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Männedorf, Switzerland, March 6, 2008 – During the 2007 financial year Tecan again increased sales and recorded strong growth in EBIT and net profit. Sales increased over the previous year by 2.1% to CHF 414.4 million. Earnings before interest and taxes (EBIT) rose by 18.6%, from CHF 50.9 million (12.5% of sales) for 2006 to CHF 60.3 million (14.6%) for 2007. Net Profit increased from CHF 40.6 million (10.0% of sales) in 2006 to an all-time record of CHF 52.4 million (12.6%) for 2007. Overall, Tecan once again markedly improved its profitability and continues to possess a strong balance sheet. As a result, Tecan is well positioned to take further steps to achieve internal and external growth.
The increase in sales by 2.1% to CHF 414.4 million was achieved solely through internal growth. Tecan posted especially strong gains in sales in Asia. Sales in Europe also developed positively. Sales in the US market declined driven largely by a more challenging market environment there. As indicated in the 2006 Annual Report, sales last year were boosted by a major contract contributing CHF 13.1 million. Excluding this extraordinary item, Tecan would have posted sales growth of 5.5% in 2007 compared to the preceding year. Overall Tecan continued to outperform the market.
Order entry for the period under review increased slightly from CHF 404.5 million in 2006 to CHF 407.9 million in 2007.
Record levels of profitability
Earnings before interest and taxes (EBIT) increased to CHF 60.3 million (2006: CHF 50.9 million). This corresponds to 14.6% of sales compared to 12.5% for the previous year. Tecan thus increased its operating earnings at a significantly greater rate than sales for the third consecutive year. This is attributable primarily to the steps taken since 2005 to improve operating efficiency. Innovative products with higher margins, price- and cost discipline, and a more advantageous product mix were other drivers of the improved result, helping Tecan to outperform the market and achieve strong levels of profitability.
Net profit rose sharply based on higher operating earnings, a lower tax rate and a significantly improved financial result, increasing by 28.9% to CHF 52.4 million (2006: CHF 40.6 million). The net profit margin reached 12.6% of sales (previous year: 10.0%). Both of these figures represent record levels in Tecan's history. The same is true of earnings per share, which rose by 28.2% to CHF 4.54.
Thomas Bachmann, CEO of Tecan, commented as follows: “After three years of intensive efforts, we are delighted to see Tecan achieving such excellent levels of profitability. Our goal is to further strengthen this position.”
Segment reporting increases transparency
As already indicated in the report for the first half year of 2007, the financial year under discussion is the first time Tecan is publishing sales and earnings by individual business segment. In doing so, Tecan is adjusting its financial reporting to the management structure in force since January 1, 2007.
Components & Detection posted sales of CHF 124.0 million in 2007. Growth in this business segment was strong thanks to new products and a successful turnaround in Japan. EBIT amounted to CHF 11.6 million or 9.3% of sales.
Liquid Handling & Robotics saw a further rise in profitability although sales were impacted by the cancellation of a large order. The segment recorded an EBIT of CHF 56.9 million on sales of CHF 264.6 million, which corresponds to an EBIT margin of 21.5%. The service business in particular fared well in this segment for the year under review.
Sample Management landed two major contracts of strategic importance in Japan in 2007 and slightly increased sales to CHF 39.9 million. The segment’s EBIT declined in the year under review to CHF 0.1 million or 0.4% of sales largely due to high costs for global marketing and substantial investments in research and development for a new modular system to store biological samples. In Sample Management Tecan is focused on finalizing the key product innovations, on developing new markets and on improving the segment’s operational efficiency to increase profitability.
Strong balance sheet
Despite the ongoing share buyback program, the company’s equity ratio rose from 50.2% to 54.7%. Tecan again recorded strong cash flow from operating activities as well as high levels of net liquidity. With its healthy balance sheet, Tecan is well positioned for further growth.
Additional payout to shareholders; Board to propose reduction in nominal value
Based on the positive results and the company’s strong balance sheet, the Board of Directors will recommend to the shareholders at the annual Shareholders’ Meeting of April 23rd 2008 that once again an additional payout to shareholders be made. This payout will consist of a dividend of CHF 0.45 per share and a repayment based on a – for the shareholders tax-beneficial – reduction in nominal value of an additional CHF 0.45 per share. As such, and similar to 2006, the total payout to shareholders will amount to CHF 0.90 per share.
In 2008, Tecan will continue to implement its current strategy of profitable long-term growth. To this end, Tecan will push product innovation and develop new geographic markets and customer segments. If challenges in the overall US economy do not worsen or spread to other economic regions, Tecan expects increased sales for 2008 and an operating return at the same levels as 2007.
Next key dates
Tecan (www.tecan.com) is a leading global supplier of laboratory instruments and solutions for the biopharma, forensic and diagnostic industries. The company specializes in the development, production and distribution of automation solutions for life science laboratories. Through its REMP subsidiary (www.remp.com), Tecan is the premier supplier of automated laboratory storage and logistics systems. Tecan's clients include pharmaceutical and biotech companies, university research departments, diagnostic laboratories and companies as well as forensics laboratories. Founded in Switzerland in 1980, the company has production, research and development sites in both North America and Europe and maintains a sales and service network in 52 countries. In 2007, Tecan achieved sales of CHF 414.4 million (USD 345.3 million; EUR 252.7 million). Registered 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.