Eurofins continues to grow revenues and make progress in bringing up to standard its Under Development activities

Q1 2009 Press Release

May 14, 2009

The first quarter has shown that in otherwise uncertain and volatile times, Eurofins is proving to be more than resilient, showing continued underlying growth. In spite of adverse currency effects and discontinued activities revenues have increased to €148.2m (Q1 2009) from €139.6m (Q1 2008), EBITDA has remained constant at €10.7m and EBITAS* is in line with overall expectations at €1.6m for Q1 2009 compared to €2.5m for Q1 2008.

The Q1 results are always the weakest of the four quarters. This was accentuated in 2009 by the impact of unusually severe weather in Europe on the Environmental business, making the testing of frozen or snow-covered soil and water almost impossible. There was also a degree of postponement of projects in the Pharma division. As organic growth was still over 5% it is too early to make judgements on any underlying short-term trends in Eurofins’ markets. For the moment there is no reason to change expectations and certainly the number of food and health issues and new regulations around the world continues to grow.

A major area for focus in 2009 will be to continue the bringing up to Group standards of the Under Development perimeter.  In its new scope (21% of Group revenues in Q1 2009) it reported a loss of -€5.8m in the first quarter, an improvement from -€6.2m for Q1 2008. Even at the current run-rate that would represent good progress from 2008 and the turn-around projects are going ahead as planned and on schedule. At the same time the Up to Standards perimeter reported good growth, at 8.8%, but as usual profitability in the quarter represents only a small proportion of expected full-year results.

In the cash flow statement Capital expenditure (€10.9m Q1 2009, €10.7m Q1 2008) was in line with full year expectations as the Group completes its current investment programme. Planned capex for 2009 is significantly below 2008 levels as a percentage of revenues (8.7% in 2008), so the Group should derive significant cash flow benefits over the course of the year. On the Balance Sheet the financing position is still comfortable, with the cash balance at €104.2m and covenants with lots of head room: Net Debt/EBITDA 2.2x and Net Debt/Equity 0.8x.  Net debt at 31 March was €171.8m compared to €158.1m at 31 Dec 2008.

In summary, the first quarter is too minor to be considered meaningful. The feedback from the markets suggests that organic growth will continue to be positive in 2009 and the progress in margins will be driven by the improvements in the Under Development perimeter and that is going according to plan. The Eurofins Group considers itself well-oriented, internally and externally, to make excellent progress in the long term.  

*EBITAS – earnings before interest, tax, amortisation of intangible assets and non-cash charge for stock options 

For further information please contact:

Investor Relations

Phone:     +32-2-769 7383

E-mail:     ir@eurofins.com 

Notes for the editor:

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