Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
www.eurofins.com
EurofinsA global leader in bioanalytical testing in the food,
environment and pharmaceutical sectors
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay 1
Debt Investor PresentationJanuary 2015
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
2
Disclaimer
The statements made during this presentation or as response to questions during the Question & Answers period that arenot historical facts are forward looking statements. Furthermore, estimates and judgements may be made based on marketand competitive information available at a certain time. Forward looking statements and estimates represent the judgementof Eurofins Scientific’s management and involve risks and uncertainties including, but not limited to, risks associated with theinherent uncertainty of research, product/ service development and commercialisation, the impact of competitive productsand services, patents and other risk uncertainties, including those detailed from time to time in period reports, includingprospectus and annual reports filed by Eurofins Scientific with the Luxembourg Stock Exchange and regulatory authorities,that can cause actual results to differ materially from those projected. Eurofins Scientific expressly disclaims any obligationor intention to release publicly any updates or revisions to any forward looking statement or estimate.
In addition, Eurofins provides in the Income Statement certain non-IFRS information (“Adjusted Results and SeparatelyDisclosed Items”) that excludes certain items because of their nature and the impact they have on the analysis of underlyingbusiness performance and trends. (Please refer to description of these terms in the Company’s Annual Report). Themanagement believes that providing this information enhances investors' understanding of the company’s core operatingresults and future prospects, consistent with how management measures and forecasts the company’s performance,especially when comparing such results to previous periods or objectives and to the performance of our competitors. Thisinformation should be considered in addition to, but not in lieu of, information prepared in accordance with IFRS.
This presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for orpurchase securities in Eurofins Scientific S.E. and neither this document nor anything contained or referred to in it shall formthe basis of, or be relied on in connection with, any offer or commitment whatsoever.
Analyst forecasts quoted are based on published analyst views. They are the responsibility of the investment banks whichpublish those forecasts and should not be interpreted as representing the views or expectations of Eurofins Scientific or theEurofins Scientific management. In particular, they do not constitute a profit forecast or estimate or trading statement byEurofins Scientific S.E. Similarly, objectives presented are only objectives and may not be achieved in reality, potentially by awide margin, due to a variety of factors.
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
3
� Introduction
� Market & Strategic Positioning
� Finance & Outlook
� Transaction Overview
� Summary
� Appendix
Contents
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
4
Eurofins’ Mission is to contribute to globalHealth, Safety & Environment with the best in bioan alysis
� Founded in 1987� IPO in 1997 in Paris at EUR 1.83 per share� Network of more than 200 laboratories in
36 countries� Over 100,000 reliable analytical methods� Over 16,000 employees� Simplified shareholder structure: Martin
Family 42.7% of share capital (59.5% of voting rights); Free float 57.3%
Key figures 2013 2008-2013 CAGRRevenues EUR 1,226m 14%EBITDA EUR 189m 19%Net Profit EUR 72m 32%
*Adjusted– reflects ongoing performance of the mature and recurring activities excluding “separately disclosed items”
Food
Environment Pharmaceuticals
Eurofins provides testing services in three main areas that have a strong impact on
human health:
“Recent trends in global food production, processing,distribution and preparation are creating an increasingdemand for food safety research in order to ensure asafer global food supply.” World Health Organisation
EUROFINS 2017: Mid Term ObjectivesEUR 2bn Revenues (13% CAGR from 2013)
>20% Adjusted EBITDA Margin
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Market size estimate ~ EUR 4bn
*To the best of Eurofins’ knowledge, based on data available to the Group
~ EUR 2.0bn ~ EUR 5bn
N°1*worldwide
N°1 to N°3* worldwide
Testing forTesting forTesting forTesting forPharma/Pharma/Pharma/Pharma/BiotechBiotechBiotechBiotech Environment Environment Environment Environment
TestingTestingTestingTesting
Food & Food & Food & Food & Feed Feed Feed Feed
TestingTestingTestingTesting
N°1*worldwide
Eurofins ranking
N° 1 in EuropeN° 1 in Germany N° 1 in France N° 1 in ScandinaviaN° 1 in BeneluxN° 1 in the UK**N° 1 in BrazilN° 2 in the USA**N° 1 in Agri Testing EU
N° 1 in Europe N° 1 in GermanyN° 1 in FranceN° 1 in ScandinaviaN° 1 in Benelux
N° 1 Worldwide in Pharma Product TestingN° 1 Worldwide in Discovery Pharmacology ServicesAmong top 3 global providers of central laboratory, genomic and agrosciences servicesN° 1 or 2 in most segments/countries in Europe
** except routine Bacteriology - focus on high end a nalysis
Leading global and local market positions
New!
New!
5Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
6
Demand for safe pharmaceuticals, quality food
and clean environment
Risks linked to global sourcing
and brand vulnerability
Consolidation of the fragmented laboratory
market and scale effects
Drivers for long-term market growth
Outsourcing of internal laboratories by industry
One-stop shopping (focus on few global testing suppliers)
Increasing wealth and quality of Life
Technological progress
Advancing globalisation
New analytical methods and lower
detection limits
Consumer expectations for
protection
Secular Underlying Fundamentals General Market Drivers Laboratory Market Drivers
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
7
An international network of world class, standardis ed laboratories is attractive for our customers
80% of the world’s population still has limited access to testing laboratories
N. America 22.7%
Germany 17.5%
France 17.0%
Others 14.6%
Nordic Region 11.9%
Benelux 10.9%
UK & Ireland 5.4%
H1 2014 revenue split :
Entry into high-growth markets with start ups
& acquisitions
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
8
Strong growth fueled by market growth, share gains and acquisitions
* Company objective
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2017*
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
CAGR10yrs 22%
CAGR5yrs 14%
RE
VE
NU
ES
EU
R m
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
9
On track towards 2017 objectives
Eurofins 5 year Report Card: 2008-2013 CAGR
Achievements in 2013
� Over 6.5% organic growth versus 5% objective
� 24% increase in adjusted EBITDA
� More than 10 acquisitions withcombined revenues of ca. €120m
� 26% increase in operating cash flows
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
2014: second year of our 5-year journey
9M 2014
� 18.6% revenue increase in Q3 to EUR 370m brings revenues for 9M 2014 to over EUR 1 billion, a 14.9% increase from 9M 2013, over 6% of which was organic (over 8% excludingcompanies in significant restructuring).
� 14 acquisitions in 9M 2014 for total annualisedrevenues in excess of EUR 150m.
� Sustained operating momentum in the group’s largest markets
HY 2014
� 17% increase in adjusted EBITDA, translating to 60bp margin expansion in H1 2014
� Stable profits despite peak in one-off costs
YTD 2014
� On track to deliver ca. 40,000m 2 of the 100,000m 2
of modern lab surface planned between 2014-2016 by the end of this year.
� Entry into specialised, genomics-baseddiagnostic testing market via the acquisition of ViraCor-IBT*
*Acquired on 01 July, 2014
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
10
Eurofins’ strategy aims at building long lasting competitive advantages
� Extensive expertise in local regulations for all major markets, and one-stop contact for compliance in multiple countries
� Globally reliable standards of high quality and consistency
� International key accounts management
� Internet-based transactions and access to testing results
� Competence Centres & R&D activities
� Proprietary technologies for proof of origin, virus phenotyping & authenticity testing
� Continuous development/acquisition of advanced technologies
One stop shop
Leading technology
Pure-play laboratory operator
� International network with a presence in 36 countries
� Vast technological portfolio with more than 100,000 reliable methods
� Over 100 million assays performed per year
� But one contact person for each customer
� Industrialised processes
� Unrivalled expertise accessible to all customers
� Continually expanding geographical coverage
� Proven operating model that can be rolled-out in various/multiple markets
Quality of customer service
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
11
� Introduction
� Market & Strategic Positioning
� Finance & Outlook
� Transaction Overview
� Summary
� Appendix
Contents
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
12
Consumers’ increasing awareness and demand for safe and high quality food
The Food testing market has robust growth drivers
� Compels industry to strengthen its testing programs
� New products (GMOs, new packaging, etc.) create nee d for new tests
� Governments increase regulations on food control
� Brands have become more global and vulnerable to co ntaminations
� Transparency and traceability are becoming the prio rities
� Increasing pressure on producers and manufacturers to invest in testing
Food scares and crises, widely covered in the
media
Demand for a high quality, state-of-the-art, intern ational network of laboratories
Globalisation: Raw materials sourced
from countries with different QC
practices
Outsourcing of industry’s
internal or state-owned
laboratories
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
13
Retail & Distribution
Eurofins’ Food & Feed testing offering is the most comprehensive in the market
Agricultural production, product
development Production
Dioxins Veterinary drug residues
Organic residues POPs
Heavy metals Irradiation
Quality ControlVitamins
GMOLabelling
PurityNutritional
Microbiology Sensorial
Authenticity Pesticides
Mycotoxins Allergens
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
14
Year Brand/ Contamination Impact CostCountry
Salmonella in tomatoes and peppers
2008
E. Coli in cookie dough
70 people sick, 25 people hospitalized, job losses, withdrawal of 86 million "cookies-worth”, court proceedings initiated
50,000 infants ill, 6 deaths, global recall of dairy and related products, criminal charges in China
Melamine in dairy products
Sanlu/ Fronterra + global brands
~ USD 100-250m
Unquantified
2009
About 1,500 people sick throughout US & Canada – pulling of products from shops & restaurants
2008
Nestlé
North America/ Mexico
Dioxins Recall of Irish pork products, job losses, destruction of 100,000 pigs
2008
FreshPlaza
CNN Health
BBC News
Irish pork > EUR 300mIrish Exporters Association
Salmonella in peanut butter
2008 ~ USD 100m
Est. only for Kellogg’s
9 dead, 683 people sick, global recall of peanut butter and related products (1,600 types of products involved)
Kellogg’s, Unilever, General Mills
Bloomberg
High profile food scares have expensive consequence s for producers…
Dioxins in eggs, poultry and pork
About 3,000 tons of feed contaminated with oil inte nded for use in bio-fuels, 4700 farms closed, revenues l ost, tightening regulation
2011 Germany BBC news
Beef products contaminated with horse meat
Sales of frozen burgers plunged 43% and frozen ready meals fell 13% in the UK between 21 Jan –17 Feb, 2013, at the height of the scandal
2013 Europe The Guardian
~ EUR 360m
Market value lost for Tesco
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
15
…and destroy market value
48% drop in share price in first week.
Threat of multiple law suits.
Over 100 brands & over 60m cans of recalled product.
The largest customer (11% of sales) has suspended orders (thought to be WalMart).
Direct cost estimated at US$ 42m
2007 example: Menu Foods is the largest maker of we t cat and dog food in N. America
Melamine contamination of pet foods due to illegal use of a plasticiser in wheat and rice gluten raw material supplies from China.
Tens, possibly hundreds of pets died
- 48%
In the wake of the scandal
drop in orders resulting in a $3.6m loss in the Q2 vs a $2.6m profit in Q2/2006
- 44%
Source: http://www.lapresseaffaires.com
Contamination Direct impact Indirect impact
In fact, this was the same type of contamination to affect baby milk one year later.
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
16
Horsegate: A reminder of the need for more systemat ic testing
Horsegate Timeline
Dec 2012 Irish authorities become aware of the adulteration in ABP Food Group burgers with 29% horse meat content
Jan 2013 Eurofins Germany confirms to FSAI presence of horsemeat on samples tested from Tesco, Asda, Iceland, etc.
Tesco market value declined EUR 360m*
Feb 2013 EU Commission launched coordinated control testing for presence of horse DNA and phenylbutazone.
Mar 2013 Of the 4,144 tests done to detect horsemeat, 193 tested positive (4.7%)
Of the 3,155 tests done to detect phenylbutazone residues, 16 tested positive (0.5%)
Large food manufacturers and retailers caught up in the scandal identified weaknesses in their supply chains. The official results confirm that only a sufficient level of SYSTEMATIC TESTING across the food supply and production chains can reduce risk and prevent similar scandals
http://ec.europa.eu/food/food/horsemeat/timeline_en .htmhttp://en.wikipedia.org/wiki/2013_meat_adulteration _scandal#cite_note-idsum-55
EU CommissionWikipedia
* The Independent, 16 January 2013
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Eurofins’ response to aid the industry
� Rapid capacity scale-up by allocating more of its DNA-testing resources to food analysis, and in particular, meat speciation
� Launch of relevant meat speciation and contamination test-packages
� Industry-beating accuracy and Turn-Around-Time (TAT)
� Developed new protocols based on the latest Next Generation Sequencing (NGS) technologies to increase its DNA-testing capacity and significantly reduce the cost per analysis.
� Eurofins reduced its prices for DNA analysis for meat testing during the crisis to reduce the cost to allow the industry to not only comply with regulations, but systematically manage the risks in their supply chain.
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
17
Eurofins is meeting the demands of global players
� The largest global food & beverage producers and re tailers are clients of Eurofins
Food and Beverage Retailers2013 Sales in EUR billion
2013 Sales in EUR billion
Nestlé Switzerland 74.9Unilever UK /Netherlands 49.8PepsiCo USA 48.8Coca-Cola USA 34.4Mars* USA 25.0Danone France 21.3McDonalds USA 20.6Kraft Foods* USA 13.4Kelloggs USA 10.9Pernod Ricard France 8.6* estimates
Wal-Mart Stores USA 347.6Carrefour France 84.3CostCo USA 77.3Tesco UK 76.3Kroger USA 72.3Metro AG* Germany 65.4Aldi* Germany 57.0Lidl * Germany 56.7Casino Guichard France 48.6ITM Enterprises France 39.9
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
18
The Pharma testing market is both healthy and full of potential
� The increasing complexity of clinical trials leads to increasing amounts of diagnostic procedures performed per pate nt
� Regulatory bodies (e.g. FDA) are demanding more stu dy data to improve safety
� Clinical trial processes are becoming increasingly rigorous to ensure drug efficacy
� The spend per drug trial is rapidly increasing
Need for big pharma companies to expand new drugs pipelines
Rapid technological change & increasing complexity in testing require ongoing investment in technology & expertise
Greater trial complexity & size will increase likeli hood of using CROs
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
19
Underlying trends are in tact for continued growth
� Large pharmas need to refill their product pipeline as the ‘blockbusters’ start to come off patent
� Drug development expenditures have increased substantially in recent years
� Total R&D is over USD 120bn and is expected to further increase
� Sponsors outsource drug development to:- Reduce their fixed cost base- Access competencies that they do not have in-house- Access experience and regulatory expertise in new geographies
� Growth of biotechnology industry:- Limited physical infrastructure- Lack of internal expertise
Source: Citigroup Research 18 Feb, 2014
Source: Citigroup Research 18 Feb, 2014
Global Drug R&D Spending (US$ bn)
Total R&D Spend$ 140 bn
Portion that could beoutsourced
$ 80bn
Currently Outsourced
$34bn
Global % R&D Outsourced
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
20
Eurofins Pharma Services: 6 activity groups
Genomics DiscoveryPharmacology
Pre-clinical / Early
Development
Clinical (Central
Laboratory)
PharmaProducts Testing /
cGMP QC
Registration
SequencingOligonucleotidesPharmacogenomicsTranscriptomicsGenotypingSNP-analysis
PharmacologyBioanalyticalanalysisTranslationalmedicinePhase I studies
BiomarkersBioanalysisImmunogenicityProteomicsMicrobiological and Anti-infectiveanalysisBioavailabilityBioequivalence
Impurities AnalysisStability StudiesProcessdevelopmentHygiene MonitoringPackaging analysis
Regulatory/Biocides/Chemicals/Agro-chemicals/ Ecotoxicology/Registration/REACH...
Phases
I - III Registration
Phase IV,
Surveillance, Quality Control
Basic Research, Discovery,
Combinatorial,
Biological Product Libraries, etc
Pharmacology, Exploratory
Toxicology, PK, Metabolism, etc
High-throughput-screeningMolecular-pharmacologycell-based assaysin vitro screeningin vitro profilingin vivo safetyin vivo efficacy
Spanning the entire drug development cycle
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
21
The Top 10 largest global pharmaceutical companies are all clients of Eurofins
Top 10 pharma companies
Pfizer
Sanofi Aventis
GlaxoSmithKline
Novartis
AstraZeneca
Merck & Co
Johnson & Johnson
Roche
Eli Lilly & Co
Bristol-Myers Squibb
Country
USA
France
UK
Switzerland
UK
USA
USA
Switzerland
USA
USA
Global CRO Market
USA 60%
Europe 20%
Japan 8%
Rest of World 12%
Market
BreakdownCAGR*
12%
9%
18%
14%
Source: William Blair &Co.
* 2007 – 2012est.
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
22
� Increasing demand by citizens for a clean environmen t
� EU expanding regulation (e.g. REACH)
� Increasingly long list of products identified as to xic
� Requirement for more sophisticated analyses and mor e expensive equipment
The Environmental testing market continues to grow
Rise in contamination & pollution issues
Progress in epidemiology & medicine has identified more compounds as toxic
Compels industry to increase testing and outsource internal labs
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
23
� Outdoor pollutants� Indoor and ambient
pollutants
Eurofins serves all the main environmental testing markets
SOILAIRWATER
Eurofins is the No.1 environmental testing service provider in the world*
� Drinking water and groundwater analysis
� Full range of contaminants
� Analysis of soil for full range of contaminants
Consulting and sampling companies are natural partners
Lancaster Environmental Testing is the laboratory of choice for Fortune 500
companies in the USA
* Management estimate based on available informatio n
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
24
Global trends in regulation support the business
� Strong regulated markets (EU, USA) are still amending and adding regulations
� Eastern European rules catching up with EU
� Fast development of regulation in Asia
� Regulation used for support of trading blocks (e.g. EU, NAFTA, ASEAN)
� European Food Regulation (EC)178/2002
Recently passed
� European REACH directive� US Country of Origin Labelling (COOL) law� PRC Food Safety Law in China� Food Safety Modernization Act (FSMA) in
USA
In the pipeline
� Comprehensive Review of Food Labelling Law and Policy in Australia & New Zealand
� Food imports
� Labelling (e.g. allergen, origin label, reference intakes)
� Foodstuffs (marketing standards for beverages, meat, fish, dairy products)
� Pesticides
� GMO & GM products
� Additives (vitamin & mineral fortification, flavourings, sweeteners, enzymes)
Key areas of food regulationMajor pieces of legislation
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
25
*Registration Evaluation and Authorisation of Chemicals(1): Regulation (EC) N° 1907/2006 and Directive 2006/121/EC of the European Parliament and of the Council
Metals, resins, acids, solvents, oils, fibres in textile, car
components, toys, cosmetics, plastics, rubber,
microchip, etc.
Food and drug ingredients are excluded
EU regulations a key driver for the testing industr y – e.g. REACH directive
� Listing and assessing the safety of 30,000chemical substances used by industries in Europe over 11 years
� Replacing the most dangerous ones - no chemical safety studies were conducted before 1981; only 3700 new chemicals analysed up to 2008 out of 100,000 used currently in EU
Time line
Physico-chemical properties: density, viscosity, etc.
Toxicity: skin, eye, mutagenicity, inhalation, oral,
reproductive
Ecotoxicity: invertebrates, plants, fish, birds, soil,
water, degradation
Increasing testing requirements from 2010
Objectives Examples of affected products or industries
Type of testing
Estimated cost
EUR 10bn according to the EU including EUR 1.5bn for testing over 11 years
> 1 t/ p.a.
production
> 100 t/ p.a.
production> 1,000 t/ p.a. production +
substances of very high concern
Nov 2010 May 2013 May 2018Deadlines for
registration
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
26
Outsourcing adds to market growth Examples of laboratories outsourced to Eurofins
Danish Hydrology Inst. Official water reference lab S candinavia
Suez/Sita Envirolab The Netherlands
Danish farmers association Steins’ water/environment laboratory Denmark
Southern Water Water testing laboratory UK
Lyon University Hospital Phase I Activity France
Austrian Research Institute Food testing Austria
Clermont University Mineral water analysis France
Raisio Group Food product testing Finland
Mondi Environmental, paper/pulp testing Slovakia
DLG Group Food and feed producer Denmark
Miljølaboratoriet Environmental testing network Denma rk
BASF/QTA Environmental, chemicals USA
MWH Global Environmental, water-testing USA
TÜV SÜD Dioxin Analysis Germany
Cranswick plc Food testing UK
Danone Infant and clinical nutrition analysis Germany
Company Outsourced Activity Country
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Laboratory Network Investments (1/2): Greenfield projects in high-growth markets
Food
Food, Pharma, Env
Env
Food
Ireland
Spain
Portugal
Netherlands
Food, Pharma
Pharma, Food
Food, Pharma
Food Brazil
Food
Agroscience
Food
Agroscience
Agroscience
Poland
Hungary
Czech Republic
Bulgaria
Romania
China
India
Japan
India: Food Lab profitable in year 2 of start-up
Japan: Radioactivity lab set up; and profitable in year of establishment. Strong start in Environment testing
Brazil: Food Testing profitable;Microbio MAPA audit passed
Eastern: New labs in CZ Republic and Europe Poland
Ireland: Through Lancaster acquisition market leadership position in PPT 1
reached
France: Through IPL acquisition marketleadership position reached in Environment & Water testing
Eurofins’ start-up businesses in aggregate became profitable in 2013
Operational achievementsCountry Market
Europe
Americas
Eastern
Europe
Asia
27
1 Pharma Product Testing
US Food - Microbiology
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Laboratory Network Investments (2/2): Expand / modernise laboratory sites
� 80 new/expanded modern state-of-the-art sites to en able consolidation /
closure of smaller or old sites
� Total of ca. 240,000 m 2 added or brought to most modern standards
between 2005 – 2013 (40,000 m 2 in 2013 alone)
� 100,000 m2 of additional modern laboratory surface planned for 2014-2016,
of which over 40,000m 2 planned to come on stream in 2014 alone
Kalamazoo
Vallensbaek
Hamburg
Les Ulis
Saverne
Acton
Singapore
2006 - 2008 2009
Holsterbro
Lidköping
Rotterdam
Cuneo
Washington
Huntsville
Suzhou
Nantes
Denver
Princeton
Vejen
Malbork
Major facilities : new or recently upgraded and pla nned for 2014-2016
Niefern
Ebersberg
Sao Paolo
2010
Cologne
Barneveld
Des Moines
Shanghai
Shenzhen
Tokyo
Nantes (Micro)
Ebersberg ext.
2011
Wolverhampton
Saverne, FR ext.
Glostrup, DK
Melbourne, AU
Monrovia, CA
Garibaldi, BR
Mikkeli, FI
2012 2014-2016
Romsey, UK
Freiberg, DE
Hamburg, DE ext.
Reichenwalde,DE
Vejen, DK ext
Uppsala, SE
Bangalore, IN
New Orleans, LA
Louisville, KY
St. Charles, MO
Aix-en-Provence, FR
Nantes, FR ext
Saverne, FR ext
Douai, FR ext
Les Ulis, FR ext
Moss, NO
Dungarvan, IE ext
Lancaster, PA ext.
Auckland, NZ ext
Yokohama; JP ext
Hamburg, DE ext.
Lancaster, PA ext.
Seattle, WA
Vergeze, FR ext.
Graauw, NL
Wageningen, NL
2013
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay 28
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Market Share: Eurofins is the leader in its industr y –and we continue to reach new market leadership posi tions
New Markets
= Market Entry
Denmark: Food and Env.
Brazil: Food Testing
France Environment
USA: Pharma Products Testing
Sweden, Norway: Food and Env.
Europe: Agroscience, Genomics
Japan: Genomics
Italy, Poland, Austria, Slovakia
Agri Testing Europe
Hungary, Finland
China, India, Singapore, Japan Environment
Australia, New Zealand
Global: Discovery Pharmacology
X No 1
2001 2002 2003 2004 2005 2006 2007 2008
Eurofins already has long-standing no.1 or no.2 posit ions in its main markets: Germany (Food + Env.), France (Food), Benelux (Food + Env. + Central lab)
2009 2010 2011 2012
No 1
X No 1
X No 1
X No 1
X No 1
X No 1
X No 1/3
X
X
X
2013
X
X No 1
X
X
No 1
2014
29Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
30
Eurofins’ strategy builds high Barriers to Entry
� GLP� GMP� GCP
ISO 9001ISO 17025
FDA Approved
Offering a premium quality service … ... and leveraging internal efficiencies
� Portfolio : over 100,000 reliable methods –unique in the world and ahead of competition
� Global laboratory network : fully set up for cross-selling worldwide to customers
� Accreditations : multiple international accreditations
� One-stop shop : single point of contact for compliance to regulations of many countries
� Standardised testing in 36 countries
� Sales and marketing : international teams plus dedicated key account management
� Reputation : high standards of quality and consistency - the Eurofins brand
� Internet : web-based transactions and online access to testing results increase switching costs
� Industrialising the laboratory process: rationalisation of sites and personnel
� Competence Centres : high volume laboratories providing highest levels of expertise and service
� Technology : the latest available in the market providing the most accurate results
� Economies of scale in Group purchasing and sales functions
� IT systems : cross-Group information tools and standardised production systems
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
31
� Introduction
� Market & Strategic Positioning
� Finance & Outlook
�Transaction Overview
� Summary
� Appendix
Contents
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
32
� Start-ups: 17 start ups between 2006 and 2010
� Typically losses in years 1 and 2 of about EUR 1-2m p.a. per start-up
� Initial Capex EUR 1- 3m per lab (e.g. premises, equipment)
� Upgrade existing laboratories: ca. EUR 440m invested in additional capital in 2006-2013
Heavy investment in new markets and resources for future profits
� Deploy IT systemseLIMS, eCommerce (EOL)
� Best practice lab organisation & processes
� Consolidation into large, world-class sites
� Standardised testing procedures
� Invest in state-of-the-art technology
Under development perimeter
Bringing recently acquired labs to group
standards
Building corporate resource for future size
and growth
� Recruitment of top leadership
� Additional layer of management to lead global business lines
� Central IT systems and processes(e.g. ERP, CRM)
� Additional central cost+EUR 13m 2010 vs 2005+EUR 13m 2013 vs 2010
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
33
Selective acquisitions to consolidate and secure leadership of our markets
Lancaster Laboratories (US, Europe, 2011)
IPL (France, 2011)
Nihon Kankyo (Japan, 2012)
Pan Labs (US, 2012), Cerep (France, 2013) and DDS Millipore (US, 2014)
NZ Labs (NZ, 2012) and mgt-Labmark (Australia, 2013)
Danone CLF (Germany, 2013)
Applus Agrofood Testing (Spain, 2014)
ViraCor IBT (USA, 2014)
Anatech (Brazil, 2014)
� Global market leadership in pharma products testing
� Leading position in water testing in France
� Leading position in environment testing in Japan
� Create world leader in Discovery Pharmacology
� Strengthen Asia Pacific footprint
� Outsourcing for infant nutrition analysis, demonstrating Eurofins capabilities
� Leading position serving the Spanish food & retail industry
� Leveraging Eurofins’ genomics testing capabilities to expand into new market segment
� Reinforces Eurofins’ footprint in one of the world’s fastest-growing environmental testing markets
Selected recent transactions Rationale/impact
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
� In 2013: >10 acquisitions with annual turnover ca. EUR 120m� In 9M 2014: 14 acquisitions with annual turnover > EUR 150m
On 8 December 2014, Eurofins has signed a definitive agreement to acquire Boston Heart Diagnostics Corporation(closing expected to occur early 2015)
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
34
Positive trends drive solid operating results
Adjusted – reflects the ongoing performance of the mature and recurring activities excluding “separately disclosed items”.LTM – last twelve monthsSeparately disclosed items – includes one-off costs from integration, reorganisation, discontinued operations and other non-recurring income and costs, temporary losses and other costs related to network expansion, start-ups and new acquisitions undergoing significant restructuring, non-cash accounting charges for stock options, 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 and the related tax effects.
HY 2014 HY 2013+/- %
Adjusted
ResultsEURm
Adjusted
Results
Separately
disclosed
items
Statutory
Results
Adjusted
Results
Separately
disclosed
items
Statutory
Results
Revenues 643.5 643.5 570.3 570.3 12.8%
EBITDA 109.0 -18.0 91.0 93.1 -14.8 78.2 17.1%
EBITDA Margin (%) 16.9% 16.3% 60 bp
EBITAS 76.3 -23.0 53.2 66.2 -19.4 46.8 15.2%
Net Profit 48.9 -26.3 22.6 45.2 -22.7 22.5 8.28%
Basic EPS 3.24 -1.75 1.50 3.02 -1.52 1.51 7.3%
Capex 56.9 43.0 32.4%
Op. Cash Flow 47.4 54.7 -13.3%
Net Debt 485.7 381.5 27.3%
Net debt/ LTM
Adjusted EBITDA
2.07x 1.94x NA
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Growth and Profitability are critical objectives
� 3-tiered margin support towards mid-term profitability objective
1. Start of profit contribution from start-ups
2. Proportion of companies in restructuring becoming smaller compared to the size of the Group (11.7% of total Group revenues in H1 2014 versus 12.3% in H1 2013)
3. Investments in large industrialized laboratories unlock operational leverage
� A target “cruising altitude” of >20% adjusted EBITDA margin, in addition to top line growth should ensure continued earnings and cash flow growth
35
Group Profitability Objectives ++
*E – company objectives ++ Based on stated company objectives and assumes linear acquisitions 2013-2017
10%
12%
14%
16%
18%
20%
22%
0
500
1,000
1,500
2,000
2,500
2011 2012 2013 2014E* 2017E*
Gro
up
Ad
just
ed
EB
ITD
A m
arg
in %
Gro
up
Re
ve
nu
es
Revenues from start-ups and companies in significant restructuring Mature Revenues
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
� EUR 300m hybrid bond (of which EUR 150m tap in July 2014 at 5% yield to call date (YTC))
� non-dilutive bond with perpetual maturity, callable at par by Eurofins in Jan 2020
� interest: fixed coupon of 7.00%* until first call, Euribor 3m + 818 bp thereafter if not called
Hybrid
OBSAAR
� issued June 2010
� maturity: EUR 176m across June 2015, 2016, 2017
Solid Balance Sheet
3.5 x� Net Debt/ LTM Adjusted EBITDA
Dec’13Jun’14
2.07 x
Maximum
� Net Debt (EUR m) 386.8
36
Net Debt calculation
Short-term borrowings
+ Long-term borrowings
- Cash & cash equivalents
= NET DEBT
� Total Equity (EUR m)
� EUR 170m issued in July 2011
� 5-7 year maturity; mid-swap or Euribor 6m + spread of 180-220 bp respectively
Schuldschein
1.76 x
485.7
404.3
� Cash + cash equivalents (EUR m)
297.3378.4
394.7
� EUR 300m Eurobond issued in November 2013
� Five-year maturity (Nov 2018) at an annual interest of 3.125%
Eurobond
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
lower effective cost of hybrid capital as second tranche was issued at lower YTC
*
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
2.08 x
1.86 x1.94 x
2.07 x
0.00 x
0.50 x
1.00 x
1.50 x
2.00 x
2.50 x
3.00 x
3.50 x
H1 2011 H1 2012 H1 2013 H1 2014
37
High Degree of Financial Flexibility
37
Net Debt/ LTM Adjusted EBITDA: max 3.5x
� Debt ratios remain well below covenant limits* despite EUR 147m** cash invested in the business in H1 2014 (EUR 215m cash in 2013) .
� Largely capex and acquisitions which did not fullycontribute yet in H1 2014.
� Large financial flexibility with fairly long debtmaturity
�OBSAAR issued in 2010; avg. maturity 2016�Schuldschein issued in 2011; avg. maturity 2017�Hybrid capital of EUR 300m; perpetual, callable 2020�EUR 300m Eurobond issued in 2013; maturing 2018�Extension and renewal of credit facilities
� Continued profitability improvement means that key debt ratios have remained stable despite an increase in absolute amount in Net Debt to EUR 486m from EUR 387m in December 2013.
Substantial headroom in the balance sheet
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
* NB: Gearing covenant no longer applicable
** EUR 147m cash investments = EUR 56.9m capital exp enditures + EUR 72.1m in acquisitions + EUR 18m one-off restruc turing costs and temporary losses
37
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
� EUR 864m of gross senior debt as of 30 June 2014 (n et debt of EUR 485.7m)
� More than 95% of senior debt located in Eurofins Scien tific SE (holding level)
� Main facilities in Eurofins Scientific SE:� OBSAAR bonds (issued in June 2010) : EUR 176m� Schuldschein (issued in July 2011) : EUR 170m� Eurobond (issued in November 2013) : EUR 300m� Bilateral RCF (drawn): EUR 188m
� EUR 25m of bank borrowings are secured over buildin gs and assets (in subsidiaries)
� In addition, EUR 300m Hybrid bond (considered equit y under IFRS), non-dilutive bond with perpetual maturity, callable at par by Eurofins in Jan 2020
Financing facility overview as of 30 June 2014
38
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
55.0
133.1
58.7
58.7
58.7
108.0 62.0
300.0
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
2015 2016 2017 2018
Bilateral credit lines (drawn) OBSAAR Schuldschein Eurobond
Maturity profile of senior debt at Holding level as of 30 June 2014
For private use only – Strictly confidential
Senior debt in Eurofins Scientific SE (EURm)
221.7
39
495.1
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Tangible Commitment from Internal Stakeholders
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay 40
� In July 2014, Eurofins issued118,820 warrants exclusively to its leaders
� Exercise Price €281.58
� Purchase Price €18.15
� Break-even Price €299.73
(in the money starting at €300)
� The warrants are not listed but gives access to new shares in Eurofins Scientific. The warrants are exercisable starting 01 July 2018, and valid for 10 years.
� Eurofins will have the right to accelerate the exercise of the warrants from July 2018 onwardsif the share price is above€506.84 (i.e. 180% of exerciseprice)
Upside/Downside for warrant holders
capital gain could becapped if exerciseacceleration istriggered by the company
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
41
�Food safety & contamination issues
�New regulations (e.g. FSMA, REACH)
�Outsourcing trend
�Risks due to globalisation of trade
�Vulnerability of global brands
�Scientific developments (e.g. GMOs, Biologics…. ) + new testing methods
Outlook: becoming the world leader in the bioanalyt ical testing market
�Unique technological portfolio of over 100,000 methods
�Volume scale advantage & Competence Centres
�Focus on running labs
�Global network of standardised labs
�Experience in integrating value adding acquisitions
�Recurring revenues with high switching costs and high barriers to entry
+ Key Success FactorsSustainable Market Growth Drivers
Eurofins’ unique position in a young, fast growing and fragmented market should lead to long term, sustainable profitability
= Solid Outlook
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
42
� Introduction
� Market & Strategic Positioning
� Finance & Outlook
� Transaction Overview
� Summary
� Appendix
Contents
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Terms & Conditions of the contemplated bond issue
� Issuer: Eurofins Scientific S.E.
� Issue Rating: Not rated
� Issue Size: EUR [300 m] minimum
� Currency EUR
� Maturity [7] years
� Denomination: EUR100k+1k
� Listing: Luxembourg Stock Exchange
� Type: Senior Unsecured
� Documentation: Standalone / Change of Control / Mak e Whole / Clean-Up Call
� Global Coordinator: HSBC
� Joint Bookrunners: BNP Paribas / HSBC / SG CIB
For private use only – Strictly confidential 43
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
44
� Introduction
� Market & Strategic Positioning
� Finance & Outlook
� Transaction Overview
� Summary
� Appendix
Contents
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
45
High-growth, non-cyclical markets driven by secular
mega-trends
Advancing globalisation but with very few global
testing suppliers
Fragmented competition & opportunities for
consolidation
Very recurring business; 8% - 12% historic organic
growth
High barriers to entry
Best in class technology and quality give best brand
protection
No. 1 or 2 worldwide in most business lines
Strong international presence in 36 countries
State-of-the-art laboratory infrastructure
High switching costs for clients
Good cash flow visibility
Experienced multi-national leadership
Conclusion: our sustainable competitive advantage
� Track record of profitable growth – Strong ROCE and cash flow generation potential
� ROCE* of 14.7% and ROE** of 19.1% in 2013 despite significant future-orientated investments and one-off restructuring
costs
� 5-year CAGR: EPS 30.7%, Operating Cash Flow 23.0%
� Large potential to roll out business model in fast growing economies
� Following the last intense investment cycle (2006-2010), Eurofins is well-positioned to double in size and reach EUR
2bn in revenues by 2017 whilst maintaining leadership in multiple markets and improving profitability
*ROCE = EBITAS/Average Capital Employed over previous 4 quarters **ROE = Net Profit/Equity at the beginning of the year
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
46
Appendix / Back up slides
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
� 1: Adjusted results - reflect the ongoing performance of the mature and recurring activities excluding “separately disclosed items”.� 2: Separately disclosed items - includes one-off costs from integration, reorganisation, discontinued operations and other non-recurring income and costs, temporary losses and other
costs related to network expansion, start-ups and new acquisitions undergoing significant restructuring, non-cash accounting charges for stock options, 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 and the related tax effects
EUR million Adjusted
Results 1
Separately
disclosed
items 2
Total Adjusted
Results 1
Separately
disclosed
items 2
Total
Revenues 643.5 643.5 570.3 570.3
Operating costs, net -534.5 -18.0 -552.5 -477.2 -14.8 -492.0
EBITDA 109.0 -18.0 91.0 93.1 -14.8 78.2
Depreciation and amortisation -32.7 -5.0 -37.7 -26.9 -4.5 -31.4
EBITAS 76.3 -23.0 53.2 66.2 -19.4 46.8
Non-cash stock option charges and
acquisition-related expenses, net
-7.1 -7.1 -5.3 -5.3
EBIT 76.3 -30.2 46.1 66.2 -24.7 41.5
Finance income 1.1 1.1 0.6 0.6
Finance costs -15.7 -15.7 -10.6 -10.6
Share of profit of associates 0.3 0.3 0.2 0.2
Profit before income tax 62.0 -30.2 31.8 56.4 -24.7 31.8
Income tax expense -13.0 3.7 -9.4 -11.1 1.7 -9.4
Net profit and loss for the period 48.9 -26.5 22.4 45.4 -23.0 22.4
Attributable to:
Equity holders of the Company 48.9 -26.4 22.6 45.2 -22.7 22.5
Non-controlling interests 0.0 -0.1 -0.1 0.2 -0.3 -0.1
Source: Eurofins H1 2014 Results
H1 2014 H1 2013
Consolidated Income Statement HY 2014 vs HY 2013
47
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Consolidated Balance Sheet HY 2014 vs HY 2013
EUR million H1 2014 H1 2013 EUR million H1 2014 H1 2013
Property, plant and equipment 279.8 231.1 Total shareholders' equity 404.3 360.3
Goodwill 497.6 439.0
Other intangible assets 108.9 75.2 Borrowings 790.9 438.1
Others 52.7 47.2 Others 103.1 91.6
Total non-current assets 939.0 792.5 Total non-current liabilities 893.9 529.7
Inventories 23.7 19.9 Borrowings 73.2 60.9
Trade accounts receivable 289.9 251.2 Trade accounts payable 94.8 77.6
Cash and cash equivalents 378.4 117.5 Others 231.7 203.3
Others 62.5 46.2 Total current liabilities 399.7 341.8
Total current assets 754.4 434.7
Asset classified as held for sale 4.5 4.7
Total assets 1,697.9 1,231.8 Total liabilities 1,697.9 1,231.8
Source: Eurofins H1 2014 Results
48
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014Source: Eurofins H1 2014 Results
EUR million H1 2014 H1 2013
Cash flows from operating activities
Profit before income taxes 31.8 31.8
Adjustments for:
Depreciation and amortisation 37.7 31.4
Change in net working capital -27.2 -5.4
Income tax paid -14.1 -14.6
Others 19.1 11.5
Net cash provided by operating activities 47.4 54.7
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired -72.1 -57.3
Purchase of property, plant and equipment -44.9 -34.9
Purchase, capitalisation of intangible assets -12.6 -8.3
Procees from sale of property, plant and equipment 0.5 0.3
Change in investments and financial assets, net -1.4 -1.4
Dividends by Associates 0.1 0.0
Interest received 1.1 0.6
Net cash used in investing activities -129.3 -100.9
Cash flows from financing activitiesProceeds from issuance of share capital 1.7 5.2
Proceeds from borrowings 188.4 81.4
Repayments of borrowings -12.2 -29.0
Change in hybrid capital -9.0
Dividends to shareholders and non-controlling interests 0.0
Earnings paid to hybrid capital investors -10.5 -9.7
Interest paid -6.4 -7.7
Others 0.1 0.3
Net cash provided by financing activities 161.1 31.4
Net effect of currency translation on cash and cash equivalents and bank
overdrafts
-0.4 -1.6
Net increase (decrease) in cash and cash equivalents less bank overdrafts 78.9 -16.5
Cash and cash equivalents less bank overdrafts at beginning of period 293.3 122.2
Cash and cash equivalents less bank overdrafts at end of period 372.2 105.8
Consolidated Cashflow Statement HY 2014 vs HY 2013
49
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
� 1: Adjusted results - reflect the ongoing performance of the mature and recurring activities excluding “separately disclosed items”.� 2: Separately disclosed items - includes one-off costs from integration, reorganisation, discontinued operations and other non-recurring income and costs, temporary losses and other
costs related to network expansion, start-ups and new acquisitions undergoing significant restructuring, non-cash accounting charges for stock options, 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 and the related tax effects
EUR million Adjusted
Results 1
Separately
disclosed
items 2
Total Adjusted
Results
Separately
disclosed
items
Total
Revenues 1,225.6 1,225.6 1,044.0 1,044.0
Operating costs, net -1,006.3 -30.2 -1,036.5 -867.5 -15.3 -882.7
EBITDA 219.3 -30.2 189.1 176.5 -15.3 161.2
Depreciation and amortisation -57.4 -9.5 -66.9 -45.4 -9.5 -54.8
EBITAS 161.9 -39.7 122.2 131.1 -24.7 106.4
Non-cash stock option charges and
acquisition-related expenses, net
-10.0 -10.0 -5.2 -5.2
EBIT 161.9 -49.7 112.2 131.1 -29.9 101.2
Finance income 1.1 1.1 1.5 1.5
Finance costs -24.6 -24.6 -21.2 -21.2
Share of profit of associates 0.3 0.3 0.2 0.2
Profit before income tax 138.7 -49.7 89.1 111.6 -29.9 81.7
Income tax expense -22.0 4.9 -17.2 -19.8 2.0 -17.8
Net profit and loss for the period 116.7 -44.8 71.9 91.8 -27.9 63.9
Attributable to:
Equity holders of the Company 116.8 -44.6 72.2 91.4 -25.4 65.9
Non-controlling interests -0.1 -0.2 -0.3 0.4 -2.5 -2.0
Source: Eurofins 2013 Annual Report
2013 2012
Consolidated Income Statement FY 2013 vs FY 2012
50
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Consolidated Balance Sheet FY 2013 vs FY 2012
EUR million 2013 2012
Restated
EUR million 2013 2012
Restated
Property, plant and equipment 251.1 209.3 Total shareholders' equity 394.7 372.0
Goodwill 456.4 402.7
Other intangible assets 86.4 69.0 Borrowings 666.9 383.0
Others 54.2 43.8 Others 96.7 88.5
Total non-current assets 848.0 724.8 Total non-current liabilities 763.6 471.6
Inventories 20.1 13.9 Borrowings 17.2 52.1
Trade accounts receivable 272.7 247.9 Trade accounts payable 101.0 77.8
Cash and cash equivalents 297.3 134.3 Others 220.5 187.1
Others 54.5 37.2 Total current liabilities 338.7 317.0
Total current assets 644.5 433.2
Asset classified as held for sale 4.4 2.5
Total assets 1,497.0 1,160.5 Total liabilities 1,497.0 1,160.5
Source: Eurofins 2013 Annual Report
51
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Source: Eurofins 2013 Annual Report
Consolidated Cashflow Statement FY 2013 vs FY 2012
52
EUR million 2013 2012
Cash flows from operating activities
Profit before income taxes 89.1 81.7
Adjustments for:
Depreciation and amortisation 66.9 54.8
Change in net working capital 13.8 -11.0
Income tax paid -30.5 -12.9
Others 30.1 21.6
Net cash provided by operating activities 169.3 134.2
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired -87.4 -79.3
Purchase of property, plant and equipment -79.2 -58.4
Purchase, capitalisation of intangible assets -20.3 -13.3
Procees from sale of property, plant and equipment 0.8 7.1
Change in investments and financial assets, net -4.0 -1.9
Interest received 1.1 1.5
Net cash used in investing activities -189.0 -144.3
Cash flows from financing activities
Proceeds from issuance of share capital 8.0 24.4
Proceeds from borrowings 325.3 11.7
Repayments of borrowings -83.7 -32.7
Change in hybrid capital -9.1 0.0
Dividends to shareholders and non-controlling interests -15.5 -12.1
Earnings paid to hybrid capital investors -9.7 -12.1
Interest paid -21.4 -19.9
Net cash provided by financing activities 194.0 -40.7
Net effect of currency translation on cash and cash equivalents and bank
overdrafts
-3.2 -0.8
Net increase (decrease) in cash and cash equivalents less bank overdrafts 171.1 -51.5
Cash and cash equivalents less bank overdrafts at beginning of period 122.2 173.7
Cash and cash equivalents less bank overdrafts at end of period 293.3 122.2
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Eurofins has vastly outperformed the market since its IPO and each of its 3 equity offerings (based on share price of EUR 212.05 as of 31 December 2014)
1997 € 5m
1998rights issue€ 6m
SPO 1
1999rights issue€ 7m
SPO 2
2000 SPO
€ 38.5m
SPO 3
Eurofins: +11,484% (32% CAGR)CAC 40: +54% (3% CAGR)SBF 120: +78% (3% CAGR)
S&P 500: +135% (5% CAGR)
Eurofins: +2,593% (23% CAGR)CAC 40: +20% (1% CAGR)SBF 120: +39% (2% CAGR)S&P 500: +93% (4% CAGR)
Eurofins: +2,670% (25% CAGR)CAC 40: -9% (-1% CAGR)SBF 120: 5% (0% CAGR)
S&P 500: +59% (3% CAGR)
Eurofins: +393% (12% CAGR)CAC 40: -32% (-3% CAGR)SBF 120: -20% (-2% CAGR)S&P 500: +49% (3% CAGR)
Eurofins: +1166% (29% CAGR)CAC 40: +12% (1% CAGR)SBF 120: +24% (2% CAGR)S&P 500: +70% (5% CAGR)
10 years
Since SPO 2
Since SPO 1
Since IPO
Since SPO 3
2 years
Eurofins: +73% (32% CAGR)CAC 40: 17% (8% CAGR)
SBF 120: 20% (10% CAGR)S&P 500: +44% (20% CAGR)
5 yearsEurofins: +455% (41% CAGR)
CAC 40: 9% (2% CAGR)SBF 120: 18% (3% CAGR)
S&P 500: +85% (13% CAGR)
Total equity raised in 4 offerings: only EUR 56m
53
IPO
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
Eurofins has generated comparable organic growth to its larger peers which have deeper footprint in fast-growing emerging markets and in cyclical areas
Source: Eurofins, Company websites
In spite of its lower cyclicality, Eurofins generat es comparable organic growth to its larger peers in ea ch cycle, and higher growth when the economy slows
H1 2014
TICS ex ERF = SGS, Intertek, Bureau Veritas* Includes 2% organic growth consensus estimate for Bureau Veritas for H1 2014
54
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
We have built a hard-to-replicate world-class infrastructure
Eurofins has been consistently investing more than its peers
Source: Eurofins, Company reports
0%
10%
20%
30%
40%
50%
60%
70%
80%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
00-'04 05-'08 09-'10 2010 2011 2012 2013
Exc
ess
In
ve
stm
en
t
Ca
pe
x to
Sa
les
ERF TICS ex ERF Excess investment
TICS ex ERF = SGS, Intertek, Bureau Veritas
55
Source presentation EDR: 1-C-IR-PRE-01187643Source modification date: 07/08/2014
56
Post acquisition and integration into Eurofins, bot h sales and profits increase significantly
Illustration
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Annual Sales / million
Acquired by
Eurofins
CAGR19%
EBITA margin in % of sales
<8% >20%
Growth drivers post acquisition:
1) Sales increase through cross selling of Eurofins lab specialities internationally
2) Cost reduction – focus on most frequently performed tests
Frequency(e.g. no. of
tests per day)
No. of tests offered
100
Prior to acquisition
50% 50%% of employees performing tests
Can be subcontracted to specialised Eurofins laboratories after acquisition
400
Focus and scale drive profitability
Actual example of an acquired lab:
100
50
500
Company A
Title: Eurofins Corporate Presentation H1 2014 Document name: H1 2014.ppt EDR: 1-C-IR-PRE-01187643 Document owner: Pamela Antay