The May 15 issue of IBO contained the first-quarter Laboratory Instrument Sales Index, including estimates for Shimadzu and Oxford Instruments. Both companies have now reported their financial results for the fiscal year ending March 31. As a result, final figures for the Index have been calculated for the calendar-year first quarter. First-quarter Index revenues grew 12.1%, including 4.1% growth from currency effects. Operating profits rose 27.1%. Operating profit margins improved 230 basis points to 19.8%.

Fiscal year 2010 showed signs of recovery for both Shimadzu and Oxford Instruments. Shimadzu Analytical & Measuring Instruments reported annual sales of ¥134,407 million ($1,447.3 million = $92.87 = ¥1), an 11.8% decline that was attributed to weak Japanese sales in the first half, declining foreign sales and a strong yen. The company noted a second-half recovery, driven by government and academic demand, as well as Japan’s supplementary budget. The segment’s annual operating income declined 19.6% to ¥17,022 million ($183.2 million) (see IBO 6/15/10).

Sales by product category and region excluded ¥222 million ($2.4 million) of inter-segment sales. Each of the segment’s product categories recorded sales declines (see table). Within General Analytical Instruments, chromatography revenue fell 9.3% to ¥59,000 million ($635.3 million). In total, segment sales accounted for 56% of company sales.

Shimadzu Analytical & Measuring Instruments’ sales in Japan fell 7.6% to make up 56% of segment sales. Sales to Asia-Oceania dropped 12.0% to represent 25% of segment sales, with Chinese sales falling 6.1% to account for 58% of Asia-Oceania sales. Chromatography sales in China grew 21.2% in local currency. European sales, which were 10% of segment revenue, fell 25.7%. North and South American sales fell 18.5%, with North American sales declining 23.2% to ¥8.2 million ($92.9 million). Shimadzu forecasts both Analytical & Measuring Instruments and company revenues to grow 4.9% this fiscal year. Segment operating income is expected to increase 13.4%.

For Oxford Instruments, fiscal 2010 sales grew 2.4% to £211.5 million ($335.7 million = £0.63 = $1), but declined 1.3% excluding currency effects. Adjusted operating profit climbed 12.2% to £14.7 million ($23.3 million) (see page 12). A fiscal 2009 restructuring program resulted in £11.0 million ($17.5 million) in annualized savings.

Revenue for Nanotechnology Tools grew 8.2% to £101.5 million ($161.1 million), and operating profit fell 4.7% to £8.2 million ($13.0 million). Within this sector, the NanoAnalysis business, which provides equipment for electron microscopes, had strong second-half sales led by the semiconductor and nanotechnology markets. The NanoScience business, which supplies equipment for low temperature and high magnetic field research, benefited from restructuring and new products, including a new consulting business. In the Plasma Technology business, which provides nanotechnology fabrication equipment, the high-brightness light-emitting diode market suffered from pricing pressure.

Industrial Products sales fell 5.5% to £71.0 million ($112.7 million), but operating profit was £1.0 million ( $1.6 million), compared to a £1.3 million loss ($2.2 million = £0.59 = $l) last year. Within the sector, the Industrial Analysis business, a provider of analytical instruments for quality control and environmental monitoring, reported improved industrial sales in the second half. The Superconducting Wire unit recorded a £40.7 million ($64.6 million) order. The unit’s Magnetic Resonance business also showed good growth.

Revenue for Service grew 3.7% to £39.0 million ($61.9 million), including a £7.7 million ($12.2 million) gain from currency and an estimated £2.0 million ($3.2 million) loss in sales due to pricing. The sector’s operating profit declined 5.2% to £5.5 million ($8.7 million). Demand was strong in Japan and for helium-fill services for MRIs.

Oxford Instruments stated that 44% of fiscal 2010 sales were to academic and research markets, 17% were to life science markets and 17% were to environmental markets. Europe, Asia and North America made up 36%, 33% and 26% of revenues, respectively. Chinese sales rose 30%. The company forecast continued growth in developing countries.

Table:

Shimadzu Analytical & Measuring Instruments, FY10

(¥B) % Chg. (¥B) % Seg. Rev.

Gen. Analy. Instr. 80.2 -8.6% 60%

Surface Analy. 9.9 -10.8% 7%

Env. Monitors 7.9 -23.6% 6%

Test. Mach. & Non-Destr. 13.4 -21.8% 10%

Insp. Mach.

Other 23 -11.6% 17%