(AOF) – Eurofins Scientific SE has announced its intention to launch a new share buyback program for a maximum amount representing up to 2% of its share capital. A first program took place between October 3, 2022 and August 8, 2023. The new program would begin on October 25, 2023 and last until October 24, 2025, subject to the renewal of the authorization of this share buyback program. shares by the Company’s Annual General Meeting to be held in April 2024.
The company may interrupt this program at any time depending on market conditions and/or changes in its investment strategy.
Shares purchased under this program will be used primarily to cover the Company’s long-term incentive plans, but may also be canceled, used to partially finance acquisitions or for other purposes approved by the Board of Directors. administration and within the framework of the authorization of the extraordinary general meeting.
Eurofins Scientific SE mandates an independent financial services provider to execute the first tranche of this program for a maximum duration of three months starting on October 25, 2023 and ending on January 24, 2024 with a maximum volume of one million shares or 0 .52% of its share capital.
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Key points
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world, created in 1987, of bioanalysis involved in biopharmacological services, food products, environmental tests, clinical diagnostics, consumer tests and the supply of testing technologies for manufacturers;
-Rise in international activity of €6.7 billion, generated by Europe for 52% of sales and North America for 37%;
– Business model based on market networking by “spoke” laboratories for the provision of simple tests and by “hub” competence centers on innovation, external growth, ownership of real estate assets and autonomy of establishments,
– Capital controlled by the founding Martin family (33% of the capital and more than 50% of the voting rights), Gilles Martin being general manager;
– Balance sheet under control with a net debt of €2.8 billion, i.e. a leverage effect of 1.9, and free self-financing of €677 million.
Challenges
– Growth strategy: 3 pillars: autonomy of operational entities -900 laboratories in 61 countries, innovation and penetration of the Asian market, – revised 2027 financial objective: revenue of €10 billion and operating margin of 24% and effect leverage from 1.5 to 2.5;
– Innovation strategy integrated into the business model: long-standing and solid partnerships with research institutions, giving a competitive advantage: deployment of laboratories and IT solutions platforms owned and supported by the LIMS system and extent of databases BioPrint, support for stat-ups (nearly 300 in 20 years, including 50 in 2022), strengthening of cybersecurity.
-Environmental strategy aimed at carbon neutrality for 2025, after a decline of 9% in 2022, via: the generalization of the measurement of emissions generated by each of the sites / the use of carbon credits, participation in the Livelihood Carbon fund / circular management ;
– Benefits of the partnership of the American subsidiary Viracor with Cornell and Stanford universities;
– Acceleration of growth investments in 2022: 50 acquisitions (€270 million in revenue) and expansion of production sites;
– Strong scientific and strategic legitimacy and portfolio of + 300,000 analysis methods.
– Largely resilient activity (75% of revenue, excluding Covid) and strong barriers to entry.
Challenges
– Activity marked by strong seasonality, with a sluggish start to the year and sensitivity to harsh climatic conditions;
-Normalization of activity after the sharp decline in anti-Covid tests, inflation of raw materials and wages and logistical difficulties in 2022;
-After stable income, 2023 objectives of a stable turnover of around €6.7 billion, an operating income of €1.35-1.4 billion and free self-financing of €700-750 M€;
-2022 dividend of €1, i.e. a distribution rate of 33% and share buyback program.
Learn more about the Pharmacy sector
Biotechs put to the test
These companies are suffering from a much less favorable economic cycle, which is reflected in particular by a drop in venture capital financing of start-ups. These companies are therefore obliged to carry out layoff plans. Added to this is a much more restrictive regulatory framework. First, in the United States, measures linked to the Inflation Reduction Act (IRA) could have a strong impact on the margins of stakeholders. Indeed, from 2026, the federal Medicare program will be able to renegotiate the price of drugs marketed for nine years (chemical) or 13 years (biological), with discounts that could range from 35 to 60% for biotechs. Likewise, in Europe, with the new drug regulations presented in Brussels in April, the duration of patent protection will be reduced if the innovative treatment is not marketed in all member countries within two years.