Brussels / Nantes, August 31, 2007
During the first half of 2007 the Eurofins Group has continued to grow its revenues organically by over 10% and is making very good progress in integrating the substantial number of acquisitions made in 2005 and 2006. In the meantime it also continues to work towards the future through continuing investment in our many start-up operations.
Sales growth in the period was 44% compared to H1/2006. EBITDA was ¤23.9m, up 18% from ¤20.2m in H1/2006 and operating profit in the half was ¤12.2m (H1/ 2006 ¤11.9m) in line with Eurofins budget. A more accurate comparison with the prior year would be on a proforma basis, taking into account the current perimeter, where the H1/ 2006 operating profit would be about ¤8m. This comparison shows an increase in operating profit by 50% which is significantly above the proforma sales growth of over 10%, confirming that good progress is being made. The same point is underlined by splitting the actual figures in the Up-to-Standards and the Under-Development operations. The Up-to-Standards operating income increased to ¤17.2m (H1/2006 ¤15.5m) and the Under-Development business improved its margins from -11.5% to -6.3%, which means that the Under-Development operations sustained a loss of only ¤4.6m in H1/ 2007.
One of the most important events in the period was the hybrid transaction, in which the Group placed ¤100m of perpetual debt with investors around Europe. This has significantly increased the Group’s financing capacity, providing flexibility to fund future growth, which is particularly important taking into account the current state of the debt markets. The impact on the Group’s existing covenants has been to reduce the net debt/ shareholders equity from 1.2x at 31 December 2006 to 0.3x at 30 June 2007 and net debt/ last 12 months EBITDA from 2.1x to 0.9x.
Whilst the main focus so far has been on integration, the Group still managed organic growth of over 10% during the half year. Two new laboratories were opened in the pharma business, in the USA and Singapore. Eurofins now operates a network of four wholly-owned central laboratories on three continents and Eurofins is only one of four companies globally to have this capability. In recognition of this Eurofins I Medinet has just been awarded a $37m contract for global clinical trials. In the environmental market the Group won an outsourcing contract with Southern Water in the UK which will be worth ¤28m over the next five years.
Investment continues to progress well in the start-up businesses, where Eurofins sees significant potential for revenue and profit growth. In China the Group has made the decision to commence construction on a food laboratory, following receipt of regulatory approval at the end of 2006. In Spain Eurofins now has its first laboratory, based in Barcelona, along with new sales offices in Madrid and Lisbon, Portugal.
Finally there were a few opportunities during the half year to make selective acquisitions that complemented the current strategy. Amongst the most significant, Biolab brings additional critical mass to our new Italian operations, Institut Dr. Rothe adds to the food testing portfolio in Germany and LabNett reinforces our market leadership in environment and food testing in Scandinavia. Overall proforma annual sales for these are about ¤15m.
Eurofins now looks forward to a second half of the year in which it believes it can deliver a strong performance and meet its objectives for both revenue and operating profit.
For further information about Eurofins please visit www.eurofins.com or contact:
Phone: +32-2-769 7383
Notes for the editor:
Eurofins - a global leader in bio-analysis
Eurofins Scientific is a life sciences company operating internationally to provide a comprehensive range of analytical testing services to clients from a wide range of industries including the pharmaceutical, food and environmental sectors.
With over 5,000 staff in more than 100 laboratories across 25 countries, Eurofins offers a portfolio of over 15,000 reliable analytical methods for evaluating the authenticity, origin, safety, identity, composition and purity of biological substances and products. The Group is committed to provide its customers with high quality services, accurate results in time and, if requested, expert advice by our highly qualified staff.
The Eurofins Group is one of the global market leaders in this field of applied life sciences. It intends to pursue its dynamic growth strategy and expand both, its technology portfolio and its geographic reach. Through R&D, in-licensing and acquisitions, the Group draws on the latest developments in the field of biotechnology 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 player in its industry, Eurofins is ideally positioned to support its clients’ increasingly stringent quality and safety standards and the demands of regulatory authorities around the world.
The shares of Eurofins Scientific are listed on Euronext in the Paris (ISIN FR0000038259) and Frankfurt (WKN 910251) Stock Exchanges (Reuters EUFI.LN, Bloomberg ERF FP, ESF, EUFI.DE).
This press release contains forward-looking statements and estimates that involve risks and uncertainties. The forward-looking statements and estimates contained herein represent the judgement of Eurofins Scientific 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 data available to the Company as of the date of publication, but no guarantee can be made as to their validity.
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