Financial results full-year and second half of 2024
Full-year order entry was CHF 903.6 million, a decrease of 12.1% compared to CHF 1,028.1 million in 2023, reflecting a 10.5% decline in local currencies. The Partnering Business segment was impacted by a shift in OEM customer ordering patterns, moving from larger, long-term orders in 2023 to smaller, more regular orders in 2024 as supply chain disruptions had fully normalized. Meanwhile, the Life Sciences Business segment saw moderate order entry growth in local currencies in the second half of 2024 compared to the same period in 2023. Overall, the Group's order entry in the second half decreased by 11.2% in local currencies.
In 2024, reduced spending in the biopharmaceutical industry led to decreased demand for life science research instruments, affecting both the Life Sciences Business and the Partnering Business. Additionally, a general market weakness in China impacted both direct sales and indirect business through global OEM customers. In the Partnering Business, sales were further influenced by specific customer-related factors, including normalized demand patterns following inventory replenishment by a key customer in 2023. As a result, reported sales for the Group in fiscal year 2024 decreased by 13.0% in Swiss francs, totaling CHF 934.3 million (2023: CHF 1,074.4 million). In local currencies, sales were 11.5% below the prior-year period, aligning with the revised sales outlook from October 2024, which anticipated a decline of 12-14%. Sales in the second half decreased by 12.3% in Swiss francs and by 11.3% in local currencies compared to the prior-year period. These sales results were previously communicated in a trading statement on January 8, 2025.
Adjusted EBITDA1 (operating profit before depreciation and amortization) was CHF 164.4 million, down from CHF 220.6 million in 2023. The adjusted EBITDA margin decreased to 17.6% of sales (2023: 20.5%), aligning with the revised margin outlook of 16-18%. The decline was primarily due to lower sales volumes, as profitability is highly volume-dependent. However, profitability was supported by a comprehensive cost-reduction program. Additionally, exchange rate movements in major currencies against the Swiss franc negatively impacted the margin by approximately 40 basis points.
Adjusted net profit2 was CHF 103.1 million, down from CHF 164.4 million in 2023, when earnings were significantly boosted by a one-time positive effect related to transitional measures from the Swiss tax reform. Adjusted earnings per share were CHF 8.08, compared to CHF 12.88 in 2023.
Cash flow from operating activities was CHF 148.5 million, compared to CHF 160.6 million in 2023. Cash conversion improved to 100.0% of reported EBITDA (2023: 77.5%). Thanks to solid cash flow management, 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 153.7 million as of December 31, 2024, up from CHF 112.6 million on December 31, 2023.
Information by business segment
Life Sciences Business (end-customer business)
Sales in the Life Sciences Business in 2024 reached CHF 397.0 million (2023: CHF 451.8 million or CHF 442.1 million in local currencies), reflecting a decrease of 12.1% in Swiss francs and 10.2% in local currencies. Reduced CAPEX spending by the biopharmaceutical industry globally, along with government and academic customers in the US, resulted in decreased demand for life science research instruments. Additionally, market weakness in China negatively impacted demand, as the announced stimulus program failed to provide any impetus in 2024. Instead, it prompted some customers to delay orders while awaiting funding decisions. Contributing to a more favorable sales development in the Life Sciences Business were recovering consumables sales post-pandemic, a solid service business due to a higher installed base of instruments, and continued strong demand for newly launched products, particularly from genomic diagnostics companies. Recurring sales of services, consumables and reagents increased to 57.6% of segment sales (2023: 52.8%).
In the second half of the year, sales declined by 5.0% in local currencies, following the sharp 15.5% decline in the first half. Sequentially, the Life Sciences Business segment grew by 13.6% in local currencies when comparing the second half of 2024 to the first half.
In the second half of 2024, the Life Sciences Business segment experienced moderate order entry growth in local currencies compared to the same period in 2023, resulting in a book-to-bill ratio slightly above 1 for the full year.
Reported EBIT in this segment (earnings before interest and taxes) reached CHF 39.5 million (2023: CHF 84.4 million). The reported operating profit margin decreased to 9.8% of sales (2023: 18.3%), primarily due to the negative volume effect, which resulted in missing economies of scale. Cost control measures helped alleviate the impact of lower sales volumes and adverse exchange rate effects. The adjusted EBITDA3 (operating profit before depreciation and amortization) for this segment was CHF 79.1 million, compared to CHF 105.5 million in 2023. This reflects an adjusted EBITDA margin of 19.6% of sales, compared to 22.9% in 2023.
Partnering Business (OEM business)
The Partnering Business generated sales of CHF 537.3 million in 2024 (2023: CHF 622.6 million or CHF 613.1 million in local currencies), marking a decrease of 13.7% in Swiss francs and 12.4% in local currencies. As anticipated, Tecan did not record any meaningful sales from the pass-through of material costs in this segment for 2024, compared to CHF 8.0 million in 2023.
The lower demand for life science instrumentation also had a negative impact on the Partnering Business, influencing both the Cavro® OEM components business and the contract development and manufacturing revenues for life science instruments in the Paramit product line. Market weakness in China also impacted the Cavro OEM components business and sales of in-vitro diagnostics systems in the Synergence™ product line to larger global OEM customers with significant exposure to China. However, outside China, sales of in-vitro diagnostics systems in the Synergence product line developed positively, with increased contributions from newly launched systems. Sales in the Paramit product line, which served medical market customers, were negatively affected by normalized demand patterns following the replenishment of depleted inventories in 2023, when supply chain disruptions eased, and by the anticipated reduction in sales from the pure pass-through of material costs. These impacts were specific to a single customer and included a model transition, rather than being related to end market conditions. All these factors had a more pronounced impact in the second half of the year, when segment sales decreased by 15.9% in local currencies.
Order entry in the Partnering Business for the full year decreased slightly more than sales as OEM customers adjusted their ordering patterns, shifting from larger, long-term orders in 2023 to smaller, more regular orders in 2024 as supply chain disruptions had fully normalized. Despite this shift, the book-to-bill ratio remained close to 1.
Reported EBIT amounted to CHF 46.6 million (2023: CHF 64.4 million), while the reported operating profit margin reached 8.7% of sales (2023: 10.3%). Similar to the Life Sciences Business segment, lower sales volumes and the resulting negative economies of scale were the main factors affecting margin development.
The adjusted EBITDA3 for this segment was CHF 91.1 million, compared to CHF 125.6 million in 2023. This reflects an adjusted EBITDA margin of 16.9% of sales, compared to 20.1% in 2023.
Highlights 2024
Enhancing operational resilience through cost-reduction initiatives, while expanding global operations and commercial reach
In 2024, Tecan enhanced its operational resilience by implementing a comprehensive cost-reduction program and continuing to optimize its global organizational footprint. Following the successful transfer of Cavro component production to facilities in Morgan Hill, California, and Penang, Malaysia, and the closure of the San Jose site in 2023, Tecan relocated its genomic reagents site from Redwood City to the expanding Morgan Hill hub at the end of 2024. In Penang, Tecan successfully passed an extensive FDA inspection, laying a strong foundation for future production of medical devices, including class 3 devices. The first medical device production was successfully transitioned to Penang in 2024. Alongside site consolidation, Tecan focused on supply chain optimization and increased vertical integration of manufacturing to leverage the Group's full capabilities and realize cost synergies.
On the commercial front, Tecan established a direct sales office in South Korea in 2024 by acquiring a long-standing distributor in the region. This new entity includes team members with over 20 years of experience working with Tecan, bringing valuable local market knowledge to better serve this growing market.
Innovation and product launches in the Life Sciences Business
In 2024, Tecan advanced its product portfolio with significant launches in genomics, proteomics, and cell biology. Examples include the Resolvex i300 module, introduced in February, which enhances throughput in proteomics by integrating with the Fluent® platform, and the Spark Cyto 3D, which supports drug discovery by enabling the analysis of complex 3D cell models. During a Capital Markets Day in October 2024, Tecan previewed Veya™, a multi-omics liquid handling workstation that simplifies lab automation and boosts productivity. Officially launched at the Society for Laboratory Automation and Screening (SLAS) international conference in San Diego, USA, in January 2025, Veya provides effortless automation by overcoming key barriers in lab automation.
Tecan also expanded its digital ecosystem with the new Introspect analytics platform, enhancing operational insights and service efficiency. This digital expansion benefits customers across both business segments.
New launches and rich project pipeline in Partnering Business
At the 2024 Capital Markets Day, Tecan highlighted its strong Partnering Business relationships and robust project pipeline across its three business lines: Synergence, Cavro, and Paramit. Examples include Tecan's collaboration with Illumina in the Synergence line, supporting their expansion into multi-omics with the development of a new system. Through Paramit, Tecan assisted THINK® Surgical with the design transfer and initiated the manufacturing of their TMINI® miniature robotic system, cart, and smart cell charging station. Additionally, Paramit is manufacturing the Avive Connect AED, an innovative and user-friendly automated external defibrillator aimed at improving survival rates for sudden cardiac arrest.
The pipeline of new development projects has been further enriched through joint selling of Synergence, Cavro, and Paramit services, targeting key customers in the life sciences, lab diagnostics, and Medtech segments. Tecan aims to double new project signings by 2027 through joint selling efforts, a targeted approach, and strategic account management.
Further building on sustainability activities
Tecan's 2024 Sustainability Report, published as part of the Annual Report, includes a Climate Risk Scenarios Analysis, highlighting the company's proactive approach to addressing transition and physical risks related to climate change. In preparation for the EU Corporate Sustainability Reporting Directive (CSRD), Tecan has integrated related data management into its Finance function. For the first time, Tecan's financial auditors conducted a limited assurance audit of key 2024 environmental and social data points. Further progress was made towards greenhouse gas emissions reduction commitments, with renewable sources accounting for 87% of all electricity purchased. In 2025, Tecan will continue its pragmatic approach to managing risks and opportunities associated with the company's material topics.
Proposal for a stable dividend at the Annual General Meeting
Based on the solid cash flows for the full year 2024 and on the basis of an ongoing positive business outlook, the Board of Directors will propose at the Company’s Annual General Meeting on April 18, 2024, an unchanged dividend of CHF 3.00 per share. Half of the dividend, i.e., CHF 1.50, will again be paid out from the available capital contribution reserve and is therefore not subject to withholding tax.
Outlook
The overall market environment is showing first signs of stabilization after a significant decline in demand last year, with further improvements expected over the course of 2025. However, new political uncertainties have emerged, including the announced reductions to the National Institutes of Health (NIH) research budget in the US, which could further impact demand for life science research instruments. For 2025, Tecan anticipates that the year will begin with continued softer market conditions, with potential improvement as the year progresses. Depending on the extent of this improvement in the second half, the market could turn slightly positive for the full year, driven by specific growth segments, such as the clinical diagnostics market.
Acknowledging the current market conditions, Tecan has initiated its short-term financial outlook for 2025, with a full-year guidance range from a low single-digit decline to low single-digit growth in sales in local currencies. The company expects sales in local currencies to decline in the first half, with a softer first quarter and a sequential improvement in the second quarter. A more positive outlook for the second half is supported by a strong reception of newly launched products and partnerships in both divisions, along with additional launches in 2025.
In 2024, Tecan demonstrated its commitment to agile cost management amid evolving economic conditions and revenue trends by implementing a comprehensive cost-reduction program and optimizing its global organizational footprint. These efforts are designed to protect profitability without limiting the company's growth potential. As a result, Tecan forecasts an adjusted EBITDA margin, excluding restructuring, acquisition- and integration-related costs, of 17.5-18.5% of sales.
The outlook 2025 does not take account of potential acquisitions during the course of the year.
The expectations regarding profitability are based on an average exchange rate forecast for full year 2025 of one euro equaling CHF 0.95 and one US dollar equaling CHF 0.90.
Tecan also reiterated its mid-term outlook, in which the company anticipates returning to average organic growth rates in the mid to high single-digit percentage range in local currencies under normal market conditions, while continuously improving profitability.
Annual Report and Webcast
The full 2024 Annual Report and the 2024 Sustainability Report were also published today and 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 2024 annual results today at 09:00 (CET). The presentation will also be relayed by live audio webcast, which interested parties can access at www.tecan.com under Investor Relations. 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
Participants should, if possible, dial in 15 minutes before the start of the event.
Key upcoming dates
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The Annual General Meeting of Tecan’s shareholders will take place on April 10, 2025
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A Q1 2025 Qualitative Update will be published on May 12, 2025
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The 2025 Interim Report will be published on August 12, 2025
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A Q3 2025 Qualitative Update will be published on October 13, 2025
1 The adjusted operating profit before depreciation and amortization excludes restructuring costs as well as acquisition- and integration-related costs (+CHF 16.4 million)
2 The calculation of 2024 adjusted net profit and adjusted earnings per share excludes restructuring costs as well as acquisition- and integration-related costs (+CHF 16.4 million) and accumulated amortization of acquired intangible assets (+CHF 19.0 million) and they were calculated with the reported Group tax rate of 13.6%.
3 The adjusted operating profit before depreciation and amortization for the Life Sciences Business segment excludes restructuring costs as well as acquisition- and integration-related costs (+CHF 6.4 million). The adjusted operating profit before depreciation and amortization for the Partnering Business segment excludes restructuring costs as well as acquisition- and integration-related costs (+CHF 5.3 million).
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 3,300 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 2024, Tecan generated sales of CHF 934 million (USD 1,062 million; EUR 984 million). Registered shares of Tecan Group are traded on the SIX Swiss Exchange (TECN; ISIN CH0012100191).
For further information:
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
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