Eurofins-cerep Sa · EURONEXT:ALECR
Eurofins-cerep Sa — Eurofins — Investor Presentation (2013)
41 slides from Eurofins-cerep Sa's investor presentation, Jul 22, 2013
Slide 1: Eurofins Corporate Presentation Full Year 2012
Eurofins A global leader in bioanalytical testing in the food, environment and pharmaceutical sectors Corporate Presentation Full Year 2012 www.eurofins.com
Slide 2: Contents
Contents Introduction Market & Strategic Positioning Finance & Outlook Summary Appendix 2
Slide 3: Eurofins' Mission and key figures
Eurofins‟ Mission is to contribute to global Health, Safety & Environment with the best in bioanalysis Founded in 1987 Eurofins provides testing services in three main areas: IPO in 1997 in Paris at EUR 1.83 per share Food Network of more than 170 laboratories in 34 countries Over 100,000 re
Slide 4: Leading global and local market positions
Leading global and local market positions N°1 N°1 to N°3 N°1 10% worldwide worldwide worldwide Food & Testing for Market growth Feed Pharma/ rate Biotech Environment Testing Testing 5% (~ 40% of (~ 40% of (~ 20% of revenues) revenues) revenues) Market size ~ EUR 1.5 - 2.0bn ~ EUR 5bn ~ EUR 4bn estim
Slide 5: Drivers for long-term market growth
Drivers for long-term market growth Secular Underlying Fundamentals General Market Drivers Laboratory Market Drivers Consumer Demand for safe Increasing wealth expectations for pharmaceuticals, quality food and quality of Life protection and clean environment Consolidation of the fragmented laborato
Slide 6: Eurofins is set to reinforce its global market leadership
Eurofins is set to reinforce its global market leadership Eurofins Growth Cycles Eurofins 2017 2,000 2000-2005 CAGR 2006-2011 CAGR 2012-2017 CAGR 36% 18% 14% * Company objective 6
Slide 7: Well-positioned for sustainable growth
Well-positioned for sustainable growth Eurofins: 2012 Achievements Eurofins 5 year Report Card: 2007-2012 CAGR 8% organic growth versus 5% objective Leadership achieved in new markets Brazil Food Testing Japanese Genomics Testing Discovery Pharmacology 20,000m2 of new, large state-of-the
Slide 8: 80% of the world's population still has limited access to testing laboratories
An international network of world class, standardised laboratories is attractive for our customers FY 2012 revenue split : N. America 22.4% France 19.6% Germany 18.3% Nordic Region 14.0% Others 12.2% Benelux 8.5% Entry into high- UK & Ireland 5.2% growth markets with 17 start ups 80% of the world‟s
Slide 9: Exposure to solid economies and fast-growing markets
Exposure to solid economies and fast-growing markets Share of Eurofins revenues in various markets (2012) Germany Benelux Germany & USA Germany UK Total France Italy Spain TOTAL Austria Scandinavia Northern + Northern Europe Excluding Greece Switzerland Europe AP & EM USA France & Portugal AP& EM So
Slide 10: Eurofins' strategy aims at building long lasting competitive advantages
Eurofins‟ strategy aims at building long lasting competitive advantages Leading technology Quality of customer service Competence Centres & R&D activities Extensive expertise in local regulations for all major markets, and one-stop contact for Proprietary technologies for proof of compliance i
Slide 11: Contents
Contents Introduction Market & Strategic Positioning Finance & Outlook Summary Appendix 11
Slide 12: The Food testing market has robust growth drivers
The Food testing market has robust growth drivers Food scares and Globalisation: Raw Consumers‟ Outsourcing of crises, widely materials sourced increasing awareness industry‟s covered in the from countries and demand for safe internal or state- media with different QC and high quality food owned pra
Slide 13: 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, product Production Retail & Distribution development Microbiology Sensorial Dioxins Veterinary drug Vitamins Quality Control residues Authenticity Pesticides Organic residues POPs Labelling GMO My
Slide 14: High profile food scares have expensive consequences for producers
High profile food scares have expensive consequences for producers… Year Brand/ Contamination Impact Cost Country 2008 North Salmonella About 1,500 people sick throughout US ~ USD 100m America/ in tomatoes & Canada – pulling of products from – USD 250m Mexico and peppers shops & restaurants FreshPla
Slide 15: ...and destroy market value
…and destroy market value 2007 example: Menu Foods is the largest maker of wet cat and dog food in N. America Contamination Direct impact Indirect impact Melamine contamination of pet 48% drop in share price in first week. Tens, possibly foods due to illegal use of a plasticiser hundreds of Threat o
Slide 16: Eurofins is meeting the demands of global players
Eurofins is meeting the demands of global players The largest global food & beverage producers and retailers are clients of Eurofins 2012 Sales in 2012 Sales in Food and Beverage EUR billion Retailers EUR billion Nestlé Switzerland 76.2 Wal-Mart Stores USA 338.3 Unilever UK /Netherlands 51.3 Carre
Slide 17: The Pharma testing market is both healthy and full of potential
The Pharma testing market is both healthy and full of potential Need for big pharma Rapid technological change & companies to expand increasing complexity in testing new drugs pipelines require ongoing investment in technology & expertise The increasing complexity of clinical trials leads to incre
Slide 18: Underlying trends are increasing
Underlying trends are increasing Global Drug R&D Spending (USD billion) CAGR 8% Large pharmas need to refill their product pipeline 116 119 as the „blockbusters‟ start to come off patent 100 68 84 Drug development expenditures have increased substantially in recent years Total R&D is over USD
Slide 19: Eurofins Pharma Services: activity groups
Eurofins Pharma Services: 5 activity groups Genomics Pre-clinical / Clinical Registration Pharma Early (Central Products Development Laboratory) Testing / cGMP QC Sequencing Pharmacology Biomarkers Regulatory/Biocides/ Impurities Analysis Oligonucleotides Bioanalytical Bioanalysis Chemicals/Agro- St
Slide 20: 8 out of 10 largest pharmaceutical companies are clients
8 out of the 10 largest global pharmaceutical companies are clients of Eurofins Top 10 pharma companies Country Pfizer USA Global CRO Market Sanofi Aventis France Market GlaxoSmithKline UK CAGR* Breakdown Novartis Switzerland USA 60% 12% AstraZeneca UK Europe 20% 9% Merck & Co USA Japan 8% 18% Rest
Slide 21: The Environmental testing market continues to grow
The Environmental testing market continues to grow Rise in Progress in epidemiology contamination & & medicine has identified pollution issues more compounds as toxic Increasing demand by citizens for a clean environment EU expanding regulation (e.g. REACH) Increasingly long list of products i
Slide 22: Eurofins serves all the main environmental testing markets
Eurofins serves all the main environmental testing markets With Lancaster, Eurofins is the No.1 environmental testing service provider in the world Lancaster Environmental Consulting and Testing is the laboratory sampling companies of choice for Fortune 500 are natural partners companies in the USA
Slide 23: Global trends in regulation support the business
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) Major pieces o
Slide 24: EU regulations a key driver for the testing industry
EU regulations a key driver for the testing industry – e.g. REACH directive Objectives Examples of affected products or industries Listing and assessing the safety of 30,000 Metals, resins, acids, solvents, oils, fibres in textile, car chemical substances used by industries in components, toys, co
Slide 25: Outsourcing adds to market growth
Outsourcing adds to market growth Company Outsourced Activity Country 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
Slide 26: Eurofins' strategy builds high Barriers to Entry
Eurofins‟ strategy builds high Barriers to Entry Offering a premium quality service … ... and leveraging internal efficiencies Portfolio: over 100,000 reliable methods – Industrialising the laboratory process: unique in the world and ahead of rationalisation of sites and personnel competition
Slide 27: Contents
Contents Introduction Market & Strategic Positioning Finance & Outlook Summary Appendix 27
Slide 28: Laboratory Network Investments (1/2): Laboratory start-ups
Laboratory Network Investments (1/2): Laboratory start-ups to enter high-growth markets Country Market Operational achievements 1 Singapore Pharma 2 China Food, Pharma India: Food Lab profitable in year 2 of Asia 3 India Pharma, Food start-up 4 Japan Food, Pharma Japan: Radioactivity lab set up and
Slide 29: Laboratory Network Investments (2/2): Expand / modernise sites
Laboratory Network Investments (2/2): Expand / modernise laboratory sites 70 new/expanded modern state-of-the-art sites to enable consolidation / closure of smaller or old sites Total of ca. 200,000 m2 added or brought to most modern standards between 2005 – 2012 (20,000 m2 in 2012) Major facili
Slide 30: Objective: Reach leadership within 5 years of entering a new market
Objective: Reach leadership position within 5 years of entering a new market New Markets 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 X = Market Entry X No 1 Denmark: Food and Env. Brazil: Food Testing No 1 France Environment X No 1 USA: Pharma Products Testing X No 1 Sweden, Nor
Slide 31: Heavy investment in new markets and resources for future profits
Heavy investment in new markets and resources for future profits Building corporate Bringing recently Under development resource for future size acquired labs to group perimeter and growth standards Start-ups: 17 start ups Recruitment of top Deploy IT systems between 2006 and 2010 leadership e
Slide 32: Strong 2012 results despite significant investments
Strong 2012 results despite significant investments during the year demonstrate the benefits of past investments Q4 2012 Q4 2011 +/- % Adjusted Separately Statutory Adjusted Separately Statutory Adjusted Q4 2012 EUR m Results disclosed Results Results disclosed Results Results items items Revenues 2
Slide 33: Growth AND Profitability are critical objectives
Growth AND Profitability are critical objectives Group Profitability Objectives++ 3-tiered margin support towards mid- term profitability objective 1. Start of profit contribution from start- ups (FY 2012 break-even) 2. Proportion of companies in restructuring becoming smaller compared to the size
Slide 34: Solid Balance Sheet with headroom
Solid Balance Sheet with headroom OBSAAR Covenants applicable to financial instruments: issued March 2006 and June 2010 Dec‟12 Dec‟11 Max.limits maturity: 2006 bond EUR 15m left for 2013 Net Debt/ Clean EBITDA 1.7 x 1.7 x 3.5 x 2010 bond EUR 176m across 2015, 2016, 2017 Net Debt/ Equity 0.8
Slide 35: Debt ratios remain well below covenant limits
Debt ratios remain well below covenant limits Net Debt/Clean EBITDA: max 3.5x Debt ratios remain well below covenant limits despite over EUR 160m cash invested in the business Solid balance sheet EUR 134.3m cash at 31.12.2012 OBSAAR issue in June 2010 and Schuldschein issue in July 2011 Le
Slide 36: Outlook: becoming the world leader in bioanalytical testing
Outlook: becoming the world leader in the bioanalytical testing market Sustainable Market Growth Drivers + Key Success Factors = Solid Outlook 5 Year Objectives Food safety & contamination issues Unique technological portfolio of over 100,000 methods New regulations (e.g. FSMA, REACH) EUR 2
Slide 37: Contents
Contents Introduction Market & Strategic Positioning Finance & Outlook Summary Appendix 37
Slide 38: Conclusion: our sustainable competitive advantage
Conclusion: our sustainable competitive advantage Best in class technology and quality give best brand High-growth, non-cyclical markets driven by secular protection mega-trends No. 1 or 2 worldwide in most business lines Advancing globalisation but with very few global Strong international presence
Slide 39: Appendix / Back up slides
<8 eurofins Appendix / Back up slides 39
Slide 40: Eurofins has vastly outperformed the market since its IPO
Eurofins has vastly outperformed the market since its IPO and each of its 3 equity offerings (based on share price of EUR 122.5 as of 31 December 2012) Eurofins: +6,276% (32% CAGR) Since IPO CAC 40: +31% (2% CAGR) SBF 120: +48% (3% CAGR) S&P 500: +63% (3% CAGR) Since SPO 1 Eurofins: +1,449% (22% CAG
Slide 41: Post acquisition and integration, both sales and profits increase significantly
Post acquisition and integration into Eurofins, both sales and profits increase significantly Illustration Growth drivers post acquisition: 1) Sales increase through cross selling of Actual example of an acquired lab: Eurofins lab specialities internationally 2) Cost reduction – focus on most freque