steve schwartz brooks life sciences sample managementmanagement+-+steve... · & inventory mgmt....

Market-leading sample management solutions

Steve SchwartzBrooks Life SciencesSample Management

© 2019 Brooks Automation, Inc. • Proprietary Information

AGENDA

Leading Player in Sample Management. Growth Set to Accelerate.

61

Market positioning

Growth strategies

Sample Management today

Business model and outlook


Sample Management at a Glance

* LTM results to June 2019 62

Revenue Breakdown (LTM)

OutsourcedStorage Services

Consumables & InstrumentsStore Systems

& Service

26%

44%

30%

Key Metrics

$205M

~$7B

>60

>1,500

58%

Revenue*

Served market

Countries

Customers

Recurring revenue

~800Global employees


Automation for

Sample Storage

Consumables

& InstrumentsBioStorage

Genomic

Analysis

Sample Tracking

& Inventory Mgmt.

Informatics

Leader in Differentiated, Integrated Products and Services

63

• Bio III Cryo Store (-196C)

• Bio Store (-80C)

• Sample Store (-20C)

• Clinical Bio Store (+4C)

• FluidX®

• 4titude®

• Biocision®

• REMP®

• IntelliXcap®

• BioStorage

(off-site and on-site)

• Cold-Chain Transport

and Logistics

• Integrated Storage

and Services

• FreezerPro®

• BioBankPro®

• PlatformOne®

• Genomic Analysis

and Lab Services

• Sample Prep and

DNA Extraction

• Sample Kits and

Logistics

30% 26%

44%


FY13 FY14 FY15 FY16 FY17 FY18 FY19

Systems & Service


Consumables & Instruments


Storage


Genomics

64

Underlying Business Segments are All Strong – Either Stable or Growing


Systems

& Service

C&I

Storage

Genomics

$43M

$63M $68M

$108M

$149M

$197M~$205M*

• Robust offerings

• All areas expanding over time

Portfolio is ResilientTotal Sample Management Revenue

© 2019 Brooks Automation, Inc. • Confidential and Proprietary Information * FY’19 - Management’s estimate

© 2019 Brooks Automation, Inc. • Proprietary Information 65

The Challenge in 2019 – Short-Term Deceleration of Organic Growth

• Lumpy top 4 customer revenues

• Market coverage concentration issues


$197M~$205M*

+14%Organic Growth

~7%Organic Growth

Major Reasons for

Deceleration

Total Sample Management Revenue

$43M

© 2019 Brooks Automation, Inc. • Proprietary Information * FY’19 - Management’s internal estimate



A C L O S E R L O O K

Short Term Growth DecelerationKey Reason: Variability in Top 4 Customers


Removing the Top 4Shows 1,500 Customers

Generating 80% of Revenueare Growing Steadily

The Top 4 Customers Account for 20% of

Revenues and are Lumpy

A Closer Look atOverall Growth Slowing

in 2019 Showing Top 4 Customers

FY13 FY14 FY15 FY16 FY17 FY18 FY19FY13 FY14 FY15 FY16 FY17 FY18 FY19

66

+14%Organic Growth

~7%OrganicGrowth

~15%OrganicGrowth

* FY’19 - Management’s internal estimate


We Remain Highly Confident in the Long-Term Growth of the Business

* Based on 3rd party Market study commissioned by the company 67

Growth in Sample StorageAddressable Market*

(Number of Samples)

Other

• Translational

Samples

• Pathology

• API

~3% Share of a $7BSample Storage Market*

CellLines

ClinicalResearchSamples

DiscoveryResearch

CompoundStorage

ClinicalTrials

1.8B

2.6B

2018 2022

+10%CAGR

Brooks will grow faster due to

• Automation

• Outsourcing


Market positioning

Growth strategies



AGENDA



Customer Workflow-Driven Business Model

69

Research / Clinical Research Sample Workflow

Transport Process Store Retrieve Informatics

End to end solutions to ensure sample integrity

Kit


CompanyKitting,

Logistics and Transport

Storageand Archival

Services

On PremiseLab Services

Clinical Trial Collection Mgmt& Coordination

Integrated Sample Mgmt

Software

Global Capabilities

Top 20Pharma

Life Sciences

Tools Competitor

Central Lab

Competitor

Diversified Catalog

Distributor Competitor

U N I Q U E LY P O S I T I O N E D :

THE Most Comprehensive, One-Stop Sample Management Customer Solution in the Industry

Complete End-to-End Solutions

70

✓ ✓ ✓ ✓ ✓ ✓✓

✓ ✓ ✓✓

✓ ✓ ✓

✓ ✓

Brooks’ business model provides clear competitive differentiation


Barriers

to Entry

World Class Sample Management Requires Unique Expertise – Creates Barriers to Entry

Specialty care

Disposal / verification

Global coordination

Cold chain logistics

FDA audit Trail

Lab services

Retrieval / archival

Tracking

71

Brooks leverages its global capabilities to maintain competitive advantage

High Standards of Cell Based Science


Our Expertise has Allowed Us to Win an Impressive Global Customer Base

1,500+ leading healthcare companies depend on Brooks

72

Healthcare / Clinical Academic / GovtPharma / Biotech


Market positioning

Growth strategies



AGENDA



Opportunities to Leverage Strengths in Pharma / Biotech and Expand Rapidly in Less Penetrated Spaces

74

Healthcare / Clinical Academic / GovtPharma / Biotech

Market Size Brooks Revenue

LEVERAGE PENETRATE / GROW PENETRATE / GROW

Market Size Brooks Revenue Market Size Brooks Revenue

$1.2B*

$3.9B*$1.7B*

$157M

$24M $24M

2019 2019 2019

✓

✓

✓

✓

✓

✓

* Based on 3rd party Market study commissioned by the company


Key Growth Strategies

75

Leverage strong position in Pharma / Biotech

Target and grow in less penetrated spaces

Capitalize on outsourcing and automation trends

1

2

3


G R O W T H S T R AT E G Y # 1

Leverage Strong Position in Pharma & Biotech

Brooks is the trusted source for Pharma / Biotech

76

Pharma

• Higher penetration, leveraging capital outside the company

• Solid, more mature growth rate

Biotech

• Lower current penetration, more targets, diverse needs

• Often no need to handle samples inside Biotech, but need to retrieve data and maintain sample database

• Long-term double-digit growth as many realize approvals and expansion

Pharma / Biotech Opportunities


G R O W T H S T R AT E G I E S # 2

Target and Grow in Less Penetrated Spaces

1,500+ leading healthcare companies depend on Brooks

77

Healthcare / Clinical

• Largest market, steady growth

• Less penetration, but strong proof points with Cleveland Clinic, Mt.Sinai, Sloan Kettering, Mayo Clinic, Karolinska

• Additional growth rate opportunity

Academic / Gov’t

• Low penetration, target rich in Academic

• Academics outsource when pressed

• Gov’t studies are opportunistic, more international than US based

• Brooks double digit growth rate opportunity driven by clinical

Healthcare / Clinical Academic / Govt Opportunities


G R O W T H S T R AT E G Y # 3

Outsourcing and Automation – High Growth Areas

78

Automation Opportunities

Outsourcing Opportunities

• Many sample collections are out-growing customers ability to manage

• ~25% of companies outsource sample storage – still a large untapped opportunity

• 2/3 of those who did not outsource indicate they will consider it

• Biological sample integrity favors automated collections

• Cell and gene therapy and IVF samples require automated storage to assure cell viability

• Large population and specific disease studies utilize automated storage


Market positioning

Growth strategies



AGENDA



High Recurring Revenues Recurring Revenues Growing Steadily

Building On an Attractive Business Model –Increasing Resilience with Recurring Revenue Base

8080

Recurring

58% Recurring RevenueFY14 FY15 FY16 FY17 FY18 FY19

$63M $68M

$108M

$149M

$205M*$197M

AutomatedSolutions

23%

Services / Informatics

57%

Consumables Instruments

20%

Recurring

Transactional

41% 58%

65%58%

57%58%

~

* FY’19 - Management’s estimate


Growth with Profit

$197

$280

2018 2022

$4

$42-50

2018 2022

Sample Management – Significant Operating Leverage Going Forward

81

Investment

• Localized sales and service infrastructure to support high growth in China

• Facility expansions to support increased samples under storage and management

Operating leverage

• Scalable OPEX structure

• Project management discipline

• Supply chain optimization

Significant leverage equation:~40-50% income per $1M revenue

Revenue($M)

9%CAGR

Operating Income*($M)

~90%CAGR

* Non-GAAP financial measure – See reconciliation tables


Returning to Double Digit Growth

$197 ~$205$220

$280

2018 2019 2020Target

2022 Target

Revenue ($M) Operating Margin*

2%~4%

~9%

15-18%

2018 2019 2020Target

2022Target

82

13%CAGR

7%CAGR

~15 pts

Moderating near-term expectations to single digit growth consistent with recent performance, confident in long term opportunity and actions



2022 Target Model - Sample Management

LifeSciences FY18 FY22

Growth / Change

Revenue $197M $280M 9% CAGR

Gross

Margin*38% 42-44% +4-6 pts

Operating

Margin*2% 15-18% +13-16 pts

• Cr

Strong market

growth

Synergy of Sample

Management and

GENEWIZ

Operating margin

expansion

• 10% growth in samples

globally with trends toward

outsourcing and automation

• Current structure affords

redeployment of

investment for growth

83

Drivers Target Model

• Value-added services and

cross-sell opportunities

Product and

Service breadth

• Most comprehensive, one-

stop sample management

solutions



• Market leader with broadest end-to-end sample solutions

• Building on strong platform with 80% of revenue growing steadily and high recurring base

• Addressing short-term challenges

• Executing plan to re-accelerate top line growth

I N S U M M A R Y

The Growth Trajectory Remains Strong:Returning to Double-Digit Growth

steve schwartz brooks life sciences sample managementmanagement+-+steve... · & inventory mgmt....

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