Currency fluctuations and economic turbulence not only produced a shift among IBO’s 2015 list of the top 30 analytical and life science instrument, aftermarket and lab product companies, but also yielded a calendar year sales decline when translated into US dollars. Total sales for the top 30 companies (see page 6) as reported in US dollars declined roughly 1%, 2% excluding acquisitions, for the year to $34.7 billion to account for more than 70% of total industry sales (see IBO 1/15/16). This decline is in line with what the total market endured in 2015 due to currency effects and tempered growth in China, along with weakness in Japanese and industrial markets.

All sales and sales growth figures in this article are based on IBO’s calculations of companies’ revenues that fall into the 10 technology categories in IBO’s forecast issue (see IBO 1/15/16).

Despite economic challenges, the reported decline in revenues for the top 30 companies in 2015 did not accurately reflect the underlying business environment. When calculating revenue growth for the top 30 using 2015 constant exchange rates for non–US companies, sales improved 0.3% excluding acquisitions and grew 4.8% organically. This growth was driven by demand for analytical instrumentation and technology upgrades, as well as product introductions and pricing. Specifically, product sales for MS, HPLC, sequencing and certain molecular spectroscopy technologies advanced at a stronger-than-average market rate as a result of increased activity in biopharmaceutical and applied markets in the US and Asia.

While the top 5 companies in the 2015 IBO list remained steady compared to 2014, for the first time, all 5 companies recorded sales of more than $2 billion to account for over 35% of the total analytical and life science instrument, aftermarket and lab product market. Reaching this exclusive echelon of over $2 billion in annual sales for the first time were Illumina and Waters. Illumina recorded 2015 sales growth of 16%, 20% organic growth, and expanded its total industry market share at the fastest pace among the top 30 companies. The company’s overall share expanded nearly 60 basis points to more than 4% in 2015, as it continued to dominate the high-throughput sequencing category, and expanded into the fast-growth oncology and reproductive health markets. However, in 2015, shipments of HiSeq systems experienced more normalized rates following an extensive backlog in the previous year.

Waters also recorded notable revenue growth last year, although at a more moderate level, to reach the $2 billion mark. Sales for the company advanced 3%, 9% organically, led by sales of new products, UPLC and LC/MS systems, and greater penetration into applied and QC markets. Much of this growth was driven by demand in emerging markets, such as China and India, for which sales each grew double digits.

Similar to Waters, the top 3 companies, which also happen to be the largest MS vendors—Thermo Fisher Scientific, Agilent Technologies and Danaher—all benefited from new product and strong biopharmaceutical demand, especially for LC/MS systems. Agilent and Thermo Scientific also detailed strength in NGS, chromatography and food testing, while Danaher experienced higher demand for water quality platforms. Nevertheless, all 3 companies were hindered by industrial sales due to declining commodity and oil prices. In addition, Agilent’s discontinued NMR business (see IBO 10/15/15) and divested XRD business (see IBO 3/31/15) further depressed reported sales for the company, which declined 1%. Excluding these factors and currency headwinds, Agilent sales grew 6% organically.

Thermo Scientific, which remained at the top of the list for the 7th consecutive year, executed a successful period, including the first full-year integration of Life Technologies (see IBO 2/15/14), the opening of a number of new life science customer experience centers across emerging markets and the introduction of several new genetic analysis products. Sales for the company expanded 1%, 3% organically, to $6.7 billion to account for 14% of the total market.

In regard to positioning, there were 2 notable changes among the top 10 companies. PerkinElmer and Bruker swapped rankings, ending up at the number 6 and 7 spots, respectively. Sales for Bruker, which fell 11% in 2015, were negatively impacted by currency, lower surface analysis product demand and divestment of its GC, single quadruopole GC/MS (see IBO 10/15/14) and ICP-MS product lines (see IBO 8/15/14). Nevertheless, the company reported sales strength for XRD, micro-XRF, MALDI Biotyper and new detection products, leading to organic revenue growth of 1%. Sales for PerkinElmer were similarly challenged by currency but were offset by the acquisition of Perten Instruments (see IBO 11/30/14), which added to the company’s food testing business, and continued growth of PerkinElmer’s lab services business.

Acquisitions also contributed to Sigma-Aldrich’s departure from the top 10, as its purchase by Merck KGaA was completed in November 2015 (see IBO 11/30/15). With a month and a half of sales accounted for by Merck and significant currency headwinds, Sigma-Aldrich moved down to the number 12 spot. Merck climbed 1 position to number 14 following IBO’s recalculation of its process chromatography technologies business, as well its protein and antibody businesses related to the 10 technology categories covered by IBO.

Replacing Sigma-Aldrich at the number 10 position was Becton, Dickinson, which moved up 1 spot despite a 4% decline in revenues. Growth for the company was hampered by currency and delayed funding in Japan. However, organic sales improved 2%, led by pharmaceutical industry demand for flow cytometers and research reagents in the US.

Another notable change due to acquisitions was AMETEK. The company advanced 2 spots to number 23 following the purchase of Amptek in August 2014 (see IBO 10/15/14), which expanded its XRF business within its Materials Analysis division. However, excluding the acquisition, sales declined as a result of lower atomic spectroscopy instrument demand from industrial markets. Tecan advanced one spot to 26 helped by the acquisition of Sias (see IBO 10/31/15) and strong organic growth.

In the more tightly contested rankings below the top 10, currency played a significant role in 2015 for company repositioning. Sales for most non–US reporting companies were subject to sharp declines when converted into US dollars, even after subtracting favorable currency effects from reported sales. Specifically, sales growth for all 5 Japanese companies in the top 30 were reduced by double digits when converted into US dollars. This decline, along with slow regional demand and a recent sales arrangement with Nikon (see IBO 12/15/14), resulted in JEOL falling 3 spots to number 21. Olympus slipped 1 spot to number 24 due to the currency translation and slow research spending in Japan. Hitachi High-Technologies experienced a sharp decline in sales due to weak organic growth and currency translation but remained at the number 17 spot. While microscopy sales were generally weak for most companies with meaningful industrial exposure, such as FEI, JEOL and Olympus, Hitachi High-Technologies appeared to lose share in the EM market.

Conversely, Nikon managed to climb 3 spots to number 18 due to strong biological microscope sales in the US and China, and distribution of JEOL’s compact SEM products. Shimadzu also withstood the effects of negative currency translation to remain at the number 8 position on account of strong organic growth. Despite a slow start to the calendar year due to weakness in Japan and slower demand for elemental analysis systems, revenues rebounded sharply led by sales of LC and MS in Southeast Asia and Europe.

Comparable to the Japanese companies, revenues for most of the European firms in the top 30 experienced currency pressure when converted to US dollars. Accordingly, ZEISS dropped 2 spots to number 15 and Eppendorf slid 3 positions to number 27.

Overall, currency played a major role in revenue growth for the top 30 companies in 2015. On a reported basis, currency reduced sales growth by 6% for the 15 North American companies. In contrast, currency added roughly 5% to revenue growth for the 5 Asia Pacific companies when their sales were calculated in US dollars at constant exchange rates. Despite varied impacts, currency added 2% growth to the combined sales of the 10 European firms in the top 30 list when calculated using the same measure.