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www.eurofins.com
Eurofins
A global leader in bioanalytical testing in the food,
environment and pharmaceutical sectors
1
Corporate Presentation
July 2015
2
Disclaimer
The statements made during this presentation or as response to questions during the Question & Answers period that are
not historical facts are forward looking statements. Furthermore, estimates and judgements may be made based on market
and competitive information available at a certain time. Forward looking statements and estimates represent the judgement
of Eurofins Scientific’s management and involve risks and uncertainties including, but not limited to, risks associated with the
inherent uncertainty of research, product/ service development and commercialisation, the impact of competitive products
and services, patents and other risk uncertainties, including those detailed from time to time in period reports, including
prospectus 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 obligation
or 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 Separately
Disclosed Items”) that excludes certain items because of their nature and the impact they have on the analysis of underlying
business performance and trends. (Please refer to description of these terms in the Company’s Annual Report). The
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 objectives 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.
This presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for or
purchase securities in Eurofins Scientific S.E. and neither this document nor anything contained or referred to in it shall form
the 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 which
publish those forecasts and should not be interpreted as representing the views or expectations of Eurofins Scientific or the
Eurofins Scientific management. In particular, they do not constitute a profit forecast or estimate or trading statement by
Eurofins Scientific S.E. Similarly, objectives presented are only objectives and may not be achieved in reality, potentially by a
wide margin, due to a variety of factors.
3
Introduction
Market & Strategic Positioning
Finance & Outlook
Transaction Overview
Summary
Appendix
Contents
4
Eurofins’ Mission is to contribute to global
Health, Safety & Environment with the best in bioanalysis
Founded in 1987
IPO in 1997 in Paris at EUR 1.83 per share
Network of 200 laboratories in 36
countries
Over 130,000 reliable analytical methods
Over 17,000 employees
Simplified shareholder structure: Martin
Family 42% of share capital (59% of voting
rights); Free float 58%
Key figures 2014 2009-2014 CAGR
Revenues EUR 1,410m 17%
Reported EBITDA EUR 230m 31%
Op CashFlow EUR 212m 27%
*Adjusted – reflect the 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 increasing
demand for food safety research in order to ensure a
safer global food supply.” World Health Organisation
EUROFINS 2017: Mid Term Objectives
EUR 2bn Revenues (12% CAGR from 2014)
>20% Adjusted EBITDA Margin
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
Start 1987
N°1 to N°3*
worldwide
Start 2000-2005
Testing for
Pharma/
Biotech
Environment Testing
Food &
Feed
Testing
N°1*
worldwide
Start 2000
Eurofins
ranking N° 1 in Europe
N° 1 in Germany
N° 1 in France
N° 1 in Scandinavia
N° 1 in Benelux
N° 1 in the UK**
N° 1 in Brazil
N° 2 in the USA**
N° 1 in Agri Testing EU
N° 1 in Europe
N° 1 in Germany
N° 1 in France
N° 1 in Scandinavia
N° 1 in Benelux
N° 3 in USA
N° 1 Worldwide in Pharma
Product Testing
N° 1 Worldwide in Discovery
Pharmacology Services
Among top 3 global providers
of central laboratory, genomic
and agrosciences services
N° 1 or 2 in most segments/
countries in Europe
** except routine Bacteriology - focus on high end analysis
New!
New!
5
New!
Leading global and local market positions
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
7
Strong growth fueled by market growth, share gains
and acquisitions
2006-2011 CAGR
18%
-
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 2015 2017
2,000
RE
VE
NU
ES
EU
R m
CAGR
5yrs 17% (2009-2014)
Objectives
CAGR
10yrs 23% (2004-2014)
2014-2017 CAGR
12%
8
On track towards 2017 objectives
Eurofins 5 year Report Card: 2009-2014 CAGR
17.1%
20.6%
27.0%
Revenues Adjusted EBITDA Op CF
Achievements in 2014
Ca. 6% organic growth versus 5%
objective
19% increase in adjusted EBITDA to
EUR 260m vs. EUR 250m objective
17 acquisitions with combined
revenues in excess of €165m
25% increase in operating cash flows
2014: second year of our 5-year journey
15% revenue growth to EUR 1,410m (above EUR
1,400m objective)
around 6% organic growth (around 7.5%
excluding companies in significant
restructuring)
Sustained operating momentum in the group’s
largest markets
17 acquisitions with total annualised revenues
in excess of EUR 165m
19% increase in adjusted EBITDA; 60bp margin
expansion
25% increase in Operating Cash Flow to EUR
212m
60,000m2 of world class lab surface added
versus 40,000m2 plan for 2014
Entry into specialised, genomics-based
diagnostic testing market via the acquisition of
ViraCor-IBT and Boston Heart*
*Acquisition closed on 31 January, 2015
14.7%
12.6%
11.8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2012 2013 2014
Size of scope in restructuring is decreasing
Proportion of revenue contribution from start-ups & businesses in significant restructuring
Separately Disclosed Items (SDI*) relative to EBITDA of mature companies**
SDI include 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
Group adjusted EBITDA margin
*
**The objective is for further significant reduction in 2015 onwards
9
Network Build-Out to Position for the Future
Lab surface added m2
20,000 40,000 60,000
Faster site roll-out drives capex acceleration
2012 2013 2014
60,000m2 of modern lab surface delivered in 2014, versus plan of 40,000m2
3 new sites; 6 major extension projects
Strong progress in IT systems deployment
eLIMS deployed in ca. 67% of Food and Environment divisions
OneIT almost fully deployed across Food and Environment divisions
Revised common Genomics and Agroscience IT systems deployment on track for 2015 completion
Eurofins On Line (EOL) almost fully deployed in Food and Environment divisions
10
0%
5%
10%
15%
20%
€ m
€ 50m
€ 100m
€ 150m
€ 200m
2012 2013 2014
Tota
l An
nu
alis
ed E
BIT
AS
Mar
gin
of A
cqui
siti
ons
Tota
l An
nu
alis
ed R
even
ues
of A
cqu
isit
ion
sNetwork Build-Out to Position for the Future
2012-2014 Acquisitions
17 acquisitions completed in 2014
Mostly high-growth and profitable companies that provide Eurofins access to new, promising growth markets
Acquisitions were profitable and in many cases above Group profitability level
No restructuring required
0.8x 1.7x 0.7x
Acquisition spend as a multiple of
total revenues of acquisitions
11
12
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 transactions 2011-2014 Rationale/impact
13
Acquisitions year to date in line with long-term
sustainable growth and profitability objectives
Boston Heart Diagnostics (USA, 2015) Reinforces footprint in specialty clinical diagnostics;
focused on cardiovascular diseases, including
proprietary genetic markers
Selected transactions YTD 2015 Rationale/impact
Experchem (Canada, 2015) Entry into Canadian bioanalytical testing market;
reinforces Eurofins’ leadership in nutraceutical testing
Sắc Ký Hải Đăng (Vietnam, 2015) Entry into Vietnam testing market; strategic positioning
within high-growth food export market
BioAccess (France, 2015) Entry into the complex, rapidly consolidating European
clinical diagnostic testing market, with strong
entrepreneurial platform
Biomnis (France, 2015) Expands Eurofins’ footprint in specialty clinical
diagnostic testing into Europe with the largest dedicated
esoteric lab in France, and probably in Europe
Diatherix (USA, 2015) Reinforces footprint into specialty clinical diagnostics for
infectious diseases. Proprietary Multiplex PCR
technology for parallel testing of multiple infectious
agents
Emory Genetics Lab (USA, 2015) Renowned for testing for genetic diseases, carrier
screening, EGL reinforces Eurofins’ footprint in the
genetics and genomic segment of the specialty clinical
diagnostic testing market.
Year to date, Eurofins has acquired, or signed agreements to acquire more than a dozen companies
with total annual revenues in excess of EUR 500m. Below is a selection of those transactions
14
An international network of world class, standardised
laboratories is attractive for our customers
80% of the world’s population still has limited access to testing laboratories
N. America 25.3%
Germany 16.7%
France 16.1%
Others 14.7%
Nordic Region 11.4%
Benelux 10.2%
UK & Ireland 5.5%
2014 revenue split :
Entry into high-growth
markets with start ups
& acquisitions
Geared towards strong economies and fast-growing
markets
Geographical breakdown of Eurofins’ revenues in 2014
Germany
Austria
Switzerland
Benelux
Nordics
(Northern
Europe)
Germany
+
Northern
Europe
USA
+
APAC
& EM
Germany
Northern Europe
USA
APAC & EM
UK
&
Ireland
Total
Excluding
France &
Southern
Europe
France Italy Spain
Portugal
TOTAL
15
16
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 130,000 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
17
Introduction
Market & Strategic Positioning
Finance & Outlook
Transaction Overview
Summary
Appendix
Contents
18
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 need for new tests
Governments increase regulations on food control
Brands have become more global and vulnerable to contaminations
Transparency and traceability are becoming the priorities
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, international network of laboratories
Globalisation: Raw
materials sourced
from countries
with different QC
practices
Outsourcing of
industry’s
internal or state-
owned
laboratories
19
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 Control Vitamins
GMO Labelling
Purity Nutritional
Microbiology Sensorial
Authenticity Pesticides
Mycotoxins Allergens
20
Year Brand/ Contamination Impact Cost
Country
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 300m Irish 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 consequences
for producers…
Dioxins in
eggs, poultry
and pork
About 3,000 tons of feed contaminated with oil intended
for use in bio-fuels, 4700 farms closed, revenues lost,
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
21
Eurofins is meeting the demands of global players
The largest global food & beverage producers and retailers are clients of
Eurofins
Food and Beverage Retailers 2013 Sales in
EUR billion
2013 Sales in
EUR billion
Nestlé Switzerland 74.9
Unilever UK /Netherlands 49.8
PepsiCo USA 48.8
Coca-Cola USA 34.4
Mars* USA 25.0
Danone France 21.3
McDonalds USA 20.6
Kraft Foods* USA 13.4
Kelloggs USA 10.9
Pernod Ricard France 8.6
* estimates
Wal-Mart Stores USA 347.6
Carrefour France 84.3
CostCo USA 77.3
Tesco UK 76.3
Kroger USA 72.3
Metro AG* Germany 65.4
Aldi* Germany 57.0
Lidl * Germany 56.7
Casino Guichard France 48.6
ITM Enterprises France 39.9
22
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 patent
Regulatory bodies (e.g. FDA) are demanding more study data to
improve safety
New wave of biologics require more testing
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 likelihood of using CROs
23
Underlying trends are intact 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 be outsourced
$ 80bn
Currently
Outsourced
$34bn
Global % R&D Outsourced
24
Eurofins Pharma Services
Genomics Discovery Pharmacology
Pre-clinical / Early
Development
Clinical (Central
Laboratory)
Pharma Products Testing /
cGMP QC
Spanning the entire drug development cycle
Sequencing
Oligonucleotides
Pharmacogenomics
Transcriptomics
Genotyping
SNP-analysis
Pharmacology
Bioanalytical analysis
Translational
medicine
Phase I studies
Biomarkers
Bioanalysis
Immunogenicity
Proteomics
Microbiological and
Anti-infective analysis
Bioavailability
Bioequivalence
Impurities Analysis
Stability Studies
Process development
Hygiene Monitoring
Packaging analysis
Phases
I - III
Phase IV,
Surveillance, Quality Control
Basic Research, Discovery,
Combinatorial,
Biological Product Libraries, etc
Pharmacology, Exploratory
Toxicology, PK, Metabolism,
etc
High-throughput-
screening
Molecular-
pharmacology
cell-based assays
in vitro screening
in vitro profiling
in vivo safety
in vivo efficacy
Specialty Clinical
Diagnostics
Cardiovascular
Diseases
Immunodiagnostics
Infectious Diseases
Specific, fast-TAT
testing for transplant
patients
25
9 of the top 10 largest global pharmaceutical companies
are clients of Eurofins
Top 10 pharma companies
Pfizer
Sanofi Aventis
GlaxoSmithKline
Novartis
AstraZeneca
Merck & Co
Johnson & Johnson
Roche
Eli Lilly & Co
Bristol-Myers Squibb
Global CRO Market
USA 60%
Europe 20%
Japan 8%
Rest of World 12%
Market
Breakdown CAGR*
12%
9%
18%
14%
Source: William Blair &Co.
* 2007 – 2012est.
Country
USA
France
UK
Switzerland
UK
USA
USA
Switzerland
USA
USA
Eurofins Pharma Locations
Clinical Diagnostics Services – a new source of growth
for Eurofins
• Enabling healthcare
providers and patients to
improve heart health and
prevent disease with our
integrated diagnostics,
personalized reporting and
lifestyle management
solution
• Engaging reports and
interactive tools and
services helps improve
health literacy and drive
medication adherence,
behavior change, and better
outcomes
• Accelerating medicine
through innovative
molecular and
immunodiagnostics
• Providing clinical diagnostic
solutions in infectious
disease, allergy,
hypersensitivity and immune
disorders
• Working with vaccine,
pharmaceutical, biotech and
medical device developers
• Rapid TAT to hospital clients
Viracor IBT
Boston Heart
• An exciting source of growth potential for Eurofins
• Focused on advanced innovative clinical diagnostics services
• Platform companies with seasoned leadership
• New line of business allowing entering into a new strategic avenue
26
• Proprietary Multiplexed
TEM-PCR™ technology for
single simultaneous
detection of multiple
infectious disease causes
(viruses and bacteria) at
high levels of sensitivity and
specificity
• Help physicians and
healthcare providers choose
more effective antimicrobial
therapy and improve patient
outcomes
Diatherix
• Comprehensive testing
facilities for cytogenetic,
biochemical and molecular
genetics
• EGL leads the industry in
gene panels including
cancer testing and exome
sequencing
• Testing for genetic diseases,
carrier screening, as well as
prenatal testing
EGL (Emory Genetics Lab)
27
Increasing demand by citizens for a clean environment
EU expanding regulation (e.g. REACH)
Increasingly long list of products identified as toxic
Requirement for more sophisticated analyses and more
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
28
Outdoor pollutants
Indoor and ambient
pollutants
Eurofins serves all the main environmental testing
markets
SOIL AIR WATER
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 information
29
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 regulation Major pieces of legislation
30
*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 industry
– e.g. REACH directive
Listing and assessing the safety of 30,000
chemical substances used by industries in
Europe over 11 years
Replacing the most dangerous ones - no
chemical safety studies were conducted
before 1981; only 3,700 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 2018 Deadlines for
registration
31
Outsourcing adds to market growth
Examples of laboratories outsourced to Eurofins
Danish Hydrology Inst. Official water reference lab Scandinavia
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 Denmark
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
32
Eurofins’ strategy builds high Barriers to Entry
GLP
GMP
GCP
ISO 9001
ISO 17025
FDA Approved
Offering a premium quality service … ... and leveraging internal efficiencies
Portfolio: over 130,000 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
33
Introduction
Market & Strategic Positioning
Finance & Outlook
Transaction Overview
Summary
Appendix
Contents
100 new/expanded modern state-of-the-art sites to enable consolidation /
closure of smaller or old sites
Total of ca. 300,000 m2 added or brought to most modern standards
between 2005 – 2014 (60,000 m2 in 2014 alone)
100,000 m2 of additional modern laboratory surface planned for 2015-2016,
of which over 40,000m2 planned to come on stream in 2015 alone
Kalamazoo
Vallensbaek
Hamburg
Les Ulis
Saverne
Acton
Singapore
Ebersberg
2006 - 2009
Holsterbro
Lidköping
Rotterdam
Cuneo
Washington
Huntsville
Suzhou
Nantes
Denver
Princeton
Vejen
Malbork
Niefern
Sao Paolo
Major facilities : new or recently upgraded and planned for 2015-2016
2010 / 11
Cologne
Barneveld
Des Moines
Shanghai
Shenzhen
Tokyo
Nantes (Micro)
Ebersberg ext.
Wolverhampton
Saverne, FR ext.
Glostrup, DK
Melbourne, AU
Monrovia, CA
Garibaldi, BR
Mikkeli, FI
2012 2015 / 2016
Freiberg, DE
Ebersberg, DE ext.
Niefern, DE ext.
Reichenwalde,DE ext.
Douai, FR ext.
Saverne, FR ext.
Les Ulis, FR ext.
Moss, NO ext.
Uppsala, SE ext.
Boston, MA ext.
Louisville, KY
Hamburg, DE ext.
Nantes, FR ext
Aix-en-Provence, FR
Amsterdam, NL
Dungarvan, IE ext.
Lancaster, PA ext.
St. Charles, MO ext.
Des Moines, IA ext.
Auckland, NZ ext
Yokohama; JP ext
Hamburg, DE ext.
Seattle, WA
Vergeze, FR ext.
Graauw, NL
Wageningen, NL
2013
34
2014
Hamburg, DE ext.
Vejen, DK ext
Bangalore, IN
New Orleans, LA
Lancaster, PA ext.
Auckland, NZ
Sidney, AU
Bordeaux, FR
Mouds View, MN
Laboratory Network Investments:
Expansion / Modernization of Laboratory Sites
Market Share: Eurofins is the leader in its industry –
and we continue to reach new market leadership positions
New Markets
= Market Entry
Denmark: Food and Env.
Brazil: Food Testing
France Environment Testing
USA: Pharma Products Testing
Sweden, Norway: Food and Env. Testing
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 positions in its main markets:
e.g. Germany (Food + Env.), France (Food), Benelux (Food + Env.)
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
35
36
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 575m invested in
additional capital in 2006-2014
Heavy investment in new markets and resources for
future profits
Deploy IT systems
eLIMS, 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 10m 2010 vs 2005
+EUR 27m 2014 vs 2010
37
Positive trends drive solid operating results
Adjusted – reflect the ongoing performance of the mature and recurring activities excluding “separately disclosed items”.
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.
2014 2013
+/- %
Adjusted
Results EURm
Adjusted
Results
Separately
disclosed
items
Statutory
Results
Adjusted
Results
Separately
disclosed
items
Statutory
Results
Revenues 1,410.2 1,410.2 1,225.6 1,225.6 15.1%
EBITDA 260.4 -30.4 230.0 219.3 -30.2 189.1 18.8%
EBITDA Margin (%) 18.5% 17.9% 60 bp
EBITAS 189.9 -41.2 148.7 161.9 -39.7 122.2 17.3%
Net Profit 128.2 -49.1 79.1 116.8 -44.6 72.2 9.8%
Basic EPS (€) 8.47 -3.25 5.23 7.79 -2.97 4.81 8.8%
Op. Cash Flow 212.2 169.3 25.3%
Capex 131.2 98.7
Net Debt 493.6 386.8
Net debt/adjusted
EBITDA
1.90x
1.76x
38
Strong underlying profitability enables investments
2014 EBITDA Composition EURm
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 (11.8% of total Group revenues
in 2014 versus 12.6% in 2013 and 14.7% in
2012).
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
39
Group Profitability Objectives++
*E – company objectives ++ Based on stated company objectives and assumes linear acquisitions until 2017
10%
12%
14%
16%
18%
20%
22%
0
500
1,000
1,500
2,000
2,500
2011 2012 2013 2014 2017E*
Gro
up
Ad
just
ed
EB
ITD
A m
arg
in %
Gro
up
Re
ve
nu
es
Revenues from mature businesses Revenues from start-ups and companies in significant restructuring
EUR 300m hybrid issued in Jan 2013, callable
at par by Eurofins in Jan 2020. Bears a fixed
coupon of 7.00% until first call, Euribor 3m +
818 bp thereafter if not called
Hybrid
OBSAAR
EUR 117.3m outstanding as of 30 June 2015
maturity: split evenly across June 2016 and 2017
Solid Balance Sheet
3.5 x Net Debt/ Adjusted EBITDA
Dec’13 Dec’14
1.90 x
Maximum
Net Debt (EUR m) 386.8
40
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
493.6
664.2
Cash + cash
equivalents (EUR m)
297.3 216.6
394.7
EUR 300m Eurobond issued in Nov 2013, 5-yr
maturity (2018) at an annual interest of 3.125%
EUR 500m Eurobond issued in Jan 2015, 7-yr
maturity (2022) at an annual interest of 2.25%
Eurobond
EUR 300m hybrid issued in April 2015, callable
at par by Eurofins in April 2023. Bears a fixed
coupon of 4.875% until first call, Euribor 3m +
701 bp thereafter if not called
1.68 x 1.70 x1.76 x
1.90 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
2011 2012 2013 2014
41
High Degree of Financial Flexibility
41
Net Debt/ Adjusted EBITDA: max 3.5x Debt ratios remain well below covenant limits despite EUR
453m* cash invested in the business in 2014 (EUR 215m
cash in 2013)
Largely capex and acquisitions which did not fully contribute
yet in 2014
Large financial flexibility with fairly long debt maturity
OBSAAR issued in 2010; avg. maturity 2016
Schuldschein issued in 2011; avg. maturity 2017
EUR 300m hybrid issued in 2013; perpetual, callable 2020
EUR 300m Eurobond issued in 2013; maturing 2018
EUR 500m Eurobond issued in 2015; maturing 2022**
EUR 300m hybrid issued in 2015; perpetual, callable 2023***
Revolving Credit Facilities
Continued profitability improvement means that key debt
ratios have slowly increased despite an increase in
absolute amount in Net Debt to EUR 494m from EUR 387m
in December 2013. This ratio should temporarily increase
in 2015.
Substantial headroom in the balance sheet
41
* EUR 453m cash investments = EUR 131m capital expenditures + EUR
292m in acquisitions + EUR 30m one-off restructuring costs and
temporary losses
** Issued in January 2015
*** Issued in April 2015
42
EUR 709m of gross senior debt as of 31 December 2014 (net debt of EUR 493.6m)
>95% of senior debt in Eurofins Scientific SE (holding level)
Main facilities in Eurofins Scientific SE:
OBSAAR bonds : EUR 176m
Schuldschein : EUR 170m
Bilateral RCF (undrawn): ca. EUR 300m
Eurobond 2018 EUR 300m
ca. EUR 20m of bank borrowings are secured over buildings and assets (in
subsidiaries)
EUR 500m 7-Yr Eurobond issued in January 2015 at a fixed interest rate of 2.25%
In addition, EUR 600m Hybrid bond (considered equity under IFRS), non-dilutive
bond with perpetual maturity, EUR 300m callable at par by Eurofins in Jan 2020,
with the remaining EUR 300m also callable at par by Eurofins in April 2023.
Financing facility overview as of 31 December 2014
43
Maturity profile of senior debt at Holding level as of
30 June 2015
For private use only – Strictly confidential
Senior debt in Eurofins Scientific SE (EURm)
€ 58.7m
€ 211.7m
€ 58.7m
€ 362m
€ 500m
44
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 bioanalytical
testing market
Unique technological portfolio of
over 130,000 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 Factors Sustainable Market
Growth Drivers
Eurofins’ unique position in a young, fast growing and fragmented market
should lead to long term, sustainable profitability
= Solid Outlook
45
Introduction
Market & Strategic Positioning
Finance & Outlook
Transaction Overview
Summary
Appendix
Contents
46
Potential transaction rationale
Following an intense M&A activity in H1 2015 with more than a dozen
transactions signed* representing in excess of EUR500m in annual sales and
EUR 700m in enteprise value (if all do close successfully)
Going forward, Eurofins is committed to maintaining a very strong balance
sheet with significant headroom to be able to respond swiftly to compelling
opportunities
Use of proceeds would be for organic and external growth, as well as general
corporate purposes
The instrument would also be used for debt management purposes (such as
potential early redemption of OBSAAR bonds and Schuldschein, which now
have short maturity profiles)
The issue would further improve Eurofins’ liquidity position by lengthening its
debt maturity profile and reduce its cost of capital
*including Bio-Access and Biomnis in France: both deals signed but not closed to date; successful
completion subject to fulfillment of conditions precedent
47
Terms & Conditions
Issuer: Eurofins Scientific S.E., [acting through its French Branch]
Issue rating: Not rated
Issue size: Benchmark size expected
Maturity: 7.5 year (Jan-23)
Denomination: EUR 100k + 1k
Listing: Luxembourg Stock Exchange (regulated market)
Type: Senior unsecured
Documentation: Standalone / Change of Control / Make Whole / Clean-Up Call / 3 Months Par Call
Governing law: Luxembourg law
Joint bookrunners: BNP Paribas / HSBC / SG CIB
48
Introduction
Market & Strategic Positioning
Finance & Outlook
Transaction Overview
Summary
Appendix
Contents
49
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; 6% - 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 20.0% in 2014 despite significant future-orientated investments and one-off restructuring
costs
5-year CAGR: Revenues 17.1%, Operating Cash Flow 27.0%
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
50
Appendix / Back up slides
51
Consolidated Income Statement
2014 2013
EUR Thousands Adjusted
results
Separately disclosed
items
Reported results
Adjusted results
Separately disclosed
items
Reported results
Revenues 1,410,227 - 1,410,227 1,225,572 - 1,225,572
Operating costs, net -1,149,797 -30,420 -1,180,217 -1,006,291 -30,191 -1,036,482
EBITDA 260,430 -30,420 230,010 219,281 -30,191 189,090
Depreciation and amortisation -70,546 -10,737 -81,283 -57,380 -9,500 -66,880
EBITAS 189,884 -41,157 148,727 161,901 -39,691 122,210
Non-cash stock option charge and acquisition-related expenses, net
- -16,889 -16,889 - -9,977 -9,977
EBIT 189,884 -58,046 131,838 161,901 -49,668 112,233
Finance income 2,232 - 2,232 1,112 - 1,112
Finance costs -32,980 - -32,980 -24,570 - -24,570
Share of (loss)/ profit of associates 243 - 243 288 - 288
Profit before income tax 159,378 -58,046 101,332 138,731 -49,668 89,063
Income tax expense -31,131 8,930 -22,201 -22,049 4,879 -17,170
Net profit and loss for the period 128,247 -49,116 79,131 116,682 -44,789 71,893
Net profit and loss attributable to:
Equity holders of the Company 128,195 -49,091 79,104 116,759 -44,579 72,180
Non-controlling interests 52 -25 27 -77 -210 -287
Earnings per share (basic) in EUR 8.47 -3.25 5.23 7.79 -2.97 4.81
- Total
- Attributable to hybrid capital investors 0.07 - 0.07 1.27 - 1.27
- Attributable to equity holders of the Company
8.40 -3.25 5.15 6.52 -2.97 3.54
Earnings per share (diluted) in EUR 7.98 -3.06 4.93 7.30 -2.79 4.51
- Total
- Attributable to hybrid capital investors 0.07 - 0.07 1.19 - 1.19
- Attributable to equity holders of the Company
7.91 -3.06 4.86 6.11 -2.79 3.32
Weighted average shares outstanding (basic) – in thousands
15,127 - 15,127 14,993 - 14,993
Weighted average shares outstanding (diluted) – in thousands
16,060 - 16,060 15,994 - 15,994
Adjusted – reflects the ongoing performance of the mature and recurring activities excluding “separately disclosed items”.
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.
52
Consolidated Balance Sheet
EUR Thousands 2014 2013
Property, plant and equipment 323,747 251,113
Goodwill 679,030 456,388
Other intangible assets 193,534 86,382
Investments in associates 2,887 4,594
Financial assets and other receivables 23,264 16,805
Deferred tax assets 26,333 32,757
Total non-current assets 1,248,795 848,039
Inventories 24,623 20,141
Trade accounts receivable 321,476 272,650
Prepaid expenses and other current assets 43,625 34,353
Current income tax assets 14,728 20,141
Cash and cash equivalents 216,620 297,257
Total current assets 621,072 644,542
Assets classified as held for sale 3,323 4,435
Total assets 1,873,190 1,497,016
Share capital 1,520 1,507
Hybrid capital 300,000 150,000
Other reserves 105,510 98,699
Retained earnings 220,986 154,235
Currency translation differences 28,467 -16,755
Total attributable to equity holders of the Company 656,483 387,686
Non-controlling interests 7,758 7,054
Total shareholders' equity 664,241 394,740
Borrowings 638,054 666,875
Derivative financial instruments 12,362 15,119
Deferred tax liabilities 42,274 28,965
Amounts due for business acquisitions 25,235 16,928
Retirement benefit obligations 34,616 30,691
Provisions for other liabilities and charges 4,903 4,985
Total non-current liabilities 757,444 763,563
Borrowings 72,178 17,228
Interest and earnings due on hybrid capital 23,832 14,123
Trade accounts payable 127,141 100,951
Advance payments received 18,621 14,369
Deferred revenues 18,804 16,764
Current income tax liabilities 11,476 20,934
Amounts due for business acquisitions 19,073 9,892
Provisions for other liabilities and charges 8,279 10,881
Other current liabilities 152,101 133,571
Total current liabilities 451,505 338,713
Total liabilities and shareholders' equity 1,873,190 1,497,016
53
Consolidated Cashflow Statement
EUR Thousands 2014 2013
Cash flows from operating activities
Result before income taxes 101,332 89,063
Adjustments for:
Depreciation and amortisation 81,283 66,880
Non-cash stock option charge and acquisition-related expenses, net 16,889 9,977
Other non-cash effects 3,285 862
Financial income and expense, net 30,701 22,302
Share of profit from associates -243 -288
Transactions costs and income related to acquisitions -1,605 -2,233
Increase (decrease) in provisions, retirement benefit obligations -4,276 -531
Change in net working capital 17,077 13,773
Cash generated from operations 244,443 199,805
Income taxes paid -32,270 -30,466
Net cash provided by operating activities 212,173 169,338
Cash flows from investing activities
Acquisitions of subsidiaries, net of cash acquired -291,798 -87,437
Purchase of property, plant and equipment -105,506 -79,229
Purchase, capitalisation of intangible assets -29,018 -20,327
Proceeds from sale of property, plant and equipment 3,334 832
Change in investments and financial assets, net -1,631 -3,987
Interest received 2,233 1,130
Net cash used in investing activities -422,386 -189,018
Cash flows from financing activities
Proceeds from issuance of share capital 6,898 7,992
Proceeds from borrowings 41,277 325,261
Repayments of borrowings -27,220 -83,651
Change in hybrid capital 163,316 -9,114
Dividends paid to shareholders and non-controlling interests -18,314 -15,485
Earnings paid to hybrid capital investors -5,667 -9,666
Interest paid -30,476 -21,370
Net cash provided by financing activities 129,814 193,967
Net effect of currency translation on cash and cash equivalents and bank overdrafts
2,221 -3,236
Net increase (decrease) in cash and cash equivalents and bank overdrafts -78,178 171,051
Cash and cash equivalents and bank overdrafts at beginning of period 293,268 122,217
Cash and cash equivalents and bank overdrafts at end of period 215,090 293,268
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
1998
rights
issue
€ 6m
SPO 1
1999
rights
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 years Eurofins: +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
54
IPO
TICS Organic Growth
Source: Eurofins, Company websites
In spite of its lower cyclicality, Eurofins generates
comparable organic growth to its larger peers in each peak
of the cycle, and higher growth when the economy slows
TICS ex ERF = SGS, Intertek, Bureau Veritas
*
55 Title: Eurofins Corporate Presentation FY 2014 Document name: FY 2014.ppt EDR: 1-C-IR-PRE-01236128 Document owner: Pamela Antay
We have built a hard-to-replicate world-class
infrastructure
Eurofins has been consistently investing more than its peers
Source: Eurofins, Company reports
TICS ex ERF = SGS, Intertek, Bureau Veritas
*
56 Title: Eurofins Corporate Presentation FY 2014 Document name: FY 2014.ppt EDR: 1-C-IR-PRE-01236128 Document owner: Pamela Antay 56
57
Post acquisition and integration into Eurofins, both 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
CAGR
19%
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
