Tecan shares fall after H1 results as FX, tariff headwinds temper cautious outlook

Shares in Tecan Group fell after the Swiss life sciences firm posted first-half results that showed muted profitability and persistent headwinds from foreign exchange and tariffs, according to an Investing.com report on its earnings call. The company confirmed its full-year 2026 outlook, but the cautious tone from management weighed on sentiment.

Tecan reported sales of CHF 427.5 million for the first half of 2026, down 2.7% in Swiss francs but up 3.4% in local currencies. The company said growth was solid in both its Life Sciences Business (+3.1% local currency) and Partnering Business (+3.6% local currency). Order entry rose 3.0% in local currencies, with a book-to-bill ratio of 1.04.

Adjusted EBITDA came in at CHF 64.5 million, giving a margin of 15.1%, up 10 basis points from 15.0% a year earlier. The improvement reflected underlying profitability gains of 180 basis points driven by higher sales volumes, a favorable product mix and early benefits from the company's "Rewired" transformation program. However, those gains were partly offset by headwinds of 120 basis points from foreign exchange and 50 basis points from tariffs.

Adjusted EBIT rose 0.6% to CHF 43.8 million, but adjusted net profit fell 3.5% to CHF 32.5 million. Adjusted earnings per share declined 1.5% to CHF 2.62, a smaller drop than profit because of ongoing share buybacks — CHF 30.5 million worth of shares were repurchased in the first half.

Reported net profit slumped 31.5% to CHF 12.3 million, and reported basic EPS fell 29.8% to CHF 0.99. The decrease was driven by higher non-recurring costs related to the implementation of SAP S/4HANA, a new CRM system, and restructuring expenses tied to the "Rewired" program. Operating cash flow dropped sharply to CHF 17.0 million from CHF 60.0 million, with cash conversion falling to 36.5% from 109.2%. The company described the cash flow decline as non-structural and said it expects cash generation to return to historically strong levels once the transformation is complete.

Segment performance

The Life Sciences Business segment posted sales of CHF 179.6 million, up 3.1% in local currencies but down 3.2% in Swiss francs. Growth was driven by continued strength in biopharma and diagnostics, while academia and government sales declined as expected. The segment's adjusted EBITDA margin was 13.8%, down from 14.0% a year earlier. Reported EBIT margin fell to 2.1% from 4.7%, largely reflecting the transformation costs.

The Partnering Business segment recorded sales of CHF 247.9 million, up 3.6% in local currencies and down 2.3% in Swiss francs. Adjusted EBITDA margin improved to 18.7% from 18.4%. Reported EBIT margin was 8.2% versus 8.7% a year ago. The company noted that sequential improvements in the Partnering Business continued into the second quarter.

CEO comments on progress

Tecan CEO Monica Manotas said the first-half performance was solid, with 3.4% group sales growth in local currencies outpacing the broader market. "We also delivered sound profitability with an adjusted EBITDA margin of 15.1%, in line with expectations," she said in the results announcement. "Market developments are encouraging and remain fully in line with our earlier guidance. As market momentum builds, we are confident in our position to consistently grow ahead of the market."

She acknowledged that more work remains: "There is more work to do to fully realize Tecan's potential. To future-proof the company and drive long-term value we launched our 'Rewired' transformation program in the first quarter. Following the implementation of initial measures in the second quarter, we expect these to contribute to our full-year performance and serve as the foundation for accelerated growth and profitability as we move toward our 2028 targets."

Transformation and outlook

The "Rewired" program, launched in the first quarter of 2026, focuses on portfolio discipline (including previously announced discontinuations), commercial excellence (building an ecosystem for AI-powered labs and expanding into India), and operational excellence (a more efficient footprint for operations, R&D and G&A).

Despite the confirmed full-year 2026 sales and adjusted EBITDA margin outlook, shares declined after the results, according to Investing.com. The earnings call transcript, summarized by Investing.com, indicated a cautious outlook from the company, with persistent headwinds from foreign-exchange rates and tariffs continuing to weigh on reported figures. The company does not provide numeric guidance for the full year in the results press release but reiterated its existing targets.

The share buyback program continued in the first half, reducing the share count and cushioning the decline in adjusted earnings per share. Net liquidity stood at CHF 73.5 million at the end of June, down from CHF 140.3 million a year earlier, partly reflecting the buyback and working capital changes.

Tecan's results highlight the challenge for Swiss-based life sciences companies: solid underlying demand in local currencies is being masked by the strong franc, while trade policy adds another layer of cost pressure. The "Rewired" program is intended to improve structural efficiency and position the company to meet its 2028 targets, but near-term market reaction suggests investors remain wary until the headwinds subside.