The factors in favour of a rise in the Eurofins Scientific share price:
Firstly it is clear that the position of this company in its activity sector is a true advantage. In fact, Eurofins Scientific is currently the international leader of bio-analysis in the food industry which generates around 40% of this group’s sales. But the group is also in third position in the sector of bio-technology tests that also generates 40% of this company’s sales as well as the environmental tests sector which generates 20% of this group’s sales.
Another strong point of this company in fact concerns the same activity sector in which it exercises its activities and which appears particularly promising. This is due to the fact that the current regulations and health environment is increasingly strict and therefore the requirements increase following recurrent food industry and pharmaceutical scandals over recent years.
Among the advantages of this group we can also cite its geographical position. In fact, Eurofins Scientific is currently present in over 40 countries worldwide including the United States, Germany, France, Scandinavia and the Benelux countries and possesses nearly 250 laboratories in its network. This strong expansion on an international level enables the group to protect itself effectively against risks linked to a single market.
Although Eurofins Scientific is basically a specialist in the food sector in which it is currently a major player it has succeeded in diversifying its activities in different niche markets.
Still relating to the advantages of this company, we can also add the fact that the group’s activities are considered as resilient activities for nearly 75% of the company’s revenue. Also, this activity sector has strong barriers to its entry. Eurofins Scientific can count on its significant data base created over numerous years to secure its position as leader.
We can also underline the strength of the Eurofins Scientific group strategy which is based on three major fundamental pillars. First, the decentralisation of operational entities that function in a totally independent manner, plus the opening and acquisition of laboratories with nearly 50 acquisitions between 2014 and 2018 as well as around 20 companies in 2016. Through this strategy Eurofins Scientific has succeeded in strengthening its position in a number of markets.
Finally, stock market investors and shareholders also appreciate the healthy financial situation of this company. This strength has notably been recently strengthened by an increase in the capital reserved for the ‘Caisse des Dépôts du Québec’ which gave it the opportunity to achieve new acquisitions without calling on the market.