Eurofins Scientific Se · EURONEXT:ERF
Eurofins Scientific — Investor Day (October 2024)
59 slides from Eurofins Scientific's investor day presentation, Oct 23, 2024
Slide 1: 2024 European Investor Day
CONFIDENTIAL AND PROPRIETARY - © Eurofins Scientific (Ireland) Ltd, 2024. All rights reserved. This document contains information that is confidential and proprietary to Eurofins Scientific SE and / or its affiliates and is solely for the use of the personnel of Eurofins Scientific SE and all its af
Slide 2: Disclaimer
Disclaimer 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
Slide 3: CEO Presentation
CONFIDENTIAL AND PROPRIETARY - © Eurofins Scientific (Ireland) Ltd, 2024. All rights reserved. This document contains information that is confidential and proprietary to Eurofins Scientific SE and / or its affiliates and is solely for the use of the personnel of Eurofins Scientific SE and all its af
Slide 4: Eurofins: The World Leader in Testing for Life
Eurofins: The World Leader in Testing for Life Key Figures 37 years of value creation • Long-term track record of turning investments into growth, productivity, margin expansion and Return on Capital Employed ca. 900 laboratories Over • Competitive advantages based on 450,000,000 scale and one-of-a-
Slide 5: Eurofins remains confident in its objectives for organic growth and M&A
Eurofins remains confident in its objectives for organic growth1 and M&A Revenue bridge (2019 to 2027E) Approaching organic growth M&A €10bn organic M&A organic growth Close to growth M&A organic €7bn M&A growth organic M&A €6.515bn growth €4.632bn 2 • Continued strength in Life and Consumer and Tec
Slide 6: Recovery in profitability is well underway, with 24% adjusted EBITDA margin objective
Recovery in profitability is well underway, with high confidence in achieving 24% adjusted EBITDA1 margin objective by 2027 COVID Challenges 2019-H1 2023: 3,000 30% • Unexpected acceleration of inflation starting in Q2 2022 due to the war in Ukraine not Before IFRS 16 Objective: adequately compensat
Slide 7: Start-ups continue to contribute materially to growth, but losses are on the decline
Start-ups continue to contribute materially to growth, but losses are on the decline Long track record Strategic rationale Contributions by start-ups in 9M 2024 Number of start-ups initiated Complements M&A strategy: • When acquisitions are too expensive or Organic growth contribution Programme Tota
Slide 8: Strong credit profile and long maturities
Strong credit profile and long maturities Leverage1 Debt maturity profile2 (€m) Key Highlights Hybrid (1st call) Eurofins’ balance sheet remains very solid Target range at the end of June 2024: 1.5x-2.5x Schuldschein Eurobond • Financial leverage1 was 1.9x at the end of June 2024 vs 2.0x at the end
Slide 9: Achieve self-financing of all needs by increasing cash conversion
Achieve self-financing of all needs by increasing cash conversion2 and disciplined use of cash Drivers Objectives Result • Increased EBITDA1 Free Cash Flow FCFF before • Net operating capex: ca. €400m p.a. • 2024: €800m – €840m investment in owned • Separately disclosed items1 at the EBITDA1 level:
Slide 10: Return on Capital Employed (ROCE) to improve in coming years
Return on Capital Employed (ROCE) to improve in coming years ROCE & ROCE excluding Goodwill1 • ROCE development affected by the following factors in 2023: 68% • Lower EBITAS due to decline in accretive COVID-19 testing, COVID-19 cost overhang and sudden inflationary headwinds Excluding owned • Incre
Slide 11: Our mid-term objectives & drivers
Our mid-term objectives & drivers (€m) FY 2023 FY 2024 Mid-term objectives & drivers FY 2027 Close to €7bn • Average +6.5% organic growth p.a. Revenues €6.515bn • Potential average revenues from acquisitions of €250m p.a. Approaching €10bn (Previously €7.075bn – €7.175bn) €1.525bn – • Organic growth
Slide 12: All of Muddy Waters' baseless allegations and disparaging claims have been disproved
All of Muddy Waters’ baseless allegations and disparaging claims have been disproved Subjects1 Eurofins’ response and refutations1 • Clearly demonstrated MW’s complete lack of understanding of Eurofins, its activities and representative peers Eurofins’ business 1 • Eurofins’ decentralised structure
Slide 13: Planned actions on subjects of greatest importance to Eurofins' key stakeholders
Planned actions on subjects of greatest importance to Eurofins’ key stakeholders Subjects Planned actions • Ernst & Young Paris has performed an additional independent audit Eurofins’ cash pooling arrangements and cash situation 1 Cash accounting in its consolidated financial statements as at 31 Dec
Slide 14: Summary
Summary Continued strong secular growth outlook in all Eurofins activities; mid-term Biopharma outlook is strong after reset of post-COVID pipelines Recovery in profitability is well underway, with high confidence in achieving 24% adjusted EBITDA margin objective by 2027 Strong credit profile with l
Slide 15: Who you will meet today
Who you will meet today Laurent Lebras Timothy Oostdyk Group Finance & Administration Director Group Executive Vice President BioPharma, Clinical Diagnostics, Genomics and Technologies North America Joachim Reichelt Yvoine Rémy Senior Vice President Senior Vice President Food & Feed Testing Europe E
Slide 16: CFO Presentation
CONFIDENTIAL AND PROPRIETARY - © Eurofins Scientific (Ireland) Ltd, 2024. All rights reserved. This document contains information that is confidential and proprietary to Eurofins Scientific SE and / or its affiliates and is solely for the use of the personnel of Eurofins Scientific SE and all its af
Slide 17: Eurofins framework organised for focus and efficiency
Eurofins framework organised for focus and efficiency Eurofins network organisation • >1,000 companies (= legal entities, or LEs) in the Eurofins network • As a comparison, Bureau Veritas1 has 507 LEs and Intertek2 has approximately 600 LEs • Each laboratory is a LE led by a local leader (= managing
Slide 18: Effective systems and controls
Effective systems and controls Standard global systems, including: • Microsoft Dynamics and Microsoft Great Plains for accounting platforms in Europe and North America with a coverage of ca. 90% of activities • IBM Cognos Controller and TM1 for consolidation, budgeting and monthly financial reportin
Slide 19: Cash audit
Cash audit The forensic tests performed by Ernst & Young Paris provide direct refutations to the baseless allegations in short seller reports published by Muddy Waters, LLC in June and July 2024: • No indication of irregularly altered documents was identified when performing dedicated forensic tests
Slide 20: Summary
Summary Eurofins framework organised for focus and efficiency Effective systems and controls Results of cash audit confirm Eurofins’ FY 2023 cash balance and the high integrity of its systems and controls 20
Slide 21: BioPharma Services
CONFIDENTIAL AND PROPRIETARY - © Eurofins Scientific (Ireland) Ltd, 2024. All rights reserved. This document contains information that is confidential and proprietary to Eurofins Scientific SE and / or its affiliates and is solely for the use of the personnel of Eurofins Scientific SE and all its af
Slide 22: BioPharma Services – Comprehensive Global Offering
BioPharma Services – Comprehensive Global Offering Clinical Development Pre-clinical / BioPharma PSS1 (Central & Agroscience Genomics Discovery Early Product Insourcing Laboratory/ Manufacturing Services Development Testing Solutions Bioanalytical) (CDMO) 21 countries Germany 50 sites US US Serving
Slide 23: BioPharma Services Evolution
BioPharma Services Evolution Started Select milestones / acquisitions Market position today 2011: Global infrastructure established (US, Among top 5 global players 2001 Central Laboratory / Bioanalytical Acquisitions: Netherlands, Singapore, China, India) 2005 Genomic Services Acquisitions: Among to
Slide 24: Leading Global BioPharma Network
Leading Global BioPharma Network 86 laboratories ~190,000 ~135,000 m2 m2 Leader in significant markets 38 laboratories Europe • Global leader in BioPharma Product Testing • Global leader in Discovery Pharmacology Services • Global leader in Agroscience CRO Services North America 144 laboratories in
Slide 25: Clients & Peers
Clients & Peers Major Biopharma companies Innovative biotech Example clients Clients1 + regional & local players Typical contractual ➢ Product Testing: annual master service agreements relationship: ➢ Research & Development Services: project-based agreements Peers + regional & local competitors 1 Ex
Slide 26: Market Update
Market Update 26
Slide 27: State of BioPharma Industry Funding
State of BioPharma Industry Funding BioPharma Funding ($bn) BioPharma Firepower ($tn) (IPOs, Follow-ons, Private and Public/Other) • Biotech funding has improved 1.4 significantly in H1 2024, although it 120 remains more heavily focused on later 1.2 117 phase assets • VC funds remain selective in te
Slide 28: Recent Funding Highlights
Recent Funding Highlights September 2024 • Bain Capital Life Sciences - $3B fund - transformative medicines, medical devices • Arch Venture Partners - $3B fund - support early stage biotech companies October 2024 • Frazier Life Sciences - $630M fund – small and mid-cap biotechs • Forbion - 2.1B euro
Slide 29: Continued growth of R&D candidates in pipeline and proportion of biologics to grow
Continued growth of R&D candidates in pipeline and proportion of biologics to grow Total R&D pipeline size Market drivers 25,000 22,825 R&D pipeline size continues to grow substantially, 21,292 driven by intensity & speed of innovation 20,109 20,000 18,582 • Increased focus on biologics vs. small 17
Slide 30: Large Market Opportunities
Large Market Opportunities Novel innovations1 Chemicals Biologics Cell and gene therapies Opportunities for Eurofins Description / Increasing complexity in Complexity2 testing and clinical trials Altering of genetic material Increased likelihood of outsourcing of testing Traditional, biomarkers, Tra
Slide 31: Established leading player in Cell and Gene Therapy
Established leading player in Cell and Gene Therapy with comprehensive client offering and >10 years of experience Successful and long track Supported the development of: record with Cell and Gene • 21 of 30 FDA-approved1 Cell and Gene Therapy Products Therapies (C>) • All 9 CAR-T therapies Eurofi
Slide 32: Delivering Value to our Clients
Delivering Value to our Clients 32
Slide 33: DiscoveryOne: Enabling Drug Discovery Through Integration of Testing and Consulting
DiscoveryOne Enabling Drug Discovery Through the Integration of Our Testing and Consulting Capabilities 10 Eurofins Companies Integrated service offering Strong Growth >6X revenues Acquired 2013 Biotherapeutics & Acquired 2004 Acquired 2012 Chemistry Cell/Gene Therapy Discovery & Development Solutio
Slide 34: Solutions for Obesity and Diabetes Drug Discovery and Development
Eurofins Discovery Provides a Wide Portfolio of Solutions for Obesity and Diabetes Drug Discovery and Development Market Leading GLP1R Agonist Anti-Obesity Drugs • Novo Nordisk Semaglutide • Eli Lilly Tirzepatide and Retatrutide Eurofins Discovery obesityLITE Panel of Cell Based Assays • The obesity
Slide 35: BioPharma Product Testing Footprint Strategy in North America
BioPharma Product Testing Footprint Strategy in North America Heat map of addressable customers for BioPharma Product Testing • >4,000 addressable customers in the US • We currently service 1,200 • Smaller regional customers value local relationships and nearby access to the laboratory • Infinity La
Slide 36: CDMO capacity and capability expansion
CDMO capacity and capability expansion: to provide fully integrated services offering Toronto Large Scale API Manufacturing Expansion • 1st plant completed H2 2024. Multiple 2,000L reactors installed • Plant capacity is nearly fully sold for next several years • Site can accommodate two additional p
Slide 37: Eurofins' proprietary IT solution offers more for clients and costs less
Eurofins’ proprietary IT solution offers more for clients and costs less than externally available software (example BioPharma Product Testing solutions suite) Eurofins’ proprietary BPT solution Benefits of Eurofins bespoke proprietary IT solutions Advantage: Differentiation and standardisation acro
Slide 38: Summary
Summary Biopharma funding environment will continue to drive secular mid-term growth, despite temporary slowdown following post-COVID pipeline resets and higher interest rates Strong rebound in BioPharma in the second half of 2025 when large studies that ended in early 2024 should be replaced by lar
Slide 39: Food & Feed Testing European Network
CONFIDENTIAL AND PROPRIETARY - © Eurofins Scientific (Ireland) Ltd, 2024. All rights reserved. This document contains information that is confidential and proprietary to Eurofins Scientific SE and / or its affiliates and is solely for the use of the personnel of Eurofins Scientific SE and all its af
Slide 40: Best-in-class Food & Feed Testing network in Europe
Eurofins operates the best-in-class Food & Feed Testing network in Europe Eurofins Food and Feed Testing European Network Market leader in significant markets • Nordics • Spain • Germany • Benelux • France • UK & Ireland >100 laboratories throughout Europe, including 5 hubs offering specialised test
Slide 41: Addressable global food & feed testing market enjoys robust growth drivers
Eurofins’ >$4bn1 addressable global food & feed testing market enjoys robust growth drivers Globalisation: raw Consumers’ Outsourcing of Food scares and materials sourced increasing awareness industry’s internal or crises, widely covered from countries with and demand for safe state- owned in the me
Slide 42: Food & Feed Testing offering is the most comprehensive in the market
Eurofins’ Food & Feed Testing offering is the most comprehensive in the market Agricultural production, Production Retail and distribution product development Microbiology Sensorial Veterinary Quality Dioxins Vitamins drug residues Control Authenticity Organic Pesticides POPs Labelling GMO residues
Slide 43: Our leading Food & Feed Testing market position
Our leading Food & Feed Testing market position is underpinned by the trust of our customers Food & beverage Agriculture Retailers Restaurants & Caterers producers Customers1 & Contracts Global players International conglomerates Supermarket chains Major operators Caterers + regional & local markets
Slide 44: Why customers choose Eurofins
Why customers choose Eurofins Leading expertise One-stop-shop Customer service • Comprehensive portfolio of state-of-the-art • We test almost all types of products that are • Fast and swift local service - in the laboratory and analytical techniques, always up to date with consumed or used in food &
Slide 45: Food & Feed Testing offers pricing and automation opportunities
Eurofins’ Food & Feed Testing offers pricing and automation opportunities • niche vs. blockbuster tests Broad Cost Leadership Differentiation Service Offering • boutique vs. automated lab • enhanced customer service Narrow Cost Focus Differentiation • optimized footprint setup Focus Cost Differentia
Slide 46: Finishing the Food & Feed Testing European Hub & Spoke network
Finishing the Food & Feed Testing European Hub & Spoke network of specialty, chemical and microbiology laboratories Today’s footprint Target footprint • Standardised network composed of: o Local time-critical microbiology laboratories o National chemistry production centres o European specialty test
Slide 47: Differentiators and unique positioning
Differentiators and unique positioning Operate best-in-class Hub & Spoke Food & Feed Testing network in Europe Most comprehensive offering Market Leading market position leadership Testing provider of choice by our customers Sustainable competitive advantage, due to Enhanced Services, Optimised Foot
Slide 48: Environment Testing European Network
CONFIDENTIAL AND PROPRIETARY - © Eurofins Scientific (Ireland) Ltd, 2024. All rights reserved. This document contains information that is confidential and proprietary to Eurofins Scientific SE and / or its affiliates and is solely for the use of the personnel of Eurofins Scientific SE and all its af
Slide 49: Addressable global environment testing market enjoys robust growth drivers
Eurofins’ >$5bn1 addressable global environment testing market enjoys robust growth drivers Progress in epidemiology & Rise in contamination & Increasing demand by citizens medicine has identified more pollution issues for a clean environment compounds as toxic Increasingly long list of products ide
Slide 50: Environment Testing offering is the most comprehensive in the market
Eurofins’ Environment Testing offering is the most comprehensive in the market Water Soil Air Other ▪ Drinking water, waste waters, ▪ Biofuels groundwater analysis ▪ Analysis of soil for full range of ▪ Outdoor pollutants ▪ Building materials ▪ Full range of contaminants contaminants ▪ Indoor and am
Slide 51: Eurofins operates the leading Environment Testing network in Europe
Eurofins operates the leading Environment Testing network in Europe France Sweden Denmark ▪ Specialties: asbestos, water, hospital ▪ Specialties: indoor air testing, solid ▪ Specialties: Covid Waste hygiene, polluted sites, air, radioactivity, oil fuels & radon Water, DNA, Geotechnical, Germany Finl
Slide 52: Our leading Environment Testing market position
Our leading Environment Testing market position is underpinned by the trust of our customers Engineering, Consulting, Industry, Manufacturing & Soil & Hazardous Waste Governments, Universities Construction firms firms & Non-Profits Customers1 & Contracts Global players Global players Typical service
Slide 53: Technology and thought leader in PFAS testing
Also leading through innovation: Eurofins is a technology and thought leader in PFAS testing Science behind PFAS testing increasing in scope and complexity Eurofins industry leadership OECD • >20 years of PFAS analytical experience revised definition Buck et al. defines OECD EPA4 estimates establish
Slide 54: The PFAS market in Europe, a sleeping giant
The PFAS market in Europe, a sleeping giant: regulations and public interest expanding in many countries to cover more matrices • EU Directive intends to implement PFAS monitoring in • European Commission sets maximum levels for certain drinking water in 2026 Link PFAS contaminants in foodstuffs Lin
Slide 55: Regulations expanding to cover even more specialised contaminants
Regulations expanding to cover even more specialised contaminants EU Urban Waster Water Treatment Directive Consequences for wastewater treatment Potential market opportunity 1. Extended treatment obligations • 26,523 to cover micro-pollutants (quaternary WWTPs in treatment) Europe4 2. Increased sco
Slide 56: Proprietary standardisation, automation and digitalisation initiatives
Parallel to stricter regulations, Eurofins’ proprietary standardisation, automation and digitalisation initiatives support strong profitable growth Sampling Reception Consumables Preparation Analysis Reporting Proprietary test kit and Samples collected in Proprietary micro grids Deployment of modula
Slide 57: The Nordic Waste case study (Denmark)
When agility, best in class TAT and capacity position us as the only possible testing provider in high exposure cases: the Nordic Waste case study (Denmark) Environmental crisis in Randers, Denmark Project requirements • High availability: 50-100 samples per day • High speed: rush turnaround time of
Slide 58: Summary
Summary Productivity will continue to improve through optimised footprint, best in class TAT, lean initiatives, automation, digitalisation and standardisation Operate best-in-class Environment Testing network in Europe Most comprehensive offering Market leadership Leading market position Testing pro
Slide 59: Definitions / Alternative Performance Measures (APMs)
Definitions / Alternative Performance Measures (APMs) APMs used in this presentation Adjusted results – reflect the ongoing performance of the mature and recurring activities excluding “separately disclosed items”. Separately disclosed items (SDI) – include: • one-off costs from integration and reor