Tecan Group AG : Tecan records stable sales and increased operating profit in
the first half of 2013
Tecan Group AG / Tecan records stable sales and increased operating profit in
the first half of 2013 . Processed and transmitted by Thomson Reuters ONE. The
issuer is solely responsible for the content of this announcement.
*Sales of CHF181.8 million (H1 2012: CHF 182.2 million)
*Stable sales despite tough economic environment
*Sales 0.2% (0.5% in local currencies) below prior-year figure
*Order entry of CHF189.2 million (H1 2012: CHF 179.6 million)
*Growth of 5.3% (5.1% in local currencies)
*Operating profit (EBIT) of CHF23.1 million (H1 2012: CHF 22.4 million)
*Operating profit margin increased to 12.7% of sales (H1 2012: 12.3%)
*Net profit of CHF16.5 million (H1 2012: CHF 17.7 million)
*Net profit margin of 9.1% of sales (H1 2012: 9.7%)
*Earnings per share of CHF 1.51 (H1 2012: CHF 1.64)
*Cash flow from operating activities of CHF 5.5 million (H1 2012: CHF -8.0
*Cash flow from operating activities of CHF28.4 million, excluding
prefinancing of an OEM development project (H1 2012: CHF 15.0
*Outlook for full-year 2013 confirmed
*Significant progress in major development programs
*OEM development program Dako Omnis successfully completed; first
instruments for market launch delivered
Männedorf, Switzerland, August 14, 2013 - The Tecan Group (SIX Swiss Exchange:
TECN) closed the first half of 2013 with stable sales and an increased
operating profit. Despite the tough economic environment, sales reached
approximately the prior-year value, down 0.2%, or 0.5% in local currencies (H1
2012: CHF182.2million). After an anticipated difficult first quarter,
double-digit sales growth was achieved in the second quarter. Order entry
increased by 5.3% to CHF 189.2 million (H1 2012: CHF 179.6 million) in the
first six months of the year, corresponding to growth of 5.1% in local
currencies. As a result, order entry exceeded sales in the first half of 2013,
leading to an increased order backlog at the end of the reporting period.
Operating profit (EBIT) increased by 3.3% to CHF23.1million in the first
half of 2013 (H1 2012: CHF22.4million) despite stable sales. At 12.7% of
sales, the operating profit margin also exceeded the prior-year figure (H1
2012: 12.3%). Net profit amounted to CHF16.5 million (H1 2012: CHF 17.7
million) in the first six months of the year. The decline is the result of a
lower financial result attributable to currency hedging measures. The net
profit margin reached 9.1% of sales (H1 2012: 9.7%), while earnings per share
were CHF 1.51 (H1 2012: CHF 1.64). Cash flow from operating activities
increased to CHF 5.5 million (H1 2012: CHF -8.0 million). Excluding an OEM
development project that Tecan is prefinancing, cash flow from operating
activities amounted to CHF28.4 million (H1 2012: CHF 15.0 million).
Tecan CEO David Martyr commented: "Despite the continuing tough economic
environment in the first half of 2013, Tecan's sales remained at approximately
the same level as in 2012. I am pleased that we have managed to increase our
operating profit as well as the operating profit margin. As we anticipated,
the first quarter was very difficult, with uncertainty around the impact of
austerity measures imposed in many countries. In the second quarter, however,
we enjoyed a noticeably positive trend with double-digit sales growth and
increased order entry.
We have achieved important progress in implementing our priorities for 2013.
The development of the key product Dako Omnis was successfully completed and
we have started deliveries for commercial distribution. As regards individual
markets and products, we enjoyed significant growth in China and in the
component business. We confirm the forecast for 2013 that we issued in the
spring, but note that the impact of market developments on our Life Sciences
Business continues to be hard to predict," Martyr continued.
Information by business segments
Life Sciences Business (end-customer business)
As anticipated, the Life Sciences Business segment was affected in the first
half of the year by the austerity measures and budget cuts in Europe and North
America, which unsettled the markets. Sales in this business segment decreased
by 3.2% to CHF 97.6 million (H1 2012: CHF100.8 million), while in local
currencies, sales were 3.5% below the prior-year period. The decline in sales
in the first six months occurred entirely in the first quarter, while the
second quarter was characterized by a markedly positive growth trend
sequentially. Also, sales in the second quarter increased slightly compared
with the prior-year period. At the product level, sales of liquid handling
platforms in the first six months were below the 2012 level. By contrast,
Tecan achieved sales growth in detection devices and services and consumables.
Overall, order entry in the Life Sciences Business was also below the
prior-year figure, but showed solid growth in the second quarter.
The segment's operating profit in the first half of 2013 was CHF 1.1 million
(H1 2012: CHF 4.8 million). The decline is principally the result of lower
sales. The profit margin reached 1.0% of sales (H1 2012: 4.4%). The Life
Sciences Business is, to a certain degree, subject to seasonality and
therefore generates the majority of the segment operating profit in the second
half of the year.
Partnering Business (OEM business)
The Partnering Business segment generated sales of CHF 84.2 million during the
reporting period (H1 2012: CHF 81.4 million), which corresponds to an increase
of 3.5% in Swiss francs and 3.2% in local currencies. Components, services and
consumables again posted strong growth in the first half of 2013. Sales of
instruments declined, as one partner phased out a product line and, following
a company acquisition, another partner shifted the focus of its combined
Order entry in the Partnering Business increased significantly in the first
half of the year, growing at a double-digit percentage rate. This led to a
significantly higher order backlog at the end of the reporting period.
The Partnering Business segment increased its operating profit margin to 29.2%
of sales in the first six months of 2013 (H1 2012: 25.6%). At CHF 25.0
million, operating profit was therefore 16.9% above that of the prior-year
period (H1 2012: CHF 21.4 million).
In Europe, sales in Swiss francs were 2.8% below the prior-year period and
decreased by 3.7% in local currencies. This decrease is primarily the result
of lower sales in the Life Sciences Business due to the continuing tough
economic situation in some European countries.
In North America, sales rose by 1.6% in Swiss francs and 0.9% in local
currencies. Growth in this region was driven by a considerable increase in
sales in the component business, which is part of the Partnering Business.
Sales in the Life Sciences Business in North America were also below the
prior-year figure, as government budget cuts unsettled the market.
Sales in Asia grew by 2.5% in Swiss francs and by 6.4% in local currencies.
Both business segments were able to contribute to growth. Sales in China again
increased at a double-digit percentage rate.
Recurring sales of services and consumables
Recurring sales of services and consumables increased by 7.8% in the first
half of 2013, or by 7.5% in local currency terms, and accounted for 35.1% of
total sales (H1 2012: 32.5%). As part of this figure, sales of consumables
again increased at a double-digit percentage rate, growing by 17.0% in Swiss
francs and by 15.8% in local currencies to a share of 11.2% of total sales (H1
Research and development
In the first half of 2013, research and development spending was at 11.7% of
sales (H1 2012: 12.3%) or CHF 21.3 million (H1 2012: CHF 22.5 million). All
told, research and development activities amounted to CHF 54.0 million gross
(H1 2012: CHF 55.3 million). This figure also includes the development costs
capitalized in the balance sheet (CHF4.2 million gross) and development costs
for OEM partners (CHF29.8 million).
Tecan announced at the beginning of June that it had successfully completed
the major Dako Omnis development program. The new platform for automated
advanced staining of tissue samples was co-developed with Dako and is
manufactured by Tecan. Dako is an Agilent Technologies company (NYSE: A). The
Dako Omnis sets new standards for automated tissue-based cancer diagnostics
and Tecan has delivered the first instruments for the market launch.
For the second major OEM development program, P14, Tecan continues to expect
the start of commercial supply of instruments to its partner around the end of
As communicated before, the launch of Tecan's next generation of liquid
handling platforms is anticipated in 2014.
Strong balance sheet - high equity ratio
Tecan's equity ratio increased further during the reporting period and reached
71.4% as of June 30, 2013 (December 31, 2012: 69.4%). Net liquidity (cash and
cash equivalents less bank liabilities and loans) amounted to CHF 130.3
million (December 31, 2012: CHF 141.3 million). The Company's share capital
remained unchanged at CHF1,144,458 at the reporting date (June 30, 2013),
consisting of 11,444,576 registered shares with a nominal value of CHF0.10
At the Tecan Group Annual General Meeting on April 17, 2013, shareholders
again approved a higher dividend versus the previous year of CHF 1.50 per
registered share. The dividends of CHF 16.5 million in total (H1 2012: CHF
13.5 million) were partly paid out from the available capital contribution
reserve. The payout took place on April 24, 2013.
Outlook for full-year 2013 confirmed
Tecan expects accelerated sales growth in the second half of 2013 for both
In an environment that remains hard to predict, Tecan continues to expect
moderate growth in local currencies in the Life Sciences Business segment in
2013, but the possibility of a decline in sales in this segment cannot be
Based on customer forecasts for existing products, in light of the
commencement of deliveries of Dako Omnis and the anticipated continuation of
dynamic growth in the component business, Tecan continues to expect good sales
growth for the Partnering Business segment in fiscal year 2013.
Overall, Tecan continues to expect sales growth for full-year 2013 to be in
the mid-single-digit percentage range in local currencies. Tecan continues to
anticipate that operating profit margin will grow by around 50 basis points in
2013 compared with 2012.
Financial Report and Webcast
The full 2013 Interim Report can be accessed on the company website
www.tecan.com under Investor Relations. An iPad App for the Tecan Financial
Reports is available from the App Store.
A conference call discussing the results in the first half of 2013 will take
place today at 10 a.m. (CEST). 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 58 310 5000 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
*A Capital Market Day for analysts and institutional investors will take
place on September 11, 2013, in Männedorf/Zurich.
*The 2013 Annual Report will be published on March 11, 2014.
*The Annual General Meeting of Tecan's shareholders will take place in
Zurich on April16, 2014.
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, and 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 &
email@example.com Tel. +41 (0) 44 922 84 30
www.tecan.com Fax +41 (0) 44 922 88 89
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