Financial results:
full-year and second half of 2017
-
Order entry of CHF 564.1
million (2016: CHF 503.2 million)
-
Sales of CHF 548.4 million
(2016: CHF 506.2 million)
-
Full-year operating profit
before depreciation and amortization (EBITDA) of CHF 105.3
million (2016: CHF 89.0 million)
-
Reported EBITDA margin of 19.2%
(2016: 17.6%), after acquisition-related integration
costs
-
Strong improvement in the
EBITDA margin of 160 basis points, driven by substantial efficiency
improvements together with some one-time effects
-
Full-year net profit of
CHF 66.5 million (2016: CHF 54.5 million); increase of
22.0%
-
Cash flow from operating
activities of CHF 99.4 million (2016: CHF 118.8 million; including
a repayment of development costs)
Operating highlights
2017 and other important information
-
Integration of US company
SPEware (now Tecan SP) and market launch of the Resolvex(TM)
product line for sample preparation for mass
spectrometry
-
Acquisition of Pulssar
Technologies S.A.S. in February 2017 to expand the technology
portfolio in Partnering Business; relocation of production
completed
-
Signing of new platform
development projects with DiaSorin and Sysmex in Partnering
Business
-
Increase in the dividend
proposed from CHF 1.75 to CHF 2.00 per share
Outlook 2018
-
Forecast for organic growth in
local currencies in the mid-single-digit percentage range;
potential acquisitions not taken into account
-
After significant margin
increase in 2017, a further year of EBITDA margin of more than 19%
of sales expected
Männedorf, Switzerland, March 14,
2018 - The Tecan Group (SIX Swiss Exchange: TECN) ended fiscal
year 2017 with a significant increase in sales and profit as well
as strong growth in order entry.
Tecan CEO David Martyr commented: "I am pleased
that we recorded another year of significant sales growth for
Tecan. Over the last three years our sales have increased by a
total of around CHF 150 million or 37%, underpinning our focus on
both organic growth as well as contributions from synergetic
M&A. Of particular note are our recurring revenues which have
increased in recent years from around 30% to now over 40% of our
overall sales.
Another key success during 2017 was the rapid
integration of the two most recently acquired companies. We also
see continued potential in terms of our existing products, which is
being underpinned by the by strong growth in order entry we had in
2017. Coupled with new products, both in the Life Science Business
and the Partnering Business, and the possibility of further
acquisitions, Tecan is in a good position for further dynamic
growth going forward."
Financial results full-year and
second half of 2017
In the year under review, Tecan grew its order
entry by 12.1% to CHF 564.1 million (2016: CHF 503.2 million),
which corresponds to an increase of 11.8% in local currencies. Both
business segments contributed with double-digit growth rates. On an
organic basis, order entry increased by 9.1% in Swiss francs and by
8.5% in local currencies. Thanks to strong order entry, which
exceeded sales, the order backlog was sharply higher as of December
31, 2017. The growth in order entry was also strong in the second
half of the year, with an increase of 7.1% in local currencies.
Sales climbed by 8.3% in Swiss francs or 8.0% in
local currencies to CHF 548.4 million in 2017 (2016: CHF 506.2
million). Tecan therefore achieved its annual outlook for Group
sales growth of more than 6% in local currencies communicated in
March 2017. On an organic basis, sales grew by 4.7% in local
currencies and 5.0% in Swiss francs.
Sales continued their positive trajectory in the second half of the
year as well, growing by 8.0% in local currencies and 8.9% in Swiss
francs. This corresponds to organic sales growth of 5.8% in local
currencies and 6.7% in Swiss francs. Organic sales growth thus
accelerated compared with the first six months of 2017, driven by
the double-digit sales growth recorded in the Partnering Business
in the second half of the year.
Operating profit before depreciation and
amortization (earnings before interest, taxes, depreciation and
amortization; EBITDA) rose strongly by 18.3% to CHF 105.3 million
in the fiscal year (2016: CHF 89.0 million). The EBITDA margin
reached 19.2% of sales (2016: 17.6%), after acquisition-related
costs in a mid-single-digit million Swiss franc amount. Tecan thus
comfortably exceeded its communicated outlook of expanding its
reported EBITDA margin to more than 18% of sales. The margin
improvement in 2017 was driven by positive volume effects as well
as substantial efficiency improvements in procurement and
production. The majority of these improvements will have a lasting
effect beyond the reporting year. In addition, Tecan also benefited
from non-recurring positive effects that were not included in the
original plan.
Net profit reported for the year 2017 increased by
22.0% to CHF 66.5 million (2016: CHF 54.5 million) The rise in
net profit was slightly greater than the increase in the operating
result due to the financial result. The net profit margin improved
by 130 basis points to 12.1% of sales (2016: 10.8%). Earnings per
share increased by 20.9% to CHF 5.73 (2016: CHF 4.74).
The cash flow from operating activities was CHF
99.4 million in line with expectations (2016: CHF 118.8
million; including a repayment of development costs by an OEM
partner). Cash flow from operating activities corresponded to 18.1%
of sales in 2017.
Information by business
segment
Life Sciences
Business (end-customer business)
Sales in the Life Sciences Business increased by 9.0% in local
currencies to CHF 306.9 million (2016: CHF 280.2 million)
in 2017 and were 9.5% above the prior-year period in Swiss francs.
On an organic basis (excluding SPEware for the first nine months),
sales in 2017 rose by 3.6% in local currencies, with contributions
from a broad range of instrument platforms, the service business
and further strong growth in consumables. Among the regions, China
again stood out with a high growth rate. After posting strong
growth in the first six months of 2017, sales increased by 2.5% in
local currencies and 3.8% in Swiss francs in the second half of the
year. At -0.6% on an organic basis, the second half of the year was
slightly below the prior-year period, during which sales had
benefited from a major project installation.
Full-year order entry in the Life Sciences Business segment once
again exceeded sales, achieving double-digit growth. Orders also
increased in the second half of the year, comfortably exceeding
overall sales growth.
Operating profit in this segment (earnings before
interest and taxes; EBIT) rose by 10.6% to CHF 50.5 million (2016:
CHF 45.7 million), after acquisition-related costs for the
integration of Tecan SP. This positive performance is primarily a
result of sales growth and a higher gross margin, as well as
further efficiency gains. The operating profit margin improved by
30 basis points to 15.9% of sales (2016: 15.6%).
Partnering Business (OEM business)
The Partnering Business generated sales of CHF 241.5 million during
the year under review (2016: CHF 226.0 million). This corresponds
to an increase of 6.7% in local currencies and 6.9% in Swiss
francs. The acquisition of Pulssar Technologies, which has been
consolidated in the financial statements since March 1, 2017, as
expected only had a limited impact on sales. On an organic basis,
excluding sales by Pulssar, revenue in 2017 rose by 6.1% in local
currencies. This increase in sales was achieved despite a high
baseline in the previous year, in which sales in the first half of
the year had benefited from the last major order for a phasing-out
platform. The lack of sales from this instrument platform was more
than offset by new instrument platforms as well as strong growth in
the components business, services and consumables.
After posting a modest decline in the first half of the year, sales
growth recovered strongly in the second half, expanding at a rate
of 16.4% in local currencies and 16.6% in Swiss francs. On an
organic basis, this corresponds to growth of 15.5% in local
currency terms in the second half of the year.
Order entry in the Partnering Business increased at a double-digit
percentage rate in 2017.
Operating profit in the Partnering Business
(earnings before interest and taxes; EBIT) rose by 26.2% to CHF
42.6 million in 2017 (2016: CHF 33.8 million). In this segment,
too, the increase was largely attributable to the growth in sales,
a higher gross margin and improved efficiency. The operating profit
margin improved by 270 basis points to 17.5% of sales (2016:
14.8%), in part also due to non-recurring positive effects and
because the prior-year period had included even higher
integration-related costs in connection with the acquisition of
Sias.
Additional information
Regional
development
In Europe, sales in 2017 fell by 3.6% in local
currencies and by 3.0% in Swiss francs compared to the previous
year. Sales in Life Sciences Business grew and the overall negative
trend was primarily due to the positive one-time effect in the
first half of 2016 incurred by Partnering Business, which had
resulted in a high comparative basis. However, a considerable
increase in sales in the second half of the year could offset a
large part of the negative developments of the first six
months.
In North America, sales grew by 19.6% in both
local currencies and Swiss francs in 2017. The Life Sciences
Business posted strong growth in this region as a result of the
first-time contribution of SPEware products. The Partnering
Business also generated significant double-digit growth, including
a strong contribution from the components business.
In Asia, Tecan achieved a considerable increase in
sales of 12.4% in local currencies and 12.6% in Swiss francs. Both
segments contributed with a double-digit rise in sales. In China,
both segments continued to benefit from continuing major investment
in healthcare and life science research.
Recurring sales
of services and consumables
Recurring sales of services and consumables increased in 2017 by
22.0% in local currencies and 22.4% in Swiss francs. This sharp
increase in sales was supported both by strong organic growth and
the first-time contribution of SPEware consumables. Recurring sales
amounted to 42.4% of total sales, their highest level ever for a
full year (2016: 37.6%). Services (including spare parts) accounted
for 21.6% of total sales, while consumables (plastics and reagents)
accounted for 20.8%.
Operating
performance 2017
The integration of the US company SPEware, now
called Tecan SP, was successfully completed in 2017. The company,
part of the Tecan Group since October 2016, is a leading provider
in the area of mass spectrometry sample preparation solutions.
Tecan SP realigned its product portfolio in the year under review,
consolidating it under the Resolvex(TM) brand. The products were
previously mainly successful in North America and in the future
will benefit from the Tecan Group's strong global distribution
structure. Marketing of these products in Europe began in the
second half of 2017.
Tecan was also able to complete the integration of
French company Pulssar Technologies S.A.S., which it acquired in
March 2017. The relocation of Pulssar production from Paris to
Tecan's existing manufacturing site for components in San Jose,
California, was undertaken rapidly and has already been completed.
Pulssar precision pumps expand the technology portfolio of Tecan's
components business in the Partnering Business and meet
application-specific customer needs in various market segments.
In Partnering Business, Tecan signed new
development agreements for instrument platforms with the Italian
partner DiaSorin and with Japan-based Sysmex Corporation. The new
platform for DiaSorin will make use of Tecan's Fluent®
Laboratory Automation Solution as a nucleic acid extraction
platform in molecular diagnostics. The instrument for Sysmex will
be based on Tecan's new Cavro® Omni Flex
platform, which was adapted specifically to the area of flow
cytometry.
Strong balance
sheet - increase in the dividend proposed
Tecan's equity ratio reached 68.5% as of December
31, 2017 (December 31, 2016: 66.2%). Net liquidity (cash and cash
equivalents minus bank liabilities and loans) reached CHF 290.7
million (December 31, 2016: CHF 242.3 million). The company's share
capital was CHF 1,166,487 as at the reporting date of December 31,
2017 (December 31, 2016: CHF 1,154,137), consisting of 11,664,872
registered shares with a nominal value of CHF 0.10.
The Board of Directors will propose an increase in
the dividend from CHF 1.75 to CHF 2.00 per share to the
shareholders at the Company's Annual General Meeting on April 17,
2018.
Outlook 2018
Tecan expects organic sales growth for full-year 2018 to be in the
mid-single-digit percentage range in local currencies. This
forecast does not take account of potential additional
acquisitions.
After the significant margin increase in 2017,
partly on the back of non-recurring positive effects, Tecan
anticipates that the EBITDA margin will once again exceed 19% of
sales in 2018.
These expectations regarding profitability include integration
costs for already completed acquisitions in a low single-digit
million Swiss franc amount and are based on an average exchange
rate forecast for full-year 2018 of one euro equaling CHF 1.15
(2016: 1.07) and one US dollar equaling CHF 0.96 (2016: 0.99).
Again, no contributions or costs linked to further acquisitions are
taken into account.
Financial Report and
Webcast
The full 2017 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 media
conference to discuss the 2017 annual results today at 09:00 am
(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 (0)58 310 50 00 or +44 (0) 207
107 0613 (UK)
For participants from the US: +1 (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 Pfäffikon (SZ) on April 17,
2018.
-
The 2018 Interim Report will be published on
August 16, 2018.
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, 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.
For further information:
Tecan Group |
|
Dr.
Rudolf Eugster |
Martin
Brändle |
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