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TRANSCRIPT
«Se
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2000
“Seizing opportunities in Life Sciences”
TECAN – BOARD OF DIRECTORS AND MANAGEMENT
From left to rightAnton Schrofner, General Manager Tecan Austria
Joe Kaelin, Head of Clinical Diagnostics
Franz Rutzer, Chief Financial Officer (CFO) Tecan Group
Jan Timmers, Head of Business Development
Steve Levers, Head of OEM and General Manager CAVRO
Dr. Emile C. Sutcliffe, Chief Executive Officer (CEO) Tecan Group
Martin von Lueder, General Manager Tecan Deutschland
Joerg Borer, Head of Customer Services
Carl Severinghaus, Head of Biopharma and General Manager Tecan US
Board of Directors TecanMike Baronian, Chairman
Prof. Dr. Armin Seiler, Vice-Chairman
Dr. Emile C. Sutcliffe, Chief Executive Officer
Timothy B. Anderson
Günter Bauer
Hans-Jörg Kummer
see inside >
TECAN AT A GLANCE
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Tecan vs. SPI
TecanSPI
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Tecan is a leading player in the fast growing Life Sciences supply industry that specializes in the development, production, and distributionof enabling solutions for the discovery ofpharmaceutical substances, as well as for ge-nomics, proteomics, and diagnostics. Tecan clients are leading pharmaceutical and biotech-nology companies, university research depart-ments and diagnostics laboratories. Founded inSwitzerland in 1980, the company has manu-facturing, research and development sites inboth North America and Europe and maintainsa sales and service network in 52 countries. In2000, Tecan achieved sales of CHF 273.5 million(USD 162 million; EUR 175 million).www.tecan.com
Tecan Group Ltd., Seestrasse 103, CH-8708 Männedorf, Switzerland, T +41 1 922 88 88, F +41 1 922 88 89, [email protected], www.tecan.com
in CHF
Drug Development
>
Culture of innovation. A culture of innovation
helps Tecan build on existing expertise to pro-
duce customized solutions and to seize new op-
portunities as they arise. This includes the flex-
ibility to apply core competencies in one area,
for example Genomics or Proteomics, to other
business areas such as Diagnostics. Tecan repre-
sentatives do more than provide instruments to
customers. In their role as consultants, they
bring innovation, an open mind, and an ability
to create new solutions for the demanding
challenges of their customers.
Leverage of global presence. Tecan is an inter-
national company with a presence in 52
countries. In 2000, new subsidiaries have been
added in Belgium, The Netherlands, and Spain
extending Tecan’s global presence even further.
Tecan leverages its global presence to exploit
its key strengths – successful core competencies,
a strong product portfolio, and an ability
to respond quickly in rapidly growing market
areas.
Creating value. Tecan distinguishes itself from
its competitors by creating value throughout
the lifetime of a project. The company is well
positioned to become the preferred partner
of its customers and the undisputed leader in
providing solutions to the Life Sciences industry.
Tecan also creates value for its shareholders.
With an increase of 149 % in 2000, Tecan’s share
price posted one of the best performances on
the Swiss Stock exchange.
TECAN AT A GLANCE
Clear strategy. Tecan’s business strategy is to
strengthen and expand on its core competen-
cies as it moves further into its fast growing
markets. In 2001, Tecan will continue to expand
its core competencies into the areas of dis-
posables and reagents. The goal is to provide
complete solutions for supply, information and
pipeline companies that constitute the Life
Sciences market.
Partnering with our customers. Tecan builds
long-lasting partnerships with its customers
and provides support throughout the lifetime
of a project. Customers are allowed to focus on
their own strengths secure in the knowledge
that Tecan will provide complementary services
based on the company’s core competencies.
Through customer intimacy, Tecan identifies
bottlenecks quickly and is able to produce
superior solutions.
Core competencies. Tecan’s success is built on a
solid reputation as a provider of high-quality
platforms for the automation of laboratory pro-
cesses. Core competencies in liquid handling,
miniaturization, software and detection are
fully integrated into automated systems. In-
creasingly, customers are asking for validated
systems that also include disposables and/or
reagents. Tecan meets these needs through
enabling packages for its markets of Genomics,
Proteomics, Drug Discovery and Diagnostics.
Syst
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LiquidHandling
Robotic Platform
Enabling Packages
Miniaturi-zation
Software
Disposables Reagents
Detection
Genomics ProteomicsDrugDiscovery
Diagnostics
Tecan's core competencies
GLOSSARY
Absorption, distribution, metabolism, excretion(ADME) toxicity Screening tests designed to
determine the toxicity of new drug candidates
Combinatorial chemistry A technique for rapidly
and systematically assembling a variety of mole-
cular building blocks in many different combina-
tions for use in drug discovery
Detection devices Instruments used to monitor
chemical and biological processes
Disposables Reagents and handling devices that
have a limited lifetime and which must be repla-
ced regularly
Enabling technologies Instruments and methods
that permit key processes and applications to be
performed
Free-flow electrophoresis Automated tool for
the separation of proteins. Allows for elimination
of large molecules that may interfere with detec-
tion of key target molecules
Functional genomics The process of assigning
functions to genes and other parts of the geno-
me of organisms
Genomics The study of the structure and func-
tion of large numbers of genes simultaneously
High-performance liquid chromatography High
resolution separation process for analysis or
sample preparation
High throughput screening Automated proces-
ses for the rapid assessment of the activity of
large numbers of samples
In situ hybridization A method of localizing eit-
her messenger RNA within the cytoplasm or DNA
within the chromosomes of the nucleus by hybri-
dizing the sequence of interest to a complimen-
tary strand of a nucleotide probe
Liquid handling Automated handling of very
small volumes of liquids to enable high-
throughput processes
Microarray Glass or silicon surface used to sup-
port rows of biological material, for example
known sequences of DNA. Microarrays are an
integral part of high-throughput processes
Microplate A standardized plastic tray typically
with 96 wells or depressions for holding small
quantities of material. The 96 wells are uniform-
ly located in 8 rows of 12 wells each
Miniaturization The reduction of systems to a
small scale. A key requirement of some high-
throughput processes
Nuclear magnetic resonance (NMR) A spectros-
copic method that uses the properties of diffe-
rent substances in a magnetic field to produce
images or spectra of molecules or other objects
Original Equipment Manufacturer (OEM) Manu-
facturer of components to be built into another
device without the name of the manufacturer
being apparent to the user
Proteomics The study of the full expression of
proteins by cells in their lifetime
Reagents Superior chemistry that allows novel
processes to be performed (e.g. high-throughput
DNA extraction or purification)
Robotic system Automated device where materi-
als are transferred by the physical movement of
a delivery device to a receptacle
Screening The use of assays or tests to detect
compounds that change the activity of a target
Secondary screening Refined testing procedures
with which already identified substances can be
more precisely characterised, optimised, and
investigated for their behavior
Single nucleotide polymorphisms (SNPs) Small
differences in genetic makeup that may be used
to predict drug response and potentially improve
disease treatment results. Offers the possibility
of personalized medicine
Software Operating system to control automa-
tion processes and instrumentation
Solid phase extraction Purification procedure for
substances in solution
Supply industries Companies providing essential
services and products to support the infrastruc-
ture of the life science industries
System integration The combination of different
elements to produce a complete functional
system
Target A molecule (usually a protein but someti-
mes a DNA sequence) that may interact with a
drug or drug candidate
Target validation The process of determining if a
target is critically involved in a disease process
Two-dimensional electrophoresis Analytical
method in which sample is subjected to two con-
secutive separation processes in different direc-
tions
Validation A process for checking if an instru-
ment or system performs adequately the task for
which it was designed
Western blot analysis Analytical method invol-
ving the use of labelled antibodies to detect pro-
teins after separation on gels
Supply Companiese.g. Affymetrix,
Applied Biosystems,
APB, Caliper, Cybio,
Qiagen
Disposables Reagents Data Mining
> > >
Tecan 2000 > Tecan 2001 + >> Information Companies
e.g. Celera
Incyte
LSB
Millenium, OGS
> Pipeline Companiese.g. Abbott
Novartis
Pfizer
Roche
>
Instruments
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>
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TECAN’S MISSION
Message to Shareholders
Chief Financial Officer’s Statement
Tecan’s business strategy
Markets
Genomics
Proteomics
Drug Discovery
Diagnostics
Five-year consolidated data
Financial Review
Financial Statements
Information for Investors
Tecan Locations
Glossary
Board of Directors & Management team
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10
141822262829335859
Tecan’s vision is to improve and enhance the quality of human health
by enabling the Life Sciences.
Our goals are to become the preferred partner of our customers and the key
player in the fast growing Life Sciences supply industry.
We serve all segments of the Life Sciences industry worldwide by offering
the most comprehensive product portfolio.
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A landmark year in the evolution of our company. In June 2000, representatives of the
Human Genome Project and the private sector
met in Washington to announce the completion
of the first draft of the human genome nucleo-
tide sequence. The recent publication of two
different sequences is a monumental achieve-
ment confirming the merits of competition and
international collaboration.
For Tecan, 2000 was also a landmark year with
significant developments in the strategic posi-
tioning of our company. Tecan is now organized
into four business segments that complement
the Life Sciences market – Genomics, Prote-
omics, Drug Discovery and Diagnostics. These
businesses put the company in a strong posi-
tion to exploit the future growth of the Life
Sciences market.
Unprecedented sales growth. Once again sales
growth exceeded expectations increasing
by 41.7 % (33 % in local currencies) to CHF 273.5
million in 2000. Net profit increased 40.6 %
to a record CHF 39.5 million and Tecan’s share
price increased by 149 % to CHF 1681 per share.
The financial results confirm the value of the
company’s business strategy and place Tecan in
an excellent position to build on its
achievements.
Striving for sustained growth. People are be-
hind the success of Tecan. In 1999, we increased
our employees by 10 % to 556. We have sur-
passed this in 2000, with a 24 % increase in the
work force to 690. Despite this increase, the
average sales per employee reached CHF 435
000 in 2000 compared to CHF 356 000 in 1999,
representing a sharp improvement in producti-
vity.
“This is an exciting time for Tecan. We are poised to benefit from the sweeping
changes that are revolutionizing the Life Sciences industry.”Dr. Emile C. Sutcliffe, Chief Executive Officer
With this considerable growth come opportuni-
ties and challenges. We are recruiting and
training high calibre people to sustain our ex-
pansion. To achieve this, we have created
mechanisms to ensure that we grow in a fo-
cused manner, respecting our core strengths
but not being afraid to try new ways of doing
things as we develop into our market areas.
Our strengths are clear – we have a strong
product portfolio, successful core competencies,
and a balanced presence in all geographic
markets. Our strategy is to provide superior
solutions to our customers, focus on high
growth market segments, and maintain the
momentum in our sales and profit growth.
Working with our customers. Our goal is to
become the preferred partner of our customers
and the undisputed leader in providing solu-
tions to the fast-growing Life Sciences industry.
Customers trust Tecan. They know our reputa-
tion for quality in laboratory automation
and our ability to provide tailor-made solutions
as they struggle to keep up with the pace of
innovation. We aim to allow customers to focus
on their own strengths, complementing their
needs through the services that we are able
to offer. In addition, we give continuing support
adding value throughout the lifetime of
projects.
New growth opportunities. We are building
solidly on the trust of our customers and our
knowledge of our markets. A case in point is the
strategic partnership with chemical giant Merck
in 2000 to develop kits using magnetic beads
for nucleic acid extraction and purification.
These kits can be incorporated seamlessly into
our platforms for DNA and RNA extraction,
offering our customers a highly effective inte-
grated solution. We seized another opportunity
in 2000 with our acquisition of the LabCD™
from Gamera Bioscience in Boston, Massachu-
setts. This revolutionary technology uses micro-
fluidics and embedded software to miniaturize
laboratory processes on a platform the size
of a compact disc. Tecan will launch this hi-tech
consumable in 2001 in selected areas of bio-
pharmaceutical research.
Investment in R&D. In addition, we are also
strengthening our core competencies with
major R&D initiatives in our four market seg-
ments. Gross R&D expenses amounted to
CHF 29.0 million and represented 10.2 % of total
sales in 2000. New products were launched in
Genomics, high-throughput drug screening, and
for assays on living cells. In clinical diagnostics,
the FE 500 Workcell was introduced to address
bottlenecks in laboratory logistics.
Finally, as we enter 2001, we are taking major
steps in our business area of Proteomics.
We have established a new company, Tecan
Proteomics GmbH, in Munich, Germany, an
advanced research facility that will offer a full
range of technologies and permit us to
enter into new collaborations with our current
pharma and biotech partners. To complement
this move, we have acquired a majority stake in
the German company Dr. Weber GmbH.
Dr. Weber GmbH brings with it access to key
technologies in proteomics and personnel
that will support our efforts as we become a
leader in this fast growing area. Proteomics
will be a significant business opportunity for
our company in the coming years.
For Tecan, 2000 was an outstanding year in
which the company made tremendous progress
in all business areas. The speed with which
we are now moving would never have been pos-
sible without the creativity, determination
and enthusiasm of our employees. To them, our
customers, and our shareholders, we would
like to extend our heartfelt thanks.
Dr. Emile C. Sutcliffe
Chief Executive Officer
Mike Baronian
Chairman of the Board
MESSAGE TO SHAREHOLDERS
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Above average industry growth rates in all markets. In Genomics/Proteomics, Tecan sales
more than doubled in the year 2000 reaching
CHF 44.8 million or 16.4 % of total sales (1999:
CHF 21.2 million). This outstanding performance
was due to strong demand for Tecan’s fully
automated high-throughput systems for Geno-
mics and functional Genomics. Drug Discovery
sales grew by 42 % to CHF 129.4 million, or 47.3 %
of total sales (1999: 90.7 million) as a result of
continued high demand for Tecan’s solutions
that help to eliminate crucial bottlenecks in the
drug discovery process. Our Diagnostics sales
increased by 22 % to CHF 99.3 million or 36.3 %
of total sales (1999: CHF 81.1 million).
Balanced geographical sales. All geographical
markets posted significant sales growth. Helped
by a strong US dollar, sales in North-America
grew by 55 % (+38 % in local currencies) to CHF
134.3 million in 2000 or 49.1% of company
sales (1999: CHF 86.7 million), thanks to a solid
performance in Genomics/Proteomics and
Drug Discovery.
European sales reached CHF 120.2 million last
year (1999: CHF 92.5 million), a 30 % increase
over 1999 (+ 31 % in local currencies). Asia, repre-
senting 6.9% of total sales, posted a gain
of 37 % (+16 % in local currencies) to CHF 19.0
million (1999: CHF 13.9 million).
Operating income increases by 41 %. Benefiting
from successful expansion into higher value
added markets and a positive currency impact,
Tecan’s gross profit margin increased to
a high level of 69.1 % in 2000 compared with
68.3 % a year earlier.
As an innovation-driven company, Tecan con-
tinued to focus its efforts on exploiting the
full potential of its R & D program to prepare
the next generation of products. To that
effect, our gross R & D expenses amounted to
CHF 29.0 million or 10.6 % of total sales
“Tecan’s goal of becoming the undisputed leader in the fast growing Life Sciences
supply industry moved closer to reality as we delivered strong financial results
in the year 2000. Sales increased by 42 %, or 33 % in local currencies, to CHF 273.5
million (1999: 193.1 million). Net income reached a record CHF 39.5 million, an
increase of 41 %.” Franz Rutzer, Chief Financial Officer
(1999: CHF 25.9 million or 13.4 % of sales). Over
the last five years, Tecan spent on average
10.9 % of sales on R & D, which is in line with the
company’s objective to spend 10 – 12 % of sales
annually on R & D.
Operating profit increased by 41 % to CHF 57.9
million or 21.2 % of sales during the year (1999:
CHF 41.0 million or 21.2 % of sales), despite
the fact that 1999 operating profit benefited
from capitalized R & D costs of CHF 3.6 million.
Included in the operating expenses is a total
of CHF 2.9 million due to the amortization of
goodwill from the acquisition of Gamera
Bioscience in July 2000 and the amortization
of capitalized R & D costs.
Net income margin reaches 14.4 % of sales. The
net financial result (CHF – 3.5 million) was
negative in 2000, due to the impact of currency
losses. The implementation of the Swiss holding
company per 1. January 2000 allowed the
company to improve its overall tax rate as the
effective income tax rate for 2000 declined
to 27.3 % (1999: 33.1 %). In the years to come, we
intend to pursue our efforts to reduce the
company’s effective tax rate on a sustainable
basis.
Tecan’s strong operative performance led to
a 41 % increase in net profit to CHF 39.5 million
(1999: CHF 28.1 million) or 14.4 % of sales
(1999: 14.5 % of sales).
Healthy financial position. Tecan continues to
benefit from a very healthy balance sheet
with shareholders’ equity representing 71.5 % of
total assets of CHF 139.0 million at December
2000 (1999: 117.9 million). Cash inflow
from operating activities increased by 10 % to
CHF 30.3 million (1999: 27.7 million) reflecting
a higher level of account receivables due
to very strong sales performance at the close
of the year as well as higher inventories.
Due notably to the acquisition of Gamera
Bioscience in July 2000 for USD 10 million and
the substantial buy back of treasury shares,
net liquidity declined to CHF 46.3 million
(1999: CHF 57.8 m). In future years, Tecan antici-
pates robust growth in the company’s cash
generating capabilities.
Increased valuation. With an increase of 149 %
in 2000, Tecan’s share price posted one of the
best performances on the Swiss Stock ex-
change, raising our market capitalization from
CHF 900 million to CHF 2.2 billion. This was due
to our strong financial performance last year
and continuing growth prospects. In addition,
the company increased substantially its investor
relations activities, resulting in increased
visibility and a broader shareholder base across
Europe and in the United States.
A strong base for future growth. Our financial
strength allows us to look ahead with confi-
dence to new opportunities that fit our busi-
ness strategy. Reflecting this, the Board of
Directors will propose at the Annual Sharehold-
ers meeting on April 26, 2001, 40 % increased
dividend of CHF 3.50 per registered share.
In the absence of any unforeseen events, we
expect for 2001 continued sales growth in
line with the performance we delivered in 2000
in local currencies, as we anticipate strong
demand from the pharmaceutical and biotech
industry both in Europe and in North America.
Last year we demonstrated our ability to deliver
innovative products with high added value to
our clients. We are also committed to pursuing
sustainable growth and returns to our
shareholders.
Franz Rutzer
Chief Financial Officer
CHIEF FINANCIAL OFFICER’S STATEMENT
Sales by business areasin CHF million
129,49
%
47.3%3
44,8 16.4%
99,3 36.3%
Genomics/Proteomics
Drug Discovery
Clinical Diagnostics
30
0
20
0
100
0
Sales broken down by region
North America
Europe
Asia
in CHF million
163,6
193,1
273,5
60
40
200
Operating and net profit
31,5
41,0
57,9
22,9
28,1
39,5
Operating profit
Net profit
1998
1999
2000
in CHF million
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Four markets – Genomics, Proteomics, Drug Dis-covery and Diagnostics. The goals of Tecan are
to become the preferred partner of its custo-
mers and a key player in the fast-growing Life
Sciences supply industry. The company serves
all segments of the Life Sciences worldwide by
offering the most comprehensive product
portfolio. To move toward its vision of a compa-
ny providing total solutions for the Life Sciences
industry, Tecan has strategically positioned
itself by expanding into new businesses. Recog-
nizing recent growth opportunities, Tecan
established business units for Genomics and
Proteomics, complementing its established busi-
ness pillars in Drug Discovery and Diagnostics.
Most Life Sciences companies are represented
adequately by the following groups: supply
companies (providing the necessary infrastruc-
ture and enabling tools for the industry), infor-
mation companies (providing knowledge for
research and development, drug discovery and
advanced diagnostics), and pipeline companies
(involved in the discovery and development
of new drugs and diagnostic methods). Tecan’s
aim is to provide solutions, the necessary infras-
tructure and enabling tools to information
and pipeline companies active in all markets of
the Life Science industry. To do this, Tecan
has adopted a selective business strategy that
strengthens and expands on its core compe-
tencies “filling the gaps” as it moves further
into its fast-growing markets.
Building on a foundation of core competenciesand experience. The success of Tecan over the
past 20 years has been built on a solid founda-
tion of core competencies, which include
expertise in liquid handling, robotics, detection,
system integration and miniaturization imple-
mented through hardware, software and third
party solutions. Tecan has evolved from a
company that primarily offered lab instruments
such as micropipettors, washers, incubators,
readers and integrated platforms with robotic
arms accompanied by software and protocols
into a company that provides applications
and solutions for the Life Sciences. Different
elements in the core competencies may be
combined with robotics platforms to produce
automated solutions or integrated systems
for specific processes. These applications, the
specific processes that may be performed
by these systems (for example high-throughput
DNA extraction or purification), are provided
by Tecan to address key bottlenecks in the Life
Sciences. Guiding Tecan’s strategy is the goal
of providing added value to its customers by
strengthening and expanding on the company’s
core competencies. Customers are allowed
to focus on their own strengths secure in the
knowledge that Tecan will complement
their efforts.
Moving into high growth markets. To meet the
needs of information and pipeline companies,
Tecan is moving further into its high growth
markets. In 2001 and beyond, the company will
provide new solutions for information and
pipeline companies as it adds disposables and
reagents to the product range. The move
into high value-added disposables has been
achieved through the acquisition of the
LabCD™ from Gamera Bioscience and free-flow
electrophoresis from Dr. Weber GmbH.
The strategic partnership with the chemical
company Merck to produce ready-made kits for
nucleic acid extraction and purification illus-
trates another progression, namely reagents.
Tecan now offers fully scalable applications of
all the basic DNA extraction technologies, an
area with significant growth potential as com-
panies start to exploit the vast amount of
information from the human genome nucleotide
sequence.
Tecan Proteomics is a good example of how
Tecan will jointly with pipeline companies pro-
vide access to information to support their quest
for new and better therapeutic agents. As bio-
pharma companies shift their focus to proteo-
mics in the search for new drug targets, they will
be looking for external partners. Tecan Proteo-
mics has the scientific expertise and the techno-
logy base to partner with pipeline companies to
perform the initial stages of target identification,
using that information to perform the subse-
quent steps in screening and development.
Three factors for success: products, high growthmarkets, and geographic reach. To implement
its core competencies as it moves into new
market segments, Tecan exploits its strong pro-
duct range, high growth markets and geo-
graphic reach. Collectively these factors are
referred to as the three business pillars.
Tecan has built its success on flexible automa-
tion platforms in which a broad product
range of components can be added or removed
depending on the needs of customers. As the
company pursues market expansion into Geno-
mics and Proteomics, new high added-value
applications in those areas can be leveraged in
Drug Discovery and Diagnostics. Global solu-
tions for the Life Sciences industry are develo-
ped by leveraging its worldwide presence
and existing distribution network – an advanta-
ge that sets it apart from its competitors.
Customer service. Tecan builds lasting partner-
ships with its customers and foresees its re-
presentatives serving as full-service technologi-
cal consultants. Backed up by a core
manufacturing capability and a range of strate-
gic alliances with third parties, they will be able
to offer everything from specific laboratory
instruments to customized packages of goods
and services making Tecan an indispensable
partner for the Life Sciences industry. Tecan
aims to let customers focus on their own
strengths, complementing their needs through
services that it is able to offer. Included in
this service is ongoing support throughout the
lifetime of a project.
Future based on experience and superior ser-vices. Tecan’s experience in providing solutions
is already allowing the company to provide
superior services. The breadth and depth of
what Tecan can offer will increase as it expands
into its markets and new business opportuni-
ties. The goal is to become the preferred partner
of our customers and the undisputed leader in
providing solutions to the Life Sciences industry.
TECAN’S BUSINESS STRATEGY
“Tecan’s vision is to improve and enhance the quality of human health
by enabling the Life Sciences.” Dr. Emile Sutcliffe, Chief Executive Officer
Tecan's Strategic Focus
ttttttentInInInInnnInsttrume sssss
sAApplications
Disposables
Reagents
Data-Mining
Drug developmentlinePipeli
CompaniesInformmationCompanies
Tecanc
200020002000
20012001IntegratedggSolutions
StrengtheningStrengtheningStrengtheningand expansion
of corecompetenciescompetenciescompetencies
“A thrilling world of discovery awaits as we step boldly into the future.”
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Industry trends: catching the next wave of theGenomics revolution. The sequencing of thehuman genome in 2000 marked the end of thefirst phase of the Genomics revolution. Now,the second phase of that revolution is begin-ning as scientists grapple with the monumentaltask of analyzing the vast amounts of datagenerated. In particular, there will be a continu-ous need for faster and more efficient techno-logies to generate genetic sequences, analyzethe expression of genes and evaluate thediagnostic and prognostic potential of singlenucleotide polymorphisms (SNPs), individualdifferences in one of the four genetic “buildingblocks” that may predispose individuals to disease. The total core market available to Tecanfor Genomics research and applications wasestimated at CHF 570 million in 2000 and isexpected to grow annually by 40% to CHF 1.57billion in 2003. Tecan will selectively expandinto the collateral market in Genomics which isestimated to be worth an additional CHF 2.18billion.
Market position and strategy: leveraging corecompetencies and products. As a resultof our close partnership with customers in thebiopharma industry, we recognized the trendtoward Genomics early, becoming one of the first companies to launch an application forfully automated DNA sample preparation. Asthe emphasis now shifts from genetic sequenc-ing to analysis of data, Tecan is in a strong position to become a leading force in this frag-mented market. Building on our innovative product portfolio from drug discovery, we havetargeted attractive niches in DNA sample prepa-ration, microarray technology and alliances with leaders in SNP scoring. New applicationsare helping us meet the strong demand for gene expression using in situ hybridization.
Holding a strong position in the Genomics, pro-teomics and drug discovery markets allowsTecan to exploit synergies in technologies suchas microfluidics and spotted arrays across these markets. Tecan’s solid presence in clinicaldiagnostics could be a significant asset asadvances in Genomics are translated into “per-sonalized medicine” on the basis of genetic pro-files and other molecular diagnostics methods.
Business performance: dynamic sales growth,versatile new products. In less than two years,Tecan has accelerated from CHF 0 to 50 millionin sales in Genomics. In 2000, sales surged by more than 100 %. Our success in thisbooming business is built on the flexibility ofour technology platforms and our ability to quickly expand our core competencies. Weintroduced two applications for the automatedextraction and purification of DNA, using solidphase extraction and magnetic bead separationthat can be integrated seamlessly into theGenesis MolBio workstation. Tecan is in the unique position of being able to fully automatethe whole DNA sample preparation processwith validated protocols for the major DNAextraction kits on the market. This flexibilityallows our customers to mix and match kits for different applications from different vendorson the same automation platform.
Our MolBio workstation, launched in 1999,fills an important gap in the Genomics labora-tory by automating the sample preparationphase with our proven expertise in robotics. Ahallmark of the workstation, which can beintegrated into the Genesis platform, is its flexi-bility in handling standard test kits available on the market. Our Ultra microtiter plate de-tection devices proved to be an ideal SNP detec-tion device. The combination of the MolBioworkstation and Ultra detection device allowedTecan to team up with major players in the SNP scoring market.
Outlook: Genomics is becoming a strong pillarof our business. We will continue to build on the success of our flexible technology forautomating genomic processes such as DNA sequencing and polymerase chain reaction(PCR) as well as expanding our presence in genotyping and SNP scoring. We will alsolaunch the first components of an entire systemfor DNA microarrays. These arrays, which consistof hundreds or thousands of known sequencesof DNA microspotted on glass or silicon, pro-duce massive amounts of information on the identification and behavior of genes. The full suite of Tecan instrumentation will cover printing spot arrays, hybridizing against labeledexperimental samples and scanning and analyzing results. Also planned for launch in2001 is an automated in situ hybridizationsystem, including reagents, for gene expressionand functional studies. Our strategic partner-ship with Merck (see inset) opens up an im-portant new market for us in disposable nucleicacid extraction and purification kits. Finally,Tecan has reached agreements with major part-ners to co-develop and co-market applicationsin the rapidly expanding SNP market. Taking allthese factors into account, we are confidentthat Genomics will rapidly become one of thepillars of our business.
Creating value for customers: nucleic acidextraction and purification kits. Biotech andpharmaceutical companies are rapidly shiftingthe focus of their discovery efforts to Genomicsfor clues to new drug targets. Conventionalmethods for isolating samples of DNA rely onsolid phase extraction columns that requireextended ethanol wash times. Tecan hasteamed up with the chemical company Merckto improve the process by developing high-throughput nucleic acid extraction and purifica-tion kits based on magnetic beads. The kits arevalidated on Tecan’s existing high-throughputlaboratory automation platforms, givingbiopharma customers a seamless process forDNA sample preparation. There are also numer-ous applications in clinical diagnostics. The strategic partnership with Merck is an outstand-ing example of the company’s expansion of itscore competencies into high-margin disposables,allowing Tecan to offer “one-stop shopping”to its customers in the life sciences industry.
GENOMICS
“Tecan’s ability to produce the right automated solutions for our customers puts
us in a strong position in the fast-growing Genomics market.”Tony Maurer, Manager Genomics
4,000
3,000
2,000
1,000
0
Total available market (CAGR)
CAGR 87%
CAGR 40%
in CHF million
2000
2003
570
1, 57
03,
750
2,18
0
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Outlook: expanding our core competencies tocapture huge opportunities. The availablemarket for Tecan in proteomics is growing dra-matically. We anticipate double-digit sales in millions (CHF) in 2001, with a steep rise inthe following years. The establishment of Tecan Proteomics GmbH is expected to put uson the map as a leader in the field, allowing us to complement our enabling solutions withresearch agreements and scientific expertise.The acquisition of free-flow electrophoresistechnology from Dr. Weber GmbH in January2001 gives us a valuable solution for a criticalbottleneck in proteomics (fractionation) and a foothold in the high-end consumables market(separation media and buffers). Whileexpanding our own business opportunities, weare also exploring the possibility of strategicpartnerships with other companies. Innovativesolutions developed by Tecan in proteomics will also unleash synergies in drug discovery.
Bridging the gap to our customers: Tecan Pro-teomics GmbH. Tecan Proteomics GmbH wasestablished in the European biotech center ofMunich, Germany, in January 2001. Leading the team of top scientists there is PD Dr. Chris-toph Eckerskorn, who did pioneering work in proteomics at the Max Planck Institute. Ourcore competencies, product portfolio and theknowledge of this scientific team will targetexisting bottlenecks in proteomics laboratoriesand address new ones. Tecan Proteomics willbuild on our network of customers in the phar-maceutical, biotech and diagnostic industry.Research partnerships will be formed, for exam-ple, for the identification of novel drug targets.The results will be turned over to clients for the next steps in the drug developmentprocess. In proteomics, Tecan is now establishedin a market where the customers’ core compe-tencies are still rudimentary. To bridge this gap,we can span the whole range of customerneeds, from instruments and applications todisposables, reagents, services and information.
Introduction: why Proteomics is so important inthe post-genomic era. Public excitementsurrounding the Human Genome Project hasgenerated unrealistic expectations aboutfinding impending cures for cancer, heart dis-ease, diabetes or other illnesses by locatingspecific, disease-causing genes. In fact, experi-mental therapies to repair defective genes have been largely unsuccessful and conventio-nal drugs have no mode of action at the genetic level. But genes do provide the “blue-prints” for the creation of proteins, which are promising drug targets. Genes are expressedin the body as proteins in forms ranging frommuscle fibers and neural endings to antibodiesand hormones. The study of the full expressionof proteins by cells is a good working definition of proteomics.
The recent announcement that the humangenome is much smaller than anticipated –from 30,000 to 40,000 genes (roughly doublethat of a fruit fly) – has shifted attention to proteomics to unravel the complexity of thehuman body. Armed with the information onthe human genome, scientists are now lookinginto the complex pathway that leads fromgenes to proteins and how proteins interact todetermine healthy cell function or disease.There may be millions of proteins – no oneknows for sure – and the enormous task of find-ing relevant proteins to different disease stages is just beginning. Pharmaceutical andbiotech companies are pouring enormousresources into this relatively new branch ofscience. Proteomics promises to be the nextrevolution in drug discovery.
Industry trends: explosive growth despite signi-ficant bottlenecks. The proteomics market hadan estimated value of CHF 1.7 billion in 2000 of which CHF 760 million are now becomingavailable to Tecan. This proteomics market seg-ment is expected to grow by 55 % annually to CHF 2.8 billion by 2003. Its main applicationsare in drug discovery (identification of drug targets, target validation, toxicology) and inclinical diagnostics (screening of patients for drug responsiveness and side effects). As pro-teomics is a young science, lab instruments and testing procedures are still developing andinvolve frequent manual intervention. Majorbottlenecks are apparent in three categories:sensitivity (for example, difficulty in detectingunknown, low-abundant proteins that could beinteresting drug targets), high-throughputmethods (lack of automation) and reproducibili-ty of results (e.g. lack of standardized methodsfor 2-D gel electrophoresis).
Market position and strategy: dual engines ofrapid growth. With the establishment of a Pro-teomics business unit (see inset), we can immediately begin to address the three majorbottlenecks in this field with our core compe-tencies, allowing us to capture market sharequickly. The second engine of growth is thescientific expertise of Tecan Proteomics,combined with early access to our technology,which will help us enter into research agree-ments with pharmaceutical and biotech compa-nies that are searching for technology andknow-how to accelerate their research process.The scientific expertise of our Proteomics unitcan also be used to develop and validate newtechnologies and solutions. The fact that we aredevoting over 20 % of our R & D budget to Proteomics in 2001 is a clear indication of ourcommitment to this field.
PROTEOMICS
“Proteomics could be the greatest single opportunity for our company
in the coming years.” Jan Timmers, Head of Corporate Business Development
3,000
2,000
1,000
0
Total available market (CAGR)
CAGR 55%
in CHF million
2000
2003
76
0
2,7
60
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Industry trends: improving efficiencies, time tomarket and information lag. The total core drugdiscovery laboratory automation market avail-able to Tecan is expected to grow annually by 9 % to CHF 1.3 billion in 2003. In this core market, Tecan will concentrate on high-growth,high-margin segments that will ensure muchfaster growth than would be possible in thetotal available core market. The company willalso selectively expand into the collateral drugdiscovery market which is estimated to beworth an additional CHF 1.55 billion. Adding to the dynamics of this market is the success-ful sequencing of the human genome – thenumber of drug targets that could offer scien-tists clues to new medical therapies is projectedto increase from 500 to 5,000 and should continue to grow. In a highly competitive mar-ket, pharmaceutical and biotech companies are compelled to improve efficiencies of theirhuman and material resources while reducingthe time to market for new drugs. These challenges have led to a concentration on areassuch as the automation of high-throughputscreening and technologies such as assay min-iaturization. In the next few years, the capabilityof ultrahigh-throughput screening equipmentwill rise dramatically, providing hundreds ofthousands of data points per day. The drive forinformation at the earliest stage in the discove-ry process has become a critical success factor, helping researchers to quickly identifyand focus on only the most promising drug candidates. In this environment, companiesrequire seamless automation to free their valu-able intellectual assets from manual labor toconcentrate on knowledge work.
Market position and strategy: adding value toopen automation platforms. Drug Discovery isour core business, making up almost 50 % ofsales. Our applications solutions cover thewhole spectrum of the drug discovery process,from early stage compound synthesis and high-throughput screening through the late pre-clin-
ical stage, including ADME (absorption, distribu-tion, metabolism, excretion) toxicology assays.Success has been driven by our broad, flexibleproduct portfolio and our global distributionnetwork, making us the preferred partner for the world leaders in the biopharmaceuticalindustry. They know Tecan solutions can beimplemented at all affiliates worldwide, stan-dardizing their discovery process and infor-mation. Expanding from our base of core com-petencies, we are moving into high-valuedisposables such as the LabCD™, which ad-dresses the strategic trends in the industrytowards miniaturization and system integra-tion. On our existing technology platforms, weare developing scalable assays that can performseveral screening tests simultaneously and provide key information at an earlier stage. Wewill increasingly leverage innovative solu-tions from Genomics and Proteomics in DrugDiscovery, giving us a strategic edge on thecompetition.
Business performance: balanced sales growthwell above market average. Our sales in DrugDiscovery surged to CHF 129 million in 2000,a 42 % increase over the previous year. In termsof the geographical distribution of sales, theUnited States represented 49.1 %, Europe 44.0 %and Asia 6.9 %. All geographical regions postedsignificant sales growth. Our successful position-ing in the market as “automation consultants”is evidenced by the sales trend away from indi-vidual instruments to high added-value integrat-ed application solutions. This approach hasmaximized our sales channel efficiency by lever-aging a single sale into a customer-implement-ed worldwide standard. We have formed severalpartnerships where Tecan provided the automa-tion solution for other technologies. Our earlyinitiative in automating several of the ADMEapplications has allowed us to secure a domi-nant share in this market.
Outlook: launch of Genesis Freedom, microflu-idics technology in 2001. At LabAutomation inPalm Springs, California, in January 2001 – the largest event of its type in the world – Tecanwas a dominant player. We unveiled theFreedom, a further evolution of the Genesisautomation platform. Our newest platformallows us to access additional applications inADME, high-throughput screening and DNAextraction. With a new third robotic arm andthe addition of an integrated centrifuge, we arethe first to provide total process automation for assays in these areas. We have also recentlyintroduced the Safire, the world’s firstmultifunctional detection device with bothabsorbance and fluorescence for the wholespectrum of drug discovery applications. Ourrevolutionary microfluidics technology, theLabCD™, will be introduced to the market in the second half of 2001. The first targeted appli-cations are in the ADME area. These applicationsolutions will include automation, reagents and disposables, allowing us to realize our stra-tegy of expanding our core competencies (see inset).
Culture of Innovation: LabCD™ in ADME.In 2000, Tecan acquired the Boston-based com-pany Gamera Bioscience. Gamera, a pioneer in microfluidics technology, has developed theLabCD™, a disposable compact disc that enab-les biological processes to be studied on a verysmall scale. The LabCD™ combines software,microscale fluid paths, reaction chambers andvalves on one platform and has many potentialapplications in Tecan’s business segments.
Miniaturization offers Tecan’s customers accessto cost-effective solutions for high throughputprocesses. Tecan has initially focused the devel-opment of the LabCD™ on applications thattarget known bottlenecks in the drug discoveryprocess. The LabCD™ will permit researchers to obtain critical data at a much earlier stage inthe drug discovery process. This will allowscientists to identify and focus on more promis-ing drug targets, reducing the costs and timeneeded for the development of new therapeu-tic agents.
DRUG DISCOVERY
“Tecan’s market leadership in drug discovery applications puts us in an ideal
position to set future industry standards and achieve our strategic growth
goals.” Christopher McNary, Manager Drug Discovery
3,000
2,000
1,000
0
Total available market (CAGR)
CAGR 42%
CAGR 9%
in CHF million
2000
2003
1,000
1,300
2,85
01,5
50
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Industry trends: paradigm shift toward molecu-lar diagnostics. The total clinical diagnosticsmarket available to Tecan was estimated at CHF830 million in 2000 and is expected to growannually by 7 % to CHF 1.02 billion in 2003. Cur-rent diagnostic methods rely primarily on tech-nologies to detect symptoms of disease such as antibodies generated by the body againstpathogens or enzyme levels in the blood, ratherthan detection of the actual cause of the disea-se (e. g. the DNA of the pathogen).
In the coming years, there will be an industry-wide shift to “molecular diagnostics” usinginstruments that can detect the DNA or RNA ofpathogens, predisposition for a particular disease, the responsiveness to certain drugsand the likelihood of side effects. This paradigmshift is being driven by pioneering work inGenomics and Proteomics that will be translat-ed to the level of individual patients, leading to a renaissance of clinical diagnostics. The riseof personalized medicine based on the genetic profile of the patient will drive increa-sed demand for cost-effective, miniaturizedsolutions.
Market position and strategy: capturing niches,exploiting synergies. Tecan has been able tobeat the overall growth rate of the clinical diag-nostics market – growth in 2000 was morethan three times the market average – due to its strong core competencies and presence inattractive niches. Tecan’s standard lab automa-tion products cover the full range of diagnosticinstruments: from liquid handling and micro-titer plate readers and washers allowing semiautomation, up to fully integrated microtiterplate processors. Tecan is also a major player inthe sample logistics and preparation market.Our main end-user market segments are bloodbanks, hospitals, and large reference and veteri-nary laboratories. Tecan is also an originalequipment manufacturer (OEM) for many well-known diagnostic companies. With its role as an established player in this market and itsgrowing presence in Genomics and Proteomics,Tecan is in an excellent position to leveragenew, high added-value applications in clinicaldiagnostics.
Business performance: strong rise in sales,quick reaction to BSE crisis. More than one-third of Tecan’s sales in 2000 came from clinicaldiagnostics, with sales increasing 22 % over1999. The Genesis RMP platform, for example,proved very successful with blood banks due to its ability to fully automate microtiter plate-based testing. We were able to expand our presence in emerging markets such as in situhybridization as a result of successful partner-ships with diagnostic companies. In 2000,we further penetrated the segment of labora-tory sample preparation, co-marketing the FE 500 Workstation with Abbott. The urgentneed for BSE-testing in Europe at the end of 2000 created a new market segment. In lessthan six weeks, we launched a modified Genesis workstation to automate tests for BSEusing existing kits (see inset).
Outlook: building on core competencies. Inmolecular diagnostics we are developing a range of applications that leverage our solu-tions from the Genomics market. In the firstquarter of 2001, we will further strengthen ourposition in the blood bank market, which is relying on “donor pooling” to economize andaccelerate PCR-based testing of blood. In mole-cular diagnostics, we will leverage solutionsfrom Genomics such as in situ hybridizationapplications and high-throughput nucleic acidextraction and purification kits developed jointly with Merck.
Looking ahead, our competitive edge in clinicaldiagnostics lies in the ability to address emerg-ing bottlenecks with a mix of our traditionalcore competencies and enabling solutions thatwe leverage from the Genomics and proteomicsmarket. This allows us to launch new productsquickly, addressing critical market needs.Our technology base and global distributionand support network makes us an attractivepartner for established and emerging diag-nostic companies that we can supply and offer support to in every stage of the life cycle.
Eliminating bottlenecks: automated testing ofBSE kits. At the end of 2000, concern over “madcow” disease caused European governments tocall for immediate testing of beef products, butlabor-intensive testing methods could not keeppace. Less than six weeks after the crisis broke,Tecan launched an automated solution basedon modifications to the Genesis platform usingexisting test kits – doubling the testing speed.Due to its close partnerships with customers,the company anticipated the bottleneck andbegan to work on it well before the crisis broke.The result demonstrates the flexibility of theGenesis platform and the ability of Tecan engi-neers to develop customized solutions.
DIAGNOSTICS
“There are still some things in the lab that must be done manually, but if it is
‘automatable,’ Tecan can do it.” Joe Kaelin, Head of Clinical Diagnostics
1,500
1,000
0
Total available market (CAGR)
CAGR 7%
in CHF million
2000
2003
83
0
1,0
20
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FINANCIAL REVIEW
Sales. In 2000, Tecan’s consolidated sales
surpassed the prior year levels by 41.7 % (32.9 %
excluding the effect of currency translation),
climbing to CHF 273.5 million. In particular, the
strength of the US dollar compared with the
Swiss franc contributed to this positive trans-
lation effect. But even excluding this impact,
the 33 % increase in sales was well above the
average growth rates in the individual markets.
Sales in Genomics/Proteomics more than dou-
bled compared with 1999. In the area of Drug
Discovery, the growth was about 43 %, and even
in Diagnostics, the market area which has
demonstrated the slowest rate of growth, sales
increased by 22 %.
All Group companies achieved double digit
growth in 2000. America showed the strongest
growth of all geographical segments, reporting
38 % growth in the local currency. This achie-
vement was followed by Europe with a 31 %
growth and Asia with 16 %. From the viewpoint
of the geographical location of customers, both
of the main sales regions America and Europe
showed approximately the same rate of growth,
at 33 % and 34 % respectively in local currencies.
In particular, new distribution channels in
Europe and the expansion to cover additional
regions through our own Group com-
panies led to this remarkable growth in sales.
Changes in Group companies. During the year,
Tecan acquired its former distributor Sercolab
Systems, Belgium (included in the consolidated
financial statements as of March 1, 2000).
As of July 1, 2000, the assets and liabilities of
Gamera Bioscience in Boston (USA) were taken
over and brought into the newly founded
research and development company Tecan
Boston. Together, these transactions resulted in
goodwill of some CHF 16.8 million, which is
scheduled to be amortized over the next five
years.
Profitability. Gross profit. The gross margin of
69.1% achieved in 2000 showed a slight im-
provement over the prior year. This positive
result is largely attributable to the following
factors: expansion into higher value added mar-
kets (Genomics/Proteomics), strong growth in
the sales of instruments in combination with
complex applications and additional options, as
well as the positive effect of foreign currency
translation during the past year.
Personnel. The number of persons employed by
the Tecan Group grew from 556 at the end of
1999 to 690 as of the end of 2000. In order to
enable the Group to maintain its strong rate of
growth in the future, additional highly qualified
professionals were recruited, particularly in the
areas of sales, marketing and customer service.
Excluding the impact of currency translation,
personnel expenses increased as a whole pro-
portionally higher than the number of employ-
ees, reflecting the successful recruitment of
highly qualified people to address new market
opportunities.
Income statement
in CHF 1,000 1996 1997 1998 1999 2000
Income statementSales 101,995 141,867 163,605 193,056 273,532Operating profit 13,759 28,141 31,545 41,015 57,915Financial result 2,964 –1,811 168 989 –3,488Income taxes 5,432 3,627 6,766 13,896 14,882Net profit 11,102 20,328 22,876 28,050 39,450Research & development, gross 10,343 12,756 18,987 25,931 29,020 Personnel expenses 35,508 46,679 46,806 56,342 73,437Depreciation of fixed assets 2,862 5,625 6,025 4,592 5,631 Amortization of intangible assets 8 51 22 – 2,928
Balance sheetCurrent assets 61,469 86,857 103,016 131,346 151,594Non-current assets 15,274 18,202 16,991 23,226 42,825Total assets 76,743 105,059 120,007 154,572 194,419 Current liabilities 19,660 30,346 26,229 32,460 48,136Non-current liabilities 7,567 5,427 4,976 4,172 7,261 Minority interests 34 169 219 80 25Shareholders’ equity 49,482 69,117 88,583 117,860 138,997
Cash flow statementCash flows from operating activities 9,465 23,726 26,097 27,656 30,334Capital expenditures in fixed assets 3,333 5,481 4,832 6,023 9,057 Dividends paid – 1,036 1,944 2,683 3,358
Other dataNumber of employees (end of period) 383 454 507 556 690Number of employees (average) 375 424 489 542 629
Research & development in % of sales 10.1% 9.0% 11.6% 13.4% 10.6%Sales per employee 272 335 335 356 435
Data per share (CHF)*Net profit 8.60 15.75 17.73 21.74 30.57Shareholders’ equity 38.35 53.56 68.65 91.33 107.71
Dividends paid (CHF/share)** 0.80 1.50 2.00 2.50 3.50
data per share are based on 1,290,420 registered shares of par value CHF 10 each outstanding for
all periods presented
proposal to the Annual General Meeting
FIVE-YEAR CONSOLIDATED DATA
*
**
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Balance sheet. As in the past, Tecan has a very
healthy balance sheet structure. Shareholders’
equity showed a net increase of CHF 21.1 million
and represents 71.5 % of total assets as of
December 31, 2000. Thereby, net purchases
of treasury shares totaling CHF 15.2 million
were charged directly against shareholders’
equity. Due to the successful business year
2000 and in particular the strong sales during
the fourth quarter, net working capital increa-
sed as of year-end. Higher capital expenditures
necessary as a result of the expanding infra-
structure to accommodate the growing number
of employees and the acquisitions of new
subsidiaries already mentioned caused total
assets to rise by CHF 39.9 million or 25.8 %
compared with the prior year, reaching CHF
194.4 million by the end of 2000.
Cash flow statement. The cash flow from opera-
tions increased by CHF 2.7 million compared
with the prior year, reaching CHF 30.3 million in
2000. Capital expenditures of CHF 9.1 million
and acquisitions totaling CHF 17.7 million
caused funds of CHF 16.3 million to be used for
investment activities. The cash flow used for
financing activities of CHF 16.7 million is largely
attributable to the purchase of treasury
shares and the dividend distribution of CHF 3.4
million. As a result, cash and cash equivalents
decreased slightly (CHF 0.4 million) as of the
end of 2000.
Treasury shares. Beginning in 2000, Tecan
began to purchase treasury shares. A portion of
these shares was used as consideration for
acquisitions made. During the year, some 18,200
shares with an average price of CHF 1,526 were
purchased and some 7,800 shares were either
sold or rendered in connection with acquisitions
at an average price of CHF 1,605. Tecan held
15,112 treasury shares as of year-end. During
2001, Tecan plans to continue this policy of in-
vesting a portion of those liquid assets not
required in its operations in treasury shares.
Nevertheless Tecan demonstrated its ability
to manage this pace of growth with a notable
increase in average sales per employee, reach-
ing CHF 435,000 (1999: CHF 356,000). There-
fore, it was and is Tecan’s goal to provide its
employees with an attractive working environ-
ment. In connection with the employee stock
option program introduced in 1999 for all
employees, some 34,500 stock options were
granted to Tecan employees during 2000.
Research & Development. In line with Tecan’s
target of investing 10 –12 % of sales annually for
research and development, expenditures in this
area amounted to CHF 29.0 million in 2000,
which represents 10.6 % of sales. In comparison
with the prior year, more emphasis was placed
on in-house development, which is reflected
in the slight reduction in external project costs.
Special expenditures were made for technologi-
cal breakthroughs and new applications
in the areas of LabCD™/microfluidics, work
stations, new Freedom platforms, ADME
and other assays.
Other operating expenses. Significant efforts
were made by Tecan during 2000 in the areas
of infrastructure, processes and systems. The
steadily increasing number of employees led to
the occupation of new office space in several
Group companies, with corresponding higher
rental expense and additional infrastructure
expenses. The new orientation of the Group’s
internal structure toward the individual
markets brought with it a strong increase in
travel, and, in addition, a large project with the
goal of coordinating processes and systems
throughout the Group was started at the begin-
ning of 2000. All of these activities resulted in
an increase in other operating expenses.
Operating profit rose by 41.2 % to CHF 57.9 mil-
lion, or 21.2 % of sales. Excluding the develop-
ment costs capitalized in 1999 of CHF 3.6 mil-
lion, the increase in operating income was
a remarkable 55 %. In addition, the EBIT in 2000
include the amortization of goodwill as
well as of capitalized development costs in
the amounts of CHF 1.7 million and CHF 1.2
million, respectively.
Financial result. The financial result in 2000 was
burdened by foreign exchange losses. Although
an increase of more than 90 % could be
achieved in net interest income of CHF 1.5
million, foreign exchange losses of CHF –5.0
million resulted in a net negative financial
result. The foreign exchange losses were attri-
butable to, on the one hand, Tecan’s risk
management strategy, which calls for a sub-
stantial hedging of operational currency risks,
and, on the other hand, unrealized translation
differences on monetary balance sheet
positions as of year-end.
Taxes. The introduction of a holding structure in
Switzerland as of January 1, 2000 had an on-
going positive impact on the effective tax rate
for the year. Furthermore, a one-time positive
tax impact resulted in an additional reduction
in income taxes. These factors led to a tax
expense of CHF 14.9 million, or 27.3 % of pre-tax
income (1999: 33.1 %).
Tecan’s strong operating performance in 2000
resulted in a net profit of CHF 39.5 million, or
14.4% of sales. This represents an increase in
net income of 40.6% compared with 1999. The
earnings per share increased from CHF 21.66 in
1999 to CHF 30.57 for the year 2000.
Manpower by activity (eop)
Manufacturing & Logistics
Customer Service
Research & Development
General & Administration
Selling & Marketing
144
142
121
20.9%
20.6%
17.5%
102 14.8%
180 26.1%
30
20
100
Research and Development
19,0
25,9
29,0
11.6%
13.4%
10.6%
Research and Development gross
Research and Development (gross) in % of sales
in CHF million
30
20
100
Cash flow
26,1
27,7
30,3
in CHF million
1998
1999
2000
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CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheet at December 31
in CHF 1,000 Notes 2000 1999
Assets
Cash 28,067 15,936Time and money market deposits 21,004 33,485Marketable securities – 10,774Trade accounts receivable 3 68,189 48,651Other receivables 5,454 4,503Inventories 4 25,461 16,889Prepaid expenses 3,419 1,108Current assets 151,594 131,346Financial assets 933 513Fixed assets 5 17,868 14,554Intangible assets 6, 16 16,854 3,600Deferred tax assets 17 7,170 4,559Non-current assets 42,825 23,226Assets 194,419 154,572
Liabilities and shareholders’ equity
Current bank liabilities 7 2,126 2,419Trade accounts payable 19,888 10,581Other liabilities 2,855 4,408Provisions 8 4,421 1,292Current tax liabilities 5,806 2,212Accrued liabilities 13,040 11,548Current liabilities 48,136 32,460Bank loans 7 640 –Other non-current liabilities 88 106Provisions 8 1,215 708Deferred tax liabilities 17 5,318 3,358Non-current liabilities 7,261 4,172Minority interests 25 80Share capital 13,020 13,000Treasury shares (151) (47)Additional paid-in capital 7,373 6,086Translation differences 1,326 2,493Retained earnings 117,429 96,328Shareholders’ equity 9,10 138,997 117,860Liabilities and shareholders’ equity 194,419 154,572
Dividends. At the annual shareholders’ meeting
on April 26, 2001, the Board of Directors
will recommend the payment of dividends of
CHF 3.50 per share. Tecan thus sets forth
its policy of distributing dividends according to
levels of net profit, and can once again rec-
ommend a significant increase in dividends.
Stock market performance. The registered
shares of Tecan Group Ltd., the Group’s ultimate
holding company, are traded on the Swiss
stock exchange. In 2000, the share price clearly
outperformed the Swiss Performance Index
(SPI).
On December 31, 2000, the stock market
closing price was CHF 1,681 – compared with
CHF 675 a year earlier – representing a 149 %
increase during the year. This made Tecan
one of the best performers on the Swiss stock
exchange and caused the company’s market
capitalization to climb from CHF 0.9 billion to
CHF 2.2 billion.
1 to 10 share split proposed. The Board of Direc-
tors will also propose a share split subject
to approval of the required change in Swiss law.
With this split Tecan will further increase
its attractiveness to shareholders and its share
price will be more in line with other comparable
companies. In addition, Tecan will pay as of
the year 2001 all custody charges incurred by its
shareholders.
High and low share price (CHF)1996 1997 1998 1999 2000
High 190 383 500 680 1,975Low 105 187 300 440 640Year end 189 330 490 675 1,681
Sales by location of customersyin CHF million
North America 129,8
107,3
26,1
10,3
%
47.5%
39.2%
9.5%
3.8%
Europe
Others
Asia
Net liquidityin CHF 1,000 1998 1999 2000+ cash and cash equivalents 37,019 49,421 49,071+ marketable securities 10,578 10,774 –./. current bank liabilities –124 –2,419 –2,126./. bank loans –3,398 – –640= net liquidity 44,075 57,776 46,305
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CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in shareholders’ equity
in CHF 1,000 Additional Total share-Share Treasury paid-in Translation Retained holders’
capital shares capital differences earnings equity
Shareholders’ equity
at 1/1/1999 13,000 (46) 6,086 (1,326) 70,869 88,583Net profit 28,050 28,050Dividends paid (2,591) (2,591)Purchase of treasury shares (1) (1)Translation differences 3,819 3,819Shareholders’ equity at 12/31/1999 13,000 (47) 6,086 2,493 96,328 117,860
Shareholders’ equity
at 1/1/2000 13,000 (47) 6,086 2,493 96,328 117,860Net profit 39,450 39,450Dividends paid (3,213) (3,213)Purchase of treasury shares (104) (15,136) (15,240)Exercise of employee stock
options 20 1,287 1,307Translation differences (1,167) (1,167)Shareholders’ equity at 12/31/2000 13,020 (151) 7,373 1,326 117,429 138,997
See also note 10.
Consolidated income statement
in CHF 1,000 Notes 2000 1999
Sales 14 273,532 193,056
Material costs (84,479) (61,105)Personnel expenses 9 (73,437) (56,342)Distribution and selling expenses (16,709) (10,899)External project costs 16 (9,294) (9,743)Depreciation of fixed assets 5 (5,631) (4,592)Amortization of intangible assets 6 (2,928) –Other operating expenses (23,670) (13,735)Other operating income and
development costs capitalized 16 531 4,375Operating expenses (215,617) (152,041)Operating profit 57,915 41,015Interest expense (237) (149)Interest income 1,759 941Foreign exchange gains (losses) 11 (5,010) 197Financial result (3,488) 989Profit before taxes 54,427 42,004Income taxes 17 (14,882) (13,896)Profit before minority interests 39,545 28,108Minority interests in profit (95) (58)Net profit 39,450 28,050
Earnings per share (CHF/share)* 20 30.57 21.66Diluted earnings per share (CHF/share)* 20 29.99 21.25
per registered share with a nominal value of CHF 10*
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SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Basis for the consolidated financial statements.The consolidated financial statements arebased on the individual subsidiaries’ annualaccounts as of December 31, which wereprepared according to uniform Group account-ing principles. These consolidated financialstatements are designed to give a true and fairview of the results of operations, financialposition and cash flows of the Tecan Group, andare prepared in accordance with InternationalAccounting Standards (IAS) issued by the Inter-national Accounting Standards Committee(IASC).
Changes in accounting principles. IAS 35 and 37 were applied to the consolidated financialstatements for the first time in 2000. All othernew or revised International Accounting Stan-dards which went into effect as of January 1,2000 were already implemented in the 1999consolidated financial statements. No retro-active changes in the financial statementsresulted.
Scope of consolidation. The consolidatedfinancial statements include Tecan Group Ltd.and all subsidiaries which are directly or in-directly under its control (generally those forwhich over 50 % of the voting rights are owned).Minority interests in shareholders’ equity and in the net profit of consolidated subsidiaries areshown separately. Group companies acquiredduring the year are included in the consolidatedfinancial statements as of the date of purchase.The essential companies which are included inthe consolidated financial statements are listedin the notes to the financial statements ofTecan Group Ltd.Currently Tecan Group Ltd. owns no investmentswhich are not consolidated.
Capital consolidation. The capital consoli-dation is performed according to the purchasemethod. Companies included for the firsttime in the consolidation are valued accordingto uniform accounting principles. Any resulting
goodwill is capitalized and amortized over itsestimated useful life.
Translation of foreign currencies. The financialstatements of foreign subsidiaries denominatedin foreign currencies are translated into Swissfrancs as follows:
Assets and liabilities current rates at year-end Shareholders’ equity historical ratesIncome and expenses average rates for the yearCash flows average rates for the year
The resulting translation differences are directlycharged against or credited to shareholders’equity.Foreign currency transactions are translatedusing rates applicable as of the transactiondate. Resulting exchange gains and losses areincluded in net profit. Monetary assets andliabilities denominated in foreign currencieswhich were held at December 31 are translatedat year-end rates. The resulting translationgains and losses are a component of net profit.
Intercompany sales and profits. Intercompanysales and profits, as well as accounts receivableand payable between Group companies, areeliminated.
Marketable securities. Securities are readilymarketable, publicly traded titles. Such assetsare stated at market value.
Receivables. Trade accounts receivable andother receivables are shown at their nominalvalues, less economically necessary allowancefor doubtful accounts.
Inventories. Inventories are valued at the lowerof purchase/production costs or market values,using the first-in-first-out or average method.Production costs include costs of material andlabor, as well as a reasonable allocation of over-head. Slow-moving and obsolete inventoryitems have been written down.
Consolidated cash flow statement
in CHF 1,000 Notes 2000 1999
Profit before minority interests 39,545 28,108
Adjustments to reconcile profit to cash flow from operating activities:
Depreciation of fixed assets 5 5,631 4,592Amortization of intangible assets 6 2,928 –Change in net deferred taxes 17 (771) 1,810Increase in provisions 8 3,774 127Loss on sales of fixed assets 89 152
(Increase) decrease in current assets:
Trade accounts receivable 3 (21,287) (7,247)Inventories 4 (9,739) (1,727)Other receivables and prepaid expenses (3,348) (383)
Increase (decrease) in current liabilities:
Trade accounts payable 9,540 3,446Other liabilities and accrued expenses 3,972 (1,222)
Cash inflows from operating activities 30,334 27,656Capital expenditures in fixed assets 5 (9,057) (6,023)Proceeds from sales of fixed assets 213 151Purchases of subsidiaries, net of cash acquired 1 (17,740) (108)Sales (purchase) of marketable securities 10,774 (196)Increase in financial assets and intangible assets 16 (476) (3,671)Cash outflows from investing activities (16,286) (9,847)Dividends paid (3,358) (2,683)Exercise of employee stock options 1,307 –Purchase of treasury shares (27,771) –Sales of treasury shares 12,531 –Increase in (repayment of) current bank liabilities (72) 1,931Increase in (repayment of) bank loans 7 657 (3,564)Cash outflows from financing activities (16,706) (4,316)Translation differences 2,308 (1,091)Increase (decrease) in cash and cash equivalents (350) 12,402Cash and cash equivalents at beginning of year 49,421 37,019Cash and cash equivalents at year-end 49,071 49,421
Interest received 1,716 941Interest paid 174 149Income taxes paid 12,338 14,575
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Changes in Group companies
Sercolab Systems, a former distributor in Belgium, was acquired as of March 1, 2000 and is includedin the consolidated financial statements as of that date. As of July 1, 2000, Tecan took over theassets and liabilities of Gamera Bioscience and brought these into the newly founded Tecan Boston.
The following amounts were included in the consolidation for assets and liabilities acquired:in CHF 1,000
Fixed assets 718Current assets 397Cash and cash equivalents 171Liabilities (168)Net identifiable assets and liabilities 1,118Goodwill 16,793Purchase price 17,911Cash acquired (171)Net cash outflow 17,740
In April 1999 Tecan acquired the minority holding of 8 % in Tecan Japan Co., Ltd. for JPY 8.4 million (CHF 0.1 million). No goodwill resulted from this transaction.
Foreign exchange rates
The Tecan Group has used the following foreign exchange rates in the preparation of the financial
statements:
in CHF Balance sheet Income statement
2000 1999 2000 1999
USD 1 1.62 1.60 1.69 1.50EUR 1 1.52 1.60 1.56 1.60DEM 100 77.77 81.81 79.64 81.81ATS 100 11.05 11.63 11.32 11.63GBP 1 2.42 2.58 2.56 2.43FRF 100 23.19 24.39 23.75 24.39ITL 1000 0.79 0.83 0.80 0.83JPY 100 1.42 1.56 1.56 1.33SGD 100 92.80 95.60 97.90 88.70
1.
2.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Fixed assets. Fixed assets are stated at cost lessaccumulated depreciation as commerciallyrequired. Depreciation is calculated under thestraight-line method based on the estimateduseful lives of the assets:
Furniture and fixtures 4–8 yearsMachines and motor vehicles 3–7 yearsEDP equipment 3–5 yearsBuildings 25–50 yearsLeasehold improvements term of the lease,
not exceeding 10 years
Assets held under financing leases tantamountto the purchase of the assets are capitalized at the net present value of lease payments anddepreciated over their estimated useful lives.
Intangible assets. Goodwill resulting fromacquisitions represents the difference betweenthe purchase price and the fair value of net assets acquired. Goodwill is capitalized andshown under intangible assets. Amortization is recorded on a straight-line basis over theestimated economically useful life, limited to amaximum of 20 years.
Taxes. The Group provides for all taxes estima-ted to be payable on Group companies’ nettaxable income for the year.Deferred taxes arising due to temporary differ-ences in the recognition of certain income andexpenses for financial and tax reporting pur-poses are provided. The deferred tax calculationis made based on the balance sheet liabilitymethod using local tax rates currently appli-cable or expected. Deferred tax assets resultingfrom timing differences and tax loss carry-forwards are recorded to the extent that theirfuture realization is probable.Beginning with the implementation of therevised IAS 12 as of January 1, 1998, deferredtaxes on possible dividend distributions fromthe retained earnings of subsidiaries areprovided. (See note 17.)
Provisions. Provisions are recognized when anobligation has resulted from past events whichwill probably require an outflow of resources,the amount of which can reliably be estimated.
Financial instruments. Forward foreign ex-change contracts are entered into only as a hedge of specific future foreign currency cashflows. Gains and losses on forward exchangecontracts are included in the determination ofnet profit at the time the underlying hedgedtransactions are concluded.
Retirement benefits. Within the Group, variouspension plan schemes exist. As a rule, theobligations are covered by independent pensionfunds, which are maintained as defined contri-bution plans.
Employee profit sharing. The company createdconditional share capital in 1997 for the purposeof an employee profit sharing program. Basedon this conditional capital, an employee shareoption plan was introduced in 1999. As suchoptions are exercised, new shares will be issuedfrom the conditional share capital, which willresult in share capital and additional paid-incapital equal to the striking prices received.
Development costs. In compliance with IAS 38,development costs are capitalized if technicaland economical feasibility is assured, if evidenceof future use exists, and if development costscan be separately determined and measured.Development costs related to the Genesis FE project were capitalized for the first time in1999 based on the fulfillment of all criteria.(See note 16.)Development costs capitalized, which includematerial costs and external project costs,are amortized over the useful life associatedwith the project, but not to exceed 5 years.
Related parties. Transactions with relatedparties are conducted under arms’ length mar-ket conditions.
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Changes in intangible assetsin CHF 1,000 Goodwill Other Total 2000 Total 1999
At costBalance at January 1 – 3,600 3,600 –Changes in Group companies 16,793 – 16,793 –Additions – – – 3,600Disposals – – – –Translation differences (680) – (680) –Balance at December 31 16,113 3,600 19,713 3,600
Accumulated amortizationBalance at January 1 – – – –Changes in Group companies – – – –Annual amortization 1,728 1,200 2,928 –Disposals – – – –Translation differences (69) – (69) –Balance at December 31 1,659 1,200 2,859 –Net book value 14,454 2,400 16,854 3,600
Other intangible assets include development costs which have been capitalized.
Bank loansin CHF 1,000 2000 Due within 1999
1 year 2–3 years over 3 years
Analysis by currencyDenominated in ATS 640 – 320 320 74Denominated in JPY 2,126 2,126 – – 2,345Total 2,766 2,126 320 320 2,419Change compared with previous year 347 (979)Thereof translation differences (223) 518
Analysis by interest rates0 %–2 % 2,126 –2 %–4 % – 2,3454 %–6 % 640 –6 %–8 % – 74Total 2,766 2,419
Unused lines of credit amounting to CHF 10.5 million were available to the Group at December 31,
2000.
6.
7.
Trade accounts receivablein CHF 1,000 2000 1999
Receivables 69,449 49,470Allowance for doubtful accounts (1,260) (819)Total 68,189 48,651Change compared with previous year 19,538 11,271Thereof translation differences (1,107) 3,729
Inventoriesin CHF 1,000 2000 1999
Raw material and work in process 10,331 6,321Semi-finished and finished goods 17,725 12,224Allowance for slow-moving and obsolete inventories (2,595) (1,656)Total 25,461 16,889Change compared with previous year 8,572 3,790Thereof translation differences (649) 1,982
Changes in fixed assetsin CHF 1,000 Furniture Machines and EDP Land and Leasehold Total Total
and fixtures motor vehicles equipment buildings improvements 2000 1999
At costBalance at January 1 5,097 10,209 14,388 10,800 2,641 43,135 36,992Changes in Group companies 184 342 228 – 78 832 –Additions 1,086 3,705 3,187 307 772 9,057 6,023Disposals (90) (412) (399) – – (901) (1,204)Translation differences (162) (327) (298) (267) (7) (1,061) 1,324Balance at December 31 6,115 13,517 17,106 10,840 3,484 51,062 43,135
Accumulated depreciationBalance at January 1 3,699 6,286 9,598 6,749 2,249 28,581 24,124Changes in Group companies 6 86 22 – – 114 –Annual depreciation 569 1,816 2,782 237 227 5,631 4,592Disposals (88) (178) (334) – – (600) (901)Translation differences (102) (147) (204) (74) (5) (532) 766Balance at December 31 4,084 7,863 11,864 6,912 2,471 33,194 28,581Net book value 2,031 5,654 5,242 3,928 1,013 17,868 14,554
Fixed assets are insured in the event of fire for the total value of CHF 39.2 million (1999: CHF 39.7
million), of which CHF 10.5 million (1999: CHF 10.8 million) relates to buildings.
As of year-end, purchase commitments for capital expenditures for fixed assets amounted to
CHF 2.2 million (1999: 2.1 million).
3.
4.
5.
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Change in the number of employee stock options outstanding:2000 1999
Number Number
Balance at January 1 33,792 –Issued 34,454 33,792Exercised (2,007) –Cancelled and expired (5,600) –Balance at December 31 60,639 33,792
Subsequent to the exercise of 2,007 options during the business year 2000, the company receivedCHF 1.3 million in cash and cash equivalents. This resulted in an increase in share capital of CHF 20,070 and in additional paid-in capital of CHF 1.3 million.
Summary of employee stock options outstanding as of year-end:2000 1999
Expiration date Exercise price Number Number
December 15, 2004 CHF 500 29,290 33,792April 10, 2005 CHF 1,000 17,562 –November 30, 2005 CHF 1,625 13,787 –
Retirement benefits. The Tecan Group maintains various retirement benefit plans for its employees.Benefits are distributed for the most part by separate pension funds. These represent financiallyindependent retirement benefit funds administered by insurance companies and banks, and are conceived solely as defined contribution plans. As a rule, financing is achieved through bothemployee and employer contributions.As of year-end, pension provisions amounted to:in CHF 1,000 2000 1999
Funded plans 408 4Unfunded plans 136 118Total 544 122
Provisionsin CHF 1,000 Warranty provision Other Total 2000
Balance at January 1 1,201 799 2,000Changes in Group companies 37 – 37Provisions made 1,995 2,637 4,632Provisions used (203) (652) (855)Provisions reversed – (3) (3)Translation differences (72) (103) (175)Balance at December 31 2,958 2,678 5,636Thereof current 2,958 1,463 4,421Thereof non-current – 1,215 1,215
Other provisions consist primarily of pension provisions and provisions for legal obligations.
Employee benefits
Personnel expenses. Personnel expenses include the following:in CHF 1,000 2000 1999
Salaries and wages 59,182 46,271Social security taxes 7,200 6,247Retirement benefits 2,142 1,073Other personnel expenses 4,913 2,751Total 73,437 56,342
Employee stock option plan. An employee stock option plan for Tecan shares went into effect inDecember 1999. In addition to salaries, all employees of the Tecan Group outside of the USAreceived options. Employees in the USA received stock appreciation rights with the same treatmentand the same conditions as the employee stock options. The options issued grant employees the right to purchase one Tecan share per option and are exercisable in up to 5 years.Options issued in 1999 in connection with the employee option plan were blocked for 4 yearsfollowing their issue date. If the expected performance goals are reached, half of the optionsgranted may be exercised after 2 years. The employee stock option plan for 2000 and 2001 includesprogressive restricted periods, which allow the exercise of a maximum of 25 % of options issuedafter one year.All outstanding options granted are covered by the conditional share capital.
8.
9.
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Rental and lease commitmentsThe commitments arising from operating leases are largely rental payments for buildings. During1999, a 10-year rental agreement was entered into for a new building to be used for operations andproduction in Switzerland.
Commitments under non-cancelable operating leases:in CHF 1,000 2000 1999
Due date
2000 – 2,1332001 6,107 2,4482002 5,467 2,2672003 5,257 2,1152004 2,089 10,8302005 and beyond 10,158 –Total 29,078 19,793
No significant commitments exist under finance leases.
Contingent liabilities and encumbrance of assets
As of December 31, 2000 and 1999, the Group had no contingent liabilities to third parties, and,except for assets capitalized under financing leases, none of the Group’s assets were pledged,assigned or subject to retention of title.
Segment information
Segment information is disclosed in accordance with the revised IAS 14. The primary segregation is indicated by geographical region. Intersegment transactions are conducted based on prevailingmarket prices.
12.
13.
14.
Shareholders’ equity
The changes in shareholders’ equity are presented on page 35.Treasury shares consist of 15,112 registered shares with a nominal value of CHF 10 each (1999: 4,128registered shares with a nominal value of CHF 10 each and 393 registered shares with a nominalvalue of CHF 15 each).Stamp taxes paid on the capital increase out of conditional capital subsequent to the exercise ofemployee stock options were charged against additional paid-in capital.Through various purchase and sales transactions dealing in treasury shares during the currentbusiness year, shareholders’ equity was charged with a net amount of CHF 15.2 millionThe composition of and the changes in share capital are disclosed in note 4 to Tecan Group Ltd.’sfinancial statements.
Financial instruments
Credit risks. The individual companies and the Group as a whole have no significant concentrationof credit risks, as financial instrument contracts are concluded exclusively with first-rate financialinstitutions. The credit risk associated with trade accounts receivable is limited, as the Group hasnumerous clients located in various geographical regions.
Interest rate risks. The Group places its cash and cash equivalents as well as bank loans primarilyshort-term with first-rate bank institutions.
Foreign currency risks. Tecan centralizes its foreign currency exposure in a few locations only. Thehedging policy of the Group is to cover the foreign currency exposure to a certain percentage of ouroperating activities. In order to hedge exchange risks related to foreign currency payments to bereceived in the year 2001, forward foreign currency sales contracts denominated in USD and JPYwith various maturity dates totaling USD 5 million and JPY 92 million have been entered into, andforeign currency options with an underlying volume of USD 2 million have been purchased. Themarket value of the forward contracts and the foreign currency options as of December 31, 2000was CHF 0.5 million above the contracted value (1999: CHF 0.6 million below).The foreign exchange loss of CHF 5.0 million in 2000 is the result of the translation differences –especially on the USD – on monetary balance sheet positions and realized losses on foreign currency contracts.
10.
11.
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Personnel
During the year, an average of 629 employees (1999: 542 employees) were employed by the TecanGroup. At year-end, the Group employed 690 persons (1999: 556 persons).
Research and developmentin CHF 1,000 2000 1999
Total research and development costs (gross) 29,020 25,931Revenues received under development contracts 169 422Government research subsidies 579 775Development costs capitalized – 3,600Amortization of development costs capitalized 1,200 –Total research and development costs (net) 29,472 21,134Thereof external project costs 9,294 9,743
Costs for research and the development of new products amounted to 10.6 % of sales (1999: 13.4 %).Based on the sales agreement with Abbott, costs relating to the completion of the Genesis FEamounting to CHF 3.6 million were capitalized for the first time at December 31, 1999. The develop-ment costs capitalized are amortized over 3 years. After offsetting revenues received under develop-ment contracts of CHF 0.2 million (1999: CHF 0.4 million) and government research subsidies, a netresearch and development expense of CHF 29.5 million resulted in 2000 (1999: CHF 21.1 million),which represents 10.8 % (1999: 11.0 %) of sales.
Income taxesin CHF 1,000 2000 1999
Current income taxes 15,533 12,086Increase (decrease) in deferred taxes (651) 1,810Total 14,882 13,896
Income taxes are calculated based on the Group profit as determined under uniform valuationprinciples. The offset of tax loss carry-forwards during the year resulted in savings in currentincome taxes of CHF 0.2 million (1999: CHF 0.4 million).Deferred income taxes arising due to temporary differences in the valuation of assets and liabilitiesfor financial reporting and for tax purposes are determined according to the balance sheet liabilitymethod. The Group recognizes both deferred tax assets and liabilities on temporary differencesusing local tax rates currently applicable or expected. In addition, deferred taxes are provided onpossible dividend distributions from subsidiary companies (withholding taxes).
15.
16.
17.
Segment information (by location of assets)in CHF 1,000 America Europe Asia Corporate/consolidation Group
2000 1999 2000 1999 2000 1999 2000 1999 2000 1999
Sales to third parties 134,313 86,681 120,213 92,511 19,006 13,864 – – 273,532 193,056Intersegment sales 10,464 6,810 59,661 31,728 – – (70,125) (38,538) – –Total sales 144,777 93,491 179,874 124,239 19,006 13,864 (70,125) (38,538) 273,532 193,056Operating profit 19,237 12,938 43,580 26,842 1,522 1,527 (6,424) (292) 57,915 41,015
Total assets 65,199 44,240 185,113 124,997 11,736 10,153 (67,629) (24,818) 194,419 154,572Capital expenditures
in fixed and intangible assets 1,707 984 7,222 4,973 128 66 – – 9,057 6,023Depreciation and amortization (3,011) (1,031) (5,440) (3,424) (108) (137) – – (8,559) (4,592)Total liabilities 39,080 19,740 37,830 24,791 9,148 7,651 (30,661) (15,550) 55,397 36,632
Other than the depreciation of fixed assets and the amortization of intangible assets, no significant
non-cash expenses were incurred.
Sales by region (by location of customers)in CHF 1,000 America Europe Asia Others Total
2000 1999 2000 1999 2000 1999 2000 1999 2000 1999
Sales to third parties 129,843 87,195 107,263 79,496 26,117 21,006 10,309 5,359 273,532 193,056Change in %* 33 21 34 6 11 12 96 140 33 15* in local currency vs. prior year
Sales by product groupin CHF 1,000 Robotic sample Readers, washers Robotic systems Development
processors and dispensers Pumps and valves (TRAC) contracts and others Total
2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999
Sales to
third parties 169,492 115,025 51,942 37,943 35,447 28,745 7,912 7,624 8,739 3,719 273,532 193,056Change in %* 38 11 33 13 9 37 0 37 135 (3) 33 15* in local currency vs. prior year
Assets and capital expenditures in fixed assets cannot be allocated meaningfully to the individualproduct groups, as these are used for all product groups. A mathematical allocation would notresult in reliable or meaningful information.
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Deferred taxes are included in the balance sheet as follows:in CHF 1,000 2000 1999
Deferred tax assets 7,170 4,559Deferred tax liabilities (5,318) (3,358)Total, net 1,852 1,201
Subsequent events
No events have occurred subsequent to the balance sheet date which would impact the disclosuresmade in these financial statements.Tecan founded a new subsidiary, Tecan Proteomics GmbH in Munich on January 1, 2001 and tookover a majority interest in Dr. Weber GmbH as of the same date.
Remuneration of directors
The total remuneration expense for the Board of Directors of Tecan Group Ltd. was CHF 270,097 in2000 (1999: CHF 141,500). Annual individual director’s fees are CHF 35,000. In addition, a total of 1,166 stock options (1999: 800) were issued to directors in connection with the employee stockoption plan.
Earnings per share
The earnings per share were determined based on the profit attributable to shareholders and theaverage number of shares outstanding, excluding treasury shares.in CHF 2000 1999
Share capital issued 13,020,070 13,000,000Treasury shares (151,120) (47,175)Share capital entitled to dividends 12,868,950 12,952,825Average number of shares outstanding 1,290,420 1,295,274Undiluted profit attributable to shareholders (CHF/share) 30.57 21.66Number of shares under option 60,639Average exercise price 901Number of shares which could be issued from the above proceeds if the company
had issued shares at the average trading price for the year of CHF 1,532 (35,647)Number of shares after dilution 1,315,412Diluted earnings per share for shareholders (CHF/share) 29.99 21.25
In 1997, Tecan Ltd. created a conditional share capital of CHF 1.3 million designated for employeeprofit sharing. At the end of 2000, 60,639 options had been issued under the employee stock optionplan.
18.
19.
20.
As in the past, tax loss carry-forwards are available to Group companies, for which the followingpotential tax benefits have not been capitalized for precautionary reasons:in CHF 1,000 2000 1999
Expiring in
2000 – 1502001 173 1502002 173 1742003 and beyond 218 –Unlimited 238 188Total potential tax benefits 802 662Thereof capitalized 0 0
The income tax expense can be analyzed as follows:in CHF 1,000 2000 1999
Profit before taxes 54,427 42,004Tax expense based on the Group’s average rate of 32 % (1999: 35 %) 17,177 14,801Non-deductible expenses 779 39Tax-free income and tax reductions (1,324) (329)Application of tax loss carry-forwards (219) (363)Under (over) provided in prior years (1,531) (252)Tax expense reported 14,882 13,896
Deferred taxes apply to the following balance sheet line items:Impact on profit
in CHF 1,000 2000 2000 1999
Inventories 1,929 4,972 3,043Fixed assets (6) (2) 4Liabilities and accrued expenses (2,883) (2,099) 784Provisions 905 (148) (1,053)Others 839 153 (686)Total net deferred tax assets arising from
temporary differences 784 2,876 2,092Deferred taxes provided on possible dividend distributions (133) (1,024) (891)Total net deferred tax assets 651 1,852 1,201
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TECAN GROUP LTD.
Balance sheet at December 31
in CHF 2000 1999
Assets
Cash 12,144,250 7,502,004Time and money market deposits 3,500,000 24,840,000Marketable securities – 10,729,122Trade accounts receivable from third parties – 6,488,630Trade accounts receivable from Group companies – 21,647,757Other receivables from third parties 1,487,952 3,433,204Other receivables from Group companies 10,252,727 1,882,913Inventories – 2,021,441Prepaid expenses 66,929 368,609Loans to Group companies 2,845,375 2,994,725Current assets 30,297,233 81,908,405Financial assets 61,482,695 16,900,018Treasury shares 23,072,820 188,700Fixed assets 1,402,870 3,676,485Non-current assets 85,958,385 20,765,203Total assets 116,255,618 102,673,608
Liabilities and shareholders’ equity
Trade accounts payable to third parties 1,087,353 4,270,976Trade accounts payable to Group companies – 1,255,861Other liabilities to third parties 758,808 1,280,226Other liabilities to Group companies 121,129 408,869Provisions 2,606,950 8,080,244Provision for taxes 1,982,000 100,000Accrued liabilities 762,140 1,885,953Current liabilities 7,318,380 17,282,129Non-current liabilities – –Share capital 13,020,070 13,000,000Legal reserves 36,826,286 10,437,014Retained earnings 59,090,882 61,954,465Shareholders’ equity 108,937,238 85,391,479Total liabilities and shareholders’ equity 116,255,618 102,673,608
Report of the Group auditors to the general meeting of shareholders of
Tecan Group Ltd., Hombrechtikon
As auditors of the Group, we have audited the consolidated financial statements of Tecan Group
Ltd., Hombrechtikon, and subsidiaries, presented on pages 33 to 49 for the year ended December 31,
2000.
These consolidated financial statements are the responsibility of the Board of Directors. Our
responsibility is to express an opinion on these consolidated financial statements based on our
audit. We confirm that we meet the legal requirements concerning professional qualification
and independence.
Our audit was conducted in accordance with auditing standards promulgated by the Swiss
profession and with the International Standards on Auditing issued by the International Federation
of Accountants (IFAC), which require that an audit be planned and performed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. We have examined on a test basis evidence supporting the amounts and
disclosures in the consolidated financial statements. We have also assessed the accounting
principles used, significant estimates made and the overall consolidated financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion the consolidated financial statements give a true and fair view of the financial
position, the results of operations and the cash flows in accordance with the International
Accounting Standards (IAS) and comply with the Swiss law.
We recommend that the consolidated financial statements submitted to you be approved.
KPMG Fides Peat
Fredy Luthiger Lukas Marty
Swiss Certified Accountant Swiss Certified Accountant
Auditors in Charge
Zurich, February 16, 2001
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Tecan Group Ltd.
Shareholders approved the retroactive creation of a holding structure in Switzerland as of January 1,2000 during their annual meeting on May 17, 2000. The holding structure was affected by spinning off the operational portion in Tecan Schweiz Ltd. and by changing the name of Tecan Ltd.to Tecan Group Ltd. Therefore, prior year figures can be compared on only a limited basis.
Financial assetsin CHF 2000 1999
Investments in subsidiaries 18,605,028 11,400,018Loans to Group companies 42,877,667 5,500,000Total 61,482,695 16,900,018
Overview of investments in subsidiaries:Company Domicile Share capital
Tecan Schweiz Ltd. Hombrechtikon (CH) CHF 5,000,000Tecan Trading Ltd. in Gründung
Tecan Austria GmbH Grödig (A) ATS 20,000,000Tecan US Group Inc. Research Triangle Park, NC (USA) USD 1,500,000– Tecan US, Inc. Research Triangle Park, NC (USA) USD 400,000– Cavro Scientific Instruments Inc. Sunnyvale, CA (USA) USD 26,000– Tecan Boston, Inc. Medford, MA (USA)
Tecan Landesholding GmbH Frankfurt (D) EUR 25,000– Tecan Deutschland GmbH Crailsheim (D) DEM 100,000Tecan UK Ltd. Reading (UK) GBP 500,000Tecan France SA Trappes (F) FRF 3,000,000Tecan Italia S.r.l. Milan (I) ITL 150,000,000Tecan Japan Co., Ltd. Tokyo (J) JPY 50,000,000Tecan Asia (Pte.) Ltd. Singapore SGD 800,000Tecan Software GmbH Hannover (D) DEM 150,000Tecan Belgium N.V. Mechelen (B) EUR 62,000
Subsequent to the purchase of an 8 % minority interest in Tecan Japan Co., Ltd. in April 1999, allsubsidiaries are held completely (100 %), except for Tecan Software GmbH (70 %).
1.
2.
NOTES TO THE FINANCIAL STATEMENTS
Income statement
in CHF 2000 1999
Sales to third parties – 28,801,555Sales to Group companies – 47,254,215Total sales – 76,055,770Material costs – (28,136,840)Personnel expenses (3,743,913) (17,737,576)Distribution and selling expenses – (2,817,381)External project costs – (8,377,839)Depreciation of fixed assets (136,685) (2,494,091)Other operating expenses (6,109,868) (7,825,487)Management fees from Group companies 10,207,013 1,636,995Operating expenses 216,547 (65,752,219)Operating profit 216,547 10,303,551Interest expense to third parties (2,428) (19,712)Interest and investment income from third parties 9,966,802 471,876Interest income from Group companies 2,412,455 1,010,922Foreign exchange losses (2,345,982) (1,605,882)Dividend income from Group companies 15,334,943 8,718,247Financial result 25,365,790 8,575,451Profit before taxes 25,582,337 18,879,002Income taxes (2,348,840) (3,742,512)Net profit 23,233,497 15,136,490
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During their 1997 annual meeting, the shareholders approved a conditional share capital of CHF 1,300,000, reserved for employees’ profit sharing. The conditional share capital as now revisedconsists of 130,000 registered shares with a nominal value of CHF 10 each. Based on this conditionalcapital, an employee stock option plan was introduced in 1999. At December 31, 2000, 60,639options not yet exercised were outstanding in connection with the stock option plan.
The Company has knowledge of the following significant shareholders as of December 31, 2000:Schweizerische Unfallversicherungsanstalt (SUVA), Lucerne, CH 130,500 shares (10.0%)
Government of Singapore, Singapore 65,604 shares (5.0%)
Fidelity International Limited, Hamilton, Bermuda 64,221 shares (4.9%)
Contingent liabilities
The total amount of guarantees, indemnity liabilities and pledges in favor of subsidiaries wasapproximately CHF 5.9 million at December 31, 2000 (1999 CHF 3.1 million).
Encumbrance of assets
As of December 31, 2000 and 1999, none of the Company’s assets were pledged, assigned, or subjectto retention of title.
Unrecorded leasing liabilities
At December 31, 2000, as in the prior year, no unrecorded liabilities under lease commitmentsexisted.
Fire insurance value of fixed assets
The insured value of fixed assets in the event of fire was CHF 4.5 million (prior year CHF 17.9million).
Liabilities to pension funds
Liabilities to pension funds amounted to CHF 0.3 million (prior year none).No other items existed which would require disclosure under the provisions of Art. 663b of theSwiss Code of Obligations.
6.
7.
8.
9.
10.
Treasury shares
The balance in treasury shares is comprised of 15,112 registered shares with a nominal value of CHF 10 each. The average price of shares purchased (sold) in 2000 amounted to CHF 1,526 (CHF 1,605).
Number of shares
Balance at January 1 4,718Additions 18,202Disposals (7,808)Balance at December 31 15,112
Changes in shareholders’ equityin CHF Legal reserves
Reserve for Total
Share General treasury shares Retained shareholders’
capital reserve (Note 3) earnings equity
Shareholders’ equity at 1/1/2000 13,000,000 10,248,314 188,700 61,954,465 85,391,479Dividends paid (3,212,960) (3,212,960)Capital increase 20,070 3,505,152 3,525,222Net profit 23,233,497 23,233,497Changes in reserves for treasury shares 22,884,120 (22,884,120) –Shareholders’ equity at 12/31/2000 13,020,070 13,753,466 23,072,820 59,090,882 108,937,238
Share capital
During the annual shareholders’ meeting on May 12, 1999, it was decided to create uniformregistered shares with a CHF 10 nominal value by conversion and splitting. Following the annualshareholders’ meeting on May 17, 2000, the remaining 400 registered shares with a nominal valueof CHF 15 were also converted into 600 registered shares with a nominal value of CHF 10 each. Thecompany’s share capital is CHF 13,020,070, consisting of 1,302,007 registered shares with a nominalvalue of CHF 10 each (1999: 1,299,400 registered shares with a nominal value of CHF 10 and 400registered shares with a nominal value of CHF 15). Each share has one voting right during theannual meeting. Shareholders are entered in the share register only up to 5 % of share capital, andnominees only up to 2 %.
On June 3, 1999, the new uniform registered shares with a par value of CHF 10 were traded for thefirst time on the main board of the Swiss stock exchange. At the same time, the secondaryplacement of the significant investment of PE Corporation, USA, was completed. No funds flowedinto the company as a result of this transaction.
3.
4.
5.
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Report of the statutory auditors to the general meeting of shareholders of
Tecan Group Ltd., Hombrechtikon
As statutory auditors, we have audited the accounting records and the financial statements of
Tecan Group Ltd., Hombrechtikon, presented on pages 51 to 56 for the year ended
December 31, 2000.
These financial statements are the responsibility of the Board of Directors. Our responsibility
is to express an opinion on these financial statements based on our audit. We confirm that we
meet the legal requirements concerning professional qualification and independence.
Our audit was conducted in accordance with auditing standards promulgated by the Swiss
profession, which require that an audit be planned and performed to obtain reasonable assurance
about whether the financial statements are free from material misstatement. We have examined
on a test basis evidence supporting the amounts and disclosures in the financial statements.
We have also assessed the accounting principles used, significant estimates made and the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the accounting records, the financial statements and the proposed appropriation
of available earnings comply with Swiss law and the company’s articles of incorporation.
We recommend that the financial statements submitted to you be approved.
KPMG Fides Peat
Fredy Luthiger Lukas Marty
Swiss Certified Accountant Swiss Certified Accountant
Auditors in Charge
Zurich, February 16, 2001
Proposal of the Board of Directors for the appropriation of retained earningsThe Board of Directors of Tecan Group Ltd. proposes that the retained earnings of CHF 59,090,882be appropriated as follows:in CHF
35 % dividends on the company’s share capital of CHF 13,020,070 at December 31, 2000* 4,557,02535 % dividends on employee stock options which may be exercised before
the date of dividend payment of CHF 43,910* 15,369Balance to be carried forward 54,518,488Total 59,090,882
Dividends on treasury shares and employee stock options which have not been exercised
on the date of the dividend payment will be added to retained earnings.
*
INFORMATION FOR INVESTORS
In 1999 shareholders approved the creation of
unitary registered shares. The bearer shares
of CHF 100 par value were each converted into
10 new registered shares of CHF 10 par value
each. The previous registered shares of CHF 15
par value each were exchanged in a two-level
transaction into new registered shares of
CHF 10 par value.
Conditional share capital. Since 1997, condi-
tional share capital of 130,000 registered shares
of CHF 10 par value has been reserved for an
employee share program. Based on this condi-
tional share capital, employee share option
plans were introduced since 1999. Subsequent
to the exercise of 2,007 options during the
business year 2000, the share capital increased
by 2,007 shares and the company received
CHF 1.3 million in cash.
Voting rights. Each share carries one vote at the
Annual General Meeting.
Registration and voting limits. The statutes
of Tecan Group Ltd. contain a limit of 5 %
for registration and voting rights. The Board
of Directors can register nominees with
a maximum of 2 % of the share capital with
voting rights in the company’s share register.
No opting-out or opting-up clauses. The stat-
utes of the company do not contain any
opting-out or opting-up clauses which limit
or remove the duty to offer based on the
Stock Exchange Law. According to Article 32 of
the Stock Exchange Law, any shareholder
who directly, indirectly or after agreement with
third parties acquires shares of Tecan Group
Ltd. and exceeds the limit of 331/3 % of voting
rights (whether exercisable or not), is obliged to
make a purchase or exchange offer to all
shareholders of Tecan Group Ltd. In addition,
there are minimum regulations for such
an exchange offer according to the law.
Shareholders. Per December 31, 2000 the follow-
ing shareholders held more than 5% of Tecan’s
shares:
SUVA Schweizerische Unfallversicherungsanstalt 130,500 sharesGovernment of Singapore 65,604 shares
Listing. Tecan registered shares are traded on
the main board of the Swiss Exchange (SWX).
Security number, exchange symbolsSecurity Number 707 821ISIN CH 0007078212Telekurs, Dow Jones TECNReuters TECZn.S
Tecan registered shares are also freely traded in EUR in Frankfurt, Munich and Berlin.Security number 922 557
Capital StructureShare capital at December 31
2000 1999 1998 1997 1996Registered shares of CHF 10 par valueNumber 1,302,007 1,299,400Nominal value CHF 13,020,070 12,994,000
Registered shares of CHF 15 par valueNumber 400 130,000 130,000 130,000Nominal value CHF 6,000 1,950,000 1,950,000 1,950,000
Bearer shares of CHF 100 par valueNumber 110,500 110,500 110,500Nominal value CHF 11,050,000 11,050,000 11,050,000
Share capital 13,020,070 13,000,000 13,000,000 13,000,000 13,000,000
Conditional share capital 1,279,930 1,300,000 1,300,000 1,300,000
TECAN LOCATIONS59
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Tecan Group Ltd.Seestrasse 103
CH-8708 Männedorf
Switzerland
T +41 1 922 88 88
F +41 1 922 88 89
[email protected], www.tecan.com
Tecan Asia (Pte) Ltd.80, Marine Parade
#13-04
Singapore 449269
Singapore
T +65 44 41 886
F +65 44 41 836
Tecan Austria GmbHUntersbergstrasse 1a
A-5082 Grödig / Salzburg
Austria
T +43 62 46 89 33
F +43 62 46 72 770
Tecan Benelux B.V.B.A.Vaartdijk 55
B-2800 Mechelen
Belgium
T +32 15 42 13 19
F +32 15 42 16 12
Tecan Benelux B.V.B.A.Industrieweg 30,
NL-4283 Giessen,
Netherlands;
T +31 018 34 48 17 4
F +31 018 34 48 06 7
Tecan Boston200 Boston Avenue
Medford, MA 02155
USA
T +1 781 306 0827
F +1 781 306 0837
Tecan Deutschland GmbHTheodor-Strom-Straße 17
D-74564 Crailsheim
Germany
T +49 79 51 94 170
F +49 79 51 50 38
Tecan France S.A.Parc d’Activités de Pissaloup
Batiment Hermes II
Rue Edouard Branly
F-78190 Trappes
France
T +33 1 30 68 81 50
F +33 1 30 68 98 13
Tecan Italia S.r.l.Via A. Volta 16
I-20093 Cologno Monzese
Italy
T +39 2 267 00 553
F +39 2 253 28 90
Tecan Japan Co. LtdMeiji Seimei Fuchu Building 10F
1-40 Miyamachi
Fuchu City, Tokyo
Japan
T +81 42 334 88 55
F +81 42 334 04 01
Tecan Proteomics GmbHKlaussnerring 17
D-85551 Kirchheim
T +49 89 904 808 13
F +49 89 904 808 14
Tecan Schweiz AGSeestrasse 103
CH-8708 Männedorf
Switzerland
T +41 1 922 81 11
F +41 1 922 81 12
Tecan Software GmbHGrosser Kolonnenweg 23
D-30179 Hannover
Germany
T +49 511 334 280
F +49 511 334 28 28
Tecan SpainSabino de Arana, 32
E-08028 Barcelona
Spain
T +34 93 490 01 74
F +34 93 24 07
Tecan UKTheale Court
11-13 High Street
Theale
UK-Reading RG7 5AH
United Kingdom
T +44 11 89 300 300
F +44 11 89 305 671
Tecan USP.O. Box 13953
Research Triangle Park, NC 27709
USA
T +1 919 361 5200
F +1 919 361 5201
Cavro Scientific Instruments Inc.242 Humboldt Court
Sunnyvale, CA 94089-1370
USA
T +1 408 548 7400
F +1 408 745 0309
Drug Development
>
Culture of innovation. A culture of innovation
helps Tecan build on existing expertise to pro-
duce customized solutions and to seize new op-
portunities as they arise. This includes the flex-
ibility to apply core competencies in one area,
for example Genomics or Proteomics, to other
business areas such as Diagnostics. Tecan repre-
sentatives do more than provide instruments to
customers. In their role as consultants, they
bring innovation, an open mind, and an ability
to create new solutions for the demanding
challenges of their customers.
Leverage of global presence. Tecan is an inter-
national company with a presence in 52
countries. In 2000, new subsidiaries have been
added in Belgium, The Netherlands, and Spain
extending Tecan’s global presence even further.
Tecan leverages its global presence to exploit
its key strengths – successful core competencies,
a strong product portfolio, and an ability
to respond quickly in rapidly growing market
areas.
Creating value. Tecan distinguishes itself from
its competitors by creating value throughout
the lifetime of a project. The company is well
positioned to become the preferred partner
of its customers and the undisputed leader in
providing solutions to the Life Sciences industry.
Tecan also creates value for its shareholders.
With an increase of 149 % in 2000, Tecan’s share
price posted one of the best performances on
the Swiss Stock exchange.
TECAN AT A GLANCE
Clear strategy. Tecan’s business strategy is to
strengthen and expand on its core competen-
cies as it moves further into its fast growing
markets. In 2001, Tecan will continue to expand
its core competencies into the areas of dis-
posables and reagents. The goal is to provide
complete solutions for supply, information and
pipeline companies that constitute the Life
Sciences market.
Partnering with our customers. Tecan builds
long-lasting partnerships with its customers
and provides support throughout the lifetime
of a project. Customers are allowed to focus on
their own strengths secure in the knowledge
that Tecan will provide complementary services
based on the company’s core competencies.
Through customer intimacy, Tecan identifies
bottlenecks quickly and is able to produce
superior solutions.
Core competencies. Tecan’s success is built on a
solid reputation as a provider of high-quality
platforms for the automation of laboratory pro-
cesses. Core competencies in liquid handling,
miniaturization, software and detection are
fully integrated into automated systems. In-
creasingly, customers are asking for validated
systems that also include disposables and/or
reagents. Tecan meets these needs through
enabling packages for its markets of Genomics,
Proteomics, Drug Discovery and Diagnostics.
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Enabling Packages
Miniaturi-zation
Software
Disposables Reagents
Detection
Genomics ProteomicsDrugDiscovery
Diagnostics
Tecan's core competencies
GLOSSARY
Absorption, distribution, metabolism, excretion(ADME) toxicity Screening tests designed to
determine the toxicity of new drug candidates
Combinatorial chemistry A technique for rapidly
and systematically assembling a variety of mole-
cular building blocks in many different combina-
tions for use in drug discovery
Detection devices Instruments used to monitor
chemical and biological processes
Disposables Reagents and handling devices that
have a limited lifetime and which must be repla-
ced regularly
Enabling technologies Instruments and methods
that permit key processes and applications to be
performed
Free-flow electrophoresis Automated tool for
the separation of proteins. Allows for elimination
of large molecules that may interfere with detec-
tion of key target molecules
Functional genomics The process of assigning
functions to genes and other parts of the geno-
me of organisms
Genomics The study of the structure and func-
tion of large numbers of genes simultaneously
High-performance liquid chromatography High
resolution separation process for analysis or
sample preparation
High throughput screening Automated proces-
ses for the rapid assessment of the activity of
large numbers of samples
In situ hybridization A method of localizing eit-
her messenger RNA within the cytoplasm or DNA
within the chromosomes of the nucleus by hybri-
dizing the sequence of interest to a complimen-
tary strand of a nucleotide probe
Liquid handling Automated handling of very
small volumes of liquids to enable high-
throughput processes
Microarray Glass or silicon surface used to sup-
port rows of biological material, for example
known sequences of DNA. Microarrays are an
integral part of high-throughput processes
Microplate A standardized plastic tray typically
with 96 wells or depressions for holding small
quantities of material. The 96 wells are uniform-
ly located in 8 rows of 12 wells each
Miniaturization The reduction of systems to a
small scale. A key requirement of some high-
throughput processes
Nuclear magnetic resonance (NMR) A spectros-
copic method that uses the properties of diffe-
rent substances in a magnetic field to produce
images or spectra of molecules or other objects
Original Equipment Manufacturer (OEM) Manu-
facturer of components to be built into another
device without the name of the manufacturer
being apparent to the user
Proteomics The study of the full expression of
proteins by cells in their lifetime
Reagents Superior chemistry that allows novel
processes to be performed (e.g. high-throughput
DNA extraction or purification)
Robotic system Automated device where materi-
als are transferred by the physical movement of
a delivery device to a receptacle
Screening The use of assays or tests to detect
compounds that change the activity of a target
Secondary screening Refined testing procedures
with which already identified substances can be
more precisely characterised, optimised, and
investigated for their behavior
Single nucleotide polymorphisms (SNPs) Small
differences in genetic makeup that may be used
to predict drug response and potentially improve
disease treatment results. Offers the possibility
of personalized medicine
Software Operating system to control automa-
tion processes and instrumentation
Solid phase extraction Purification procedure for
substances in solution
Supply industries Companies providing essential
services and products to support the infrastruc-
ture of the life science industries
System integration The combination of different
elements to produce a complete functional
system
Target A molecule (usually a protein but someti-
mes a DNA sequence) that may interact with a
drug or drug candidate
Target validation The process of determining if a
target is critically involved in a disease process
Two-dimensional electrophoresis Analytical
method in which sample is subjected to two con-
secutive separation processes in different direc-
tions
Validation A process for checking if an instru-
ment or system performs adequately the task for
which it was designed
Western blot analysis Analytical method invol-
ving the use of labelled antibodies to detect pro-
teins after separation on gels
Supply Companiese.g. Affymetrix,
Applied Biosystems,
APB, Caliper, Cybio,
Qiagen
Disposables Reagents Data Mining
> > >
Tecan 2000 > Tecan 2001 + >> Information Companies
e.g. Celera
Incyte
LSB
Millenium, OGS
> Pipeline Companiese.g. Abbott
Novartis
Pfizer
Roche
>
Instruments
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>
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2000
“Seizing opportunities in Life Sciences”
TECAN – BOARD OF DIRECTORS AND MANAGEMENT
From left to rightAnton Schrofner, General Manager Tecan Austria
Joe Kaelin, Head of Clinical Diagnostics
Franz Rutzer, Chief Financial Officer (CFO) Tecan Group
Jan Timmers, Head of Business Development
Steve Levers, Head of OEM and General Manager CAVRO
Dr. Emile C. Sutcliffe, Chief Executive Officer (CEO) Tecan Group
Martin von Lueder, General Manager Tecan Deutschland
Joerg Borer, Head of Customer Services
Carl Severinghaus, Head of Biopharma and General Manager Tecan US
Board of Directors TecanMike Baronian, Chairman
Prof. Dr. Armin Seiler, Vice-Chairman
Dr. Emile C. Sutcliffe, Chief Executive Officer
Timothy B. Anderson
Günter Bauer
Hans-Jörg Kummer
see inside >
TECAN AT A GLANCE
1996
1997
1998
1999
2000
2001
Tecan vs. SPI
TecanSPI
2200
2000
1800
1600
1400
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1000
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600
400
200
0
Tecan is a leading player in the fast growing Life Sciences supply industry that specializes in the development, production, and distributionof enabling solutions for the discovery ofpharmaceutical substances, as well as for ge-nomics, proteomics, and diagnostics. Tecan clients are leading pharmaceutical and biotech-nology companies, university research depart-ments and diagnostics laboratories. Founded inSwitzerland in 1980, the company has manu-facturing, research and development sites inboth North America and Europe and maintainsa sales and service network in 52 countries. In2000, Tecan achieved sales of CHF 273.5 million(USD 162 million; EUR 175 million).www.tecan.com
Tecan Group Ltd., Seestrasse 103, CH-8708 Männedorf, Switzerland, T +41 1 922 88 88, F +41 1 922 88 89, [email protected], www.tecan.com
in CHF