Tecan Group Ltd. Full year 2011: Tecan records double-digit sales growth in local currencies and solid profitability

The operating profit margin reached 13.6% of sales (2010: 15.1%), despite the fact that Tecan increased its research and development spending by 2.4% of sales and recorded additional negative currency effects of 2.3% of sales. At constant exchange rates, the operating profit margin was above the prior-year level at 15.9%. Tecan posted an operating profit (EBIT) in 2011 of CHF 51.3 million (2010: CHF 56.0 million). Net profit from continuing operations amounted to CHF 44.9 million (2010: CHF 46.9 million), while the net profit margin amounted to 11.9% of sales (2010: 12.7%). Earnings per share from continuing operations were CHF 4.18 (2010: CHF 4.50). Additional earnings from a discontinued operation brought net profits for the reporting period up to CHF 47.6 million (2010: CHF 16.2 million) and earnings per share to CHF 4.42 (2010: CHF 1.55). Due to the pre-financing of a major OEM development project, cash flow from operating activities fell compared with the previous year and amounted to CHF 45.1 million (2010: CHF 62.5 million).

Gérard Vaillant, acting CEO of Tecan, commented: "We are delighted about the strong, broad-based growth achieved by our company in local currencies in 2011. In 2011, we elaborated the strategic focus for the future activities of our Life Sciences Business in order to pave the way toward sustained sales growth above the market average in the coming years. In Partnering Business too, we succeeded in further increasing sales despite a high baseline, and we also concluded two new development and supply agreements. Despite increased research and development spending coupled with some significant negative currency effects, we reported solid profitability during the reporting period."

"We set the course for the future development of our business in the year under review. These decisions are laying the foundation for the next phase of Tecan's development. We do, however, face some operational challenges which we are tackling energetically. Innovation is a decisive success factor for achieving sustainable, profitable growth. In the development of two major projects though, we are behind the schedule and face substantial additional costs. We therefore anticipate increased investment in research and development in the coming years as well, which will have a temporary negative impact on the sales and earnings development. We are convinced that the new management and the measures undertaken will allow us to complete the projects successfully and will enable us to benefit considerably from the market success of these products. Tecan continues to be well on its way to a successful future. Thanks to the enduring positive business outlook, the Board of Directors proposes a substantial increase in the distribution to the shareholders for 2011," Vaillant continued.

Regional development and additional information
In Europe, sales in Swiss francs increased by 1.4%, continuing to be negatively impacted by the exchange rate movements of the euro versus the Swiss franc. The average rate of the euro fell by 10.9% against the Swiss franc during the reporting period. In Europe, sales in local currencies increased by 7.4% compared with the previous year. This increase is primarily due to significant improvements in Life Sciences Business (end-customer business), coupled with solid demand in the Partnering Business (OEM business). In North America, Tecan achieved sales growth of 4.3% in Swiss francs. This key performance figure was also negatively impacted by the exchange rate development of the US dollar versus the Swiss franc. Compared with the previous year, the average rate of the US dollar fell by 14.4% against the Swiss franc in 2011. In local currencies, sales in North America rose by 19.6%. Life Sciences Business (end-customer business) and Partnering Business (OEM business) contributed with roughly the same rate to the strong growth in North America.

Sales in Asia came in at 2.7% and 12.4% above the prior-year's levels in Swiss francs and local currencies, respectively. Tecan recorded clear double-digit growth in China, while sales in Japan, sales rose slightly compared with the previous year.

Total recurring sales of services and consumables increased by 10.6% in local currency terms, and accounted for 30.0% of total sales (2010: 30.6%). As part of this figure, sales of consumables in local currencies grew by 17.0% compared with the previous year, to a share of 8.0% of total sales (2010: 7.6%).

Tecan increased its research and development spending in 2011 from 10.1% to 12.5% of sales, or CHF 47.0 million (2010: CHF 37.4 million). All told, research and development activities amounted to CHF 90.6 million gross (2010: CHF 53.9 million). These figures also include the development costs capitalized in the balance sheet (CHF 3.3 million gross) and development costs for OEM partners (CHF 42.3 million). As previously announced, Tecan is stepping up its investment in research and development for a limited period. Tecan is now also looking at increased research and development spending of around 12% in 2013 and 2014 (so far 10%), as development of the next generation of liquid handling platforms will require more time and investments than originally planned.

Contact
Tecan Group Ltd. Seestrasse 103 8708 Männedorf Tel. 044 922 88 88 Fax 044 922 88 89 info@tecan.com

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