Tecan posts a solid performance in 2012 and an acceleration in sales in the second half

Tecan posts a solid performance in 2012 and an acceleration in sales in the 
second half 
MANNEDORF, SWITZERLAND -- (Marketwire) -- 03/07/13 --  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
ONE. The issuer is solely responsible for the content of this
announcement.  
Financial results: full-year and second half of 2012   * Sales of CHF
391.1 million (2011: CHF 377.0 million) 
* Growth of 3.8% or 1.9% in local currencies in 2012       *
Accelerated sales growth of 7.1% or 3.3% in local currencies in the   
second half 
* Order entry of CHF 382.3 million (2011: CHF 383.9 million) 
* Slight decline of -0.4% or -2.2% in local currencies in 2012  
* Growth of 7.9% or 4.1% in local currencies in the second half 
* Operating profit (EBIT) of CHF 52.3 million (2011: CHF 51.3
million) 
* Operating profit margin of 13.4% of sales in 2012 (2011:
13.6%)       * Above the expected range of 12.2% to 13.2% 
* Net profit from continuing operations: CHF 42.2 million (2011:
CHF 44.9     million) 
* Profit margin of 10.8% of sales in 2012 (2011: 11.9%)       *
Earnings per share from continuing operations of CHF 3.90 (2011:      
CHF 4.18) 
* Cash flow from operating activities: CHF 2.4 million (2011: CHF
45.1     million) 
* Cash flow from operating activities of CHF 45.0 million,
excluding         prefinancing of an OEM development project 
Other important information   * Strengthening of management: Manager
with extensive sector-specific     experience to head the Life
Sciences Business   * Board 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   *
Increase in the dividend from CHF 1.25 to CHF 1.50 per share
proposed 
Outlook   * 2013: Forecast of growth in local currencies in
the mid-single-digit     percentage range and an increase in
operating profit margin of around 50     basis points   * Start of
commercial instrument deliveries under two significant OEM programs  
  expected in 2013   * Medium-term target for 2015: Sales of around
CHF 500 million with increased     profitability 
Maennedorf, 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 CHF 391.1 million in 2012 (2011: CHF 377.0 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 CHF 382.3 million (2011:
CHF 383.9 million). 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 CHF 52.3 million in 2012 (2011: CHF 51.3 million). 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 CHF 42.2 million in 2012 (2011: CHF 44.9
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 CHF
3.90 (2011: CHF 4.18). Cash flow from operating activities totaled
CHF 2.4 million (2011: CHF 45.1 million). Excluding prefinancing of
an OEM development project, cash flow from operating activities
amounted to CHF 45.0 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 CHF 235.2 million in 2012
(2011: CHF 232.2 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
CHF 29.0 million in the year under review (2011: CHF 23.8 million).
Operating profit margin rose two percentage points to 11.6% of sales
(2011: 9.6%), mainly due to a higher gross margin. 
Partnering Business (OEM business) The  Partnering Business generated
sales of  CHF 156.0 million in the year under review  (2011: CHF
144.7 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 CHF
30.6 million, operating profit was therefore below that of the
previous year (2011: CHF 35.6 million). 
Additional information 
Regional development 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 CHF 51.5 million (2011:
CHF 47.0 million). All told, research and development activities came
to CHF 114.7 million gross (2011: CHF 90.6 million). This figure also
includes the development costs capitalized in the balance sheet of
CHF 4.0 million gross and development costs for OEM partners of CHF
61.9 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
congress. 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 CHF 141.3 million (December   31, 2011: CHF   163.0 million)  
despite   increased  investment  in development  programs. The
Company's share capital stood at CHF 1,144,458 at the reporting  date
(December 31, 2012), consisting  of 11,444,576 registered shares with
a nominal value of CHF 0.10 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 CHF 1.25  to  CHF 1.50  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 Europe/Canada. 
The Board will also propose the reelection of current members Rolf A.
Classon, Heinrich Fischer, Dr. Oliver S. Fetzer, Gerard Vaillant, Erik
Wallden and Dr. Karen Huebscher for a further one-year term.
Dominique F. Baly will not seek reelection at this year's Annual
General Meeting. 
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. 
Outlook
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 impact.
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 CHF 500 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 event. 
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. 
About Tecan 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 CHF 391 million (USD
416 million; EUR 323 million). Registered shares of Tecan Group are
traded on the SIX Swiss Exchange (TECN; ISIN CH0012100191). 
Press Release with financial tables:  
http://hugin.info/100384/R/1683313/550888.pdf 
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Source: Tecan Group AG via Thomson Reuters ONE [HUG#1683313] 
For further information: 
Tecan Group 
Dr. Rudolf Eugster          Martin Braendle 
Chief Financial Officer     Head of Corporate Communications & 
Investor Relations 
investor@tecan.com          Tel. +41 (0) 44 922 84 30 
www.tecan.com               Fax +41 (0) 44 922 88 89
 
 
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