Investor Presentaiton
Return on Capital Employed
* eurofins
Before IFRS 16
implementation
After IFRS 16
implementation2
-
■ Heavy investment phase during 2016-2020 for:
■ Laboratory extensions of existing sites many
new sites in 2019 and 2020 not yet highly utilised
■ Start-up laboratories resulting in early operating
losses (part of SDI's) included in capital employed
but not contributing profits
infrastructure set up, development and
deployment of new generation IT solutions not yet
generating positive impact on efficiency and
margins
(EURM)
2016
2017
2018
2019
2020
Average capital employed at the end of
2,399
2,803
4,521
6,304
6,423
each quarter
Average capital employed excluding
Goodwill at the end of each quarter
657
785
1,080
1,925
1,996
■ IT
Adjusted EBITAS
358
400
521
574
1,024
ROCE¹
9.1% 15.9%
ROCE (return on capital employed
54.4%
50.9% 48.2%
29.8% 51.3%
☐
excluding Goodwill)
■
Resulting in dilution of ROCE short-term
ROCE = adjusted EBITAS/ average capital employed over previous 4 quarters
2 IFRS 16 added c. EUR 490m right-of-use (ROU) assets in 2019 and c. EUR 514m in 2020
into the capital employed figures
■Goodwill from M&A with over 110 acquisitions in
2017 and 2018 increasing capital base
Restructuring of acquired laboratory network (part
of SDI's) to fit with hub-and-spoke model
■ Hurdle rate of 12% ROCE (pre-tax) by Year 3
■ROCE should start increasing again when investment
phase is completed and Eurofins is reaping the
benefits from past investments
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