The rate of productivity growth, as measured by sales per employee for instrument and laboratory product companies, more than doubled in FY15 compared to the previous year, and grew slightly above the average 3.2% growth rate from FY10 to FY14. Based on currency-neutral sales, the average sales-per-employee ratio for the 19 companies in the table on page 6 advanced 3.4% in FY15 to $327,781.

FY15 productivity gains were driven by stronger organic sales growth, along with restructuring and streamlining measures. On the revenue side, sales benefited from robust biopharmaceutical and certain applied markets, as well as higher pricing and new products. Meanwhile, strategic and restructuring initiatives, including the reorganization of sales channels, expanded e-commerce capabilities, the redistribution of resources to high-growth markets and lean manufacturing, further elevated productivity growth for a number of companies in the table. These actions, along with completed efficiency measures in the previous years, elevated operating profits.

IBO’s calculations are based on FY15 employment and currency-neutral sales figures in US dollars. Sales for non-US companies are based on 2015 constant exchange rates.

Two smaller but fast growing companies, Pacific Biosciences and NanoString Technologies, recorded the strongest productivity gains among the table companies in FY15, climbing 33.7% and 21.9%, respectively. However, aside from resilient consumables sales, productivity growth advanced primarily due to strong revenue contributions from product development collaborations. Sales for Pacific Biosciences jumped 53.1% including the milestone payments from Roche (see IBO 4/15/16). The company also highlighted interest in its new lower-priced Sequel system, for which the company continues to expand its workforce. In FY15, total headcount expanded 14.5%, including a 30.6% increase in operations and production personnel.

NanoString benefited from collaboration revenue for the development of companion diagnostic assays as well as strong demand for life science consumables. Currency-neutral sales for the company expanded 35.6% in FY15. While sales of Prosigna IVD kits contributed to growth, this revenue was below expectations due to reimbursement issues. Consequently, the company reorganized its sales and marketing department, which had nearly doubled in FY14 in anticipation of Prosigna’s commercialization. Despite downsizing its sales and marketing group by 8%, total headcount grew 11.2%, including a 33.3% jump in R&D personnel in order to keep pace with the company’s growth phase and ongoing product development.

Illumina was also among the high growth flyers in the table in FY15, as currency-neutral sales jumped 23.3% due to robust growth for sequencing consumables, and demand from oncology and healthcare markets. However, the company’s headcount grew at a similarly vigorous pace, expanding 22.5%, or by 845 employees, to support growth and advance product development. Despite a modest productivity gain of 0.6% to $482,557, Illumina maintained the highest sales per employee among the companies in the table.

Restructuring and reorganization resulted in productivity gains for a number of companies in the table including Agilent Technologies, Bruker, Harvard Bioscience, Oxford Instruments and PerkinElmer in FY15. Given the ongoing challenges in the industrial markets, restrained demand from academic and government customers and currency headwinds, the above companies remained steadfast on boosting productivity through efficiency and cost saving measures, including divestments, facility consolidation and outsourcing of noncore products. Strategic initiatives also played a critical role in driving productivity as Agilent and PerkinElmer realigned their business groups to improve customer service and provide biopharmaceutical markets with complete solutions offerings. In addition, Oxford Instruments separated its surface science business in order to generate operational synergies (see IBO 5/31/15). These actions resulted in headcount reductions for Agilent, Bruker and Oxford Instruments.

Following the decision to discontinue its NMR business in late FY14 (see IBO 3/31/15) due to weak growth within the research products business, Agilent cut roughly 300 positions, terminating all but 30 employees as of FY15. In addition, the company implemented a multiyear “Agile Agilent” program designed to drive profitability and become more customer-centric. As part of the plan, the company realigned its business group structure and streamlined operations. The company consolidated five sales teams into two groups linked to either the analytical laboratory or regulated diagnostics businesses. Overall, Agilent’s headcount declined 1.7%, or by 200 employees, in FY15. These actions, along with new product introductions and strong demand from pharmaceutical markets, resulted in the company’s strongest organic sales growth rate in four years. Excluding currency, productivity advanced 7.6%.

Bruker continued its multiyear restructuring phase to heighten profitability following weak top line growth. Despite higher NMR demand in the second half of the year as well as improved pricing following Agilent’s exit, Bruker continued facility consolidations, including the closure of its BioSpin ultra–high field NMR facility in Rheinstetten, Germany. These actions are expected to reduce the number of employees within the BioSpin Group by 9%. The company also maintained outsourcing initiatives for manufacturing of noncore products. As a result, total headcount fell 1.6%, or by 100 employees, in FY15. With flat revenue growth on a currency-neutral basis, productivity improved 1.6%.

Oxford Instruments similarly reduced its workforce, which contracted 14.2%, or by 343 employees, in FY15 due to cost saving measures and realigned business operations. The company disposed of its Omicron business in a separate joint venture with Scienta Scientific, which is expected to generate operational synergies. Despite continued revenue declines as a result of weak industrial markets, productivity grew for the first time in three years, climbing 7.4% due to the separated surface science business.

As a result of facility consolidations and relocation of its headquarters following the acquisition of HEKA (see IBO 1/15/15), Harvard Bioscience eliminated a number of redundant positions in FY15. Including the acquisition, headcount declined 2.2%, or by 10 positions, while currency neutral sales improved 3.7%. As a result, productivity for the company climbed 6.1%.

PerkinElmer’s restructuring activities persisted in FY15, however, these actions were primarily intended to redirect resources to the faster growing reproductive health, diagnostics and food testing markets. The company initiated two new restructuring plans in the second and fourth quarters in FY15, which included a workforce reduction of 271 employees and facility closures. Nevertheless, given the company’s stronger commitment to its higher growth markets and acquisition of five businesses during the year, total headcount grew by 300 employees, or 3.9%. Including the acquisitions, currency-neutral sales grew 7.5%, led by demand from pharmaceutical and diagnostics customers. As a result, productivity advanced 3.4%.

In contrast to PerkinElmer, which has produced minimal synergies from various acquisitions, Thermo Fisher Scientific continues to benefit from its purchases, which have strengthened its breadth of products and distribution channels, improved its e-commerce platform and created revenue synergies. As such, the purchase of Life Technologies (see IBO 4/15/13) is on track to deliver $300 million in cost synergies and $150 million in revenue synergies by 2016. The company continued its consolidation and closure of facilities. These savings, along with additional resources, have been redeployed towards higher growth opportunities. In FY15, the company opened several life sciences technology centers in emerging markets, expanded its bioproduction facility in the UK and established a clinical services facility in Singapore. The company also acquired Advanced Scientific (see IBO 2/15/15) and Alfa Aesar (see IBO 6/30/15), expanding its bioproduction and chemicals businesses, respectively. Despite a headcount increase of 2.0%, or 1,000 employees, primarily from the acquisitions, Thermo Fisher recorded a healthy productivity gain of 4.0% in FY15, as sales grew 6.0% excluding currency.

Biotage and Eppendorf also recorded notable productivity gains in FY15, climbing 8.4% and 5.5%, respectively. Both companies delivered healthy currency-neutral revenue growth with minimal headcount additions. In fact, Biotage maintained the same level of employees while growing sales 8.4% excluding currency. The company benefited from lean manufacturing with the help of the newly automated production of consumables. Eppendorf recorded strong organic sales growth of 7.1% in FY15, driven by biopharmaceutical markets, new products, and increased sales representation in Europe and Asia Pacific.

Fluidigm, one of last year’s strongest productivity drivers, experienced a sharp reversal in FY15. The company’s productivity slumped 16.0% in FY15 due to a significant hiring spree and sales growth of 3.5% excluding currency. The company not only overestimated the sales cycles and demand for new products, but realigned its sales and marketing efforts away from core products. As a result, sales of single-cell genomics systems and consumables contracted. The company’s workforce increased 23.2%, or by 110 employees, including a 35.7% climb in combined personnel for sales, technical support and marketing.

Bio-Techne, FEI and QIAGEN also recorded lower productivity growth in FY15 due to expansion and acquisitions. FEI grew its headcount 15.0%, or by 400 employees. The increase in personnel was primarily in R&D as well as sales and marketing, for which the headcount jumped 27.3% and 21.9%, respectively. Half of the total headcount increase was attributed to the acquisition of DCG (see IBO 12/31/15) within the Industry segment. Additionally, towards the end of FY14, the company opened a new manufacturing and development center in Brno, Czech Republic. While the company has maintained a regional presence there for quite some time, the new facility is expected to employ around 600 people and account for roughly 60% of its total EM production. Productivity for the company fell 10.4%.

Bio-Techne’s headcount jumped 40.2%, or by 389 employees, in FY15 following the acquisition of ProteinSimple (see IBO 6/30/14), Novus Biologicals (see IBO 7/15/14) and Cyvek (see IBO 11/15/14). The company was unable to overcome the sizable expansion as sales advanced 28.8% excluding currency. Revenue growth was hampered by the timing of product cycles from large biopharmaceutical companies in Germany and weak demand in Japan. Productivity contracted 8.2%.

QIAGEN recorded a modest productivity decline in FY15, which slid 1.5%. The company completed several acquisitions and expanded its presence in certain geographic regions. QIAGEN also augmented its R&D and production facilities in Hilden, Germany, and Manchester, UK. The company further grew its sales force for informatics products in preparation for its new NGS system.