2013-03-07 07:05:07 -
Tecan Group AG /
Tecan posts a solid performance in 2012 and an acceleration in sales in the
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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
* 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
* Profit margin of 10.8% of sales in 2012 (2011: 11.9%)
* Earnings per share from continuing operations of CHF 3.90 (2011:
* Cash flow from operating activities: CHF 2.4 million (2011: CHF 45.1
* 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
* Increase in the dividend from CHF 1.25 to CHF 1.50 per share proposed
* 2013: Forecast of growth in local currencies in the mid-single-digit
percentage range and an increase in operating profit margin of around 50
* 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
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 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
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).
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
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, 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 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
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
CHF 391 million (USD 416 million; EUR 323 million). Registered shares of Tecan
Group are traded on the SIX Swiss Exchange (TECN; ISIN CH0012100191).
For further information:
Dr. Rudolf Eugster Martin Brändle
Chief Financial Officer Head of Corporate Communications &
Tel. +41 (0) 44 922 84 30
www.tecan.com Fax +41 (0) 44 922 88 89
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