Eurofins Scientific SE

Reported H1 revenue growth was modest because organic growth was 2.7% and FX was a 2.9% headwind; M&A contribution was very limited. Reported EBITDA margin was 23.3%, up 190 bps year over year, including a 50 bps exceptional gain from legal settlements; adjusted EBITDA margin was 23.7%, up 130 bps year over year. EPS increased 29% year over year to EUR 1.55. Free cash flow to the firm rose 46% year over year to EUR 403 million, with cash conversion at 47% and leverage stable at 2.2 versus December. For guidance, management said it is keeping its mid-single-digit organic growth objective for 2026, expects margins to improve this year, and confirmed its objectives for next year, including the view that 2027 should benefit from the ongoing hub-and-spoke and IT programs. CapEx is still guided at about EUR 400 million per year overall, with roughly EUR 200 million on owned sites, though some spending may slip into 2028.

Gilles Martin framed H1 as a period of strong execution on profitability, cash generation, and portfolio focus, even if top-line growth was below the company’s midterm goal. He emphasized that the business is becoming more efficient as duplicate sites are closed, hubs are built, and IT systems are rolled out, while saying the company is still in the middle of costly disruptions, especially in Europe. His tone was constructive and confident, repeatedly saying the company is on track to finish the network and digital transformation by end-2027 and come out with a stronger platform for growth.

Laurent Lebras highlighted the financial upside from margin expansion and cash conversion. He said reported EBITDA margin improved to 23.3% and adjusted EBITDA margin to 23.7%, with SDI down to 0.4% of revenue, and he pointed to EPS growth of 29% to EUR 1.55. He also stressed that free cash flow to the firm increased to EUR 403 million, leverage stayed at 2.2, and the company used the strong cash generation to increase share buybacks by EUR 200 million in the first half. On capital deployment, management said CapEx remains around EUR 400 million annually, though real estate spending is lumpy and may shift timing.

Analysts pressed management on why BioPharma growth weakened in Q2 despite easier comps, and whether the decline reflected contract losses, weak visibility, or a broader demand issue. Management said visibility is intentionally limited because the business has many small contracts and some larger clinical/CDMO programs that can move timing significantly; it pointed to ended contracts in Europe, weak European BPT, and negative growth in some ancillary areas like Phase I clinics, BioAnalysis, and CDMO. Questions also focused on CapEx and whether the pace of real-estate investment was slowing; management replied that spend is lumpy, owned-site CapEx is still guided at about EUR 200 million, and some projects may slide into 2028. A separate debate centered on whether Eurofins should be viewed as a conglomerate or a focused specialist, with Gilles Martin arguing that focus and market leadership in each vertical drive scale, margin, and digital efficiency.