Tecan's Financial Performance in H1 2024
Tecan reported financial results for the first half of 2024, reflecting a challenging market environment. Sales dropped to CHF 467.2 million, a decline of 13.7% in Swiss francs. This decrease is primarily due to reduced demand in biopharmaceutical instruments and market weakness in China. The company is seeing a return to pre-pandemic seasonality, expecting stronger sales in the second half of the year.
Profitability and Earnings
The company's Adjusted EBITDA fell to CHF 67.9 million, with a margin of 14.5%, down from 18.7% in H1 2023. This reduction is mainly due to lower sales volumes. Similarly, Adjusted net profit and earnings per share also saw declines, reaching CHF 36.5 million and CHF 2.86, respectively.
Market Segment Performance
Life Sciences Business
Sales plummeted by 18% in Swiss francs, largely due to decreasing instrument sales to biopharmaceutical companies in Europe, North America, and China. However, consumables sales stabilized, maintaining a high level of service business. The recurring sales of services and reagents grew to 59.4% of the segment's sales.
Partnering Business
The Partnering Business saw a 10.6% decline in sales in Swiss francs. Despite stable in-vitro diagnostics outside China, Cavro OEM components faced reductions due to inventory cuts. The Paramit product line sustained its high sales level from the previous year.
Strategic Initiatives and Operational Highlights
Tecan is making strides in innovation, launching new products such as the Phase Separator for genomics and Resolvex i300 for proteomics. Sustainability efforts are advancing, with a Climate Scenarios risk analysis completed. Tecan has also scaled its global operations, setting up a direct sales office in South Korea and successfully passing an FDA inspection in Malaysia.
Revised Outlook for Full-Year 2024
Due to persistent weak demand and slow market recovery, Tecan has revised its full-year outlook. Sales are expected to range from the prior-year level to a mid-single-digit decline. Despite these challenges, Tecan aims to return to mid to high single-digit growth rates by 2025, leveraging its strong financial position for strategic expansions through mergers and acquisitions.
CEO Dr. Achim von Leoprechting remains optimistic about overcoming temporary market weaknesses, highlighting the company's robust trends and innovative capabilities.
