Eurofins reveals lab space expected to go on stream this year
Between 2015 and 2017, there are plans for another 100,000m2 of lab surface, it said at the time of announcing its full year results.
60,000m2 was added in 2014, ahead of the plan for 40,000m2 to serve clients including Nestlé, Unilever, PepsiCo, Coca-Cola and Kellogg’s.
The food testing business continues to be supported by increasing market volumes, and the gaining of market share due to its large past investments.
Eurofins has begun construction of four additional food testing labs across the US, citing regulatory tailwinds as one factor behind growth in the country.
Ramping up US footprint
Eurofins completed the move of its central lab business from Washington DC to Lancaster, Pennsylvania following completion of the 7,250m2 extension, bringing the lab surface to almost 30,000m2.
Part of the extension houses a lab that serves as a hub for food microbiology testing activities in the northeast US.
In New Orleans, it moved to its lab with double the capacity of the older facility with over 4,000m2 of lab surface as a hub for the southeast and a competence centre for contaminants testing.
In the US, where revenues rose 29.6% to €356.9m, and which now makes up over 25% of total revenues, launched construction of four additional food testing labs to strengthen its position in the market, which is supported by regulatory tailwinds, and the firm’s growing scale.
Dr Gilles Martin, CEO, said organic growth remained above objectives despite economic headwinds in some regions and impact of some reorganization.
“The €453m total cash that we have invested in the business in 2014 for acquisitions (€292m), capital expenditures (€131m) start-ups and restructuring programmes (€30m), reflect our commitment in creating unmatched efficiencies and offering portfolio and securing long-term competitive advantages for all our businesses.
“In the next couple of years, we intend to continue to execute on our plans to further strengthen Eurofins’ competitive advantages and secure long-term leadership in the markets we are active in.
“For 2015, Eurofins’ objective is to exceed €1.6bn of revenues and €300m in adjusted EBITDA. Longer-term, I remain confident that the group should be able to achieve its objectives of at least €2bn in revenues and 20% adjusted EBITDA margin by 2017.”
EU consolidation
Eurofins consolidated five small laboratories into one large site in Vejen, Denmark for its food and environmental testing activities.
The consolidation, which was finalised in October, was reflected in the revenue contribution from the group’s fourth largest market with revenues of €160.9m in 2014.
Revenues from the Benelux were €144.3m, representing growth of 27.2%, as KBBL and Omegam were acquired in the food and environmental testing market sectors.
It is also combining several small laboratories in the Benelux region into one large site in The Netherlands and another in Belgium.
In Germany, several multi-building or multi-location labs are being consolidated into a single-site campus in Hamburg. In Sweden, two labs are being combined into one larger site in Uppsala.
Germany, the second largest market generating 16.7% of total revenues, grew 11.5% to €236.1m.
Revenue contribution from France, the third largest market was €226.5m (16.1% of total revenues).
Strong growth was driven by market share gains and contract wins such as a three-year agreement with Burger King to provide the fast-food chain with a food safety control program in the country.
UK and Asia Pacific
In the UK revenues were €77.8m on organic growth in excess of objectives.
Eurofins upgraded and re-designed 7,300m2 of its recently-acquired lab in Australia and New Zealand and is also completing construction of two labs in Queensland and Christchurch, New Zealand.
The growing scale in emerging markets and Asia Pacific is reflected in revenue contribution remaining at over 10% of total sales despite growth and acquisitions across most of the group’s other markets.
