Eurofins Scientific SE · EURONEXT:ERF
Eurofins Scientific — Investor Presentation (November 2012)
9 slides from Eurofins Scientific's investor presentation, Nov 5, 2012
Slide 1: Does the Stock Market Penalise Fast-growing Firms?
Does the Stock Market Penalise Fast- growing Firms? Chris Brooks Professor of Finance and Director of Research Presentation on the Occasion of Eurofins’ 15-Year Anniversary, 5 November 2012 www.icmacentre.ac.uk
Slide 2: Motivation and Background
Motivation and Background • There is a large literature concerning the effects on stock returns of IPOs, SEOs, acquisitions, significant capital investments. • This research mainly finds that they “destroy shareholder value” • Yet this is puzzling and perhaps counter-intuitive. 2
Slide 3: Objectives of the Study
Objectives of the Study • To examine the link between firms’ accounting data and their stock returns. • To use Eurofins as an exemplar of a very fast growing firm to look at the link between them more closely. 3
Slide 4: The Companies Examined
The Companies Examined • All stocks that were part of the CAC All-Shares on 1 September 2012. • We collect data for September 1997 – September 2012 • A total of approximately 500 firms. • The first part of the study uses all available firms (5288 firm-years). • The second part examines Eurofins in r
Slide 5: Total Asset Growth (TAG) and Returns
Total Asset Growth (TAG) and Returns • The contemporaneous relationship averaged across all firms is negative for 11 out of 15 years examined o It is also negative when averaged over all firms and years • Form decile portfolios sorted on the previous year’s TAG • Highest TAG decile portfolio : 12.2%
Slide 6: Key Performance Measures for Eurofins
Key Performance Measures for Eurofins Total Stock Information Treynor Growth in Growth in sales Growth in Growth in ROE ROA Returns Ratio Ratio assets per revenue (%) net cash (%) dividends per share (%) share (%) 1998 275.20 12.55 - 85.71 87.56 -28.69 - 8.26 5.83 1999 -1.35 -0.05 - 56.41 128.30 99.
Slide 7: Top Companies by Total Shareholder Returns 1997-2012
Top Companies by Total Shareholder Returns 1997-2012 Company Market Cap Market Cap Average Annual Return 2012 (%) Total Compounded Sep 1997 Sep 2012 Return 15 Years 15-year Return (%) (%) EUROFINS SCIENTIFIC 21.5 1485.78 30 77 5108 ACANTHE DVPPT. 5.4 47.12 29 97 4461 FIEBM 2.18 15.44 26 9 3191 SECHI
Slide 8: Top Companies by Information Ratio 1997-2012
Top Companies by Information Ratio 1997-2012 Company Information Information Total Ratio – Average Ratio 2012 Compounded 15- 15 years year Return (%) SOFIBUS PATRIMOINE 13.68 -1.82 100 EUROFINS SCIENTIFIC 3.69 7.24 5108 AST GROUPE 3.67 0.03 1285 VERNEUIL PARTICIPAT. 3.56 -1.21 133 EUROSIC 3.04 -5.46
Slide 9: Conclusions
Conclusions • Yes, the stock market does penalise fast-growing firms. • Thereafter stock prices catch up. • Shareholders should take a long-term view (5 yrs +). • Thereafter we get the perhaps more intuitive result that investors are actually rewarded for funding fast-growing firms. 9
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