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Männedorf (Switzerland), August 14, 2007 – Tecan once again increased its operating result (EBIT) and net profit during the first half of 2007. Compared to the same period in the previous year, EBIT rose by 7.4% to CHF 24.8 million, which equates to 12.7% of revenues (previous year 11.5%). Net profit increased by 23.8% (8.8% of revenues) to CHF 21.8 million (11.1%). Influenced primarily by two one-time effects, revenues declined by 2.2% to CHF 196.2 million. Overall, Tecan continued to strengthen its earnings capacity and balance sheet.
The most significant growth was recorded in Asia where the Japanese market in particular performed very well. Tecan’s European markets also recorded a significant rise in revenues, while sales in North America decreased slightly. During the reporting period, one of the aforementioned one-time effects saw a customer cancel a development project which had been initiated at the end of 2004, negatively impacting order entry and sales during the first half of 2007. The cancellation impacted sales with CHF 6.4 million. In addition, and as noted last year, a major order for the forensic analysis of DNA created a one-time effect of CHF 11.6 million in the corresponding period of the previous year. Excluding these effects, Tecan’s revenues grew by 7.2% during the first six months of 2007.
Order entry for the first half of 2007 totaled CHF 200.2 million. This represents a 4.0% increase compared to the corresponding period during the previous year. The above mentioned project cancellation negatively impacted order entry with CHF 9.3 million. Reported new orders now stand at CHF 190.9 million.
Currency effects contributed 0.6% to revenues and order entry.
Renewed increase in profitability and earnings per share (EPS)
Tecan’s EBIT rose to CHF 24.8 million or 12.7% of revenues during the first half of 2007. This compares to an EBIT margin of 11.5% for the corresponding period in the previous year. The fact that Tecan was able to increase its operating profitability despite largely flat revenues is a positive sign that the measures implemented since 2005 to improve operating efficiency continue to be effective. In addition, innovative products which generate higher margins, together with cost and pricing discipline, have contributed to this positive development.
Tecan also recorded a marked increase in net profit. Compared to the previous year, it rose by 23.8% to CHF 21.8 million or 11.1% of revenues (previous year: 8.8%). The increase was due mainly to a higher operating result, an improved financial result and lower tax rates. The earnings per share (EPS) also rose, by 22.7% to CHF 1.89.
For both net profit and earnings per share, Tecan posted record figures during the reporting period.
Thomas Bachmann, CEO of Tecan, noted: “To date, we have concentrated mainly on the continued strengthening of Tecan’s operating efficiency and profitability. An additional key focus for the future is product innovation and an increasing customer focus in our organization”.
New segment reporting structure
The reporting period for the first half year of 2007 sees Tecan introduce revenue and profitability figures on the level of individual business segments, thereby aligning its financial reporting structure with the organizational and leadership structure in place since January 1, 2007. Due to the new structure, no figures from previous reporting periods can be provided.
The business segment Components & Detection generated revenues of CHF 59.8 million during the first half of 2007. Driven by new products that were well received by the market, and a successful turnaround in Japan, Components & Detection continued successfully along its growth path. Within the Tecan Group, this business segment recorded the strongest growth, with operating profit of CHF 5.2 million, or 8.6% of revenues.
The business segment Liquid Handling & Robotics was the key unit impacted by the project cancellation mentioned above. It recorded muted growth, generating revenues of CHF 124.0 million. The business segment displays strong profitability, recording an operating profit of CHF 23.1 million, or 18.7% of revenues.
The business segment Sample Management secured two large orders in Japan and thus achieved successful entry into this important market. As a result of ongoing mergers and restructuring within the pharmaceutical industry, European and US customers continued to delay a number of major investment decisions, causing revenues in this business segment to stagnate at CHF 19.6 million during the first half of 2007. Operating profit amounted to CHF 1.1 million, or 5.8% of revenues. Sample Management continues to work on enhancing its profitability and entering new markets through targeted product innovation and development.
Continued strengthening of the balance sheet
Tecan possesses a strong balance sheet and is well prepared for additional growth steps. Compared to the previous year, Tecan’s equity ratio and net liquidity have improved greatly, rising from 50.3% to 53.3% and from 7.6 million to 33.5 million respectively.
During the second half of 2007 Tecan will continue to strengthen its market presence, drive product innovation and further enhance the customer focus of the entire Group.
Despite the specific challenges in the US pharmaceuticals sector and assuming no unexpected changes in the market climate in other regions, Tecan expects that revenues, EBIT and net profit for the full year 2007 will exceed the previous year’s results.
Upcoming key dates
Tecan will report its full year results for the 2007 business year on March 6, 2008.
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. Its customers include pharmaceutical and biotechnology companies, university research departments and diagnostic laboratories. 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/Sec. no.: 1210019).
For further information please contact:
Tecan Group Ltd.