After difficult year, Tecan sees no recovery in early 04
turnover growth in its genomics/proteomics division failed to
counterbalance declines in drug discovery and diagnostics.
The company said that the sales performance resulted from weak demand for some of its key product lines, a situation which been affecting the business since 2001. And while it said business picked up in the fourth quarter, Tecan painted a gloomy outlook for the first quarter of 2004, saying that its order book in the last period of 2003 was below the orders registered over the last two years.
Genomics/proteomics sales rose 14.4 per cent to SF 85.8 million, while drug discovery turnover fell 13.1 per cent to SF 103 million, while diagnostics slipped 11.4 per cent to SF 123 million.
Meanwhile, operating profits at the company fell by just over 50 per cent to SF 22.1 million (€14.1m), although Tecan said that SFR 12.3 million of that decline came from one-off charges - including the closure of a proteomics facility in Germany - while the weak dollar versus the Swiss franc accounted for a further SFR 10.6 million.
"2003 was a difficult transition year for Tecan," said chief executive Aitor Galdos, who joined the company following the departure of former CEO Emile Sutcliffe last May.
However, the company insisted that its 2003 sales performance was a consequence of the general problems affecting companies supplying the pharmaceutical industry.
There has been a decline in R&D spending growth in the wake of a series of mega-mergers in the early part of the decade, with Europe particularly affected. In the 1990s, growth of 11 per cent or more a year was the order of the day, but since then the average has slipped back to around 8 per cent.
In a conference call, Tecan noted that its 2003 sales growth in local currencies, at -0.4 per cent, is better than the average of around -2 per cent for companies supplying the life sciences industry.
Galdos said that the measures the company has taken in 2003, including a 9 per cent workforce reduction to 812 and less spending on sales and marketing. Overall, the reduction in spending was down SF11.9 million to SF 31.9 million.
