per share (basic) in EUR
- Total
1.61
3.17
- Attributable to owners of the
Company
1.33
3.02
- Attributable to hybrid capital
investors
0.28
0.15
Earnings per share (diluted) in EUR
- Total
1.57
3.07
- Attributable to owners of the
Company
1.30
2.92
- Attributable to hybrid capital
investors
0.27
0.15
Basic weighted average shares outstanding
- in millions
193
193
Diluted weighted average shares
outstanding - in millions
198
199
Table 9: Summarised Balance Sheet
31 December 2023
31 December 2022
In €m except otherwise stated
Reported
Reported
Property, plant and equipment
2,297
2,168
Goodwill
4,551
4,524
Other intangible assets
796
919
Investments in associates
5
5
Non-current financial assets
78
78
Deferred tax assets
94
76
Total non-current assets
7,822
7,770
Inventories
139
146
Trade receivables
1,073
1,053
Contract assets
308
288
Prepaid expenses and other current
assets
203
198
Current income tax assets
118
136
Derivative financial instruments
assets
4
6
Cash and cash equivalents
1,221
487
Total current assets
3,066
2,313
Total assets
10,889
10,083
Share capital
2
2
Treasury shares
-55
-14
Hybrid capital
1,000
583
Other reserves
1,601
1,593
Retained earnings
2,394
2,333
Currency translation reserve
136
286
Total attributable to owners of the
Company
5,078
4,782
Non-controlling interests
60
69
Total shareholders' equity
5,137
4,851
Borrowings
3,326
3,112
Deferred tax liabilities
110
134
Amounts due for business acquisitions
107
136
Employee benefit obligations
66
60
Provisions
21
19
Total non-current liabilities
3,630
3,460
Borrowings
601
214
Interest due on borrowings and earnings
due on hybrid capital
59
38
Trade accounts payable
600
648
Contract liabilities
193
184
Current income tax liabilities
27
35
Amounts due for business acquisitions
36
48
Provisions
21
35
Other current liabilities
585
572
Total current liabilities
2,122
1,772
Total liabilities and shareholders'
equity
10,889
10,083
Table 10: Summarised Cash Flow Statement
FY 2023
FY 2022
In €m except otherwise stated
Reported
Reported
Cash flows from operating
activities
Profit before income taxes
423
780
Depreciation and amortisation
565
504
Share-based payment charge and
acquisition-related expenses, net
138
136
Gain/(loss) on disposal
2
-141
Finance income and costs, net
104
138
Share of profit from associates
0
-1
Transactions costs and income related to
acquisitions
-8
-16
Changes in provisions employee benefit
obligations
-11
2
Other non-cash effects
10
-
Change in net working capital
-65
31
Cash generated from operations
1,158
1,432
Income taxes paid
-140
-296
Net cash provided by operating
activities
1,018
1,136
Cash flows from investing
activities
Purchase of property, plant and
equipment
-478
-576
Purchase, capitalisation of intangible
assets
-72
-84
Proceeds from sale of property, plant and
equipment
6
15
Net capex9
-544
-645
Free cash Flow to the Firm10
474
491
Acquisitions of subsidiaries, net
-158
-430
Proceeds from disposals of subsidiaries,
net
7
215
Disposal/(acquisitions) of investments,
financial assets and derivative financial instruments, net
2
2
Interest received
12
3
Net cash used in investing
activities
-681
-856
Cash flows from financing
activities
Proceeds from issuance of share
capital
8
15
Purchase of treasury shares, net of
gains
-56
-16
Proceeds from issuance of hybrid
capital
593
-
Repayment of hybrid capital
-183
-417
Proceeds from borrowings
639
634
Repayment of borrowings
-90
-83
Repayment of lease liabilities
-181
-166
Dividends paid to shareholders and
non-controlling interests
-193
-193
Earnings paid to hybrid capital
investors
-42
-36
Interests and premium paid
-82
-49
Net cash (used in)/provided by
financing activities
414
-311
Net effect of currency translation on cash
and cash equivalents and bank overdrafts
-13
-1
Net (decrease)/increase in cash and
cash equivalents and bank overdrafts
738
-32
Cash and cash equivalents and bank
overdrafts at beginning of period
483
515
Cash and cash equivalents and bank
overdrafts at end of period
1,221
483
1 Adjusted results – reflect the ongoing
performance of the mature14 and recurring activities excluding
“separately disclosed items”.
2 Separately disclosed items – include
one-off costs from integration and reorganisation, discontinued
operations, 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 charge5, impairment of goodwill, amortisation of acquired
intangible assets and negative goodwill, gains/losses on disposal
of businesses 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), net finance costs related to hybrid capital and
the related tax effects.
3 EBITDA – Earnings before interest,
taxes, depreciation and amortisation, share-based payment charge,
acquisition-related expenses, net and gain and loss on disposal of
subsidiaries, net.
4 EBITAS – EBITDA less depreciation and
amortisation.
5 Share-based payment charge and
acquisition-related expenses, net – Share-based payment charge,
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.
6 EBIT – EBITAS less Share-based payment
charge, acquisition-related expenses, net and gain and loss on
disposal of subsidiaries, net.
7 Net Profit – Net profit for owners of
the Company and hybrid capital investors before non-controlling
interests.
8 Basic EPS – basic earnings per share
attributable to owners of the Company.
9 Net capex – Purchase, capitalisation of
intangible assets, purchase of property, plant and equipment less
capex trade payables change of the period and proceeds from
disposals of such assets.
10 Free Cash Flow to the Firm – Net cash
provided by operating activities, less Net capex.
11 Net debt – Current and non-current
borrowings, less cash and cash equivalents.
12 Net working capital – Inventories,
trade receivables and contract assets, prepaid expenses and other
current assets less trade accounts payable, contract liabilities
and other current liabilities excluding accrued interest receivable
and payable.
13 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 of 1st January Y-1.
All revenues from businesses acquired since 1st January Y are
excluded from the calculation. Also, all revenues from discontinued
activities / disposals in both the previous financial year (Y-1)
and year Y are excluded from the calculation.
14 Mature scope: excludes start-ups and
acquisitions in significant restructuring. A business will
generally be considered mature when: i) The Group’s systems,
structure and processes have been deployed; ii) It has been
audited, accredited and qualified and used by the relevant
regulatory bodies and the targeted client base; iii) It no longer
requires above-average annual capital expenditures, exceptional
restructuring or abnormally large costs with respect to current
revenues for deploying new Group IT systems. The list of entities
classified as mature is reviewed at the beginning of each year and
is relevant for the whole year.
15 Discontinued activities / disposals:
discontinued operations are a component of the Group’s Core
Business or product lines that have been disposed of, or
liquidated; or a specific business unit or a branch of a business
unit that has been shut down or terminated, and is reported
separately from continued operations. For more information, please
refer to Note 2.26 of the Consolidated Financial Statements for the
year ended 31 December 2023.
16 FCFF before investment in owned sites:
FCFF less Net capex spent on purchase of land, buildings and
investments to purchase, build or modernise owned sites/buildings
(excludes laboratory equipment and IT).
Notes to Editors:
About Eurofins – the global leader in bio-analysis
Eurofins is Testing for Life. The Eurofins network of companies
believes that it is a global leader in food, environment,
pharmaceutical and cosmetic product testing and in discovery
pharmacology, forensics, advanced material sciences and agroscience
contract research services. It is also one of the market leaders in
certain testing and laboratory services for genomics, and in the
support of clinical studies, as well as in biopharma contract
development and manufacturing. It also has a rapidly developing
presence in highly specialised and molecular clinical diagnostic
testing and in-vitro diagnostic products.
With ca. 62,000 staff across a decentralised and entrepreneurial
network of more than 900 laboratories in 62 countries, Eurofins
offers a portfolio of over 200,000 analytical methods to evaluate
the safety, identity, composition, authenticity, origin,
traceability and purity of a wide range of products, as well as
providing innovative clinical diagnostic testing services and
in-vitro diagnostic products.
Eurofins companies’ broad range of services are important for
the health and safety of people and our planet. The ongoing
investment to become fully digital and maintain the best network of
state-of-the-art laboratories and equipment supports our objective
to provide our customers with high-quality services, innovative
solutions and accurate results in the best possible turnaround time
(TAT). Eurofins companies are well positioned to support clients’
increasingly stringent quality and safety standards and the
increasing demands of regulatory authorities as well as the
evolving requirements of healthcare practitioners around the
world.
Eurofins has grown very strongly since its inception and its
strategy is to continue expanding 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.
Shares in Eurofins Scientific are listed on the Euronext Paris
Stock Exchange (ISIN FR0014000MR3, Reuters EUFI.PA, Bloomberg ERF
FP).
Until it has been lawfully made public widely by Eurofins
through approved distribution channels, this document contains
inside information for the purpose of Regulation (EU) 596/2014 of
the European Parliament and of the Council of 16 April 2014 on
market abuse, as amended.
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 guarantees can be made as to their completeness
or validity.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240226093646/en/
For more information, please visit www.eurofins.com or
contact: Investor Relations Eurofins Scientific SE Phone: +32 2
766 1620 E-mail: ir@sc.eurofinseu.com
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