Tecan Group (TECN) H2 2024 earnings summary

Executive summary

• 2024 faced significant headwinds from reduced CapEx in biopharma, US government, and academic sectors, as well as market weakness in China and post-pandemic normalization, leading to lower demand for instruments and components.

• Clinical diagnostics and consumables rebounded, with strong demand for new products and a robust service business supporting resilience.

• Operational resilience was enhanced through cost reduction, site consolidations, and global expansion, including a new sales office in South Korea and successful FDA inspection in Malaysia.

• Innovation focus included significant product launches in genomics, proteomics, and cell biology, and previewed the multiomics workstation VEIA/Veya for 2025.

• Sustainability initiatives advanced, with 87% renewable electricity use, ESG data integration into finance, and climate risk analysis.

Financial highlights

• 2024 sales declined 13% in CHF to CHF 934.3 million (11.5% in local currencies), slightly better than revised outlook.

• Order entry for 2024 was CHF 903.6 million, down 12.1% year-over-year (10.5% in local currencies); H2 showed moderate order growth in Life Sciences.

• Gross profit fell 17.9% to CHF 320.6 million, with margin down 200 bps to 34.3% due to lower volumes and higher depreciation.

• Adjusted EBITDA was CHF 164.4 million (margin 17.6%), down 25.5% from 2023.

• Adjusted net profit was CHF 103.1 million, down 37.3%, with adjusted EPS at CHF 8.08 (vs. CHF 12.88 in 2023).

• Cash flow from operations was CHF 148.5 million; net liquidity rose to CHF 153.7 million.

• Stable dividend of CHF 3 per share proposed.

Outlook and guidance

• 2025 guidance: sales expected to range from a low single-digit decline to low single-digit growth in local currencies; H1 2025 anticipated to see a decline, with improvement in H2 driven by new product launches and partnerships.

• Adjusted EBITDA margin forecasted at 17.5–18.5% for 2025, supported by cost management and supply chain optimization.

• Midterm: aim for mid to high single-digit organic growth and annual EBITDA margin increase of 30–50 bps, targeting 20% margin at CHF 1 billion sales.