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Zurich, Switzerland, August 10, 2005 – Tecan, a leading manufacturer of products
and solutions for the biopharmaceutical and clinical diagnostic industries, today published its half-year financial results. For the first six months of the year, consolidated sales reached CHF 144.4 million. This represents an increase of 2.9%
or 5.7% in local currency compared to the same period in 2004. Operating profit amounted to CHF 8.8 million (6.1% of sales) compared to CHF 12 million (8.5% of sales) in the first half of 2004.
Commenting on the results, Thomas Bachmann, Chief Executive Officer of Tecan, remarked: “We were able to halt the decline in sales that was evident over the last years and have resumed a growth path. However profitability is not at our targeted level in the second quarter.” This was mainly due to necessary investments and a shift in the product mix. According to Mr. Bachmann, the main focus remains to increase the operational efficiencies of the company. “To reach this objective, we have eliminated production bottlenecks and terminated development programs that did not meet our targets. Concurrently, we have strengthened our research activities to maintain the flow of innovative products”.
Sales by markets
For the first six months, sales in Genomics/Proteomics continued to register a strong performance, increasing by 36.1% to CHF 53.5 million (2004: CHF 39.3 million). Sales
in Drug Discovery continued to underperform reaching CHF 31.3 million, a decrease of 20.6% versus 2004. Sales in Diagnostics decreased by 3.2% during the first half year to
CHF 59.5 million.
Sales in North America and Europe increased by 7.7% and 5.6% in local currency respectively. The newly opened China office was nearly able to double its volume, albeit on
a small base. The ongoing consolidation in the Japanese pharmaceutical and biomedical market continued to negatively impact our sales.
For the first six months of 2005, gross profit margins decreased by 0.7% of sales due primarily to product mix changes and an increased share of 3rd party product integration. Operating profit in the first half of 2005 reached CHF 8.8 million (2004: CHF 12.0 million). The main reasons for the decrease were exchange rate effects, investments in R&D projects, increased Sales & Marketing expenses as well as increased ongoing costs to comply with regulatory requirements.
Net profit reached CHF 4.5 million (2004: CHF 8.8 million) in the first six months. This corresponds to a decrease of 48.2%. This was due to the above mentioned reasons as
well as a negative financial result, due to foreign currency hedging.
In line with growing revenues and to ensure adequate delivery times, inventories in critical spare parts and finished goods were increased during the first half of 2005. This development was largely responsible for a change in cash flow for operating activities to
CHF -2.3 million (2004: CHF 18.3 million) compared with the same period last year.
Order intake for the second quarter of 2005 was CHF 80.0 million after CHF 70.1 million in the first quarter and is in line with historic levels.
Business Highlights in the First-Half of 2005 and outlook for the Second Half of 2005
Business milestones for the first six months of the year include:
In the second half of 2005, Tecan will be launching various new products, including a an additional detection device, new metering pumps and a solution for the extraction of genomic DNA from large blood volumes. Several new options for the Freedom EVO will also become available, including a new version of EVOware software. These additions will enhance the flexibility of the Freedom EVO platform and expand its potential for application solutions.
New International Financial Reporting Standards (IFRS)
Due to the amendments of existing International Accounting Standards (IAS) and the introduction of new International Financial Reporting Standards (IFRS) that are effective as of January 1, 2005, the previous year has been restated accordingly (see tables).
Tecan (www.tecan.com) is a leading global player in the Life Sciences supply industry specializing in the development, production, and distribution of advanced automation solutions enabling drug discovery, genomics, proteomics and diagnostics. Through its REMP subsidiary (www.remp.com), Tecan is the leading supplier of compound and sample storage, management and logistics solutions. Tecan clients are pharmaceutical and biotechnology companies, university research departments and diagnostic laboratories. Founded in Switzerland in 1980, the company has manufacturing, research and development sites in both North America and Europe and maintains a sales and service network in 52 countries. In 2004, Tecan achieved sales of CHF 286.0 million (USD 230.6 million; EUR 185.7 million) and REMP achieved sales of CHF 36.4 million. Registered shares of Tecan Group are traded on the SWX Swiss Exchange (TK: TECN / Reuters: TECZn.S / Valor: 1210019).
Chief Financial Officer
Corporate Communications & Investor Relations
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