Eurofins Scientific: Food Division, Real Estate Contracts & Org Structure

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That's interesting. We spoke about decentralization and everyone being empowered. Considering the involvement of Gilles Martin, who is not only your boss but also your boss's boss, how did that affect your sense of empowerment? Did you still feel empowered enough?

On the other hand, there are big decisions, like deciding what type of activity the laboratory will continue to perform, building clusters of laboratories together when making acquisitions, for example, in France, sometimes with properties not owned by Eurofins. There were also decisions about grouping all laboratories into one unique campus built from scratch, sometimes owned by Eurofins or the Gilles Martin family. Those big decisions systematically came from Gilles Martin. We could make some decisions on our own, but the big decisions were clearly his, even if we disagreed. On the day-to-day, we had a lot of autonomy to deal with customers, pricing, and everything.

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I can't have this guy saying three days when I'm only going to deliver in six.

The testing business is complex and not easy to manage as a global contract. It's not like negotiating a price per kilo or per ton for raw materials. There are thousands of methods, and prices vary greatly depending on the matrix and other factors. This complexity makes it difficult for buyers to manage. In the water market, the margins are lower because it's standardized testing, so buyers can easily compare prices. But in food testing, it's more complex, leading to better margins but making it a nightmare for buyers.

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So, that’s the personality of that person, which informs it. Maybe we can get into the real estate part. What has been your overall experience with Eurofins leasing the real estate from someone, Eurofins owning the real estate, or Gilles Martin owning the real estate? What was your experience around that?

I can tell you that in Nantes, it's around 100, a bit more than 100 euros per square meter a year, 120. It depends on the place and the building itself. The difficulty at Eurofins was that we were paying, as the operating company, way more than 200, 250 euros per square meter a year. The real estate company was paying and investing in some settings for the laboratory itself, such as HVAC for air replacement and cooling, which are very expensive.

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