• Order Entry: CHF903.6 million, a decrease of 12.1% year-on-year, or 10.5% in local currencies.
• Revenue: CHF934.3 million, a decrease of 13% in Swiss francs, or 11.5% in local currencies.
• Gross Profit: CHF320.6 million, down 17.9% from 2023, with a gross profit margin of 34.3%.
• Adjusted EBITDA: CHF164.4 million, with a margin of 17.6% of sales.
• Net Profit: CHF103.1 million, down from CHF164.4 million in 2023.
• Adjusted Earnings Per Share: CHF8.08, compared to CHF12.88 in 2023.
• Cash Flow from Operating Activities: CHF148.5 million, with a cash conversion of 15.9% of sales.
• Life Sciences Business Segment Sales: Decreased by 12.1% in Swiss francs, 10.2% in local currencies.
• Partnering Business Segment Sales: CHF537.3 million, a decrease of 13.7% in Swiss francs, 12.4% in local currencies.
• Dividend Proposal: CHF3 per share, with half paid from capital contribution reserve.
• Net Liquidity Position: CHF153.7 million as of December 31, 2024.

• Warning! GuruFocus has detected 8 Warning Signs with XSWX:TECN.

Release Date: March 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Tecan Group AG (XSWX:TECN) demonstrated operational resilience by implementing a comprehensive cost reduction program and consolidating sites to optimize their global organizational footprint.
• The company successfully expanded its global commercial presence with a new sales office in South Korea and achieved a successful FDA inspection in its manufacturing facility in Penang, Malaysia.
• Innovation remains a key focus, with significant product launches in genomics, proteomics, and cell biology, including the groundbreaking multiomics liquid handling workstation, Veya.
• Tecan Group AG increased its purchase of electricity from renewable sources to 87%, reflecting its commitment to sustainability.
• The company maintained a strong financial position with a net liquidity increase to CHF153.7 million as of December 31, 2024, up from CHF112.6 million the previous year.

Negative Points

• Order entry for the full year 2024 decreased by 12.1% year-on-year, influenced by a shift in OEM customers' ordering patterns.
• Reported sales for the group in fiscal year 2024 decreased by 13% in Swiss francs, with a significant impact from reduced demand in the life sciences business segment.
• The gross profit margin decreased by 200 basis points to 34.3%, affected by lower sales volume and increased depreciation.
• The adjusted EBITDA margin decreased to 17.6% of sales, impacted by lower sales volumes and negative economies of scale.
• The market environment remains challenging, with continued uncertainties related to the NIH budget in the US and market conditions in China.

Q & A Highlights

Q: Can you provide insights into the impact of the US academic and government accounts on your 2024 revenues? A: Achim Von Leoprechting, CEO: In 2024, US academic and government accounts represented about 5% to 6% of our revenues, translating to approximately CHF50 million. This was split between our life sciences and partnering business divisions. The uncertainty in these accounts has affected our order patterns, and we are working to understand the implications for 2025.

Q: How did your largest customer perform in 2024, and what are your expectations for 2025? A: Achim Von Leoprechting, CEO: In 2024, sales to our largest customer were around CHF170 million, 16% above 2022 levels. The decline in 2024 was due to normalized demand patterns and a model transition. For 2025, we expect stable sales levels, and we anticipate significant growth in the future due to our strong relationship and preferred supplier status.

Q: What is your outlook for the biopharma segment in 2025? A: Achim Von Leoprechting, CEO: We expect a gradual improvement in biopharma throughout 2025. The segment has been impacted by strategic shifts and political decisions, but we are seeing increased engagement from pharma companies for automation systems. AI-driven drug discovery and humanized disease models present growth opportunities for us.

Q: Can you elaborate on the impact of the NIH budget developments on your business? A: Achim Von Leoprechting, CEO: The NIH budget reductions and overall budget uncertainty in US academic and governmental accounts could significantly impact our revenues. We expect consumables and service sales to continue normally, but equipment sales may be affected. Our guidance accounts for these uncertainties.

Q: How did the cost reduction measures impact your financial performance in 2024, and what are your expectations for 2025? A: Tania Micki, CFO: In 2024, we implemented cost reduction measures that started showing impact in the second half, contributing to a better-than-expected earnings performance. For 2025, we expect annualized savings of around CHF10 million, with additional efficiency improvements planned.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.