Continued growth with significant improvement in results – Increased dividend

In 1999, TECAN, a major solution provider in Life Sciences and Clinical Diagnostics, recorded significant growth beyond expectations. Sales rose by 18% to CHF 193.1 m driven by a strong demand for breakthrough technologies in the automation of DNA research, along with new DNA-based platforms for blood screening, especially in the US market. Operating profit  (EBIT) increased by 30% to CHF 41.0 m (CHF 31.5 m in 1998). Net profit rose by 23% to CHF 28.1 m. TECAN personnel increased 10% in 1999, ending the year with 556 people. The Board of Directors will propose an increased dividend of CHF 2.50 per registered share to the Annual General Meeting on 17 May 2000.

Hombrechtikon/Zurich, Switzerland, 2 March 2000 – In 1999 TECAN exceeded expectations with sales up 18% to CHF 193.1 m (currency adjusted +15%) compared with CHF 163.6 m in 1998. Sales grew in both of TECAN’s markets, Clinical Diagnostics and Life Sciences, with a trend towards more complex, higher-value products. All geographic markets increased their market presence. The North American market, the largest region with CHF 87.2 m, was the major impetus for the Group’s growth. Driven by strong demand for applications in Genomics, sales in North America rose 21% in local currency for the second consecutive year. After an increase of 19% in 1998, Europe slowed down with sales up 6% in local currency to CHF 79.5 m in 1999. The recovering Asian market also contributed to the positive results with CHF 21 m in sales, a 12% increase in local currency. Operating profit before investments in research and development increased by 25% compared to 1998, reflecting further productivity improvements in the Group’s operations.

Significant R&D investments

Total costs for research and development amounted to CHF 25.9 m in 1999. This substantial investment provides a platform for the planned rapid growth in the year 2000 and beyond. Major resources were deployed for new applications in the Drug Discovery, Genomics and Pre-analytical Diagnostics markets. Based on the co-marketing agreement with Abbott Laboratories, TECAN’s strategic partner for sales and marketing of Pre-analytics, non-recurring costs of CHF 3.6 m relating to the completion of the Genesis FE were capitalized on December 31, 1999. Including government grants received and paid for R&D expenses in the amount of CHF 1.2 m, net investment in R&D increased by 15% to CHF 21.1 m in 1999 (11% of sales).

Efficient Operations

Operating profit (EBIT) rose by +30% to CHF 41.0 m, or 21% of sales (CHF 31.5 m or 19% the previous year), after capitalization of non-recurring R&D costs of CHF 3.6 m. The higher sales and improved profit generated from operations translated into a net profit of CHF 28.1 m, up 23% from last year. This was achieved despite higher income tax charges compared to 1998, which benefited from the transition period to a new tax system in the Canton Zurich, Switzerland.

Financial Statement of TECAN AG

The financial statement of TECAN AG closes with a profit of CHF 15.1 m. The Board of Directors will propose to the Annual General Meeting on 17 May 2000 the payment of an increased dividend of CHF 2.50 per registered share.

TECAN Group well-positioned

Emile Sutcliffe, CEO of TECAN Group stated: “During fiscal year 1999, TECAN enlarged and consolidated its position as a major provider of Life Sciences solutions worldwide. At the same time, in 1999 we passed all set milestones for the development of Genesis FE 500, our automation system for the growth market Pre-analytics. The North American market benefited from explosive growth in Genomics where TECAN has taken over the leading position in DNA preparation. We are in the middle of a very exciting and rewarding era, where amazing advances in biotechnology and drug discovery are revolutionizing our understanding of life. We are making quantum leaps towards the vision of a world free of genetic diseases. TECAN is in the gratifying position of contributing to these advances by providing technology solutions to the pharma and biotech community.”

Outlook 2000

Genomics and Proteomics are markets with exponential growth potential.  Drug Discovery presents a multitude of opportunities, and Diagnostics has several outstanding niches. With a strong foothold in all of these areas, TECAN expects continued growth for 2000. A healthy balance sheet will enable sustained growth as evidenced by recent significant strategic investments in research and development. Earlier this year, TECAN announced new solutions in Genomics for biochips and microarrays based on nanoliter liquid handling. Also, a new solution for massive parallel pipetting in high-throughput screening for Drug Discovery was introduced at the beginning of this year.