Eurofins Scientific (ERF) Q2 2026 earnings summary

Executive summary

• Achieved 29% year-over-year EPS growth to €1.55 in H1 2026, with 130bps adjusted EBITDA margin expansion and strong cash conversion, nearing 2027 profitability objectives ahead of schedule.

• Revenues rose 2.5% to €3,701m, with 2.7% organic growth, despite a 2.9% FX headwind; Life and Consumer & Technology Products Testing segments showed stronger performance as the half progressed.

• Ongoing network integration and digitalization programs are progressing, with full completion targeted by end of 2027.

• Strategic portfolio focus advanced through the divestment of MET Labs and electrical/electronic testing businesses and the acquisition agreement for Element's Life Sciences Testing Services in North America.

• Confirmed mid-single-digit organic growth and margin objectives for 2026 and 2027, despite current growth softness.

Financial highlights

• Basic EPS grew 29.4% to €1.55; revenues rose to €3,701m (+2.5% reported, +2.7% organic).

• Adjusted EBITDA margin improved by 130bps to 23.7%; reported EBITDA margin up 190bps to 23.3%, including a 50bps one-time legal settlement gain.

• Free Cash Flow to the Firm rose 46% year-over-year to €403m; cash conversion reached a record 47%.

• Leverage remained stable at 2.2x net debt/EBITDA, within the target range.

• Net working capital intensity reduced to 4.9% of revenues; capex ratio at 5.7% of revenues, down from 6.9% in H1 2025.

Outlook and guidance

• Maintains mid-single-digit organic growth target for 2026, requiring a significant H2 pickup; €125m consolidated impact from acquisitions expected.

• Margin improvement objectives for 2026 and 2027 reaffirmed; confident in achieving 24% margin by 2027.

• SDI at EBITDA level to further decline; FCFF and cash conversion to remain strong.

• CapEx guidance remains at €400m per year, with potential to decrease after 2027.

• Long-term organic growth objective of 6.5% p.a. and leverage target of 1.5-2.5x maintained.