Ladies and gentlemen, welcome and thank you for joining Eurofins' Q1 2025 Trading Update Presentation. Please note that this call is being recorded and will later be available for replay on the Eurofins Investor Relations' website. Throughout today's presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions] During this call, Eurofins' management may make forward-looking statements, including, but not limited to, statements with respect to outlook and the related assumptions. Management will also discuss alternative performance measures such as organic growth and EBITDA, which are defined in the appendices of our press releases. Actual results may differ materially from objectives discussed. Risks and uncertainties that may affect Eurofins' future results include, but are not limited to, those described in the Risk Factors section of the most recent Eurofins annual report. Please also read the disclaimer on Page 2 of this presentation, subject to which this call and the Q&A session are made. I would now like to turn the conference over to Dr. Gilles Martin, Eurofins CEO. Please go ahead.

And thank you for joining our brief quarterly update call. Well, the first quarter has proceeded as we expected it. We've had longer discussions with many of you when we published our annual result for 2024. We've had good organic growth in most of our business. Our food testing, environmental testing business did very well. We were a bit affected in the U.S. in environment due to the very extreme weather that we saw in Q1 and a couple of phasing in large programs, but we're very positive about the growth of that area. It remains a nicely oriented market, and we have a strong leading position in Europe and North America. In biopharma product testing, we continued to do well and register good organic growth. The areas that we had flagged as being affected continue to some extent to be affected. We have a very negative base effect in our central laboratory, in Biopharma and our bioanalysis, where we've had some very large studies that ended in Q2 or Q3 of last year, but still are in the base -- in the comparison base in 2024 for Q1. Agroscience continues to be soft and we flagged that, that might not change for a while. Well, of course, as we go towards the end of this year, the comparison base will be much lower. Overall, we are positive about our markets. Of course, the world is undergoing a lot of change, a lot of uncertainty. To some extent, we've been there before. I've had the privilege, if you want, to go through a few economic crises or some and have observed through those crises that our core business is very resilient. Testing food, water, pharmaceutical, those are important things that need to get done and we don't see that changing. We have had in the first quarter no sign of all the tariff or other geopolitical aspects affecting our business. It is, of course, since the war in Ukraine and the difficulty in Germany, for example, the German economy has not been doing well the last two years, and we have less growth there than we used to, but still our business is solid. So, overall, we are positive about the future evolution of our business and prepared to adjust to things that might affect our clients. And -- but normally, wherever food come from, it has to be tested. Whether it's imported or not imported, it's something that has to be tested. So, we have no significant causes for worries. Also, clinical diagnostics, a very local business that needs to be done because people get sick and they need to be tested, and there is a lot of innovation, and new tests can help people stay healthy. So, that's for the general the general presentation of the organic growth. On the Pages 4 and 5 of the presentation, we give a bit more color on that. Of course, FX is very volatile, too. So, it's really hard to know what FX will be in Q2, Q3, Q4. We've seen very unexpected swings before in directions we didn't expect, sometime positive, sometime negative. So, we cannot change or update anything regarding FX on a quarterly basis. We did it a bit last year, but actually Q4 of last year turned out to have a better FX result than what we thought when we adjusted our objectives for Q4 of last year. So, we're not doing that guessing game anymore. Maybe you know better than us what FX will be in two, three, or four quarters. Organic growth, as I discussed on Page 5, you get a bit more color on this. Overall, we're still affected by these base effects in -- especially in the clinical parts of our biopharma business. But the bulk of our business is doing very well. And this thing in biopharma should pick up at some point. We're still bullish on the overall biopharma midterm orientation and growth and our positioning and the capacity that we have that will come online. Also in clinical diagnostics, we're adding capacity. And that will lead to growth and profitability growth. We incur very significant costs when we launch new laboratories, CapEx costs and operating losses cost. And as those labs fill, we see the benefit of that. We've made a significant acquisition in Spain, and we closed that acquisition in the first quarter -- at the end of the first quarter. It is probably the largest laboratory -- clinical laboratories network in Spain, added to our position, which was number two and number three. We are a strong leader. That network was not profitable, so we are going to have to make very significant integration to bring the two networks together, but we paid very little for it. So, the upside for us in terms of value creation is very significant once we integrate our two networks and remove the very significant overlap. So, we're optimistic that we can create a lot of value over the next two to three years on that acquisitions. Although short-term, it will cost us. That's part of our budget for SDI this year, some significant one-off reorganization costs and some dilutive effect in the short-term. But the impact, we think within year two or three will be quite positive in terms of return on capital employed. So, those are the significant news of Q1. We continue to make small bolt-on acquisitions everywhere. So, we are on plan, and we think we will achieve our objectives in terms of acquisitions for this year, including this large acquisition of -- in Spain. We might be above the target for this year. On Page 7, we describe a bit where our cash goes to. And -- so, we continue to build the group. It -- we make every five-year a plan. And now we are well ahead in the third year of this five-year plan. By 2027, on our current markets, we will have built our complete laboratory network with hub-and-spoke network. We will have developed and deployed a complete new portfolio of IT solutions to fully digitalize our business, remove a lot of duplication, remove causes for errors, for potential mistakes, miscommunication. It is causing a lot of disruptions in our business, the rollout of such a new suite of IT system when you have IT changes. So, we have cost for that. We have costs that are -- basically, we can't even calculate them. They're not development costs. They're just disruptions to our business, people being busy learning, deploying a new system, entering the core data in the new system making, making -- fixing all the glitches and so on, especially since at the same time, we are completely rebuilding our infrastructure -- our IT infrastructure in a much more resilient manner. So, we will end 2026 with -- probably 2025 actually for the infrastructure with a completely new super-modern IT infrastructure, more resilient, more compartmentalized. And by 2027, we are optimistic that we'll have deployed all those new IT solutions, which will, on the one hand, mean less cost; and on the other hand, mean a much more efficient, faster, better on business. So, this is a core of what we're doing. Actually, you don't really see it in the numbers, except you see the cost in the numbers. And it impacted also a little bit on the top line from all those disruptions that are -- that occur when you deploy a new IT -- a set of new IT solutions on a very broad network. But we think that will be very positive. In terms of balance sheet, Laurent can talk more about it if you have questions, but we are committed to our investment-grade rating and to keep our leverage in the range that we have stated, 1.5 to 2.5. we issued a new hybrid to replace the one we had in the same amount. This is about €1 billion of hybrid, which we think is a good component in our total balance sheet. And we are returning a lot of money to our shareholders. We are of the opinion that our share price is very depressed, has been very depressed for a while for reasons we don't quite understand. And we have decided to deploy a significant part, not insignificant part of our cash flow and our capabilities, our finance capability within this leverage to buy back shares. And as you see, we even canceled a significant amount of shares in the last few weeks. We will propose a dividend for payment at the end of this month for general assembly, which is taking place this week. And Eurofins is slowly coming into a phase where we should generate a lot of cash and return a lot of that cash to our shareholders in different channels. Some people might ask, what about your leverage? And as I mentioned, our -- we also have the possibility to raise the funds, should the share price anomaly has -- be sustainable by disposing some noncore assets, not in a huge way, but it can be part of the financing if required. On Page 8, we just repeated our objectives as they were published -- when we published our 2024 results. Basically, today, we don't see a reason to change them. And as nobody knows what FX will be, we wouldn't be able to do anything for that. And on the operating, we see pluses and minuses of potential changes. And there, again, it's very hard to know whether those changes will happen, when will they happen, how much it will affect our clients and what are the positives. Because in the way testing, the more duplication there is in production, the more testing you have to do. If you have three factories making the same thing rather than 1 factory, the three factories have to do testing. That's a very global and macro view, but testing is required. So, if you centralize testing in 1 country for the whole world, you have in fact less testing than if you produce in three different places. Now, this is a bit science fiction because nobody knows exactly what will happen. But that gives a bit of a 10-year view, some color on how we think. We think actually, if the world is efficient and produces in a single space, which is -- place which is the most cost-effective, that reduces the need for testing rather than producing everything everywhere, which then need to be tested on smaller batches. That's a very general view, and I don't know how applicable this will be or come to be, but that's how we see. So, overall, we don't see -- in spite of the -- a lot of changes in the world, the economy, the macro economy, geopolitics, we don't see major changes now from what we saw when we published our 2024 results. But of course, if you have specific questions, we'll be happy to answer. And now I'll turn back the microphone to you for questions.

Thank you very much. [Operator Instructions] Thank you very much. Your first question is coming from Remi Grenu of Morgan Stanley. Remi, your line is live.

Good afternoon and thanks for taking my questions. Just three, if I may. So, the first one is on the weather impact in Q1 in environment in the U.S. that you're calling. Can you help us quantify that and if you are expecting any kind of catch-up effect in the second quarter of the year? So that would be the first question. Then the second one, I think you previously flagged that these early-stage clinical activities in Agroscience, which is the pocket of weakness, declined 10% in 2024. So, wondering whether the momentum in this business has improved against the minus 10% last year and whether the recent engagement with clients and your Q1 publication has made you more confident on -- in the potential beginning of recovery later this year? And the third one is just housekeeping, if you can give us your view on the work and the impact we should expect for the second quarter this year? Thanks.

Thank you. Yes, our U.S. teams are -- in environment are quite positive for the remainder of the year, and they do think there will be a catch-up, especially some large contracts that maybe started a bit later should be spent or carried out within the remaining part of the year. I don't have the exact number of the early-stage reduction. But as I mentioned, we have a big base effect from the central lab and from the bioanalysis and also in genomics. And we have -- and that base effect will finish when those -- when the comparable periods in 2024 where those studies were still running will run out. And then we have -- the other thing is when do new studies start for which there is always a bit more uncertainty, as usual, because it depends on biopharma processes and biopharma advancements of developments, et cetera. So, that would boost even more the growth in addition to the end of a very strong base effect. And we still think that within Q4 of this year, we should start to see the positive trends in Biopharma. Agroscience is depressed and might stay depressed for a while. It's -- again, we have a base effect of things having gone down. We don't think it will go down a lot from there, but we don't think either it will pick up in a big way in the short-term. In the midterm, of course, the world needs agrochemicals, and it's a challenge because more and more agrochemical become a question of controversy. If you -- for example, in the topic of PFAS -- broader topic of PFAS, one of the related compound called TFA, we start to find it everywhere. It was found -- yesterday, there was a publication, it was found in wine at fairly high level. We already found out it was product. This is a PFAS derivative, and that could mean a lot of testing is required. How fast this will be required and so on, we don't know. But there is a lot of things that could happen that would -- that could push the testing requirements. On the working day impact, I don't have it in front of me, but Laurent can answer.

Yes, it should be negative still in Q2 by 0.7%. But it should be at about flat for the remainder of the year in Q3 and Q4.

Okay, understood. Thanks very much.

Thank you very much. Our next question will be asked by Suhasini Varanasi of Goldman Sachs. Suhasini, your line is live.

Hello, good morning or good afternoon. Thank you for taking my questions. Two for me, please. In the U.S., do you have any exposure to any pharma projects or health projects that are subject to federal funding with the government and which are potentially at risk of cuts? That's the first one. Second one, at the end of last month, you issued the press release that discussed the potential purchase of related party leases. First bucket, I think, of seven sites, potentially as soon as this year; second bucket, subject to a consultative nonbinding shareholder vote. Can you help us understand how you're thinking about the timing of these purchases? And what implications should we see for depreciation charges as a result on an annualized basis? Thank you.

Thank you. Yes. So far, we have not seen much biopharma linked to budget costs in the U.S. by the U.S. government. Our biopharma work is, I would say, almost exclusively for either biotech companies or pharma companies. In our Genomics business, we work a bit for academics, so universities and so on, and we did see some effect. That's a really small business for us. Our whole genomic business worldwide is something -- is smaller than €100 million, so is -- and the U.S. part is maybe €40 million. So, we saw a bit of an effect on that, what is it called, genomics testing for the academic part. But at the size of Eurofins, €7 billion, it's really a drop in the ocean. And what the general -- I mean the question you haven't asked [indiscernible] FDA do or not do, this is, of course, hard to know. They were saying yesterday, they want to outlaw a lot of dies in food. Whether that will happen, of course, nobody knows. But of course, to take that out completely in all products and make sure it's not there, it's going to be also a testing challenge. Pharma products in the end have to be safe. And vaccines, we need vaccines as we see in Texas. But it's very hard for us to predict anything. Our view and the view of our clients, more importantly, is that they are bullish about the potential of developing new products and medicines that really help us live longer and better. And leases. Yes, leases, we have asked to investors for a consultative vote. We have engaged since we had those slanderous attacks. Of course, we've had a dialogue -- an increased dialogue with our investors to try to find out what they want. It seems to be clear that our investors would like this problem -- potential problem, which is more premium -- matter of appearance than anything to go away as soon as possible. So, our investors would like that, but of course, don't want us to have too much leverage. And that will guide basically our decision as to the timing. The timing from the point of view of our investors is, generally, if I can summarize it as I understand it, yes, it should be done. It should be done as soon as possible while not being to the detriment of the other needs for use of capital. So, in other words, if we need our capital to buy companies, if we need our capital to buy back shares because they are really very depressed, if we need our capital for other things, then that should take precedence over the buyback of the buildings. But if we have headroom and we can afford to do it without damaging or preventing us from doing the things we need to do, they would like this problem to go away and this to be dealt with. And this will be the guiding principle that we follow. The easiest would be to do all-in-one transactions and still this year and be done with it. That's the optimistic scenario, assuming we have enough cash and it's -- maybe your share price recovers a bit and so on, which makes buying back shares right now a bit less attractive. There are a number of moving parts that we will consider, that the Board will consider when making that decision. But the direction is -- and I think it will be confirmed on Wednesday.

Tomorrow.

Tomorrow, yes, by our shareholders' vote to which my holding will not participate. So, you will have a clear view of what the non-related shareholders think. Our -- recommendation to get this done. So, it will get done. And the sooner we can do it, the better. But if there are other places where we should invest our shareholders' money, including buying back our shares as a priority, we will also do that. So, the decision will be in flux until the end of this year, depending on a number of factors. Also, I mean, any other use of capital, M&A, et cetera, or potential small divestments or -- of nonmaterial or businesses that are not core to our business. So, all those aspects will play into deciding the exact timing of this.

And Suhasini, concerning your -- the impact on the depreciation, we pay about €35 million of rent to related parties. The two buckets are more or less of equal size. So, it's quite linear, the impact, depending on the timing of repurchase of these related party assets.

Thank you very much.

This will increase a little bit leverage but increase also EBITDA by the amount of rent that will go away.

Understood. Thank you.

And I think it's -- if you look at what the expert who value those buildings, and I was not involved in any way in that, by the way, is they -- I think it's something between 7% or 8% cap rate. So, that gives you an idea of the impact -- financial impact. So, it's not the priority investment to spend money, but considering it gives us like -- these are -- those are buildings that we will use -- Eurofins will use forever. They are a very low-risk investment because we know we would have to pay the rent, no matter what.

Thank you very much.

Okay. Thank you very much. Our next question is coming from Delphine Le Louet of Bernstein. Delphine, your line is live.

Thank you. Hello. Good afternoon everybody. Laurent, three question on my side. I just need a valuation of the U.S. impact regarding the bad or the poor weather condition you have over the first trimester. Was this something around €20 million, more or less, in Q1? And the other question is how you're going to mitigate that in terms of EBITDA impact. The second question deals with the French dairy reimbursement into the lab testing. And I was wondering if you can also quantify that and give us more granularity regarding the evolution of the mix in France regarding that division in between the reimbursed and the non-reimbursed testing? And finally, can we have an update on the arbitrage procedure regarding SGS agroscience business, please?

Thank you. I think I will answer because I don't think the impact of the weather is €20 million. It's a few millions, but single-digit million. And -- but on the quarter and one -- just one €500 million business line issue, that's €125 million per quarter, €125 million, so 5% $125 million is €5 million -- type of math. In France, all our clinic -- I think you had mentioned the clinical testing business. It's pretty much all reimbursed, some by private insurance, some by the state, but mostly by the state. But we do specialty and the reimbursement cuts were less for specialty than for routine. So, we -- and we can introduce also much more test in specialty in the genomic area. And the arbitrage with SGS, it still goes on. We believe that the deal should have completed as planned. We will see the time line is a year or two, I think, to get to a resolution on this one. And we will continue to pursue it aggressively as -- that are ongoing.

Okay. Thanks.

Thank you very much. Our next question is coming from Neil Tyler of Redburn Atlantic. Neil, your line is live.

Thank you. Good afternoon. Just a question on environmental testing, and I think particularly in the U.S., the sort of medium-term outlook and how you see the vulnerability or exposure of that business to GP, but more specifically, I think -- I suppose, construction trends. Can you help us understand which components of the environmental testing business, U.S. and elsewhere, we should consider to be sort of linked to construction trends, please? Thank you.

Thank you. Yes, there is some level linked to construction, I'd say a lot, especially in Europe to infrastructure, so big infrastructure programs have an impact. And of course, all those programs have long time lines. When government in Europe has allocated money for infrastructure, it can take five to 10 years to get that one spent and build the roads or the bridges or whatever. For private construction, the timelines are more three to four years. And -- but also all the transactions on existing buildings require environmental testing, Phase 1 testing and so on. There is also a big decontamination programs of known contamination. There has been assessments and there is ongoing assessments of potential contamination. Once contamination is detected, it has to be remediated. A lot of testing is carried out as part of the remediation of sites that were already identified as being contaminated. I don't have the exact component on the new build. We also do a lot of building testing, existing building testing, for example, asbestos in buildings. That's often due to renovation, but if you do energy protection of buildings while making buildings more environmentally friendly, then you also have a lot of asbestos testing and other contaminants testing, mold testing. A lot of testing and building can be also recurring like water. The water testing part is, of course, of the environmental testing. It's probably half of the market. I don't know if it's half for us exactly, but in total spend might be half, is all completely recurring. If you're testing drinking water, swimming pool water, all those things are not really linked to the economic cycle at all because they -- just ensuring the water we drink or the water or the rivers and the sea and so on is not polluted. But we can research that. It's an interesting point and try to get those data points.

Thank you. That would be helpful. And then the second question on the European food testing. release mentioned that, that had been stable, which feels -- perhaps I'm wrong, it feels like a sort of loss of the recent momentum that has recovered quite helpfully during the second half of last year. Can you perhaps expand a little bit on what you see happening in European food testing?

I think we have differences from country to country. But I think, I mean, specifically, it's about linked to our overall growth -- of our overall growth for the first quarter. And again, one quarter doesn't mean so much. We've always said that, don't overemphasize one quarter. But it's -- we have areas where it's softer, like the areas where the economy is more challenged like Germany and areas where it's more dynamic within Europe. When we said stable growth -- continued stable growth in Europe within Food Testing means basically around mid-single-digit, which it was higher, and we've had periods where it was high single-digits for food testing in Europe. But the economic climate -- and that gives you an idea of -- Germany has been in recession for two years, and we still have positive growth in Food Testing, not as big as it was before. And it shows a bit how -- not recession-proof -- fully reception-proof, but relatively little affected by a recession, our business can be.

That’s great. Thank you very much. That’s very clear.

Thank you very much. Our next question is coming from Arthur Truslove of Citi. Arthur, your line is live.

Good afternoon. Thank you very much for taking my questions. Three, if I may. The first question, I heard that a number of drug companies have been pulling forward drug shipments to North America. Has that pulled forward revenue within your biopharma business on the basis that those shipments would need to be tested before being sent over to the U.S.? Second question on the margin. Obviously, U.S. dollar hasn't been performing especially well against the euro. If you take rates as they are today, what impact -- what kind of impact does that have on the margin that you're likely to have -- what kind of impact on the margin is that likely to have on a full year basis? And then third question, clearly, the FDA in America have seen quite a few people let go. Is this impacting your customers' willingness to conduct biopharma testing no, which stages of the process? Is it more at the beginning, in the middle or the end of the clinical trials process? Thank you.

Thank you very much. On the first question, drug companies pulling forward shipments, I think it wouldn't have affected us at all or very minimally. That would come maybe from Ireland where we have some operations, maybe marginally. But we do -- the bulk of our testing is actually for the development of drugs where -- for the phases where -- the clinical trial phases are -- we have the Discovery. So, Discovery is very early stage, and that was affected like starting two years ago after COVID, when companies were reevaluating their investment in early stage. The bulk of what we do is on products that are not so far from being on the market, that are three, four, five years from being on the market, and that's not what gets cut. This is like the research that needs to go on because it's going to be monetized. Whether -- coming to your last question, whatever the FDA does creates a huge bottleneck. So, the FDA cannot approve products -- I would doubt that it would go that far. There is certainly the whole U.S. biopharma industry, the local biopharma industry will be massively affected. And they are paying for it, by the way. The people at FDA were doing the drug evaluation. There are fees that the pharma industry pays for those things. So, we haven't heard from our clients that they would want to test less or do less or develop fewer product because there is arm wrestling about reimbursement of pharma product, and the pharma industry says, well, if you cut reimbursement, then we'll do less research. But in reality, research is done because companies know their products will go off patent. And if they want still to be there in five or 10 years, they need to have new products. Otherwise, everything goes generic. And it's more driven by the fact will this research lead to new products? And in the end, how much profit those product bring? The profit won't be negative. The profit will be a positive. So, there -- we don't see a real issue there. On the U.S. dollar impact, frankly, you can model it. What you can -- I'll give you some data points, and you can model whatever you want with whatever hypotheses you would like to put in your models. We've shown the profitability of our business in 2023, in 2024, Europe, U.S. by segment. And that's why we think segments by geography are more meaningful than segments by activity, at least for Eurofins, and by type of activity. We have higher margins in the U.S. This difference has started to reduce in 2024 compared to 2023. As our European business improves, and it's improving this year, we think this gap of margin between U.S. and Europe will also reduce. And the translation effect on the U.S., if the dollar were to completely collapse, would be visible, of course, in our consolidated numbers. Whether the dollar will completely collapse on average throughout the year, I have no idea. And -- but you are welcome, of course, to simulate whatever you think might happen and -- might happen this year in the reverse next year or in one quarter and will reverse the other quarter. That's just something that we -- I mean we have no basis to make any better hypothesis than saying what we planned at the beginning -- what we set as an objective at the beginning of the year is as good as we can make now. But midterm -- because in the end, if you look at an investor midterm, we should improve our profitability in Europe to levels that should be in the same order of magnitude than the U.S. Once we're done with station hub and spoke, IT developments. So, the impact should not be so material. But of course, in the translation impact on the margin level, I mean. On the total size consolidated in euro, currencies will do what they do. They will vary. And it's hard to say what will happen in two to five years.

Great. Thank you.

Thank you very much. Our next question is coming from Allen Wells of Jefferies. Allen, please go ahead.

Hey, good morning Gilles, good morning Laurent -- good afternoon, sorry. A couple from me, please. Firstly, just on the guidance. I noticed that the full year results, you had some comments around the shape of the year where you talked about stronger second half weighting. They seem to be -- have been taken off the slides and the announcement today. Anything we need to read into that about your view on weighting first half versus second half? Will it be a bit more even? That's my first question. And then secondly, I just wanted to get some thoughts and some background on the Synlab acquisition and just how dilutive do you think that's going to be on a full year view. If I just do the basic math on a break-even number, that's about 40 bps dilutive. Obviously, your full year guidance is for improving margins. I'm just mindful that -- are you expecting that business to improve from the loss-making position by the end of the year? Or do you think the rest of the business just can fully offset the dilution for that in there? And maybe then just as a follow-up on Synlab. I know you've mentioned it's loss-making. Any color on the growth rate of that business? Is it growing -- still growing broadly in line with the group or above or below group levels just in terms of a dilutive or accretive that will be to group growth over the midterm? Thank you.

Thanks Allen -- for your questions, Allen. And it's nice to see that someone reads our releases word-by-word. It has not occurred to me that this thing about second half weighting might have been erased. It was not intentional in any way. We still think we have -- as I mentioned earlier in the call, we have some bad comps in the first half, at least in the first few quarters and that those comparables should weigh less definitely on Q4 and a bit on Q3. So, we stand by what we wrote. We're going to investigate why that maybe come -- got erased or fell through. So that's a mistake. Then Synlab, yes, Synlab is significantly loss-making. How fast this will turn depends on things, but we need to remove costs. And that means also, unfortunately, removing some head count. We're not fully in control how fast those things happen in Europe. There has to be consultation, et cetera. So, we're going to, of course, try to do it as fast as possible. I think the main impact will mostly be visible next year. I don't expect a huge impact this year. So, there will be a dilutive effect. On the other hand, the rest of our business should improve. And that's probably part of why we didn't set objective for massive profitability increase this year. And we guided or we set an objective for very modest profitability increase this year, including that company. And on growth, I think it is also in the lower end of our growth range. So, what is the term? A bit below mid-single-digit. So low to mid-single-digits is maybe the historic growth rate of the business. So hopefully, within our control, it will grow faster, but we'll have to see. We did this acquisition because we do believe that our local management in Spain has done a good job in improving our own business in Spain. And we think they can do that job to an even greater effect on the combined business of Synlab and Eurofins. And again, it's -- we look at investments on a return on capital employed basis. And we don't necessarily look at margin or growth. Providing the growth is positive and the margins can be sufficient, we more decide, okay, we deploy so much capital year one, and this is going to be worth so much in year three because the profits will be that level in year three. And that's the rationale for making those acquisitions, which, indeed, I agree with you on the initial impact of our consolidated numbers for this year is not a positive thing. But we run the company like shareholders and not only looking at each quarter's margin or growth to buy the share today to have in three years something that's going to be worth a lot more.

Makes sense. And can I just ask one quick extra question? Just obviously, a lot of the pricing discussions happened in Q1 for a number of your businesses. Can you maybe just say a few qualitative comments around the pricing dynamics in the business. Obviously, we had a couple of years of reasonably strong inflation, but like there's been some catch-up. How do you think about pricing or the pricing discussions for 2025? Thank you.

Well -- thank you. Well, this has changed dramatically. I remember running the business -- I've been running this business for more than 30 years. It would be a tradition that would increase prices every year by 2%, 3%, 4% at the beginning of the year, and that was normal. Then inflation came down to almost zero and everybody lost that habit of increasing prices. And then came the war in Ukraine and massive inflation in Europe, and we got caught by surprise because we had lost the habit of increasing prices every year, not everywhere, but to a large extent. Now, we're back in that habit. It's normal for all our businesses to do that. It's normal for all our clients to accept that. The amount will vary by country, whether we get 2%, 3%, 4%. We still have a few pockets where we are still catching up historically to low pricing, and we continue to pursue that aggressively. But yes, now the discussion on pricing and price increase, they do happen every year.

Thank you.

Thank you very much. And our last question is coming from Pablo Cuadrado of Kepler. Pablo, your line is live.

Yes. Good afternoon gents. Just two quick questions. First one will be on the ForEx again. And I don't know if the question is for Laurent. I assume or presume that basically the bulk of your debt is based on terms. So, the question would be, do you have currently in place any kind of hedging or forward ForEx that you can use in order to, let's say, to benefit or to reduce the impact on top line that you can gather on the financial expenses or cash flow on that front? And the second question is on the share cancellation. I mean a few weeks ago, you announced that you were canceling the shares, but the shape back has been ongoing and you still have your share that you have been buying back. Shall we assume that the current plan ongoing at the pending amount that you have, again, ideas that you could cancel those shares again?

Okay. The ForEx, we do hedge our short-term. Let's say, we win a contract in dollar, and it's performed in euro cross-country, which is very rare and marginal for us, but that will be hedged. We don't hedge our balance sheet. You cannot hedge forever anyway. So, -- and we don't -- so we don't hedge our debt in dollar or euro. And actually, so far, it was pretty good because we did borrow in euro mostly. Share cancellation, buyback ongoing. Well, our buyback, it depends on a number of parameters. First, we don't want to have too much leverage. We want to stay strictly within our leverage range, but also depends on the share price. I mean we thought the last few months that our share price was extremely underpriced and that it presents a no-brainer opportunity to deploy capital. Because you know, we know what we buy. When we buy companies at 13, 12 times EBITDA or 10 times even for smaller ones or 8 times, we don't know what we buy. Every time you make an acquisition, you discover things. And sometime it's good, sometime it's less good. When we buy Eurofins share, we know what we buy. We know how well invested our businesses. We know what we're going to do. We think we know what we're going to do in profit next year. So, it's, in our opinion, a low-risk investment, and that was a bar game. And depending on valuation of share price, we will decide on how much we buy back and what we do to make sure we stay in our leverage range.

Thank you.

Thank you very much. This is all the time that we have for today's question-and-answer session. We would like to turn the conference back to Dr. Gilles Martin for closing remarks.

Well, thank you very much to all of you for joining this call. And what you have with Eurofins is a fairly diversified company, both geographically and by activity in sectors that in my old professional experience of more than 30 years have proven very resilient. But this is not to say that global changes and radical changes will not affect us in some way. In some ways, my experience has been our sector is usually much less affected than other sectors when those things happen. We are not fully decoupled from the economic evolution, but we have proven over time to be very resilient. That's for the macro. And for the micro, we are continuing our work. We have a very large number of streams we are working on that should lead to improved cash flows, improved profitability, reduced CapEx. And we're looking forward to delivering very good result by the end of our five-year plan in 2027, and we are as convinced as before that we will deliver on that. And within the general economic climate, I'm not saying we're going to be completely spared, but we probably will show to be more resilient than potentially other sectors. Thanks a lot for your support. I'm happy to take more questions when we meet in other conferences in person, and have a very nice day. Bye, bye.

Ladies and gentlemen, the call has now concluded. You may disconnect your telephone. Thank you for joining, and have a pleasant day.