Eurofins beats own target, continues on impressive trajectory
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Eurofins beats own target, continues on impressive trajectory

Eurofins Scientific, the world-leading laboratory group that services the pharmaceutical, food and water testing, and environmental, industries, has reported strong results for 2017, beating its own predictions. The company has been growing consistently for years, and for the most part, the share price has followed suit. The trend continued this week, as investors – liking what they saw – sent the company’s value up by 5% on Tuesday morning.

Over the last 5 years, Eurofins has been on positive growth trajectory, seeing its share price appreciate by almost 190%

graph 0803 eurofins

SOURCE: Yahoo Finance

The company reported organic growth for full year 2017 of nearly 6% year on year - increasing to 7% (adjusted to take the impact for public working days into account) in the fourth quarter. This came in above the company’s target of 5%. Adjusted earnings before interest tax deductions and amortization (EBITDA) was €557 million for the full year, resulting in a margin of 18.7%.

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Source: Eurofins Scientific 2017 Annual Report

Dominion Investment Manager Christian Cole praised “Eurofins’ ability to grow organically at a solid run-rate while also leveraging its scale in a fragmented global market and acquiring bolt-ons on attractive terms” in an internal note.

Writing in the company’s annual report, Eurofins’ CEO Gilles Martin was quick to discuss its M&A strategy, which has proved successful in years past. He said:

“2017 was a record year for Eurofins with about 60 acquisitions closed, representing annual revenues of ca. EUR 700m, and 30 start-up laboratories launched. We have substantially surpassed our annual M&A revenue objective of EUR 200m and our initial plan to open 20 laboratories in 2017.”

Disclosure

Dominion holds Eurofins Scientific in its Global Trends Managed Fund.


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