Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining Eurofins' 2021 Q1 Interim Management Statement. Throughout today's presentation, all participants will be in a listen-only mode. The presentation will be followed by a question- and- answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone to register for questions. Please press the star key followed by zero for operator assistance.
Just to complete the typical disclaimer, 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, which is defined in the footnotes of our press release. 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 Eurofins' annual report. Please also read the disclaimer on page two of this presentation, subject to which this call and Q&A session are made. I would like to now turn the conference over to Dr. Gilles Martin. Please go ahead, Gilles.
Thank you. Hello, everybody, and thank you for joining our quarterly call. We are very pleased to report on outstanding results in Q1 of 2021. Not only have we had a very strong Q1 overall, but we have seen a strong acceleration in our core business, excluding the testing we do for COVID and the reagents we sell around COVID testing. Our core business has been extremely dynamic and beyond Q1, it is very encouraging for the future. We see very strong demand. Actually, we are, in some cases, having to raise capacity. This all looks very good. We have a presentation. I will go on page three of this presentation. I guess you all have it. Some highlights of this first quarter. We continued to see strong demand for COVID testing, but the type of testing is changing.
We are increasingly looking for variants. We developed unique solutions to detect variants very fast, faster than what can be done with sequencing. We also continued to launch products to remove the bottleneck to testing, because very often people have to wait in long lines at laboratories or sampling stations to be tested. We have developed a range of products that allow home testing. Of course, not only with antigen testing, which miss half of the positives in many cases, many situations, and have a lot of false positives too, but with reliable PCR testing, which is what governments require. You also have to realize that the next phase of the pandemic will be tracing variants. You cannot detect variants with rapid antigen tests.
You're faced with the problem of having to resample the positives with PCR, finding those people, and then only once you have a specimen in a lab, you can detect which variant is present and potentially take public health measures. More and more countries, including the U.K., for example, as part of the requirements for people coming back to the country that are being set up, are really insisting on PCR so this variant tracing can be performed. The situation around the virus is still very hard to predict. I don't think anybody in the world can really predict what will happen. The world has been faced with multiple surprises, positive surprises with vaccines and unfortunately negative surprises with variants. There's still a lot of worry at the moment about the new variants that appeared in Brazil, in Manaus, and more recently in India.
Nobody really know how more pathogenic or how more transmissible they are. We are getting very significant contracts for sequencing. We're also one of the largest sequencing companies in the world and in Europe especially. We're starting to do sizable amounts of sequencing to help public health authorities trace the virus, and more importantly, connect the clinical characteristics or clinical outcomes of the patients with the genetic sequence of the viruses and the variants present. This is why it's really hard to know how things will continue to evolve. We all hope that thanks to vaccines, this will all be brought to a better situation. However, it seems that public health measures will be there for a while. We see countries getting better at putting things in place to avoid new waves.
Of course, there are still local waves active in different countries in Europe and of course, in other parts of the world. The whole problem will also revolve around travel. It's not really known if people that are vaccinated cannot still carry the virus back home and potentially viruses that have mutated. This is the main reason why we haven't changed our objectives, because it's really hard to know. It could mean huge demand for a long time, or if we are lucky, everything could go back to normal by the end of this year. We've stuck with our objective of zero COVID testing next year. It looks increasingly unlikely that there would be zero COVID testing next year and the years to come in the following years, but that's where we stand. In the meantime, there's not only COVID.
The rest of our business is doing very well. We are developing new tests. There is strong demand in environmental testing for a whole various range of contaminants. Our environmental testing business is still affected by the pandemic because we have to go and sample, so we still haven't recovered the 2019 level, nor have we had growth compared to 2019 in part of that business in some countries. That means to get to 10% organic growth, actually 11% if we correct it for public working days, it means the rest of our core business is doing very well. In biopharma, we're doing a lot. Actually, we would do a lot even without any work on vaccines and other therapeutics related to COVID.
There's so much demand that we have affected some of that capacity to have prioritized some of our capacity for the companies developing vaccines, obviously, knowing how important this is for the world. The other thing is we continue to build the company. While we do our little share in fighting COVID, we continue to build our network of laboratories. We have moved in our new food testing laboratory in Madison now. It is the largest and most modern food testing laboratory in the United States. It's on a par with what we have in a couple of locations in Europe. Very high throughput, very efficient, very modern, and there we can set the standards of quality and turnaround times. On the level of M&A, we still see a low level of M&A this year. We've stayed disciplined in what we paid. We did mostly smaller acquisitions.
We continue to add interesting capabilities or interesting locations to our network, but we'll probably not exceed our targets for M&A this year. We are prudent on that. Slide would be slide number four, please. Financially, as you have seen, we've had extremely strong growth, over 30%, 40% organic growth, almost 45% organic growth. We've about 11% adjusted for public working days growth of our core business in Q1. I have to say, this is not compared to easy comps. Our Q1, contrary to many other companies which have strong presence in China, our Q1 results of 2020 were not so bad. We still had an organic growth of over 4% in Q1 of 2020. We had only started to be affected in Europe in March of 2020.
The comps will start to get better from Q2, but we already see some of the businesses that were affected by those lockdowns to have recovered and start growing beyond where they were prior to the pandemic. Other businesses are going very well. We've had about close to EUR 400 million revenues from COVID, actually much more than we expected, a similar level, similar order of magnitude plus within 10% of what we had in Q4 of last year, of 2020. That is with many countries having much less cases and much less virus prevalence. Our market penetration is increasing. We are still not doing a lot of SAFER@WORK testing because events, workplaces, travel, have not really restarted.
A lot of governments are talking now, and hopefully by end of May, we will know what the conditions are to travel across borders in Europe and internationally, and that context on what will be the conditions for people returning to offices and to schools and to events. That will have an impact on how much testing we will do to support those activities. On the financial side, we don't publish full levels for Q1, but we've of course generated significant amount of cash. We've decided to repay by anticipation on notes due in 2022 with a make-whole call to reduce the cash on our balance sheet. We have too much cash on our balance sheet, and as I said, we're not going to spend it on overpriced M&A at the moment. I will move to page five.
I think I will not comment on all of those topics, but we've been very active to develop the right product to fight the pandemic, and they are changing. We have a range of new tests that we are launching. We're launching serology tests that can differentiate if people have been vaccinated or have the antibodies because of a prior infection. We are launching variant-specific tests and a lot of new variant-specific tests because almost every month, the variant of most concern is a different one. We are very fast in our cycles since we have labs all over the world. We have labs in India, we have labs in Brazil. We're very fast to be able to access specimens and develop those kits and validate them. You can develop the kit without having actual specimen, but to validate it, you need actual specimen.
We're starting to win very significant contracts for sequencing, and our biopharma continue to support the development of new vaccines and the release of vaccines. Some interesting things. We've had interesting partnerships with large organizations. We have partnered with IATA, the International Air Transport Association, to provide global testing. We are one of the few providers of clinical testing that have almost a global network, so we can test for passengers from departure and arrival. We are well-positioned to know exactly what are the requirements of almost all arrival countries. Each country has specific requirements for tests, how they have to be sampled, which methods. The same discussion as for vaccine, which vaccine will be accepted by which country for arriving passengers, are the case for tests, and we are well positioned to respond to that because we have labs in all those countries.
We also have a partnership with Uber for having Uber driver bring the samples home to people, the test kits, so that they don't have to go anywhere, and they don't have to wait. Lots of things are happening. On page six, you see other things we are doing. We have an increasing number of contracts which are about to start. Some of them are starting. Some events are starting. We're continuing to support Formula One, for example, and other organizations. On the next page, we're talking a bit about ESG. As we mentioned for annual results, Eurofins is a strong ESG enabler. All the things we do as a positive contribution to life, to health, to protecting the environment, with the environmental and food testing that we do. We didn't communicate enough about that, so we will do more about it.
We have increased our team that is working on achieving our carbon footprint reduction by 2025, which is a fairly ambitious program. We have increased our actions on diversity and equality. All of our leaders have objectives now for ESG goals, including equality and environment. We are continuing to increase our contribution through Eurofins Foundation to causes that aim at protecting the environment and protecting the less fortunate. You will be happy to hear that we now have an eight members board, with five Independent Directors and two new, very well-qualified Independent Directors. One bringing strong HR and leadership development experience, which is key for our future development, and one bringing a very good industry experience, who was a member of the top leadership team of DEKRA, a large global TIC company out of Germany.
Also providing diversity of culture, diversity of origins, and equality of men and women in our Board. We'll move to the next slide. Our objective, just as a reminder, we presented them with our annual results. We should increase them, but we don't know what number to put, frankly, for 2021, especially. The farther out we look, the harder it is to really estimate what level of COVID testing will remain. What is really a good sign is outside of COVID, our core activity is doing very well. It could be. I've always advised against drawing long-term conclusions based on the results of one quarter. Now they are very good, and some of you might say, okay, now if Eurofins long-term organic growth target is going to be 10%, not 5%, I would advise against doing that. We need to see more quarters.
We need to see that our business has fully recovered. Once our businesses, including environment and some clinical tests, et cetera, are fully recovered, we'll have a better view of the long-term growth potential. We're sticking with our objectives. As soon as we think there are some really more stable and more visible situation regarding COVID and recovery, we'll adapt more. We'll comment on our objectives. However, the general trend is extremely positive. To conclude this short introduction before we move to Q&A, can we move to slide nine? A very strong performance in Q1, and a lot of progress on the operational side on building our global network, developing our new set of IT solutions, developing new tests, new capabilities, reducing debt, generating cash. We will come out of 2021 with a very strong balance sheet.
Big acquisitions are not really on the horizon for us at this time. We have a lot to do organically. We are opening labs in Asia. We are also opening labs in the Western world. A lot of innovation in COVID and this innovation ability that we demonstrated in COVID, we do intend to apply to many other types of testing that are a bit underserved or where the testing capabilities are too expensive or too slow or suffer from other limitations. Overall, a very good quarter, and I will be happy now to take questions. Thank you. Operator, we can go to Q&A.
Ladies and gentlemen, at this time, we will begin the question- and- answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. The first question comes from Patrick Wood with Bank of America. Your question, please.
Perfect. Thank you very much. I'll keep it to three please, if I can. The first one, just curious if you could give a few more details on the drug discovery business, just sort of the trends you've seen there, relative size within the group and the kind of growth. That's the first one. Second one, similar question, but on the sequencing side of things, I'm just curious how big is that business for you guys now, whether qualitatively or quantitatively and the kind of growth you're seeing there. The final one, just curious on the SAFER@WORK program, how are a lot of these structured? Because a lot of events would need quite rapid results. There's no use going to a baseball game and only being told a day later whether you do or don't have COVID. Are those on-site rapid antigen tests or how are those structured? Thanks.
Thank you very much. Yeah, drug discovery is a dynamic business. Was always dynamic. I don't have the figures in front of me because we have multiple labs, but it's definitely either close to double-digit or significant double-digit. We've been adding capabilities. We've been adding footprint, net footprint recently over the last few years, and we definitely benefit from that. We think this will be a booming business for quite some time. Biopharma and biotech is extremely well-funded, and the first place they spend money is in the early phases, which our drug discovery business serves, and then this will flow through into the BPT business, which does all the development work or part of the development work, and ultimately to our colleagues who do the clinical work. We do a bit of clinical work in our central lab. We're not the largest.
Overall, our bio-pharma business is growing very fast and in some areas above 20%, and our leadership there thinks it is going to be something quite sustainable, and they are confident that they can replace the work that we do for vaccine or our COVID therapeutic work with all the bio-pharma work. Of course, time will tell. Sequencing was nothing last year. We launched specific sequencing product in June or July or May of last year, then governments were accepting. The U.K. were not really interested about this topic, did very little. Of course, with all the variants, the whole world has realized sequencing is required, so we're starting to test quite a bit. It's just early days because this realization should have occurred at least in December when the problems arise. It took three months for people to get their act together.
I think this was mostly growing volumes in Q2. This could be for a long time because monitoring of, for example, monitoring of viruses in wastewater is going to be also a large program globally and maybe forever. I think the world will understand that doing this monitoring is important, both on patient samples and environmental samples. How big would that be for Eurofins? EUR 100 million per year, EUR 200 million, EUR 50 million, EUR 500 million? It's really hard to say at the moment. Probably, if I had to guess, maybe EUR 100 million on a sustainable basis. It depends on if the world did what should be done, it would be massive. Whether the world would do that, I don't know. For SAFER@WORK, it's usually multi-modalities programs. One has to know, those rapid antigen tests, they don't really work. You've got two problems.
You've got half of the non-symptomatic people that test negative are not negative, they're positive. You have a large fraction of the positive that actually are not positive. In those events, and we're not only testing at events, we're testing also at offices, at factories, et cetera. Even if you talk about events, you need to be able to do pre-testing of people with PCR. You need to be able to test the staff. Usually, the staff would be tested with PCR and tested at frequent intervals. All the athletes, if it's a sport event, you have to offer rapid testing. We do the rapid testing, and we even provide the kits. We have our own rapid testing kits. You need to do what is called reflex PCR.
Whenever there's a positive, you need to be able to confirm it with PCR very well. Often, you have to do a random number of PCR tests to check that the rapid tests are not missing too many positives. The fact that we have everything in the IT systems to run that and do it efficiently is very much appreciated by many partners. You've got the whole return to work topic, and this hasn't really started because in most countries, at least in Europe, people are not coming back to offices in great numbers. More and more governments are going to put the onus on companies to keep their employees safe, and there will be more discussions on liability, because now it is possible to test and possible to prevent outbreaks.
Companies will more and more proactively, at least in many regions and countries, proactively set a program to ensure their due diligence. It's not only about cleaning the offices, but avoiding the outbreak and testing at some frequency, depending on the geography, is part of that. You've got the whole travel scenario, where I doubt that people will be able to travel internationally without some level of testing, because otherwise, there's no way you can catch the variants coming in. Of course, it's all subject to how the variants evolve. If we're lucky and the vaccines work very well against all variants and enough people get vaccinated, then maybe we'll be done with this at the end of this year as we all hoped. That's just one scenario out of many. We will see.
Super. Thank you, Gilles, for the questions.
The next question is from the line of Edward Stanley with Morgan Stanley, y our question please.
Afternoon? Thank you for taking my questions. I've got three as well, please. The 10% in the base business is obviously very strong, and you mentioned the vaccine work, for example, is included in the biopharma business and not in the EUR 400 million COVID revenue. If we were being sort of strict on the definition of what's COVID and taking out the benefits of vaccine work or sequencing that falls in the base business, do you have a feeling of what the 10% number would have been? That would be helpful to know. The second question, travel, as you've mentioned a few times, is increasingly important topic, and you've announced the IATA news.
What utilization is your COVID capacity now running at, such that if there were a sudden demand in travel, would you and the industry more generally be able to cope with that surge in demand without prices rising or turnaround times extending? Finally, I was hoping to get a tiny bit more clarity on the SAFER@WORK stuff. The EUR 500 million or EUR 550 million potential revenue. It sounds relatively certain, like you know that number, but it sounds like it's based on a huge number of variables. Can you give a feeling of what the key variable is? Is it the number of people coming back to work, or is it the timing of those people coming back to work? Just something that gives us sort of a greater understanding of why that EUR 550 million is possible.
Yeah. Thank you very much. The base business. If we get data corrected for public working days, which is maybe a better proxy, the sequencing actually is not part of our core business, and we put all the sequencing testing as part of the COVID testing. The only thing that would be in our core business is our biopharma work. Our biopharma work, frankly, without COVID, it would have been most likely what it is, because we just said to some clients, we can't take your work because we have to take some vaccine work. That's the reality. I think the vaccine work, the order of growth, it would be something like 2%.
You're talking maybe it would go. If you remove that and you make the hypothesis, which is not what we think, but you make the hypothesis, we wouldn't have done any other work with this capacity that wouldn't have been used for vaccine, we would be maybe around 9% corrected for or something like that. You have to also consider that if part of Europe is not working, we still have some of our food testing for catering that has been restarted in Europe. We have our environmental testing, which is still significantly down, especially in North America. That's that on growth. On travel, yes, we've built very much extra capacity, so we could cope with big surge and big peaks, and that could happen. We are ramping up very fast where it has to be.
The travel testing will take place in different places than the routine testing. We're also strong in Southern Europe. We've got people who go to France and stay in Italy and other countries where we are present during summer, and then they will have to return to Western European countries. It's not really clear yet what the rules will be in the United States. We are getting ready for that, but I cannot really comment. I don't have enough information. SAFER@WORK, yeah, it's very hard to estimate exactly the actual numbers. It will depend on also some government decisions as to what is required. For example, things like travel, will travel be allowed or not be allowed? If there is no travel, there will be very limited testing.
It seems difficult for governments to prevent their citizens to go on holiday outside of the country this summer, but that could happen. That's why it's just an objective, it's a target, and events are the same. The exact conditions under which events can occur are still not clear in every country. There are still regulatory questions. As to offices, it's a bit the same. When will people go back to offices? It can depend, maybe companies will want them to return to offices, but they don't want to return to offices, or governments don't allow that. We have the same question in almost every country. There are a number of variables in almost every country that could influence this both ways, up or down.
That's very helpful. I was hoping for one follow-up. You've mentioned the revenue and since the full year results, you've obviously grown the number of contracts you have. Is the pipeline of activity of negotiating new contracts still growing in SAFER@WORK or is it leveling off?
It's very active. The real question is when will those things start? I mean, some could never start. We have to be clear about that. You never know, depending on the regulations. Also, the content of those contracts can change. How much will be rapid antigen, how much will be PCR, how much will be pre-testing prior, how much will be testing on-site? That's really an open question. I think the world now has to figure out what they will do to avoid a fourth wave or to avoid those variants. I think there will still be a range of responses by country. Some countries will be very much laissez-faire, and when things get really terrible, they might react if it gets terrible, and others might be a bit more proactive. For us, it's very hard to guess.
Thank you very much.
The next question is from the line of Will Kirkness with Jefferies, y our question, please.
Thanks very much. I've got three also, please. First, just on the COVID-19 testing revenues that fell in the first quarter, that EUR 400 million. Looks like it was maybe a touch down from the fourth quarter. It was maybe about EUR 450 million. Just wondered if you could talk about whether there's anything in difference between sort of the volume of tests you're seeing or the value of those tests. Second question linked to that is just the outlook for the second quarter. I know you have seen some price cuts coming through, so even if the volume stays high, I wonder if you have a view on what kind of million euros we should be looking at for the second quarter. Then the final question, just another follow-up around SAFER@WORK, and the strong progress there.
Is your sense, have you got a feeling that is a market-leading product, you're sort of number one in this? I can see other operators have similar sorts of products, but I don't think they've gained as much traction as you have. I wonder if you've got any view on the competitive dynamics there. Thank you.
Thank you very much. I think COVID testing Q4 of last year was a bit less than EUR 450 million, and it's a touch below EUR 400 million this quarter. I think it's higher in Q1 than we thought, because really the number of infections is going down around the world. I mean, not around the world, but in the U.S. definitely and in some parts of Europe. That is not I think we were expecting it to go down faster for the clinical part of it. For the surveillance part, and the SAFER@WORK, it's just starting. This will be, as I was saying, up to discussions by governments and decisions what level of surveillance will be required or decided on a more long-term basis. All the things around travel, going back to offices.
It's very difficult to see what Q2 and Q3 will be. Q3 will be the summer season, so it could be a lot around travel, depending on the exact requirements. Also for vaccinated people, I was reading what the U.K. seems to imply. I don't think they have finally decided, but they probably will want everybody, including those that are vaccinated, to take one to return to the U.K. Actually, we are trying to support that. We have offered a very cost-effective test because it's unfair that people cannot travel because testing is too expensive. We are a testing company for the long term, so we don't want to take advantage of this type of situation where there's not enough testing for people.
We think our contribution should be to make those tests easy, available, to create huge capacity so people don't wait for their results, and that they can afford it. It's a lot of logistics, it's not really on the testing. It's making sure people get their tests quickly and get their results quickly and can return the samples rapidly. I think our advantage, going to your next question, is our global network. A lot of the clinical testing providers are somewhat local. We are at both ends of the travel. We are in the U.S., we are in Europe, we are in Asia, we are in Europe, we are in India, we are in Brazil. We are in pretty much all European countries.
A German tourist that goes on holiday in Ibiza or in Spain will probably need to test before they leave and test on arrival. The clients, whether it be airports, airlines, government, also see that benefit. It doesn't make us unique, and there are others that certainly can put together offers and others are better in some local markets because they have bigger network in that country or better connections or whatever. Overall, we do have an advantage. Our strategy has always been for clinical testing to be a specialty provider. We never wanted to do the routine tests, which are subject to price cuts.
We wanted to have a global network to sell high-value specialty tests where we can innovate and where we can create value by offering better tests that come from our R&D labs. Of course, we are not finished with deploying the global network of labs, but we are somewhat along the way, and that's really useful for us now to be able to help the travel industry. There are also cruise ships, cruise lines that want to restart. It's also unknown when they will be able to restart, but they will need testing. There are lots of industries that will need testing to return to normal operations. I'll just say that it's not so much the product, it's more the footprint and then the way we deliver it, all the IT behind it. We're a strong company with strong IT capabilities.
All the apps we are developing, all the websites where people have to log in and do their details. If it's done well, they do it faster, they do it only once. It's not that we never have glitches or things don't work, but I think overall on balance, we're a bit further ahead on the curve than most others. This won't be a business forever either, so we are in there, we have the experience. It doesn't make sense for a lot of people to start from scratch for something that might happen just one summer, and then will be gone after that, or maybe not. Nobody knows.
Okay, thanks. I want to just follow up on the sort of the COVID run rate. The monthly implication is like EUR 130 million, say. Do you know how April's looking versus that? Would you expect it to be down versus that, just given reduction in prevalence, et cetera?
No, we're still testing strongly in April. I don't have the numbers on that. You see, the prices are not coming down so much. We already gave discounts some time ago for large contracts, so there is some level of erosion. Some of it we do ourselves, because we don't want to gouge people, and we're very efficient. Yeah, the level of April might be similar to the level of January to March. We'll see. Always in the same order of magnitude, let's say.
Okay. Thanks very much.
Thank you.
The next question is from the line of Andy Grobler with Credit Suisse, y our question, please.
Hi, good afternoon? Just three from me, if I may as well, please. A couple of which are just follow-ups, really, from previous questions. You mentioned that pricing, you were already discounting for large contracts. Some of the indications suggest that government prices are going to fall pretty sharply in the second half of the year. Would that be your expectation as well? Would be the first one. The full year results, you talked about EUR 250 million of the revenues that were lost in food and environmental because of the pandemic last year. Have you started to see any of that catch up yet, or is that going to be later in the year as we return to work and going out and so forth? Lastly, just a quick financial one.
Given the debt repurchases during the quarter, what is your average interest rate at this point, and what are your expectations for full-year interest? Thanks very much.
Thank you very much. Yeah, there is some element in pricing. We haven't seen it too massively. It's a mix of different contracts. We also have contracts that last a number of months or quarters, the pricing effect might come later. The big uncertainty will be the volume over the next few months. I think that's going to be the biggest impact than any pricing impact. This volume is going to be linked to the evolution of the pandemic and the variants and government decisions as to how to deal with the situation. The funny thing is, when there is a lockdown, there is less testing, much less testing. The testing increases when the lockdown stops and people start to be contaminated again. Of course, with the vaccine, everybody hopes that the contamination level will be less. The variants complicate that a little bit.
We still haven't upgraded our objectives for this year, for that reason. There's just too much uncertainty. It's going to fall on the right side. It's going to be above our forecast in any case, and maybe enormously above, or maybe just significantly above. It's really hard to say. Yes, the EUR 250 million, we started to recover some of that in Q1. Not all of it. I think maybe a third of that is starting to come back on a quarterly basis. It's really hard to say. Q1 wasn't so badly affected anyway last year. It's really in March that we could compare. Some of the things that we had in March last year, we haven't recovered that, because in the U.S., our environment was affected later last year, maybe in the last week of March.
France was very badly affected in March last year, the environmental part has recovered. The food part not really, because catering is still on lockdown in France. Debt repurchasing, yeah, we will manage our balance sheet, and we have different projects around that to overall lengthen our funding and reduce our interest rates. We still are paying the interest rate that we had on previous instruments. If we do a make-whole or if we repurchase our existing debt, we are actually bringing forward the interest cost that we would pay over the whole period of the instrument. It's a good thing overall, especially if we replace some of the shorter lines with longer-term lines, which would be carrying much lower interest. The initial impact is not a positive one. At the moment, we have too much cash anyway.
Okay. Thank you very much.
The next question is from the line of Neil Tyler with Redburn, y our question, please.
Hi, good afternoon? Yes, three from me as well, actually. Firstly, your improved outlook statement. Do any of the factors that you've referred to that improve that statement also alter your view of the level of investment required, either in personnel operating costs or capacity over the sort of shorter and longer term? Second question on biopharmaceutical testing specifically and around advanced therapeutics, and I wondered whether you could perhaps offer your insights into whether the clinical testing landscape for those products differs at all from the landscape and the competitive environment and things like contract visibility in more traditional drug development.
Finally, in food testing, your statement mentions an upswing in the rate of innovation in R&D, and I just wondered whether the source of that new innovation was any different, namely, is it coming from a different type of customer, smaller customers, or traditionally, or typically from the same customer base that you've served previously? Thank you.
Thank you very much. Yeah, very interesting questions on that. Yeah, we have targeted about 6% CapEx. We've always said 6% CapEx should enable us to do the maintenance CapEx of 2% or 3% and achieve at least 5% organic growth. If we were, and I'm not saying we will do it, but if we were to be convinced that the level of organic growth is going to be substantially higher than 5%, we might need a bit more CapEx, not a whole lot more. We're not a capital-intensive industry. We are adding capacity as fast as we can. The main limitation, in fact, is finding the people in some of those areas. That might create a limit to how fast we can grow. If we go from 6% to 7% and our growth that is 10% instead of 5%, it still is totally manageable.
I'm not saying we are at 10% organic growth. It's definitely way too early to review on how the whole of our business will perform post-COVID. We're still sticking to this 5% secular organic growth, which is, of course, 5% on a non-cyclical basis. We don't have the down years that other business would have over a cycle. ATMP, yeah, I think your question is specifically to the clinical phases on new therapeutic products alternative. This is early days, but what we see, we have a central lab that does clinical testing for many things. We also are doing specialized testing for biologics and in all the labs, in our central labs, as part of clinical trials. For example, for the COVID vaccines, we did a lot of testing out of our Viracor company to help the team companies carry out their clinical studies faster.
There are different types of testing needed that our specialized unit can be carrying out that are not typically in a traditional central lab. Of course, some central labs are adding those capabilities as they can. Food testing, it's more about the structure of the food industry. If you read a bit about the consumer trends, I think organic food is growing, is really booming. More than 10% growth of organic food. Even very large companies like Nestlé are trying to move more organic. It's consumers are looking at this much more holistically now than organic. They're looking at sustainable farming, regenerative farming, all the things that will make this agriculture more local and the food supply more generally more local and less impactful on the environment. With alternative sources of proteins, insects, of course, vegetables, et cetera.
It's often smaller companies that can be extremely well-funded. You've got the giants of the industry, like Nestlé, which are also investing heavily to change their scope of products. They are often attacked for not being good enough and providing unhealthy products. We also have all the aspects of the product being healthy. Consumers are also much more attached to understand, not all consumers, but an increasing range of consumers understand the impact on food on our health and want to have a product that will have as much transformed ingredients, how much rapid carbohydrates, how much sugar, et cetera. Sugar, it's becoming more and more competitive. Sugar is also bad, not only fat is bad, et cetera.
Which creates a lot of innovation, a lot of new products and an evolution of the makeup of the food industry and the retail and food distribution. That tend to bring more testing needs indeed.
Thank you. That's very helpful.
The next question is from the line of Nicolas Tabor with Stifel, y our question, please.
Good afternoon? Thank you very much for taking my questions. The first one would be, first, could you give us an idea of the overall average PCR price you are charging right now based on discussions with the governments? If we think a bit maybe one year down the road, when we have dealt with the COVID crisis in Europe, in the U.S., have you already had insight from discussion with the government institution about how they will evolve the overall prices? Not for PCR testing, but overall clinical diagnostic reimbursement. Have they already said, basically, the budget was heavy on your side supporting you guys during the COVID crisis, now we'll have to shift it back to other places of the economy, therefore, we could see the clinical diagnostic segment underperforming in terms of prices. Is it already in discussion or not?
Regarding the cost base, the reagents were obviously hard to find and expensive last year. How is it evolving today? How much more investment are you making at the moment in the COVID testing capacities? How is that evolving exactly? Thank you very much.
Thank you. Yeah, PCR prices vary between countries. I think now it's more like $50, EUR 40, something like that, on average. Some are lower and some are higher. You have to see what you buy. Because if you have to deliver a kit with a driver to a patient, wait until the patient is taking his test, and have the driver drive the samples right direct to the lab, of course, this is more expensive than if we just ship a kit and people test themselves and drop stuff in a box, depending on the return shipping option and speed. There's a range of things.
If we get thousands of samples shipped to us by a government where we have nothing to do but test, it's also a different price. If we have to organize our own sampling station and manage the sampling stations, it's a different service. For antigen, it's the same. You can have people selling an antigen test for EUR 50 and others just selling the test to someone for EUR 5. It's really a big range depending on the associated services and additional requirements of reporting to governments, et cetera, requirements to do reflex testing with PCR, or requirements to do sequencing of the positives for the PCR test. Every situation is different and will remain different. As to the pricing of clinical, the reason why we don't want to be big in routine is that routine is not innovative.
Governments will always, before the pandemic and after, they will always try to bring these costs down. That's why there was this PAMA initiative in the U.S. already starting in, I think, 2017 or 2018, where Medicare is bringing down the reimbursement and similar initiatives all over Europe. That's why we focus to be a specialist. You see it with COVID. It's kind of interesting, I think for Q1, SYNLAB just went public and reported a 40% growth, and they're pure clinical. We did also 40% growth, but we're not clinical. Clinical is only 20% of our revenues, which means our growth has been way higher than the growth of clinical labs due to COVID. The reason is the mix of our work and our focus is more on advanced testing and less on the routine testing.
We do some routine testing in France and a bit in Spain and a bit in Germany, but that's definitely not the majority of what we do and want to focus on. As to reagents, we make our own reagents. We have always had access to reagents when others didn't, and we have enough supply chains, and we even make our own plastics now because also plastics were an issue at some point in the pandemic. We are well at pace.
Great. Thank you very much.
The next question is from the line of Allen Wells with Exane, y our question, please.
Hey, good afternoon to you? Most of my question's been asked, just a couple of quick follow-ups. On the COVID side, COVID testing side, can I just quickly check, has there been any changes in Q1 from a regional perspective? I think when we talked before, you talked a little about two-thirds of that revenue was European and about a third U.S. I'm guessing U.S. activities is falling a bit further. I'm just wondering if Europe is a bigger part of your COVID testing, and any comments you can make on country exposure. That's my first question. Secondly, just following back up on the environmental testing side of it, you talked about you've seen a little bit of recovery in Q1. Is there an expectation that there's a bit of a backlog that will need to be cleared here?
I mean, a lot of this is kind of mandated type of testing that will need to be done, whatever. Is there a backlog that needs to be worked through that gives you maybe a bit of a boost as the market for sampling opens up a little bit now? Thank you.
Thank you very much. I mean, with our COVID has been indeed, as you mentioned, mostly bigger in Europe than North America. I think our European teams simply did better than our U.S. team in contributing. We are bigger in Europe historically as our other businesses in Europe have been able to help more. Our U.S. team did maybe better in biopharma, contributed more in the biopharma part of the fight against COVID. In the first quarter and the last part of the first quarter, yes, it's becoming even more heavily biased towards Europe, but also India, Asia, Brazil is picking up, unfortunately, and other third world countries where the virus is present. The West should be careful because if these mutations happen in India or if they happen anywhere else in the world, they will spill over.
In sequencing, we're also helping countries outside of core European countries and working with the European Union on that to provide those sequencing capabilities to those less affluent countries, because we cannot prevent the virus from traveling. It's going to be very, very hard if there are some extremely dangerous mutations that occur anywhere in the Third World to prevent them from spreading in the Western world, unless we have measures that are as strict as Australia and China, which might not be sustainable in a continent like Europe. The shift might change around over time. In Europe, we work for a large number of European countries, and the focus switches a bit from month to month, depending on how governments react to the pandemic.
As to environmental, there might be some backlog indeed because there are new contracts, we could see that in the second half as things restart. We have now in the U.S. very fast accelerating sample numbers in April, that could be part of that. There is another thing to say, is that we will be strong beneficiary of the infrastructure programs. A lot of infrastructure programs will mean more roads, more public works, more building, more energy saving. Energy saving means a lot of work in houses, we carry out a lot of our testing also in that context, testing of toxic chemicals in materials or for asbestos whenever there is work in a building. That will be slower to pick up. We will see impact of those infrastructure programs maybe in 2022, 2023.
That could have a long-term impact, also positive long-term impact on our environmental testing business and other businesses that we do on materials.
Thank you. Maybe just a very quick follow-up just to make sure I understand your comments around pricing. Obviously, I understand that when you look at the kind of regulated public level pricing, you comment that there'll be a little bit of pressure as that comes down, but there's some puts and takes there. Am I also right in thinking as we think about the rest of the year, you'll probably see a mix of volume coming more through from the private side with things like SAFER@WORK, et cetera, coming through, which is typically higher priced. Actually, on a like for like volume, the pricing might not actually fall that much as the private side of your business probably picks up a little bit work as the market opens up. Is that a fair comment there?
Yes. Each situation is different, it depends on the services we are providing. Maybe we provide more elaborate services to private industry indeed or to people traveling than we do for mass testing for governments. Add the sequencing. Of course, sequencing is adding a layer of cost on top of the testing, as you have to sequence all the positives. The all-in price is, we don't even calculate it, to be honest, because it's so much linked to the type of testing we do that it's a bit meaningless. We could do the pure lab test part of the testing and bill that. We don't do it very much. The U.S. was extremely generous initially at $100 a sample. We haven't participated all that much to that type of testing. There are still open questions.
We could go to millions of testing if, for example, with pooling, we could test a very large number of samples at very low cost. It could be a part of the instrument for reopening schools in September, that there would be very regular pool testing. It can only be pool testing if incidence of the virus is low. If you have, like many countries are still at 5% positives. Now in the U.S. and California, they're back to 1.5% positive. When you are at that level, you can start pooling, and you can potentially create capacity for millions and millions of tests, which could be a good thing to detect outbreaks before they have time to spread. The things that should have been done in the spring to prevent second and third waves are more possible with the testing capacity and also the change in mind.
The self-testing was not allowed. FDA only approved our self-testing modality as a DTC, direct to consumer OTC product a couple of months ago. They were not ready to approve this type of products in the spring of last year. Those products are really important if you want to test millions of people on a daily basis. Those are part of the question. Of course, if we do pool testing, which means we test only one sample in 10 and go back and test individual samples only if we have one positive, obviously the price per unit will be less, will be cheaper than antigen testing, by the way, because it's much more automated and can be handled by machines and computers better.
Great. Thank you very much.
The next question is from the line of Rajesh Kumar with HSBC, y our question, please.
Hi, good afternoon? It's Rajesh Kumar from HSBC. On the drug discovery comment you made earlier, can you give us some color on what type of demand is coming back? Is it more diagnostic work for clinical trials? Are you getting more work on lab chemistry? Just in terms of understanding what is the type of backlog you see with your customers who probably prioritize vaccine and COVID-related work over other types of work. If you could give us some sense of backlog on the drug development side. The second question is on basically food testing. You mentioned that there are some incremental demand from new types of new development in the space. Compared to the historic run rate, how is the rate of innovation looking there? Are we down 10%-15% or more like 20%-30% compared to, say, 2018 or 2019?
Finally, you gave some very helpful numbers on the variables that are involved in cost per test. You refer to a EUR 40 cost of test, but that is for one type . Give or take EUR 400 million of revenue equates to 10 million tests there. Now, there will be pool tests, and there'll be mix effect. Just in terms of headline volume trends of COVID testing, how have you seen that trend this quarter compared to the previous two?
Thank you. Yeah. In biopharma, we have excuse me, a number of capabilities. The bulk of our testing is our biopharma product testing, where we have worked for a lot of the therapeutics developments around COVID, drugs against COVID, in this COVID space, which is a tiny part of our biopharma product testing. We did a bit of vaccine development work. Drug discovery is early. It's mainly other therapies not necessarily related to COVID. We did a bit of clinical trial work for sort of clinical testing indeed for the clinical trials of COVID of new COVID vaccines. It can be also preparing the kits that are sent to the hospitals and analyzing the results. The backlog, yeah, we cannot take all and try to look for a place.
There is definitely not enough capacity in the market to meet some of the demand, as you have well heard, for vaccine and for production of vaccines. The same applies to the testing. Food testing, it's very hard to put number on the rates of innovation. It's more qualitative information. There is more demand. There are more products. Also supplements in the U.S. are growing very fast, so dietary supplements and all kinds of botanicals product, more interest for a range of those products. Those products are lower volume, but very varied. If you go to a supplement shop, you will see how many varieties of products you have, and each of them needs to be tested. Whereas if you go in a supermarket, you have different cornflakes, but still each of them take a big part of the shelf.
That's a general trend, more diversification of food types and less transformed food products, more fresh food products, et cetera. Yeah, the number of tests, we track it, but it's very difficult. I don't even know how we count the pool sample. I think in India, the government, for example, was mostly doing pool testing, to reduce the cost, but now they are moving to having to test every sample, unfortunately, because of the high level of positives. I'm not even sure how we count it. I would say the number is high, and it varies every week, every day, every month, so I don't really have it in memory. The same orders of magnitude. We haven't seen massive price changes, frankly. Probably next quarter, we won't see so much of that.
Again, I would like to reiterate, I think the main order rather than price is going to be volume. There are a range of scenarios that can impact volume. Volume can change 30% when average price will change 5%. That's why volume would be, we think, the main impact.
Understood. Very helpful. Thank you.
The next question is on the line of Suhasini Varanasi from Goldman Sachs, y our question, please.
Hi. Good afternoon? Thank you for taking my questions. One is as a follow-up to your previous comments that you mentioned potential benefit from infrastructure programs in environmental testing. Is that mainly in France or is that across Europe, please? The second one, I know it's just a revenue call, nothing on profits, but I wanted to clarify some of the comments you made earlier where you mentioned that you've fully written down the value of the machines that are used for PCR testing. Was that taken as a higher depreciation expense, or was it taken above EBITDA line, just so that we can understand how the dynamics and margins will trend this year? The last one would be, what's the total value of the machines that you have written off last year? Thank you.
Thank you very much. Infrastructure programs, I think they will be global. I think it's not only in France or it's all over Europe for sure, and I think in North America, there are also infrastructure programs about workloads and public works and also green buildings, which will mean a lot of work. I'm not sure I understood the second and third question. If I could ask you to repeat it, please.
Yeah, sure. I think that the full year results, you mentioned that you've actually written down the value of the PCR machines. You fully just expensed it almost. I just wanted to understand whether it was taken as a depreciation expense or whether it was taken above EBITDA line, whether EBITDA margins benefited from it last year, so we can understand how the dynamics change this year.
Thank you very much. Yeah. Well, what we've done is we've geared to be fully written down at the end of the pandemic, this should be by more or less, we targeted next summer, I mean, this summer to be done with writing off all those COVID tests because our central hypothesis was no COVID testing next year. The write-down, it is part of depreciation, so it does affect the EBIT. The value, yeah, it was significant, tens of millions of dollars that we invested in this whole thing. We also wrote down some stocks to not have too much stock in case there is an abrupt change.
We also shift some stock from areas where there is less testing to areas where there is more testing, and that should mitigate that to some extent, that we don't have too much testing reagents around if the testing were to stop abruptly.
Understood. Thank you very much. That's very helpful.
The next question is from Pierre Fournier with Moneta, y our question, please.
Good afternoon, gentlemen. Can you hear me?
Yes.
Thank you very much for taking the questions. The first question would be a follow-up on SAFER@WORK. Just to be sure I understand, or how to understand the EUR 550 million figure. In the situation where, on the 30th of June, we all go back to office, school, and airports, does it mean that Eurofins will achieve EUR 550 million of revenue in H2, or is it a more spread out figure? Maybe another on SAFER@WORK. Does it bear the same margin as the traditional business? On the 10% growth, which is very impressive, I understood there was maybe a slight catch-up effect in environmental from clients who could not do their test in 2020. Is there another catch-up effect from another sub-industry that you are serving other than environmental? The last question is regarding France.
I would just like to know how much is France in percentage of COVID-related revenues. Thank you.
Thank you. Thank you very much. I don't know exactly when those numbers would fall. We said for SAFER@WORK mostly in the second half is what we think. Each contract is different. Can be event contract and travel depends on when travel restarts, and it could continue for a very long time, even beyond 2021, depending on government regulations. That's the best guess we could give you of the magnitude of what we have. We don't see why the margin would be substantially different than other things we do. I think there was a misunderstanding on catch-up. I don't think we have seen any catch-up of anything. It's more part return to normal that we are seeing so far in part of the work where our clients could not work at all.
They are starting to work a bit more normally, and that the work that could not be done before in 2020 will be done now. I don't know. This is something that might happen in the next few quarters. I don't think that we have much evidence of that right now. It's not like certification where audits have to be done and where a lot of common other companies doing certification, there's a lot of work in Q4 of last year because things have to be done annually. I don't think in, for example, in catering and so on, those things won't happen. Maybe a bit in environmental, but we'll see it in the second half of the year in the U.S., for example, for environment, how much of that happens.
France is a proportional part of COVID of, I don't know, maybe for what we do in Europe, maybe 20%. Like I say, I don't have the exact figures in front of me, but it's not everything. It is significant, of course, but we also do a lot of testing for other European countries, even countries where we are not so present with a lab network. I think I will take one last question because we are running over.
It's 20% of European group revenues?
No, of the COVID.
Of COVID. Thank you. Okay.
It's not, I don't have the exact number. It's just an educated guess. I think it's around that. I can take one last question if there is one.
There are no further questions at this time.
All right. Thank you very much. Thank you very much for joining our call. I appreciate that we had so many questions. Of course, we can follow up one-on-one, or you can follow up with Guy and Laurent, Hugues, and Javier separately. To conclude, I think we've had a very strong first quarter. The most important thing is we see our core business doing extremely well, which is very encouraging for the years to come. We start to see the benefits of all the investments we made in IT and having a very big state-of-the-art network. We see the benefits of all the investments we made in opening labs in Asia. Basically, it makes us even more positive and bullish about the long-term future of Eurofins.
I would like to thank all of you who are investors here for your support for the many years where we are building the company, and I am happy that now we are coming in a phase where you can see the benefits of all those investments and of your patience. Thanks a lot for your support, and have a very nice day, and I hope that with all our work and that of many governments and testing companies around the world and vaccine companies, we can meet again in person in the second half of this year. Have a very good afternoon. Thank you.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.