IBO Sales Indexes: Double-digit Growth Combined Indexes in First Quarter

For the first quarter of 2018, most publicly held instrument and lab products businesses delivered outstanding results, driven by strong demand and growth. Sales to most major regions, along with sales to most key end-markets, performed above expectations, especially in the Asia Pacific region and in the biopharmaceutical and industrial end-market.

As such, combined calendar year first quarter 2018 sales for the 22 companies or business units in the IBO Life Science and Analytical Instrument Indexes (LSA Indexes) grew 10.3% organically, versus 4.0% in the prior first quarter. The double-digit growth was due in part to a weaker comparison from the prior period, along with strong results from Analytical Instrument companies. Sequentially, organic sales growth was up 1.7 percentage points. Against the calendar year 2017 organic growth rate, first quarter 2018 organic sales growth was up 4.0 percentage points.

Quarterly estimates were calculated for the following companies: Oxford Instruments, Spectris and Tecan. All sales figures below are organic. IBO will publish the final LSA Indexes figures when they are updated.


Biopharmaceutical Markets

First quarter biopharmaceutical sales for companies and businesses in the LSA Indexes were solid, as organic growth advanced in the high single digits. Sales growth was primarily driven by Agilent Technologies, Bio-Techne, QIAGEN and Thermo Fisher Scientific. Agilent sales to the biopharmaceutical market advanced in the high single digits, driven by strong MS, consumables and genomics sales. Bio-Techne’s sales to the biopharmaceutical end-market also grew in the high single digits, fueled by sales in the US. QIAGEN delivered high single digit organic sales growth to this end-market as well. Thermo Fisher’s organic sales to the end-market rose double digits, driven by continued strength across all businesses, especially solid bioproduction and MS sales.

Against the previous quarter, however, biopharmaceutical sales growth has slowed by a few basis points, as Bio-Techne sales to the biopharmaceutical market decelerated from high-teen growth.


Applied Markets

For the companies and businesses in the LSA Indexes, organic sales growth in applied markets increased high single digits. Organic growth was primarily driven by strong sales growth for Agilent and Thermo Fisher. Applied end-market sales for Agilent grew in the high single digits, driven by solid analytical instrument sales.

First quarter food sales for the Indexes’ companies and businesses grew low single digits, while sales to the environmental end-market also increased low single digits. Both end-markets were driven by mid-single digit sales growth for PerkinElmer’s Discovery & Analytical Systems (DAS) and Thermo Fisher’s Analytical Instruments, partially offset by slower food sales for Agilent.


Academic and Government Markets

Academic and government sales for the quarter grew at a low- to mid-single digit pace, decelerating from the prior year period. Among the Indexes’ businesses, Bio-Techne delivered double-digit sales growth, while PerkinElmer DAS and Waters delivered high-single digit growth, only to be offset by low single digit growth from Agilent, Bruker SI and QIAGEN. The healthy growth for the end-market was in part due to solid demand in the Americas and European region.


Industrial Markets

First quarter industrial sales for the LSA Indexes advanced in the mid- to high-single digits, driven by sales for Bruker SI and Thermo Fisher. Both companies’ sales to this end-market grew organically in the mid- to high single digits. PerkinElmer also contributed as well, as its sales to this end-market advanced in the low single digits. However, Waters’ sales to the industrial market slid for the quarter, falling low single digits.


Geographic Markets

First quarter Asia Pacific sales for the Indexes’ businesses grew the fastest of the three major regions, increasing low teens organically. The strong result was mainly driven by double-digit growth for Biotage, Bio-Techne, Fluidigm, Illumina, Merck KGaA Life Science and Thermo Fisher Scientific. Bio-Techne reported low teens organic sales growth in the Asia Pacific region, driven by over 20% organic sales growth in China. Sales to the region were, however, offset by weak sales from Bruker BioSpin.

Sales to the European region grew in the high single digits for the Indexes’ companies and businesses, primarily driven by continued growth for Agilent, Bio-Techne Biotechnology, Illumina and Shimadzu Analytical & Measuring Instruments (AMI). Bio-Techne’s organic sales for the European region increased in the high single digits due to strong sales to the academic and government end-markets. Illumina’s sales to the region grew double-digits, driven by solid NGS and array-related revenues. Shimadzu AMI sales to the European region also increased in the double digits due to increased demand.

Sales to the Americas for the Indexes’ companies and businesses grew mid-single digits. The continued strength for the region was driven mainly by double-digit sales growth for Biotage, Illumina, QIAGEN and Shimadzu AMI. Illumina delivered over 20% growth in sales to the region, while Shimadzu AMI experienced mid-teen organic growth. Bio-Techne Biotechnology sales also contributed to the region’s solid performance, advancing in the mid-single digits due to strong sales to the academic end-market.


Life Science Index Sales

IBO’s Life Science Index sales advanced 9.7% organically for the first quarter of 2018. Sales growth was down 90 basis points sequentially, yet was up 5.5 percentage points versus the prior year period.

The organic growth for the Index was mainly driven by strong double-digit growth from Bio-Rad Laboratories Life Science, Bio-Techne, Illumina and NanoString Technologies. Organically, Bio-Rad LS sales were up in the high single digits, at 8.9%. Bio-Techne Biotechnology and Protein Platforms delivered another strong quarter of sales, increasing 14.8%, 7.9% organically, to $135.6 million, driven by strong growth in the academic end-market.

Illumina sales for the quarter leaped 30.8% to $782.0 million, driven by strong high-throughput NGS systems sales. Thermo Fisher Life Science Solutions (LSS) also contributed Index sales increases, increasing 9.9% to $1,499.0 million. Organically, Thermo Fisher LSS sales grew 5.0%.

Adjusted operating margin for the Index grew 4.8 percentage points to 23.8%. Sequentially, however, adjusted operating margin fell 1.8 percentage points.


Analytical Instrument Index Sales

First quarter IBO Analytical Instrument Index sales advanced 10.9% organically to $4,363.3 million, up 1.4 percentage points. Sequentially, Index sales were up 4.1 percentage points to keep the upward trend for the fourth consecutive quarter. Reported sales growth for the Index grew 13.8%, driven by increased demand in Asia Pacific, as well as continued strength for LC/MS-related products. By end-market, the biopharmaceutical market continued to do well, with the industrial market showing particular strength.

The Index was heavily driven by double-digit sales growth from Agilent, Bruker Scientific Instruments (BSI), Thermo Fisher Scientific Analytical Instruments (AI) and HORIBA. PerkinElmer’s Discovery and Analytical Solutions (DAS) segment, along with Shimadzu AMI also contributed to the strong Index performance for the quarter with high single digit organic revenue growth. Agilent’s solid first quarter was due in part to strength in MS and consumables sales. Agilent also experienced continued demand in the Americas and Europe.

BSI sales were mostly driven by strong growth for its biopharma solutions portfolio, microbiology products and Optics products. Sales growth for BSI were also robust in the European region, up in the high single digits.

Thermo Fisher AI revenue delivered 19.5% growth, climbing the most in the Index. Sales for the segment was heavily driven by strength in the biopharmaceutical end-market and in the academic and government end-markets.

Adjusted operating margin for the Index amounted to 18.5%, an increase of 50 basis points versus the prior year period.

Reported IBO Indexes’ organic sales growth excludes acquisitions and are based on constant exchange rates for international companies when converted into US dollars.

IBO Life Science Index businesses: Bio-Rad Laboratories (Life Science); Biotage; Bio-Techne (Biotechnology, Protein Platforms); Fluidigm (Product); Illumina; Merck KGaA (Life Science); NanoString Technologies; Pacific Biosciences (Products, Services); PerkinElmer (Discovery & Analytical Solutions); QIAGEN; Tecan (Life Sciences); Thermo Fisher Scientific (Life Science Solutions).

IBO Analytical Instrument Index businesses: Agilent Technologies (Life Sciences and Applied Markets, Agilent Crosslab); Bruker (Scientific Instruments); HORIBA (Process and Environmental Instruments & Systems, Scientific Instruments & Systems); Oxford Instruments; PerkinElmer (Discovery and Analytical Solutions); Shimadzu (Analytical and Measuring Instruments); Spectris (Materials Analysis); Thermo Fisher Scientific (Analytical Technologies); Waters.

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