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Zurich, Switzerland, March 13th 2007 – Successful year for Tecan: Sales increased by 17.7% compared with the previous year to CHF 405.9 million. Earnings before interest and taxes (EBIT) rose by 104.8% from CHF 24.8 million (7.2% of sales) to CHF 50.9 million (12.5%). In addition, Tecan also achieved a marked increase in net profit which grew from from CHF 14.0 million (4.0% of sales) to CHF 40.6 million (10.0%). Cash flow from operating activity reached the record value of CHF 67.2 million (2005: CHF 15.1 million). Tecan has a strong balance sheet and financially, operationally and strategically created the basis for safeguarding profitable long-term growth.
In 2006 Tecan achieved marked internal and acquisition-related growth. The REMP Group, consolidated since July 2005, contributed CHF 19.4 million to Tecan’s sales in the first six months of 2006. Excluding REMP, sales in the year under review rose by 12.1%. Organic growth benefited from the one-off effect of a large order in the forensics sector which contributed CHF 13.1 million. Excluding acquisitions and extraordinary projects, growth reached 8.9% and thus was clearly above the growth of the market overall. Exchange rate effects contributed 0.5% to the overall growth rates.
Tecan’s European region showed the strongest growth in 2006. The company also registered high growth rates in Asia, albeit on a significantly lower basis. With regard to markets, biopharma (genomics/proteomics, drug discovery) developed particularly successfully during the year under review.
Order entry amounted to CHF 413.8 million in the 2006 financial year. This corresponds to an increase of 18.2% (17.7% in local currencies) compared to 2005. Excluding REMP, order entry grew 9.5%.
During the year under review Tecan streamlined its organization and reorganized into locally managed, customer focused business units. In addition, the company made additional investments in its sales and marketing infrastructure in key growth regions. Furthermore the special initiative to meet regulatory requirements (compliance program) was successfully completed and the program has been transferred into normal operational processes.
Thomas Bachmann, Chief Executive Officer of Tecan, commented: “In 2006 we demonstrated a strong operational performance, complemented and strengthened our management team and clearly defined our medium and long-term strategy. Our new organisational structure enables us to be highly effective in dealing with our global markets and creates the transparency required to manage Tecan more efficiently well into the future.”
Significant increase in profitability
In the 2006 financial year Tecan achieved a doubling of its earnings before interest and taxes (EBIT) and almost tripled its net profit. EBIT rose by 104.8% to CHF 50.9 million (2005: CHF 24.8 million), which corresponds to an EBIT margin of 12.5% (2005: 7.2%). This positive development is mainly attributable to the gearing of the business and the measures introduced during the previous year to improve operational efficiency. In addition, cost and price discipline and good capacity utilisation further supported the ongoing profitability improvements. Finally, Tecan was able to maintain a favourable product mix. As a result of above’s factors, Tecan was able to outperform the overall sector profitability and also exceeded its self-imposed profitability targets more than a year ahead of schedule.
Thanks to the improved EBIT, a clearly improved financial result and a lower applicable tax rate, Tecan’s net profit increased by 191.2% in 2006 compared with the previous year. It amounted to
CHF 40.6 million (2005: CHF 14.0 million) or 10.0% of sales (2005: 4.0%).
Basic earnings per share increased by 181% from CHF 1.26 to the historical record value of CHF 3.54.
Strong operational cash flow and balance sheet
Despite the growth, Tecan was able to attain a healthy cash flow from operating activities in 2006. It rose from CHF 15.1 million to a historical high of CHF 67.2 million and clearly exceeded the previous record of 44.7 million for the 2003 financial year. The cash flow, coupled with the operational performance allowed Tecan to achieve a clear improvement in balance sheet ratios in 2006 resulting in a very strong balance sheet and thus preparing Tecan for further growth measures.
Doubling of payout to shareholders
During the Annual General Meeting of the company, the Board of Directors will propose the doubling of the payout to shareholders. The payout will consist of 2 parts. For one, the board will propose the payment of an unchanged dividend of CHF 0.45 per share. For another, the board will propose that in addition to the dividend, a payout based on the repayment of reduction in nominal value in the amount of CHF 0.45 per share be made. The repayment will likely take place as of the middle of 2007.
Annual General Meeting: Heinrich Fischer and Jürg Meier nominated as members of the Board of Directors
As announced on February 13th 2007, during the Annual General Meeting on April 19th 2007 the Board of Directors will nominate Heinrich Fischer to succeed Heino von Prondzynski who stepped down on February 2nd 2007. Heinrich Fischer has successfully run the Saurer Group as its CEO and delegate to the Board of Directors for more than 10 years and will resign from this position at the end of April 2007.
Timothy Anderson will step down from the Board of Directors after being a member for seven years. As announced on March 2nd 2007, the Board of Directors will nominate Dr. Jürg Meier as Mr. Anderson’s successor. Jürg Meier possesses significant expertise in the area of biopharmaceutical research and most recently was in charge of the Novartis Venture Fund until 2006. He is currently active on the boards and advisory committees of multiple organizations. With his experience, Dr. Meier will be able to make a significant contribution to the further strategic development of Tecan.
Prof. Dr. Peter Ryser is standing for another term of office.
In 2007 Tecan will continue to work on implementing the recently adopted strategy and invest in targeted growth markets and regions worldwide. In addition, innovation will continue to be a central topic as the company continues to invest in the development of new products and solutions. Despite the cooling US economy and the specific challenges posed by the current US biopharmaceutical restructuring, for the current financial year Tecan is aiming for an above market increase in sales and profitability.
The following dates represent key upcoming events. All pertinent information will also be published on Tecan’s web-site at www.tecan.com.
Tecan (www.tecan.com) is a leading global supplier of solutions for the biopharma, forensic and diagnostic industries. The company is a leader in the development, production and distribution of advanced automation and detection solutions for the world’s leading life science laboratories. Through its REMP subsidiary (www.remp.com), Tecan is the premier supplier of large-scale automated laboratory storage and logistics systems. Founded in Switzerland in 1980, the company has over 1100 employees, owns production, research and development sites in both North America and Europe and maintains a sales and service network in 52 countries. In 2006, Tecan achieved sales of CHF 405.9 million (USD 324.7 million; EUR 258.6 million). Shares of the Tecan Group are traded on the SWX Swiss Exchange (TK: TECN/Reuters: TECZn.S/Valor: 1210019).
For further information please contact:
Tecan Group Ltd.