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Zurich, Switzerland, 8 March 2001 – Tecan, a leading player in the fast growing life sciences supply industry, today reported a 40.6% increase in net profit for the year 2000 to CHF 39.5 million or 14.4 % of sales, compared with CHF 28.1 million, or 14.5% of sales, one year earlier. Operating profit increased by 41.2% to CHF 57.9 million or 21.2% of sales for the year (1999: CHF 41.0 million or 21.2% of sales). As announced on 16 January 2001, total sales for the year 2000 increased 41.7% to CHF 273.5 million (1999: 193.1 million). In local currencies, sales increased by 33%.
“2000 was a landmark year for Tecan as we delivered outstanding financial results and implemented strategic initiatives that put Tecan in a strong position to exploit the future growth of the life sciences market," said Emile Sutcliffe, CEO of the Tecan Group. "Our strong product portfolio, unique blend of core competencies, access to all the segments of the life sciences industry, as well as a balanced presence in all geographical markets, will ensure that Tecan continues to deliver benefits both for its customers and its shareholders".
Strategic acquisitions and alliances offer additional growth
In 2000, Tecan significantly strengthened and expanded its leading position in the life sciences market as it very successfully entered the Genomics / Proteomics markets and made acquisitions and alliances that offer substantial growth opportunities.
This included the acquisition of Gamera Bioscience in July 2000, a Boston-based company that specializes in microfluidics technology, and with it the LabCD™, a revolutionary disposable compact disc suitable for high throughput applications. Tecan will launch it in 2001 in selected areas of biopharmaceutical research.At the end of 2000, Tecan announced a strategic alliance with the chemical company Merck to provide fully automated solutions for the extraction and purification of nucleic acids. Tecan now offers fully scalable applications of all the basic DNA extraction technologies for which there is considerable demand.
Recently, Tecan formed Tecan Proteomics GmbH, a new company based in Munich, Germany, and acquired a majority stake in the German firm Dr Weber GmbH. With Dr Weber GmbH comes access to proprietary free-flow electrophoresis technology, which is particularly useful in the identification of new targets for drug discovery. Both Tecan Proteomics GmbH and Dr Weber GmbH will allow further expansion into the high growth market of Proteomics, estimated to be growing above 40% annually.
Operating income increases by 41%
Tecan’s gross profit margin increased to a high level of 69.1% in 2000 compared with 68.3% a year earlier due to successful expansion into high value-added markets and a positive currency impact. Operating profit before R&D and goodwill amortization reached CHF 89.1 million or 32.6 % of sales in 2000, compared to CHF 62.1 million or 32.2% in 1999.
Net R&D expenses amounted to CHF 29.5 million or 10.8% of total sales (1999: CHF 21.1 million or 11.0% of sales) and focused primarily on the development of new applications and technologies, in particular the Lab-CD, the new Freedom platform as well as new applications for assays on living cells (ADME).
Operating profit increased by 41.2% to CHF 57.9 million or 21.2% of sales during the year (1999: CHF 41.0 million or 21.2% of sales), despite the fact that 1999 operating profit benefited from capitalized R&D costs of CHF 3.6 million. Included in the operating expenses 2000 is a total of CHF 2.9 million due to the amortization of goodwill from the acquisition of Gamera Bioscience in July 2000 and the amortization of capitalized R&D costs.
Net profit margin reaches 14.4% of sales
Despite the fact that the net financial result (CHF -3.5 million) was adversely affected by currency losses due to the implemented hedging strategy and the revaluation of balance sheet items at year end, Tecan's net profit increased by 40.6% to CHF 39.5 million or 14.4 % of sales (1999: CHF 28.1 million or 14.5% of sales), resulting in a record net profit for the Tecan Group. The implementation of the Swiss holding company on 1. January 2000 contributed positively to this result, as the effective income tax rate for 2000 declined to 27.3% (1999: 33.1%).
Strong balance sheet
At 31 December 2000, shareholders' equity represented 71.5% of total assets or CHF 139.0 million (1999: 117.9 million). Cash inflow from operating activities increased by 9.7% to CHF 30.3 million (1999: 27.7 million).
Due notably to the acquisition of Gamera Bioscience in July 2000 for USD 10 million and the substantial buy back of treasury shares, cash and cash equivalents decreased slightly by CHF 0.4 million to CHF 49.1 million. At the end of the year, liquid funds represented 25% of total assets.
At the Annual Shareholders meeting on 26 April 2001 in Männedorf, the Board of Directors will propose a 40% increased dividend of CHF 3.50 per registered share (1999: CHF 2.50). The Board of directors will also seek approval for a 10-for-one split of Tecan registered shares.
At the end of the year 2000, Tecan employed 690 employees compared to 556 a year earlier.
“The strategic acquisitions and initiatives we implemented in 2000, are in line with our strategy to expand our core competences into the areas of disposables and reagents. This offers added value to our customers and positions Tecan for strong future growth,” said Mr. Sutcliffe. "As we continue to see strong demand from the pharmaceutical and biotech industry both in Europe and in North America, we anticipate for 2001 continued sales growth in local currencies, in line with the performance we delivered in 2000."