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Zurich, Switzerland, March 12, 2004 – Tecan today reported fourth quarter and full-year results for 2003.
Fourth quarter sales 2003 reached CHF 87.1 million, an increase of 2.8% compared with CHF 84.7 million recorded in 2002. Excluding the impact of currency, Q4 sales increased by 5.7% versus the prior year. Consolidated sales for 2003 decreased by 6.2% to CHF 311.6 million, but remained comparable to the previous year in local currency.
Biopharma (Genomics/Proteomics/Drug Discovery), with sales of CHF 188.4 million in 2003, or 60.5% of total sales, showed sharply contrasting performances within its market segments. Sales in Genomics/Proteomics have shown a solid sequential year-over-year increase to reach CHF 85.8 million, an increase of 14.4% in Swiss Francs, or 26.1% in local currency. On the other hand, Drug Discovery sales declined by 13.1% in Swiss Francs or 6.5% in local currency, to CHF 102.6 million. This decrease was primarily due to continuing low market demand in specific market segments. Diagnostics sales have shown a consistent and robust sales pattern over the last 6 quarters, reaching CHF 123.2 million or 39.5% of total sales in 2003, a decrease of 11.4% in Swiss Francs or 8.7% in local currency compared with the full year results 2002. Sales in both Genomics/Proteomics and Diagnostics showed a strong increase in the fourth quarter of 2003 with growth rates of 24.7% and 14.4%, respectively, over 2002.
Aitor Galdos, Chief Executive Officer of Tecan, commented: “2003 was a difficult transition year for Tecan. The company assessed its strategic position and implemented measures to focus on its core competencies. At the same time, Tecan continued to reduce its costs and took some one-off charges against earnings.” He added: “These measures and others that we are implementing will allow Tecan to strengthen the company’s organization with a new management team, improve operational efficiencies and exploit new market opportunities to increase its revenue base. We enter 2004 with cautious optimism convinced that Tecan has the potential to deliver increasing value to all our stakeholders.”
2003 results were strongly influenced by several one-off charges which amounted to CHF 12.3 million. These included costs for the closure of the company’s proteomics operations in Munich, an impairment charge on the company’s LabCD™ project as well as the settlement with the former CEO.
Influenced by these unusual charges of CHF 12.3 million, a weak US dollar versus the Swiss Franc which had a negative impact of CHF 10.6 million, operating profit reached CHF 22.2 million in 2003, a decline of 50.4% compared with 2002. Without special charges, operating profit would have been around 34.5 million or 11.1% of sales. Earning per share decreased by 53.1% to CHF 1.21 (2002: CHF 2.58). Excluding unusual items, earnings per share decreased by 24.8% to CHF 1.94. Disregarding the negative CHF 10.6 million currency impact, earning per share would have been comparable with the previous year.
The total number of employees at Tecan was 812 at the end of 2003 (2002: 872).
Increase of cash flow from operating activities
Despite the lower profit, Tecan achieved a growth in cash flow from operating activities to a robust CHF 44.7 million (2002: CHF 44.0 million). Due notably to the share buy-back programs, which amounted to CHF 56.4 million, cash outflow from financing activities rose to CHF 58.2 million (2002: CHF 35.1 million). For this reason, net liquidity decreased in 2003 to CHF 26.1 million (2002: CHF 48.4 million).
At the Annual Shareholders’ meeting on 28 April 2004, the Board of Directors will propose an unchanged dividend of CHF 0.45 per registered share.
By early 2005 Tecan will describe its business not only from the perspective of Genomics, Proteomics, Drug Discovery and Diagnostics, but also from the standpoint of its core competencies. The development of this new reporting system will permit the company to put in place a new strategic plan by 2005 and enhance its financial guidance.
In the meantime, the company will continue to focus its attention on implementing measures to improve operational efficiencies and increase its revenue base in an uncertain economic environment marked by a continuing weakness of the US dollar. Tecan’s order book entry during the fourth quarter was below the orders registered over the last two years, which suggests a weak first quarter 2004. For the full year 2004, Tecan anticipates low single digit sales growth in local currencies and, excluding the negative impact of currency fluctuations, will maintain its Ebit margin around current levels.
Tecan’s goal is to continue providing cutting edge solutions of the highest possible quality to its customers worldwide. The company is committed to achieving sustainable growth and above average profitability.
Tecan 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 2003, Tecan achieved sales of CH 311.6 million (USD 230.8 million; EUR 205.0 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 2003 will take place today at 2pm (CET). This event will also be relayed by live audio web cast which interested parties may access via Tecan’s corporate home page at www.tecan.com. Additionally, the web cast will be available for replay until close of business on March 15th, 2004.
Please find enclosed the press release in 3 languages.
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OfficerChief Financial Officer
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