Tecan reports a 43.4% sales increase for first quarter of 2001

Tecan reports a 43.4% sales increase for first quarter of 2001

• Net profit increases over proportionally by 47.2%
• Sales in Genomics/Proteomics more than doubled
• On track to exceed objective of around 30% growth in local currencies in 2001

Zurich, Switzerland, 3 May 2001 – Tecan, a leading player in the fast-growing Life Sciences supply industry, reported today record sales of CHF 84.2 million for the first three months of 2001 compared with CHF 58.7 million in the same period in 2000, an increase of 43.4% or 44.3% in local currencies. Net profit for the first quarter increased by 47.2% to CHF 11.1 million (2000: CHF 7.5 million). This is the second consecutive year in which first quarter sales have exceeded those of the fourth quarter of the previous year.

“We are very pleased with our results for the first quarter. They put us in an excellent position to exceed our objective, which was a 30% top- and bottom-line growth in local currencies in 2001", commented Mr Emile Sutcliffe, Chief Executive Officer of the Tecan Group. “It is clear that single-quarter financial results for specific markets may not be representative for the whole year. However, our overall sales performance to date not only reflects our strengths in Diagnostics and Drug Discovery but also confirms the merits of our business strategy to expand into the high-growth markets of Genomics and Proteomics. For the first time, these two markets represent more than 20% of our total business.”

Mr Sutcliffe added: "In contrast to the slowdown in sales for some companies in the Life Sciences industry, the on-going success of Tecan reflects our strong product portfolio, broad geographic reach, and an increasing presence in strategic markets. In addition, our powerful R&D pipeline and forthcoming new applications put us in an excellent position to benefit from the long-term growth opportunities offered by all our business areas.”

Continued growth rates in all markets

Sales in Genomics/Proteomics increased by 118.2 % from CHF 8.5 million in the first quarter of 2000 to CHF 18.5 million in the same period in 2001. This significant growth in sales was due to continuing increase in demand for Tecan’s fully automated high-throughput systems for genomics, functional genomics and proteomics.

Drug Discovery sales reached CHF 27.7 million or 32.9% of total sales for the first quarter 2001, an increase of 9.1% (2000: CHF 25.4 million). This growth rate is due largely to the strong sales recorded in the last quarter of 2000 in this market (CHF 44.4 million) which amounted to more than one third of the overall sales achieved in Drug Discovery in 2000 (CHF 129.4 million). As such, it is not typically representative of the overall yearly performance expected in this market. As for other market segments, sales for Drug Discovery are expected to be consistent with the overall performance of Tecan anticipated for 2001.

Diagnostics sales amounted to CHF 38.0 million or 45.1% of total sales, an increase of 53.1% over the same period in 2000. Growth was driven by impressive sales of the Genesis FE 500 workcell, with first quarter sales of this instrument exceeding total sales in 2000, and by new applications in molecular diagnostics resulting from existing expertise in genomics. The new applications in molecular diagnostics illustrate Tecan’s ability to exploit existing synergies in all of its business areas.

Strong demand from our customers in Europe and the United States

Tecan’s major geographical markets (by location of customers) of the United States and Europe showed significant sales growth. Sales reached CHF 42.1 million in the United States in the first three months of 2001, an increase of 48.3% (44.3% in local currencies) over CHF 28.4 million reported in 2000. In Europe, the corresponding increase was 38.4% (42.9% in local currencies), up from CHF 21.8 million in 2000 to CHF 30.2 million in 2001. Sales in Asia increased by 6.2% (13.0% in local currencies) from CHF 6.8 million in the first quarter of 2000 to CHF 7.2 million this year.

Significant increase in profit

The strong increase in sales growth in the first quarter allowed Tecan to invest heavily in Proteomics and the Lab CD™ and, at the same time, increase operating profit by 27.3% despite the amortization of goodwill from acquisitions.

Gross R&D expenses increased significantly in the first quarter to CHF 10.8 million or 12.9% of total sales (2000: CHF 6.5 million or 11.0% of sales) while the amortization of goodwill from acquisitions amounted to CHF 0.8 million, or 1.0% of sales during the first quarter 2001. Operating profit reached CHF 14.8 million, or 17.6% of sales, during the first quarter 2001 compared to CHF 11.6 million a year earlier.

Tecan’s net profit for the first quarter increased by 47.2% to CHF 11.1 million (2000 : CHF 7.5 million).

Outlook

For 2001, Tecan is in a good position to exceed its original expectation of sales growth of around 30% in local currencies. Traditionally, sales in the second half of the year are higher. Assuming continuing strong demand for its products in all markets, Tecan anticipates sales growth of around 35% in local currencies. The company’s goal for R&D expenditure in 2001 remains at 10–12% of sales. Growth in net profit in 2001 is expected to be in line with sales growth.