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Eurofins plans four labs to support food testing growth

By Joe Whitworth+

01-Sep-2014

Picture: Eurofins. A site in Denmark.
Picture: Eurofins. A site in Denmark.

Eurofins is planning to add 100,000m2 of laboratory space in the next two years to maximize synergies and optimize efficiencies across the businesses.

The firm is setting up four laboratories in different US cities to support the growth in food testing activities.

More than 40,000m2 is planned to come on stream in 2014 to serve clients including Nestlé, Unilver, PepsiCo, Coca-Cola and Kellogg’s. 

It has also finalized the move of its southern US food testing hub into a new site with double the capacity at the University of New Orleans campus in Louisiana.

One-off costs from integrations, reorganizations and discontinued operations, and other non-recurring costs totalled €8.8m in its half year results compared to €4.5m for H1 2013.

However, temporary losses and other costs related to network expansion, start-ups and new acquisitions in significant restructuring dropped to €9.2m from €10.4m last year.

Strong revenues and growth

Dr Gilles Martin, CEO, said revenue growth continues to be strong and organic growth in the first half of the year was over 8.5%, excluding acquisitions in significant restructuring.

We are optimistic that a significant portion of our restructuring programmes has now been addressed, which should gradually unlock further profit expansion,” he said.

“Overall, acquisitions made in 2014 thus far are highly profitable and should not require significant restructuring.”

Eurofins is in the final stages of the construction of a large site in Vejen, Denmark, where five small and mid-sized laboratories will be combined.

In Benelux, the group is evaluating the combination of several small laboratories into two large sites in The Netherlands and Belgium.

In Germany, it is shifting several multi-building or multi-location laboratories into a large, single-site campus in Hamburg. In Sweden, it is combining two laboratories into one larger site in Uppsala.

Continued strengthening in food testing

Revenues in H1 were €644m, representing an increase of 12.8% (15.5% at constant currencies) on organic growth of over 6.5%.

Excluding acquisitions in significant restructuring, organic growth was over 8.5%.

The continued strengthening in the food testing business is underpinned by increasing market volumes and ability to gain market share due to large past investments, said Eurofins.

The bioanalytical testing market remains buoyant in the US, which accounts for 23% of the group’s total revenues.

In France, continued growth in food testing from 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, mitigated the impact of the ongoing IPL restructuring during the period.

The group’s businesses in the UK also recorded good organic growth in H1 2014, despite strong comparable results in the previous year, which included the horse meat scandal.

Examples of laboratories outsourced to the firm include the Austrian Research Institute, Raisio Group and Cranswick, Mondi and Danone.      

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