Everyone deals with this company on a daily basis without even knowing it

nantes The end of the pandemic is making itself felt in the balance sheets of Eurofins: Net profit fell by 23 percent to 606 million euros last year. This year, the global laboratory group, which presented its figures for the first quarter on Wednesday, will have to do without the special effects of the Corona virus.

The company reported a 10 percent drop in sales compared to the same quarter last year. In the first three months of 2022, the business with corona tests was more than 300 million euros, now it was less than ten million euros.

Eurofins boss Gilles Martin is nevertheless confident: he only ever saw the pandemic as an exceptional time. “The corona test business temporarily accounted for up to 20 percent of our sales,” said the Frenchman in an interview with the Handelsblatt. “Long term, we believe that all of our businesses will grow significantly.”

The company, which is listed on the Paris stock exchange index CAC 40, is one of the world’s leading providers of bioanalytical services. A network of 900 laboratories in 61 countries tests food and feed, examines pharmaceuticals and examines environmental samples for pollutants. The range of services extends to forensic analyzes for criminal investigators.

Eurofins: Corona pandemic suddenly makes laboratories visible

During the pandemic, Eurofins suddenly became visible to the general public with corona tests. Normally, however, most people don’t notice the work of the test companies in everyday life, says Martin. “We work very confidentially for the industry to ensure the products we consume every day are safe.”

Demand is high: According to a study by the consulting firm Spherical Insights & Consulting, the global market for tests, inspections and certifications (TIC) was worth a good 221 billion US dollars in 2021. By 2030, it is expected to grow to more than $300 billion.

In addition to Eurofins, other heavyweights are active in the TIC market, including Tüv Nord and Tüv Süd from Germany, SGS from Switzerland, Intertek from Great Britain and the traditional French company Bureau Veritas. While the origins of the competition sometimes go back to the end of the 19th century, Eurofins is a young company that has quickly established itself in the top group with strong growth. In some business areas, such as food testing, the company is the world market leader.

Eurofins boss Gilles Martin initially looked for adulterated wines

Eurofins started out in Nantes in western France. The first office from which Gilles Martin ran the company is now part of a test laboratory for alcohol and fruit juices. The company premises have grown by several buildings since it was founded in the late 1980s – and yet it is no longer the largest Eurofins location that is now in the US state of Pennsylvania.

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Martin owes the business idea to his parents: Gérard and Maryvonne Martin, researchers at the University of Nantes, developed a test method for the purity of wine. They applied for a patent – and asked their son to commercialize the invention. By the time he was 23, he had already founded two companies and was just doing his doctorate in computer science in the USA.

“At the time I had no idea about wine and bioanalysis,” says Martin. After it was founded, Eurofins initially remained in a niche. “We all enjoy drinking wine, but don’t seem particularly interested in knowing whether it’s authentic or not.”

Giles Martin

The head of Eurofins was a wine tester and became a billionaire.

(Photo: Eurofins Group)

Beyond the search for adulterated wine, however, Martin saw a lot of potential in the test business. “My idea was to combine a decentralized laboratory network in one IT structure,” he says. “This approach was new at the time, nobody had done it before.”

Eurofins: The former start-up with three employees now has 61,000 employees

Since the 1990s, Eurofins has been buying up laboratory companies specializing in other areas. Martin raised capital with an IPO, but the company also took on large debts. The increasingly aggressive growth strategy has meanwhile raised concerns among investors that the company could become overstretched with debt-financed acquisitions.

“There were times when we made massive acquisitions compared to our size at the time. That won’t be the case now, we don’t need that anymore,” says Martin. Organic growth is between six and 15 percent annually. “And we are currently founding 30 to 50 start-ups a year.”

Eurofins started out as a start-up with three employees, now there are more than 61,000 employees. Sales in 2021 were around 6.7 billion euros. Martin runs the decentralized company from Brussels, with the head office in Luxembourg. Eurofins also operates numerous laboratories in Germany, and the largest location in Europe is in Hamburg-Harburg.

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Martin, who speaks fluent German, said he could initially imagine the Federal Republic of Germany as a location for the company headquarters. “We lived in Nuremberg for a few years at the end of the 1990s, and one of my daughters was also born there,” he says. Germany is “very far ahead in bioanalytics”, chemistry, unlike in France, is “one of the top fields of study”.

The Eurofins boss sees growth opportunities in the coming years, especially in the environmental sector. There will also be an increase in demand in the pharmaceutical industry with new drugs and therapies in the fight against cancer, which are individually tailored to the patient and therefore require tests in each individual case.

Artificial intelligence is becoming increasingly important in food monitoring

In food testing, on the other hand, sales have recently declined somewhat. “Due to inflation, consumers have changed their purchasing decisions and are turning to cheaper products,” says Martin. “Manufacturers have responded by downsizing their offerings, requiring less testing on higher value products.”

Martin, who once wrote his doctoral thesis on the subject of artificial intelligence, relies on the power of data. “If an expert is looking for asbestos in a sample under a microscope, for example, it takes much longer and is also more error-prone than if you use an AI model,” he says. Eurofins employs more than 3000 programmers.

In the future, work in laboratories will be much more automated. “But there are still no robots that can handle the entire range of products to be tested,” says Martin. “Because it makes a big difference if a pizza has to be prepared for the food test today and a drinking cup with orange juice tomorrow.”

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