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Zurich, Switzerland, 10 August 2006 - Tecan, a leading provider of laboratory products and solutions for the biopharmaceutical research, diagnostics and forensics industries, recorded a marked increase in sales as well as in operating and net profits during the first half of 2006. Year-on-year, consolidated sales increased by 39.0% to a total of CHF 200.7 million while earnings before interest and taxes (EBIT) rose from CHF 8.8 million (6.1% of sales) in 2005 to CHF 23.1 million (11.5% of sales) during the first half year 2006. Net profit increased from CHF 4.5 million (3.1% of sales) to CHF 17.6 million (8.8% of sales). These positive developments were primarily driven by the market success of Tecan’s products, the effects of the company’s ongoing operational efficiency initiatives as well as the one-time effects associated with the acquisition of REMP and a major forensics project.
The major project for forensic analysis of DNA, already accounted for in the first quarter of 2006, contributed CHF 11.6 million to sales. For the first half of 2006, a further CHF 19.4 million was generated by the REMP Group, which was acquired in June 2005. Excluding these effects, Tecan generated sales of CHF 169.7 million, representing organic revenue growth of 14.5% in local currency. Exchange rate effects contributed an additional 2.9% to this figure for an overall organic growth rate of 17.4%. "We are pleased that during the first half of the current year, we were able to continue the positive business trend and realize a substantial rise in sales and, through the continued focus on disciplined cost management, further enhance our profitability", commented Thomas Bachmann, Chief Executive Officer of Tecan.
Tecan increased sales in all geographic regions, considerably exceeding the market growth rate of an estimated 5-8%. Growth was driven by all Tecan product categories with particularly strong performances delivered by Diagnostics and Detection products.
Order entry during the first half of 2006 rose by 28.2% year-on-year to CHF 192.4 million. Exchange rate effects contributed 3.1% to this figure.
Profitability and Cash Flow increase significantly; strong Balance Sheet
During the first half of 2006, Tecan improved EBIT to CHF 23.1 million or 11.5% of sales (H1 2005: 6.1%).The increase in profitability was driven mainly by the company’s ongoing implementation of operational efficiency measures, higher capacity utilization, price discipline and innovative products.
Of note was also the growth in net profit, which rose to CHF 17.6 million, or 8.8% of sales (H1 2005: 3.1%) as a result of the higher operating profit as well as a considerably improved financial result.
Finally, cash flow from operating activities developed strongly. For the first half of the year, it amounted to CHF 28.3 million compared to a negative cash flow of CHF 2.1 million during the same period in 2005.
As a result of the strong overall performance, Tecan was able to significantly strengthen its balance sheet and has essentially returned to the ratios seen prior to the REMP acquisition.
In the second half of 2006, Tecan will continue the operational efficiency measures, expand its market presence and drive forward product innovation. For the full year 2006, Tecan anticipates that sales, operating profit and cash flow will exceed the figures for the previous year.
Next important date
The 2006 Q3 report will be published on 1 November 2006.
Tecan (www.tecan.com) is a leading player in the life sciences supply industry. The company specializes in the development, production and distribution of automation solutions which facilitate the researching of active pharmaceutical compounds, as well as diagnostics, pharmaceutical research and forensics for clients in the life sciences sector. Through its REMP subsidiary (www.remp.com), Tecan is the leading supplier of large-scale automated storage and retrieval systems. Tecan clients are pharmaceutical and biotechnology companies, university research departments and diagnostic laboratories. Founded in Switzerland in 1980, the company has manufacturing, research and development sites in both North America and Europe and maintains a sales and service network in 52 countries. In 2005, Tecan achieved sales of CHF 344.9 million (USD 275.9 million; EUR 222.5 million). Registered shares of Tecan Group are traded on the SWX Swiss Exchange (TK: TECN/Reuters: TECZn.S/Valor: 1210019).
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