The Top 30 Companies of 2014

With the completed acquisition of Life Technologies (see IBO 2/15/14) in 2014, Thermo Fisher Scientific further solidified its number one position among IBO’s list of the top 30 analytical and life science instrument, aftermarket and lab product companies. 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 1/15/15). Thermo’s 2014 sales grew 55% to $6.7 billion to make up roughly 14% of industry sales (see IBO 1/15/15), up from 9% prior to the acquisition. The firm also reported solid organic growth due to demand for chromatography and MS systems.

Not to be outdone in organic growth, Illumina jumped four spots to number five, as it significantly outperformed the market for the second consecutive year. The company expanded its dominance in the sequencing market through new product introductions, and benefited from strong demand for services and growing opportunities in commercial, clinical and oncology markets. Illumina’s 2014 sales jumped roughly 30% organically to $1.7 billion.

Other notable changes in the top 30 include Becton, Dickinson, which advanced two spots to number 12 as a result of strong demand for high-end flow cytometers in Asia and the US as well as reagent sales. Full-year organic sales grew 5.8%. Nikon also leaped two spots, moving up to number 21. Nikon’s sales grew double digits in local currency, led by strong microscope sales to government markets in Japan and the US.

VWR entered the top 30 list for the first time at number 29 as a result of robust sales of private label products. After a three-year absence, Affymetrix returned to the top 30, at number 30, replacing HORIBA, which was negatively impacted by the conversion of sales into US dollars. Affymetrix recorded strong sales of cytogenetic and genotyping products as well as flow reagents. FEI and Sartorius each moved up three spots due to recalculations. Other changes in the 2014 rankings compared to 2013 (see IBO 4/15/14) are primarily attributed to the acquisition of Life, currency and IBO’s recalculations.

Overall, 2014 was a resilient year for the top 30, as demand from pharmaceutical and biopharmaceutical markets rallied in the second half of the year, especially in the US and Europe. By product category, aside from sequencing technology, demand for MS, surface science and molecular spectroscopy products grew at rates faster than the total industry’s growth (see IBO 1/15/15).

As reported in US dollars, total 2014 organic sales for the top 30 grew roughly 4.8% to $35.5 billion to account for 72% of total industry sales (see IBO 1/15/15). Excluding Illumina, top 30 organic sales grew 3.6%. Sales growth for non-US companies is calculated based on 2014 constant exchange rates to denote growth as reported in local currencies.

Due in part to acquisitions, share gains and robust financial results for Illumina, industry sales continued to be weighted toward the largest vendors in 2014. The top three companies each recorded more than $3 billion in revenues to represent roughly a quarter of the industry total. Organic sales for the top three grew roughly 4.0%, slightly higher than the average sales growth for the top 30 excluding Illumina. As the largest supplier, Thermo 2014 sales were nearly double those of number two, Agilent Technologies’.

With shares of roughly 7% and 6% of the analytical and life science instrument, aftermarket and lab product market in 2014, Agilent and Danaher retained their respective spots at numbers two and three. Agilent’s 2014 sales grew roughly 3.6%, led by demand for LC, LC/MS and spectroscopy products from pharmaceutical and biotechnology customers as well demand for sample preparation products for sequencing. Danaher recorded roughly 4.0% organic growth for revenues, led by sales of LC/MS systems and water quality–testing products.

Seven other top 30 companies recorded sales of more than a $1 billion in 2014, including Waters. Waters 2014 sales grew 4.5%, or 6.1% organically. Growth was driven by new MS systems and service. The company also continued to expand its reach in applied markets. Based on current growth projections and planned acquisitions, Illumina, Merck KGaA and Waters should all top $2 billion in sales in 2015.

Besides Illumina and Waters, sales growth for several other companies surpassed the top 30’s 2014 revenue growth. Mettler-Toledo recorded 2014 organic sales growth of 6.6%, driven by demand for new products and increased pricing. Shimadzu’s 2014 sales expanded roughly 5.5% in local currency due to chromatography and MS revenue growth in the US. ZEISS organic sales grew over 6.0%. In contrast to Nikon, ZEISS experienced microscopy growth primarily in industrial markets, especially in developing regions, but lower government spending in the US and China.

Oxford Instruments expanded sales by double digits in 2014, but this was due to the acquisition of Andor Technologies (see IBO 11/15/13). The company’s organic sales declined for the year as a result of weak demand from academic and government markets, and slower industrial sales. Spectris and Bruker were the only two other companies to record declines in organic sales in 2014. Bruker was negatively impacted by weak atomic spectroscopy sales, lower demand for high-field NMR products and soft sales in Japan. Spectris reported weak industrial sales in Asia and flat academic revenue.

Although the strong US dollar negatively impacted sales for the five Japanese firms when converted into US dollars, growth figures are based on constant exchange rates. Total sales for the five companies climbed roughly 8.5%, or 5.2% organically. For the 10 European firms, total counted sales declined roughly 0.3% but grew 1.5% organically. For the 15 US companies, total sales grew roughly 15.7%, 4.8% organically, to account for nearly 70% of the top 30’s sales.

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