Financial results
for the first half of 2018
-
Sales of CHF 273.5 million
(H1 2017: CHF 252.2 million)
-
Operating profit before
depreciation and amortization (EBITDA) of CHF 48.1 million (H1
2017: CHF 41.6 million)
-
Net profit of CHF 29.2
million (H1 2017: CHF 26.0 million)
-
Net profit margin of 10.7%,
including integration costs (H1 2017: 10.3%)
-
Increase in earnings per share
by 10.7% to CHF 2.49 (H1 2017: CHF 2.25)
-
Organic outlook for full-year
2018 confirmed (excluding acquisitions announced after the end of
the first half of 2018)
Operating
performance in the first half of 2018
-
Market launch of
Fluent® Gx platform
variant for regulated markets; successful registration as a Class I
medical device in the US
-
Considerable progress made with
several development projects in the Partnering Business
-
Event after the end of H1
2018: Tecan accelerates broad genomics
strategy with the acquisition of NuGEN Technologies (see separate
press release)
Männedorf, Switzerland, August
16, 2018 - The Tecan Group (SIX Swiss Exchange: TECN) posted a
substantial increase in sales in the first half of 2018, driven by
strong growth in the Partnering Business. As a result, net profit
for the period rose at a double-digit percentage rate.
Tecan CEO David Martyr commented: "Tecan's sales
have developed well, once again, in the current financial year, and
this has been achieved almost exclusively through organic growth.
The performance of the Partnering Business has been particularly
pleasing, with considerable demand for a broad range of instrument
platforms and consumables. In the Life Sciences Business, we are
particularly delighted with the successful market launch of Fluent
Gx for customers in clinical diagnostics and other regulated
markets. The newly launched platform variant with its specific
functionalities enjoyed strong demand and contributed significantly
to the sharp rise in order backlog in the Life Sciences Business,
which will have a positive impact on sales in the second half of
the year."
Financial results for the first
half of 2018
Despite a high comparative basis, order entry
increased by 2.8% to CHF 298.1 million in the first six months
of the year (H1 2017: CHF 290.1 million), thus substantially
exceeding sales. This equates to a rise of 1.3% in local
currencies. As previously reported, order entry in the first half
of 2017 was extraordinarily strong, influenced by the timing of
several large orders in the Partnering Business.
Sales climbed by 6.9% in local currencies or 8.4%
in Swiss francs to CHF 273.5 million in the first half of the
year (H1 2017: CHF 252.2 million). This resulted almost
exclusively from organic growth excluding acquisition effects.
Growth at Group level was driven by a double-digit sales increase
in the Partnering Business, while sales in the Life Sciences
Business were virtually unchanged following growth of more than 18%
in local currencies in the prior-year period. Recurring sales of
services and consumables increased in the first half of 2018 by
6.8% in local currencies and 8.3% in Swiss francs, and therefore
amounted to 44.8% of total sales (H1 2017: 44.9%).
The operating profit before depreciation and
amortization (earnings before interest, taxes, depreciation and
amortization; EBITDA) rose by 15.5% to CHF 48.1 million in the
reporting period (H1 2017: CHF 41.6 million). The EBITDA
margin improved to 17.6% of sales (H1 2017: 16.5%) including
integration costs associated with acquisitions. The margin
improvement of 110 basis points was mainly driven by positive
volume effects, lower acquisition-related integration costs
compared to the prior-year period and increased operational
efficiency in procurement and production.
Net profit for the first half of 2018 increased by
12.1% to CHF 29.2 million (H1 2017: CHF 26.0 million).
Alongside the higher operating result, contributing factors
included the lower tax rate, primarily as a result of the tax
reform in the US that came into effect in the reporting period. By
contrast, the financial result had an inhibiting effect on net
profit, falling by CHF 4.6 million year-on-year due to
currency hedging losses. The net profit margin in the first half of
2018 thus increased to 10.7% of sales (H1 2017: 10.3%), while
earnings per share rose to CHF 2.49 (H1 2017:
CHF 2.25).
Cash flow from operating activities climbed 21.0%
to CHF 38.4 million (H1 2017: CHF 31.7 million), thereby
corresponding to 14.0% of sales in the first half of 2018 (H1 2017:
12.6%).
Information by business
segment
Life Sciences
Business (end-customer business)
Sales in the Life Sciences Business increased by 1.7% to
CHF 140.5 million (H1 2017: CHF 138.2 million) in the
first half of the year and were 0.6% below those of the prior-year
period in local currencies. After the segment generated
particularly high growth of 18.2% in local currencies in the first
six months of 2017, a smaller sales increase had been expected.
Despite a similarly high comparative basis from the prior-year
period, order entry in the Life Sciences Business posted moderate
growth in local currencies, however, with the order backlog growing
at a double-digit rate on the back of orders for new instruments.
The newly launched Fluent Gx platform variant enjoyed strong demand
on the market and also led to numerous orders, which contributed
significantly to this growth. In some cases, customers ordered
several of these innovative instruments at once.
Operating profit in this segment (earnings before
interest and taxes; EBIT) rose to CHF 18.1 million (H1 2017:
CHF 17.8 million). The operating profit margin was comparable
to the prior year period at 12.2% of sales (H1 2017: 12.4%).
Partnering Business (OEM business)
The Partnering Business generated sales of CHF 133.0 million
in the period under review (H1 2017: CHF 114.1 million), which
corresponds to an increase of 16.1% in local currencies and 16.6%
in Swiss francs. The segment posted continued strong growth from
existing instrument platforms and the consumables business.
Operating profit in this segment (earnings before
interest and taxes; EBIT) rose by 32.2% to CHF 25.6 million
(H1 2017: CHF 19.3 million). This positive performance is
primarily a result of sales growth as well as further efficiency
gains. The operating profit margin improved by 230 basis points to
19.1% of sales (H1 2017: 16.8%).
Additional information
Regional
development
In Europe, Tecan's sales in the first six months
of 2018 increased by 19.9% in local currencies and by 24.4% in
Swiss francs, with the Partnering Business performing particularly
well in this region. The Life Sciences Business benefited from a
stronger euro, and was therefore able to post solid growth in Swiss
francs. In local currencies, sales were stable against the high
base of the prior-year period.
In North America, sales in the first six months of
2018 fell by 2.5% in local currencies and by 4.5% in Swiss francs
compared to the same period of 2017. This development was mainly
due to the high comparative basis of the prior-year period, when
Tecan posted a sales increase of 31.7% in local currencies in this
region, with both business segments contributing clear double-digit
growth.
In Asia, Tecan generated an increase in sales of
5.4% in local currencies and 10.6% in Swiss francs. Both segments
contributed to this result with good growth in all of the region's
key national markets.
Operating
performance in the first half of 2018
The Fluent Gx platform variant was launched in
various regions in the first half of 2018, after successful
registration as a Class I medical device also in the US. Fluent Gx
was developed for the automation of laboratory workflows in
regulated markets. The last remaining major market segment for
Fluent - the market for clinical diagnostics and other regulated
sub-markets - has now been developed. Its specific functionalities,
which facilitate greater process security, traceability of samples
and stricter user management, have met with a lot of interest.
Within the space of a few months, prestigious customers in clinical
diagnostics have already been acquired who will now be able to
benefit from the high level of productivity and performance offered
by the Fluent platform.
Overall R&D activities and gross expenses were
higher compared to the prior-year period, however due to customer
funding of projects and higher capitalized development costs, net
R&D expenses were reported lower. Tecan made considerable
progress with a number of development projects in the Partnering
Business in the first half of 2018. More than five projects are
currently in the development phase, the sales potential of which
ranges from single-digit to clear double-digit million amounts in
Swiss francs per year. The first market launches are expected
within the next six months.
Strong balance
sheet - high equity ratio
Tecan's equity ratio reached 71.1% as of June 30,
2018 (December 31, 2017: 68.4%). Net liquidity (cash and cash
equivalents minus bank liabilities and loans) reached
CHF 284.1 million (December 31, 2017: CHF 290.7 million).
The company's share capital was CHF 1,175,926 as at the
reporting date of June 30, 2018 (December 31, 2017:
CHF 1,166,487), consisting of 11,759,259 registered shares
with a nominal value of CHF 0.10.
At the Tecan Group Annual General Meeting on April 17, 2018,
shareholders approved an increase in the dividend from
CHF 1.75 to CHF 2.00 per share. The payout of dividends
totaling CHF 23.5 million took place on April 23, 2018.
Acquisition of
NuGEN Technologies
In a separate press release, Tecan announced today
the acquisition of US-based NuGEN, Inc. NuGEN is a leading provider
for innovative next-generation sequencing (NGS) sample preparation
solutions, the fastest growing field within the genomics area.
Through this acquisition, Tecan expands its dedicated solutions
offering into the new market segment of NGS reagents, accelerating
its broad genomics strategy and further increasing recurring
revenues.
Organic outlook for full-year
2018 confirmed (excluding acquisitions after the end of the first
half of 2018)
On the basis of an unchanged scope of consolidation compared to the
first half of the year, Tecan continues to expect organic sales
growth for full-year 2018 in the mid-single-digit percentage range
in local currencies. After the significant margin increase in 2017,
partly on the back of non-recurring positive effects, Tecan
anticipates that the EBITDA margin will continue to exceed 19% of
sales in 2018.
These expectations regarding profitability
(excluding NuGEN and any additional acquisitions) include
integration costs for already completed acquisitions in a low
single-digit million Swiss franc amount. They are based on an
average exchange rate forecast for full-year 2018 of one euro
equaling CHF 1.15 (2017: 1.07) and one US dollar equaling
CHF 0.96 (2017: 0.99).
The impact of the NuGEN acquisition on Tecan's
2018 financial results depends on the exact timing of the closing
of the transaction. Currently, the closing of the transaction is
anticipated within the coming weeks. The acquisition could generate
additional sales in a low single-digit million Swiss franc amount.
Initial integration costs in a low single-digit million Swiss franc
amount together with reduced margins associated with the
acquisition are expected to lower the communicated Group EBITDA
margin outlook by around 50 to 75 basis points.
Financial Report and
Webcast
The full 2018 Interim 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 a conference call to
discuss the results in the first half of 2018 today at
10:00 a.m. (CEST). 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 2017
Annual Report will be published on March 14, 2019.
- The Annual
General Meeting of Tecan's shareholders will take place in Zurich
on April 16, 2019.
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 automation 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. In 2017, Tecan generated sales of
CHF 548 million (USD 560 million;
EUR 494 million). Registered shares of Tecan Group are
traded on the SIX Swiss Exchange (TECN; ISIN CH0012100191).
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