Tecan Group AG : Tecan posts a solid performance in 2012 and an acceleration
in sales in the second half
Tecan Group AG / Tecan posts a solid performance in 2012 and an acceleration
in sales in the second half . Processed and transmitted by Thomson Reuters
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Financial results: full-year and second half of 2012
oSales of CHF391.1 million (2011: CHF377.0 million)
oGrowth of 3.8% or 1.9% in local currencies in 2012
oAccelerated sales growth of 7.1% or 3.3% in local currencies in the
oOrder entry of CHF382.3 million (2011: CHF383.9 million)
oSlight decline of -0.4% or -2.2% in local currencies in 2012
oGrowth of 7.9% or 4.1% in local currencies in the second half
oOperating profit (EBIT) of CHF52.3 million (2011: CHF51.3 million)
oOperating profit margin of 13.4% of sales in 2012 (2011: 13.6%)
oAbove the expected range of 12.2% to 13.2%
oNet profit from continuing operations: CHF42.2 million (2011: CHF44.9
oProfit margin of 10.8% of sales in 2012 (2011: 11.9%)
oEarnings per share from continuing operations of CHF3.90 (2011:
oCash flow from operating activities: CHF2.4 million (2011: CHF45.1
oCash flow from operating activities of CHF45.0 million, excluding
prefinancing of an OEM development project
Other important information
oStrengthening of management: Manager with extensive sector-specific
experience to head the Life Sciences Business
oBoard of Directors: Dr. Christa Kreuzburg to be proposed to the upcoming
Annual General Meeting as a new member of the Board; Dominique Baly will
not seek reelection
oIncrease in the dividend from CHF1.25 to CHF1.50 per share proposed
o2013: Forecast of growth in local currencies in the mid-single-digit
percentage range and an increase in operating profit margin of around 50
oStart of commercial instrument deliveries under two significant OEM
programs expected in 2013
oMedium-term target for 2015: Sales of around CHF500 million with
Männedorf, Switzerland, March 7, 2013 - The Tecan Group (SIX Swiss Exchange:
TECN) closed 2012 with a solid performance and a substantial acceleration in
sales in the second half. Sales increased by 3.8% to CHF391.1 million in 2012
(2011: CHF377.0 million) and were up by 1.9% in local currency terms.
Following low growth in the first six months, sales growth accelerated
considerably in the second half and was 7.1% higher than in the prior-year
period. This equates to an increase of 3.3% in local currencies. Order entry
in 2012 was only slightly below the prior-year figure at CHF382.3 million
(2011: CHF383.9million). Advance orders in 2011 resulted in a significant
decline in order entry in the first six months of 2012. However, this decline
was almost fully offset by growth in orders of 7.9% (4.1% in local currencies)
in the second half.
Operating profit before interest and taxes (EBIT) increased by 2.0% to
CHF52.3million in 2012 (2011: CHF51.3million). At 13.4% of sales, the
operating profit margin exceeded the expected range of 12.2% to 13.2%, and was
only slightly below the prior-year level (2011: 13.6%), although research and
development spending increased by 0.7 percentage points year-on-year. Net
profit from continuing operations amounted to CHF42.2 million in 2012 (2011:
CHF44.9 million). Net profit in 2011 benefited from a significantly better
financial result, which was largely attributable to gains from currency
hedging. The net profit margin was 10.8% of sales in 2012 (2011: 11.9%).
Earnings per share from continuing operations were CHF3.90 (2011: CHF4.18).
Cash flow from operating activities totaled CHF2.4 million (2011: CHF45.1
million). Excluding prefinancing of an OEM development project, cash flow from
operating activities amounted to CHF45.0 million.
Tecan CEO David Martyr commented: "In a continuing difficult market
environment, Tecan closed financial year 2012 with a solid result overall.
Following low growth in the first six months, sales growth accelerated
considerably in the second half, as we expected. We are particularly pleased
by the strong growth in China, where we generated sales of more than 20
million Swiss francs for the first time, with a clearly double-digit growth
rate. Our component business also posted double-digit growth, thanks to a
number of newly acquired customers."
"We intend to continue to increase our sales and profitability in 2013 and
beyond. The start of instrument deliveries to two OEM partners during the
course of this year and the resulting expected substantial contribution to
sales from 2014 mean that we already have significant growth drivers for the
coming years. We will also implement our growth strategy in a more targeted
way in other areas. For example, we believe growth markets such as China still
harbor considerable potential. Overall, we are well on track to bring Tecan to
the next level of business development. Our aims for 2015 are sales of around
500 million Swiss francs with increased profitability," said Martyr.
Information by business segments
Life Sciences Business (end-customer business)
Sales in the Life Sciences Business segment rose by 1.3% to CHF235.2 million
in 2012 (2011: CHF232.2 million). In local currencies, sales were 1.1% below
the prior-year period. The Life Sciences Business constituted 60.1% of total
Group sales (2011: 61.6%). In the second half of the year, sales increased by
3.4%, and in local currency terms were 1.1% below the prior-year level. In
local currencies, sales generated by liquid handling platforms in 2012 were
close to the previous year's level, while those of detection devices were down
slightly compared to 2011. Tecan posted high double-digit growth in all
product groups in Asia Pacific. Order entry in the Life Sciences Business
remained slightly below the previous year's figure in local currencies, but
improved during the second half.
Operating profit in the segment rose 21.8% to CHF29.0 million in the year
under review (2011: CHF23.8 million). Operating profit margin rose two
percentage points to 11.6% of sales (2011: 9.6%), mainly due to a higher gross
Partnering Business (OEM business)
The Partnering Business generated sales of CHF156.0 million in the year under
review (2011: CHF144.7 million), which corresponds to an increase of 7.8% in
Swiss francs and 6.7% in local currencies. The OEM business accounted for
39.9% of total Group sales (2011: 38.4%). Sales growth accelerated further in
the second half, and was 14.4% higher than 2011 in Swiss francs, and 12.1%
higher in local currency terms. Components, services and consumables posted
double-digit growth in 2012.
Order entry in the Partnering Business was below the prior-year period in the
first six months, due to advance orders made by customers in December 2011
rather than in the first quarter of 2012. In the second half, however, order
entry was up substantially on the same period of 2011, and was down only
slightly year-on-year for 2012 as a whole.
The Partnering Business segment achieved an operating profit margin of 19.1%
of sales in 2012 (2011: 23.7%). The main reason for the lower operating profit
margin was costs booked under a development program for an OEM customer. At
CHF30.6 million, operating profit was therefore below that of the previous
year (2011: CHF35.6 million).
In Europe, sales in Swiss francs were 7.8% below the prior-year period and
decreased by 7.2% in local currencies. This is due to lower sales in the
Partnering Business, mainly as engineering income generated in an OEM project
declined. In light of the challenging economic situation in some European
countries, sales in the Life Sciences Business were also below the prior-year
level. Sales in Europe were 1.8% below 2011 in Swiss francs, and 2.5% lower in
local currency terms in the second half.
In North America, Tecan generated sales growth of 10.4% in Swiss francs and
5.4% in local currencies. Growth in this region was driven by the strong
performance of the Partnering Business, primarily a considerable increase in
sales in the component business. Life Sciences Business sales to end customers
were below the prior-year level in North America due to the continuing
strained economic environment. In the second half of the year, sales in North
America increased by 9.4%, or 2.4% in local currencies.
Sales in Asia were strong, growing by 24.5% in Swiss francs and by 20.2% in
local currencies. Investments in the market organizations are starting to pay
off, particularly in China. Sales in China increased at a clearly double-digit
percentage rate, driven by the Life Sciences Business. In the second half of
the year, sales in Asia increased by 19.2%, or 14.2% in local currencies.
Recurring sales of consumables and services
Recurring sales of consumables and services increased by 6.0% in the year
under review, or by 4.0% in local currency terms, and accounted for 30.6% of
total sales (2011: 30.0%). As part of this figure, sales of consumables grew
by 17.9% in Swiss francs and by 15.4% in local currencies to a share of 9.1%
of total sales (2011: 8.0%)
Research and development
Research and development spending in 2012 amounted to 13.2% of sales (2011:
12.5%) or CHF51.5 million (2011: CHF47.0 million). All told, research and
development activities came to CHF114.7 million gross (2011: CHF90.6
million). This figure also includes the development costs capitalized in the
balance sheet of CHF4.0 million gross and development costs for OEM partners
of CHF61.9 million.
Tecan has three major development programs currently underway. For the two
major OEM programs under development (P14 and P16), Tecan continues to expect
the start of commercial supply of instruments to its partners in 2013. In a
separate press release, Tecan has announced today that its OEM partner Dako,
an Agilent Technologies Company and worldwide provider of cancer diagnostics,
unveiled the new platform previously referred to by Tecan as P16, at a global
As communicated before, the launch of Tecan's next generation of liquid
handling platforms is anticipated to take place in 2014.
Strong balance sheet - high equity ratio
Tecan's equity ratio increased during the reporting period and reached 71.9%
as of December 31, 2012 (December 31, 2011: 69.1%). Net liquidity (cash and
cash equivalents minus bank liabilities and loans) amounted to CHF141.3
million (December 31, 2011: CHF 163.0 million) despite increased investment in
development programs. The Company's share capital stood at CHF1,144,458 at
the reporting date (December 31, 2012), consisting of 11,444,576 registered
shares with a nominal value of CHF0.10 each.
Further increase in distribution to shareholders
On the basis of a strong balance sheet and a sustainable good business
outlook, Tecan intends to increase its profit distribution to shareholders
again. The Board of Directors will therefore propose a 20% increase in the
dividend from CHF1.25 to CHF1.50 per share to the shareholders at the
Company's Annual General Meeting on April 17, 2013. The dividend will be paid
out in part from the available capital contribution reserve, and this portion
of CHF 1.00 is therefore not subject to withholding tax.
Election to the Board of Directors
The Board of Directors will propose the election of Dr. Christa Kreuzberg as a
new member of the Board at the Annual General Meeting. Dr. Kreuzburg is an
experienced manager from the pharma industry, and has held a range of
management positions at Bayer AG. Most recently, she was a member of the
Executive Committee of Bayer HealthCare and Head of Bayer Schering Pharma
The Board will also propose the reelection of current members Rolf A. Classon,
Heinrich Fischer, Dr. Oliver S. Fetzer, Gérard Vaillant, Erik Walldén and Dr.
Karen Huebscher for a further one-year term.
Dominique F. Baly will not seek reelection at this year's Annual General
Strengthening of management
At the beginning of 2013, CEO David Martyr took the opportunity to restructure
the management team and strengthen it in a targeted way to implement the
growth strategy. On February 28, Tecan announced that it has appointed Dr.
Stefan Traeger as a member of the Management Board. As Head of the Life
Sciences Business division Stefan Traeger will be responsible for the Group's
global end-customer business. He will take up his new post at Tecan on July 1,
2013. Stefan Traeger has extensive domain experience in a variety of
management positions in the life science industry.
Searches for a Head of the Partnering Business division and a Head of
Corporate Development are underway.
Financial year 2013
In a continuing challenging economic environment, Tecan predicts moderate
growth in local currencies in the Life Sciences Business segment in 2013.
Based on customer forecasts for existing products, new instruments scheduled
to be launched in 2013 as well as the anticipated continuation of dynamic
growth in the component business, Tecan expects good sales growth for the
Partnering Business segment in 2013.
Overall, Tecan expects sales growth for full-year 2013 to be in the
mid-single-digit percentage range in local currencies. The Company anticipates
a moderate increase in sales in the first six months followed by stronger
growth in the second half, similar to the trend in 2012. This is primarily
based on the expected start of instrument supply under a significant OEM
program, which should begin contributing to sales in the second half.
Tecan is targeting a further improvement in profitability in 2013.
A reduction in research and development spending as a proportion of sales will
have a positive effect on the operating profit margin here; however, lower
average exchange rates compared with 2012 are expected to have a negative
Overall, Tecan expects operating profit margin to grow by around 50 basis
points in 2013 compared with 2012.
Medium-term targets for 2015
Tecan also announced its medium-term targets for 2015 today.
The start of commercial instrument deliveries under two significant OEM
programs to partners during the course of this year and the resulting expected
considerable contribution to sales from 2014 mean that the Company already has
significant growth drivers for the near future. Further, the targeted
implementation of the growth strategy should make a substantial contribution
to sales growth, for example in growth markets such as China.
Tecan's aims for 2015 at current exchange rates are sales of around CHF500
million and increased profitability.
Financial Report and Webcast
The full 2012 Financial Report can be accessed on the Company's website
www.tecan.com under Investor Relations. An iPad App for the Tecan Financial
Reports is available from the App Store.
Tecan will hold an analyst and press conference to discuss the 2012 annual
results today at 10:00 am (CET). The presentation will also be relayed by live
audio webcast, which interested parties can access at www.tecan.com. A link to
the webcast will be provided immediately prior to the event.
The dial-in numbers for the conference call are as follows:
For participants from Europe: +41 91 610 5600 or +44 203 059 5862 (UK)
Participants from the US: +1 (1) 866 291 4166
Participants should if possible dial in 15 minutes before the start of the
Key upcoming dates
- The full Annual Report 2012 will be published at the end of March.
- The Annual General Meeting of Tecan's shareholders will take place in
Zurich on April 17, 2013.
- The 2013 Interim Report will be published on August 14, 2013.
Tecan (www.tecan.com) is a leading global provider of laboratory instruments
and solutions in biopharmaceuticals, forensics and clinical diagnostics. The
company specializes in the development, production and distribution of
automated workflow solutions for laboratories in the life sciences sector. Its
clients include pharmaceutical and biotechnology companies, university
research departments, forensic and diagnostic laboratories. As an original
equipment manufacturer (OEM), Tecan is also a leader in developing and
manufacturing OEM instruments and components that are then distributed by
partner companies. Founded in Switzerland in 1980, the company has
manufacturing, research and development sites in both Europe and North America
and maintains a sales and service network in 52 countries. In 2012, Tecan
generated sales of CHF391million (USD416million; EUR323million).
Registered shares of Tecan Group are traded on the SIX Swiss Exchange (TECN;
For further information:
Dr. Rudolf Eugster Martin Brändle
Chief Financial Officer Head of Corporate Communications &
firstname.lastname@example.org Tel. +41 (0) 44 922 84 30
www.tecan.com Fax +41 (0) 44 922 88 89
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