Substantial sales growth for Tecan in first half of 2010
Sales growth of 9.1% to CHF 178.0 million (H1 2009: CHF 163.2 million); 12.2% growth in local currencies
The Tecan Group closed the first half of 2010 with substantial sales growth and a strong operating result. Shortly after the end of the first half year, Tecan signed a share and asset purchase agreement to sell the Sample Management activities as part of its strategic portfolio alignment. The company also announced that it is realigning its organization and changing its management and reporting structure to enable it to more effectively implement its strategy for long-term profitable growth. The new management structure will be accompanied by changes to the Group Executive Committee.
Thomas Bachmann, CEO of Tecan, commented: "We are delighted to have achieved such significant growth in the first half of 2010. This shows that our strategy execution for long-term profitable growth is on track. In particular our global OEM business has performed very successfully. The realignment of our organizational and management structure into the Life Sciences Business and Partnering Business segments will provide a strong basis to drive both businesses forward more strongly. Following the divestiture of the Sample Management activities, Tecan will increasingly focus its financial and personnel resources on these two businesses."
Half year results from continuing operations
Sales increased by 9.1% to CHF 178.0 million (H1 2009: CHF 163.2 million) in the first half of the year and were 12.2% above those of the prior-year period in local currencies. The operating profit margin rose to 13.0% (H1 2009: 12.8%). In the first six months of 2010, Tecan achieved an operating profit (EBIT) of CHF 23.1 million (H1 2009: CHF 20.8 million). Net profit came in at CHF 15.6 million and was thus below the prior-year level (H1 2009: CHF 17.1 million). This was due to a weaker financial result caused by foreign exchange losses. The net profit margin was 8.8% of sales (H1 2009: 10.5%). Earnings per share were CHF 1.50 (H1 2009: CHF 1.64). Cash flow from operating activities increased to CHF 20.8 million (H1 2009: CHF 17.3 million), which corresponds to 11.7% of sales.
Tecan increased order entry by 7.4% to CHF 193.4 million, which corresponds to growth of 10.7% in local currency terms.
Half year results including the discontinued Sample Management business segment
As announced, the Tecan Group and NEXUS Biosystems, Inc., based in Poway (California, USA), have signed an agreement concerning the sale of REMP AG, a wholly-owned subsidiary of Tecan, as well as other related assets. Under this agreement, Nexus will acquire all activities of Tecan's Sample Management business segment. The Sample Management business segment is therefore presented as a "discontinued operation."
Sales including the Sample Management business segment increased by 2.9% to CHF 187.9 million (H1 2009: CHF 182.6 million) in the first half of the year, and were 5.7% above the previous year's level in local currencies. Operating profit (EBIT) reached CHF 20.6 million (H1 2009: CHF 21.1 million), while the operating profit margin was 11.0% of sales (H1 2009: 11.5%).
Regional development and additional information on continuing operations
In Europe, sales in Swiss francs increased by 25.1%, being negatively impacted by the exchange rate development of the euro versus the Swiss franc. European sales were 28.2% above the prior-year level in local currency terms. The increase in sales is mainly the result of a very strong OEM business with diagnostic companies. End-customer business, on the other hand, was weaker and its performance remained mixed across the various European countries.
In North America, sales decreased by 3.7% in Swiss francs. This figure was also negatively impacted by the exchange rate development of the US dollar versus the Swiss franc. Sales in North America remained at the prior-year level in local currency terms. The OEM components business grew considerably, while North American end-customer business was slightly below the prior-year level.
In Asia, sales were 1.1% below the prior-year level in Swiss francs, but unchanged in local currency terms. Sales in Japan declined, which was largely the result of a basis effect caused by a major contract in the previous year. Sales in China again recorded double-digit growth.
New organization with stronger focus on growth strategy
In order to implement its strategy for long-term profitable growth even more sustainably, Tecan is refocusing its organizational and management structure on the end customer and OEM customer groups. Instead of the current product-oriented Components & Detection, Liquid Handling & Robotics and Sample Management business segments, for the latter of which a sales agreement was signed on July 15, 2010, the Tecan Group will in future be made up of the two business segments Life Sciences Business (end-customer business) and Partnering Business (OEM business). Tecan is also creating or realigning Group-wide functions to better exploit synergies in research, development, procurement and production across various locations, in order to speed up innovation and further increase overall operating efficiency.
The new organization will come into effect on January 1, 2011. With effect from this date, Tecan Group AG's Group Executive Committee will be adapted to the new organization and reduced to six members. The Group Executive Committee will then consist of Chief Executive Officer Thomas Bachmann, Chief Financial Officer Dr. Rudolf Eugster, the Heads of the two business segments Life Sciences Business and Partnering Business and the Heads of the Development & Supply Operations and Science & Technology functions.
Matthew Robin, who is currently in charge of the Liquid Handling & Robotics business segment, will head up Partnering Business. Management of the Development & Supply Operations function will be taken over by Dr. Jürg Dübendorfer, who is currently the Group Executive Committee member responsible for the Services & Consumables business unit. Tecan will make a decision and an announcement about the management of the Life Sciences Business segment and Science & Technology function at a later date. The remaining members of the current Group Executive Committee will continue to perform their previous duties within the new Group organization or will assume new responsibilities from January 1, 2011, but will not be part of the newly formed Group Executive Committee.
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