Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on EUROFINS SCIENTIFIC. We currently have 1 research reports from 1 professional analysts.
|13Dec16 07:13||PRN||Eurofins First in U.S. to Earn International Olive Council Accreditation|
|13Sep16 08:59||PRN||Eurofins Food Safety Systems Partners with AGGI Asociados for Public Food Safety Training in Mexico|
|03Aug16 02:36||PRN||Eurofins Appoints New President for US Microbiology Division|
|02Aug16 03:45||PRN||Eurofins QTA and Q-Interline announce Collaboration for the Advancement of Infrared Testing|
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Research reports on
Initiating coverage on Eurofins Scientific.
25 Oct 16
Recommendation and upside: We are initiating coverage on Eurofins Scientific (market cap. of c.€7.2bn and a float of c.58%) with a Reduce recommendation and a target price of €393 (c.8% downside). While we acknowledge the company’s dominant position in the attractive bioanalytical industry, its robust growth prospects, superior technical know-how and its successful value accretive M&A history, we believe the current share price (saw a rally of c.26% over the last three months, primarily fuelled by solid H1 16 results and full-year guidance upgrade) fully discounts all these positives. It currently trades at a 2016E EV/EBIT of c.28x (vs. 22x of SGS and 17x of Bureau Veritas), making the valuation highly demanding. Business: Eurofins Scientific operates in the €130bn global Testing, Inspection, and Certification (TIC) market (of which c.45% is outsourced), with a presence across 39 countries. It employs a total workforce of c.25k people across c.250 laboratories and offers c.130k tests/ methods to evaluate the identity, composition, safety and purity of biological products. Unlike SGS, Bureau Veritas and Intertek (the big three in the industry), which cater to diverse industries, Eurofins focuses on the niche bioanalytical testing market (outsourced market size of c.€12bn) consisting of three sub-segments – Food & Feed testing (market size: €2-3bn; market share: c.30%), Pharma/Biotech testing (market size: c.€5bn; markets share: c.10%) and Environment testing (market size: c.€4bn; market share: c.7%), all of which offer stable and strong growth prospects (in the mid single-digit range), mainly driven by the expansion and tightening of regulations, the growing demand for improved safety and quality of food and environment, the increasing trend towards outsourcing, a burgeoning middle class and rising demand in emerging markets. In addition, it has forayed into the c.€160bn clinical diagnostics space in 2014 through the acquisition of Viracor IBT and, since then, has made aggressive strides into this area with the help of several more acquisitions. Need to know: The bioanalytical testing industry is characterised by a number of small regional players, often operating with very low margins, providing excellent opportunities for consolidation by the handful of global players. Over the years, Eurofins has shown great acumen of identifying targets at a reasonable price, successfully integrating them into its group structure and improving profitability of these acquired companies. This has driven the strong growth in both the top-line and the bottom-line, thereby creating value for its shareholders. These acquisitions have also expanded Eurofins’s geographical reach, technological base and product offerings, helping it to become a leading player in the industry (#1 or #2 position in most businesses/countries in which it operates). This aggressive acquisition strategy, however, has come at the expense of its cash generation capabilities. The situation is exacerbated by the fact that unlike SGS, Bureau Veritas and Intertek Group, Eurofins’ business model is more capital intensive (capex is c.8% of sales vs 3-6% for the big three) given its focus on laboratory testing (requires significant capex), with negligible exposure to certification or inspection businesses (which require lesser capex). This is evident in the cash flow examination of the company – while the company has been able to convert c.80% of EBITDA into operating cash flow (over 2011-15), the FCF/EBITDA conversion is decidedly grimmer (average of c.20% over 2011-15). Eurofins’ share capital is primarily held by the founding (Martin) family, through a holding company, Analytical Bioventures, which owns 41.7% of the group’s share capital and 58.5% of the total voting rights, effectively controlling the company. The family remains involved in the day-to-day operations and the long-term strategy execution, as evidenced by their strong representation on the company’s board – three of the five board members belong to the Martin family (Gilles Martin himself, his brother Yves-Loïc Martin and their sister Valerie Hanote).
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
Small Cap Breakfast
17 Jan 17
Global Energy Development (GED.L) — To be renamed Nautilus Marine Services. Schedule 1 from developer and seller of hydrocarbons and related products. Reverse takeover. Raising $10.5m via a convertible. Expected 9 Feb. Eco (Atlantic) Oil & Gas—TSX-V listed oil and gas exploration has announced its intention to float on AIM. Assets in Guyana and Namibia. Proposed £2m-£3m fundraise. Diversified Gas & Oil—According to LSE website first day of trading on AIM now expected for 30 January.
N+1 Singer - Morning Song 19-01-2017
19 Jan 17
Actual Experience (ACT LN) 2017 – a milestone year for revenue | Bagir Group (BAGR LN) Independent NED appointment to strengthen Board composition | Bioquell (BQE LN) Reassuring pre-close statement | Carador Income Fund (CIFU LN) Q4 dividend increased to 2.75c, 0.5c higher than forecast | FreeAgent (FREE LN) Contract with Royal Bank of Scotland | Halfords Group (HFD LN) Excellent Q3 update, special divi and confidence in FX mitigations | N Brown Group (BWNG LN) Robust peak trading with reversal of drag from older titles | NCC Group (NCC LN) Interims confirm underlying business sound | St Ives (SIV LN) Downgrade | Summit Therapeutics (SUMM LN) Dr David Roblin appointed Chief Operating Officer and R&D President | Wilmington Group (WIL LN) Acquisition – Further scaling of Healthcare
N+1 Singer - Small-cap quantitative research - Momentum screen refresh + 10 focus stocks
12 Jan 17
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
Demanding targets exceeded
17 Jan 17
Sinclair is a pure-play aesthetics company with a concentrated and highly competitive portfolio of differentiated injectable aesthetics products, which target unmet clinical needs for effective, high quality, longer duration, natural looking and minimally-invasive treatments, which is a significant growth opportunity. Sinclair has an established sales and marketing presence in Europe, direct sales in Brazil, and operates through an international group of distributors in other markets, including SE Asia and the US. With the benefit of a strong balance sheet, Sinclair is investing in an accelerated growth phase and margin expansion.
N+1 Singer - Morning Song 16-01-2017
16 Jan 17
As the birthplace of Stephenson, Armstrong and Swan, the North East of England has a proud history of industrial and technological innovation. Despite local economic challenges, the region’s industrial heritage lives on through continuing success in high end engineering and technology. The recent takeovers of private equity backed SMD (subsea robotics) and Nomad Digital (wi-fi on the railways) are testament to this. The North East has also emerged as a leader in genetics and genomics with an enviable life sciences and healthcare infrastructure. Against this backdrop, we expect the region to continue to throw up attractive IPO candidates to build on the six new listings in the past three years. We expect 2017 to be far kinder to the existing portfolio of North East plcs than 2016 (a year to forget) with recent management changes one important theme for the new year. Our top picks are Hargreaves Services, Quantum Pharma and Zytronic (all N+1 Singer Corporate clients) and we are Buyers of Northgate and Grainger.