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Zurich, Switzerland, March 15, 2005 – Tecan, a leading manufacturer of products and solutions for the biopharmaceutical and clinical diagnostic industries, today published its full-year financial results. Total sales reached CHF 286.0 million for 2004, a decrease of 5.5% in local currency compared with 2003 or 8.2% in Swiss Francs. Operating profit declined by 17.2% to CHF 18.4 million. In 2004, net liquidity increased to CHF 30.7 million (2003: CHF 26.1 million). Fourth quarter sales in 2004 reached CHF 76.9 million, 11.7% compared with CHF 87.1 million recorded in 2003, a decrease of 6.8% in local currency.
Lower overall sales in 2004 were due to several factors. These including logistical issues, delays in delivery and compliance with regulatory requirements. Tecan will improve operations and strengthen the internal organization throughout 2005. The strengthening of our Board of Directors and the appointment of Thomas Bachmann as new Chief Executive Officer will allow Tecan to pursue its ambitious objectives in the years ahead.
Thomas Bachmann, new CEO of Tecan, remarked: “I have now been on-board since February 1st and have spent this time getting to know Tecan, its employees and our customers more closely. It is obvious that we have some major challenges ahead of us, but I have been impressed by the level of commitment and untapped potential that exists to restore vigour and growth to the company.”
Sales by markets
In 2004, Tecan continued to experience variable demand for its solutions and products in the markets in which it operates. Performance in Drug Discovery was below expectations and sales in this market segment decreased by 8% in local currency to CHF 91.5 million (2003: CHF 102.6 million). Diagnostic sales, which amounted to CHF 113.0 million, were reduced by 6.9% compared with 2003 (CHF 123.2 million). However, the Diagnostic business remains the largest contributor to Tecan’s total sales worldwide. Sales in Genomics/Proteomics of CHF 81.5 million (-0.3% in local currency) were in-line with last year’s performance (2003: CHF 85.8 million).
The devaluation of the US dollar impacted the gross profit margin which decreased by 1.8% in 2004 to 49.1% (2003: 50.9%) or CHF 140.5 million. Operating profit fell by 17.2% (2003: -50.4%) to CHF 18.4 million (2003: CHF 22.2 million). Excluding unusual items, operating profit would have been around CHF 21.3 million (2003: CHF 34.5 million) or 7.4% of sales. Net profit reached CHF 12.6 million which represents a decrease of 10.2% compared with the previous year. Basic earnings per share decreased by 5.0% to CHF 1.15 per share (2003: 1.21).
Strong cash flow from operating activities
Despite the negative impact of both currency effects and market performance, Tecan’s balance sheet at the end of the year remains strong. Shareholders’ equity represents 54.8% (2003: 49.3%) of total assets of CHF 191.3 million (2003: CHF 224.2 million). Cash flow from operating activities reached CHF 29.3 million in 2004 (2003: CHF 44.7 million). Net liquidity increased to CHF 30.7 million, an increase of 17.6% over 2003 (2003: CHF 26.1 million).
At the Annual Shareholders’ meeting on April 21, 2005, the Board of Directors will propose an unchanged dividend of CHF 0.45 per registered share.
In 2004, business highlights included a large contractual agreement with the South African Police Service for fully automated DNA typing system for a national forensic databank; as well as a number of key partnerships with leading manufacturers of reagent and research kits. Furthermore, the strengthening of Tecan’s presence in Asia-Pacific region proceeded through a new application development center in Kobe, Japan, and the establishment of a new office in Beijing, China. Product launches included the Freedom EVOware state-of-the-art software for Tecan’s liquid handling platforms, the Safire2 microplate reader offering new levels of speed and versatility in detection and the Freedom EVO 75 platform for smaller laboratories and lower throughput requirements.
Tecan (www.tecan.com) is a leading player in the Life Sciences supply industry that specializes in the development, production, and distribution of solutions enabling the discovery of pharmaceutical substances, as well as for genomics, proteomics, and diagnostics. Tecan clients are leading 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). Registered shares of Tecan Group are traded on the SWX Swiss Exchange (TK: TECN / Reuters: TECZn.S / Valor: 1210019).
A conference call discussing the full year results for 2004 will take place today at 2pm (CET).
Chief Financial Officer
Phone : +41 (0)44 922 81 86
Fax : +41 (0)44 922 88 89
Corp. Communications & Investor Relations
Phone: +41 (0)44 922 84 30
Fax: +41 (0)44 922 88 89