Tecan Group Ag · SIX:TECN
Tecan — Q2 2003 Earnings Presentation
40 slides from Tecan's earnings presentation, Jul 22, 2003
Slide 1: Second quarter results 2003
Second quarter results 2003 Conference call and web cast, July 22, 2003 www.tecan.com 2003.07_v9
Slide 2: Conference call – Q2 2003
Conference call – Q2 2003 Outline - 20 minutes presentation - 40 minutes Q&A Speakers - Mike Baronian, CEO - Rudolf Eugster, CFO - Jan Timmers, Head of Marketing www.tecan.com 2
Slide 3: Highlights Q2, 2003
Highlights Q2, 2003 Continuing difficult market conditions Stronger second quarter sales: YoY -2.2% but + 5.4% in l.c. Very good performance in Biopharma (+ 30.5% in l.c.) offset by weaker sales in Diagnostics (-17.7% at l.c.) Half year sales declined by 11.1% or 2.4% in l.c. Earning per share
Slide 4: Sales performance per quarter in 2002 - 2003
Sales performance per quarter in 2002 - 2003 Quarter on quarter sales 100 increased by 14.8% in 86.7 82 84.7 Q2 2003 in CHF and in 78.8 80.2 80 l.c. 69.9 60 Stronger performance in Q2, 2003 versus a weak Q1, 2003 40 Increase also reflects higher order book entry noted early May 2003 20 At end
Slide 5: Q2 sales year on year
Q2 sales year on year 120 Sales decreased by 2.2% in Swiss Francs but increased by 90.4 5.4% in local currencies 90 82.0 80.2 Comparable performance to Q2 60 2001 and 2002, taking into account the negative impact of currencies 30 Biopharma represents 59% of total sales, Diagnostics 41% - 9.3 % 3
Slide 6: Sales performance per quarter Biopharma
Sales performance per quarter Biopharma Biopharma Q2 sales increased 70 by 17.0% (30.5% in l.c.) 60 55.5 In absolute numbers one of the 48 48.8 47.6 50 best quarters since two years 40.7 41.9 40 Strong impact of currencies 30 Genomics/Proteomics: + 15%.1 or 29.9% in l.c. 20 Drug Discovery: +
Slide 7: Sales performance per quarter Diagnostics
Sales performance per quarter Diagnostics Diagnostics Q2 sales decreased by 21.2% (- 17.7% in l.c.) 41.3 40 38.6 Performance in line with the last 32.6 29.9 29.2 27.9 three quarters – slight improvement 30 over Q1 2003 In large part due to reduced sales of 20 the FE 500 workcell Base business
Slide 8: 1st half sales by location of customers
1st half sales by location of customers 100% 6% 2% 2% Different picture of the regions 8% 10% 9% in 2003 80% America: -5.0% in l.c. 37% 40% 44% 60% Europe: -0.2% in l.c. Asia: 10.6% in l.c. 40% RoW: -38.6% in l.c. 49% 50% 45% 20% Slight recovery in America 0% during the second quarter 1st
Slide 9: Financial highlights
Conference call – Q2 2003 Financial highlights - Rudolf Eugster, CFO www.tecan.com 9
Slide 10: 1st half 2003 Gross profit
1st half 2003 Gross profit Declining gross profit in 1st 120.0 semester 2003 99.4 100.0 92.7 -3.6% from 2002 to 2003 77.0 80.0 where from - 2.1% from exchange rates 60.0 - 1.5% from geo. sales mix and price pressure 40.0 20.0 54.9 % 57.0 % 51.3% 0.0 CHF m 1st sem 01 1st sem 02 1st sem 03 % Gross Pro
Slide 11: Cost structure 1st half 2003
Cost structure 1st half 2003 80 Managing and controlling 71.2 1.9 69.0 64.3 costs 3.0 17.1 2.9 16.9 17.1 Distinct reduction in G&A (excluding one off 40 23.2 18.0 payments), S&M 19.6 Continued R&D investments 29.0 31.1 24.7 0 CHF m 1st sem 01 1st sem 02 1st sem 03 Selling and marketing Research and
Slide 12: Q2 Gross profit margin
Q2 Gross profit margin Declining Gross profit margin 50.0 in Q2 40.5 40.0 36.6 -1.9% from Q1 largely due to product mix 30.0 and price pressure 20.0 10.0 50.2 % 52.4 % 0.0 CHF m Q1-03 Q2-03 % Gross Profit margin www.tecan.com 12
Slide 13: Q2 Cost structure
Q2 Cost structure 40 34.3 32.7 31.4 33.0 Excluding a one-off payment 1.5 1.4 1.3 of CHF 1.7 million stable cost 1.7 7.3 6.7 structure compared to Q1 7.5 9.5 10.3 11.1 10.0 9.6 15.2 13.5 12.2 12.5 0 CHF m Q3 02 Q4 02 Q1 03 Q2 03 Selling and marketing Research and development General and administratio
Slide 14: 1st half Operating result (EBIT)
1st half Operating result (EBIT) EBIT decreased by 46.3% to 30 28.2 CHF 12.7 million 23.7 CHF - 7.5 m. is due to exchange rates 20 CHF - 2.9 m. due to volume effect CHF - 1.5 m. higher material cost 12.7 CHF + 2.6 m. due to cost savings CHF - 1.7 m. settlement former 10 CEO 14.0 % 16.2 % 8.5 % 0 CHF
Slide 15: 1st half Net profit
1st half Net profit Net profit decreases by 39.5% 25 to CHF 9.8 million 20.7 20 CHF - 5.3 m. is due to 16.2 exchange rates CHF + 1.3 m.due to positive 15 financial result 9.8 CHF - 2.5m. due to other EBIT 10 effects CHF + 0.1m. due to tax rate 5 12.0 % 6.6 % 9.6 % 0 CHF m 1st sem 01 1st sem 02 1st s
Slide 16: Basic EPS per quarter
Basic EPS per quarter Earnings per share increased 1.00 by 10.2% over 2002 0.77 Impact of share buy-back 0.80 0.70 0.62 Increase of 30.1% excluding 0.60 0.54 special charge 0.49 0.40 0.28 0.20 0.00 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q2-03 CHF m www.tecan.com 16
Slide 17: Cash flow
Cash flow 25 Cash flow from operations of 20 CHF 18.9 million -2.9 15 10 18.9 Investments of CHF 2.9 14.9 -12.8 million compared to CHF 7.6 5 +2.2 0 million amortization & -36.5 depreciation -5 -10 Cash outflow from financing -15 mostly due to share buy- -20 back and dividend -25 CHF m 1st sem 02 1s
Slide 18: Key figures 1st half 2003
Key figures 1st half 2003 CHF m 2002 2003 ∆ 02/03 Sales 168.7 150.0 -11.1% R&D 18.0 19.6 +8.5% in % of sales 10.7% 13.0% Operating profit 23.7 12.7 -46.3% in % of sales 14.0% 8.5% Net profit 16.2 9.8 -39.5% in % of sales 9.6% 6.6% EPS 0.82 1.26 -34.9% Cash 68.7 39.3 -42.9% in % of assets 25.6% 19.0%
Slide 19: Markets
Conference call – Q2 2003 Markets - Jan Timmers, Head of Marketing www.tecan.com 19
Slide 20: Tecan customer segmentation
Tecan customer segmentation TECAN 13% 14% 29% 44% Biotech Companies Academia Pharma Companies Diagnostics Companies Serono Harvard Aventis Blood banks Amgen Oxford GSK Corporate Accounts: Millennium Yale Pfizer Abbott Etc. Etc. Roche J&J Etc. Etc. www.tecan.com 20
Slide 21: Sales segmentation: Platform and core competencies
Sales segmentation Platform and core competencies 2% 19% 20% 59% Platform and detection Customer Service OEM New solutions (LabCD, FFE, etc.) www.tecan.com 21
Slide 22: Competitive analysis
Competitive analysis Detection Platform (Liquid Handling and Robotics) Molecular Beckm an Devices Mitsubishi CRS 10% PE / Packard 14% PE / Packard 4% 2% 7% 12% Zym ark 10% Others 55% Ham ilton Therm o 4% Tecan 12% Others Tecan Gilson 7% 43% 4% 16% Tecan: No 1 in crucial core competencies allowing co
Slide 23: BioPharma
BioPharma Growth driven by proteomics applications based on platforms ADMET sales based on platforms solution Rising clinical trials sales Differentiation through customization Declining screening business www.tecan.com 23
Slide 24: Diagnostics
Diagnostics Stable sales over the last four quarters Weak Lab Logistics sales in H1 2002 Strong sales in Molecular diagnostics Business primarily driven by Corporate Accounts www.tecan.com 24
Slide 25: Serving the needs of the Life Science market
Serving the needs of the Life Science market Business based on platforms and core competencies Robotics, liquid handling and detection – Launching the Freedom EVO concept Integration of additional competencies – Software, miniaturization and integration Solution development Applications soluti
Slide 26: Scale-up the System
Scale-up the System Consistent portfolio freedom evo 200 freedom evo 150 freedom evo 100 1 platform 1 software 4 sizes (75, 100, 150, 200) Infinite configurations www.tecan.com 26
Slide 27: Basic Platform
Basic Platform www.tecan.com 27
Slide 28: Upgrade with Sample Manipulator
Upgrade with Sample Manipulatior www.tecan.com 28
Slide 29: Robotic Arms with Access below Worktable
Robotic Arms with Access below Worktable www.tecan.com 29
Slide 30: Customizable Worktable Layout
Customizeable Worktable Layout www.tecan.com 30
Slide 31: Increase of Sample Throughput
Increase of Sample Throughput www.tecan.com 31
Slide 32: Integration of Analytical Devices
Integration of Analytical Devices www.tecan.com 32
Slide 33: Third Party Device Integration
Third Party Device Integration www.tecan.com 33
Slide 34: Sample and Consumable Logistics and Storage
Sample and Consumable Logistics and Storage www.tecan.com 34
Slide 35: Infinite System Extension
Infinite System Extension www.tecan.com 35
Slide 36: R&D focus 2003
R&D focus 2003 Strengthen our core competencies Platform – IVD ; Next generation Detection Software – System integration – Customization Next wave of OEM products Consolidate portfolio Effectiveness in logistics and production – efficiency gains Expand portfolio of applications for new mar
Slide 37: Summary and Outlook
Conference call – Q2 2003 Summary and Outlook - Mike Baronian, CEO www.tecan.com 37
Slide 38: Streamlining of R&D portfolio
Streamlining of R&D portfolio Specific technologies that did not deliver the expected results will be stopped Concerns specific Proteomics technologies This project has no impact on sales Tecan Munich will closed 15-20 employees will be affected The remaining activities will be moved to othe
Slide 39: Summary
Summary Continuing low visibility Very good performance in Biopharma offset by weaker Diagnostics sales Despite stronger second quarter results, cautious outlook for 2003 Increase in earnings per share Strong impact of currency fluctuations on EBIT EPS Q2 increased by 10.2% or 30.1% excludin
Slide 40: ...it's an attitude
...it‘s an attitude www.tecan.com www.tecan.com