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TECAN on course in the first half of 1999: Sales reach CHF 86,4 m, up 12% on last year. Operating profit (Ebit) up at CHF 16,7 m (+23,7%).
Sales target for full 1999: +10%.
Substantial investments prepare ground for growth spurt in 2000.
The Tecan Group, headquartered in Hombrechtikon near Zurich (active in the field of laboratory automation) had a better than expected first half year. Consolidated Group sales increased by +12% to CHF 86,4 m, compared to the previous year, while Ebit rose by 23,7% to CHF 16,7 m. The planned sales target of +10% for 1999 is reckoned by Group management to be realistic. Substantial investments are being made in Research and Development as a preparation for the growth spurt in the coming year.
The Tecan Group's sales in the first half of 1999 rose compared to the previous year by around 12% in both CHF and local currencies. Sales grew world-wide in both of Tecan's markets, "Diagnostics" and "Life Sciences". All geographical markets contributed to this success, with the exception of Japan which continues to suffer under the Asian crisis. The trend towards more complex, higher-value products has continued and this had a positive impact on the gross margin.
Upfront expenditure for the future increased markedly once again in the first half of 1999. Gross investments in Research and Development rose to 15% of sales and totaled CHF 13,3 m, roughly 1.5 times the figure for last year and almost three times the figure for 1997.
The substantial investments made in terms of cash and development know-how is the basis for the planned rapid growth in the year 2000 and beyond.
Other operating costs grew more slowly than sales which means that the Ebit margin, after non-recurring capitalization of R&D costs of CHF 3,2 m, reached 19%.
The Tecan unitary shares which are meanwhile listed in the Mid-Cap segment of the Swiss Exchange (SWX) have, as in previous years, outperformed the SPI.
Although higher taxes and currency losses from hedging transactions will tend to hold back the result for 1999, sales are traditionally stronger in the second half of the year, and operating costs are likely to grow less rapidly than sales until the end of year. This means that forecast sales growth of 10% and increased profits compared with the previous year can be regarded as realistic targets.