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Media Centre >> Press Releases 2015 >> 2015-03-02

Eurofins exceeds all its 2014 objectives with another strong set of results

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Monday, March 2, 2015

2014 Highlights

  • Revenues grew 15% to EUR 1,410m on organic growth of around 6% for the full year (around 7.5% excluding acquisitions in significant restructuring).
  • Adjusted EBITDA rose 19% to EUR 260m with adjusted EBITDA margin expanding 60bp to 18.5% compared to 17.9% in 2013. The mature perimeter, comprising more than 88% of Group revenues, achieved an EBITDA margin of 20.9%.
  • 25% increase in Operating Cash Flow to EUR 212m reflecting higher profits and successful management of working capital to 4.3% of sales, exceeding annual objective of 5% NWC/Sales, resulted in Free Cash Flow of EUR 51m for 2014 (+10% versus 2013) in spite of very heavy investments in 2014 in the lab network and bond funding for future growth.
  • 17 acquisitions completed in 2014 with total annualized revenues in excess of EUR 165m versus an objective of EUR 120m and more than double profitability level versus 2013 acquisitions.
  • 60,000m2 of world class laboratory surface added in 2014, well ahead of the Group's plan of 40,000m2 for theyear.
  • The proportion of start-ups and businesses that are in significant restructuring has been reduced from 12.6% in 2013 to 11.8% of total Group revenues in 2014. Associated costs and losses from companies in significant restructuring have been reduced from 13.8% of EBITDA generated by the mature businesses in 2013 to 11.7% in 2014.  The objective is for significant acceleration of this reduction starting 2015, following completion of the Group's heaviest restructuring programs in 2014 (e.g. IPL and Central Laboratory).
  • Balance sheet remains strong and financial flexibility maintained with net debt to adjusted EBITDA of 1.90x.
  • Proposed 10% increase in dividends to EUR 1.32 per share.
  • 2015 objective to exceed EUR 1.6bn in revenues and EUR 300m in adjusted EBITDA.

Table 1: Summary of FY 2014 results

Adjusted Results*  EURm (unless otherwise stated)

2014

2013

Change

Revenues

1,410

1,226

+15%

EBITDA3

260

219

+19%

Net Profit

128

117

+10%

Basic Earnings per share6 (EUR)

8.47

7.79

+9%

Operating Cash Flow7 (Reported)

212

169

+25%

 

 

 

 

Proposed Dividend per share (EUR)

1.32

1.20

+10%

*Adjusted for Separately Disclosed Items (SDI) as described in the notes at the end of the press release.

Comment from Dr. Gilles Martin, CEO:

"I am pleased to report Eurofins' strong performance in 2014. Organic growth remained above Group objectives despite economic headwinds in some of the regions where we operate, and the temporary impact of some of our reorganization initiatives. In the second of Eurofins' five-year growth programme to build a world class high-growth, highly-defendable business, Eurofins has achieved or exceeded all its operational and financial objectives. This allows us to remain very confident that the Group should be able to deliver on its 2017 objectives. 

These strong results reflect the benefits of our continuous investments into our network. The EUR 453m total cash that we have invested in the business in 2014 for acquisitions (EUR 292m), capital expenditures (EUR 131m) start-ups and restructuring programmes (EUR 30m), reflect our commitment in creating unmatched efficiencies and offering portfolio and securing long-term competitive advantages for all our businesses.

The profitability improvements despite investments that have temporary dilutive impact demonstrate the continued strengthening of the profitability of our mature businesses. In the next couple of years, we intend to continue to execute on our plans to further strengthen Eurofins' competitive advantages and secure long-term leadership in the markets we are active in.

In view of the satisfactory financial performance and prospects of the Company, the Board of Directors proposes to raise the amount of dividends paid out to shareholders by 10% to EUR 1.32 per share.

For 2015, Eurofins' objective is to exceed EUR 1.6bn of revenues and EUR 300m in adjusted EBITDA. Longer-term, I remain confident that the Group should be able to achieve its objectives of at least EUR 2bn in revenues and 20% adjusted EBITDA margin by 2017."

Business Review

The following figures are extracts from the Consolidated Financial Statements and should be read in conjunction with the Consolidated Financial Statements and the accompanying notes.

Table 2: Full Year 2014 Results Highlights

 

FY 2014

FY 2013

+/- % Adjusted Results

In EUR m except otherwise stated

Adjusted1 Results

Separately disclosed items2

Statutory Results

Adjusted Results

Separately disclosed items

Statutory Results

Revenues

1,410.2

 

1,410.2

1225.6

 

1225.6

+15.1%

EBITDA3

260.4

-30.4

230.0

219.3

-30.2

189.1

+18.8%

EBITDA Margin (%)

18.5%

 

 

17.9%

 

 

+60 bp

EBITAS4

189.9

-41.2

148.7

161.9

-39.7

122.2

+17.3%

EBITAS Margin (%)

13.5%

 

 

13.2%

 

 

+30 bp

Net Profit5

128.2

-49.1

79.1

116.8

-44.6

72.2

+9.8%

Basic EPS6 (EUR)

8.47

-3.25

5.23

7.79

-2.97

4.81

+8.8%

Operating Cash Flow7

 

 

212.2

 

 

169.3

+25.3%

 

 

 

 

 

 

 

 

Capex

 

 

131.2

 

 

98.7

 

Net Debt

 

 

493.6

 

 

386.8

 

Leverage Ratio (net debt/adjusted EBITDA)

 

1.90x

 

 

1.76x

 

N.B. H2 2014 results can be found hereafter.

Revenues

Revenues increased by 15.5% in the fourth quarter to EUR 396.6m, driving full year 2014 revenues up 15.1% to EUR 1,410.2m. The strong negative currency impact in the first half of the year was partially reversed in the second half, with currency translation impact for the full year of -1%. In 2014, the Group generated organic growth of around 6%, whilst the organic growth of companies not in significant restructuring stood at around 7.5%.

The majority of markets where Eurofins is active remain buoyant, as reflected in the Group's strong performance across most of its businesses. Variations in the Group's results were largely driven by its own initiatives in specific markets and businesses to secure or strengthen its long-term competitive advantages.  The food testing business continues to be supported by increasing market volumes, and the Group's ability to gain market share due to its large past investments in this business. Results from Eurofins' environmental testing business is somewhat influenced by the slower economic activities in certain parts of Europe, strong comparable results in the previous year due to the Mayflower oil spill incident in the US, and the IPL restructuring, which was completed at the end of the year, but for which impact on revenues was still evident for the full year 2014. In the pharma testing business, Eurofins continues to gain traction due to the Group's unparalleled operational footprint. Developments in the pharmaceutical industry (e.g. biologics and biosimilars), as well as market share gains, underpinned the strong performance in pharma products testing. Likewise, the Group's genomics business remains supported by demand especially from its newest range of services. Eurofins' discovery services business remains somewhat affected by the ongoing integration programme being implemented to optimize the combination of the three leading global players in this niche market (DDS Millipore acquired in January 2014, Cerep in 2013, and Panlabs in 2012), whilst the impact of the reorganization of the Group's central lab operations, which was finalized at the end of the year, is still evident in the results for the year.  

Eurofins is further ramping up its footprint in the US, where revenues rose 29.6% to EUR 356.9m, and which now makes up over 25% of total revenues. The Group completed a modern, large southern food testing hub in New Orleans, and launched the construction of 4 additional food testing laboratories across the country to strengthen its position in the US food testing market, which is supported by regulatory tailwinds, as well as Eurofins' own growing scale. Likewise, Eurofins continues to expand its environmental testing activities in the US, further boosting its footprint with the acquisition of Calscience and UL's water testing business in 2014. The Group's US pharmaceutical testing business benefits from steady growth in traditional biopharmaceutical testing market, as well as increased volumes from new pharmaceutical developments. In addition, Eurofins entered the specialty diagnostics market in July 2014 with the acquisition of ViraCor-IBT, one of the largest independent laboratories servicing the specialty diagnostic market segment focused on helping physicians treat time-sensitive transplant patients, and further enhancing the Group's capabilities in pharmaceutical testing. 

Revenues from Germany, the Group's second largest market generating 16.7% of total revenues, grew 11.5% to EUR 236.1m. Contribution from outsourcing activities, in addition to continued acceleration in market share gains, have resulted in organic growth well above the Group's objective, demonstrating the benefits of scale, and our ability to grow even in a mature market.  Revenue contribution from France, the Group's third largest market was EUR 226.5m in 2014 (16.1% of total revenues). Strong growth in food testing driven by continued market share gains, contract wins such as the 3-year agreement with Burger King to provide the fast-food chain the most advanced food safety control program in the country, in addition to positive trends in some areas of pharma testing, as well as in other areas of environmental testing (namely air and soil testing), partially offset the impact of the IPL restructuring.     

The consolidation of 5 sites into one large site in Denmark, which was finalised in October, as well as negative currency impact in the Nordic region, were reflected in the revenue contribution from the region, the Group's fourth largest market with revenues of EUR 160.9m in 2014. Going forward, the Group believes that the efficiency gains from the recent site consolidation and optimization programme should allow the Group to further grow its market share and its new markets in the region, such as its recently-developed agro and feed testing business.

Revenues from the Benelux were EUR 144.3m, representing growth of 27.2%, as Eurofins continued to strengthen its leading position in food and environmental testing markets with the acquisition of KBBL and Omegam at the beginning of the year. In the UK, where Eurofins' expanded food testing footprint continues to gain ground, revenues were EUR 77.8m on organic growth in excess of the Group's objective. Finally, Eurofins' growing scale in emerging markets and the Asia Pacific region is reflected in their revenue contribution remaining at over 10% of total sales despite rapid growth and many acquisitions across most of the Group's other markets.

In summary, the strong performance in most of Eurofins' businesses mitigated the negative impact of restructuring of some of the businesses that once completed, will provide the Group even greater scale and efficiency, as well as unparalleled competitive advantages.

Profitability

In 2014, group adjusted EBITDA rose 18.8% to EUR 260.4m, implying a 60bp adjusted EBITDA margin expansion to 18.5% despite the inclusion of start-ups which only recently became profitable, and of recent acquisitions that are not yet at the Group's profitability level.

The mature businesses of the Group, i.e. excluding start-ups and acquisitions in significant restructuring, achieved an EBITDA margin of 20.9% on revenues of EUR 1,243.5m for the full year 2014. In 2013, the Group's mature businesses had generated an EBITDA margin of 20.5% on revenues of EUR 1,071.5m. The margin expansion of the mature businesses in 2014 is notable given that the companies that have recently been upgraded to the mature perimeter (start-ups and acquisitions made over the past two years that are no longer in restructuring) are still diluting the margin of that perimeter. Furthermore, the proportion of start-ups and businesses that are in significant restructuring has been further reduced from 12.6% of Group revenues in 2013 to 11.8% in 2014. Going forward, it is Eurofins' objective that this proportion should further decrease as the bulk of the significant restructuring has been completed, and as the mature perimeter continues to grow, as well as new acquisitions on average being increasingly profitable and requiring minimal integration work.

Separately disclosed items (SDI) for the full year 2014 remained at the same level as the previous year at EUR 30.4m, which implies significant improvement in H2 2014 to EUR 12.4m, compared to EUR 18.0m in H1 2014, which as previously reported was the peak of the exceptional costs from the Group's various restructuring programmes. Of the EUR 30.4m in SDI, EUR 20.8m were one-off costs directly related to restructuring such as redundancies and site closures at IPL (restructuring), Denmark site consolidation (5 sites into 1), Central Lab site relocation and Discovery Services integration; the first three of which have been completed in 2014. The remaining EUR 9.6m of the SDI relates to the temporary losses from start-ups and businesses in significant restructuring, and shows a significant improvement from a loss of EUR 9.2m in H1 2014 to EUR 0.4m in H2 2014.   

With the largest part of the restructuring now behind the Group, the management believes that these businesses now have the optimal cost structures relative to their operational footprint in the case of IPL and Central Lab, or a strong platform for further long-term efficiency gains, in the case of Denmark. Most notably, IPL should now have a fixed cost structure closer to the size of its addressable market, as well as a harmonized IT and common sales platform that provides it a strong competitive advantage to be the laboratory partner of choice for water testing in France.

As communicated previously, and in-line with its 2017 objectives, Eurofins continues to position itself in markets where the Group sees current or potential tangible growth opportunities. In addition, Eurofins intends to continue investing in its existing network, to maximize efficiencies, and ensure long-term profitability. To benefit from the growth in the US, in food testing (driven by regulatory catch-up), in pharma testing (driven by product and market developments) and environmental testing (driven by consolidation), Eurofins is rolling-out new laboratories or implementing site consolidations. In Europe, to further accelerate market share gains by leveraging its scale, Eurofins is opening up several new sites across the region, and at the same time consolidating several small laboratories into newly-expanded sites to streamline and optimize efficiencies or maximize synergies across our businesses.

However, going forward, although the Group still has limited site consolidations and reorganization programmes for the next couple of years, and a few businesses that are in restructuring or start-up mode, management aims for its separately disclosed items (i.e. associated one-off charges) to continue to decrease significantly relative to the EBITDA generated by the core profitable businesses of the Group.

Despite the Group's ongoing restructuring and reorganization programmes, reported EBITDA grew 21.6% to EUR 230m, with reported EBITDA margin expanding 90 bp to 16.3%, demonstrating that the profitability of the core mature businesses is sufficiently strong to enable the Group to invest for future growth and efficiency gains and still deliver earnings improvements.

Depreciation and amortization charges increased by 21.5% to EUR 81.3m, in-line with the recent uptick in capital expenditures. The significant increase in non-cash accounting charges is due to employee stock options[1] related to the appreciation of Eurofins' share price and the issuance of a new plan in 2014, and to the accounting treatment of amortization of intangible assets related to acquisitions[2], in addition to the increase in acquisition investments due to the increased volume of transactions, resulted in a negative impact of EUR 6.9m versus 2013. Interest costs for 2014 increased 31.1% to EUR 30.7m primarily due to higher debt amount following the issuance of the Group's inaugural Eurobond of EUR 300m in November 2013 to generate a cash reserve for future years, partially mitigated by lower interest rates. Income tax expense increased 29% to EUR 22.2m on effective tax rate of 21.9%, compared to 19.3% in 2013.

Adjusted net profit for the year was EUR 128.2m, a 9.8% increase from the previous year whilst adjusted EPS stood at EUR 8.47.  Despite the start-up and reorganization investments, as well as only partial consolidation of the companies acquired in 2014, reported net profit still increased by 9.6% to EUR 79.1m, and basic EPS by 8.6% to EUR 5.23. The earnings attributable to equity shareholders show a 45.5% increase to EUR 5.15 per share, as the benefit from the lower coupon on the hybrid bond issued in January 2013 is fully reflected in 2014, as well as the positive one-off impact of the premium received from the hybrid bond tap in July 2014, which was issued above par value.  

Cash Flow and Financing

The 13.8% increase in pre-tax profit to EUR 101.3m, despite the multiple investments that the Group is undertaking that may be temporarily dilutive, in addition to the successful management of net working capital to 4.3% of sales (versus 5% NWC/Sales annual objective), resulted in a 25.3% increase in operating cash flow for the Group, to EUR 212.2m in 2014.

Capital expenditures in 2014 stood at EUR 131.2m, as the Group's laboratory expansion and modernization plans have progressed faster than planned, with 60,000m2 of lab surface delivered versus 40,000m2 planned in 2014,  as well as an acceleration in the Group's investments in IT systems deployment. Despite the significant uptick in capital expenditures and higher interest payments, Free Cash Flow8 still expanded by 10.2% to EUR 51.1m in 2014, due mostly to the strong growth in the Group's operating cash flows.

During the year, the Group further optimized its funding position by a EUR 150m tap on its existing hybrid bond, extending the Group's hybrid bond capital to EUR 300m. The tap was issued above par, with a yield to call date of 5%, effectively lowering the average cost of Eurofins' hybrid capital down to 6.0%. At the end of December 2014, net debt was EUR 493.6m. In spite of the significant level of capital expenditures and acquisitions in 2014, the Group's leverage ratio stood at 1.90x net debt/adjusted EBITDA compared to 1.76x in 2013, and remains well below its covenant limit of 3.5x.

Business Developments

Acquisitions & Outsourcing

Eurofins completed 17 acquisitions in 2014 either to strengthen its leadership in existing markets or enter new segments within the Group's competencies. In February, Eurofins acquired KBBL, one of the leading food and water testing service providers in The Netherlands, and a reference laboratory for meat testing. KBBL is a strategic fit for Eurofins both in operational competence, and geographic location. The acquisition provides Eurofins access to the domestic meat testing market, and allows KBBL to further develop this competence. In addition, KBBL's competence in drinking water testing reinforces Eurofins' leadership in this market.  Also in The Netherlands, in March, Eurofins acquired Omegam one of the leading independent laboratories in the country for environmental testing. Formerly Amsterdam's water quality control board, Omegam reinforces Eurofins' leadership in the environmental testing market in the Benelux, and strengthens the Group's service offering to cover the full spectrum of water analysis, specifically in helping clients comply with the EU Water Framework Directive, a current industry priority ahead of the 2015 deadline for progress report.

Also in March, Eurofins announced the acquisition of Applus Agrofood Testing[3], from Applus Servicios Tecnológicos S.L.  Applus Agrofood Testing has a high penetration of the largest consumer goods retailers in the Spanish market, and is a local reference laboratory in agro-environmental testing, with specific competence in pesticides testing. The acquisition allows Eurofins to expand its footprint and extend its current activities to a leading position in the Spanish food testing market. In the same month, Eurofins acquired the food and environmental testing laboratory of Maintpartner Group in Finland, providing Eurofins inroads with the largest customers in the agro-chemical and food industries. Furthermore, the laboratory's strategic location gives Eurofins access to the Kokkola Industrial Zone, one of the Baltic Sea region's fastest-growing ports. In April, Eurofins acquired the consumer and municipal water testing business of UL (Underwriters Laboratories), bringing together the top two laboratories with the highest volume of US Environmental Protection Agency (EPA) Unregulated Contaminant Monitoring Rule 3 (UCMR3) program contracts. The acquisition reinforces Eurofins' position as the premier laboratory in the US serving the UCMR3 needs of the EPA. In May, Eurofins acquired Calscience, the largest independent full-service environmental testing laboratory on the West Coast. Calscience strengthens the Group's position as the premier provider of analytical testing services for the environment.

In July, Eurofins entered the specialty diagnostic testing market with the acquisition of ViraCor-IBT (VIBT), one of the largest privately-held independent laboratories servicing the specialty diagnostic market segment focused on helping physicians treat time-sensitive transplant patients in the US. VIBT also significantly enhances the Group's capabilities in pharmaceutical testing, and allows Eurofins to leverage its renowned competence in genomic testing.

Also in July, Eurofins acquired Analytical Technology (Anatech), one of the leading environmental testing service providers in Brazil. Anatech is one of the leading laboratories for water, air and soil testing, as well as for oil geochemistry analysis in the country, and provides Eurofins a strong position in one of the fastest-growing environmental testing markets in the world, as well as inroads to the large industrial clients in Brazil.

In December, Eurofins signed an agreement to acquire Boston Heart Diagnostics Corp. (Boston Heart) in the US. Boston Heart is one of the leading diagnostics companies specialized in cardiovascular diseases using proprietary diagnostics. Boston Heart strengthens Eurofins' clinical testing and genomic service offering, and expands the Group's operating footprint, test portfolio and client reach into promising growth areas. Boston Heart will be consolidated in the Group's financial statements from the 1st of February 2015.

Eurofins also completed a host of smaller acquisitions that either provide the Group with specific technical know-how or increased market share. All together, the acquisitions completed in 2014 have combined total annual revenues in excess of EUR 165m and are significantly more profitable than those completed in previous years.

Infrastructure

The Group continues to invest massively in its laboratory network to strengthen and expand its market leadership in food, environment and pharmaceutical testing. In 2014, Eurofins added 60,000m2 of modern laboratory surface to its network as it adds capacity in high-growth markets, and consolidates some small laboratories into fewer, but larger industrialized sites that should provide greater efficiency and economies of scale.  

In 2014, Eurofins completed the move of its central laboratory business from Washington DC to its campus in Lancaster, PA following the completion of the 7,250m2 extension, bringing the total laboratory surface there to almost 30,000m2. The move not only provides the central lab business a better platform to showcase to large pharmaceutical clients the Group's capabilities in the world's largest single-site independent laboratory, but also results in savings longer term given the lower costs in that part of the country. Part of the extension in Lancaster also houses a new, modern food testing laboratory that serves as a hub for food microbiology testing activities in the northeast US.  In New Orleans, Eurofins has moved to its recently completed laboratory with double the capacity of the older facility with over 4,000m2 of lab surface. The new site serves as the Group's food testing hub in the southeast of the country and a competence centre for contaminants testing.

In Europe, Eurofins completed the consolidation of 5 small laboratories into 1 large site in Vejen, Denmark for its food and environmental testing activities in October, 2014. The Group has also launched a programme to combine several small laboratories in the Benelux region into 1 large site in The Netherlands and another large site in Belgium. In Germany, several multi-building or multi-location laboratories are being consolidated into our large single-site campus in Hamburg. In Sweden, 2 laboratories are being combined into 1 larger site in Uppsala.

In the Asia Pacific region, Eurofins completed the comprehensive upgrade and re-design of 7,300m2 of laboratory surface of its recently-acquired laboratories in Australia and New Zealand. The Group is also completing the construction of 2 laboratories in Queensland and Christchurch, NZ. 

Between 2015 and 2017, the Group has plans for another 100,000m2 of modern laboratory surface, of which around 40,000m2 is expected to come on stream in 2015. These programs include both upgrade and modernization of laboratory surface to consolidate smaller laboratories into large, industrial facilities with higher automation, greater efficiencies and ultimately higher profitability, as well as construction of new facilities in high-growth markets.

Post-closing events:

In January 2015, Eurofins successfully raised EUR 500m in its second senior unsecured Euro bond public issuance. The bonds have a seven-year maturity (due 27 January 2022) and will bear an annual coupon of 2.25%.

At the end of January, the transaction to acquire Boston Heart Diagnostics Corp. (Boston Heart) in the US, announced in December 2014, successfully closed. 

In February, Eurofins announced the acquisition of BioDiagnostics Inc., one of the leading seed and plant-tissue testing laboratories serving the agricultural industry in the USA.

2015 Outlook:

The management of Eurofins is positive about the outlook for 2015, and has set objectives for the Group to generate in excess of EUR 1.6bn of revenues and EUR 300m in adjusted EBITDA. More importantly, the Group maintains its mid-term objectives of reaching at least EUR 2bn in revenues and 20% adjusted EBITDA margin by 2017.

Table 3: H2 2014 Results Highlights

 

H2 2014

H2 2013

+/- % Adjusted Results

In EUR m except otherwise stated

AdjustedResults

Separately disclosed items

Statutory Results

Adjusted Results

Separately disclosed items

Statutory Results

Revenues

766.7

 

766.7

655.3

 

655.3

+17.0%

EBITDA

151.4

-12.4

139.0

126.2

-15.3

110.8

+20.0%

EBITDA Margin (%)

19.8%

 

 

19.3%

 

 

+50 bp

EBITAS

113.6

-18.2

95.5

95.7

-20.3

75.4

+18.7%

EBITAS Margin (%)

14.8%

 

 

14.6%

 

 

+20 bp

Net Profit

79.3

-22.7

56.5

71.6

-21.9

49.7

+10.8%

Basic EPS

5.24

-1.50

3.74

4.77

-1.46

3.31

+9.8%

 

Table 4: Separately disclosed items

FY & HY  Separately disclosed items:

H1 2014

H2 2014

FY 2014

H1 2013

H2 2013

FY 2013

One-off costs from integrations, reorganisations and discontinued operations, and other non-recurring costs

8.8

12.0

20.8

4.5

11.2

15.7

Temporary losses and other costs related to network expansion, start-ups and new acquisitions in significant restructuring

9.2

0.4

9.6

10.4

4.1

14.5

EBITDA impact

18.0

12.4

30.4

14.8

15.3

30.2

Depreciation costs specific to start-ups and new acquisitions in significant restructuring

5.0

5.7

10.7

4.5

5.0

9.5

EBITAS impact

23.0

18.2

41.2

19.4

20.3

39.7

Non-cash accounting charges for stock options, impairment of goodwill, amortisation of acquired intangible assets, negative goodwill as well as income from unused amounts due for business acquisitions

7.1

9.7

16.9

5.3

4.7

10.0

Tax effect from the adjustment of all separately disclosed items

-3.7

-5.3

-8.9

-1.7

-3.2

-4.9

Non-controlling interests of separately disclosed items

-0.1

0.1

-0.0

-0.3

0.1

-0.2

Total impact on Net Profit

26.3

22.7

49.1

22.7

21.9

44.6

Impact on EPS

1.75

1.50

3.25

1.52

1.46

2.97

 

1 Adjusted - reflects 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. (Details in Note 2.3 of the Annual Report)

3 EBITDA Earnings before interest, taxes, depreciation and amortisation, 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 unused amounts due for business acquisitions.

4 EBITAS - Earnings before interest, taxes, 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 unused amounts due for business acquisitions.

5 Net Profit - Net profit for equity holders after non-controlling interests but before payment to Hybrid holders

6   Basic EPS - earnings per share before payment of dividends to hybrid holders

7 Operating Cash Flow - net cash provided by operating activities after income taxes paid

8 Free Cash Flow -Operating Cash Flow, less interest and cash used in investing activities (but excluding acquisition payments)

For details of the FY 2014 results, including consolidated financial statements and related notes, please visit: /en/investor-relations/reports-presentations.aspx

For more information, please visit www.eurofins.com or contact:

Eurofins Investor Relations

Phone: +32 2 766 1620

E-mail: ir@eurofins.com

Notes for the editor:

Eurofins - a global leader in bio-analysis

Eurofins Scientific is the world leader in food and pharmaceutical products testing. It is also number one in the world in the field of environmental laboratory services and one of the global market leaders in agroscience, genomics, discovery pharmacology and central laboratory services.

With over 17,000 staff in around 200 laboratories across 36 countries, Eurofins offers a portfolio of over 130,000 reliable analytical methods for evaluating the safety, identity, composition, authenticity, origin and purity of biological substances and products. The Group provides its customers with high-quality services, accurate results in time and expert advice by its highly qualified staff.

Eurofins is committed to pursuing its dynamic growth strategy by expanding both 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 and the most comprehensive range of testing methods.

As one of the most innovative and quality oriented international players in its industry, Eurofins is ideally positioned to support its clients' increasingly stringent quality and safety standards and the expanding demands of regulatory authorities around the world.

The shares of Eurofins Scientific are listed on the Euronext Paris Stock Exchange (ISIN FR0000038259, Reuters EUFI.PA, Bloomberg ERF FP).

 

Eurofins provides in the Income Statement certain non-IFRS information ("Adjusted Results and Separately Disclosed Items") that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. (Refer to description of Separately Disclosed Items).

In addition, Eurofins shows the following two earnings measures in the Income Statement with the objective to be close and consistent with the information used in internal Group reporting to measure the performance of Group companies and information published by other companies in the sector:

EBITDA:Earnings before interest, taxes, depreciation and amortisation, 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 unused amounts due for business acquisitions" and,

EBITAS:Earnings before interest, taxes, 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 unused amounts due for business acquisitions"

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 but excluding discontinued operations.

Organic growth excluding businesses in significant restructuring - non-IFRS measure based on the same calculation as for organic growth as defined above, but excluding businesses in significant restructuring (mainly IPL, Central laboratory and Discovery Services) as defined for the Separately Disclosed Items.

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 from 1st January Y-1. All revenues from businesses acquired since 1st January Y are excluded from the calculation. 

Management believes that providing this information enhances investors' understanding of the company's core operating results and future prospects, consistent with how management measures and forecasts the company's performance, especially when comparing such results to previous periods or forecasts and to the performance of our competitors. This information should be considered in addition to, but not in lieu of, information prepared in accordance with IFRS.


 

[1] According to IFRS 2

[2] According to IFRS 3 and IAS36R

[3] Transaction closed in May, 2014

 

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 judgement of Eurofins Scientific’ 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 guarantee can be made as to their validity.