Regulatory News:
Eurofins Scientific (Paris:ERF):
- Q3 2021 revenues increased 14.6% year-on-year to EUR 1,630m vs.
EUR 1,423m1in Q3 2020, despite a negative FX headwind of -0.4%.
Over the first nine months of 2021 (NM 2021), revenues grew 30.9%
to EUR 4,902m vs. EUR 3,746m1 during the same period last
year.
- Organic growth2 was very strong at 11.7% in Q3 2021 vs. Q3 2020
and 30.8% in NM 2021 vs. NM 2020.
- The Core Business (excluding COVID-19 related clinical testing
and reagent revenues) delivered strong organic growth in Q3 2021
(about 9% vs. Q3 2020) and in NM 2021 (about 14% vs. NM 2020). Core
Business organic growth corrected for the impact of the 2 June 2019
cyber-attack was around 10%3 in Q3 2021 vs. Q3 2019 in spite of
stronger comparative due to the catch-up of revenues and billing
post the cyber-attack and around 12%3 in NM 2021 vs. NM 2019,
demonstrating the growth dynamism and resilience of our life
sciences and health related end markets.
- Revenues from COVID-19 clinical testing and reagents continued
at high levels in Q3 2021, generating slightly over EUR 300m,
totalling ca. EUR 1,050m in NM 2021
- There has been a gradual change in the demand mix, with a
greater proportion of antigen tests and testing requiring more
sampling and logistic costs, which contributed to a lower EBITDA6
margin level than in previous quarters.
- COVID testing continues at significant levels but the future
evolution of the pandemic and related government measures remain
difficult to predict. For now, Eurofins is upgrading its COVID
revenues objective from EUR 1bn to EUR 1.2bn for the full year
2021.
- Eurofins leadership and teams were delighted to join the large
cap CAC 40 Index on September 17, only 34 years after the Group’s
creation in 1987.
- Outlook: The Core Business once
again performed strongly in Q3, above the Group’s long-run organic
growth target of 5% per annum. Eurofins continues to see strong
demand across its markets for the remainder of the year and in the
mid-term. Overall including the additional anticipated COVID
revenues, we are upgrading our FY 2021 revenue objective to EUR
6,350m. As the Group works to maintain significant COVID-19 testing
capacity and staffing levels for Q4 to support healthcare
authorities containment efforts in case of new COVID or flu waves
this winter, and the actual volume and geographic mix of testing is
uncertain, we are not changing the FY 2021 EBITDA and Free Cash
Flow to the Firm9 objectives for the time being. Although it is
likely that COVID testing will continue in 2022, the financial
objectives for FY 2022 and FY 2023, which exclude any COVID related
revenues, are also unchanged at this time and are set out in table
number 5 below. Eurofins will exceed its objective to add EUR 150m
annualised proforma revenues from acquisitions in 2021, having
completed 28 acquisitions in NM 2021. These acquired businesses
generated revenues of over EUR 160m for the full year ended 31
December 2020. Eurofins M&A pipeline remains substantial. We
stay very selective and disciplined on valuation, in order to
continue to create significant long-term value for our
shareholders.
Comments from the CEO, Dr. Gilles Martin:
“I am pleased with the
performance delivered in Q3. Our Core Business continues to perform
very well with growth across business lines and geographies. Our
markets are very dynamic and are growing significantly on the back
of recent genomic, proteomic, and life sciences scientific
breakthroughs. The outlook for our markets is very positive. The
focus in the Core Business remains on growing market share,
improving utilisation of our laboratories, becoming increasingly
digital and aiming for a gradual improvement of profitability
margins. Global demand for
BioPharma services remains very strong particularly Discovery
services and Product Testing services for biologics and Advanced
Therapy Medicinal Products (ATMPs). Pharmaceutical companies
continue to outsource an increasing amount of testing services and
Eurofins is actively expanding capacity across its laboratory
network in the U.S., Europe and Asia.
Food and Environment testing
needs appear to also be increasing significantly in most
markets.
The outlook for the pandemic
is unclear, but we remain ready to respond very quickly to any new
public health crisis. We are maintaining capacity of high-quality
laboratory testing services to help monitor the development of
variants and to provide critical support to the efforts of
healthcare authorities with a current focus on protecting children
returning to schools and universities.”
Table 1: Q3 2021 Organic Growth
Calculation and Revenue Reconciliation
In EUR m except otherwise
stated
Q3 2020 reported revenues1
1,423
+ 2020 acquisitions - revenue part not
consolidated in Q3 2020 at Q3 2020 FX rates
14
- Q3 2020 revenues of discontinued
activities / disposals11
-1
= Q3 2020 pro-forma revenues (at Q3 2020
FX rates)
1,436
+ Q3 2021 FX impact on Q3 2020 pro-forma
revenues
-5
= Q3 2020 pro-forma revenues (at Q3
2021 FX rates) (a)
1,432
Q3 2021 organic scope* revenues (at Q3
2021 FX rates) (b)
1,599
Q3 2021 organic growth rate
(b/a-1)
11.7%
Q3 2021 acquisitions - revenue part
consolidated in Q3 2021 at Q3 2021 FX rates
31
Q3 2021 revenues of discontinued
activities / disposals11
0
Q3 2021 reported revenues
1,630
* Organic scope consists of all companies
that were part of the Group as at 01/01/2021. This corresponds to
the 2020 pro-forma scope.
Table 2: NM 2021 Organic Growth
Calculation and Revenue Reconciliation
In EUR m except otherwise
stated
NM 2020 reported revenues1
3,746
+ 2020 acquisitions - revenue part not
consolidated in NM 2020 at NM 2020 FX rates
58
- NM 2020 revenues of discontinued
activities / disposals11
-6
= NM 2020 pro-forma revenues (at NM 2020
FX rates)
3,798
+ NM 2021 FX impact on NM 2020 pro-forma
revenues
-83
= NM 2020 pro-forma revenues (at NM
2021 FX rates) (a)
3,715
NM 2021 organic scope* revenues (at NM
2021 FX rates) (b)
4,859
NM 2021 organic growth rate
(b/a-1)
30.8%
NM 2021 acquisitions - revenue part
consolidated in NM 2021 at NM 2021 FX rates
43
NM 2021 revenues of discontinued
activities / disposals11
0
NM 2021 reported revenues
4,902
* Organic scope consists of all companies
that were part of the Group as at 01/01/2021. This corresponds to
the 2020 pro-forma scope.
Table 3: Q3 Geographical Revenue Breakdown
In EUR m except otherwise stated
Q3 2021
As % of total
Q3 20201
As % of total
Growth %
Europe
934
57.3%
825
58.0%
13.3%
North America
549
33.7%
495
34.8%
10.9%
Rest of the World
147
9.0%
103
7.2%
42.5%
Total
1,630
100.0%
1,423
100.0%
14.6%
Table 4: NM Geographical Revenue Breakdown
In EUR m except otherwise stated
NM 2021
As % of total
NM 20201
As % of total
Growth %
Europe
2,939
60.0%
2,101
56.1%
39.9%
North America
1,557
31.8%
1,354
36.1%
15.0%
Rest of the World
406
8.3%
291
7.8%
39.6%
Total
4,902
100.0%
3,746
100.0%
30.9%
Europe
In Europe, revenues increased 13.3% to EUR 934m in Q3 2021
compared to EUR 825m in Q3 2020. Revenues increased 39.9% to EUR
2,939m in NM 2021 compared to EUR 2,101m in NM 2020.
In relation to COVID-19, Eurofins has been very active in Q3
helping to facilitate travel for passengers, providing testing
through its network of more than 1,000 owned or contracted sampling
stations across Europe providing high quality and fast turn-around
times.
Eurofins BioPharma services in Europe is expanding its testing
portfolio for its chemistry clients by offering Absorption,
Degradation, Metabolism and Excretion (ADME) characteristics
testing for compounds developed and synthesised at the Eurofins
Villapharma site. Eurofins is also introducing high throughput
experimentation capabilities at Villapharma to develop and
synthesise chemicals at much faster turnaround times. As a result,
Eurofins will be able to provide faster testing for its client’s
compounds helping them to determine in a timely manner whether they
should proceed with further testing and progress the molecule to
the next phase of drug discovery. Eurofins DiscoverX, the
industry's leading provider of innovative cell-based assays and
services for drug discovery and development, is now fully
operational in Europe. Eurofins DiscoverX can now offer its
capabilities in protein production and custom protein production
out of its site in Poitiers, France, contributing to growth through
direct sales and faster supply to clients in Europe.
Eurofins Technologies continues to innovate and launch new
tests. It launched four new food allergen lateral flow device (LFD)
tests for the detection of hazelnuts, total milk, pistachios and
walnuts in food, as well as two new animal health diagnostics
tests, a PTB ELISA kit for the detection of bovine paratuberculosis
and a test to detect African Swine Fever Virus (ASFV) through real
time PCR. Eurofins Gold Standard Diagnostics (GSD) launched a new
generation of its NovaPrime IVD RNA extraction kit using more
internally developed components supporting Eurofins’ ongoing
efforts to vertically integrate its supply chain where significant
savings and performance improvements are possible.
In Germany, a new reimbursement rule for Hepatitis B virus
testing and screening is expected to lead to significantly higher
sample volumes.
PFAS testing in the European food market is increasing
significantly as a result of the stricter safety thresholds set by
the EFSA regulations in late 2020. Eurofins is investing in a Food
Chemistry Centre of Excellence in Cork, Ireland, which will be
located in the heart of the dairy industry. This state-of-the-art
facility will position Eurofins as the market leader for dairy
nutritional testing capabilities.
North America
In North America, revenues increased 10.9% to EUR 549m in Q3
2021 compared to EUR 495m in Q3 2020. Revenues increased by 15.0%
to EUR 1,557m in NM 2021 compared to EUR 1,354m in NM 2020.
The U.S. Department of Air Force (DAF), in coordination with the
Department of Health and Human Services (HHS), awarded a USD 30m
contract to Eurofins Genomics US to build a new production facility
and expand capacity for the manufacturing of reagents used in
COVID-19 diagnostic tests. The new facility will focus on the
production of oligonucleotides, a key reagent in molecular
diagnostic testing but vulnerable to supply shortages. Eurofins’
new production facility will help combat current and future
pandemics and empower a broader range of research in the molecular
diagnostic field.
Eurofins was awarded a significant contract from the Ministry of
Health in Canada to provide regional COVID-19 testing. EmpowerDx,
our direct to consumer brand, launched eighteen new tests in Q3,
including heart health, women’s and men’s health, mental vitality,
sexually transmitted infections (STIs), and metabolism testing.
Eurofins Transplant Genomics (TGI) launched OmniGraf™ in September
which combines its proprietary TruGraf® blood gene expression test
and Eurofins Viracor’s TRAC® donor-derived cell-free DNA assays
providing the only combination biomarker panel that provides
earliest indication of rejection in kidney transplant recipients.
TruGraf® continues to show significant growth in sample volumes
(+46% in Q3 2021 vs. Q2 2021). The first patients have been
enrolled for the TGRP01 European study with both TRAC® and
TruGraf®. Eurofins Viracor is on schedule to move into its new
facility in Kansas City in Q1 2022. This new site covering over
10,000 m2, offers significant capacity to accommodate for future
growth for our post-transplant testing and BioPharma services
businesses already located at the Kansas campus.
This year many pharmaceutical companies have decided to
outsource their testing services for new compounds to private
laboratories following the COVID shutdowns and disruptions
experience in 2020. Eurofins Discovery has launched a new business
initiative, applying research informatics to explore and support
the use of artificial intelligence (AI) in drug discovery. Eurofins
Discovery is working on a new standardised LIMS programme to drive
efficiency, harmonise processes, harmonise data reporting and
improve turnaround times throughout the Eurofins Discovery
operations, worldwide. Organic growth in BioPharma Product Testing
remained very strong across the business globally. In particular
the demand for services to support biologics and advanced therapy
medicinal products (ATMPs) is extremely robust. As a result, the
Group is actively expanding capacity across its laboratory network,
including expansion of services in Lancaster (PA), Columbia (MO)
and San Diego (CA) in the U.S. and across multiple sites in Europe
(France, Denmark, Italy, Spain, Ireland, Germany, Netherlands,
Sweden, UK, Slovakia) and in Kyoto, Japan.
Eurofins Food Testing business in Madison, Wisconsin, is now
offering analysis of Vitamin A/E/D/K by supercritical fluid
extraction and chromatography. This technology is environmentally
friendly, using twenty-times less solvent than conventional
analysis methods, and can achieve a one-day turnaround time for
vitamins in dietary supplements. Eurofins Quality Trait Analysis
(QTA) submitted a patent application for a novel testing method not
yet available in the market titled “System, Method and Device for
On-Site Rapid, Direct, and Non-destructive Analysis of a Material
Sample Using a Portable High Performance Near–Infrared
Spectrometer”.
The Environment Testing Business in North America is currently
developing at-home collections kits for its new product “PFAS
Exposure Self-Collection Blood Test” based on whole blood using a
simple finger prick. New large U.S. laboratory site developments in
Los Angeles (CA) and Canton (OH) remain on track for Q4
commissioning. Plans have been finalised for expanding the
footprint of a specialty drinking water laboratory in Los
Angeles.
Rest of the World
In the Rest of the World, revenues increased 42.5% to EUR 147m
in Q3 2021 compared to EUR 103m in Q3 2020. Revenues increased by
39.6% to EUR 406m in NM 2021 compared to EUR 291m in NM 2020.
Eurofins Food and Environment Testing businesses joined forces
to win the Singapore Food Agency SARS-CoV-2 virus surface swabs
testing project tender. Eurofins continues to play an important
role supporting the Ministry of Health in controlling the pandemic
through reliable and quick turnaround PCR testing services.
Singapore has increased the frequency of COVID-19 tests for workers
in "high-risk" settings to once a week. The National Environment
Agency (NEA) is also expanding its wastewater surveillance
programme to cover more than 400 sites by 2022, supporting the
monitoring and management of the pandemic.
Eurofins is developing a new Eurofins DiscoverX products
business in Shanghai, China to support drug discovery research
clients in China. In addition a biologics start up laboratory
expansion has been initiated in Shanghai to support the rapidly
developing biologics market in China. In Australia, Therapeutic
Goods Association (TGA) granted registration of the Eurofins Gold
Standard Diagnostics (GSD) NovaGen SARS-CoV-2 Antigen Rapid Test
which will be instrumental in supporting the reopening of
Australia’s economy. Eurofins Clinical Testing Services laboratory
in Singapore received College of American Pathologists (CAP)
accreditation in September 2021. In Brazil, Centro de Genomas
developed three new tests: fetal gender in mother’s blood,
hereditary cancer and Nutrigenetics. Centro de Genomas is investing
in a new hub for research and testing in Sao Paulo which is ready
for commissioning in Q4 2021.
Eurofins Brea in the U.S. established a strategic collaboration
with China’s largest infant formula and dietary supplement
manufacturer, Feihe Dairy, on new analytical methods development
for value-added food and nutraceutical ingredients. Eurofins has
three accredited laboratories in China that can provide the
necessary pesticide residue testing service to comply with China’s
new pesticide MRL GB 2763-2021 standard which went into effect in
September 2021. Eurofins Environment Testing business now offers
full regional coverage in the Pacific region, from Perth, Australia
to Auckland, New Zealand.
2021-2023 Objectives
Table 5: 2021-2023 Objectives
In EUR m except otherwise stated
FY 2021A
FY 2022B
FY 2023B
Revenues excl. potential M&A
6,275
5,450
5,725
Adjusted4 EBITDA
1,700
1,300
1,375
Free Cash Flow to the Firm
700C
750
800
Revenues incl. potential M&AD
6,350
5,700
6,175
A FY 2021 revenue objective has
been updated and FY 2021 Adj. EBITDA objective, which was upgraded
on 5 August 2021, remains unchanged
B 2022 & 2023 objectives set at
average 2020 exchange rates and excluding any revenues from
COVID-19 testing and reagents and any M&A beyond 31/12/2020
(i.e. organic Core Business ex. COVID-19 objectives), assuming full
return to normal of economies / markets to pre-pandemic levels
C Note this objective has not been
upgraded since 1 March 2021
D Including potential proforma
revenues from acquisitions of EUR 150m in 2021 and EUR 200m in both
2022 & 2023 (consolidated at mid-year)
1 Q3/NM 2020 revenue figures have been adjusted for an
additional EUR 10m COVID revenues which were previously accounted
for in Q4 2020 pending verification at end of Q3 2020. FY 2020
revenues are not affected by this adjustment. 2 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 (of year Y) but excluding
discontinued operations. 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 of 1st January Y-1. All revenues from businesses
acquired since 1st January Y are excluded from the calculation. 3
Core Business organic growth corrected for 2019 cyber-attack impact
(EUR 7m impact on Q3 2019 revenues and EUR 69 impact on NM 2019
revenues). 4 Adjusted results - reflect the ongoing performance of
the mature10 and recurring activities excluding “separately
disclosed items5”. 5 Separately disclosed items - include one-off
costs from integration, reorganisation, discontinued operations11
and other non-recurring income and costs, temporary losses and
other costs related to network expansion, start-ups and new
acquisitions undergoing significant restructuring, share-based
payment charges7, impairment of goodwill, amortisation of acquired
intangible assets, negative goodwill, gains/losses on disposal of
businesses and transaction costs related to acquisitions as well as
income from reversal of such costs and from unused amounts due for
business acquisitions, net finance costs related to borrowing and
investing excess cash and one-off financial effects (net of finance
income) and the related tax effects. 6 EBITDA – Earnings before
interest, taxes, depreciation and amortisation, share-based payment
charge, impairment of goodwill, amortisation of acquired intangible
assets, negative goodwill, loss/gain on disposal and transaction
costs related to acquisitions as well as income from reversal of
such costs and from unused amounts due for business acquisitions. 7
Share-based payment charge and acquisition-related expenses, net –
Share-based payment charge, impairment of goodwill, amortisation of
acquired intangible assets, negative goodwill, loss/gain on
disposal and transaction costs related to acquisitions as well as
income from reversal of such costs and from unused amounts due for
business acquisitions. 8 Net capex – Acquisition of intangible
assets, property, plant and equipment, less proceeds from the
disposal of such assets. 9 Free Cash Flow to the Firm - Net cash
provided by operating activities, less Net capex8. 10 Mature scope:
excludes start-ups and acquisitions in significant restructuring. A
business will generally be considered mature when: i) The Group’s
systems, structure and processes have been deployed; ii) It has
been audited, accredited and qualified and used by the relevant
regulatory bodies and the targeted client base; iii) It no longer
requires above-average annual capital expenditures, exceptional
restructuring or abnormally large costs with respect to current
revenues for deploying new Group IT systems. The list of entities
classified as mature is reviewed at the beginning of each year and
is relevant for the whole year. 11 Discontinued activities /
disposals: discontinued operations are a component of the Group’s
Core Business or product lines that have been disposed of, or
liquidated; or a specific business unit or a branch of a business
unit that has been shut down or terminated, and is reported
separately from continued operations. Disposals correspond to the
sale by Eurofins of business assets to a third party. For more
information, please refer to Note 3.20 of the Consolidated
Financial Statements for the year ended 31 December 2020.
Notes to Editors:
Conference Call
Eurofins will hold a conference call with analysts and investors
today at 15:00 CET to discuss the results and the performance of
Eurofins, as well as its outlook, and will be followed by a
questions and answers (Q&A) session.
Click here to Join Call >>
No need to dial in. From any device, click the link above
to join the conference call.
Alternatively, you may dial-in to the conference call via
telephone using one of the numbers below:
UK: + 44 330 336 9105 US: + 1 646 828 8143 FR: + 33 1 76 77 22
74 BE: + 32 2 404 0659 DE: + 49 69 22 22 13 420
Confirmation Code: 277 30 08
About Eurofins – the global leader in bio-analysis
Eurofins is Testing for Life. Eurofins is the global leader in
food, environment, pharmaceutical and cosmetic product testing and
in agroscience Contract Research services. Eurofins is also one of
the market leaders in certain testing and laboratory services for
genomics, discovery pharmacology, forensics, BioPharma Contract
Development and Manufacturing, advanced material sciences and in
the support of clinical studies. The Group also has a rapidly
developing presence in highly specialised and molecular clinical
diagnostic testing and in-vitro diagnostic products.
With 55,000 staff across a decentralised and entrepreneurial
network of 900 laboratories in over 50 countries, Eurofins offers a
portfolio of over 200,000 analytical methods to evaluate the
safety, identity, composition, authenticity, origin, traceability
and purity of a wide range of products, as well as providing
innovative clinical diagnostic testing services and in-vitro
diagnostic products.
The Group’s objective is to provide its customers with
high-quality services, innovative solutions and accurate results on
time. Eurofins is ideally positioned to support its clients’
increasingly stringent quality and safety standards and the
increasing demands of regulatory authorities as well as the
requirements of healthcare practitioners around the world.
In 2020, Eurofins reacted quickly to meet the global challenge
of COVID-19, by creating the capacity to help over 20 million
patients monthly who may have been impacted by the pandemic with
our testing products and our services and directly supporting
healthcare professionals working on the front line to fight the
virus. The Group has established widespread PCR testing
capabilities and has carried out over 30 million tests in its own
laboratories, is supporting the development of a number of vaccines
and has established its SAFER@WORK™ testing, monitoring and
consulting programmes to help ensure safer environments, travel and
events during COVID-19.
Eurofins has grown very strongly since its inception and its
strategy is to continue expanding 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.
Shares in Eurofins Scientific are listed on the Euronext Paris
Stock Exchange (ISIN FR0014000MR3, Reuters EUFI.PA, Bloomberg ERF
FP).
Until it has been lawfully made public widely by Eurofins
through approved distribution channels, this document contains
inside information for the purpose of Regulation (EU) 596/2014 of
the European Parliament and of the Council of 16 April 2014 on
market abuse, as amended.
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 judgment of
Eurofins Scientific’s 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 guarantees can be made as to their completeness
or validity.
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For more information, please visit www.eurofins.com or
contact: Investor Relations Eurofins Scientific SE Phone: +32 2
766 1620 E-mail: ir@eurofins.com
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