Brooks Automation Inc. (BRKS) Barclays Capital Global Technology Conference Call December 8, 2011 02:30 pm ET Executives Martin Headley - EVP & CFO Analysts Presentation Martin Headley
Going forward on a full quarter basis it will double digits, 10% to 12% of our business. And the Brooks Product Solutions Business, that is the technology equipment solutions that we bring was 76% of our business. Within that just over half of the business saw a 47% of our total revenues in the quarter with the semiconductor frontend, 18% to Industrial Markets and 11% to other adjacent markets such as LED, MEMS, OLED, flat panel display, solar and analystical instrumentation.It is our intent to further diversify this picture and grow elements of our business outside semiconductor frontend in the course of next two years through both organic growth and through selective acquisitions particularly in the Life Science Systems area. So the exiting in a couple of years time we anticipate a picture that would see our Life Sciences Business be upto about 20% or more of our business. The rest of the components except semi frontend being somewhat similar to where they are because of growth drivers and semi frontend products representing about 35% of our business. That diversification also reduces some of the customer concentration that Brooks has historically had. If you look to September of 2010 we have three greater than 10% customers, Applied Materials, Varian Semiconductor and Lam Research. And together those represented 46% of our business. If you go fast forward now 12 months to the September quarter of 2011, we had no greater than 10% customers and those three customers that represented 46% of our business, 12 months prior were 19% of our business. We think that that is a much healthier state of play. So what are our sources of growth? Well, we’re going to continue to expand share in semiconductor wafer equipment markets for automation, instrumentation and vacuum solutions. And we intend doing so by technology leadership. We’re investing significantly in R&D in our Brooks Product Solutions Business for both wafer frontend and adjacent markets.
Our systems capabilities enable particularly smaller OEMs to optimize their time to market with tools by relying on our backbones and automation systems that represent the core tool architecture on which they then focus their process technologies. And our global support capabilities are greatly favored by the smaller OEMs who can rely on those to provide global support.Continued expansion into adjacent markets and examples here are although the LED market could probably best be described as somewhat moribund at the moment, it will be a growth driver in the long term, driven by general illumination. And our solutions are increasing the content that we have on MOCVD tools which represent about 50% of the capital spend put in to an LED fab. Growth in MEMS capabilities, that’s been driven by mobile computing and telecommunications and automotive applications will continue apace. Backend semiconductor applications become a new market, traditionally or historically there has been no wafer movement in the backend of semiconductor in the test and packaging areas. Those have all been [pick] type robotics. Now with through silicon via wafer level handling we believe that within a couple of years, let’s say $50 million to $70 million market for wafer automation into backend markets. And we are already very well positioned with some of the leading players there to take a significant share of that market. And then looking forward there are areas of nano manufacturing utilizing things such as carbon nanofiber substrate. We already have developed the capabilities to provide automated movements of those kinds of substrates. And so we believe that we are in an excellent position. And then finally we will build our new Brooks Life Science Systems vertical. That business is a $48 million business with projecting growth of at least 20% per annum. When we are already the leader in this space by virtue of our acquisitions. Our initial target in Life Sciences is automated sample management and this is our target because the core competencies are exactly the same competencies where we have developed extensive expertise and specialty within Brooks. The characteristics of automation in a controlled environment, controlled cold environment in creating that cold environment and the abilities to then track those samples which we have through our RFID capabilities. Read the rest of this transcript for free on seekingalpha.com