Endpoint: Lab Sales Index
Financials for the IBO Laboratory Sales Index have been updated from the February 15 issue to include all the companies. Fourth quarter 2014 Laboratory Sales Index sales grew 3.8%, 6.1% organically, to $7,287 million. Operating profit climbed 7.7% to $1,748 million, and operating margin advanced 220 basis points to 21.3% of sales. For 2014, Index revenues grew 4.8%, 5.4% organically, to $26,062 million. Operating profit expanded 8.5% to $5,705 million. Operating margin advanced 110 basis points to 19.6% of sales.
Based on Analytik Jena’s new calendar-year reporting period, fourth quarter 2014 sales for Analytical Instrumentation (AI) fell 5.3% to €13.0 million ($16.3 million = €0.80 = $1) (see page 12) to account for 45% of revenues. Excluding the acquired ICP-MS business (see IBO 8/15/14), organic sales fell roughly 30% due to weakness in Japan, Russia and the Middle East, as well as slower demand for higher-priced items and soft Chinese sales. AI gross profit improved 260 basis points to 56.3% of sales as a result of restructuring efforts at its Japanese subsidiary. Segment adjusted operating profit fell 82.1% to €0.2 million ($0.2 million) as a result of lower-than-expected sales in Thailand, France and India, where the company had invested additional resources to expand its direct sales force. Life Science (LS) revenue contracted 3.5% to €10.3 million ($12.9 million) to account for 36% of sales. Pricing pressure for Biometra thermal cyclers and discontinued sepsis-diagnostics products offset higher CyBio sales. As a result, gross margin slumped 560 basis points to 40.7%. Adjusted operating loss was €2.7 million ($3.4 million), compared to a profit of €0.3 million ($0.5 million).
Fourth quarter 2014 sales for Harvard Bioscience grew 9.0%, roughly 2.5% organically, to $30.4 million (see page 12). Acquisitions added roughly 8%–9% to revenue growth. Currency lowered sales by 2%. Demand was driven by the US and Europe, while China remained soft. Backlog climbed more than 41% to $7.2 million. Gross profit margin expanded 330 basis points to 46.7% of sales due to restructuring efforts. Adjusted operating profit nearly doubled to $4.1 million.
Full-year 2014 Harvard Bioscience revenues grew 3.3% to $108.7 million, but were roughly flat excluding acquisition and currency contributions of 2% and 1%, respectively. Academic markets accounted for roughly 70% of revenues. US sales slipped 0.1% to account for 59%. Sales in the UK and Rest of the World grew 7.1% and 10.7% to make up 23% and 19%, respectively. Gross margin expanded 300 basis points to 45.8% of sales. Adjusted operating profit climbed 33.4% to $11.1 million. For 2015, sales are expected to grow 5%–7% to $114–$116 million. Excluding 11%–12% growth from acquisitions and currency headwinds of 5%–6%, organic sales are projected to grow roughly 1%.
For the fourth quarter 2014, HORIBA’s Process & Environmental Instruments & Systems (P&E) revenue declined 3.1% to ¥4,666 million ($40.7 million = ¥114.59= $1) to make up 9% of sales. Excluding currency, segment sales declined in the upper single digits due to weak demand in Europe and a strong year-over-year comparison. Japanese sales fell to account for 47% of P&E revenue. P&E operating income fell 14.3% to ¥558 million ($4.9 million). Sales for HORIBA Scientific Instruments & Systems (SI) advanced 7.1% to ¥8,264 million ($76.8 million) to account for 16% of revenues. Excluding the acquisition of Photon Technology (see IBO 2/15/14) and currency, SI sales fell in the low single digits. SI operating profit grew 12.4% to ¥1,227 million ($10.7 million).
Full-year 2014 HORIBA P&E sales rose 11.9% to ¥16,465 million ($155.5 million = ¥105.89 = $1) to account for 11% of total sales. Excluding currency and acquisitions, P&E revenue grew in the mid-single digits, led by demand for stack gas analyzers and water-quality analyzers in Asia, as well as higher sales of portable gas analyzers in Europe. Japanese sales grew 3.4% to make up 51% of P&E revenue. Sales in other Asian markets and Europe jumped 45.6% and 14.6% to account for 20% and 14%, respectively. Sales in the Americas grew 5.5% to make up 14%, but declined organically. P&E operating profit rose 58.9% to ¥2,007 million ($19.0 million).
For 2014, HORIBA SI sales grew 11.8% to ¥22,913 million ($234.6 million) to account for 17% of sales, but were roughly flat organically. Increased spending from governments and universities in Europe primarily drove organic sales. Japanese sales fell 2.3% to account for 27% of SI sales. Including acquisitions and currency, sales in Europe, the Americas and Asia grew 24.5%, 16.7% and 12.6% to make up 28%, 24% and 21%, respectively. SI operating profit grew 28.6% to ¥1,206 million ($11.4 million). For 2015, P&E sales are expected to grow 15% to ¥18,500 million ($150 million), and SI sales are projected to rise 9% to ¥28,000 million ($227 million).
For the second half of 2014, Spectris’s Materials Analysis (MA) sales grew 1.1% to £198.1 million ($319.5 million = £0.62 = $1) to account for 31% of revenues. Organic sales declined less than 1% excluding acquisition growth of 6% and currency headwinds of 4%. Academic revenue expanded because of strong demand in China for environmental applications and higher UK sales. Pharmaceutical sales maintained good growth, and semiconductor sales improved as a result of new products and the acquisition of a South Korean distributor. MA adjusted operating profit fell 6.1% to £40.1 million ($64.7 million).
Full-year 2014 Spectris MA sales fell 3.8%, roughly 3.0% organically, to £348.8 million ($571.8 million = £0.61 = $1) to account for 30% of revenues. Acquisitions added 4% to sales growth, but were offset by currency headwinds of 5%. Weak demand from the metals, minerals and mining industries, especially in Asia Pacific, and flat academic sales slowed growth. These two end-markets each accounted for roughly 30% of MA sales. Accounting for 37% of MA sales, pharmaceutical and fine chemicals revenue was led by demand from biopharmaceutical and generic drug customers, primarily in North America. Aftermarket sales grew roughly 7% to make up 31% of MA revenue. MA US sales grew 6.4%, but fell 3.6% in the Rest of North America to make up 19% and 3% of sales, respectively. European sales declined 5.7% to account for 30%, with a decline in Germany. Asia Pacific sales fell 7.7% to account for 37%, including a 7.2% decline in China. Rest of the World sales were roughly flat to make up 10%. MA adjusted operating profit contracted 15.8% to £53.3 million ($87.4 million).