Ad hoc announcement pursuant to Article 53 of the SIX Exchange Regulation Listing Rules
Tecan reports financial results for the first half of 2024and revises its outlook for full year 2024
Financial results for the first half of 2024 – Highlights
Adjusted EBITDA of CHF 67.9 million (H1 2023: CHF 101.2 million)
Adjusted net profit of CHF 36.5 million (H1 2023: CHF 65.8 million)
Full-year outlook revised to reflect persistent weak demand and slower market recovery
Operating highlights in the first half of 2024
Significant strides in launching and successfully commercializing new products targeting the key application areas of genomics, proteomics, and cell biology
Partnering Business with robust project activity and product launches across all three business lines: Synergence, Cavro and Paramit
Männedorf, Switzerland, August 13, 2024 – The Tecan Group (SIX Swiss Exchange: TECN) today announced its financial results for the first half of 2024 and revised its outlook for full year 2024.
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Tecan CEO Dr. Achim von Leoprechting commented: «In the first half of the year, we faced a challenging market environment characterized by reduced spending in the biopharma sector, which led to softness especially in our instrument business. Additionally, the end markets in life science research have faced broad but, in our view, temporary challenges. We have also experienced general market weakness in China, which has affected our direct sales into the region as well as our indirect business exposure through global OEM customers. Despite good demand for newly launched products, particularly in the field of clinical diagnostics, we were unable to fully compensate for the decline in academic, government and biopharma customers. We now anticipate that the weaker demand in those segments will persist longer than originally expected, while the new China stimulus program is likely to have a meaningful impact only from 2025. As a result, we have revised our outlook for the full year 2024. In response to these developments, we have defined and already implemented rigorous cost management and cost-saving measures in line with the sales development. However, we view these market weaknesses as temporary effects. Tecan remains in a strong position, supported by robust underlying trends that are driving increased demand for laboratory automation and scaled healthcare solutions. In addition, Tecan is further expanding its leading position through the continuous launch of innovative products and new partnerships. Therefore, we are confident that we will return to our mid-term growth rate of mid-single to high-single digits once the market has normalized, potentially as early as 2025. We are also continuing to focus on leveraging our strong financial position for further inorganic strategic expansion through M&A.»
Financial results for the first half of 2024
Order entry for the first six months of the year was CHF 472.2 million (H1 2023: CHF 536.6 million), down 12.0% year-on-year, or 9.9% in local currencies. Order entry improved sequentially in the second quarter. As a result, orders exceeded sales in the first half of the year and the book-to-bill ratio returned to a level of above 1.
In a weak market environment, reported sales in the first half of 2024 decreased by 13.7% in Swiss francs and 11.6% in local currencies to CHF 467.2 million (H1 2023: CHF 541.5 million or CHF 528.5 million when compared in local currencies). The decline in sales was mainly due to softness in the instrument business with biopharmaceutical companies globally in the Life Sciences Business (sales declining >25% and contributing with over 1/3 of the total sales decline) and a general market weakness in China affecting both business segments (sales declining >20% and contributing with over 1/4 of the total sales decline). In addition, and as anticipated, Tecan did not record any further sales from the pure pass-through of material costs in the first half of 2024 (H1 2023: CHF 7.0 million). Consumables sales in the Life Sciences Business stabilized with only a slight decline compared to the previous year. In the Partnering Business, on the other hand, there were further destocking effects for consumables, spare parts and Cavro components. By contrast, the service business in the Life Sciences Business remained stable at a high level. Sales of the Paramit product line in the Partnering Business also remained at the high level of the prior-year period.
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Adjusted operating profit before depreciation and amortization (earnings before interest, taxes, depreciation and amortization; EBITDA) decreased to CHF 67.9 million (H1 2023: CHF 101.2 million). As profitability is highly dependent on volume, the decline in profit is almost exclusively due to lower sales volumes. Accordingly, the adjusted EBITDA margin amounted to 14.5% of sales (H1 2023: 18.7%), including a negative effect from foreign exchange rates of around 50 basis points.
Adjusted net profit1 amounted to CHF 36.5 million (H1 2023: CHF 65.8 million), while adjusted earnings per share1 reached CHF 2.86 (H1 2023: CHF 5.16).
Cash flow from operating activities amounted to CHF 43.4 million in the first half of 2024 (H1 2023: CHF 82.5 million). Tecan’s net liquidity position (cash and cash equivalents plus short-term time deposits less bank liabilities, loans and the outstanding bond) increased to CHF 87.6 million (June 30, 2023: CHF 61.7 million, December 31, 2023: CHF 112.6 million).
Information by business segment
Life Sciences Business (end-customer business) Sales in the Life Sciences Business reached CHF 187.5 million (H1 2023: CHF 228.6 million or CHF 221.8 million in local currencies), a decrease of 18.0% in Swiss francs or 15.5% in local currencies compared to the first half of 2023. Almost three quarters of the decline in segment sales is attributable to fewer instrument sales with biopharmaceutical companies in Europe and North America as well as the market weakness in China. Regional sales in China also provided a high basis for comparison, as segment sales there rose by around 10% in the same period of the previous year. Consumables sales in the Life Sciences Business stabilized with only a slight decline compared to the previous year and the service business remained stable at a high level. As a result, recurring sales of services, consumables and reagents increased to 59.4% of segment sales (H1 2023: 51.5%). Order development in the Life Sciences Business improved sequentially in the second quarter compared to the previous quarter, resulting in a book-to-bill ratio of above 1 in the first half of 2024.
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Reported operating profit in this segment (earnings before interest and taxes; EBIT) reached CHF 12.6 million (H1 2023: CHF 40.3 million). The operating profit margin amounted to 6.6% of sales (H1 2023: 17.2%), which is primarily due to the lower sales volume and the resulting underabsorption of fixed costs in the first half of the year.
Partnering Business (OEM business) The Partnering Business generated sales of CHF 279.6 million in the period under review (H1 2023: CHF 312.9 million or CHF 306.6 million in local currencies), representing a decrease of 10.6% in Swiss francs and 8.8% in local currencies. No additional sales from the pure pass-through of material costs were recorded in the first half of 2024 (H1 2023: CHF 7.0 million). Sales of in-vitro diagnostics systems in the Synergence™ product line remained stable overall outside of China, with many customer accounts showing growth. However, market weakness in China impacted both direct sales and global OEM customers for these systems, leading to a moderate overall decline. Cavro® OEM components saw a more substantial decline as customers in the life science and diagnostics sectors reduced their inventories more slowly due to weaker end markets. Sales in the Paramit product line, which primarily serves the medical market, were nearly at the high level of the prior year when adjusted for the pass-through revenues of material costs. New orders in the Partnering Business were approximately equal to sales, resulting in a book-to-bill ratio of 1.
Reported operating profit in this segment (earnings before interest and taxes; EBIT) amounted to CHF 22.5 million (H1 2023: CHF 30.8 million), while the operating profit margin reached 8.0% of sales (H1 2023: 9.8%). Similar to the Life Sciences Business segment, lower sales volumes and the resulting negative economies of scale were the main factors affecting margin development.
Operating highlights for the first half of 2024
Innovation and product launches in key application areas
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Tecan made significant strides in launching and successfully commercializing new products targeting the key application areas of genomics, proteomics, cell biology, and medical mechatronics.
Genomics: The Phase Separator™, an innovative new pipetting capability available on the Fluent® Automation Workstation since last year, continued to gain traction with both existing accounts and new customers. This technology represents a significant advance in liquid-separation, crucial for fast-growing workflows like cell-free DNA sequencing in Liquid Biopsy applications.
Proteomics: In February 2024, Tecan launched the Resolvex i300, which quickly garnered substantial market interest. The Resolvex i300 is a state-of-the-art module that can be integrated into the Fluent® automation platform or OEM developments. It automates sample preparation, cleanup, evaporation, and resuspension on a single integrated platform for both research and diagnostic workflows, being “IVD-ready” (in vitro diagnostics-ready). As proteomics applications in the life sciences market grow rapidly, and mass spectrometry remains essential to most proteomics analyses, the demand for faster throughput is expected to rise dramatically. The i300 addresses these evolving customer needs.
Cell Biology: Tecan launched the Spark Cyto 3D, enabling the analysis of complex 3D cell models, such as spheroids, organoids, and organ-on-a-chip systems. Spark Cyto 3D allows customers to culture samples in a 3D matrix, better mimicking human body conditions. Utilizing a new AI algorithm-based analysis tool, key parameters of cells growing in three dimensions can be tracked in real-time. For instance, a mini 3D representation of cancer cultivated from a patient’s cancer cells can guide clinicians to the most effective drugs and treatment combinations.
Progress in Partnering Businesswith robust project activity
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In the Partnering Business, progress continued in the first half of 2024 with robust project activity across all three business lines: Synergence, Cavro, and Paramit.
Synergence: Significant progress has been made with recently acquired projects to develop full OEM systems, with initial deliveries to new customers accelerating.
Cavro: The business with standard or customized liquid handling OEM components saw a strong development pipeline for new projects. The product roadmap lays a solid foundation for sustainable growth, positioning Cavro as a technology leader in the components space.
Paramit: The contract development and manufacturing offering saw good progress in the pipeline for new technology development and manufacturing projects. This progress reflects the dynamic period of healthcare innovation currently underway. Several new projects were secured due to synergies with the other two business lines.
Scaling of global operations and commercial channel
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Tecan’s global presence expanded in the first half of 2024 with the establishment of a direct sales office in South Korea. This new entity was formed following the acquisition of a long-standing distributor in the region and now includes colleagues who have worked with Tecan through this distributor relationship for over 20 years. These colleagues bring valuable local market knowledge that complements our existing businesses in the region, enabling Tecan to serve this growing market more effectively. Tecan anticipates that South Korea will benefit from increased investments in the life science research and broader healthcare market in the future.
Tecan successfully passed an extensive FDA inspection at its facility in Penang, Malaysia, underscoring the strength of Tecan’s operational processes and sound business management practices. The audit provides an excellent foundation for future production of medical devices, including class 3 medical devices, paving the way for substantial growth.
Further Building on Sustainability Activities
Tecan’s 2023 Sustainability Report was published as part of the Annual Report 2023 in March. At Tecan’s AGM in April 2024, the Sustainability Report was put to a shareholder vote for the first time and received almost 100% approval.
Tecan’s climate scenarios risk analysis was completed in the first half of the year, paving the way for full TCFD (Task Force on Climate-related Financial Disclosures) reporting later in 2024. TCFD is a framework that provides recommendations for companies to disclose information on their climate-related financial risks and opportunities, helping investors make better-informed decisions.
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Outlook for full-year 2024
Based on the financial results from the first half of the year, Tecan has revised its full-year outlook. This revision is also due to the anticipation that weaker demand, driven by general market weakness, will persist longer than originally expected, while the new China stimulus program is likely to have a meaningful impact only from 2025. Consequently, Tecan now expects full-year 2024 sales in local currencies to range from on prior-year level to a decrease in the mid single-digit percentage range (previously expected to increase in the low single-digit percentage range in local currencies).
In light of the lower sales volumes, Tecan has adjusted its profitability outlook and has defined and already implemented rigorous cost management and cost-saving measures to mitigate volume-related margin pressures. The company now expects an adjusted EBITDA margin, excluding acquisition- and integration-related costs, of 18-20% of sales (previously at least around 20% of sales).
The company views these market weaknesses as temporary effects. Tecan remains in a strong position, supported by robust underlying megatrends that are driving increased demand for healthcare solutions. In addition, Tecan is further expanding its leading position through the continuous launch of innovative products and new partnerships. Therefore, Tecan reiterated its mid-term outlook, expecting to continue outperforming the average growth rate of the underlying end markets. Tecan anticipates returning to average organic growth rates in the mid to high single-digit percentage range in local currencies, while continuously improving profitability. Tecan is also continuing to focus on leveraging the company’s strong financial position for further inorganic strategic expansion through M&A.
The outlook 2024 does not take account of potential acquisitions during the course of the year.
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The expectations regarding profitability are based on an average exchange rate forecast for full year 2024 of one euro equaling CHF 0.95 and one US dollar equaling CHF 0.85.
Financial Report and Webcast
The full 2024 Interim Report can be accessed on the company’s website www.tecan.com under Investor Relations.
Tecan will hold an analyst and media conference to discuss the results in the first half of 2024 today at 08:30 (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
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Participants should if possible dial in 15 minutes before the start of the event.
Key upcoming dates
A Capital Markets Day will be hosted on October 22, 2024
The 2024 Annual Report will be published on March 12, 2025
The Annual General Meeting of Tecan’s shareholders will take place on April 10, 2025
1 The calculation of adjusted net profit and adjusted earnings per share excludes acquisition and integration costs (+CHF 8.0 million) as well as the accumulated amortization of acquired intangible assets (+CHF 9.7 million) and they were calculated with the reported Group tax rate of 20.5%.
About Tecan Tecan (www.tecan.com) improves people’s lives and health by empowering customers to scale healthcare innovation globally from life science to the clinic. Tecan is a pioneer and global leader in laboratory automation. As an original equipment manufacturer (OEM), Tecan is also a leader in developing and manufacturing OEM instruments, components and medical devices that are then distributed by partner companies. Founded in Switzerland in 1980, the company has more than 3,500 employees, with manufacturing, research and development sites in Europe, North America and Asia, and maintains a sales and service network in over 70 countries. In 2022, Tecan generated sales of CHF 1,144 million (USD 1,192 million; EUR 1,144 million). Registered shares of Tecan Group are traded on the SIX Swiss Exchange (TECN; ISIN CH0012100191).
For further information:
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Tecan Group Martin Brändle Senior Vice President, Corporate Communications & IR Tel. +41 (0) 44 922 84 30 Fax +41 (0) 44 922 88 89 investor@tecan.com www.tecan.com
Major issues to watch in the 2026 Oregon legislative session
Oregon lawmakers will convene beginning on Feb. 2 in a short legislative session. Here are the major issues they will focus on.
Legislators passed a bill March 5 to modify forthcoming changes to Oregon’s campaign finance system despite outcry from good government groups who say the bill creates new loopholes.
Those groups were key in creating House Bill 4024, which was created and passed in 2024 in place of warring ballot measures seeking to overhaul the system.
That legislation included new limits on contributions, including capping individual spending on statewide candidates each cycle at $3,300, and other changes. Parts of the bill were set to go into effect in 2027 and 2028.
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Under the new proposal, House Bill 4018, the limits would still begin in 2027, but disclosure requirements and penalties would be pushed to 2031. It also gives the Secretary of State money to update the campaign finance system, but far less than the office previously thought it might need.
Representatives voted 39-19 to pass the bill. A few hours later, the Senate passed it 20-9.
Fourteen of the “no” votes in the House were Democrats, including Reps. Tom Andersen, D-Salem, and Lesly Muñoz, D-Woodburn.
Muñoz told the Statesman Journal she voted against the bill after hearing from people upset with the bill’s process.
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Six Democratic senators cast a “no” vote on HB 4018.
Oregon campaign finance reform advocates say they were left out of negotiations
After working together in 2024, advocates said Speaker of the House Julie Fahey, D-Eugene, “ghosted” them.
Good government groups said the bill does far more than address necessary technical fixes to HB 4024.
HB 4018 is “a complete betrayal of the deal that was made two years ago,” Norman Turrill of Oregon’s League of Women Voters said.
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Should the bill be signed by Gov. Tina Kotek, the groups said they will push their own changes through a 2028 ballot initiative.
Those advocates have outlined at least 11 different changes they believe the bill creates. The bill’s contents were first shared through a Feb. 9 amendment that was posted after 5 p.m., hours before it received a public hearing in an 8 a.m. work session on Feb. 10 and later, Feb. 12.
Secretary of State Tobias Read told legislators in January his office was requesting $25 million as a placeholder to fund a new campaign finance system for the state. Read was not secretary of state when House Bill 2024 was passed and his office is now working to implement the bill’s changes on a fast approaching deadline.
An additional amendment to the bill instead gives the Secretary of State’s Office $1.5 million for staff, some of whom would be tasked with updating the state’s current system.
House members agreed March 4 to send the bill back to committee, presumably to be amended. A 5 p.m. committee meeting was canceled about an hour after initially being announced.
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A work session on HB 4018 was moved to the next morning. After an hour of delay, legislators convened and finished the meeting, moving the bill back to the floor without any changes, in less than three minutes.
A new campaign finance bill, Senate Bill 1502, was introduced and scheduled for a public hearing and work session March 4.
The bill is “very simple,” Senate Minority Leader Bruce Starr, R-Dundee, said. It tells the Secretary of State’s Office to draft a bill for the 2027 session with necessary campaign finance improvements from HB 4024 and HB 4018.
Three senators voted against the bill March 5. It now moves to the House. Legislators have a March 8 deadline to end the session.
“SB 1502 would not correct the severe damage to campaign finance reform that will occur, if HB 4018 B is enacted in this session,” Dan Meek of Honest Elections Oregon wrote in submitted testimony.
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Lawmakers appear unsatisfied, but supportive, toward Oregon campaign finance bill
House Majority Leader Ben Bowman, D-Tigard, said HB 4018 made positive changes but acknowledged it was “a challenging vote for many of us.”
“We are implementing this whole new system that is new for all of us, and there are a lot of opinions and there are a lot of details to figure out,” House Minority Leader Lucetta Elmer, R-McMinnville, said. Elmer and Bowman carried the bill in the House. “With that being said, we’re moving forward in good faith, knowing that we’ll also be coming back next year to make sure that those details and all those kinks are worked out.”
Rep. Mark Gamba, D-Milwaukie, said he was concerned about the bill and the “non-inclusive process” that led to it.
Gamba pointed to a letter from the Washington, D.C.-based Campaign Legal Center that states in part that the bill “would substantially revise critical campaign finance reforms enacted two years ago in Oregon” and weaken the state’s campaign finance law.
The current bill is not the only possibility for moving forward, Sen. Jeff Golden, D-Ashland, told lawmakers. Proposed amendments that would have extended implementation timelines without the additional changes were ignored, he said.
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“House Bill 4024 and this bill, 4018, have two things in common. One, they were thrown together in a few days behind closed doors, mostly by organizations who dominate campaign funding in the current system,” Golden said. “And two, very few legislators understand what is actually in these bills.”
He urged lawmakers to abandon the system created in House Bill 4024 as an “uncomfortably expensive learning experience” and develop a new plan based on successful programs in other states.
Sen. Sara Gelser Blouin, D-Corvallis, also spoke against the bill on the Senate floor.
“The concern that I had and that my constituents had was technical changes are one thing, but it should not be increasing the amount of money that candidates can take in or hold or carry over,” Gelser Blouin said. “Unfortunately, as it’s drafted, this bill does all of those things.”
HB 4024 is too complicated and “unimplementable” without the fixes in HB 4018, Starr said.
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Sen. Lew Frederick, D-Portland, agreed, saying HB 4018 and SB 1502 give reassurance about a system he has concerns about.
“If there were no cameras and the lights were off, I think most people would agree this is not the bill we want,” Rep. Paul Evans, D-Monmouth, said.
Some lawmakers expressed similar feelings of discontentment with the bill in Ways and Means and one of its subcommittees on March 3, but said they felt it was important to make some progress on the issue. Discussions could happen again in 2027, they said.
Rep. Nancy Nathanson, D-Eugene, who ultimately voted in favor of the bill, said March 3 supporting it “is a very painful choice to make.”
Statesman Journal reporter Dianne Lugo contributed to this report.
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Anastasia Mason covers state government for the Statesman Journal. Reach her at acmason@statesmanjournal.com or 971-208-5615.
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Last year, Paramount said it would use $24 billion in funding from Saudi Arabia, Abu Dhabi, and Qatar to help buy WBD.
Now that Paramount has won that deal, it won’t say whether that’s still the plan.
A key Paramount backer suggests that Gulf money would be a good thing for this deal.
We still don’t know if Paramount intends to use billions of dollars from Gulf states like Saudi Arabia to help it buy Warner Bros. Discovery.
But if Paramount does end up doing that, it wouldn’t be a bad thing, says a key Paramount backer.
That update comes via Gerry Cardinale, who heads up RedBird Capital Partners, the private equity company that helped finance Larry and David Ellison’s acquisition of Paramount last year and is doing the same with their WBD deal now.
In a podcast with Puck’s Matt Belloni published Wednesday night, Cardinale wouldn’t comment directly on Paramount’s previously disclosed plans to use $24 billion from sovereign wealth funds controlled by Saudi Arabia, Abu Dhabi, and Qatar to help buy WBD.
Instead, he reiterated Paramount’s current messaging on the deal’s financing: The $47 billion in equity Paramount will use to buy WBD will be “backstopped” by the Ellison family and RedBird — meaning they are ultimately on the hook to pay up. The rest of the $81 billion deal will be financed with debt.
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Cardinale also acknowledged what Paramount has disclosed in its current disclosure documents: It intends to sell portions of that $47 billion commitment to other investors: “We haven’t syndicated anything at this time,” he said. “We do expect to syndicate with strategic, domestic, and foreign investors. But at the end of the day, that alchemy shouldn’t matter because it’ll be done in the right way.”
And when asked about concerns about Middle Eastern countries owning part of a media conglomerate that includes assets like CNN, Cardinale suggested that could be a plus.
“I think we want to be a global company,” he said. “You look at what’s going on right now geopolitically. What’s going on right now geopolitically out of the Middle East wouldn’t be, the positives of that would not be happening without some of those sovereigns that you’re referring to.”
He continued:
“The world is changing. We can stick our head in the sand and pretend it’s not, or we can embrace globalization and the derivative benefits both geopolitically and otherwise that come from that. Content generation coming out of Hollywood is one of America’s greatest exports.I firmly embrace the global nature and orientation that we bring to this from a capital standpoint, from a footprint standpoint, etc. At the end of the day, I do understand some of the concerns that you’ve raised, but that will work itself out between signing and closing because at the end of the day, worst-case scenario, Ellison and RedBird are 100% of this thing.”
All of which suggests to me that Paramount still intends to use money from Gulf-based sovereign wealth funds to buy WBD.
What I don’t understand is why the company won’t say that out loud. Does that mean it’s still negotiating with potential investors? Or that it’s reticent to disclose outside investors, for whatever reason, until it has to? A Paramount rep declined to comment.
Talks on landmark crypto legislation have hit a new impasse after banks said they could not back a compromise pushed by the White House, a development that cast doubt on whether the bill will pass this year and sparked criticism from President Donald Trump who accused lenders of trying to undermine it.
