Eurofins has targeted doubling the size of the business to €2bn in revenues by 2017, adding that it is sufficiently diversified in business and geographic exposure to achieve the aim.
The firm recorded its €1bn revenue objective a year ahead of schedule, according to the full year 2012 results, representing 25.9% year-on-year growth.
In the results it said the group became the leader in the food testing market in Brazil and the second largest food testing service provider in the US.
Growth in food testing is highest where there is regulatory catch-up (US), or increased trade and wealth (emerging markets).
France, the second largest market following the acquisition of IPL, generated 19.6% of revenues, and continues to see strong growth in food testing, supported by increased capacity following the completion of the expansion of the flagship laboratory in Nantes at the end of 2011.
In environmental testing, the group benefitted from the first full year consolidation of IPL, which has led to the leading market share in the domestic water testing market.
The group’s third largest market, Germany, which contributed 18.3% of revenues, posted high organic growth despite strong comparable figures in the previous year.
Eurofins said it is planning to invest €500m in capital expenditures over the next five years in the most modern laboratories, analytical technology and IT systems.
The US, now Eurofins’ biggest market generating 22.4% of total group revenues, posted double-digit organic growth during the year.
Domestic food testing market benefits from a steady increase in volumes in the wake of multiple food scandals, and as producers and retailers pre-empt the expected wave of new regulations associated with the Food Safety Modernization Act (FSMA) enforcement.
The company cited food scandals including contamination of peanut butter, mangoes, alfalfa beans; multi-state E.coli and salmonella outbreaks, and lean beef mislabelling in 2012 in the US.
Eurofins is reinforcing its food testing capabilities in the US by adding capacity to its existing sites, transferring technologies from food competence centres in Europe, and through targeted acquisitions, such as the deal for DQCI in early 2012, which provided an entry into the dairy testing market in the Midwest.
In environmental testing, the firm is reinforcing its footprint through strategic acquisitions. Reference contracts, such as the one from the US Environmental Protection Agency (EPA) for water testing, reflect the benefits of scale in specialized markets.
For the environmental business, most of the incremental growth was generated from market share gains either through acquisitions, or weakened competition.
The increase in capital expenditures in Q4 2012 was driven by progress made in building projects for sites including the extension of the Lancaster building for a food testing facility and capacity increases at Vergeze, France, in Vejen, Denmark and in Hamburg, Germany.
CEO, Dr. Gilles Martin, said: “Our ability to grow earnings despite losses from companies that are in significant restructuring, and the temporary dilution from new acquisitions that are not yet at group level, demonstrate the strong inherent profitability of our business as a whole.
“Whilst there is still work for us to do, especially in completing the restructuring programme for some of our recent acquisitions to enable them to reach group profitability levels, we are optimistic that we will be able to continue leading our markets and expanding our footprint.”