Eurofins Scientific reports in-line 1H25 results with continued margin growth

Investing.com -- Eurofins Scientific on Wednesday reported first-half 2025 results in line with expectations, showing modest organic growth of 2.9% while continuing to improve margins.

The testing services company posted revenues of €3,612 million for the first half, matching consensus estimates.

When adjusted for working days, organic growth reached 3.9%, with total growth at 5.7% despite a 0.7% foreign exchange headwind.

Regional performance showed improvement in North America, which accelerated to 4.1% growth in the second quarter compared to 2.6% in the first quarter. Meanwhile, European growth slowed to 1.6% in Q2 from 2.9% in Q1.

The company’s BioPharma segment showed sequential improvement but remained weak with 1.5% growth in Q2 versus 0.3% in Q1.

The Life segment improved to 6.1% growth as first-quarter weather impacts normalized, while diagnostics grew 1.9% compared to 0.7% in Q1.

Adjusted EBITDA came in at €810 million with margins improving 30 basis points year-over-year to 22.4%.

Special items decreased 14% year-over-year to €37 million, though this doesn’t yet include any Synlab restructuring costs.

First-half adjusted earnings per share grew 18% year-over-year to €1.83, exceeding consensus estimates of €1.74.

Free cash flow to the firm reached €276 million, or €354 million excluding site investments, representing an 8% year-over-year increase.

Working capital outflow was €117 million compared to €78 million in the prior year, while capital expenditure totaled €251 million, including €78 million in site investment.

Net debt to EBITDA stood at 2.1x, up from 1.9x at the end of fiscal year 2024, though this figure is flattered by an additional €200 million hybrid.

Eurofins maintained its full-year 2025 guidance, which calls for mid-single-digit organic growth, year-over-year improvement in adjusted EBITDA margin, and free cash flow growth from the €954 million achieved in fiscal 2024.

Meeting this guidance will require significant cash generation in the second half, with over €600 million needed compared to the €354 million generated in the first half.

The company’s shares closed at €63.36, with analysts at Jefferies maintaining a price target of €46.00, implying 27% downside potential.

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