Brussels/ Nantes, May 31st, 2007
Eurofins is pleased to report on yet another quarter of exceptional growth. Sales increased by 47% to ¤102.7m (Q1/ 2006 ¤70.1m), of which over 10% was organic growth. Sales are up in every region and growth has been strong in many areas where Eurofins is developing its business, such as Scandinavia, the British Isles and the Other Countries.
As expected, the results for the first quarter have been affected by a combination of the traditional seasonal weakness and more importantly the impact of our acquisitions last year. Indeed, headline profitability has been impacted by the integration this year of many acquisitions and especially by the loss-making nature of a number of these laboratories (proforma losses for 2006 would have been approximately ¤12m for these businesses).
The potential in the businesses that currently fall in the category of “under development” is demonstrated particularly well by the step-up in sales but it is too early in the integration process to have had time to reduce significantly their high costs (such as outsourcing or labour costs). Some of these companies have been in the Group for less than six months.
Therefore the traditionally weak Q1 sees the expected first time effect of full consolidation. EBITDA was ¤8.9m (Q1/ 2006 ¤9.0m) and operating profit was ¤3.2m (Q1/ 2006 ¤5.1m). To put this into perspective, the “up-to-standards” perimeter reported operating profit margins of over 8%, which is broadly in line with historic first quarter performance, and “under development” made an expected loss of ¤2.4m.
The Company expects to meet the objectives set for its full year results. The acquisitions will be brought up to Group standards over a three to four year period and the Group ROCE* target remains at 20%.
* ROCE = EBITA over last 12 months / average capital employed at start of last 4 quarters.
The full first quarter report is available on our website under http://www.eurofins.com/investors/publications/reports/en.
For further information about Eurofins please visit www.eurofins.com or contact:
Phone: +32-2-769 7383
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