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Zürich, Switzerland, March 14, 2006 –Tecan, a leading global supplier for the Biopharma, Forensics and Diagnostics industries, announces an increase in revenue and significantly improved operating results for the fiscal year ended December 31, 2005. The consolidated turnover for the company amounted to CHF 344.9 million, an increase of 20.6% compared to FY 2004. Concurrently, EBIT rose by 48.2% to CHF 24.8 million and net income increased by 9.7% to CHF 14.0 million. During the past year, Tecan was also able to realize an important strategic step through the successful acquisition and integration of REMP, the leading global supplier of compound and sample management solutions. To enable further strategic growth opportunities, the board of directors will propose the creation of authorized and additional conditional capital during the upcoming ordinary general meeting of the shareholders.
„The execution on the measures outlined last year, specifically the focus on our core business, disciplined cost management, implementing a more effective organizational structure and improving our internal processes have started to pay off during 2005,” commented Thomas Bachmann, CEO of Tecan.
Even excluding the REMP acquisition, Tecan was able to grow its business well above market growth rates in the past fiscal year, growing by 12.8% to CHF 322.7 million. The acquisition of REMP, which was consolidated into the corporate results as of July 1, 2005, contributed an additional CHF 22.2 million to the overall Group revenue of CHF 344.9 million.
The company’s organic growth was due to the market’s acceptance of a number of products notably in the areas of Detection and Diagnostics thereof especially within the OEM business. Another positive aspect was the development of the order entry over the entire year.
Furthermore, the company significantly invested in further strengthening its regulatory capabilities and has addressed the previously identified issues. The result of this ongoing effort was validated by successfully passed audits from numerous customers and regulatory bodies.
During the fourth quarter, traditionally the strongest of the year, the company was able to realize significant improvements in revenue and the resulting increase in profitability.
Strong increase in profitability
The company’s Earnings Before Interest and Taxes (EBIT) increased by 48.2% compared to the same period 2004, amounting to CHF 24.8 million and resulting in an EBIT margin of 7.2% (previous year 5.9%). This result includes an extraordinary charge of CHF 4.9 million resulting from the company’s discontinuation of the Boston-based LabCD program. REMP contributed CHF 1.1 million to the overall EBIT. Excluding the extraordinary cost, Tecan reached an EBIT margin of 8.6% (previous year 6.9%).
The strong increase in profitability was driven mainly through the implementation of the measures for improved operational efficiency outlined by the company during its last full year results review, notably disciplined cost management and strengthening of the operational processes as well as the overall high capacity utilization especially during the second half of the year.
Net income increased by 9.7% to CHF 14.0 million amounting to 4.0% of revenue (previous year 4.4%). This result was positively impacted by the increased EBIT and negatively impacted by the financial results and higher taxes.
Successful integration of REMP
The acquisition of REMP, the leading global supplier of compound & sample management solutions for the pharmaceutical and biotechnology industries located in the Swiss town of Oberdiessbach, enabled Tecan to expand its product offering for the world’s leading laboratories during 2005. The combined product portfolio of REMP and Tecan now covers the key processes of the drug discovery workflow. The combination of Tecan and REMP was universally seen as a strong combination from both, the customer and the market side. The integration of the well managed and strongly positioned REMP was successfully concluded and initial synergies in the areas of sales and product development are already becoming apparent.
Increase in capital to be proposed during Shareholders’meeting
The Board of Directors and the Management of Tecan are committed to further growth of the company both organically and through the acquisition of complementary technologies or companies. While currently no concrete plans exist, management nonetheless continually evaluates potential opportunities. In order to have the flexibility to pursue and finance such opportunities, the Board of Directors intends to propose the creation of authorized and additional conditional capital in the amount of approximately 10% and 15% respectively of the share capital during the company’s ordinary Shareholders’Meeting which will be held on April 26, 2006. In addition, the Board of Directors will propose the payment of a dividend of CHF 0.45 per share. This amount is in line with last year’s dividend.
Given the continuing favorable environment in Tecan’s key markets of Biopharma and Diagnostics, the company believes that it will be able to maintain the positive trend achieved during 2005 again in 2006. The company’s objective is to grow above market growth rates and to further increase its profitability through the focused execution of its operational efficiency initiatives. Furthermore, Tecan intends to invest in strengthening its distribution channels and in the development of new products and applications during 2006.
New International Financial Reporting Standards (IFRS)
Based on a change in the existing International Accounting Standards (IAS) as well as the introduction of new International Financial Reporting Standards (IFRS) which are effective as of January 1, 2005, the previous year has been restated in accordance with these rules.
Tecan will hold its Annual Shareholders’Meeting on April 26, 2006 at 15:00 (CET) in Zurich. The Q1 2006 figures will be published on May 4, 2006.
Tecan (www.tecan.com) is a leading global player in the Life Sciences supply industry specializing in the development, production, and distribution of advanced automation solutions enabling pharma and academic research, diagnostics, food and veterinary research as well as forensics. Through its REMP subsidiary (www.remp.com), Tecan is the leading supplier of compound and sample storage, management and logistics solutions. 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 Mio.; EUR 222.5 Mio.). Registered shares of Tecan Group are traded on the SWX Swiss Exchange (TK: TECN / Reuters: TECZn.S / Valor: 1210019).
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