UBS Global Life Sciences ConferenceTecan Group AGDr. Rudolf Eugster, CFO
September 20, 2011
September 20, 2011 / p2 / UBS GLSC
Contents
• Introducing Tecan
• Strategic Growth Drivers
• Financials H1 2011 & Outlook
September 20, 2011 / p3 / UBS GLSC
Introducing Tecan
• Provider of instruments and workflow-solutions to the world’s pharma, biotech, diagnostic and forensic laboratories and companies
• Our solutions accelerate, automate and enhance the processes in state-of-the-art life sciences laboratories
• Global leader in laboratory automation for 30 years
• Leading provider of OEM instruments and components
• HQ in Switzerland, 3 manufacturing and R&D sites; ≈1,100 employees; maintaining a sales and service network in 52 countries
• Listed at the SIX Swiss Exchange (TECN; TECN SW)
September 20, 2011 / p4 / UBS GLSC
Life Sciences Business
Tecan’s Products, Business Structure and Markets
• Focused on all end-user activities• Products marketed under the Tecan
brand through own sales & service organizations and distributors
Partnering Business• Focused on all OEM activities• Products sold by partners under
their own brand
Life Science Research Diagnostics Forensics Applied
Markets
September 20, 2011 / p5 / UBS GLSC
Contents
• Introducing Tecan
• Strategic Growth Drivers
• Financials H1 2011 & Outlook
September 20, 2011 / p6 / UBS GLSC
Life SciencesBusiness
PartneringBusiness
Strategic Drivers for Sustainable Profitable Growth
High-Value Services & Consumables
Increased Innovation to Drive Organic Growth
Geographic Expansion into Growth Markets
Diversified Industry Segments & Broad Application Spectrum
In-Licensing and M&A Opportunities
Expanded Project Pipeline
Sales ChannelLeverage
September 20, 2011 / p7 / UBS GLSC
Life
Sci
ence
sB
usin
ess
Strategic Growth Drivers for the Life Sciences Business
Innovation• New family of liquid handling
platforms and new modules • New detection instruments• Applications & workflow solutions• Plastic consumables• FEMS Kit and System
Geographic Expansion
• Asia; in particular China • South America• Eastern Europe• Near & Middle East
• Various co-operation models in Life Science Research and Forensics to provide standardized workflow solutions
• Co-development and co-validation of market leading applications
Partnerships for Workflow Solutions
• Leveraging Tecan’s sales channels for innovative 3rd party products
• Complement product portfolio• Realize cost synergies
Slide 8
Slide 9Sales Channel Leverage
September 20, 2011 / p8 / UBS GLSC
Applications & Integrated Workflow SolutionsLi
fe S
cien
ces
Bus
ines
s
Software
User Interfaces
Modules 3rd Party Devices
Consumables
ReagentsInstruments
Services
Quality & Regulatory
Provided by Tecan Provided by Partner
September 20, 2011 / p9 / UBS GLSC
Leveraging Tecan’s Sales Channels
• Tecan and HP to provide faster, more accurate drug screening
• Companies to market new drug-dispensing solution for pharmaceutical testing
• Tecan will provide exclusive sales, marketing, service and support for the instruments and consumables
• Started quoting and taking orders; first shipments in a few weeks
• Exclusive distributor agreement for Attana's biosensor instruments and assay technology in North America
• Attana’s biosensor technology allows in-depth analyses of molecular interactions in a wide variety of research applications
• Begun marketing in H1 2011
Life
Sci
ence
sB
usin
ess
September 20, 2011 / p10 / UBS GLSC
Strategic Growth Drivers for the OEM Business
• Today majority of OEM market is „captive“, i.e. instruments developed by IVD & LSR companies
• Trend towards outsourcing • Focus on faster time to market,
cost and existing service network• Innovative research technologies
transitioning into regulated Diagnostics
addressable„open“ market1
„captive“~$ 6bn*
~10%*
*Tecan estimates; 1“open” market is excluding clinical chemistry analyzers
OEM Market
2010 2015
~20%*
~$ 8bn*
0
20
40
60
80
100
120
140
160
2005 2008 2009 2010
OEM Business End-user Business
CH
F (m
io)
Components Instruments, Services & Consumables
43.7%30.8%
H1 20112009
OEM sales OEM as a % of total sales
Par
tner
ing
Bus
ines
s
37.8%
2010•Total sales for all periods are from continuing operations only
CAGR: 10.5%
CAGR: 14.4%
September 20, 2011 / p11 / UBS GLSC
Tecan’s Broad OEM Offering
Dedicated Solutions
OEM Components
Cus
tom
erS
ervi
ce &
S
pare
Par
ts
Plastic
Consum
ables
Platform-based Solutions
Integrated Solutions• Concepts developed by Tecan and showcased to potential partners• Integrating instrument, plastic consumables and enabling reagents
Par
tner
ing
Bus
ines
s
P14 P16Under development
September 20, 2011 / p12 / UBS GLSC
P14 & P16: Two Major OEM Agreements
• Building on established partnership with global diagnostics company• Tecan to develop and supply a next generation dedicated diagnostics instrument and a
corresponding plastic consumable• Tecan is pre-financing the development costs; 50% repaid by the diagnostics company
upon launch and 50% one year after launch• Sales potential* estimated to be more than CHF 80m over first 5 years
(= purchase commitment)• Supply of first instruments for commercial launch expected in late 2012
Par
tner
ing
Bus
ines
s
P14 (announced 11/2010)
* Upon successful completion of development
• Agreement with new OEM customer, a global leader in a fast growing field of diagnostics• Tecan to develop and supply a next generation dedicated diagnostics instrument • Development fully funded by the diagnostics company• Sales potential* estimated to be more than CHF 100m over first 5 years• Supply of first instruments for commercial launch expected “within the next 24 months”
after signing the agreement
P16 (announced 05/2011)
September 20, 2011 / p13 / UBS GLSC
NeoPlex4(Newborn)
Signed OEM Development & Supply Contracts2010 2011 2012 2013
Liquid Handling SolutionsSupply of 9 instruments
= anticipated commercial supply= commercial supply
Par
tner
ing
Bus
ines
s
= R&D and validation
ELISA platform for MUREX line(Infec. diseases)
Detection InstrumentsSupply of 6 instruments
Recently launched:Qubit 2.0(Genomics)
Configuration 1 Configuration 2 Configuration 3(MDx)
Under development / recently launched:DNA Extractor(MDx) High Throughput HTA
Mid Throughput MTA
P16
P14
Enigma ML(PoC MDx)
September 20, 2011 / p14 / UBS GLSC
Our OEM Instrument Partners
Liquid Handling Solutions
Detection Instruments
Par
tner
ing
Bus
ines
s
September 20, 2011 / p15 / UBS GLSC
Strategic Growth Driver: Services & Consumables
0
20
40
60
80
100
120
2008 2009 2010
Services & Consumables salesC
HF
(mio
)
Services Consumables Services & Consumables Instruments
S&C as a % of total sales
31.2%
2009 2010
30.6%
Life
Sci
ence
sB
usin
ess
Par
tner
ing
Bus
ines
s
Goal 2014
40%
• Examples for sales per year:• Diagnostics: CHF 10-15K (e.g. EVOlyzer, M2000)• Forensics: CHF 20K (e.g. HID EVOlution)• Life Science Research: CHF 50K
(MCA 384 for high-throughput screening)
• Agreement with HP to commercialize HP D300 Digital Dispenser including consumables
• Development of application-specific, proprietary consumables underway (e.g. F3/FEMS)
• Individual process steps taking place directly within consumable itself
•Total sales for all periods are from continuing operations only
September 20, 2011 / p16 / UBS GLSC
Contents
• Introducing Tecan
• Strategic Growth Drivers
• Financials H1 2011 & Outlook
September 20, 2011 / p17 / UBS GLSC
H1 2011: Strong Business Performance
020406080
100120140160180200
2010 2011
Rest of WorldAsiaEuropeNorth America
Sales
CH
F (m
io)
CH
F (m
io)
0
5
10
15
20
25
2010 2011
EBITNet Profit
Profitability
• Net Added Value Index (NAVI) = (EBIT + personnel expenses)/personnel expenses• Results from continuing operations only
• Substantial sales growth• +12.3% in local currencies; +2.2% in CHF • Life Sciences Business (end customers)
+18.1% in local currencies• Partnering Business (OEM customers)
+5.7% in local currencies• Services & Consumables +13.7% and
Consumables only +19.7% in local currencies• Order Entry +12.0% in local currencies; +1.3% in
CHF; highest Order Backlog in Tecan’s history
• Strong profitability• EBIT margin of 11.5%• Corresponding to EBIT margin of 13.7% at
H1 2010 constant currencies• Increased investments in R&D by 2.5% of sales• Significantly increased Net Profit margin to
12.8% of sales; EPS at record level
September 20, 2011 / p18 / UBS GLSC
Outlook for Full Year 2011
Mid-single-digit sales growth in local currencies
Sales FY 2011 Profitability FY 2011As of March 10, 2011
EBIT Margin of 12-13%Based on average FX rates of:1.30 EUR/CHF and 1.00 USD/CHF
Sales forecast increasedSales growth in local currencies inthe high single digits
Updated guidance as of August 18, 2011
Profitability target confirmedEBIT Margin of 12-13%Based on average FX rates of:1.20 EUR/CHF and 0.85 USD/CHF
September 20, 2011 / p19 / UBS GLSC
Next Events2011:December 1: Analyst & Investor Day
2012:March 8: Full Year 2011 financial resultsApril 18: Annual Shareholder Meeting
ContactMartin Braendle
Head of Corporate Communications & Investor Relations
Phone: +41 (0) 44 922 84 30
www.tecan.com
Safe Harbor StatementAll statements in this presentation not referring to historical facts are predictions of the future and constitute no guarantee whatsoever of future performances. They are subject to risks and uncertainties including, but not limited to, future global economic conditions, exchange rates, legal regulations, market conditions, activities of competitors and other factors outside the Company’s control.
Tecan Group AG is making all efforts to include accurate and up-to-date information into this presentation. Yet, it cannot be ruled out that omissions or errors might have occurred. Therefore, Tecan Group AG cannot make any representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this presentation. Changes in this presentation can be made any time without notice. All mentioned trademarks are protected by law. © Tecan Group AG, Tecan Trading AG, Switzerland, all rights reserved.