OREANDA-NEWS. The Tecan Group (SIX Swiss Exchange: TECN) closed the first half of 2015 with double-digit sales growth and record net profit.

Tecan CEO David Martyr commented: "I am pleased with Tecan's performance in the first half of 2015, especially with the high growth rate in our Partnering Business. The launch of major new products in both business segments and the successful integration of IBL International, which we acquired last year, both contributed to the company's strong growth. I am particularly pleased with the strong expansion in profitability. Our results from the first half of the year set a new company record for net profit, earnings per share, and cash flow from operating activities.

We can look back on a successful first half of the year, not just financially but also as regards the market. We launched important products in two main product lines: the second application-specific Fluent(TM) solution in liquid handling as well as the next-generation reader platform Spark(TM) 10M. Feedback from customers has been very positive for both instruments, and we have already received follow-up orders for Fluent. We have also reached the first anniversary of the acquisition of IBL International. We are pleased by the smooth integration and the successful development of the business, which has managed to exceed our expectations. The level of collaboration with our new colleagues is also very encouraging."

Financial results for the first half of 2015

Order entry increased by 14.6% in local currencies to CHF 220.1 million (H1 2014: CHF 196.6 million) in the first six months of the year, corresponding to growth of 11.9% in Swiss francs. Excluding acquisitions, order entry rose by 9.4% in local currencies and by 6.9% in Swiss francs. Due to the strong order entry figures, the Group recorded a double-digit percentage increase in the order backlog at the end of the reporting period.

Sales climbed by 18.9% in local currencies or 16.2% in Swiss francs to CHF 200.0 million in the first half of the year (H1 2014: CHF 172.0 million). Excluding the IBL International business, which was consolidated on August 1, 2014, Tecan grew by 13.0% in local currencies or 10.5% in Swiss francs.

Operating profit before depreciation and amortization (earnings before interest, taxes, depreciation and amortization; EBITDA) rose by 21.4% to CHF 32.6 million in the first six months of the year (H1 2014: CHF 26.8 million). The EBITDA margin improved by 70 basis points to 16.3% of sales (H1 2014: 15.6%).

Tecan increased net profit for the first half of 2015 by 39.7% to CHF 26.0 million - thus setting a new company record (H1 2014: CHF 18.6 million). The net profit margin improved by 220 basis points to 13.0% of sales (H1 2014: 10.8%). Earnings per share increased by 37.5% to CHF 2.31 (H1 2014: CHF 1.68).
In addition to the positive effect from higher sales volumes, net profit development also benefited from the improved financial result attributable to currency hedging measures, given the weakness of the US dollar against the Swiss franc since the end of 2014. Exchange rate movements versus the euro were not hedged, as costs incurred in euro exceeded sales generated in the same currency. The discontinuation of the exchange rate floor and the resulting depreciation of the euro therefore did not have an impact on the net profit margin.

Cash flow from operating activities more than doubled to CHF 35.1 million (H1 2014: CHF 16.2 million), representing 17.6% of sales.

Information by business segments

Life Sciences Business (end-customer business)
Sales in the Life Sciences Business segment increased by 10.7% in local currencies to CHF 107.5 million (H1 2014: CHF 100.9 million) in the first half of the year and were 6.6% above those of the prior-year period in Swiss francs. Excluding IBL International, which has been part of the Life Sciences Business since August 1, 2014, sales in local currencies grew by 0.5% compared to the high base of the prior-year period. In Swiss francs, segment sales were 3.3% below the prior-year level, being negatively impacted by the exchange rate movements of the euro versus the Swiss franc. Order entry in the Life Sciences Business grew overall and organically and clearly exceeded sales in the first half of the year. New product launches contributed considerably to this growth.

The segment's operating profit was CHF 11.3 million (H1 2014: CHF 14.8 million), corresponding to an operating profit margin of 9.8% of sales (H1 2014: 14.0%). The decline versus the first half of 2014 was largely due to higher costs and investments during the launch phase of the new instruments as well as the accounting of acquisition-related costs.

Partnering Business (OEM business)
The Partnering Business segment generated sales of CHF 92.4 million during the period under review (H1 2014: CHF 71.1 million), which corresponds to an increase of 30.2% in local currencies or 30.0% in Swiss francs. Instruments launched in the past two years made a significant contribution to the strong sales growth. Sales with existing large corporate customers also performed well following a weak prior-year period. Order entry in the Partnering Business also grew at a double-digit percentage rate in the first half of 2015.

The segment's operating profit in the first six months of 2015 rose to CHF 17.4 million (H1 2014: CHF 11.3 million). The operating profit margin grew to 18.6% of sales (H1 2014: 15.5%). The impact of lower margins on profitability from some newly introduced instruments, which are normal during launch phase, was more than outweighed by higher sales volumes.

About Tecan

Tecan 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. In 2014, Tecan generated sales of CHF 400 million (USD 437 million; EUR 331 million). Registered shares of Tecan Group are traded on the SIX Swiss Exchange (TECN; ISIN CH0012100191).