Ladies and gentlemen, welcome to the Analyst and Media Conference Call Live Webcast. I am Paul, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions in writing via the related field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Martin Brändle, Senior Vice President, Corporate Communications & IR. Please go ahead.
Thank you, Paul. Good morning, ladies and gentlemen, and thank you for joining us for our conference call this morning. We are really pleased to discuss with you this financial result for the first half year of 2021. With me on the call are our Chief Executive Officer, Dr. Achim von Leoprechting, and our Chief Financial Officer, Tania Micki. Before we start, as always, some formalities. The corresponding press release announcing our financial results was issued this morning at 6:30 A.M., Central European Summer Time. Both the press release as well as the full 2021 interim report are available on the company website, tecan.com, under the Investor Relations tab. The call is being webcast over the internet on our homepage, and we have also posted the presentation slides for this call for download.
With that short introduction, let me now turn the call over to Achim von Leoprechting. Achim.
Thank you very much, Martin. Good morning and welcome to the Tecan 2021 half year results presentations from our side. Before Tania will discuss the financial results of H1 2021 in more detail, I will give you an overview of the financial and operational highlights. When we presented our financial results for the full year 2020 in March, vaccinations were well underway in many countries, but others were still waiting for supply of vaccine, and new virus variants were starting to spread mostly among non-vaccinated people. We were expecting that our business would continue to support the global research and clinical community with COVID-19 test solutions, but we also expected that this part of our business would start to normalize with infection cases starting to decline as a result of vaccination.
It is probably fair to say that testing volumes overall stayed at a higher level than most people, including us, expected. To point at a specific figure as an example, in the U.S., PCR test volumes in the first six months of this year were reported to have already reached 105% of the entire volume seen in the full year 2020. On the other hand, we expected the COVID headwind continuing to ease off as a result of a rebound of life sciences research, pharma research, and non-COVID diagnostic procedures following the lift of lockdowns. All the facts were expected to offer continuous growth opportunities for Tecan, given the diversification of our business and the breadth of our global market reach. Therefore, I'm pleased to tell you today that Tecan closed this first half year of 2021 with outstanding growth in sales and profits.
As before, we are extremely proud of the Tecan employees who continue to support our customers in the global response to manage COVID-19, as well as in our customers' efforts to bring the non-COVID business fields back to track. Looking at some of the financial highlights first. We recorded orders growth of 20.9% in local currencies, where non-COVID-19 orders exceeded pandemic-related orders for the first time since maybe the first quarter of last year. From a revenue perspective, we ended the half year with 47.5% growth in local currencies and 46.5% growth in Swiss francs. This performance is in relation to an already strong performance in the comparable period of H1 in 2020. Sales growth continued to be driven by significant COVID-19 related product demand, as well as a starting recovery and a more positive market environment in other business areas. Both of our business segments saw similar growth rates.
We are also pleased that the reported EBITDA margin increased to 25.3% with the reported EBITDA increasing by 91.1%. Our reported net profit more than doubled to CHF 82.6 million, with a reported net profit margin of 18.2% of sales. Our operating cash flow generated CHF 111 million, which corresponds to 24.5% of sales. Let me comment on some of the operational and product highlights of the first half year of 2021. In continuation of our innovation strategy, we commercially launched new variants of our very successful Fluent automation workstation, addressing specific needs in important research and diagnostic applications. One of these new capabilities is called Mix & Pierce, for example, which helps clinical labs to eliminate a common bottleneck in dealing with whole blood samples.
Our new Frida Reader, as another example, offers a unique detection solution for critical genomic applications, eliminating the loss of precious samples in sample preparation. We also launched new genomic reagent kits, including a new solution for the sequencing of degraded and mixed RNA samples as found, for example, in nasal swabs for SARS-CoV-2 infected people. From our digitalization development efforts, we launched several new software features, including the FluentControl Scheduler for the Fluent automation workstation, which offers a number of features designed to simplify day-to-day laboratory automation. Building on the strong experience serving regulated markets, we are proud to having received, among the first companies, the certification for a family of our reagent products according to the new In Vitro Diagnostic Regulation, or IVDR, of the European Union. This is a clear testament to Tecan's continued commitment and leadership as a supplier of safe and compliant solutions.
Our employees are at the core of Tecan's success and future growth, as I mentioned before. In order to create a basis of measurable employee engagement and trust feedback, Tecan participated in the Great Place to Work survey. We received the certification for 2021. We are ranking among Switzerland's best large workplaces. This clearly is a recognition of our activities aiming to improve employee engagement, development, and trust, as well as encouragement to continue our efforts in this important area. As discussed in June, we expanded our commercial reach, our capabilities, and presence in the U.S. and Asia with the acquisition of Paramit Corporation headquartered in California. This acquisition was completed on August 2nd. We are now looking forward to begin with the integration process. I come back to discuss more highlights of the Paramit acquisition later in this presentation.
With this, I hand over to Tania, our CFO, for a more detailed discussion of the 2021 H1 financial results.
Thank you, Achim, good morning, ladies and gentlemen, from my side as well. I'm delighted to present to you our financial results for H1 of 2021 in more detail. I hope you will agree with me, a very strong set of financials. Starting with order entry and sales. Order entry continues on a high level, also in H1. It increased by 20.9% in local currency or 20.2% in CHF to CHF 449.6 million in the first six months of the year. We continue to see strong order entry for consumables to support the global fight against the coronavirus pandemic, and as expected, to a lesser extent for new instruments used for COVID-19 testing. In contrast to the two previous six-month reporting period, orders for products for other research and clinical applications were at a significantly higher level and exceeded pandemic-related orders.
Sales climbed by 47.5% in local currency or 46.5% in CHF to CHF 454 million in H1 of the year. This substantial increase is based on the high order backlog at year-end 2020 that I had pointed out to you in March, but also based on the strong order entry I have just discussed for pandemic-related sales for instrument components and consumables. As with order entry, sales in H1 also benefited significantly from a recovery and a more positive market environment in areas that were negatively impacted by the pandemic, such as life science research, pharma, and non-COVID-19 diagnostic testing. Looking at where the sales growth came from, it was really both areas, COVID-19 and non-COVID-19. I would estimate the split to be pretty much 50/50 of the sales growth.
Also, again, very positive, both business segments contributed almost equally to the overall sales growth in the first six months of the year, which brings me to the next slide. Looking at the sales performance of our two business segments. Sales in the Life Sciences Business segment grew by 47.8% to CHF 250.4 million. In local currencies, they were 49.5% above the prior year period. We continue to see a strong revenue contribution from products supporting the COVID-19 response. As mentioned before, this was based on the high order backlog at year-end 2020, but also based on new orders. These products were mainly liquid handling and automation workstations and associated disposable pipette tips.
Sales in the Life Sciences business in H1 also benefited significantly from a recovery in areas that were negatively impacted by the pandemic, including liquid handling and automation workstations for various life sciences research applications, detection instruments, and research reagents for next-generation sequencing. Order entry in the Life Sciences business grew with a strong double-digit rate in the first half of the year. The increase in order entry was mainly driven by strong momentum in automation systems for a wide variety of applications and detection instruments. For instruments, clearly more orders came from non-COVID areas. However, we continued to see substantial demand for consumables used for COVID-19 testing. The Partnering business segment generated sales of CHF 203.7 million in the first half year, which corresponds to an increase of 44.8% in CHF and 45.1% in local currencies. We observed similar patterns to the Life Sciences business.
In the Partnering Business, automation platforms, OEM components, and disposable pipette tips supporting COVID-19 testing contributed strongly to sales as orders were converted from the high backlog into sales. Sales to our customers in other areas of in vitro diagnostics, which were negatively affected during the pandemic, also showed positive momentum again. With the shift in order entry from COVID-driven applications to non-infectious disease customers, order entry in the Partnering Business also grew at a strong double-digit rate. Now looking at sales development in the different regions on slide 9. In the different regions, we still saw strong demand for COVID-related products. However, the percentage development versus the prior year period was obviously impacted by the COVID contribution we had already seen last year. For example, we saw a tailwind from those product lines already early in the year 2020 in China and Australia, which are grouped into Asia here.
Orders, but not yet sales, started to grow substantially in the U.S. only in the second quarter. As mentioned before, on top, we also saw a significant recovery in various other application areas in H1 this year. In Europe, sales in the first six months of 2021 increased by 36.1% in local currency and by 38.3% in CHF. Both business segments grew with a double-digit rate, the Partnering Business with 13.4% in local currency and the Life Sciences Business with 59%. In North America, sales growth by 69.4% in local currencies and by 62% in CHF. The Life Sciences Business increased sales in the first six months of 2021 by 61.1% in local currency, and the Partnering Business sales rose by 80.8%, despite a high comparative basis from the prior year period. In Asia, sales increased by 30.9% in local currencies and 33.7% in CHF.
Both segments contributed to the sales growth in the region with double-digit rates in CHF. In local currencies, the Life Sciences Business recorded growth of 8.6% and the Partnering Business grew by 59.7%. On China specifically, in H1 of this year, the Chinese market environment returned pretty much to normal levels. Keep in mind, as I have just explained, our business in China had already benefited significantly from pandemic-related sales growth in the prior year period. We continued to record solid sales growth in the first half of 2021 in China, although this was lower than in the Asia region as a whole due to that high comparison base. Our next slide addresses our gross profit. Gross profit increased to CHF 224.5 million, which was CHF 78.4 million or 53.7% above the prior year figure.
The reported gross profit margin increased to 49.4%, 230 basis points higher compared to the prior year. As always, we have several factors impacting the gross profit margin. I want to highlight the main factors that led to the higher gross margin. The largest contribution to the gross margin improvement again came from product mix and the overhead cost absorption. As we mentioned in the press release, the results development was also helped by a one-time positive effect from an adjustment of the Swiss pension plan. In total, the effect was a CHF 7 million tailwind. About half of the positive effect was allocated to the cost of goods sold, i.e., part of the gross profit margin improvements. The rest had to be booked in OpEx.
I will refer to this effect on other slides as well, so keep in mind that we are assessing alternative pension schemes that could require a reversal of this gain in H2 of the year. As a third positive factor, we were again able to increase prices. The first negative effect came from higher freight logistics, inventory related, and material costs. You heard me already talk about higher rates for forwarders last year as well as in March of this year. Lastly, FX rates were affecting our margins negatively. I will come back to that point when discussing the development of our operating margin. On the next slide, some comments regarding our cost structure. Overall, our operating expenses grew only at about half the rate compared to sales.
Operating expenses totaled CHF 128.2 million or 28.2% of sales, down by 520 basis points compared to H1 last year. Most of this improvement was driven by economies of scale due to the substantially higher volumes. Keep in mind what I mentioned on the previous slide regarding the pension plan benefit. The remaining half of the CHF 7 million benefit had to be booked here, pretty much distributed over all cost center and functions. Looking at these different functions in more detail. Sales and marketing increased less in sales to CHF 52.7 million despite continued investments in the market unit. With the focus on further expanding our sales force and growing our e-commerce channel. We also continue to invest in research and development to position the business for sustained, accelerated growth.
In total, CHF 31.1 million or an additional CHF 5.8 million compared to H1 2020. The ratio shows a relative decrease compared to sales, keeping in mind that our top line grew by 46.5%. As I have already mentioned in March, R&D programs just can't be scaled or started at the same pace. As always, we also had projects that have reached the final stages before launch, where the costs are capitalized. This was below the prior year figure and pretty much at a similar level with amortization from past R&D capitalization. General and administration expenses increased to CHF 44.4 million in line with sales. This development is mainly due to more costs on the corporate level related to corporate development activities. As you can guess, that's mostly related to the Paramit acquisition, but also to other targets we looked at.
These were legal costs, due diligence costs, but also, for example, the hedging costs for the deal. Looking at the EBIT and EBITDA development in more detail. In H1 of the year, our reported EBITDA, the earnings before interest, taxes, depreciation, and amortization, rose to CHF 115 million. This is an increase of 91.1%. Thereby at a significantly higher rate compared with sales. This increase was mainly driven by benefits of scale due to the significantly increased volumes and the favorable product mix of instruments, as well as a higher contribution for consumables and spare parts. I mentioned it when discussing the gross profit. The results development was also helped by the one-time positive effect from an adjustment of the Swiss pension plan. I mentioned this before as well.
Also, the fact that we are assessing alternative pension schemes that could require a reversal of this gain in the second half of the year. We also had a gain of CHF 1 million from the sale of the building that was recognized in other operating profits. On the other hand, we provided for CHF 6 million as part of the acquisition related costs. Another negative effect came from the exchange rate movement in major currencies versus the Swiss franc. They had a negative impact on the reported EBITDA. The reported EBITDA margin grew correspondingly by 590 basis points to 25.3% of sales or to 25.9% of sales in constant currencies.
With an increase of 129.4%, the profit before interest and taxes, EBIT, grew even faster than EBITDA and came in at CHF 97.8 million, that is more than what Tecan recorded in an entire financial year prior to 2020. The EBIT margin increased to 21.5% of sales, up by 780 basis points compared to the prior year. Looking at the operating profitability on a segment level. Reported EBIT in the Life Sciences Business rose by 180.9% to CHF 63.1 million. The operating profit margin increased to 22.8% of sales. This positive performance is primarily a result of sales growth, as well as a strong margin contribution from the consumables business. On the negative side, I have already mentioned the higher freight, logistics, inventory related, and material costs.
Reported EBIT in the Partnering Business increased by 86.9% to CHF 49.2 million, while the operating profit margin grew to 24% of sales. H1 2020 was 18.6%. Main drivers for the increase in profitability were also benefits of scale and a favorable product mix. Moving on, reported net profit for H1 2021 more than doubled to CHF 82.6 million. Reported net profit increased in line with operating profit, EBIT. The reported net profit margin amounted to 18.2% of sales. Only a brief discussion on the next slide. Earnings per share rose to CHF 6.88. I guess this number speaks for itself. Finally, on the cash flow, on slide 16, cash flow from operating activities increased by 34.5%, to CHF 111.4 million in the first half year. This corresponds to 24.5% of sales. Our DSO, the days sales outstanding, went up from 39 days to 49 days.
Keep in mind here that last year's figure was very low. It is directly related to sales in the month of June. Sales in June 2020 were at an extraordinary level. This was when COVID-related sales really took off in the U.S. and Europe. Because of the lower June sales in 2021, this brings up the DSO number as receivables are put in relation to the sales of the two previous months. The operating cash flow includes CHF 17.2 million for amortization and depreciation, CHF 5.4 million thereof from IFRS 16, another CHF 2.3 million for the amortization of the purchase price allocation from past acquisitions, and CHF 3.8 million from development costs we capitalized in the past. On the other hand, we invested a total of CHF 13.6 million.
When you compare this figure to the one from last year, keep in mind that this figure included an investment of CHF 120 million in time deposits. The H1 2021 figure includes CHF 5 million for newly capitalized development costs, which compares to CHF 9.2 million in the prior year period. Our investment in PPE, property, plant, and equipment, was at CHF 5.5 million. Let me point out, though, that this was net of the building sale I mentioned before. On a gross level, it was CHF 9.7 million. Moving on to the cash flow from financing activity. This includes the dividend payments we made in April this year in the total amount of CHF 27.6 million. Cash and cash equivalents were at CHF 215.1 million at the end of the period.
Our net liquidity position, adding the cash and cash equivalents, and also the short-term time deposits, and then deducting all bank liabilities and loans, reached CHF 534.4 million as of June 30, 2021. This compares with CHF 354 million on June 30, 2020, and CHF 467.7 million at the end of 2020. The next slide 17, shows the key figures. As always, this is just for your reference, as I have already discussed most of the figures on this slide. With this, I now hand back over to Achim von Leoprechting. Achim?
Thank you very much, Tania. Before turning to the outlook, I would like to recap briefly the key points of the acquisition of Paramit. Headquartered in California, U.S., Paramit is the leading OEM developer and manufacturer of medical devices as well as life sciences modules and instruments. The addition of Paramit's capabilities and customer portfolio will further extend Tecan's reach into the life sciences and in vitro diagnostic markets, but also adds with medical mechatronics, an entirely new business and growth vertical to Tecan. The acquisition adds a highly complementary expertise and presence in the important life sciences and healthcare markets, U.S. and Asia Pacific, with differentiated development, industrialization, and manufacturing capabilities. Paramit Corporation have operating locations both in the U.S. and Malaysia, and offers significant engineering and differentiated manufacturing capabilities to its global clients.
The total consideration for the acquisition of Paramit is $1 billion, or CHF 920 million. The acquisition of Paramit is a significant step up in Tecan's strategic growth plans for the existing life sciences and in vitro diagnostic markets. Furthermore, Paramit, as said, expands Tecan's addressable market into the medical devices market segments, where we also see significant growth opportunities. With points one, two, and three of our strategic growth vectors, we continue to strengthen our Life Sciences Business and Partnering Business organically and inorganically by adding competencies in lab automation, one; expanding our portfolio in life sciences instruments, two; as well as adding reagents and consumables to complete the solutions offering with a particular focus on genomics, proteomics, and cell analysis workflows. Since 2013, we have completed our organic investments in these areas with six bolt-on acquisitions.
Paramit now adds capabilities which will allow us to further strengthen our customer offering for the life sciences and in vitro diagnostic markets to both of our divisions as they exist today. The life sciences research market, with a wide variety of different instruments, was pretty much not addressable to our Partnering Business as these are mostly bench-top instruments. With Paramit, it now is. As you can see in the chart, instruments make up for the majority of this market segment. In addition, Paramit now offers access and scale in a sub-segment of the $100 billion medical devices market called medical mechatronics, with a significant total addressable market opportunity of around $14 billion. Combining Paramit's differentiated engineering and manufacturing capabilities for highly regulated markets with Tecan's competencies in systems engineering and software development, which are also geared towards innovative, yet regulated markets.
We believe that we can offer an even more compelling offering to customers in those growth markets globally. Complementing the development and manufacturing side of Tecan, Paramit operates two sites in the U.S., one in Morgan Hill, California, and one in Boston, Massachusetts, focused on OEM product development, industrialization, and manufacturing with more than 450 employees in the U.S. Paramit also operates a state-of-the-art manufacturing site in Penang, Malaysia, with more than 170,000 sq ft and 570 employees. All manufacturing sites are ISO 9001 and ISO 13485 certified, and therefore allow Paramit to successfully supply the highly regulated IVD and MedTech markets, also leveraging Paramit's proprietary and highly differentiated quality manufacturing system called vPoke. The acquisition of Paramit strengthens the financial profile of Tecan in several ways. Paramit will be immediately and significantly accretive to earnings per share, EPS.
In full year 2021, Paramit is expected to generate around $280 million in sales, which is around CHF 257 million. Regarding operating profit, we expect around $50 million or CHF 46 million. That is before acquisition-related costs in full year 2021. This acquisition will provide the Tecan Group with critical mass and scale, further enhancing its already strong operating cash flows. The strength in financial profile will allow us to drive future growth, both organic and through additional acquisitions. As part of the integration efforts, we expect to drive substantial commercial and ost synergies, which are being achieved through a range of opportunities. For example, supply chain, internalization of suppliers, and others. Paramit is included in the consolidated financial statements as a part of the Partnering Business segment from August 1st, 2021. Now turning to the financial outlook for the full year 2021.
With a very strong performance recorded in the first six months and the expectation of a continued strong business momentum in 2021, we raise our organic forecast for sales growth of the full year 2021 to be in the low to mid-teens % range in local currencies. We expect the effect of COVID-related products continue to normalize in the second half compared with a very high base of the prior year period. The developments of demand for products related to COVID-19 still remain subject to uncertainty for the remainder of the year. We expect a continuation of recovery and a more positive market environment in areas that have been negatively affected by the pandemic, such as life science research, pharma, and non-COVID-19 diagnostic testing. These projections are based on the assumptions that supply chains remain undisrupted and all production sites stay fully operational.
From a profitability perspective, we now expect a reported EBITDA margin for the full year 2021 of at least 23% of sales. The expectations regarding profitability are based on an average exchange rate forecast for full year 2021 that you see at the bottom of the slide. They also do not include acquisition-related costs. The addition of Paramit is expected to add around CHF 100 million in revenue and CHF 18 million EBITDA before acquisition-related costs. With this, I think we can open up the line for Q&A.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the queue, you may press star two. Questioners on the phone are requested to use only handsets and eventually turn off the volume from their webcasts. Webcast viewers may submit their questions in writing the dedicated field. Anyone who has a question may press star one at this time. The first question comes from the line of Sibylle Bischofberger from Vontobel. Please go ahead.
Good morning, everybody. Thank you to take my question. I have two questions about the outlook 2021. First, you expect sales growth organic of low to mid-teens. In H1 , you had a 49% sales growth. This excludes the CHF 100 million Paramit and the FX effect. Here my question is, do you expect a negative sales growth in H2 ? Our 2nd question is about the EBITDA margin of a minimum 23%. In H1 , you had one of 25.3%. Just to understand the additional CHF 18 million EBITDA of Paramit is not included. Also not included is the CHF 20 million transactional costs. Thank you.
Hey, good morning, Sibylle, and thank you very much for your questions. Maybe I actually start with the second one. Yes, your assumption is right that anything from the Paramit acquisition that we will include in our financials starting August 1st is not included in the forecast. To your first question, clearly, we believe we will face a very tough comparison in the second half. Yeah, I think you're directly correct that our guidance, if you do the math, includes the scenario where we would assume the revenue decline relative in the second half. Keep in mind, second half last year was exceptionally high. I think, as you heard me talk about in the presentation, we're very pleased to see now that rebound of the non-COVID business accelerating in many geographies.
Of course, reading the news, as you do, there's still a lot of dynamic in the COVID-related markets as well, both potentially affecting future lockdowns, God forbid, but also the testing of COVID. I think we were expecting to normalize, as you know, more rapidly already in the first half, and that did not materialize so much as the vaccinations were slower and the variants were spreading. We, again, look at it very carefully, but we believe the guidance is prudent. As I said, within that range of low to mid-teens, you could assume a comparable decline or negative percentage range. I think when I look at the overall performance of the business, we are very pleased with both trajectories, COVID-related orders still coming in and the onset of a very robust recovery of the non-COVID markets in, I would say most geographies.
Thank you very much. Just to make sure that I understood it right, the EBIT in the first half, it included minus CHF 6 million transactional costs, plus CHF 9 million gain of a building and plus CHF 7 million of the pension costs. Is this right?
Tania, you want to take this?
Sure. Yes, Sibylle, this is correct. The CHF 7 million reversal on the pension, the CHF 1 million gain on the sale of the building, and the CHF 6 million acquisition-related costs were included in this.
Thank you very much, Tania.
The next question comes from the line of Scott Bardo from Berenberg. Please go ahead.
Yeah. Thanks very much for taking my questions. Congratulations on a strong set of figures today. Achim, I think your commentary over the last six-12 months has highlighted confidence in the ongoing dynamism of your business. I know that there's a lot of focus already onto the baseline for 2022, your guidance then for this year, including some sort of normalization in H2 . I think you've spoken quite positively about the company's growth prospects into 2022. I wonder, do you still have a similar optimism today, given that you've elevated the baseline now for the group performance this year? Do you still believe that the group can perform and have a positive growth organically next year? Some commentary around that would be helpful. Thanks. The second question on Paramit, again, congratulations on the close.
I wonder if you could share some high-level thoughts on the acquisition now that you've consolidated it, Achim. I know it's early days, but if you could help us understand some of the efforts that you're undertaking for the integration and business development, any ideas that you may have in terms of improving efficiencies for the board organization. It'll be interesting just to hear the first thoughts here, please.
Thank you very much, good morning to you, Scott. Yeah, of course. Your question on 2022, you probably still see me very positive about Tecan's ability to weather any kind of market scenarios as we've done, I think, in the past 18 months very successfully to see how we can both continue to grow our contribution to pandemic containment, but also continue to invest in our partnerships, but also in new products that we very actively target to mitigate any normalization curve that will come our way. This is just a continuation of what you just heard me say in response to Sibylle's question on H2. Clearly, looking at the % growth figures, and I also pointed out, I think just earlier, that even when I look at the H1 2020 comparison, which was already quite high half, the comps are getting tougher and tougher.
We are, of course, looking at this very carefully. We are investing in all the areas where we can, in sales and marketing, in R&D programs. I think I said earlier in other calls that we are very happy to see that the R&D pipeline is more or less undisturbed. Of course, we're accelerating wherever we can to bring new products to market as we've just done in the Life Sciences Business segment. We're also focusing with our OEM partners in the Partnering Business division to bring them to market as soon as we can support them. All of that said, I think we have as good as possible basis for 2022 with all these elements.
Of course, as I said, I'm looking at growth percentage numbers that will be tough to beat. That makes us probably even more engaged right now in driving additional expansion in our direct commercial efforts and the new partnerships that I just mentioned. You still hear me very positive, but I think we need to stay resilient and very clearly focusing on our strength, which is that kind of mixed diversification and addressing also opportunities in geographies, for example, that pre-COVID we have not been able to reach and touch. I think that was also something I commented on earlier, that COVID brought to us both clients in the Life Sciences Business and sometimes even entire, I would say, country infrastructures and then also on the Partnering Business side, new partners that of course we are now driving for future and sustainable growth beyond the contribution to COVID.
I think 2022 will be another very exciting and dynamic year for Tecan. On the Paramit acquisition, clearly, very happy that we closed the acquisition for both sides. We are now opening up the integration teams, which are staffed both from the Paramit leadership team and the Tecan leadership team. We just had our first sessions. Teams are exchanging information and content, driving the first integration initiative, which clearly for us are geared in two directions. One is the goals that we have to improve operational efficiencies.
We of course look at Paramit as an option to source for components and modules as actually we've started to do even prior to the acquisition and build that out with a very strong focus on manufacturing and even more capabilities, I would say, offering us to vertically integrate supplies and then leveraging the synchronized supply chains as probably the first. The other element that of course is very attractive to us is using now these new capabilities in our commercial efforts and really supporting Paramit from our teams in the Partnering Business, to get access to new clients and broaden the reach for Paramit maybe even stronger now with our teams in Europe and Asia. Of course we still see in the U.S. quite some good runway for Paramit.
Also the other way around, we've actually already been approached by a number of Paramit customers trying to assess if the Tecan automation, and particularly also the support and service capabilities could be a means to engage further with new clients that actually we've mostly not spoken before. I think there's a whole set of things happening, but the two areas of course are kind of operational efficiency gains that we're aiming to drive with the Paramit acquisition in the direction using their capabilities and secondly on the commercial side.
Very good, thanks. Oh, sorry, Achim Go ahead.
No, I just want to say, for us in addition to the more operational things that we're driving, very pleased to see the reaction of the Paramit teams and the very positive reception. We've conducted all hands meetings and interactions with teams both on the Paramit side and the Tecan side. On both sides the reaction was extremely positive and very recent. Teams seem to be very engaged and motivated, which is probably a good starting point to really drive a successful integration and then future growth on both parts of the company.
Understood. Perhaps just one quick follow-up then please. I think on the announcement of the acquisition, you highlighted that the deal would be partly funded with some equity issuance. I guess looking at your solid net liquidity position prior to the acquisition, one could argue that this would give the organization quite a lot of additional flexibility to do further M&A. I wonder if you could talk a little bit about whether that remains part of the strategy and whether there are active targets that you're seeking and have capacity for.
Yeah. You absolutely hit the right buttons there. Our strategy how to finance the transaction has not changed. Mainly exactly for the reason that you're pointing out. We've talked a lot about our willingness and stability to grow, not just organically but also inorganically. Paramit of course is probably the most significant next step in the adventure and strategy. As I also alluded to in the description of Paramit, we still remain very focused on these bullets one, two, and three in our strategic market considerations. We continue to look and cultivate targets both on the, I would say now core Life Sciences and core Partnering Business division. That gives us that flexibility.
As always, these things happen when they happen and we take a very prudent look and as we've done now with Paramit, what fits strategically and operationally to our future growth profile and we will go through these measures and assessments as we've done in the past years. Clearly, now with the financial profile and the way we structured the purchase price, how we intend to afford it gives us the flexibility that we want to have for future periods. Again, we are now very happy with this acquisition.
We are in the full swing of the integration and I also want to make sure that things happen in the right cadence and we take now the gained experience of our own integration teams in the Paramit acquisition and then look at future opportunities as both we are ready and of course these targets get ready to be discussed in more detail.
Very good. Thanks so much, Scott Bardo.
Before we take the next question from the phone, there is a question from the chat that fits in well. It's regarding the customer concentration at Paramit. Achim?
Paramit has been growing, obviously, for three decades, their customer base. As we also see in our Partnering Business, there are larger customers in there, and there are kind of a range of up-and-coming and growth companies in there. I would say, when we look at it, Paramit has a similarly diversified customer base. They serve some market leaders in different segments, and which are really blue-chip names. This is, also in our reality, not unusual that some customers make up more higher percentage. That's more a testament to success and strategic engagement with a selected group of clients in their innovation profiles than anything else. When I look at Paramit, their three largest customers make not more than 50%.
Another question from the chat was already answered regarding the 2020 outlook, and we can commence with more questions from the telephone.
The next question comes from the line of Sebastian Vogel from UBS. Please go ahead.
Hello, can you hear me?
Yes.
Perfect. Great stuff. The first one would be on the orders and sales. I am usually trying to compare orders in one half year and sales in the following half year. If I do that for Tecan on a group level, I normally see that your first half orders are growing, and you would need to multiply them by 1.1 times, and then you have your H2 year sales. If I do that, I would get to something like CHF 490 million of revenues in the second half. Is there anything in the order book that would object this sort of approach? That you say there is plenty of orders that are actually supposed to be delivered in 2022 or later or something?
Thank you very much, Sebastian. As always, good and elegant questions. Your calculation, and maybe we have similar calculators, in normal years would substantiate what you just said. The slight issue that we have and you may have with using this approach is that I think we are far from normal yet. Our H1 performance has probably also illustrated some of that, where I think we have been growing very successfully in both of these markets, but also very strong contributions still from pandemic-related orders, where we expected maybe a kind of faster onset of normalization in the first half. When we look at the second half, like I said, it's a combination of that onset of normalization for COVID and the non-COVID related performance. When I look at the order book and the backlog, you're right.
We are coming in with a good backlog. There's substantial book and ship to be achieved in H2 , and there's a lot of work to be done to come to this. Clearly, that's why I referred earlier. We are looking very carefully and prudent at the kind of monthly intake of particularly orders that we'd associate to COVID-19. As you know, that's always not very easy because our instrumentation and consumers are multipurpose. We try to do the best effort guesstimate what that could look like. Then the deduction comes from there. Clearly, H2 , there's a lot of dynamic in there. We feel pretty good about the starting point with the backlog that we're entering H2 .
We also are very, I would say, careful projecting too much of a hockey stick, which we also normally see in calendar years in Q4 because of just the sectors that we see in the markets and customers that we're talking to. In aggregate, I think there is, of course, that range that I mentioned, low to mid-teens. That includes a lot of these elements.
A quick one. Also you?
Maybe just adding to also what Achim is saying. Bear in mind that we book our orders that will be delivered in the next 12 months, and in the Partnering Business, especially for the non-COVID-19 related business, we have frame orders which will be pulled in the next 12 months. There, you of course, cannot consider that we will deliver all of it in the next six months. That's a little bit of this as well that we need to apply.
Understood. Quickly then on Paramit. You mentioned that you're expecting CHF 100 million of sales for the next four-five months since August, meaning that you have CHF 120 million most likely then for the whole second half. If I compare that to the CHF 260 million that were initially expected for the full year, that seems to be having a bit of a different seasonality to your existing business. Is that the case or is this year also a bit different?
That is directionally correct. We also observed a different kind of shift in their half year performances. Also maybe a bit more lumpy, more comparable to our Partnering Business in, I would say, normal years, where we've also seen some of, I would say, a bit of a shift in weighting from the first and second half. The other effect is clearly when we look at it right now, Paramit is subjected to a significantly higher COVID exposure or COVID impact exposure, I would say, because their end markets and their OEM partners are typically not related to COVID testing or any of these type of procedures. Yes, they have seen probably a stronger headwind effect and continue to see some of the effects in the second half. That's probably the second kind of more significant element in what you said.
In aggregate, I think very positive about their ongoing trajectory and then also ability to sign on new clients, which of course then the future basis for growth in 2022, as we also expect the COVID-related headwind effects for Paramit to ease off as soon as we see it also for our normal business.
Understood. One very last question. Do you have already seen sort of more visibility on how the machines that have been sold over the last years that are used in the sample preparation for COVID-19 tests, are they still in use for these PCR testing or do you see them already getting sort of repurposed for other testings?
Both. Quite of course, a number of them continue to be performing PCR testing. In some regions and geographies, we even see an uptick, compared to what we've seen already in this normalization curve, rebounding back to more PCR tests. For example, Israel is one of these regions where PCR tests are actually indicated to go up again. Secondly, we see another second element where some of these instruments are deployed to do and continue to perform PCR tests for COVID, but also for other medical indications. Thirdly, some of these systems are expanded, if you want, from a capability and application standpoint, to do not only PCR tests, but also sequencing tests or workflows and large runs for the analysis of virus variants, which is something we expected to happen. It's a heterogeneous picture right now.
I would say to this date, most of the instruments that we know have been deployed for PCR testing are effectively still performing PCR tests for COVID. There is a menu expansion happening, particularly in the service labs, like the big service providers in the U.S. and Europe, that of course use that infrastructure now to add on a bigger menu of their lab developed tests in addition to the COVID tests.
Perfect. Sorry, one follow-up question with regards to the pricing point you mentioned in the slide deck. I know that you don't want to share too much information there. Yeah, that's absolutely understandable. The question is when are they in place and have they already impacted positively your top line, or is it rather a thing that would impact your top line on H2 ?
You mean product price increases?
Yeah. The product price increases. Yeah.
We are, as you know, we are looking at kind of price opportunities wherever we believe, particularly our innovation trust kind of significantly elevates value of our solutions. As you heard me talk about some additional software features that we launched and others. We run this as a routine process and it's not just an annual kind of one-off event. I think over the last years, we already very significantly and successfully increased prices at around 1%. This is also what we looked at and recorded maybe in H1 .
As we launch new products, as we also, of course, increase the value of some of the products, this is something we obviously very dynamically also look at whether that is possible and justifiable to continue to do in H2 than maybe for kind of H2 effects as well as 2022 effects. It is an ongoing process. This year, again, I think we keep this routine. We measure it very, as you would probably expect, precise on a part number level. The one or slightly more than 1% effective price increase was actually realized price increases and not price increases on price lists or anything.
Understood. Many thanks.
The next question comes from the line of Daniel Jelovcan from Mirabaud Securities. Please go ahead.
Good morning as well. I have two questions. The first one, Tania, you mentioned the nice OpEx leverage of growing half the top line level on slide 11. I just looked back at the year 2019, so before the pandemic. There was absolutely no OpEx leverage. Okay, I know there are a lot of moving parts in your OpEx, and so on. Going forward, I think it's not a sustainable level, considering the fact that you had probably the perfect world in the first half with high volume growth, excellent leverage, and so on. Is it fair to assume that your OpEx leverage is probably in a normalized world, more like 70%? OpEx grows 30% less than top line? That's the first question. The second question, your growth in LSB in Asia was quite moderate with high single digits.
You mentioned that the high base China and its normalized world there. Still, isn't that a bit disappointing? I mean, Asia is still a small base for you, and at the group level, you grow now in H1 in the north of 40%. When I just think about H1 2022, I make this comparison, what that means for grow in the H1 next year. It's tough to imagine. If you can comment on that.
Thank you for the question. Maybe I start with the first one on the OpEx. You're absolutely right. What we do is we try to keep our OpEx close to those sales. That's a very clear element. However, with the significant growth that we have seen, we of course cannot sustain potential future growth as well with the low OpEx base. We are in this mandatory process of upgrading and increasing our sales force, the service and the support organization, but also some admin positions, because we are now for 18 months functioning with an organization that was not scaled in parallel to this tremendous growth. It wouldn't be sustainable for us to continue to deliver the growth targets based on the current organization. Of course, there are some effects working against the volume leverage that we will see in the future.
Our focus again is to really increase in terms of sales, of field service people, to ensure installation of equipment, to ensure the maintenance, et cetera. That is the part that we will see where we will see this OpEx more maybe normalized around those levels as well. You're absolutely right on this.
Okay.
On the second question, I think what you have to see, I think your question was related to Asia growth. You have to remember that in H1 2020, we had quite a significant growth of Asia because of the pandemic start there, and therefore they were very much in advance compared to the others in terms of growth in H1 when we had 2020, where we had 25.3% in local currency. When you compare it to, for example, North America, that was only 2.9% in H1 2020, and Europe only six. Of course, with the progression of the pandemic, which hit Europe and then North America later than Asia, we have a comparison basis which was already higher in Asia comparing now to H1 2020. I hope that answers a little bit your question on the Asia growth as well.
That's good. Maybe just on Asia. Is it fair to say that this high single digit, let's say, in a more normalized region like Asia is maybe a good reference going forward when the world hopefully normalizes?
I would probably say we wouldn't be satisfied with this, just simply because China, as you illustrate itself in Asia context, already such a dynamic growth environment. We have, as you know, a very good and well-distributed team in China that is capable of supporting both our Life Science and Partnering Business. Look, as Tania said, the comp was pretty tough. We have a lot of growth elements that we see as very, I would say, beneficial for us in China particularly. As you know, the Partnering Business has been very successful signing collaborations with domestic in vitro diagnostic companies. That is a trend that is ongoing. We're very happy, actually, with the success that we have with our modular platforms in China, particularly in the areas of molecular diagnostics and immuno diagnostics.
As always, in these kind of OEM partnerships, growth sometimes depends on time to market and development timelines. When we look at the pipeline, very happy with the continued growth, both from our Partnering Business kind of systems business, but also the building blocks that we supply to companies that then build the analyzers on our Tecan infrastructure. On the Life Science side, again, I think we are now in kind of rebound mode still. The normality has begun, but as you also know, just now, some regions are again under lockdown, and I would say although the normalization was starting earlier than in other parts of the world, I would say it never reached the real normal to that extent because travel restrictions were still in place. Customers were not fully back in operations.
Now I think when we look at the normalization, we were very happy, particularly with the pickup of our new platforms and products in China. Fluent is beginning to be very successful there. Also our detection range, which includes a lot of applications for biochemical, but also cellular analysis processes, has been picked up very successfully in China because of the focus of research in clinical and pharma leveraging cell models. I think overall, the outlook that I see for China is very good. Again, I don't want to guide on a specific country or region, but clearly I just want to probably be a bit more positive than the figures that you called out for what we look at Tecan's reality in China, given the relatively small, as you said, contribution of China to the overall business.
Good. Okay.
Before we take another question from the phone, maybe a quick one from the chat. Tania, maybe you want to take that one. It's regarding the process for the purchase price allocation of Paramit. Any update?
Sure. As you know, Paramit did not use IFRS, the detailed purchase price allocation is yet to be performed. At this stage, we expect the amortization from the PPA to a level of CHF 10 million-CHF 15 million per year, as we announced in the closing of the Paramit acquisition Q&A.
Good. Thank you. We come back to the Q&A from the telephone. Being conscious of time, please limit your questions to one, please.
The next question comes from the line of Maja Pataki from Kepler Cheuvreux. Please go ahead.
Okay. Thank you very much for taking my questions. I will try to limit it to one, and then try to follow up with you, Martin, later. With regards to the full-year guidance, Achim, as you can see, we're all trying to figure out how to consolidate what is implied in your guidance for H2 of the year and how to think about that. I was wondering if you could remind me quickly on what has happened in 2020. You've spoken about the headwinds from COVID-19 amounting somewhere to CHF 60 million-CHF 80 million, and you've been talking about the tailwinds from COVID in 2020 at CHF 150 million-CHF 170 million. My first question. It is a 1A, 1B question, sorry. My first question is, can you tell us the headwinds, was it mainly Q1, Q2, or how shall we think about the headwinds in 2020?
When we look at the tailwinds, could you also give us an indication on split H1, H2? Actually, C, as a question, I'm sorry. The CHF 70 million COVID-related revenues that you posted in H1, additional, as part of growth. Could you give us an indication what the split was between the consumables and instruments? That would be helpful so we can actually try to evaluate how we think the pandemic will play out. Thank you.
Okay. Thank you very much. Maybe I start off, then I'll invite Tania for some detail support here. The H1 2020 dynamic, as to be expected, was very much loaded towards the second quarter dynamic in both headwind and tailwind effect. Clearly, the pandemic was building up then the lockdowns were starting to happen. Also from the product placements and orders we received, the lead times and turnaround times, most of these actually accumulated back into the second quarter contribution for the first half. Then in the second half, clearly, the headwind effects were pretty severe and probably accelerated, the COVID tailwind was probably then to the higher contribution to the normal business.
Maybe just to add some flavor to your question, when we look now in the H1 results, the distribution of the COVID effect was pretty much 50/50 in terms of the growth contribution from COVID and non-COVID related recovery from a growth portion of that performance. The dynamic was, again, quarterly differently. As expected, normalization started in Q1, but was probably stronger in the second quarter, where normalization took the other turn. I think just directionally, that's what you're looking at right now. Just to complicate matters a little bit further is this pattern that I described is geographically heterogeneous. We saw different patterns in the U.S. and Europe and Asia. Directionally, it's the same path.
As I just said, for example now, with the virus variants popping up and significantly elevating some testing regimes again, this is something where we are not entirely sure how this will then play out in the second half. Maybe, Tania, you want to take some of the.
kind of detail questions.
Maybe on the last question as well, Maja, on the consumables versus instruments. If you look, again, to Achim's point on a quarterly basis, Q1 2021 was pretty much in line with Q4 2020, as we still delivered a lot of the instruments that were ordered in Q4 of 2020. We continued to supply also consumables for the COVID testing. Q2, on the other hand, was less on the COVID-related instruments as we expected, while consumables continued to be on a high level and pretty much actually on the same level as compared to Q1 2021. If you look at this, the split is probably close to a 50/50 between the consumable and the instrument in that half year.
Okay. Thank you. Still, I know it's a very vague situation and everything, but can you help us understand what the tailwinds amounted to from COVID in H2 2020?
I think you're right. In 2020, we looked at tailwind, headwind, because it made sense, right? To understand how much we benefited from the COVID perspective and how much we were hit on the non-COVID related side. You cannot really look at it in H1 2021 from that perspective, because really, we had growth from both areas, both COVID and non-COVID. Again, there, the split from the sales growth perspective is pretty much 50/50. Of course, there are some smaller areas where we could still talk about headwind, tailwind, but I think we still have to think more like there was a pickup from the areas that were hit negatively in the pandemic.
We are not fully back to the pre-pandemic levels overall, and as I said, we are still behind some others, but you can't really, again, it doesn't make really much sense to assess the tailwind and the headwind. I really would more focus on the fact that COVID related growth was around CHF 70 million-CHF 80 million, and the growth from the other application areas was also somehow between CHF 70 million and CHF 80 million. Again, it's of course very difficult to quantify the exact effects because, for example, we do not know if the type of tips were used for the COVID testing or another test, so we have to use some assumptions on this from the perspective of which instruments were placed and how they are used, COVID versus non-COVID. Again, as you know, our instruments, our equipment, is multipurpose.
I hope that a little bit helps you to answer that question again.
Maybe just to add, directionally, Maja, we reckon H2 would be kind of dominated by non-COVID businesses. As Tania said, the effect of course for kind of COVID elongated effect is more on the consumable side and spare parts and things in H2 . We reckon that the new business and business growth will mostly come from non-COVID related business in H2 .
Thanks, understood. I'll have to give you a hard time this afternoon and try to understand a bit the second half potential implication from COVID. Thank you very much for trying to answer.
There is one last follow-up question I understand, but please limit it to one follow-up question.
Yes. The last follow-up question comes from the line of Scott Bardo from Berenberg. Please go ahead.
Thanks, guys. Real quick. Just maybe Tania's perspectives for some financial assumptions for Paramit. You mentioned around CHF 20 million acquisition-related costs this year. Can you give us a flavor for what the costs may look like on this basis over the next few years or some sort of cumulative number? Given the size of this acquisition / PPA that you highlight, is there now cause and reason for Tecan to move to a more adjusted EPS number, which arguably would be more in keeping with some of your MedTech peers?
Thank you, Scott. As we mentioned, we expect initial integration and transaction costs of around CHF 20 million. Some of it will impact the EBITDA, some only the net earnings or the earnings per share. As I said before, we have to finalize some of the assessment, like the PPA, but we expect at this stage roughly of half impacting the EBITDA and the remainder only the EPS, the earnings per share. In 2021, we estimate the post-merger integration cost to mid-single digit CHF millions and the PPA for the first 5 months, around CHF 4 million-6 million. In 2022, our post-merger integration cost on an annualized basis will be in the high single digits CHF millions, and the PPA is, as I mentioned before, estimated between CHF 10 million-15 million. Acquisition costs, they are basically some financing costs, some PPA, and some integration costs.
That's the bulk of the breakdown in there. When it comes to the adjusted earnings per share, this is something we are contemplating. However, as you know, so far, we have taken the route of disclosing the numbers as they are and then disclosing only one-off effects, which at the end, is very similar to what would have been an adjusted number. Again, it's something we are looking into.
Thank you very much.
Yeah, with this, probably we are at the end of the Q&A session. Thank you very much for your participation and questions. With this, I believe we can close the call and look forward for meeting and talking to you for future discussions. Thank you very much and speak to you soon.
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