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Bruker Corporation (NASDAQ: BRKR)
Q1 2014 Earnings Presentation
Frank Laukien, President & CEO
Charles Wagner, EVP & CFO
Joshua Young, VP, Investor RelationsMay 7, 2014
Innovation with Integrity
Any statements contained in this presentation that do not describe historical facts may constitute
forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.
Any forward-looking statements contained herein are based on current expectations, but are subject to
risks and uncertainties that could cause actual results to differ materially from those projected, including,
but not limited to, risks and uncertainties relating to adverse changes in conditions in the global economy
and volatility in the capital markets, the integration of businesses we have acquired or may acquire in the
future, changing technologies, product development and market acceptance of our products, the cost and
pricing of our products, manufacturing, competition, dependence on collaborative partners and key
suppliers, capital spending and government funding policies, changes in governmental regulations,
realization of anticipated benefits from economic stimulus programs, intellectual property rights,
litigation, and exposure to foreign currency fluctuations and other risk factors discussed from time to time
in our filings with the Securities and Exchange Commission. These and other factors are identified and
described in more detail in our filings with the SEC, including, without limitation, our annual report on
Form 10-K for the year ended December 31, 2013. We will also be referencing non-GAAP financial
measures in this presentation. A reconciliation of non-GAAP to GAAP results is available in our earnings
press release and in this presentation.
Bruker Corporation
Safe Harbor & Reg. G Statement
ยฉ Bruker Corporation 2
Q1 2014 Business Update
ยฉ Bruker Corporation 3
$0.08
$0.11
Q1 2013
Q1 2014
Q1 Financials
Revenues [$ m]
Non-GAAP EPS
Solid start to the year with operating margin
expansion and growth from all three BSI Groups
+8%
+38%
ยฉ Bruker Corporation 4
393
424
Q1 13 Q1 14
Q1 2014 Performance
๏‚ง Organic revenue growth of ~7% y-o-y
1.Double-digit growth in CALID, driven by
Optics and Life Science divisions; easy
comparison to weak Q1 2013
2.Mid-single digit revenue growth in BioSpin
and BMAT Groups
3.Continued revenue growth in Europe
๏‚ง Non-GAAP Operating margin expands by 160
basis points; operating expense control more
than offsets currency impact on gross margins
๏‚ง 38% non-GAAP EPS growth in Q1 2014
compared to Q1 2013
๏‚ง Free cash flow improves by $42M, totaling $9M
in Q1 2014 compared to ($33M) in Q1 2013
Bruker BioSpin Group
๏‚ง Mid-single digit revenue growth, with strongest growth in Asia
Pacific, continued growth in Europe
๏‚ง Quarter-to-quarter fluctuations in product/geographic mix
๏‚ง Pre-Clinical Imaging Division posts a strong quarter driven by MRI
revenue growth; improving molecular imaging trends
๏‚ง Outsourcing programs in Germany and France on track
Bruker CALID Group
๏‚ง Double-digit growth in revenues, compared to weak Q1 2013
๏‚ง Optics and Life Science & Clinical (LSC) Divisions drive growth
๏‚ง Optics: new products Tango and Lumos well-accepted
๏‚ง LSC: MALDI Biotyper good momentum, Q-TOF products
perform well; divested Leipzig machine shop in Q1 2014
๏‚ง CAM Division posts weak performance; Sales management
combined with LSC in Q1 2014; review of cost structure underway
๏‚ง Detection Division revenues dip due to export license delays
5ยฉ Bruker Corporation
GROUP OVERVIEW:
Q1 2014 Performance
Bruker MAT Group
๏‚ง BMAT Group delivers mid-single digit revenue growth, compared
to a weak Q1 2013
๏‚ง General industrial markets stabilize, but no recovery yet in
microelectronics markets
๏‚ง Research and academic markets remain healthy
๏‚ง BAXS, BNS, and BNA Divisions all grew, compared to Q1 2013;
BNS benefited from fluorescence microscopy acquisition
๏‚ง Profitability improved compared to Q1 2013, as operating
expenses were reduced by secondโ€“half 2013 restructuring actions
BEST Segment
๏‚ง Revenue growth of 12% and non-GAAP operating margin of 8.0%
๏‚ง Growth benefits from revenue timing, and margin benefits from
2013 cost initiatives
๏‚ง Contract renewals with key MRI customers for superconducting
wire
GROUP OVERVIEW:
Q1 2014 Performance
6ยฉ Bruker Corporation
Q1 2014 Financial Update
ยฉ Bruker Corporation 7
NON-GAAP FINANCIAL PERFORMANCE:
Q1 2014 Overview
[$ m, except EPS] Q1 2014 Q1 2013 ฮ”
Revenues 423.7 393.4 8%
Operating Income 32.1 23.6 36%
Margin (%) 7.6% 6.0%
EPS 0.11 0.08 38%
Free Cash Flow 9.3 -32.8 42.1M
๏‚ง Revenue growth in all BSI
Groups and at BEST
๏‚ง Operating margin
expansion, driven by
control of operating
expenses
๏‚ง EPS growth of 38%
๏‚ง Free cash flow of $9 million
8ยฉ Bruker Corporation
COMMENTS
[$ m] Mar 31,2014 Dec 31,2013 ฮ”
Net Cash 99.2 83.7 19%
Working capital (WC)* 799.1 822.6 -3%
WC-to-revenue ratio 0.43 0.45 -0.02
* WC = (Accounts Receivable +
Inventory โ€“ Accounts Payable)
Q1 2013 Organic Currency Acquisition Q1 2014
393.4
423.7
Q1 2014 revenue bridge
๏‚ง Revenue growth driven
by Europe and Asia
๏‚ง Minimal net currency
impact, with stronger
Euro offset by weaker
Yen and other currencies
๏‚ง Benefit from BMAT
acquisition of Prairie
Technologiesโ€™
fluorescence microscopy
products, completed in
September 2013
9ยฉ Bruker Corporation
Q1 2014 DRIVERS
Q1 2014 Revenue bridge [$ m]
25.9 0.0 4.4
Organic Currency
Acquisitions &
Divestitures Total
6.6% 0.0% 1.1% 7.7%
Q1 2014 Revenue Growth for Bruker Corp.
Q1 2014 Non-GAAP Results
๏‚ง Gross margin decline of
140 bps primarily due to
currency impact
๏‚ง Y-o-y impact of Yen
devaluation lessens in
Q2 2014 and beyond
๏‚ง Expense control and
2013 restructuring drive
300 bps decline in
operating expense
๏‚ง Tax rate of 25.5% is
below full-year 2014
expectation, due to
timing of discrete items
10ยฉ Bruker Corporation
COMMENTS[$ m] Q1 2014 Q1 2013 ฮ”
Total Revenues 423.7 393.4 8%
Gross Profit 187.2 179.5 4%
Margin (% of sales) 44.2% 45.6%
SG&A -109.1 -106.5 2%
(% of revenues) 25.7% 27.1%
R&D -46.0 -49.4 -7%
(% of revenues) 10.9% 12.6%
Operating Income 32.1 23.6 36%
(% of revenues) 7.6% 6.0%
Tax Rate 25.5% 27.1% -160 bps
Net Income* 18.7 13.4 40%
EPS $0.11 $0.08 38%
Shares Outstanding 169.4 168.1 NM
* Attributable to BrukerSum of items may not total due to rounding
Q1 2014 Reconciliation of GAAP and
Non-GAAP Results
[$ m] Q1 2014 Q1 2013
GAAP Operating Income 20.6 12.2
Restructuring Costs 2.4 3.2
Acquisition Related Costs 1.1 0.6
Purchased Intangible Amortization 5.2 5.1
Other Costs 2.8 2.5
TOTAL 11.5 11.4
Non-GAAP Operating Income 32.1 23.6
Non-GAAP Net Interest Income (Expense) & Other -5.2 -4.8
Non GAAP Profit Before Tax 26.9 18.8
Taxes -6.9 -5.1
Non-GAAP Tax Rate 25.5% 27.1%
Minority Interest -1.3 -0.3
Non-GAAP Net Income* 18.7 13.4
Non-GAAP EPS $0.11 $0.08
11ยฉ Bruker Corporation
* Attributable to BrukerSum of items may not total due to rounding
Balance sheet
[$ m] Mar 31, 2014 Dec 31, 2013 ฮ”
Cash & Cash Equivalents 454.0 438.7 3%
Financial Debt 354.8 355.0 NM
Net Cash 99.2 83.7 19%
12ยฉ Bruker Corporation
[$ m] Mar 31, 2014 Dec 31, 2013 ฮ”
Total Assets 2,027.7 1,988.3 2%
Working Capital 799.1 822.6 -3%
Intangible & Other Assets 254.3 256.9 -1%
Q1 2014 Cash Flow Statement
๏‚ง Inventory DIO improved
by 30 days vs. Q1 2013
โ€“ Still room for
improvement
๏‚ง Cash flow benefit from
timing of payments
๏‚ง Capex now at a more
normalized level
13ยฉ Bruker Corporation
COMMENTS[$ m] Q1 2014 Q1 2013 ฮ”
Net Income 10.0 5.7 4.3
Depreciation & amortization 15.2 15.2 0.0
Changes in working capital* 17.0 -20.5 37.5
Other -23.7 -18.6 -5.1
Operating cash flow 18.5 -18.2 36.7
Capital expenditures -9.2 -14.6 5.4
Free cash flow 9.3 -32.8 42.1
2014 Guidance
ยฉ Bruker Corporation 14
Bruker FY 2014 Guidance
Revenue Growth (reported) 3% to 4%
Restructuring Costs ~$15-$20M
Non-GAAP Tax Rate ~29%-30%
Non-GAAP EPS Growth 10% to 14%
15ยฉ Bruker Corporation
FY 2014 Guidance
๏‚ง No change to full-year
guidance
๏‚ง Revenue growth of all
three BSI Groups similar to
total company growth
๏‚ง Less than $50M of capex
๏‚ง Q2-14 financial
performance expected to
be similar to relatively
strong Q2-13
๏‚ง Current currency
assumptions:
Yen/USD: 103
EUR/USD: 1.38
ASSUMPTIONS
Appendix
ยฉ Bruker Corporation 16
Q1 2014 GAAP Results
[$ m] Q1 2014 Q1 2013 ฮ”
Total Revenues 423.7 393.4 8%
Gross Profit 179.7 174.5 3%
Margin (% of sales) 42.4% 44.4%
SG&A -109.5 -106.8 3%
(% of revenues) 25.8% 27.1%
R&D -46.0 -49.4 -7%
(% of revenues) 10.9% 12.6%
Operating Income 20.6 12.2 69%
(% of revenues) 4.9% 3.1%
Net Income* 8.7 5.4 61%
EPS $0.05 $0.03 67%
Shares Outstanding 169.4 168.1 NM
17ยฉ Bruker Corporation
* Attributable to BrukerSum of items may not total due to rounding
Q1 SEGMENT RESULTS:
BSI and BEST GAAP Performance
[$ m] Q1 2014 Q1 2013 ฮ”
REVENUE
Scientific Instruments (BSI) 393.9 366.3 8%
Organic Revenue Growth (%) 6.6% -1.0%
Energy & Supercon Technologies (BEST) 34.8 31.2 12%
Organic Revenue Growth (%) 7.4% 3.4%
Corporate Eliminations & Other -5.0 -4.1
Total Revenue 423.7 393.4 8%
OPERATING INCOME
Scientific Instruments (BSI) 16.6 10.6 57%
Energy & Supercon Technologies (BEST) 2.8 0.9 211%
Corporate Eliminations and Other 1.2 0.7
Total Operating Income 20.6 12.2 69%
18ยฉ Bruker Corporation
Sum of items may not total due to rounding

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Bruker q1 2014 earnings presentation final

  • 1. Bruker Corporation (NASDAQ: BRKR) Q1 2014 Earnings Presentation Frank Laukien, President & CEO Charles Wagner, EVP & CFO Joshua Young, VP, Investor RelationsMay 7, 2014 Innovation with Integrity
  • 2. Any statements contained in this presentation that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on current expectations, but are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including, but not limited to, risks and uncertainties relating to adverse changes in conditions in the global economy and volatility in the capital markets, the integration of businesses we have acquired or may acquire in the future, changing technologies, product development and market acceptance of our products, the cost and pricing of our products, manufacturing, competition, dependence on collaborative partners and key suppliers, capital spending and government funding policies, changes in governmental regulations, realization of anticipated benefits from economic stimulus programs, intellectual property rights, litigation, and exposure to foreign currency fluctuations and other risk factors discussed from time to time in our filings with the Securities and Exchange Commission. These and other factors are identified and described in more detail in our filings with the SEC, including, without limitation, our annual report on Form 10-K for the year ended December 31, 2013. We will also be referencing non-GAAP financial measures in this presentation. A reconciliation of non-GAAP to GAAP results is available in our earnings press release and in this presentation. Bruker Corporation Safe Harbor & Reg. G Statement ยฉ Bruker Corporation 2
  • 3. Q1 2014 Business Update ยฉ Bruker Corporation 3
  • 4. $0.08 $0.11 Q1 2013 Q1 2014 Q1 Financials Revenues [$ m] Non-GAAP EPS Solid start to the year with operating margin expansion and growth from all three BSI Groups +8% +38% ยฉ Bruker Corporation 4 393 424 Q1 13 Q1 14 Q1 2014 Performance ๏‚ง Organic revenue growth of ~7% y-o-y 1.Double-digit growth in CALID, driven by Optics and Life Science divisions; easy comparison to weak Q1 2013 2.Mid-single digit revenue growth in BioSpin and BMAT Groups 3.Continued revenue growth in Europe ๏‚ง Non-GAAP Operating margin expands by 160 basis points; operating expense control more than offsets currency impact on gross margins ๏‚ง 38% non-GAAP EPS growth in Q1 2014 compared to Q1 2013 ๏‚ง Free cash flow improves by $42M, totaling $9M in Q1 2014 compared to ($33M) in Q1 2013
  • 5. Bruker BioSpin Group ๏‚ง Mid-single digit revenue growth, with strongest growth in Asia Pacific, continued growth in Europe ๏‚ง Quarter-to-quarter fluctuations in product/geographic mix ๏‚ง Pre-Clinical Imaging Division posts a strong quarter driven by MRI revenue growth; improving molecular imaging trends ๏‚ง Outsourcing programs in Germany and France on track Bruker CALID Group ๏‚ง Double-digit growth in revenues, compared to weak Q1 2013 ๏‚ง Optics and Life Science & Clinical (LSC) Divisions drive growth ๏‚ง Optics: new products Tango and Lumos well-accepted ๏‚ง LSC: MALDI Biotyper good momentum, Q-TOF products perform well; divested Leipzig machine shop in Q1 2014 ๏‚ง CAM Division posts weak performance; Sales management combined with LSC in Q1 2014; review of cost structure underway ๏‚ง Detection Division revenues dip due to export license delays 5ยฉ Bruker Corporation GROUP OVERVIEW: Q1 2014 Performance
  • 6. Bruker MAT Group ๏‚ง BMAT Group delivers mid-single digit revenue growth, compared to a weak Q1 2013 ๏‚ง General industrial markets stabilize, but no recovery yet in microelectronics markets ๏‚ง Research and academic markets remain healthy ๏‚ง BAXS, BNS, and BNA Divisions all grew, compared to Q1 2013; BNS benefited from fluorescence microscopy acquisition ๏‚ง Profitability improved compared to Q1 2013, as operating expenses were reduced by secondโ€“half 2013 restructuring actions BEST Segment ๏‚ง Revenue growth of 12% and non-GAAP operating margin of 8.0% ๏‚ง Growth benefits from revenue timing, and margin benefits from 2013 cost initiatives ๏‚ง Contract renewals with key MRI customers for superconducting wire GROUP OVERVIEW: Q1 2014 Performance 6ยฉ Bruker Corporation
  • 7. Q1 2014 Financial Update ยฉ Bruker Corporation 7
  • 8. NON-GAAP FINANCIAL PERFORMANCE: Q1 2014 Overview [$ m, except EPS] Q1 2014 Q1 2013 ฮ” Revenues 423.7 393.4 8% Operating Income 32.1 23.6 36% Margin (%) 7.6% 6.0% EPS 0.11 0.08 38% Free Cash Flow 9.3 -32.8 42.1M ๏‚ง Revenue growth in all BSI Groups and at BEST ๏‚ง Operating margin expansion, driven by control of operating expenses ๏‚ง EPS growth of 38% ๏‚ง Free cash flow of $9 million 8ยฉ Bruker Corporation COMMENTS [$ m] Mar 31,2014 Dec 31,2013 ฮ” Net Cash 99.2 83.7 19% Working capital (WC)* 799.1 822.6 -3% WC-to-revenue ratio 0.43 0.45 -0.02 * WC = (Accounts Receivable + Inventory โ€“ Accounts Payable)
  • 9. Q1 2013 Organic Currency Acquisition Q1 2014 393.4 423.7 Q1 2014 revenue bridge ๏‚ง Revenue growth driven by Europe and Asia ๏‚ง Minimal net currency impact, with stronger Euro offset by weaker Yen and other currencies ๏‚ง Benefit from BMAT acquisition of Prairie Technologiesโ€™ fluorescence microscopy products, completed in September 2013 9ยฉ Bruker Corporation Q1 2014 DRIVERS Q1 2014 Revenue bridge [$ m] 25.9 0.0 4.4 Organic Currency Acquisitions & Divestitures Total 6.6% 0.0% 1.1% 7.7% Q1 2014 Revenue Growth for Bruker Corp.
  • 10. Q1 2014 Non-GAAP Results ๏‚ง Gross margin decline of 140 bps primarily due to currency impact ๏‚ง Y-o-y impact of Yen devaluation lessens in Q2 2014 and beyond ๏‚ง Expense control and 2013 restructuring drive 300 bps decline in operating expense ๏‚ง Tax rate of 25.5% is below full-year 2014 expectation, due to timing of discrete items 10ยฉ Bruker Corporation COMMENTS[$ m] Q1 2014 Q1 2013 ฮ” Total Revenues 423.7 393.4 8% Gross Profit 187.2 179.5 4% Margin (% of sales) 44.2% 45.6% SG&A -109.1 -106.5 2% (% of revenues) 25.7% 27.1% R&D -46.0 -49.4 -7% (% of revenues) 10.9% 12.6% Operating Income 32.1 23.6 36% (% of revenues) 7.6% 6.0% Tax Rate 25.5% 27.1% -160 bps Net Income* 18.7 13.4 40% EPS $0.11 $0.08 38% Shares Outstanding 169.4 168.1 NM * Attributable to BrukerSum of items may not total due to rounding
  • 11. Q1 2014 Reconciliation of GAAP and Non-GAAP Results [$ m] Q1 2014 Q1 2013 GAAP Operating Income 20.6 12.2 Restructuring Costs 2.4 3.2 Acquisition Related Costs 1.1 0.6 Purchased Intangible Amortization 5.2 5.1 Other Costs 2.8 2.5 TOTAL 11.5 11.4 Non-GAAP Operating Income 32.1 23.6 Non-GAAP Net Interest Income (Expense) & Other -5.2 -4.8 Non GAAP Profit Before Tax 26.9 18.8 Taxes -6.9 -5.1 Non-GAAP Tax Rate 25.5% 27.1% Minority Interest -1.3 -0.3 Non-GAAP Net Income* 18.7 13.4 Non-GAAP EPS $0.11 $0.08 11ยฉ Bruker Corporation * Attributable to BrukerSum of items may not total due to rounding
  • 12. Balance sheet [$ m] Mar 31, 2014 Dec 31, 2013 ฮ” Cash & Cash Equivalents 454.0 438.7 3% Financial Debt 354.8 355.0 NM Net Cash 99.2 83.7 19% 12ยฉ Bruker Corporation [$ m] Mar 31, 2014 Dec 31, 2013 ฮ” Total Assets 2,027.7 1,988.3 2% Working Capital 799.1 822.6 -3% Intangible & Other Assets 254.3 256.9 -1%
  • 13. Q1 2014 Cash Flow Statement ๏‚ง Inventory DIO improved by 30 days vs. Q1 2013 โ€“ Still room for improvement ๏‚ง Cash flow benefit from timing of payments ๏‚ง Capex now at a more normalized level 13ยฉ Bruker Corporation COMMENTS[$ m] Q1 2014 Q1 2013 ฮ” Net Income 10.0 5.7 4.3 Depreciation & amortization 15.2 15.2 0.0 Changes in working capital* 17.0 -20.5 37.5 Other -23.7 -18.6 -5.1 Operating cash flow 18.5 -18.2 36.7 Capital expenditures -9.2 -14.6 5.4 Free cash flow 9.3 -32.8 42.1
  • 14. 2014 Guidance ยฉ Bruker Corporation 14
  • 15. Bruker FY 2014 Guidance Revenue Growth (reported) 3% to 4% Restructuring Costs ~$15-$20M Non-GAAP Tax Rate ~29%-30% Non-GAAP EPS Growth 10% to 14% 15ยฉ Bruker Corporation FY 2014 Guidance ๏‚ง No change to full-year guidance ๏‚ง Revenue growth of all three BSI Groups similar to total company growth ๏‚ง Less than $50M of capex ๏‚ง Q2-14 financial performance expected to be similar to relatively strong Q2-13 ๏‚ง Current currency assumptions: Yen/USD: 103 EUR/USD: 1.38 ASSUMPTIONS
  • 17. Q1 2014 GAAP Results [$ m] Q1 2014 Q1 2013 ฮ” Total Revenues 423.7 393.4 8% Gross Profit 179.7 174.5 3% Margin (% of sales) 42.4% 44.4% SG&A -109.5 -106.8 3% (% of revenues) 25.8% 27.1% R&D -46.0 -49.4 -7% (% of revenues) 10.9% 12.6% Operating Income 20.6 12.2 69% (% of revenues) 4.9% 3.1% Net Income* 8.7 5.4 61% EPS $0.05 $0.03 67% Shares Outstanding 169.4 168.1 NM 17ยฉ Bruker Corporation * Attributable to BrukerSum of items may not total due to rounding
  • 18. Q1 SEGMENT RESULTS: BSI and BEST GAAP Performance [$ m] Q1 2014 Q1 2013 ฮ” REVENUE Scientific Instruments (BSI) 393.9 366.3 8% Organic Revenue Growth (%) 6.6% -1.0% Energy & Supercon Technologies (BEST) 34.8 31.2 12% Organic Revenue Growth (%) 7.4% 3.4% Corporate Eliminations & Other -5.0 -4.1 Total Revenue 423.7 393.4 8% OPERATING INCOME Scientific Instruments (BSI) 16.6 10.6 57% Energy & Supercon Technologies (BEST) 2.8 0.9 211% Corporate Eliminations and Other 1.2 0.7 Total Operating Income 20.6 12.2 69% 18ยฉ Bruker Corporation Sum of items may not total due to rounding