Tecan Group (TECN) H1 2024 earnings summary

Executive summary

• Sales for H1 2024 declined 11.6% in local currencies (13.7% in CHF) to CHF 467.2 million, mainly due to biopharma and China market weakness.

• Adjusted net profit was CHF 36.5 million, with adjusted EPS of CHF 2.86 and adjusted EBITDA of CHF 67.9 million (14.5% margin).

• Book-to-bill ratio improved above one in both segments, with order entry growth in Q2 2024.

• Strategic progress included new product launches in genomics, proteomics, and cell biology, expanded global presence, and sustainability initiatives.

• Workforce reduced by over 100 FTEs, mainly in the U.S., as part of cost-saving measures.

Financial highlights

• Order entry for H1 2024 was CHF 472.2 million, down 12% year-over-year.

• Sales in Life Sciences fell 18% in CHF (15.5% in LC) to CHF 187.5 million; Partnering Business sales dropped 10.6% in CHF (8.8% in LC) to CHF 279.6 million.

• Gross profit was CHF 160.8 million, down CHF 43.8 million from prior year, with gross margin at 34.4%.

• Operating expenses decreased by CHF 5.3 million to CHF 137.8 million (29.5% of sales).

• Cash flow from operating activities was CHF 43.4 million; net liquidity at CHF 87.6 million as of June 30, 2024.

Outlook and guidance

• Full-year 2024 sales guidance revised from low single-digit growth to flat or a mid-single-digit percentage decline in local currencies.

• Adjusted EBITDA margin outlook set at 18–20%, depending on sales volume.

• Market normalization and recovery expected to begin in 2025, with mid- to high-single-digit organic growth targeted midterm.

• Major new product launches planned for October 2024, with revenue impact expected in 2025.

• China stimulus expected to impact only from 2025.