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Tecan Group Ltd., Seestrasse 103, CH-8708 Männedorf, Switzerland, T+411 922 88 88, F+411 922 88 89, info@tecan.comwww.tecan.com
Annual Report 2002Bringing innovation to the Life Sciences
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TECAN PROFILE
Tecan is a leading player in the Life Sciences supply industry. The companyspecializes in the development, production, and distribution of enablingsolutions for Genomics, Proteomics, Drug Discovery and Diagnostics.Founded in Switzerland in 1980, the company has manufacturing, researchand development sites in both North America and Europe and maintains asales and service network in 52 countries. Tecan clients are leading pharma-ceutical and biotechnology companies, university research departmentsand diagnostic laboratories.
The business strategy of Tecan is to focus on growth opportunities in its fourmarket segments of Genomics, Proteomics, Drug Discovery and Diagnostics.The company focuses on key bottlenecks in the Life Science industrythat benefit from its expertise in automation, liquid handling, robotics,detection, software and miniaturization.
Registered shares of Tecan Group are traded on the Swiss SWX stock exchange(TK: TECN / Reuters: TECZn.S / Valor : 1210019). In 2002, Tecan achieved salesof CHF 332.2 million (USD 213.0 million; EUR 226.0 million).
www.tecan.com
CreditsText: Rochat & Partners, Geneva, Switzerland
Design: Inox Graphic Design, Neuchâtel, Switzerland
Prepress/Printing: Neidhart + Schön AG, Zurich Switzerland
Project Management: Tecan Corporate Communications and Corporate Finance, Männedorf, Switzerland
© Copyright Tecan Group Ltd.
BOARD OF DIRECTORS AND MANAGEMENT
TECAN - EXECUTIVE LEADERSHIP COMMITTEE
1. Anton Schrofner President Tecan Instruments2. Franz Rutzer Chief Financial and Operating Officer of Tecan Europe3. Jan Timmers Head of Business Development and Biopharma4. Dr. Emile C. Sutcliffe Chief Executive Officer (CEO)5. Carl Severinghaus President Tecan US6. Steve Levers President Tecan Systems
TECAN - ENHANCED MANAGEMENT TEAM
Joerg Borer Head of Customer ServicesWolfgang Deuringer President Tecan Sales InternationalScott Eaton President Tecan JapanRudolf Eugster CFOSylvain Hunault President Tecan Southern EuropeSarah Kreienbühl Head of Human ResourcesMartin von Lueder President Tecan Central EuropePaul Mitchell President Tecan Northern EuropeBob Young President Tecan Boston
TECAN - BOARD OF DIRECTORS
Mike Baronian Chairman of the BoardProf. Dr. Armin Seiler Vice ChairmanDr. Emile C. Sutcliffe Chief Executive Officer (CEO)Timothy B. Anderson MemberHans-Jörg Kummer Member
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CONTENTS
FOREWORD
Profile 2
Message to Shareholders 4
Bringing Innovation to the Life Sciences 8
MARKETS
Genomics 14
Proteomics 18
Drug Discovery 22
Diagnostics 26
CORPORATE GOVERNANCE 30
FINANCIALS
Chief Financial Officer’s Statement 36
Five-year Consolidated Data 38
Financial Review 39
Consolidated Financial Statements 42
INFORMATION
Glossary 68
Tecan Locations 70
Tecan Board of Directors and Management Team 71
Unfavourable market conditions for the Life Sciences
In 2002, the slowdown in the global economy continued to have a negative impact on international markets. Risk
aversion and extreme caution have become the order of the day for many companies — the Life Science industry is
no exception. In many cases, market confidence has been impaired, investments have declined and many companies
have been left with no choice but to revise financial expectations. This has resulted in reduced expenditure by
biotechnology and pharmaceutical companies around the globe.
Tecan has felt the effects of these unfavourable market conditions. As much as possible, we have been proactive in
our response by putting in place the necessary mechanisms to control costs and manage the fundamentals of our
business. These mechanisms have been effective and will remain active until we see changes in the market.
Throughout the slowdown in the Life Science sector, we have maintained our market share. We have also continued
to strengthen our product portfolio, which should put us in a good position to take advantage of future business
opportunities and of any improvement in economic conditions.
Lower sales – strong financial position
Following strong increases in 2000 and 2001, sales in local currencies decreased by 3.3% in 2002 (-8.4% in CHF). This
was principally due to reduced R&D spending by the pharmaceutical and biotechnology industries, as well as
difficult local market conditions especially in Latin America. Tecan’s portfolio effect, which results from the
company’s strategic commitment to serve the four key markets in the Life Sciences, again produced
benefits in 2002. A presence in four key markets protected Tecan from specific growth variations
observed in each of its market segments of Genomics, Proteomics, Drug Discovery, and Diagnostics.
MESSAGE TO SHAREHOLDERS
Annual report 2002: Innovation for the Life Sciences
“In 2002, we focused on managing the fundamentals of our business due to challengingmarket conditions. At the same time, we successfully launched new products acrossall our business areas. This impetus in expanding our product portfolio should deliversignificant benefits to Tecan over the coming years.”
Dr. Emile C. Sutcliffe, Chief Executive Officer
By maintaining its gross profit
margin at a high level and imple-
menting its cost reduction program,
Tecan kept the level of its operating
margin at 13.5% of sales compared to
an average of 11.7% for the life
science supply industry. With an
EBITDA at 18.1% of sales, we also
demonstrated our ability to increase
cash flow from operations. In a
difficult environment, cash flow from
operating activities rose 31.6% to CHF
42.6 million. Tecan is thus in a good
cash position and benefits from a
strong balance sheet.
Net profit represented 9.9% of
sales (2001: 12.4 %). The decrease in
profit margins is due directly to the
very abrupt slowdown in top-line
growth, which fell from more than
20% in the last quarter of 2001 to no
growth at the beginning of 2002.
Consistent with our policy to deliver
value to our shareholders, we started
in 2002 a share buy-back program
of up to CHF 40 million. This
program began in 2002
and will last for up to
two years.
We have maintained our strategic
commitment to keep R&D expendi-
ture at 10-12% of sales. The number
of launches in 2002 and the current
product pipeline are the highest
and strongest, respectively, since
the foundation of the company
more than 20 years ago.
Increased organizational efficiencies.We continued to strengthen our
internal organization. The creation
of Tecan Europe is the latest step in
the further integration of our
European subsidiaries and will bring
additional improvements to the
quality of services we offer our
customers.
The acquisition of CST Logic GmbH,
a German company specializing in
the development of software for
laboratory automation and data
management, was also completed in
2002.
By significantly cutting operating
expenses through a cost and
headcount reduction program, we
further improved the efficiency of
operations.
The role of innovation atTecan
The theme for this year’s annual
report is innovation. Innovation is
at the center of our business
model and yields solutions for
our customers. It is not only the
foundation of our growth — the
success of the diagnostic, pharma-
ceutical and biotechnology indus-
tries depends on it.
In October, Forbes Magazine rated
us as one of the world’s 200 best
small (“under a billion dollars in
revenue”) companies which shows
that our efforts to be one of the
most innovative companies in the
Life Sciences are being noticed.
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Business Area Highlights
Our ability to deliver innovation to
our customers results from commit-
ment to our proven business model.
This business model focuses on
supplying the Life Sciences industry
with innovative solutions to elimi-
nate the key bottlenecks in the four
markets of Genomics, Proteomics,
Drug Discovery and Diagnostics.
Recognizing new opportunities.Both the public and private
sectors are striving to streamline
and accelerate drug discovery and
development, introduce cost and
resource savings, and implement
the latest advances in genomics.
Tecan entered the new market of
Genomics in 1999 and, by the
start of 2002, Genomics/Proteomics
already represented 20.5% of total
sales. Genomics has developed into
an important part of our business
and its contribution to Tecan sales
further increased in 2002 to 22.6%
total sales. Genomics/Proteomics
showed positive growth in local
currencies for 2002.
In 2002, Tecan completed its Gene
Expression Suite by launching
the HS 4800 Hybridization Station
for microarray processing. The
microarray market is one of the
fastest growing segments for bioin-
strumentation (Strategic Directions
International, September 2002).
Business model supports successfulentry into new markets. In Proteo-
mics, we launched the ProTeam™
FFE, the cornerstone of our modular
ProTeam™ Product Suite. At our
Innovation Day in Munich, Germany,
and at the first meeting of the
Human Proteome Organization
(HUPO) in Versailles, France, we
unveiled for the first time the
ProTeam™ suite of technologies. The
successful entry into the Proteomics
market has been achieved within
two years since the foundation of
our Center of Expertise in Proteo-
mics at Tecan Munich.
Our strategic commitment to Pro-
teomics is a further step in the
implementation of Tecan’s business
strategy and demonstrates the
effectiveness of our business model
to focus on new needs in new
markets.
Broadening of portfolio in DrugDiscovery. In Drug Discovery, we
have expanded our portfolio in de-
tection technologies and advanced
pipetting solutions that enable
high throughput drug discovery.
The launch of the LabCD™-ADMET
System in November was a major
milestone since it validated our
business strategy to develop new
core competencies at Tecan — in this
case a combination of microfluidics
and miniaturization to accelerate
drug discovery and development.
Further applications are in progress
for this breakthrough technology.
With 35.5% of total sales, Drug
Discovery remains our core business
in Biopharma. Tecan entered this
market in 1995 and innovation has
lead to substantial business. Despite
a global slowdown in this market
since 2001, we have continued to
strengthen our position in Drug
Discovery by investing in new
products.
Partnerships in Diagnostics. In 2002,
we had some good examples of how
our synergies between business
areas are giving us competitive
advantages in new and existing
markets. Our know-how in nucleic
acid testing in Genomics was
particularly useful in advancing
applications in Diagnostics. In
2002, we concluded two agree-
ments in molecular diagnostics with
Abbott Laboratories and Chiron
Corporation.
In 2002, sales in Diagnostics repre-
sented 41.9% of total sales. We
strongly believe that this market will
provide significant future growth
opportunities for the company re-
sulting from the new developments
already impacting molecular diag-
nostics. Tecan is in a good position to
take advantage of this revival.
MESSAGE TO SHAREHOLDERS
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Dr. Emile C. Sutcliffe
Chief Executive Officer
Mike Baronian
Chairman of the Board
Managing the essentials of our business
We focused in 2002 on managing the fundamentals of our business due
to the challenging market conditions. In part, this was achieved by
implementing cost and headcount reduction programs whose full-year
impact will be seen in 2003.
Managing our business according to the criteria that reflect the current,
uncertain, market conditions will remain our priority in 2003. We will remain
cautious in our outlook as long as we experience unpredictable spending
patterns by the pharmaceutical and biotechnological industries, a cyclical
period of lower investments and a weak economy.
Longer term, we remain convinced that the need for increased efficiencies is
paramount for the Drug Discovery industry. This should imply a gradual
acceleration in pharmaceutical spending over time.
The success of Tecan relies on the effectiveness of its proven business model
to eliminate key bottlenecks in Genomics, Proteomics, Drug Discovery, and
Diagnostics. Our goal is to deliver genuine technological breakthroughs to
our customers.
In 2002, we made good progress in strengthening the range of innovative
solutions we offer. In 2003, we should be able to see the impact of the
launches secured in the past twelve months.We are ready to seize any upturn
in demand as these launches have considerably strengthened our product
portfolio in all business areas.
We would like to thank everyone for the commitment they have shown in
making this possible.
Civilization grows through innovation
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We bring innovation to the Life Sciences"Technological progress is equally dependent on the skills of innovation and themanagement of invention. At Tecan, innovation is key to recognizing and enteringnew high growth markets, developing new core competencies, and benefiting fromsynergies across all of our business areas."
Dr Emile C. Sutcliffe, Chief Executive Officer
BRINGING INNOVATION
TO THE LIFE SCIENCES
Innovation at Tecan.
Innovation can be found at all levels of Tecan in each of its four business areas of Genomics, Proteomics, Drug
Discovery and Diagnostics. It starts by identifying a particular need for which there is no available or effective
technological solution and which represents a significant growth opportunity for the company. Innovation brings original
solutions, enables entry into new markets, provides novel core competencies and delivers benefits from synergies between
the different business areas directly to clients in the Life Sciences.
GENOMICS: Realizing the potential of genomic informationto improve medical interventions
Genomics originally referred just to the study of a genome - in particular the
exhaustive mapping, sequencing and analysis of all of its genes. Today, the
focus is not just on gene structure but function as well. Most recently, the
trend is not solely to generate information and knowledge but to take advan-
tage of that knowledge to realize the full promise of modern health care.
Advancing healthcare. Genomics holds tremendous potential for improving
health globally. The information it generates over time will provide major
benefits for the prevention, diagnosis and management of both commu-
nicable and genetic diseases as well as other common causes of illness
such as heart disease, cancer, diabetes, and mental illness.
Innovation in Genomics: Recognizing high growth markets
Beyond the genome. The first major advance in genomics was the technology to analyse genomes on a large scale.
The second phase of the revolution in Genomics is even more challenging. It requires not only analysis of the large
amounts of data being generated but establishing the function of the many genes that have been sequenced and
identified. This endeavour, which is often referred to as functional genomics, represents one of the newer frontiers for
biomedical research.
New market opportunities. The move towards functional genomics will benefit significantly from developments
in automation. Application know-how and core competencies in liquid handling, robotics, detection, software and
miniaturization has put Tecan in a good position to recognize and quickly develop original solutions for these high
growth market opportunities.
Understanding gene function
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Access to new drug targets
PROTEOMICS: Enabling more direct routes to disease targetsand new drugs
Why proteomics? Proteomics directly studies and measures the proteins that
carry out most of the biological events in a living cell. It is the next logical
step after genomics, in which the emphasis shifts more from what could be
happening in a cell to what is actually happening in a cell.
Diverse clinical applications. Since proteins are responsible for most biologi-
cal actions, they are excellent targets for developing specific drugs. These
versatile molecules may also be used to identify biological markers for diag-
nostic and pharmacological applications. Changing the levels of some
proteins is enough to treat certain diseases. Moreover, proteins make
excellent therapeutic agents and are one of the cornerstones of the
revolution in biotechnology and pharmaceutical development.
Innovation in Proteomics:Entry into new markets
The proteomics market is singularly
driven by advances in technology
and thus by innovation in automa-
ted solutions. Innovation in proteo-
mics has allowed Tecan to rapidly
enter new markets and open up
significant business opportunities
for the company.
Impetus driven by innovation.Within two years, Tecan has moved
from establishing a new center of
expertise in Proteomics to introduc-
ing a full range of innovative solu-
tions for the proteomics market. This
innovation depends on combining
world class experience in automa-
tion with the expertise of highly
skilled scientists working at its
Proteomics Center in Munich,
Germany.
Critically, this innovation specifically
targets the consistency of results,
the sensitivity or size of a response
for very small amounts of proteins,
the resolution or ability to clearly
distinguish one protein from
another, and the speed at which
results are generated. Through
groundbreaking technologies, Tecan
provides flexible modular suites of
solutions for all of the sample
preparation steps performed in
proteomics before analysis by
detection methods such as mass
spectrometry.
Enabling drug discovery
DRUG DISCOVERY: Developing new therapeutics againstdisease targets
Solutions for Drug Discovery. Developing new therapeutics against disease
targets requires tools to transform drug discovery. These tools are needed to
identify and validate or confirm the role of a new drug against a target
that is typically a protein. They are required not only to accelerate the drug
discovery process but to increase the success rate for novel drugs.
Meeting clinical needs. To treat and manage the many diseases that up to
now have proven impossible to control requires significant advances in
the drug discovery and development process. From infectious diseases
such as malaria, tuberculosis and AIDS to non-communicable diseases
such as heart disease, cancer, and diabetes - all are awaiting drastic
improvements in the standard of available therapeutic agents.
Improving efficiency. The challenges
facing drug development are
evident from its current deficiencies.
An insufficient number of disease
targets are being validated and
screened each year: many failures
occur in late-stage drug develop-
ment due to incomplete target
validation and unpredicted drug
effects; the drug discovery process is
in many cases too long and places
large demands on resources; the
number of new drugs reaching the
market is insufficient. This is where
innovative technologies in automa-
tion can play their role.
Core competencies. Tecan is devel-
oping new core competencies, such
as microfluidics and miniaturiza-
tion, that accelerate the identifica-
tion of new drugs and their targets,
that speed the drug discovery
process, save on critical resources,
and increase the likelihood of a new
drug being successful. Tecan is also
developing new detection devices,
which offer innovative features such
as fluorescence lifetime measure-
ments, bringing major benefits
to growth areas such as
assay development and
drug screening.
The LabCDTM. A good example is the
LabCDTM
-ADMET system launched
in 2002. This revolutionary micro-
fluidics platform on a disposable
disc enables pharmaceutical and
biotechnology companies to per-
form more tests earlier in the drug
discovery process at a fraction of
the cost of traditional assays. This is
of immense benefit to researchers
involved in R&D in their quest to
rapidly develop new therapeutic
agents against disease targets.
Innovation in Drug Discovery: New core competencies for the Life Sciences
BRINGING INNOVATION
TO THE LIFE SCIENCES
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Innovation in Diagnostics
DIAGNOSTICS: Empowering the revolution in personalizedmedicine
Diagnostics is undergoing a major transformation away from technologies
that detect just the symptoms of a disease towards molecular diagnostic
methods that detect the actual cause of or predisposition to a disease. The
sweeping changes in this area will have major implications for the practice of
modern health care.
Personalized medicine. In the coming years, doctors, other health care
professionals and even patients will be able to assess the likelihood of a
particular disease occurring, the responsiveness of a disease to certain
drugs, and the likelihood of drug side effects. This will result in
personalized medicine based on the genetic profile of a patient
becoming an essential part of health care practice.
Innovation in Diagnostics: Synergies across business areas
The move towards molecular diagnostics is being made possible by rapid advances in a wide range of disciplines in-
cluding genomics, proteomics and bioinformatics. The new clinical focus is personalized or individualized medicine,
managed care and evidence-based medicine.
A multidisciplinary approach. Tecan is able to bring innovation to diagnostics by exploiting synergies that exist or
arise in its different business areas. For example, Tecan is able to leverage its expertise in nucleic acid sample prepa-
ration and amplification, to develop cutting edge solutions in molecular diagnostics.
Advances in detection and microarray processing. Tecan's microarray processing technologies and the introduction of
detection solutions such as the LS Series of laser scanners also mean that the latest advances in diagnostics are within
reach of Tecan's customers. These new testing methods will be used to diagnose a wide range of infectious diseases
of viral or bacterial origin.
Innovation to support business partners. Tecan's strength in innovation is not only the foundation of its own product
portfolio but is also the cornerstone of technological solutions offered by other companies in the Life Sciences. Tecan
has been the Original Equipment Manufacturer (OEM) of choice for diagnostic and biotechnology instrument
manufacturers for more than 20 years. For this purpose, Tecan develops and manufactures solutions for a variety of
clients, from start-up companies to Fortune 500 enterprises.
This success testifies to the strength of Tecan's innovation and its reputation worldwide.
Information to build knowledge
GENOMICS
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Realizing the potential of genomicinformation to improve medicalinterventionsBy launching the HS 4800 Hybridization Station in 2002, Tecan completed its GeneExpression Suite offering. Through the automation of activities from microarray processing up to the validation of tissue gene expression, Tecan is further penetratingfast-growing market segments in Genomics.
Industry trends
The need and drivers. Biotechnology
and pharmaceutical companies are
using genomic and other information
in their search for new therapeutics.
For this purpose, they are investing
in the latest developments in
sequencing, genotyping and gene
expression analyses. Tecan is one of
the leading supplier of tools that
enable Life Science companies to
make full use of the advances taking
place in genomics.
The need for higher throughput,
sensitivity, and reproducibility is
pressing. The more processes can be
automated, the more researchers will
be able to deal with the large
amounts of data being generated.
In the genomic era following the
sequencing of the human genome,
some of the key activities in the geno-
mics industry are found in comparati-
ve nucleic acid sequencing, geno-
typing and gene expression studies.
Key facts: GenomicsApproximately 30 000 human genes
Microarray processing solutions, scanners and
hybridization station market estimated at USD
296 million in 2001 1
Microarray-related market expected to grow at
a CAGR2 of approximately 20% to reach 749 USD
million by 20061
1 Strategic Directions International 20012 Compound Annual Growth Rate
GENOMICS
Tecan's approach
Tecan is active in Front-end
Sequencing, Genotyping and Gene
Expression analysis segments of the
Genomics market.
Front-end Sequencing Solutions.Tecan provides automated solutions
for major tasks prior to sequencing
like Nucleic Acid Sample Preparation,
Normalisation, Sequencing reaction
set-up, thermocycling and dye
removal.
According to individual customer
needs, Tecan offers several automa-
tion and detection platforms ranging
from smaller scale solutions based
on the MiniPrep series of liquid
handling systems and larger-scale
Genesis workstations all the way
up to the very-large-scale fully auto-
mated TRAC (Tecan Robotic Assay
Composer) systems for ultra high-
throughput applications.
Genotyping Solutions. In Geno-
typing, which includes the identifica-
tion and scoring of single nucleotide
polymorphisms (SNPs), Tecan offers
detection devices such as the Ultra
family to complement the nucleic
acid sample preparation solutions
described above.
Solutions for Gene Expression Analyses. For Gene Expression, a high
growth market as the interest of researchers shifts to functional genomic
studies, Tecan provides different solutions that form the modular Gene
Expression Suite (see table). The Gene Expression Suite automates a range of
activities from microarray processing on slides or microplates up to in situ
hybridization.
Market opportunities in microarray processing. Tecan's microarray
processing solutions may be used to process and detect both nucleic acid and
protein-based arrays on slides and microplates, which provides much needed
flexibility for this rapidly growing market. For Gene Expression studies, Tecan
also provides the Tecan GenePaint system, an automated solution for in situ
hybridization.
Gene Expression Suite ApplicationNucleic Acid Sample Preparation and reaction Sequencing, Genotyping,
set-up platforms, plus associated consumables Gene Expression Analyses
HS 4800 Hybridization Station Microarray processing on slides
LS 200 series laser scanners Detection of microplates and slides
GenePaint System Gene expression analyses in tissue
Customized solutions, flexible options. Uniquely, Tecan systems for genomics
may automate applications using three different separation technologies:
vacuum filtration/solid phase extraction, magnetic bead separation, or
centrifugation. In addition to providing its own solutions for these applications,
Tecan actively validates a range of purification chemistries from third party
suppliers thus offering a host of automation solutions for all three types of
separation technologies.
Achievements 2002
Market segment Product launch ApplicationsGene Expression HS 4800 Hybridization Station Microarray processing on slides
Sequencing MiniPrep with MagPrep kits Nucleic Acid Sample
Preparation and Purification
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In 2002, Tecan launched the HS 4800 Hybridization Station. The promise of
miniaturization, automation and massive parallel analysis makes solutions
such as the Hybridization Station powerful tools with applications in both
industrial and academic settings.
The Hybridization Station enables
automated hybridization of microar-
rays on slides and is a key component
of Tecan's Gene Expression Suite. The
HS 4800 Hybridization Station has
been designed to offer researchers
improved reproducibility, superior
performance and the throughput
necessary to perform a wide range of
applications in Genomics and
Proteomics.
2002 also saw the introduction of further magnetic bead sample preparation
solutions (Te-MagS) for the MiniPrep platform. Tecan provides a range of
specific magnetic-bead-based kits that offer low-throughput solutions for
nucleic acid sample preparation.
Outlook
In 2003, Tecan will continue to strengthen its product pipeline in all market
segments of Genomics. Further validated nucleic acid extraction kits will
become available for the range of Tecan automated platforms. A new hybridi-
zation station, the HS 400, will be launched targeting researchers who require
a lower throughput solution for functional genomics applications.
With its portfolio of solutions for gene expression, nucleic acid sample
preparation and genotyping applications, Tecan is well positioned to meet the
different needs of its customers in Genomics.
Partnerships with leadingacademic research institu-tions.
"To establish the function of a gene
requires knowing when and where it
is expressed in a particular tissue. For
the approximately 30 000 genes in
the human body this is a significant
undertaking considering that one of
the best available techniques for this
purpose, in situ hybridization (ISH), is
extremely labor intensive and time
consuming. We recognized several
years ago that the solution was to
automate the process and we have
been working closely with Tecan to
develop a fully automated in-situ-
hybridization workstation – the
Tecan GenePaint system."
Professor Gregor Eichele, Director of theDepartment of Molecular Embryology at theMax-Planck-Institute in Hannover
www.genepaint.org
The Tecan GenePaint system was
recently used in a landmark study to
map human chromosome 21 gene
expression in the mouse. 1
Ref: 1 Reymond et al. (2002) Human chromoso-me 21 gene expression atlas in mouse. Nature420: 582-586.
Magnetic-bead-based sample preparation
Tools to transform discovery
PROTEOMICS
Enabling more direct routes todisease targets and new drugsThe unveiling of the ProTeam Product Suite was a major milestone for Tecan Proteomics.For the first time, researchers were able to see at first hand a modular automatedsystem that is able to perform almost every sample preparation task in the modernproteomics laboratory.
Industry trends
The need and industry drivers.Pharmaceutical and biotechnology
companies need to identify and
validate new drug targets, accelerate
their drug discovery processes, and
increase the success rate for new
drugs.
The proteomics industry is being
driven by developments in technolo-
gy that offer a more direct route to
disease targets and drugs.
Key facts: ProteomicsApproximately 30 000 human genes
More than 200 000 protein species
The available market for Tecan in integrated
proteomic systems was estimated at USD 183
million in 2001
Available market for integrated systems is
expected to grow by a CAGR1 of over 30% in the
next five years2
1 Compound annual growth rate2 Source: Frontline 2001
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PROTEOMICS
Tecan's approach
Tecan customers are free to decide
the technologies they need for their
particular proteomics requirements.
The company works with customers
to combine different options into a
solution that meets their individual
needs. For this purpose, Tecan
provides application development
programs whereby the company and
the client can work together to
develop a customized solution.
The study of proteins usually first
involves sample fractionation into
more manageable parts. These
fractions are separated, the resulting
proteins are quantified or measured,
and proteins of interest are isolated.
Finally, selected proteins are identi-
fied and characterized. Protein
identification is often carried out by
mass spectrometry, a technique that
accurately identifies protein species.
Tecan is active in three market
segments of Proteomics – Fraction-
ation and Protein Identification, which
together constitute all the sample
preparation steps performed before
mass spectrometric analysis,
and Protein Characterization.
Tecan’s technologies in Genomics, for
example the HS 4800 Hybridization
Station and LS series of laser
scanners, also have many applica-
tions in Proteomics. These include
the processing of protein microarrays
on slides and microplates and
quantitating experimental results.
The bottlenecks in Proteomics DeliverableReproducibility Consistent results
Sensitivity Detection of low amounts of proteins
Throughput Speed and high quality data
Access to low-abundance proteins New proteins for study
Informatics and data management Managing large data sets/data analysis
Standardization of methods and protocols Ease-of-use and consistency
to prepare samples that reproducibly represent
a proteome
Achievements 2002
Market segment Product ApplicationsFractionation ProTeam FFE Reducing the complexity of the proteome
Enriching low abundant proteins
Isolation of cell organelles, cell types,
and complex protein mixtures
Protein Identification ProTeam Advanced Digest In-gel and in-solution protein digestion
Sample preparation for MALDI-mass
spectrometry1
1 Matrix-assisted Laser Desorption/Ionization
Protein identification
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Rapidly entering new markets
Event WhenCenter of Expertise January 2001
in Proteomics founded
ProTeam FFE unveiled September 2001
at Innovation Day
First demonstration of September 2002
ProTeam Product Suite
at Innovation Day
BioPharma Day October 2002
Unveiling of ProTeam November 2002
Product Suite at Human
Proteome Organization
(HUPO) meeting
Meeting the challenges posed bymembrane proteins. Membrane
proteins play a fundamental role
in biology. However, they are also
amongst some of the most difficult
proteins to study and characterize.
Tecan is a partner in the program
“New efficient techniques for
functional proteome analysis”. This
project, which is sponsored by the
German Government (Bundes-
ministerium für Bildung und
Forschung or BMBF), is already
delivering results: cell organelles,
sub-structures in the cell carrying
out some of the most essential
processes in biology, have been
isolated with unmatched purity
using the Tecan ProTeam FFE;
the two-dimensional separation of
membrane proteins from a bacterial
membrane has also been achieved by
combining free flow electrophoresis
with gel electrophoresis (SDS-PAGE).
This is opening up new opportunities
for target identification and va-
lidation in the quest for new
therapeutic agents.
Highlights
2002: Innovation Day, Biopharma Day,and the HUPO meeting. In September,
2002, Tecan unveiled the revolutionary
ProTeam product suite at its Innovation
Day in Munich, Germany. The ProTeam
product suite is the first automated
platform capable of performing all the
sample preparation steps necessary
before analysis by mass spectrometry. One month later,Tecan opened its doors
at Munich to the biopharmaceutical industry to show the potential of its
technological solutions to transform their research and development
activities. In November, the ProTeam Product Suite was demonstrated to
a wide audience including representatives from the pharmaceutical,
biotechnological and academic sectors of the Life Sciences at the First World
Congress of the Human Proteome Organization (HUPO) in Versailles, France.
Powerful solutions for protein digestion. In 2002, Tecan completed the
development of the ProTeam Advanced Digest. Protein digestion, in which
large protein molecules are cleaved into smaller fragments or peptides, allows
the transfer of peptides to a wide range of target plates that facilitate mass
spectrometric analysis.
The ProTeam Advanced Digest is a next-generation solution for automated
protein processing in gels or in solution. It offers extended sensitivity to very
low quantities of proteins and high throughput (3000 samples
processed/day).
Outlook
Automated 2D electrophoresis. In 2003, Tecan will commence Early
Access Programs for the ProTeam 2D (automated 2D electrophoresis). 2D
electrophoresis is the method of choice in proteomics laboratories for the
separation of proteins. The company will continue to introduce and develop
further the ProTeam Product Suite.
Protein Crystallization. In Protein Crystallization, automation is key to
overcome bottlenecks in determining the structures of proteins, a critical step
in designing new drugs. In 2003, Tecan will pursue business opportunities for
its already popular ProTeam Crystallization solutions.
Recognizing that the emerging proteomics market is singularly driven by
advances in technology,Tecan has quickly positioned itself as a provider of inno-
vative technologies to serve this important sector of the Life Sciences industry.
Protein Characterization
Light to bring solutions
DRUG DISCOVERY
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Developing new therapeuticsagainst disease targetsWith the launch of Ultra Evolution, a new detection platform enabling FluorescenceLifetime measurements, Tecan is providing a solution to overcome some of the majorbottlenecks in drug screening.
Industry trends
The need. Rapidly rising drug
development costs, increasing
competition, and changing health-
care and regulatory environments
mean pharmaceutical and bio-
technology firms will continue to
strive for greater efficiencies.
Tecan’s approach. Tecan’s strategy is
to target the key bottlenecks in the
drug discovery process by developing
innovative automation, detection,
and modular integrated-system
solutions.
Industry drivers. One of the main
drivers in drug discovery and
development is the need for new
detection technologies. These
technologies, which are used to
monitor chemical and biological
processes, are of particular use in
identifying and screening new drug
targets. A key bottleneck is the speed
at which it is possible to perform
ADMET (Adsorption, Distribution,
Metabolism, Excretion and Toxicity)
assays. ADMET assays are essential
pharmacological screening assays
used to determine if a drug
candidate is suitable for further
development.
The total core drug discovery
laboratory automation market
available to Tecan is expected to
grow annually by 9% to USD 0.8
billion in 2006.
DRUG DISCOVERY
Achievements 2002
Significant expansion of product pipeline. In 2002, expansion of the Tecan
product pipeline was reflected in key launches for all of its targeted
market segments.
Market segment Product launch ApplicationsTarget Identification See also Proteomics Drug Development
and Validation and Genomics business areas
Compound Synthesis and Automated Weighing Station Automated weighing
Compound Logistics and dilution
Assay Development/ Ultra Evolution with fluorescence Assay Development,
Screening lifetime capabilities Screening, Compound
Characterization
Assay Development/ Connect - Automated Reader Range of biological assays
Screening Interface with Plate Stackers including Cellular and Sub-
Cellular Screening Assays
Screening & 384-tip head for multi-channel High Throughput Screening
Compound Logistics pipettors and Plate Replication
ADMET (Adsorption, Distribution, LabCD™ Cytochrome P450 Inhibition &
Metabolism, Excretion & Toxicity) Serum Protein Binding assays
Highlights.
Innovation in detection. Detection devices are used in many segments of
drug discovery. These include primary and secondary screening, in which assays
or tests are used to detect compounds that represent drug candidates, and assay
development, in which methods are developed to detect the activities of
potential therapeutic compounds. Tecan offers both Assay Development and
different Screening workstations based on a range of existing Tecan technologies.
These include both the Genesis and Genesis Freedom platforms. In 2002,
Tecan added the Ultra Evolution with Fluorescence Lifetime technology to
its existing detection portfolio (Safire, Ultra and the GENios line of detec-
tion devices; see Innovation in detection for drug discovery).
Synergies from Genomics andProteomics. Tecan’s Proteomics and
Genomics technologies have impor-
tant applications in Drug Discovery.
For example, the ProTeam FFE
enables access to many previously
unavailable low-abundance proteins
potential drug targets not accessible
by conventional technologies.
Milestone in microfluidics. In Novem-
ber, Tecan launched its revolutionary
microfluidics technology the LabCD™.
The LabCD™, which represents a major
step in the expansion of Tecan’s core
competencies, allows researchers to
perform key drug discovery assays in
a more standardized and efficient
way. ADMET assays are essential
screening tests designed to test the
suitability of compounds as new
drug candidates.
The LabCD™ complements Tecan’s
existing portfolio including its Cell
Permeability, Drug Metabolism and
Cell Maintenance workstations.
Further applications for the
LabCD™ technology are
planned for release in
2003.
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Outlook
Enhanced automation platforms.Tecan will continue to introduce new
automation, detection, and integra-
ted system solutions targeting its
key market segments in Drug
Discovery. A new platform will
further strengthen Tecan’s product
portfolio, while simultaneously
enabling new, key drug discovery
applications.
Portfolio of liquid handling solutions.For Screening, Tecan will launch
several new multi-channel pipetting
systems, including the stand-alone
Aquarius system. Multi-channel
pipettors are automated systems
designed to dispense many liquids
over a range of volumes to different
target vessels such as microplates.
With the pending introduction of its
exciting new proprietary Impulse
low-volume pipetting technology,
Tecan customers will be able to
choose from a complete portfolio of
multi-channel pipetting options.
Strength in detection. New detec-
tion devices such as GENios Pro will
strengthen Assay Development
and Drug Screening applications
by enabling several new types of
biological assays including cell-based
assays.
In addition, further market penetra-
tion is expected for a new version of
the Safire scanning monochromator
reader, a detection device suitable for
many applications in assay develop-
ment, compound characterization
and high throughput screening.
These solutions will strengthen
further Tecan’s portfolio in Drug
Discovery and, at the same time,
improve the effectiveness of Tecan’s
business partners in bringing new
therapeutics to the market.
Ultra Evolution
Innovation in detection for drug discovery.
Dr. Ulrich Hassiepen,
Novartis Pharma AG, Basel
“Pharmaceutical companies conti-
nually strive to introduce the latest
developments in detection plat-
forms into their drug screening
procedures. One of our main
concerns is to not spend time
pursuing compounds that do not
represent lead compounds.
Tecan’s ULTRA Evolution, a new
detection platform enabling Fluor-
escence Lifetime measurements
(FLT), overcomes some of the major
bottlenecks in drug screening.
For years, researchers have been
vexed with the problem of “false
positive” screening results. These
“false positive” results were often
generated by screening artefacts
such as compound autofluorescence.
With FLT technology, time and
resources wasted on “false posi-
tives” can be minimized by selecting
the best lead compound for further
development.”
Innovation to drive molecular diagnostics
DIAGNOSTICS
Empowering the revolution in personalized medicine
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Tecan further strengthened its portfolio of automated molecular diagnostic solutionsin 2002. This progress reflects not only Tecan’s considerable expertise in automateddiagnostic methods but also its ability to implement synergies from its Genomicsbusiness area.
Industry trends
The need. Diagnostics customers worldwide are looking for the best
options in laboratory automation. In addition to worldwide access
to service networks, they need flexible solutions that may be customized
to meet specific needs.
Industry drivers. Integrating the latest clinical diagnostic technologies with
innovative engineering solutions will deliver the best solutions for laboratory
automation. In a highly regulated marketplace, those companies that most
effectively implement the recommendations of the In Vitro Diagnostic (IVD)
Directive will benefit most in the coming years.
Diagnostics: Key factsThe available market for Tecan in Diagnostics was estimated at USD 300 million in 2002
The available market for Tecan in Diagnostics is expected to grow at a CAGR1 of 6% to reach
over USD 0.5 billion in 2006
The available market for Tecan for Nucleic Acid Testing (NAT) was estimated at USD 120 million
in 2002
The available market for Tecan for NAT is expected to show double digit growth to 2006
1 Compound Annual Growth Rate
Tecan’s approach
Tecan is active in four market
segments in Diagnostics – Blood
Grouping, Immunology, Laboratory
Logistics and Molecular Diagnostics.
For these markets, the company
provides a whole spectrum of inno-
vative solutions used in many
diagnostic laboratories and blood
banks.
Advances in moleculardiagnostics
Building on its reputation as a
leading automation provider, Tecan
is implementing the latest advances
in molecular diagnostics into its
portfolio of automated platforms.
DIAGNOSTICS
Roche Diagnostics collaboration. In collaboration with Roche Diagnostics in
the United States and Europe, local solutions were launched that automate
PCR sample preparation of the COBAS AMPLICOR™ and AMPLICOR™ assays
for chlamydial and gonorrhoeal infections.
Achievements 2002
Partnership ApplicationChiron Corporation Nucleic acid testing (NAT) for HIV-1 1 and HCV2
Abbott Laboratories NAT testing for HIV-1 and HCV
Gen-Probe NAT testing for sexually transmitted diseases
Roche Diagnostics PCR sample preparation
1 Human immunodeficiency virus 2 Hepatitis C virus
Advances in Immunology.
Immunological tests typically involve capturing and measuring a component
of the body’s immune system using an immunoassay (e.g. by an ELISA1
assay)
and are major diagnostic tools both in human and veterinary diagnosis.
In Immunology, Tecan provides automated systems that perform a host of
immunological diagnostic tests. These options range from different readers,
for example the popular Sunrise absorbance reader, up to fully automated
Genesis RMP systems capable of high throughput applications. Demand for
these systems is continuing on a global level – recently Tecan’s Genesis RMP
platform was selected as the automation platform of choice to meet the needs
of all blood banks in Taiwan. Further growth in this area is expected in 2003.
ProfiBlot, Tecan’s unique fully automated solution for Western blot analysis,
continues to establish outstanding market penetration. In addition to the
confirmatory testing of HIV and hepatitis C infections, the device automates
the testing for diseases such as cystic fibrosis. In all these areas, the need for
diagnostic tests continues to grow.
Diverse markets, flexible solutions. In veterinary diagnostics, Tecan is
expanding on its recent success of rapidly providing automated solutions for
BSE testing. The goals are to consolidate the position of Tecan as the leading
supplier in this area, to deliver further options for prion testing, as well as to
expand in the field of veterinary diagnostics.
Major partnerships inMolecular Diagnostics
Chiron collaboration. In 2002, Tecan
and Chiron Corporation entered into
an agreement to include Chiron’s
FDA-approved Procleix™ HIV-1/HCV
assay on the high-throughput
Genesis platform. The Procleix™
assay is a breakthrough develop-
ment in nucleic acid testing (NAT) —
tests or assays that enable genetic
material to be amplified and easily
measured. Procleix™ assays, which
are performed on the blood supply,
are particularly effective since they
allow very early detection of viruses
causing Acquired Immunodeficiency
Syndrome (AIDS) and hepatitis C.
Abbott partnership. In 2002, Tecan
also announced an agreement with
Abbott Laboratories. Both compa-
nies have agreed to develop and
commercialize automated sample
preparation systems for Abbott’s
molecular diagnostic assays for
HIV and hepatitis C. Automation is
allowing these methods to be
performed more efficiently, reducing
costs and enhancing productivity.
Blood typing
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Advances in Laboratory Logistics.
In Laboratory Logistics, Tecan supplies a range of automated platforms for
sample preparation and processing. Tecan recently introduced novel features
for the FE500 Workcell. Overall flexibility has been improved through a more
enhanced modular system design, a new tube inspection unit that reads
directly through sample tube labels and a novel archiving system that delivers
improved options for sample storage.
The Genesis FE500 workstation continues to be a popular option for pre-ana-
lytic processing, one of the most labor-intensive parts of clinical laboratory
testing. Building on this success, Tecan is actively expanding further its
corporate partnership options for FE500 distribution worldwide.
Synergies from Genomics andProteomics. Breakthrough solutions
in Genomics, such as the HS 4800
Hybridization station or GenePaint
on the Genesis platform, are today
well established solutions for geno-
mics applications. Similarly forensic
applications in DNA matching based
on Genesis and MiniPrep platforms
are finding routine uses in genomic
applications and are the first solutions ready to enter the diagnostic
market. These are examples of how Tecan’s business model supports
the leverage of solutions in genomics to enhance the successful
development of applications in clinical diagnostics.
Outlook
In 2003, Tecan will introduce further
solutions in Nucleic Acid Testing
(NAT) catering for growth opportu-
nities in Molecular Diagnostics.
A new platform will also be
launched that is fully compliant
with forthcoming IVD medical
device regulations (see Tecan and
IVD compliance). The goal of these
efforts is not only to assure that
the efficacy and effectiveness of
Tecan’s diagnostic solutions comply
with the recommendations, but also
that Tecan’s staff are fully trained
to deliver the best possible services
to accompany these changes.
Tecan is well on track with its IVD
readiness program — the end result
will be improved customer service
at all levels of the organization.
1 Enzyme-Linked Immunosorbent Assay
Tecan and IVD compliance
Over the past years, Tecan has been preparing to meet the requirements
of the IVD (In vitro diagnostic) Directive, the new EU initiative to ensure safety,
quality and performance of diagnostic medical devices. Companies that
most effectively meet these regulations will benefit from significant new
business opportunities.
Tecan was one of the first companies to make readers and washers available
that comply with the IVD Directive. The company is in a strong position
to build on its position as a leading supplier of IVD-compliant solutions in
the diagnostics industry.
Dispensing to microplate
Automated nucleic acid preparation
for PCR Testing
CORPORATE GOVERNANCE
1. Group structure and shareholders
Group structure. Tecan Group Ltd. (the "Company"), Seestrasse 103, CH-8708
Männedorf, Zürich, Switzerland, is the parent company of the Tecan Group
The company is listed on SWX Swiss Exchange.Security number: 1 210 019
ISIN: CH0012100191
Telekurs, Dow Jones: TECN
Reuters: TECZn.S
The Company's shares are also traded in EUR in Frankfurt, Munich and
Stuttgart under the security number 922 557. At December 31, 2002, the
market capitalization of the company was CHF 593.4 million.
The list of consolidated subsidiaries, none of which is publicly listed, is present-
ed in the financial section on page 64 of this Annual Report. The operational
group structure is organized according to the geographical regions Europe,
America and Asia as well as to the business areas Genomics/Proteomics, Drug
Discovery and Clinical Diagnostics. The segment reporting according to this
structure is presented in the financial section on page 56 of this Annual Report.
Significant shareholders. As per December 31, 2002 the following sharehold-
ers held more than 5% of Tecan’s shares:
shares %Schweizerische Unfallversicherungsanstalt (SUVA), Lucerne, Switzerland 1,438,394 11.1%
UBS Fund Management, Zurich, Switzerland 748,400 5.7%
Tecan Group Ltd., Männedorf, Switzerland (treasury shares) 662,430 5.1%
The Company does not have any cross-shareholdings exceeding 5% of the
capital or voting rights on both sides.
2. Capital structureCapital structure of Tecan Group Ltd. at December 31
2002 2001 2000Registered shares of CHF 1 nominal value
Number 13,076,075 13,040,930
Nominal value CHF 13,076,075 13,040,930
Registered shares of CHF 10 nominal value
Number 1,302,007
Nominal value CHF 13,020,070
Share capital CHF 13,076,075 13,040,930 13,020,070
Legal reserves CHF 72,480,731 55,933,389 36,826,286
Retained earnings CHF 84,852,535 70,340,959 59,090,882
Shareholders’ equity CHF 170,409,341 139,315,278 108,937,238Conditional share capital CHF 1,223,925 1,259,070 1,279,930
In 1999, the shareholders of the
Company approved the introduction
of one single class of registered
shares. Each formerly existing bearer
share of CHF 100 nominal value was
converted into 10 new registered
shares of CHF 10 nominal value. The
previous registered shares of CHF 15
nominal value each were exchanged
in a two-level transaction into new
registered shares of CHF 10 nominal
value. In the annual shareholders’
meeting in 2001, the Company's
shareholders decided to split the
registered shares in a 1:10 ratio.
As of December 31, 2002, the
Company’s share capital was CHF
13,076,075, divided into 13,076,075
registered shares with a nominal
value of CHF 1 each. Each share is
entitled to any dividends approved
by the shareholders.
Conditional share capital – changesin capital. In 1997, the Company's
shareholders approved a conditional
share capital of CHF 1,300,000
(consisting of 1,300,000 registered
shares of CHF 1 nominal value each)
reserved for the purpose of
employee participation. Since 1999,
employee stock option plans have
been adopted based on this
conditional share capital. Details on
options granted under these plans
are given in the financial section on
page 52 of this Annual Report. At
December 31, 2002, 1,141,754 shares
of the conditional share capital were
reserved for outstanding employee
stock options. Subsequent to the
exercise of 35,145 options during the
financial year 2002 (2001: 20,860
options; 2000: 20,070 options),
the Company's share capital was
increased in 2002 by 35,145 shares
(2001: 20,860 shares; 2000: 20,070
shares) and the Company received
(Information according to the Directive on Information Relating to
Corporate Governance of the SWX Swiss Exchange, DCG)
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CHF 1.7 million in cash (2001: CHF 1.1
million; 2000: CHF 1.3 million).
Limitations on transferability andnominee registration. Registration
with voting rights in the Company’s
share register is conditional on share-
holders declaring that they have
acquired the shares in their own
name and for their own account. No
shareholder is registered with voting
rights for more than 5% of the share
capital. The Board of Directors of the
Company may register nominees for
up to 2% of the share capital as
shareholders with voting rights in
the share register. Nominees are per-
sons who do not explicitly declare in
the application for registration to hold
the shares for their own account and
with whom the Company has en-
tered into an agreement accordingly.
Further, the Board of Directors may
for shares in excess of 2% of the
share capital register nominees with
voting rights in the share register if
such nominees disclose the names,
addresses, nationalities and share-
holdings of the persons in whose
interest they hold 2 or more per cent
of the share capital.
Entities which are bound by voting
power, common management or
otherwise or which act in a coordi-
nated manner to circumvent the 5%-
rule are considered as one sharehold-
er. The Board of Directors is entitled
to grant exceptions from the regis-
tration restrictions in special cases.
No such exceptions were granted
in the year under review.
The procedures and condi-
tions for canceling these
limitations on trans-
ferability are de-
scribed under
item 6.
3. Board of Directors
The Board of Directors is responsible for the ultimate supervision and
management of the Company, including the establishment of general
strategies and guidelines, as well as for other matters which by law are under
its nontransferable responsibility. To the extent permitted by law and except
as otherwise provided in some cases in the Company's Articles of
Incorporation and Organizational Regulations, the management of the
Company's affairs is delegated to the Management Board pursuant to
Organizational Regulations adopted by the Board of Directors.
Members (see also page 71):
Mike Baronian (Chairman)1947, Canadian-Swiss citizen, Degree in Finance (Concordia, Montreal Canada)
Since 2000, elected until 2003
Professional background: AZAD Pharma (CH), CEO
Prof. Dr. Armin Seiler (Vice Chairman)1939, Swiss citizen, MS in mechanical engineering (Swiss Federal Institute of
Technology), MS and Ph.D. in business administration (University of Zurich).
Since 1998, elected until 2003
Professional background: Professor at the Swiss Federal Institute of
Technology in Zurich for Marketing and Strategic Management
Other activities: Industrieholding Cham (CH), Board member
Tuxedo Invest (CH), Board member
Dr. Emile C. Sutcliffe (Delegate of the Board, CEO)1957, Swiss citizen, Dr. Technological Sciences (Swiss Federal Institute of
Technology ETHZ, Zurich) and MBA (City University, Zurich)
Since 1999, elected until 2003
Functions: CEO since 1998
Professional background: Oscilloquartz, (CH), CEO until 1998
Timothy B. Anderson1946, US-American citizen, Degree in Business Studies (Northwestern
University) and MBA (Stanford University)
Since 2000, elected until 2003
Professional background: Baxter International, (US), executive management
Other activities: Lake Forest Hospital, (US), Board member
Hans-Jörg Kummer1941, Swiss citizen, Degree in Economics (University of Zurich)
Since 1999, elected until 2003
Professional background: Schering-Plough Corporation, (US), Chairman
Europe / Canada / Middle East / Africa
Other activities: Project Hope (CH), Board member
Meetings. The Board of Directors
meets as often as business matters
require, normally at least four times
a year. The Committees of the Board
of Directors hold separate meetings
as often as the business requires.
On scientific issues, the Board is
provided support by a Scientific
Advisory Board of which all mem-
bers are external specialists.
Election and term of office. Members
of the Board of Directors are elected
by the Annual General Meeting for a
1-year term of office. Reelection is
possible. The Board of Directors
constitutes itself.
Independence. With the exception of
Dr. Sutcliffe (CEO), all the members
of the Board of Directors are non-
executive members. None of the
non-executive board members has
important business connections with
Tecan Group Ltd. or any other group
company. None of the non-executive
board members was formerly a
member of the management of Tecan
Group Ltd. or any group company
prior to the period under review.
There is no cross involvement of the
Company with the boards of
directors of other listed companies.
Committees. The Board of Directors
may appoint from amongst its mem-
bers committees for the preparation
and implementation of its resolutions
and for exercising its supervision
function. The following committees
have recently been established:
Audit CommitteeTimothy B. Anderson (Chairman)
Mike Baronian
Prof. Dr. Armin Seiler
The principal tasks and responsibili-
ties of the Audit Committee are, in
short, to form an impression of the
internal and external audit, to assess
the quality of internal control and
compliance, to review the financial
statements, and to report and make
recommendations on its activities to
the full Board of Directors.
Compensation CommitteeHans-Jörg Kummer (Chairman)
Mike Baronian
Prof. Dr. Armin Seiler
The principal tasks and responsibili-
ties of the Compensation Commit-
tee are, in short, to prepare and
submit to the full Board of Directors
proposals on the amount and form
of remuneration of the members
of the Board of Directors, the CEO,
and the other members of the
Management.
Information and Controlling Instru-ments. To monitor the group’s
financial situation and its evolution,
the Board of Directors continually
receives reports from the group’s
Management Information System.
To limit and control treasury risks,
regulations for treasury affairs
are in place.
4. Executive Leadership Committee (ManagementBoard)
The Executive Leadership Commit-
tee, under the presidency of the CEO,
is responsible for all areas of man-
agement of the Company which are
not reserved to the Board of
Directors by law or by the Articles of
Incorporation and the Organiza-
tional Regulations of the Company.
Members (see also page 71)
Dr. Emile C. Sutcliffe (CEO)See page 31
Franz Rutzer1960, Swiss citizen, Degree in
Economics (University of St. Gallen)
and Professional Controller’s Degree
(SIB)
Functions: CFO from 1998 to 2002;
CFO/COO Tecan Europe & President
of Tecan Trading since 2002
Professional background: Oerlikon-
Bührle Holding (head of group
controlling)
Anton Schrofner1963, Austrian citizen, Diploma in
Engineering (University of Salzburg)
and Degree in Economics (University
of Innsbruck)
Function: President of Tecan Austria
since 1994; President of Tecan
Schweiz since 2001; President of
Tecan Instruments since 2002
Professional background: SLT Lab-
instruments GmbH (operational
management)
CORPORATE GOVERNANCE
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Jan Timmers1962, Dutch citizen, Diploma in
Biochemistry and Clinical Chemistry
Function: Marketing manager of
Tecan Schweiz and Tecan Austria
since 1992, Head of business
development and Biopharma since
1999 and 2002 respectively
Professional background: Proton
Wilten / Spectra and Ortho-Clinical
Diagnostics / Johnson & Johnson
(application and sales specialist and
product manager)
Steve Levers1954, US-American citizen, Degree in
Finance (San Jose State University)
and MBA (University of Santa Clara)
Functions: CFO of Tecan Systems
since 1997; President of Tecan
Systems since 2000
Professional background: Different
companies and industries in the
Silicon Valley (financial manage-
ment)
Carl Severinghaus1952, US-American citizen, Degree in
Finance (Drake University, Iowa)
Function: Sales manager of Tecan
US since 1996; President of Tecan US
since 1999
Professional background: Beckman
Coulter and American Monitor
(sales specialist)
Enhanced Management TeamJoerg Borer: Head of Customer Services
Wolfgang Deuringer: President Tecan Sales International
Scott Eaton: President Tecan Japan
Dr. Rudolf Eugster: CFO
Sylvain Hunault: President Tecan Southern Europe
Sarah Kreienbühl: Head of Human Resources
Martin von Lueder: President Tecan Central Europe
Paul Mitchell: President Tecan Northern Europe
Bob Young: President Tecan Boston
Management Contracts. No agreements for the delegation of management
tasks between the Company and third parties not being part of the Tecan
Group were entered into or existing in the year under review.
5. Compensations, shareholdings and loans
Decisions regarding the compensation of the members of the Board of Directors
and the Management Board as well as decisions regarding the grant of employee
stock options are taken by the Board of Directors (since 2003: upon proposal
by the Compensation Committee). In addition, the newly established Compen-
sation Committee supervises the salary structure within the Tecan Group.
Compensations paid in 2002 2001Member CHF 1,000 Member CHF 1,000
Non-executive members of 4 260 5 241
the Board of Directors in total
Executive members of the Board 7 2,231 10 3,573
of Directors and Executive Leadership
Committee in total
Options granted in 2002 2001(Plan 2003) Member Number Member Number
Non-executive members of 4 13,140 5 4,380
the Board of Directors in total
Executive members of the Board 7 90,810 10 39,330
of Directors and Executive Leadership
Committee in total
The details of the employee stock option plan 2003 are described in the consolidated financial
statements, note 9 ‘Employee benefits’.
6. Shareholders’participation rights
Each share entitles to one vote. No
shareholder, or groups of sharehold-
ers acting in concert, may represent
at a shareholders’ meeting more
than 5% of the aggregate voting
rights of the Company. An exception
exists for shareholders who were
registered as shareholders with
voting rights for more than 5% of
the Company’s share capital in the
course of the restructuring of the
share capital in 1999 (introduction of
one single class of shares). Further,
this voting restriction does not apply
to the independent voting represen-
tative and to a proxy holder appoint-
ed by the Company (“Organ-
vertreter”). The board of directors
may agree with banks on exceptions
of the voting restrictions to enable
the exercise of the voting rights for
deposited shares by proxy. No such
agreements were entered into or
existing in the year under review.
Shareholders may be represented
at the shareholder’s meeting by
their legal representative, another
shareholder with voting rights, the
independent voting representative,
the proxy appointed by the
Company or a proxy appointed by a
depository institution. A written
power of attorney is required
which is valid and issued for
only one specific share-
holder’s meeting.
CORPORATE GOVERNANCE
In 2001 and 2002, neither special compensations upon resignation nor
compensations to former members of the Board of directors or the Executive
Leadership Committee were paid.
The member of the Board of Directors with the highest total compensation
received a compensation of kCHF 500 and 44,430 employee stock options in
2002 (compensation of 650 kCHF and 14,810 employee stock options in 2001).
No shares have been allocated to any member of the Board of Directors, any
member of the Executive Leadership Committee or any related parties
during 2001 and 2002.
Ownership of shares as per December 31, 2002Number
Non-executive members of the Board
of Directors including related parties in total 1,100
Executive members of the Board of Directors,
Executive Leadership Committee and related parties in total 0
Ownership of employee stock options as per December 31, 2002Plan Number
Non-executive members of the Board 1999 2,000
of Directors including related parties in total 2000 6,660
2001 4,380
2002 4,380
2003 13,140
Executive members of the Board of Directors, 1999 64,920
Executive Leadership Committee and related parties in total 2000 34,489
2001 25,910
2002 32,620
2003 90,810
The details of the employee stock option plans are described in the consolidated financial
statements, note 9 ‘Employee benefits’.
No additional fees and/or compensations have been paid during 2001 and
2002 to any member of the Board of Directors, any member of the Executive
Leadership Committee or any related parties. No loan is outstanding as per
December 31, 2002 to or by any of these persons.
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Art. 13 paragraph 2 of the Company's
Articles of Incorporation lists mat-
ters as to which, in addition to the
qualified majority requirements
prescribed by law, a shareholders
resolution taken by a qualified
majority of at least two thirds of
the votes represented is required.
These matters are the following:
- the conversion of registered
shares into bearer shares;
- the cancellation or modification
of transfer restrictions (Art. 5 of
the Articles of Incorporation);
- the cancellation or modification
of voting-right restrictions (Art.
12 paragraph 4 of the Articles of
Incorporation);
- the dissolution of the Company
with liquidation, and
- the cancellation of Art. 13
paragraph 2 of the Articles of
Incorporation itself and the
cancellation or modification of
the majority requirements in
this provision.
Shareholders representing shares in
the aggregated nominal value of at
least CHF 1 million may demand that
an item be included on the agenda
and shareholders representing 10%
of the share capital may demand
that a General Meeting of Share-
holder be convened.
Shareholders registered with voting
rights are convened to general meet-
ings by mail at least 20 days prior to
the day of the meeting. From the
day on which the invitations for the
general meeting are dispatched,
no further entries are made
in the share register until
the first day after the
general meeting.
7. Changes of control and defence measure
The Company's Articles of Incorporation do not contain an opting-out or
opting-up clause to remove or limit the duty to make a mandatory offer based
on the Stock Exchange Law.
There are no clauses on changes of control in agreements or plans benefiting
members of the Board of Directors and/or the Management of the Company
or the Tecan Group.
8. Auditors
Date of assumption of the existing auditing May 28,1997
mandate by KPMG Fides Peat (date of acceptance)
Date on which the head auditor in charge Fredy Luthiger in 1997
took up office
Total audit fees KPMG 2002 (CHF 1,000) 420
Total consulting fees KPMG 2002 (CHF 1,000) 341
The largest portion of the consulting fees is paid for tax consulting.
The auditors are elected by the Annual General Meeting for a one-year term
of office. Since 2003, the external audit is reviewed by the Audit Committee.
9. Information policy
It is Tecan's policy to keep shareholders and the financial community up-
dated regarding significant development in business operations. This policy
is primarily implemented through regular press releases, quarterly and
annual financial reports and information provided on the Company’s website:
www.tecan.com. Hardcopies of company publications are available on
request. They can also be downloaded from Tecan’s website. Important
website paths are:
http://www.tecan.com/index/com-ir/com-ir-fina_repo.htm
http://www.tecan.com/index/com-ir/com-ir-inve_cale.htm
http://www.tecan.com/index/com-ir/com-ir-corp_present-entry.htm
CFO STATEMENT
Strong financial position maintained indifficult environment.
In 2002, Tecan was exposed to two major factors that
negatively affected its performance. Firstly a decline of
the markets in which it is operating and secondly the fall
of the US-Dollar versus the Swiss Franc. Despite these
factors, Tecan’s balance sheet per December 31, 2002,
remained strong. Shareholder’s equity represented a high
71.4% (2001: 68.7%) of total assets of CHF 240.9 million
(2001: CHF 262.4 million). Due notably to the substantial
buy-back of treasury shares, the execution of a put
option and exchange rate effects, cash and cash
equivalents declined to CHF 58.9 million (2001: CHF 64.4
million). Tecan has no net debt but a net liquidity of
CHF 48.4 million (2001: CHF 55.2 million).
Lower sales impact profit.
In 2002, Tecan experienced a decrease of sales in local
currencies of 3.3%. (2001: +34.8%). Due to the lower
exchange rates, consolidated sales declined to CHF 332.2
million (-8.4%). Tecan, being a company with high profit
and contribution margins, posted a net profit decrease of
26.9% (2001: +14.3%) to CHF 33.0 million (2001: CHF 45.1
million). In 2002 Tecan reported the income from engi-
neering services as sales instead of as other operating
income. The change is due to the increasing importance
of Tecan being a solution provider. The incremental sales
from engineering services in 2002 compared to 2001
were CHF 2.3 million or +0.6% of total sales. The net
profit is not affected by these changes.
Increase of cash flow from operatingactivities.
In 2002, Tecan strengthened its focus on operations. Cash
flow from operating activities rose by 31.6 % (2001: 6.6 %)
to a robust CHF 42.6 million (2001: CHF 32.3 million) and
demonstrates Tecan’s ability to generate cash in a difficult
market environment.
Personnel reduction implemented to reduceimpact of lower sales on EBIT.
To increase efficiency, Tecan implemented several cost
reduction projects. As a consequence of this, the number
of employees decreased to 872 (2001: 915) at the end of
the year. Tecan will benefit in 2003 from the full-year
effect of these savings.
Investment in R&D kept at long-term level.
The company’s objective is to spend 10-12% of sales
annually on R&D. This objective was met in 2002 with
R&D expenses amounting to 11.9% of sales (2001: 12.1%).
New tax strategy lowers overall tax rate.
Tecan is in the process of successfully implementing a new
tax strategy. Major benefits were achieved in 2002, and
resulted in a decrease of the tax rate to 24.1% (2001: 29.4%).
Share buy-back program launched.
In the summer of 2002, Tecan announced a share buy-
back program. By the end of 2002, the number of shares
bought-back amounted to 348,943 and the total number
of treasury shares amounted to 622,430. Tecan will
continue its buy-back program in 2003 according to the
announcement made in the summer of 2002.
Dr. Rudolf Eugster,
Chief Financial Officer
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Net Liquidity
in CHF 1,000 2000 2001 2002
+ cash and cash equivalent 49,071 64,386 58,901
./. current bank liablities -2,126 -7.982 -9,368
./. bank loans -640 -1,166 -1,141
= net liquidity 46,305 55,238 48,392
Cashflow from operating activities
in CHF million
2000 30.3
2001 32.3
2002 42.6
0 10 20 30 40 50
Research and development
in CHF million
2000 29.0
10.6 %
2001 43.7
12.1 %
2002 39.5
11.9 %
0 10 20 30 40 50
Research and Development gross
Research and Development (gross) in % of sales
Operating and net profit
in CHF million
2000 57.9
39.5
2001 62.4
45.1
2002 44.7
33.0
0 20 40 60 80 50
Operating profit
Net profit
Diluted earings per share
in CHF/share
2000 3.00
2001 3.48
2002 2.57
0 10 20 30 40 50
Manpower by activity (eop)
Manufacturing & Logisitics 172 19.7 %
Selling & Marketing 324 37.1 %
Customer Service 106 12.2 %
Research & Development 174 20.0 %
General & Administration 96 11.0 %
Total 872
Sales broken down by region
in CHF million
2000 273.7
2001 362.7
2002 332.2
0 100 200 300 400 500
North America Asia
Europe Others
Sales by markets
in CHF million
Genomics/Proteomics 75.0 22.6 %
Drug Discovery 118.1 35.5 %
Diagnostics 139.1 41.9 %
Total 332.2
FIVE-YEAR CONSOLIDATED DATA
Five-year consolidated data
in CHF 1,000
Income statement
Sales
Operating profit
Financial result
Income taxes
Net profit
Research and development, gross
Personnel expenses
Depreciation of property, plant and equipment
Amortization of intangible assets
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority interests
Shareholders' equity
Cash flow statement
Cash inflows from operating activities
Capital expenditure in property, plant and equipment and intangible assets
Dividends paid
Other data
Number of employees (end of period)
Number of employees (average)
Research and development in % of sales
Sales per employee
Data per share (CHF)*
Net profit
Shareholders' equity
Dividends paid (CHF/share) **
* data per share are based on 12,761,653 registered shares of par value CHF 1 each outstanding for all periods presented
** proposal to the Annual General Meeting
2002
332,180
44,701
-1,466
10,427
32,972
39,492
102,819
9,170
6,237
183,859
57,057
240,916
61,548
7,338
68,886
0
172,030
42,581
20,296
5,807
872
904
11.9%
367
2.58
13.48
0.45
2001
362,675
62,378
1,500
18,789
45,093
43,729
101,396
7,512
4,575
206,071
56,363
262,434
74,565
7,645
82,210
0
180,224
32,345
24,873
4,534
915
855
12.1%
424
3.53
14.12
0.45
2000
273,701
57,915
-3,488
14,882
39,450
28,935
73,437
5,631
2,928
151,594
42,825
194,419
48,136
7,261
55,397
25
138,997
30,334
25,850
3,358
690
629
10.6%
435
3.09
10.89
0.35
1999
193,478
41,015
989
13,896
28,050
25,720
56,342
4,592
0
131,346
23,226
154,572
32,460
4,172
36,632
80
117,860
27,656
9,623
2,683
556
542
13.3%
357
2.20
9.24
0.25
1998
164,279
31,545
168
6,766
22,876
18,650
46,806
6,025
22
103,016
16,991
120,007
26,229
4,976
31,205
219
88,583
26,097
4,832
1,944
507
489
11.4%
336
1.79
6.94
0.20
39
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Sales
Tecan Group consolidated sales in 2002 fell by 8.4% to
CHF 332.2 million (2001: CHF 362.7 million). The fall of the
CHF against the USD to CHF 1.39 (2001 CHF 1.67), had an
adverse effect on the overall sales figures. Excluding
the effect of currency translation, sales were reduced
by 3.3%. Sales within the market segments showed
differing performance levels. Genomics/Proteomics sales
were more or less flat compared to 2001, rising by 0.3% to
CHF 75.0 million, which amounted to 22.6% of total sales.
In local currency terms however, sales pushed ahead by a
healthy 6.8% compared to 2001. Drug Discovery sales
totaled CHF 118.1 million, which amounted to 35.5% of
total sales. This represented a fall of 9.4%, and in local
currency terms a decrease of 3.2%. Diagnostics sales
were reduced to CHF 139.1 million or 41.9% of total sales,
which represents a decrease of 11.8% in 2002, and in local
currency terms a fall of 8.0%.
Additionally, at the end of 2002 income from engineer-
ing contracts previously recognized as other operating
income has been reclassified directly to sales. Related
costs are disclosed as cost of sales instead of research
and development expenses. Prior year figures have been
reclassified accordingly. In 2002 the income from
engineering contracts increased by 290% to CHF 3.2
million. (2001 CHF 0.8 million). This reclassification has
had no impact on operating profit.
In terms of location of customers, whereas in 2001 the
America geographical segment showed the largest
growth in sales, in 2002 the European market showed
stronger growth. In local currency terms this amounted
to 7.0%. These increased sales were largely attributed to
a more locally focused distribution network. In line with
the general turndown in the business environment
in that area, the America market segment showed
negative growth in local currency terms of 3.9%.
Changes in Group companies
In January 2002 Tecan acquired the remaining 49% of Dr.
Weber GmbH. On the same date Tecan purchased 100%
of CST Logic Softwareentwicklungs GmbH in Mainz-
Kastel, Germany. In addition as of December 19, 2002
Tecan has acquired the remaining 30% of Tecan Software
GmbH. Tecan also established new distribution channels
to cater for the requirements of certain local markets.
On January 1, 2002 Tecan Sales Switzerland AG, Tecan
Sales Austria GmbH, and Tecan Sales International GmbH
were formed and on December 31, 2002 Tecan Iberica
Instrumentacion S.L. came into existence.
FINANCIAL REVIEW
FINANCIAL REVIEW
Profitability
Gross profit. A gross profit of 54.4% was achieved in
2002. This figure was down on 2001 (56.7%) and more
than 1% of the fall could be associated with the
exchange rate impact.
Personnel. With the changing market conditions a
number of programmes to increase efficiency were
introduced within the Tecan Group. This led to a
reduction in the number of employees at year end 2002
to 872 (2001: 915). However, the area of Research and
Development was not affected. Due to the lower sales
reached in 2002, sales per employee fell to CHF 367,000
(2001: CHF 424,000). Despite the difficult market
conditions investment into development of staff and
further education of employees was not affected,
ensuring that Tecan would continue to develop highly
qualified staff for the future. Tecan employees once
again as in previous years had the possibility to partici-
pate in a stock option plan. In the year some 510,007
stock options were granted to employees. (2001: 184,752)
Research & Development. Tecan consistently maintains
a target of spending 10-12% of sales on R&D. In 2002,
Tecan invested CHF 39.5 million in R&D compared to CHF
43.7 million in 2001. This represents 11.9% of sales, a slight
decrease on the previous years figure. (12.1% in 2001). In
comparison to the previous year R&D expenditure in
2002 concentrated on internal development which led to
a 30% fall in external R&D expenditures.
Tecan launched a significant amount of new products in
2002, especially in the second half of the year. Main
product releases include the HS 4800 Hybridization
Station in Genomics, the ProTeam FFE in Proteomics,
several new detection devices, LabCD-ADMET based
ADME solutions and parallel pipetting devices in Drug
Discovery. In Diagnostics Tecan launched a solution for
nucleic acid testing and extended the FE500 Workcell
functionality.
Other operating expenses. Throughout 2002 Tecan
entered into a number of efficiency and improvement
programs during the year. These programs ensured that
the Tecan Group cost base could be reduced. However,
Tecan continued to invest in system and infrastructure
expenses to ensure continued efficiency of processes.
Operating profit fell by 28.3% to CHF 44.7 million, or
13.5% of sales (2001: 17.2%). The fall in the operating
margin reflects the overall fall in sales but is bolstered by
the cost and efficiency improvement programmes on
the cost base. The figure also includes amortization
intangibles of CHF 6.2 million (2001: CHF 4.6 million).
Financial result. The decline of the US Dollar to CHF 1.39
at the end of the year (2001: CHF 1.67), caused Tecan to
suffer on a operational level but also caused a larger than
expected currency loss. The size of the loss was offset
largely by Tecan policy of hedging. The exchange losses
for the year were CHF 2.2 million.
Taxes. Tecan in 2002 continued to benefit from a higher
allocation of its profits to countries with lower tax rates.
The Group is continuing with improvements in its tax
strategy, in which many of the benefits can be seen in
2002. The Group target of maintaining tax rates at
sustainable levels was achieved with the underlying tax
rate for 2002 of 24.1% (2001: 29.4%)
41
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41
Tecan's operating performance in 2002 resulted in a
net profit of CHF 33.0 million, or 9.9% of sales. This
represents a decrease in net income of 26.9% compared
with 2001. The diluted earnings per share fell from CHF
3.48 in 2001 to CHF 2.57 for the year 2002.
Balance sheet
Despite the difficult market conditions, Tecan has conti-
nued to show a very strong balance sheet structure.
Although shareholders' equity showed a net decrease of
CHF 8.2 million it still represents a high 71.4% of total
assets as at December 31, 2002, (2001: 68.7%). Tecan has
a policy of continuing to buy treasury shares during the
financial year. Due to the dealings in treasury shares
shareholders equity was charged with a net amount of
CHF 21.0 million (2001: 3.1 million).
Cash flow statement
Despite the slow down in market conditions, Tecan conti-
nued to focus its attention on operations. Cash flow from
operations increased by CHF 10.2 million compared with
the 2001, reaching CHF 42.6 million in 2002. Cash flow
from investing activities remained flat compared to 2001
at CHF 20.1 million. The cash outflows from financing
activities of CHF 30.5 million are largely attributable to
the purchase of treasury shares and put options on the
treasury shares. As a result, cash and cash equivalents
decreased by CHF 5.5 million as of the end of 2002. Cash
and cash equivalents amounted to CHF 58.9 million
which represents 24.4% of the total balance sheet.
Treasury shares
During the year 2002, some 517,931 shares were pur-
chased and some 28,650 shares were sold. Tecan held
662,430 treasury shares as of year-end. In 2002 Tecan
announced a share buy back program of up to 10% of its
shares issued. The program will be terminated at the
latest in August 2004.
Dividends
At the annual shareholders' meeting on April 16, 2003,
the Board of Directors will recommend the payment of
dividends of CHF 0.45 per share (2001: CHF 0.45).
Stock market performance
The registered shares of Tecan Group Ltd., the Group's
ultimate holding company, are traded on the Swiss
stock exchange. In former years, the share price clearly
outperformed the Swiss Performance Index (SPI).
At the end of 2002 Tecan shares traded at CHF 45.50
which was 59% lower than at the start of the year.
The performance of the SPI during the same period was
-26%. The stock's high was 115 and the low 29.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheet at December 31
Assets
in CHF 1,000 Notes 2002 2001
Cash and cash equivalents 58,901 64,386
Trade accounts receivable 3 76,858 98,595
Other accounts receivable 8,489 7,131
Inventories 4 29,481 31,072
Prepaid expenses and other current assets 10,130 4,887
Current assets 183,859 206,071
Financial assets 73 296
Property, plant and equipment 5 25,712 28,461
Intangible assets 6 19,293 14,246
Deferred tax assets 20 10,742 12,264
Other non-current assets 1,237 1,096
Non-current assets 57,057 56,363
Assets 240,916 262,434
Liabilities and equity
Current bank liabilities 7 9,368 7,982
Trade accounts payable 10,907 21,204
Other accounts payable 3,606 2,898
Advance payments 0 497
Current provisions 8 6,291 5,033
Current tax liabilities 8,807 11,995
Accrued and other current liabilities 22,569 24,956
Current liabilities 61,548 74,565
Bank loans 7 1,141 1,166
Non-current provisions 8 1,841 1,811
Deferred tax liabilities 20 3,867 4,207
Other non-current liabilities 489 461
Non-current liabilities 7,338 7,645
Minority interests 0 0
Share capital 13,076 13,041
Capital reserve 15,845 21,223
Treasury shares (48,537) (27,213)
Retained earnings 202,014 174,849
Translation differences (10,368) (1,676)
Shareholders’ equity 10 172,030 180,224
Liabilities and equity 240,916 262,434
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Consolidated income statement
in CHF 1,000 Notes 2002 2001
Sales 14, 15 332,180 362,675
Cost of sales (151,434) (156,866)
Gross profit 180,746 205,809
Selling and marketing (59,814) (62,738)
Research and development 18 (39,492) (43,729)
General and administration (30,868) (34,023)
Amortization of intangible assets 6 (6,237) (4,575)
Other operating income 19 366 1,634
Operating profit 44,701 62,378
Interest expense (383) (184)
Interest income 1,126 1,318
Foreign exchange gains (losses) (2,209) 366
Financial result (1,466) 1,500
Profit before taxes 43,235 63,878
Income taxes 20 (10,427) (18,789)
Profit before minority interests 32,808 45,089
Minority interests in profit 164 4
Net profit 32,972 45,093
Earnings per share (CHF/share) * 24 2.58 3.50
Diluted earnings per share (CHF/share)* 24 2.57 3.48
* per registered share with a nominal value of CHF 1
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in shareholders’ equity
in CHF 1,000
Shareholders’ equity at 1/1/2001
Net profit
Dividends paid
Movement in treasury shares
Share capital increase from exercise
of employee stock options
Put option on treasury shares
Translation differences
Shareholders’ equity at 12/31/2001
Shareholders’ equity at 1/1/2002
Net profit
Dividends paid
Movement in treasury shares
Share capital increase from exercise
of employee stock options
Put options on treasury shares (net)
Translation differences
Shareholders’ equity at 12/31/2002
See also note 10.
Share
capital
13,020
-
-
-
21
-
-
13,041
13,041
-
-
-
35
-
-
13,076
Capital
reserve
15,017
-
-
1,070
1,103
4,033
-
21,223
21,223
-
-
314
1,712
(7,404)
-
15,845
Treasury
shares
(23,073)
-
-
(4,140)
-
-
-
(27,213)
(27,213)
-
-
(21,324)
-
-
-
(48,537)
Retained
earnings
134,261
45,093
(4,505)
-
-
-
-
174,849
174,849
32,972
(5,807)
-
-
-
-
202,014
Translation
differences
318
-
-
-
-
-
(1,994)
(1,676)
(1,676)
-
-
-
-
-
(8,692)
(10,368)
Total share-
holders’equity
139,543
45,093
(4,505)
(3,070)
1,124
4,033
(1,994)
180,224
180,224
32,972
(5,807)
(21,010)
1,747
(7,404)
(8,692)
172,030
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Consolidated cash flow statement
in CHF 1,000 Notes 2002 2001
Profit before minority interests 32,808 45,089
Adjustments to reconcile profit to cash flow from operating activities:
Depreciation of property, plant and equipment 5 9,170 7,512
Amortization of intangible assets 6 6,237 4,575
Change in provisions 8 1,778 1,138
Change in net deferred taxes 20 737 (6,161)
(Gain) loss on sales of property, plant and equipment 1,173 (967)
(Increase) decrease in current assets:
Trade accounts receivable 3 14,037 (31,136)
Inventories 4 (3,020) (4,915)
Other (7,446) (3,513)
Increase (decrease) in current liabilities:
Trade accounts payable (9,182) 1,152
Other (3,711) 19,571
Cash inflows from operating activities 42,581 32,345
Purchase of property, plant and equipment 5 (11,854) (22,878)
Proceeds from sales of property, plant and equipment 0 5,653
Acquisitions, net of cash 1 (4,191) (2,692)
Purchase of intangible assets 6 (4,073) 0
(Increase) decrease in financial assets 220 (503)
(Increase) decrease in other non-current assets (243) 0
Cash outflows from investing activities (20,141) (20,420)
Dividends paid (5,807) (4,534)
Share capital increase from exercise of employee stock options 1,747 1,124
Purchase of treasury shares (net) (21,010) (3,148)
Put options on treasury shares (net) 10 (7,404) 4,020
Increase in current bank liabilities 1,957 6,498
Increase in bank loans 7 0 660
Cash in(out)flows from financing activities (30,517) 4,620
Translation differences 2,592 (1,230)
Increase (decrease) in cash and cash equivalents (5,485) 15,315
Cash and cash equivalents at beginning of year 64,386 49,071
Cash and cash equivalents at year-end 58,901 64,386
Interest received 791 1,215
Interest paid 173 140
Income taxes paid 16,211 13,154
SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Basis for the consolidated financial statements
The consolidated financial statements are based on the
individual subsidiaries’annual accounts as of December 31,
which were prepared according to uniform Group
accounting principles. These consolidated financial state-
ments are designed to give a true and fair view of the
results of operations, financial position and cash flows of
the Tecan Group, and are prepared in accordance with
International Financial Reporting Standards (IFRS).
These consolidated financial statements were approved by
the Board of Directors on February 14,2003. Final approval is
subject to acceptance by the Annual General Meeting of
shareholders on April 16, 2003.
ReclassificationsIncome from engineering contracts previously recog-
nized as other operating income has been reclassified to
sales. The related costs associated with this business
are disclosed as cost of sales instead of research and
development expenses. Prior year figures have been
reclassified accordingly (see note 14).
Scope of consolidation
The consolidated financial statements include Tecan
Group Ltd. and all subsidiaries, which are directly or
indirectly under its control (specifically those for which
over 50% of the voting rights are owned). Minority
interests in shareholders’ equity and in the net profit of
consolidated subsidiaries are shown separately. Group
companies acquired during the year are included in the
consolidated financial statements as of the date of
purchase. The companies, which are included in the
consolidated financial statements, are listed in the notes
to the statutory financial statements of Tecan Group Ltd.
Currently all investments owned by Tecan are fully
consolidated.
Capital consolidation
The capital consolidation is performed according to the
purchase method. Companies included for the first
time in the consolidation are valued according to
uniform accounting principles. Any resulting goodwill is
capitalized and amortized over its estimated useful life.
Translation of foreign currencies
The financial statements of foreign subsidiaries
denominated in foreign currencies are translated into
Swiss francs as follows:
Assets and liabilities current rates at year-end
Income and expenses average rates for the year
Cash flows average rates for the year
The resulting translation differences are directly charged
against or credited to shareholders’ equity.
Foreign currency transactions are translated using
rates applicable as of the transaction date. Resulting
exchange gains and losses are included in net profit.
Monetary assets and liabilities denominated in foreign
currencies, which were held at December 31 are
translated at year-end rates. The resulting translation
gains and losses are a component of net profit.
Intercompany sales and profits
Intercompany sales and profits, as well as accounts
receivable and payable between Group companies, are
eliminated.
Marketable securities
Marketable securities consist of easily realizable invest-
ments in debt and equity securities for which a liquid
market exists. The Group does not hold investments for
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trading purposes. All securities held by the Group are
classified as being available-for-sale. They are stated
at fair value, with any resultant gain or loss being
recognized in the income statement. There were no mar-
ketable securities as per balance sheet date.
Receivables
Trade accounts receivable and other receivables are
shown at their nominal values, less economically
necessary allowance for doubtful accounts.
Inventories
Inventories are valued at the lower of purchase/produc-
tion costs or market values, using the first-in-first-out or
average method. Production costs include costs of
material and labor, as well as a reasonable allocation
of overhead. Provisions have been made against any
slow-moving and obsolete inventory items.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses where
economically necessary. Depreciation is calculated under
the straight-line method based on the estimated useful
lives of the underlying assets:
Furniture and fixtures 4 - 8 years
Machines and motor vehicles 3 - 7 years
EDP equipment 3 - 5 years
Leasehold improvements term of the lease,
not exceeding
10 years
Assets acquired under leasing agreements, which
provide the Group with substantially all benefits and
risks of ownership are classified as finance leases and
capitalized at amounts equivalent to the estimated
present value of the underlying lease payments. The
corresponding rental obligations, net of finance charges,
are included in liabilities. Leased assets are depreciated
over their estimated useful lives.
Intangible assets
GoodwillGoodwill resulting from acquisitions represents the
difference between the purchase price and the fair
value of net assets acquired. Goodwill is stated at cost
less amortization and impairment losses. Amortization
is recorded on a straight-line basis over the estimated
economically useful life, limited to a maximum of 20 years.
Development costsIn compliance with IAS 38, development costs are
capitalized if technical and economical feasibility is
assured, if evidence of future use exists, and if
development costs can be separately determined and
measured. Development costs capitalized which include
material costs and external project costs, are amortized
over the useful life associated with the project, but not
to exceed 5 years.
SoftwareThe third party expenditure (license and external
consulting fees) related to the implementation of
integrated software in the individual subsidiaries are
capitalized and written off over five years.
Provisions
Provisions are recognized when an obligation has
resulted from past events, which will probably require an
outflow of resources and the amount of which can
reliably be estimated.
SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Employee profit sharing
In 1997 shareholders approved a conditional share
capital, reserved for the employee profit sharing
program. Since 1999, based on this conditional share
capital, employee stock option plans have been
introduced. As such options are exercised, new shares
will be issued from the conditional share capital, which
will result in a share capital and capital reserve equal to
the strike prices received.
Provision for employee benefits
Within the Group, various retirement benefit plans for
employees exist. As a rule, the obligations are covered by
independent pension funds, which are maintained as
defined contribution plans.
Equity instruments
When own shares are purchased, the amount of the
consideration paid, including directly attributable costs
and taxes, is recognized as a change in equity.
Repurchased shares are classified as treasury shares
and presented as a deduction from total equity. The
consideration received when treasury shares are sold is
recognized as a change in equity.
The Group enters into certain option contracts on own shares,
which are classified as equity instruments with option
premiums recognized directly in equity (capital reserve).
Financial instruments
The Group uses derivative financial instruments to
economically hedge certain exposures to foreign
exchange rate risks. Hedge accounting is not applied.
Derivative financial instruments are recognized initially
at cost. Subsequent to initial recognition, derivative
financial instruments are stated at fair value.
Recognition of any resultant gain or loss is recognized in
the income statement.
Government research subsidies
The Group receives unconditional Government grants
for research activities. They are recognized as income
when received.
Taxes
The Group provides for all taxes estimated to be payable
on Group companies’ net taxable income for the year.
Deferred taxes arising due to temporary differences in
the recognition of certain income and expenses for
financial and tax reporting purposes are provided. The
deferred tax calculation is based on the balance sheet
liability method using local tax rates currently
applicable or expected. Deferred tax assets resulting
from timing differences and tax loss carry-forwards are
recorded to the extent that their future realization is
probable.
Differences relating to investments in subsidiaries are
not provided for to the extent that they will probably
not reverse in the foreseeable future.
Related parties
Transactions with related parties are conducted under
arms’ length market conditions.
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2001
63
1,044
51
(379)
(19)
760
1,995
2,755
(63)
2,692
2002
509
454
69
(525)
(176)
331
4,369
4,700
(509)
4,191
Changes in Group companies (acquisitions)The following amounts were included in the consolidation for assets and liabilities acquired:
in CHF 1,000
Cash and cash equivalents
Other current assets
Property, plant and equipment
Liabilities
Minority interests
Net identifiable assets and liabilities
Goodwill
Purchase price
Cash acquired
Net cash outflow
Foreign exchange ratesThe Tecan Group has used the following foreign exchange rates in the preparation of the financial statements:
in CHF
USD
EUR
GBP
SEK
JPY
SGD
Acquisitions in 2001:As of January 1, 2001, Tecan acquired an interest of 51% (majority) in Dr. Weber GmbH (Germany). After having
founded Tecan Nordic AB as of November 1, 2001, Tecan took over assets from its former distributor in Sweden
(Lambda Instruments) and Denmark (Laboratory, Automation & Technology).
Acquisitions in 2002:Tecan purchased the remaining 49% of Dr. Weber GmbH as of January 1, 2002. At the same time Tecan acquired a
100% of CST Logic Softwareentwicklungs GmbH (Germany). Finally Tecan took over the remaining 30% of Tecan
Software GmbH as of December 19, 2002.
Income statement
2001
1.69
1.51
2.43
15.71
1.39
0.95
2002
1.56
1.47
2.34
16.00
1.24
0.87
Balance sheet
2001
1.67
1.48
2.42
15.98
1.27
0.91
2002
1.39
1.45
2.23
15.82
1.17
0.80
1
1
1
100
100
1
Trade accounts receivable
in CHF 1,000
Receivables
Allowance for doubtful accounts
Total
Change compared with previous year
Thereof translation differences
2001
100,568
(1,973)
98,595
30,406
(344)
2002
78,765
(1,907)
76,858
(21,737)
(9,102)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
2.
3.
Property, plant and equipment
in CHF 1,000
At cost
Balance at January 1
Changes in Group companies
Additions
Disposals
Transfer
Translation differences
Balance at December 31
Accumulated depreciation
Balance at January 1
Changes in Group companies
Annual depreciation
Disposals
Transfer
Translation differences
Balance at December 31
Net book value
Furniture and
fixtures
8,903
69
1,573
(404)
395
(625)
9,911
3,804
51
1,456
(243)
211
(333)
4,946
4,965
Machines and
motor vehicles
14,317
41
6,166
(1,542)
(395)
(843)
17,744
7,384
16
2,993
(534)
(210)
(450)
9,199
8,545
EDP
equipment
19,925
229
3,589
(457)
(2,896)
(1,193)
19,197
10,743
203
3,850
(381)
(1)
(886)
13,528
5,669
Leasehold
improvements
8,067
-
526
106
-
(563)
8,136
820
-
871
34
-
(122)
1,603
6,533
Total 2002
51,212
339
11,854
(2,297)
(2,896)
(3,224)
54,988
22,751
270
9,170
(1,124)
-
(1,791)
29,276
25,712
Total 2001
51,062
88
22,878
(22,535)
-
(281)
51,212
33,194
37
7,512
(17,849)
-
(143)
22,751
28,461
Inventories
in CHF 1,000
Raw material and work in process
Semi-finished and finished goods
Allowance for slow-moving and obsolete inventories
Total
Change compared with previous year
Thereof translation differences
2001
13,606
19,642
(2,176)
31,072
5,611
14
2002
13,072
20,173
(3,764)
29,481
(1,591)
(4,035)
Property, plant and equipment are insured in the event of fire for the total value of CHF 51.2 million (2001: CHF 51.0
million). As of year-end, purchase commitments for capital expenditure for property, plant and equipment amounted
to CHF 0.2 million (2001: CHF 3.9 million).
In 2002 capitalized software licenses totaling CHF 2.9 million have been transferred from property, plant and
equipment to intangible assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.
5.
Intangible assets
in CHF 1,000
At cost
Balance at January 1
Changes in Group companies
Additions
Disposals
Transfer from property, plant and equipment
Translation differences
Balance at December 31
Accumulated amortization
Balance at January 1
Changes in Group companies
Annual amortization
Disposals
Transfer
Translation differences
Balance at December 31
Net book value
Goodwill
18,889
4,369
-
-
-
(85)
23,173
5,843
-
4,458
-
-
(31)
10,270
12,903
Development
costs for products
3,600
-
-
-
-
-
3,600
2,400
-
1,200
-
-
-
3,600
-
Software
-
-
4,073
-
2,896
-
6,969
-
-
579
-
-
-
579
6,390
Total 2002
22,489
4,369
4,073
-
2,896
(85)
33,742
8,243
-
6,237
-
-
(31)
14,449
19,293
Total 2001
20,531
1,995
-
-
-
(37)
22,489
3,677
-
4,575
-
-
(9)
8,243
14,246
Interest-bearing loans and borrowings
in CHF 1,000
Analysis by currency:
Denominated in EUR
Denominated in JPY
Denominated in USD
Total
Change compared with previous year
Thereof translation differences
Analysis by interest rates:
Variable (LIBOR)
0% - 2%
2% - 4%
4% - 6%
6% - 8%
Total
2002
5,700
4,680
129
10,509
1,361
(224)
9,239
129
1,141
-
-
10,509
1 year
4,559
4,680
129
9,368
Due within
2 – 3 years
1,141
-
-
1,141
Over 3 years
-
-
-
-
2001
1,270
7,638
240
9,148
6,382
(233)
-
7,638
645
625
240
9,148
Unused lines of credit amounting to CHF 42.7 million are available to the Group at December 31,2002 (2001:CHF 44.4 million).
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6.
7.
Provisions
in CHF 1,000
Balance at January 1
Changes in Group companies
Provisions made
Provisions used
Provisions reversed
Translation differences
Balance at December 31
Thereof current
Thereof non-current
Warranty
provision
3,925
63
6,289
(4,498)
(1,221)
(343)
4,215
4,129
86
Provisions for
legal obligations
331
-
163
-
(129)
(11)
354
64
290
Employee
benefits
1,125
-
966
(637)
-
(152)
1,302
678
624
Other
1,463
-
1,399
(330)
(224)
(47)
2,261
1,420
841
Total 2002
6,844
63
8,817
(5,465)
(1,574)
(553)
8,132
6,291
1,841
Total 2001
5,636
110
5,330
(4,192)
-
(40)
6,844
5,033
1,811
2001
82,403
10,114
2,455
6,424
101,396
2002
87,656
9,691
3,508
1,964
102,819
Personnel expenses include the following:
in CHF 1,000
Salaries and wages
Social security
Retirement benefits
Other personnel expenses
Total
Employee profit sharingIn December 1999 Tecan introduced the first employee stock option plan for Tecan shares. In addition to their salaries,
all employees of the Tecan Group outside of the USA receive options. Employees in the USA receive stock appreciation
rights with the same treatment and the same conditions as the employee stock options. The options issued grant
employees the right to purchase one Tecan share per option.
The employee stock option plans include progressive restricted periods, which allow the exercise of a maximum of
25% / 50% / 75% / 100% of options issued after one / two / three / four years (exception plan 1999: maximum of
50% / 100% of options issued after two / four years).
All outstanding options granted are covered by the conditional share capital.
Employee benefits
Change in the number of employee stock options outstanding:
Balance at January 1
Issued
Exercised
Cancelled and expired
Balance at December 31
2001
Number
606,390
184,752
(20,860)
(21,330)
748,952
2002
Number
748,952
510,007
(35,145)
(82,060)
1,141,754
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8.
9.Personnel expenses
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Subsequent to the exercise of 35,145 options during the financial year 2002, the company received CHF 1.7 million in
cash and cash equivalents (2001: CHF 1.1 million). This resulted in an increase in share capital of CHF 35,145 and in
capital reserve of CHF 1,711,833.
Summary of employee stock options outstanding as of year-end:
Expiration date
December 15, 2004
April 10, 2005
November 30, 2005
November 30, 2012
November 30, 2013
Balance at December 31
Thereof vested
Strike price (CHF)
50.00
100.00
162.50
99.00
48.40
2002
Number
203,755
160,460
117,585
152,851
507,103
1,141,754
275,079
2001
Number
266,020
176,690
132,350
173,892
-
748,952
123,390
Provision for employee benefitsThe Tecan Group maintains various retirement benefit plans for its employees. Benefits are distributed for the most
part by separate pension funds. These represent financially independent retirement benefit funds administered
by insurance companies and banks, and are conceived solely as defined contribution plans. As a rule, financing is
achieved through both employee and employer contributions.
As of year-end, provisions for employee benefits relating to termination benefits and long-service leave amounted
to CHF 1.3 million in 2002 (2001: CHF 1.1 million).
Shareholders’ equityThe changes in shareholders’ equity are presented on page 44.
The position ‘treasury shares’ consists of 662,430 registered shares with a nominal value of CHF 1 each (2001: 173,149
registered shares with a nominal value of CHF 1 each). Through various purchase and sales transactions dealing
in treasury shares during the current financial year, shareholders’ equity was charged with a net amount of CHF
21.0 million (2001: CHF 3.1 million).
In 2002 the following amounts relating to sales of put options on own shares have been recognized directly in equity (capital reserve):
in CHF 1,000
Option premiums received
Realized losses
Total
2001
4,033
-
4,033
2002
6,246
(13,650)
(7,404)
10.
At the end of 2002 a put option on own shares, which gives the other party the right to deliver 100,000 Tecan shares
until April 11, 2005 at a strike price of CHF 100.0 payable by Tecan in cash, was outstanding (2001: 100,000 Tecan shares
until November 30, 2005, at a strike price of CHF 162.5). As this put option is classified as an equity instrument,
changes in its fair value are not recognized.
The composition of and the changes in share capital are disclosed in note 3 to Tecan Group Ltd.’s statutory financial
statements.
Financial instruments
Credit risksThe individual companies and the Group as a whole have no significant concentration of credit risks, as financial
instrument contracts are concluded exclusively with first-rate financial institutions. The credit risk associated with
trade accounts receivable is limited, as the Group has numerous clients located in various geographical regions. The
maximum exposure to credit risk is represented by the carrying amount of each financial asset, including derivative
financial instruments, in the balance sheet.
Interest rate risksThe Group places its cash and cash equivalents as well as bank loans, which are primarily short-term, with first-rate
bank institutions.
Foreign currency risksThe Group incurs foreign currency risks on sales, purchases, borrowings and investments denominated in a currency
other than the measurement currency of the respective subsidiaries. On a consolidated basis, the Group is also
exposed to currency fluctuations between the Swiss Franc and the local measurement currencies of its subsidiaries.
The two major currencies giving rise to currency risks are Euros and US Dollars.
Tecan centralizes its foreign currency exposure in a few locations only. The hedging policy of the Group is to cover the
foreign currency exposure to a certain percentage of the operating activities. The Group uses forward exchange
contracts, currency options and swaps to hedge its foreign currency risk on specific future foreign currency cash flows.
These contracts have maturities of up to 12 months. The Group does not hedge for its net investment in foreign
entities and the related foreign currency translation of local earnings. The derivative financial instruments used as
economic hedges of foreign currencies are summarized in the table below. They are recognized at fair value as other
current assets and liabilities respectively.
in CHF 1,000
Foreign currency forwards
Denominated in USD
Denominated in EUR
Foreign currency options
Denominated in USD
Denominated in GBP
Total 2002
Total 2001
Positive
988
-
-
-
988
278
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11.
Contracted value
Due within
3 – 12 months
-
-
11,120
2,230
13,350
54,650
3 months
27,800
2,900
2,780
2,230
35,710
2,420
Total
27,800
2,900
13,900
4,460
49,060
57,070
Fair value
Negative
(606)
-
(23)
(4)
(633)
(815)
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55
Rental and lease commitmentsThe commitments arising from operating leases are largely rental payments for buildings.
No commitments exist under finance leases.
Contingent liabilities and encumbrance of assetsAs of December 31, 2002 and 2001, the Group had no contingent liabilities to third parties, and none of the Group’s
assets were pledged, assigned or subject to retention of title.
Based on the above adjustments the following notes have also been reclassified: Note 14, 15, 16 and 18.
In 2002 the income from engineering contracts increased by 290% to CHF 3.2 million.
Commitments under non-cancelable operating leases:
in CHF 1,000
Due date
2002
2003
2004
2005
2006
2007 and beyond
Total
2001
5,729
5,217
4,448
4,467
4,539
18,062
42,462
2002
-
7,429
6,560
5,645
5,313
24,128
49,075
Income from engineering contracts (reclassification)
in CHF 1,000
Sales
Cost of sales
Gross profit
Research and development
Other cost items
Other operating income
Operating profit
2001
Reclassified
362,675
(156,866)
205,809
(43,729)
(101,336)
1,634
62,378
Adjustments
+809
-550
+259
+550
-809
0
2001
Annual report 2001
361,866
(156,316)
205,550
(44,279)
(101,336)
2,443
62,378
12.
13.
14.
Segment informationThe primary segmentation is indicated by geographical region. Intersegment transactions are conducted based on
prevailing market prices.
2002
154,044
10,994
165,038
21,553
76,648
2,289
(2,110)
63,896
America
2001
178,555
13,505
192,060
23,237
91,465
5,225
(1,933)
61,294
2002
161,817
67,936
229,753
26,072
282,218
9,523
(13,206)
54,086
Europe
2001
164,409
73,218
237,627
39,162
246,874
17,490
(10,035)
57,078
2002
16,319
-
16,319
1,077
7,274
42
(91)
7,080
Asia
2001
19,711
-
19,711
556
15,152
163
(119)
13,538
2002
-
(78,930)
(78,930)
(4,001)
(125,224)
-
-
(56,176)
Corporate /
consolidation
2001
-
(86,723)
(86,723)
(577)
(91,057)
-
-
(49,700)
2002
332,180
-
332,180
44,701
240,916
11,854
(15,407)
68,886
Group
2001
362,675
-
362,675
62,378
262,434
22,878
(12,087)
82,210
Sales by regions (by location of customers)
in CHF 1,000
Sales to third parties
Change in local
currency versus the
prior year in %
2002
153,982
(4)
America
2001
173,109
33
2002
145,850
7
Europe
2001
140,190
34
2002
27,890
2
Asia
2001
29,566
24
2002
4,458
(77)
Others
2001
19,810
95
2002
332,180
(3)
Total
2001
362,675
35
Sales by markets
in CHF 1,000
Sales to third parties
Change in local currency
versus the prior year in %
2002
75,022
7
Genomics /
Proteomics
2001
74,788
76
2002
118,047
(3)
Drug
Discovery
2001
130,226
3
2002
139,111
(8)
Diagnostics
2001
157,661
57
2002
332,180
(3)
Total
2001
362,675
35
No significant non-cash expenses other than depreciation of property, plant and equipment and amortization of
intangible assets were incurred.
Assets and capital expenditure in property, plant and equipment cannot be allocated meaningfully to the individual
markets. A mathematical allocation would not result in reliable or meaningful information.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15.
Segment information (by location of assets)
in CHF 1,000
Sales to third parties
Intersegment sales
Total sales
Operating profit
Total assets
Capital expenditure in
property,plant and
equipment
Depreciation and
amortization
Total liabilities
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Operating expenses by nature
in CHF 1,000
Material costs
Personnel expenses
Depreciation of property, plant and equipment
Amortization of intangible assets
Other operating income and expenses (net)
Total operating expenses
2001
112,831
101,396
7,512
4,575
73,983
300,297
2002
102,741
102,819
9,170
6,237
66,512
287,479
Other operating income
in CHF 1,000
Government research subsidies
Gain on sales of property, plant and equipment
Other operating income (miscellaneous)
Other operating expense (miscellaneous)
Total other operating income
2001
439
1,561
-
-366
1,634
2002
422
-
141
-197
366
Research and development
in CHF 1,000
Total research and development (gross)
Amortization of
Development costs capitalized
Goodwill arising from R&D driven acquisitions
Government research subsidies
Total research and development (net)
Thereof external project costs
2001
43,729
1,200
3,098
-439
47,588
18,977
2002
39,492
1,200
3,880
-422
44,150
13,226
PersonnelTecan Group employed an average of 904 employees (2001: 855 employees) during 2002. At year-end, the Group
employed 872 people (2001: 915 people).
Costs for research and the development of new products amounted to 11.9% of sales (2001: 12.1%). Based on a sales
agreement with Abbott, costs relating to the completion of the Genesis FE amounting to CHF 3.6 million were
capitalized for the first time at December 31, 1999. The development costs capitalized are amortized over 3 years.
Goodwill arising from research and development driven acquisitions are amortized over 5 years. After offsetting the
government research subsidies, net research and development expense in 2002 was CHF 44.2 million (2001: CHF 47.6
million), which represents 13.3% (2001: 13.2%) of sales.
16.
17.
18.
19.
Deferred income taxes arising due to temporary differences in the valuation of assets and liabilities for financial
reporting and for tax purposes are determined according to the balance sheet liability method. The Group recognizes
both deferred tax assets and liabilities on temporary differences using local tax rates currently applicable or
expected. In addition, deferred taxes are provided on expected dividend distributions from subsidiary companies
(withholding taxes).
Income taxes:
in CHF 1,000
Current income taxes
Deferred taxes
Total
2001
24,994
(6,205)
18,789
2002
9,690
737
10,427
The income tax expense can be analyzed as follows:
in CHF 1,000
Profit before taxes
Tax expense based on the Group’s average rate of 25.8% (2001: 29.2%)
Non-deductible expenses
Tax-free income and tax reductions
Unrecognized tax loss carry-forwards used
Under (over) provided in prior years
Tax expense reported
2001
63,878
18,657
1,103
(2,674)
(205)
1,908
18,789
2002
43,235
11,176
637
(3,100)
-
1,714
10,427
Tax loss: carry-forwards available to Group companies:
in CHF 1,000
Expiring in
2002
2003
2004
2005 and beyond
Unlimited
Total potential tax benefits
Thereof not capitalized
2002
-
-
-
1,796
1,042
2,838
-
2001
-
-
47
3,011
595
3,653
2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.
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Deferred taxes apply to the following balance sheet line items:
in CHF 1,000
Inventories
Property, plant and equipment
Liabilities and accrued expenses
Provisions
Other
Total net deferred tax assets arising from temporary differences
Deferred taxes provided on
Expected dividend distributions
Potential tax benefits from tax loss carry-forward
Total net deferred tax assets
Translation differences
Impact on profit at average currency rates
2002
4,564
(844)
785
318
(620)
4,203
(166)
2,838
6,875
2001
4,992
(1,113)
875
67
684
5,505
(1,099)
3,651
8,057
Impact on profit
2002
(428)
269
(90)
251
(1,304)
(1,302)
933
(813)
(1,182)
445
(737)
Temporary differences on inventory primarily relate to income on intra-group sales eliminated for accounting purposes.
Deferred taxes are included in the balance sheet as follows:
in CHF 1,000
Deferred tax assets
Deferred tax liabilities
Total, net
2001
12,264
(4,207)
8,057
2002
10,742
(3,867)
6,875
Subsequent eventsNo events have occurred subsequent to the balance sheet date, which would impact the disclosures made in these
financial statements.
Future change in accounting principlesDue to the increasing importance of services in our products (i.e. installations) Tecan decided effective January 1, 2003
to recognize sales based on acceptance rather than on delivery. Such a change in revenue recognition is purely a deferral
in time of the recognition of sales and results in a decrease in equity in the balance sheet on January 1, 2003 of CHF 11.8
million.
21.
22.
in CHF
Share capital issued
Treasury shares
Share capital entitled to dividends
Average number of shares outstanding
Undiluted profit attributable to shareholders (CHF/share)
Average number of shares under option
Average exercise price
Number 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 69.19
Average number of shares after dilution
Diluted earnings per share for shareholders (CHF/share)
2001
13,040,930
(173,149)
12,867,781
12,869,766
3.50
3.48
2002
13,076,075
(662,430)
12,413,645
12,761,653
2.58
277,146
49.76
(199,295)
12,839,504
2.57
Remuneration of directorsThe total remuneration expense for the Board of Directors of Tecan Group Ltd. was CHF 0.76 million in 2002 (2001: CHF
0.89 million). In addition, a total of 57,570 stock options (2001: 19,190 stock options) were issued to the Board members
in connection with employee stock option plans.
Earnings per shareThe earnings per share are determined based on the profit attributable to shareholders and the average number of
shares outstanding, excluding treasury shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23.
24.
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Report of the Group auditors to the general meeting of shareholders ofTecan Group Ltd., Männedorf
As auditors of the Group, we have audited the consolidated financial statements of Tecan Group Ltd.,
Männedorf, and subsidiaries, presented on pages 42 to 60 for the year ended December 31, 2002.
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 Financial Reporting Standards (IFRS) and comply with
Swiss law.
We recommend that the consolidated financial statements submitted to you be approved.
KPMG Fides Peat
Fredy Luthiger Werner Pfäffli
Swiss Certified Accountant Swiss Certified Accountant
Auditor in Charge
Zurich, February 14, 2003
TECAN GROUP LTD.
2001
21,095,890
708,655
14,758,221
2,770,700
713,314
40,046,780
91,362,772
18,440,561
777,437
2,895,800
113,476,570
153,523,350
3,043,256
62,305
1,218,404
6,665,800
1,400,000
1,818,307
14,208,072
13,040,930
55,933,389
70,340,959
139,315,278
153,523,350
2002
19,456,857
775,838
16,200,782
44,404,333
2,109,912
82,947,722
64,797,797
30,140,606
972,685
3,030,166
98,941,254
181,888,976
390,254
75,636
1,791,451
6,994,306
1,400,000
827,988
11,479,635
13,076,075
72,480,731
84,852,535
170,409,341
181,888,976
Consolidated balance sheet at December 31
Assets
in CHF
Cash and cash equivalents
Other accounts receivable from third parties
Other accounts receivable from Group companies
Current loans to Group companies
Prepaid expenses
Current assets
Financial assets
Treasury shares
Property, plant and equipment
Intangible assets
Non-current assets
Assets
Liabilities and shareholders’ equity
Trade accounts payable to third parties
Other liabilities to third parties
Other liabilities to Group companies
Current provisions
Current tax liabilities
Accrued liabilities
Current liabilities
Share capital
Legal reserves
Retained earnings
Shareholders’ equity
Liabilities and equity
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Income statement
in CHF
Dividend income from Group companies
Interest and investment income from third parties
Interest income from Group companies
Management fees from Group companies
Gain on sales of property, plant and equipment
Income
Personnel expenses
Depreciation of property, plant and equipment
Amortization of intangible assets
Financial expense
Other expenses
Expenses
Profit before taxes
Income taxes
Net profit
2001
38,756,746
535,518
3,611,484
16,766,140
560,886
60,230,774
(5,938,909)
(305,967)
0
(9,652,345)
(12,998,773)
(28,895,994)
31,334,780
(559,834)
30,774,946
2002
42,371,823
391,278
5,440,438
23,046,108
0
71,249,647
(6,681,298)
(500,422)
(319,868)
(19,109,078)
(10,826,426)
(37,437,092)
33,812,555
(591,600)
33,220,955
NOTES TO THE FINANCIAL STATEMENTS
Financial assets
in CHF
Investments in subsidiaries
Non-current loans to Group companies
Total
2001
20,565,755
70,797,017
91,362,772
2002
21,161,675
43,636,122
64,797,797
Overview of investments in subsidiaries:
Company
Tecan Schweiz AG
Tecan Trading AG
Tecan Sales Switzerland AG
Tecan Austria GmbH
Tecan Sales Austria GmbH
Tecan Sales International GmbH
Tecan Landesholding GmbH
• Tecan Deutschland GmbH
• Tecan München GmbH
• CST Logic Softwareentwicklungs GmbH
Tecan Software GmbH
Tecan Belgium N.V.
Tecan France SA
Tecan Iberica Instrumentacion S.L.
Tecan Italia S.r.l.
Tecan UK Ltd.
Tecan Nordic AB
Tecan US Group, Inc.
• Tecan US, Inc.
• Tecan Systems, Inc.
• Tecan Boston, Inc.
Tecan Japan Co., Ltd.
Tecan Asia (Pte.) Ltd.
S = services, holding functions, R = research and development, P = production, D = distribution
All subsidiaries are 100% owned.
Activities
R/P
S
D
R/P
D
D
S
D
R
R
R
D
D
D
D
D
D
S
D
R/P/D
R
D
D
Share capital
5,000,000
300,000
250,000
1,460,000
35,000
35,000
25,000
51,129
25,000
25,000
76,694
62,000
450,000
34,850
77,469
500,000
100,000
1,500,000
400,000
26,000
0
50,000,000
800,000
Currency
CHF
CHF
CHF
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
GBP
SEK
USD
USD
USD
USD
JPY
SGD
Domicile
Männedorf (CH)
Männedorf (CH)
Männedorf (CH)
Grödig / Salzburg (Oe)
Grödig / Salzburg (Oe)
Grödig / Salzburg (Oe)
Crailsheim (D)
Crailsheim (D)
Kirchheim (D)
Mainz-Kastel (D)
Hannover (D)
Mechelen (B)
Trappes (F)
Barcelona (E)
Milano (I)
Reading (GB)
Mölndal (S)
Research Triangle Park, NC (US)
Research Triangle Park, NC (US)
San Jose, CA (US)
Medford, MA (US)
Tokyo (Jap)
Singapore (Sin)
Changes in 2002:- Purchase of the remaining 49% of Dr. Weber GmbH and absorption of the company by Tecan München GmbH as of
January 1, 2002.
- Formation of the distribution companies Tecan Sales Switzerland AG, Tecan Sales Austria GmbH and Tecan Sales
International GmbH in the context of business restructuring as of January 1, 2002. The distribution companies are
spin-offs from the production companies Tecan Schweiz AG and Tecan Austria GmbH.
- Acquisition of 100% of CST Logic Softwareentwicklungs GmbH as of January 1, 2002.
- Purchase of the remaining 30% of Tecan Software GmbH as of December 19, 2002.
- Formation of the distribution company Tecan Iberica Instrumentacion S.L. as of December 31, 2002.
1.
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Treasury sharesThe balance in treasury shares is made up of 662,430 registered shares with a nominal value of CHF 1 each. The
average price of shares purchased (sold) in 2002 amounted to CHF 46.23 (CHF 102.35).
The increase in treasury stock holdings is mainly due to the company’s Share-Buy-Back-Program. The program was
announced on July 30, 2002. It intends to buy back treasury shares up to 10% of the outstanding share capital over a
period of two years.
The company’s share capital is CHF 13,076,075, consisting of 13,076,075 registered shares with a nominal value of CHF 1
each (2001: 13,040,930 registered shares with a nominal value of CHF 1 each). Each share has one voting right at the
Annual General Meeting. Shareholders are entered in the share register only up to 5% of the share capital, and
nominees only up to 2%.
In 1997 shareholders approved a conditional share capital of CHF 1,300,000, reserved for an employee profit sharing
program. The conditional share capital consists of 1,300,000 registered shares with a nominal value of CHF 1 each.
Since 1999, based on this conditional capital, employee stock option plans have been introduced. At December 31,
2002, 1,141,754 options not yet exercised were outstanding in connection with the employee stock option plans.
At the end of 2002 a put option on own shares, which gives the other party the right to deliver 100’000 Tecan shares
until April 11, 2005 at a strike price of CHF 100.0 payable by Tecan in cash, was outstanding (2001: 100,000 Tecan shares
until November 30, 2005, at a strike price of CHF 162.5). The fair value of the put option has been provided for. The
reserve for treasury shares includes the purchase of treasury shares resulting from the potential exercise of this put
option (after deducting the premium received).
Balance at January 1
Additions
Disposals
Balance at December 31
Number of shares
173,149
517,931
(28,650)
662,430
Changes in shareholders’ equity
in CHF
Shareholders’ equity at 1/1/2002
Dividends paid
Capital increase
Net profit
Changes in reserves for treasury shares
Shareholders’ equity at 12/31/2002
Share capital
13,040,930
-
35,145
-
-
13,076,075
General reserve
16,490,828
-
3,453,297
-
-
19,944,125
Legal reserves
Reserve for treasury shares
(Note 2)
39,442,561
-
-
-
13,094,045
52,536,606
Retained
earnings
70,340,959
-5,807,191
191,857
33,220,955
-13,094,045
84,852,535
Total share-
holders’ equity
139,315,278
-5,807,191
3,680,299
33,220,955
-
170,409,341
2.
3.
The Company has knowledge of the following significant shareholders as of December 31, 2002:
Schweizerische Unfallversicherungsanstalt (SUVA), Lucerne, CH, 1,438,394 shares (11.0%)
UBS Fund Management, Zürich, CH, 748,400 (5.7%)
Tecan Group Ltd, Männedorf, CH, 662,430 (5.1 %)
Contingent liabilitiesThe total amount of guarantees in favor of subsidiaries was CHF 42.8 million at December 31, 2002 (2001: CHF 37.2
million).
Encumbrance of assetsAt December 31, 2002 and 2001, none of the Company’s assets were pledged, assigned, or subject to retention of title.
Unrecorded leasing liabilitiesThe total amount of unrecorded liabilities under lease commitments was CHF 0.3 million at December 31, 2002 (2001:
CHF 0.2 million).
Fire insurance value of property, plant and equipmentThe insured value of property, plant and equipment in the event of fire was CHF 1.0 million (2001: CHF 0.9 million).
Liabilities to pension fundsAt December 31, 2002, as in the prior year, no liabilities to pension funds existed.
No other items existed which would require disclosure under the provisions of Art. 663b of the Swiss Code of
Obligations.
Proposal of the Board of Directors for the appropriation of retained earnings
The Board of Directors of Tecan Group Ltd. proposes that the retained earnings of CHF 84,852,535 be appropriated as
follows:
in CHF
45% dividends on the company’s share capital of CHF 13,076,075 at December 31, 2002 * (CHF 0.45 per share as in the previous year)
45% dividends on employee stock options which may be exercised before the date of dividend payment, totaling 275,079*
Balance to be carried forward
Total
* 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.
5,884,234
123,785
78,844,516
84,852,535
NOTES TO THE FINANCIAL STATEMENTS
4.
5.
6.
7.
8.
Report of the statutory auditors to the general meeting of shareholders ofTecan Group Ltd., Männedorf
As statutory auditors, we have audited the accounting records and the financial statements of Tecan Group
Ltd., Männedorf, presented on pages 62 to 66 for the year ended December 31, 2002.
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 Werner Pfäffli
Swiss Certified Accountant Swiss Certified Accountant
Auditor in Charge
Zurich, February 14, 2003
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GLOSSARY
GenotypingThe determination of nucleotide base sequences in
genetic material (chromosomes)
High-throughput screeningAutomated processes for the rapid assessment of the
activity of large numbers of samples
In situ hybridization A method of localizing either messenger RNA within the
cytoplasm or DNA within the chromosomes of the
nucleus by hybridizing the sequence of interest to a
complimentary strand of a nucleotide probe
IVD DirectiveIn Vitro Diagnostic Directive – new European directive to
ensure safety, quality and performance of diagnostic
medical devices
Liquid handling Automated handling of very small volumes of liquids to
enable high-throughput processes
Matrix-Assisted Laser Desorption/Ionization massspectrometry (MALDI-MS)A spectrometric technique that is used to determine the
mass of large biomolecules
Absorption, distribution, metabolism, excretion, toxicity(ADMET) assaysScreening tests designed to determine the toxicity of new
drug candidates
AIDSAcquired Immunodeficiency Syndrome
Detection devicesInstruments used to monitor chemical and biological
processes
FractionationThe physical separation of molecules of different properties
Free-flow electrophoresisAutomated tool for the fractionation of proteins. Allows
for elimination of abundant molecules that may interfere
with detection of key target molecules
Functional genomicsThe process of assigning functions to genes and other
parts of the genome of organisms
GenomicsThe study of the structure and function of large numbers
of genes simultaneously
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Microarray Glass or silicon surface used to support rows of biological
material, for example known sequences of DNA.
Microarrays are an integral part of high-throughput
processes
MicrofluidicsThe miniaturization of fluid-based biological processes
to very small volumes that enables high throughput
analysis
MicroplateA standardized plastic tray typically with 96 wells or
depressions for holding small quantities of material. The
96 wells are uniformly 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
ProteomeThe continually changing protein complement expressed
by a genome or tissue
ProteomicsThe study of the full expression of proteins by cells in their
lifetime
ScreeningThe use of assays or tests to detect compounds that
change the activity of a target
Secondary screeningRefined testing procedures with which already identified
substances can be more precisely characterised, opti-
mised, 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
TargetA molecule (usually a protein but sometimes a DNA
sequence) that may interact with a drug or drug
candidate
Target validationThe process of determining if a target is critically involved
in a disease process
Two-dimensional electrophoresisAnalytical method in which sample is subjected to two
consecutive separation processes in different directions
Tecan Asia (Pte) Ltd.80, Marine Parade / #13-04Singapore 449269 / SingaporeT +65 644 41 886 / F +65 644 41 836
Tecan Japan Co. LtdMeiji Seimei Fuchu Building 10F / 1-40 MiyamachiFuchu City, Tokyo, JapanT +81 42 334 88 55 / F +81 42 334 04 01
LOCATIONS
TECAN SALES OFFICES
Tecan Sales Austria GmbHUntersbergstrasse 1aA-5082 Grödig / Salzburg, AustriaT +43 62 46 89 33 / F +43 62 46 72 770
Tecan Sales International GmbHUntersbergstrasse 1aA-5082 Grödig / Salzburg, AustriaT +43 62 46 89 33 / F +43 62 46 72 770
Tecan Benelux B.V.B.A.Vaartdijk 55 / B-2800 Mechelen, BelgiumT +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 18 34 48 17 4 / F +31 18 34 48 06 7
Tecan Deutschland GmbHTheodor-Strom-Straße 17 / D-74564 Crailsheim,GermanyT +49 79 51 94 170 / F +49 79 51 50 38
Tecan France S.A.Parc d'Activités de Pissaloup / Bâtiment Hermes IIRue Edouard Branly / F-78190 Trappes, FranceT +33 1 30 68 81 50 / F +33 1 30 68 98 13
Tecan Italia S.r.l.Via F.lli Cerci, Palazzo BerniniCentro Direzionale Milano 2I-20090 Segrate (Mi), ItalyT +39 02 215 21 28 / F +39 02 215 97 441
Tecan Nordic ABBox 208 / SE-43123 Mölndal, SwedenT +46 31 75 44 000 / F +46 31 75 44 010
Tecan Nordic ABVallenbaekvejn 22 B / DK-2605 Bröndby, DenmarkT +45 70 234 450 / F +45 70 234 450
Tecan Sales Switzerland AGSeestrasse 103 / CH-8708 Männedorf,SwitzerlandT +41 1 922 89 22 / F +41 1 922 89 23
Tecan SpainSabino de Arana, 32 / E-08028 Barcelona, SpainT +34 93 490 01 74 / F +34 94 411 24 07
Tecan UK Ltd.Theale Court, 11-13 High Street, ThealeUK-Reading RG7 5AH, United KingdomT +44 11 89 300 300 / F +44 11 89 305 671
TECAN MANUFACTURING
AND R&D SITES
Tecan Austria GmbHUntersbergstrasse 1aA-5082 Grödig / Salzburg, AustriaT +43 62 46 89 33 / F +43 62 46 72 770
Tecan Munich GmbHFeldkirchner-Straße 12aD-85551 Kirchheim, Germany T +49 89 98 106 111 / F +49 89 98 106 180
Tecan Schweiz AGSeestrasse 103 / CH-8708 Männedorf, SwitzerlandT + 41 1 922 81 11 / F +41 1 922 81 12
Tecan Software GmbHGrosser Kolonnenweg 23 / D-30179 Hannover,GermanyT + 49 511 334 280 / F + 49 511 334 28 28
CST Logic Softwareentwicklungs GmbHSchmalweg 5 / D-55252 Mainz-Kastel, GermanyT +49 6134 18 14 21 / F +49 6134 18 14 30
Tecan Systems, Inc2450 Zanker Road / San Jose, CA 95131, USAT +1 408 953 3100 / F +1 408 953 3107
Tecan US, Inc.P.O. Box 13953 / Research Triangle ParcNC 27709, USAT +1 919 361 5200 / F +1 919 361 5201
Tecan Boston, Inc.200 Boston Avenue, Suite 3000 / Medford, MA02155, USAT +1 781 306 08 27 / F +1 781 306 08 37
Tecan Systems, Inc2450 Zanker Road / San Jose, CA 95131, USAT +1 408 953 3100 / F +1 408 953 3107
EUROPE
ASIA
USA
TECAN PROFILE
Tecan is a leading player in the Life Sciences supply industry. The companyspecializes in the development, production, and distribution of enablingsolutions for Genomics, Proteomics, Drug Discovery and Diagnostics.Founded in Switzerland in 1980, the company has manufacturing, researchand development sites in both North America and Europe and maintains asales and service network in 52 countries. Tecan clients are leading pharma-ceutical and biotechnology companies, university research departmentsand diagnostic laboratories.
The business strategy of Tecan is to focus on growth opportunities in its fourmarket segments of Genomics, Proteomics, Drug Discovery and Diagnostics.The company focuses on key bottlenecks in the Life Science industrythat benefit from its expertise in automation, liquid handling, robotics,detection, software and miniaturization.
Registered shares of Tecan Group are traded on the Swiss SWX stock exchange(TK: TECN / Reuters: TECZn.S / Valor : 1210019). In 2002, Tecan achieved salesof CHF 332.2 million (USD 213.0 million; EUR 226.0 million).
www.tecan.com
CreditsText: Rochat & Partners, Geneva, Switzerland
Design: Inox Graphic Design, Neuchâtel, Switzerland
Prepress/Printing: Neidhart + Schön AG, Zurich Switzerland
Project Management: Tecan Corporate Communications and Corporate Finance, Männedorf, Switzerland
© Copyright Tecan Group Ltd.
BOARD OF DIRECTORS AND MANAGEMENT
TECAN - EXECUTIVE LEADERSHIP COMMITTEE
1. Anton Schrofner President Tecan Instruments2. Franz Rutzer Chief Financial and Operating Officer of Tecan Europe3. Jan Timmers Head of Business Development and Biopharma4. Dr. Emile C. Sutcliffe Chief Executive Officer (CEO)5. Carl Severinghaus President Tecan US6. Steve Levers President Tecan Systems
TECAN - ENHANCED MANAGEMENT TEAM
Joerg Borer Head of Customer ServicesWolfgang Deuringer President Tecan Sales InternationalScott Eaton President Tecan JapanRudolf Eugster CFOSylvain Hunault President Tecan Southern EuropeSarah Kreienbühl Head of Human ResourcesMartin von Lueder President Tecan Central EuropePaul Mitchell President Tecan Northern EuropeBob Young President Tecan Boston
TECAN - BOARD OF DIRECTORS
Mike Baronian Chairman of the BoardProf. Dr. Armin Seiler Vice ChairmanDr. Emile C. Sutcliffe Chief Executive Officer (CEO)Timothy B. Anderson MemberHans-Jörg Kummer Member
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Tecan Group Ltd., Seestrasse 103, CH-8708 Männedorf, Switzerland, T+411 922 88 88, F+411 922 88 89, info@tecan.comwww.tecan.com
Annual Report 2002Bringing innovation to the Life Sciences
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