Financial results:
full-year and second half of 2016
-
Order entry of CHF 503.2
million (2015: CHF 465.0 million)
-
Full-year growth of 6.9% in
local currencies or 8.2% in Swiss francs
-
Strong H2 growth in Life
Sciences Business, supported by new products
-
H2 growth in Partnering
Business impacted by one large order shifted to January
2017
-
Sales of CHF 506.2 million
(2015: CHF 440.3 million)
-
Full-year growth of 13.5% in
local currencies or 15.0% in Swiss francs
-
Full-year organic growth of
8.2% in local currencies and 9.6% in Swiss francs
-
H2 sales growth of 12.2% in
local currencies or 12.7% in Swiss francs
-
Full-year operating profit
before depreciation and amortization (EBITDA)
of CHF 89.0 million (2015: CHF 83.4 million)
-
Reported EBITDA margin of 17.6%
(2015: 18.9%), including acquisition-related costs and reduced
margins associated with the acquisition of Sias AG
-
Underlying EBITDA, excluding
acquisition-related effects, of CHF 93.2 million
-
Strong improvement in
underlying EBITDA margin of 140 basis points to 19.5% (2015:
18.1%), driven by positive volume and price effects as well as
substantial efficiency improvements
-
Full-year net profit of CHF
54.5 million below prior year due to integration costs and
non-operational effects (2015: CHF 57.1 million)
-
Strong full-year cash flow from
operating activities of CHF 118.8 million (2015: CHF 99.1
million) or 23.5% of sales (2015: 22.5%)
Operating highlights
2016 and other important information
-
Significant increase in serial
production of major platforms in the Partnering Business
-
Successful integration of Sias
AG, which was acquired in November 2015
-
Acquisition of SPEware
Corporation in September 2016, a leading provider for mass
spectrometry sample preparation solutions
-
Launch of additional important
features for Fluent® next generation liquid handling platforms as well as a new variant of the Spark® reader
platform
-
Unchanged dividend of CHF 1.75
per share proposed
Outlook 2017
-
Full-year sales are forecast to increase by at least 6% in local
currencies
-
Reported EBITDA margin expected
to further expand to at least 18% of sales, including
acquisition-related costs in a mid single-digit million Swiss franc
amount
Männedorf,
Switzerland, March 15, 2017 - The Tecan Group (SIX Swiss
Exchange: TECN) today announced its financial results for full-year
and second half of 2016.
Tecan CEO David Martyr commented: "I am pleased
that we recorded another year of double-digit sales growth and a
further improvement in underlying profitability during 2016.
Importantly, we posted strong sales growth in both divisions and
all regions, with China being a specific highlight. Once again, the
high operating cash flow of over 23% of sales was particularly
satisfactory.
Our new platforms had a strong market uptake, with
Fluent quickly becoming the industry-leading automation solution
and Spark setting new standards for multimode readers regarding
sensitivity, speed and accuracy. In our Partnering Business, we saw
a substantial increase in serial production of major platforms and
we successfully concluded several new development agreements,
providing the basis for continued growth. We fully integrated Sias
AG, which we acquired at the end of 2015 and relocated our new
colleagues and the production lines into the Tecan site in
Maennedorf. In August, we were delighted to announce the
acquisition of US-based SPEware Corporation, which further expands
our solutions offering into the sample preparation for mass
spectrometry market," Martyr continued.
Financial results full-year and
second half of 2016
In the second half of 2016, order entry in the Life Science
Business grew strongly, however Partnering Business was affected by
a large order which was shifted by a corporate customer from
December 2016 to January 2017. Despite this timing effect, order
entry in the second half overall increased by 2.8% in local
currencies and by 3.1% in Swiss francs against a strong base in the
prior-year period. For the full year, order entry increased by 6.9%
in local currencies to CHF 503.2 million (2015: CHF 465.0 million),
corresponding to growth of 8.2%. On an organic basis, order entry
increased by 1.8% in local currencies and by 3.1% in Swiss francs.
Organic development only includes contributions from acquisitions
from those months in the reporting period that were already
included in the consolidated financial statements in the prior-year
period.
Sales in the second half rose by 12.2% in local
currencies and by 12.7% in Swiss francs. This corresponds to
organic sales growth of 7.3% in local currencies and 7.8% in Swiss
francs. Sales in financial year 2016 increased by 13.5% in local
currencies and 15.0% in Swiss francs to CHF 506.2 million (2015:
CHF 440.3 million), exceeding the CHF 500 million mark for the
first time in the Company's history. On an organic basis, sales
grew by 8.2% in local currencies and 9.6% in Swiss francs.
Operating profit before depreciation and
amortization (earnings before interest, taxes, depreciation and
amortization; EBITDA) rose by 6.8% to CHF 89.0 million in the
fiscal year (2015: CHF 83.4 million). Including acquisition-related
costs from two recent transactions and reduced margins associated
with the acquisition of Sias AG, the EBITDA margin was 17.6% of
sales (2015: 18.9%). By contrast, the underlying EBITDA margin,
excluding acquisition-related effects, improved by 140 basis points
to 19.5% of sales, thereby comfortably delivering on the margin
commitment for the year of "at least 50 basis points". In 2015, the
underlying EBITDA margin reached 18.1% and excludes a one-time
positive net impact mainly from revised pension liabilities. The
margin improvement in 2016 was driven by positive volume and price
effects as well as substantial efficiency improvements in
operations and in research and development.
Despite a higher operating result, net profit for
the year 2016 was CHF 54.5 million and therefore below the
prior-year period due to non-operational effects (2015:
CHF 57.1 million). In addition to acquisition-related costs,
the difference is due to the lack of the positive one-time effects
from 2015, an increase of the tax rate in 2016 to an again more
normalized level and a lower financial result due to currency
hedging. The net profit margin therefore reached 10.8% of sales
(2015: 13.0%), while earnings per share were CHF 4.74 (2015:
CHF 5.05)
Cash flow from operating activities grew strongly
to CHF 118.8 million (2015: CHF 99.1 million), including
a further reimbursement of development costs by an OEM partner.
Thus, cash flow from operating activities corresponded to 23.5% of
sales.
Information by business
segment
Life Sciences
Business (end-customer business)
In the second half of the year, sales in the Life Sciences Business
increased by 10.7% in local currencies and were 11.7% above the
prior-year period in Swiss francs. On an organic basis, excluding
sales from SPEware in the last quarter, sales in the second half
grew by 7.5% in local currencies. Sales for the full year totaled
CHF 280.2 million, representing an increase of 8.6% in local
currencies and 10.7% in Swiss francs over the prior-year period
(2015: CHF 253.0 million). On an organic basis, sales increased by
6.8% in local currencies in 2016. The new Fluent and Spark
platforms as well as recurring sales of services, consumables and
reagents made a considerable contribution to this growth. Order
entry in the Life Sciences Business again exceeded sales for the
full year and saw an acceleration in the second half, supported by
a strong market uptake of new products.
Operating profit before interest and taxes (EBIT)
in the segment was CHF 45.7 million in the year under review (2015:
CHF 45.4 million), corresponding to an operating profit margin of
15.6% of sales (2015: 17.0%).
Partnering Business (OEM business)
Sales in the Partnering Business grew by 14.3% in local currencies
as well as in Swiss francs in the second half of 2016. On an
organic basis, revenue rose by 7.0% in local currencies.
The Partnering Business generated sales of CHF 226.0 million in
financial year 2016 (2015: CHF 187.3 million), which corresponds to
an increase of 20.1% in local currencies and 20.7% in Swiss francs.
On an organic basis, sales increased by 10.1% in local
currencies.
Instrument platforms launched in recent years made a significant
contribution to the strong sales growth. Also, sales in China
increased substantially, with several local components and
instrument customers now successfully commercializing their
respective platforms. Order entry in the Partnering Business also
grew at a solid rate for the full year 2016, albeit slowing down in
the second half as a large order was shifted by a corporate
customer from December 2016 to January 2017.
The segment's operating profit rose to
CHF 33.8 million (2015: CHF 30.2 million), despite
integration costs related to the Sias acquisition reaching a mid
single-digit million Swiss franc amount. Due to those
acquisition-related costs, operating profit margin was down on the
prior-year period at 14.8% of sales (2015: 16.0%).
Additional information
Regional
development
In Europe, full-year sales in local currencies increased by 12.8%
and by 13.3% in Swiss francs. This growth was driven primarily by
the Partnering Business, both from the first-time contribution to
sales from Sias products and strong organic growth by major
platforms.
In North America, sales grew by 7.6% in local
currencies and 9.6% in Swiss francs. The Life Sciences and
Partnering Business recorded solid growth in this region.
In Asia, Tecan once again achieved a considerable
increase in sales of 27.0% in local currencies and 30.2% in Swiss
francs. Both segments posted a double-digit increase in organic
sales, which was further supported by a first-time contribution to
sales by Sias products. Growth in China, where sales grew with more
than 50%, was particularly pleasing, bringing the total business to
close to CHF 50 million in the year.
Recurring sales
of services, consumables and reagents
In 2016, recurring sales of services and consumables increased by
12.5% in local currencies and 14.1% in Swiss francs, and therefore
amounted to 37.6% of total sales (2015: 37.8%). Services (including
spare parts) accounted for 20.7% of total sales, while consumables
(plastic and reagents) accounted for 16.8%.
Research and
development
Research and development expenses in 2016 amounted to 9.3% of sales
(2015: 9.1%) or CHF 47.1 million (2015: CHF 39.9 million). All
told, research and development activities were CHF 51.9
million gross (2015: CHF 56.7 million). The total figure also
includes development programs for OEM instrument customers in the
Partnering Business (CHF 9.8 million) and capitalized
development costs (CHF 6.6 million). However, these costs were
clearly exceeded by amortization amounting to CHF 11.6
million.
Strong balance
sheet - dividend unchanged
Tecan's equity ratio reached 66.3% as of December 31, 2016
(December 31, 2015: 68.7%). Net liquidity (cash and cash
equivalents minus bank liabilities and loans) increased to CHF
242.3 million (December 31, 2015: CHF 198.8 million). This figure
includes the acquisition of SPEware Corporation with a base
purchase consideration of USD 50.0 million (CHF 49.0 million), of
which the net payable was fully paid in cash. The company's share
capital was CHF 1,154,137 as at the reporting date of December 31,
2016 (December 31, 2015: CHF 1,146,758), consisting of 11,541,371
registered shares with a nominal value of CHF 0.10.
The Board of Directors will propose an unchanged
dividend of CHF 1.75 per share to the shareholders at the Company's
Annual General Meeting on April 11, 2017.
Outlook 2017
As previously communicated, Tecan expects in the mid-term to
continue to organically outgrow the market average and increase
this growth rate through acquisitions. For 2017, total Tecan Group
sales are forecast to increase by at least 6% in local currencies.
The reported EBITDA margin is expected to further expand to at
least 18% of sales, including acquisition-related costs in a mid
single-digit million Swiss franc amount.
These expectations regarding profitability are
based on an average exchange rate forecast for full-year 2017 of
one euro equaling CHF 1.07 and one US dollar equaling CHF 0.99 and
exclude future acquisitions.
Financial Report and
Webcast
The full 2016 Financial Report can be accessed on the Company's
website www.tecan.com under Investor Relations. An iPad App for the
Tecan Financial Reports is also available from the App Store.
Tecan will hold an analyst and press
conference to discuss the 2016 annual results today at 9:00 a.m.
(CET). The presentation will also be relayed by live audio webcast,
which interested parties can access at www.tecan.com. A link to the
webcast will be provided immediately prior to the event.
The dial-in numbers for the
conference call are as follows:
For participants from Europe: +41 58 310 50 00 or
+44 203 059 58 62 (UK)
For participants from the US: +1 631 570 5613
Participants should if possible dial in 15 minutes before the start
of the event.
Key upcoming dates
-
The Annual General Meeting of Tecan's
shareholders will take place in Pfaeffikon, SZ, on April 11,
2017.
-
The 2017 Interim Report will be published on
August 16, 2017.
About
Tecan
Tecan (www.tecan.com) is a leading global provider of laboratory
instruments and solutions in biopharmaceuticals, forensics and
clinical diagnostics. The company specializes in the development,
production and distribution of automated workflow solutions for
laboratories in the life sciences sector. Its clients include
pharmaceutical and biotechnology companies, university research
departments, and forensic and diagnostic laboratories. As an
original equipment manufacturer (OEM), Tecan is also a leader in
developing and manufacturing OEM instruments and components that
are then distributed by partner companies. Founded in Switzerland
in 1980, the company has manufacturing, research and development
sites in both Europe and North America and maintains a sales and
service network in 52 countries. Registered shares of Tecan Group
are traded on the SIX Swiss Exchange (TECN; ISIN CH0012100191).
For further
information:
Tecan Group |
|
Dr.
Rudolf Eugster |
Martin
Braendle |
Chief
Financial Officer |
Vice
President, Communications & |
|
Investor
Relations |
investor@tecan.com |
Tel. +41
(0) 44 922 84 30 |
www.tecan.com |
Fax +41
(0) 44 922 88 89 |
Press Release with financial
tables