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Bruker Corporation (NASDAQ: BRKR)
Q1 2016 Earnings Presentation
Frank Laukien, President & CEO
Anthony Mattacchione, SVP & CFO
Joshua Young, VP, IR & Corporate Development May 4, 2016
Innovation with Integrity
BRUKER CORPORATION
Safe Harbor & Reg. G Statement
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, our ability to successfully implement restructuring initiatives, 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, 2015 and subsequently filed Quarterly reports on Form 10-Q. 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.
2
Business Update
Q1 2016
3
Q1-2016 Performance
Revenue growth of $22M, or +6.2% y-o-y
− FX lowers revenue by -0.9% y-o-y
− Jordan Valley acquisition adds +1.5% y-o-y
Organic revenue growth of +5.6% y-o-y
− North America and China strongest performing
regions
Non-GAAP operating margin expands by +250 basis
points y-o-y to 12.6%
GAAP EPS grows to $0.14, from $0.04 in Q1-15
Non-GAAP EPS grows by +50% y-o-y
Q1 Financials
4
Revenues [$ m]
353 375
Q1-15 Q1-16
Non-GAAP EPS
Momentum continues with good organic revenue
growth and margin expansion in Q1-16
+6%
+50%
$0.14
$0.21
Q1-15
Q1-16
Bruker BIOSPIN Group
Strong revenue growth for BioSpin Group due to weak Q1-15
comparison and high order growth in 2015
BioSpin NMR products benefit from volume and price increases, as
well as from acceptance of first shielded Aeon™ 1 GHz NMR
Steady growth in applied markets and improvement in service and
after-market revenues as a result of new LabScape service offering
2015 restructuring is positively affecting operating performance
CALID Group delivers solid organic revenue gowth
Optics delivers strong growth driven by near infrared and remote
sensing products
Daltonics delivers high-single digit organic growth due to continued
growth of MALDI Biotyper and higher service revenue
Daltonics focused on acceleration of orders for new products
Detection performance driven by large legacy order with a low margin
GROUP OVERVIEW:
Q1 2016 Performance
5
CALID Group
Bruker CALID Group
Bruker NANO Group
Weak NANO Group revenue performance primarily due to soft
industrial markets: petroleum, mining, metals and cement
AXS reports sluggish start to the year with weakness in Europe and
lower funding for single-crystal products
Nano Surfaces continues to see weak demand in all markets
Jordan Valley semiconductor metrology tools with slow start in Q1-16,
but improving orders and backlog
BEST Segment
Flat revenues as a result of phase out of ROSATOM and DESY projects
Good revenue growth for superconducting wire as a result of strong
backlog and long-term contracts, but margins under pressure
High-temperature superconducting (HTS) tapes make technical and
quality progress; commercial revenue expected in 2017
GROUP OVERVIEW:
Q1 2016 Performance
6
Innovation with Integrity
ENC 2016 ANNOUNCEMENT:
World's first shielded Aeon 1 GHz System
installed
Active shielding reduces space requirements by > one order of magnitude
Aeon 1 GHz magnets leverage advanced BEST superconductors
Active refrigeration eliminates liquid nitrogen, reduces liquid helium boil-off essentially to zero
GHz magnet technology, new NMR probes and methods enable novel studies of IDPs, larger
protein structures and of complete membrane proteins
7
Aeon 1 GHz at Research Center for Bio-Macromolecules at University of Bayreuth
Innovation with Integrity
ENC & ECCMID CONFERENCE ANNOUNCEMENTS IN APRIL 2016:
NMR expansion into applied markets;
New workflows & consumables for MALDI Biotyper
8
New Honey Profiling
module in NMR
FoodSceener™
Disposable MBT Biotargets
96 improve lab efficiency
for MALDI Biotyper
New high-value resistance
testing workflows (RuO)
Updated Wine Profiling
module in NMR
FoodSceener™
NMR HoneyScreener MBT Biotargets 96 NMR WineScreener
2016 Key Priorities
Continue Margin Expansion as we transition
from our three-year Transformation phase to
our next phase of Operational & Commercial
Excellence
Strengthen systems and management
insights by harmonizing business processes
and ERP platforms
Accelerate profitable growth in four strategic
growth markets
Reemphasize strong focus on customers, as
well as on product and business innovation
9
Financial Update
Q1 2016
10
NON-GAAP FINANCIAL PERFORMANCE:
Q1-2016 Overview
[$ m, except EPS] Q1-2016 Q1-2015 Δ
Revenues 375.4 353.5 +6%
Operating Income 47.3 35.8 +32%
Margin (%) 12.6% 10.1%
Non-GAAP EPS $0.21 $0.14 +50%
Free Cash Flow -22.0 21.3 -43M
[$ m] Mar 31, 2016 Mar 31, 2015 Δ
Net Cash 118.3 138.7 -14%
Working capital (WC)* 598.4 614.4 -3%
WC-to-revenue ratio 0.36 0.35 +0.01
11
COMMENTS
Operating leverage results in
increased operating income
and EPS
Reduction in customer
advances, taxes on cash
repatriation and other items
result in negative free cash
flow of -$22M
Share buyback and dividend
payment result in lower net
cash
Lower working capital due to
33 day improvement in cash
conversion cycle
FX drives the increased
WC-to-revenue ratio
* WC = (Accounts Receivable + Inventory - Accounts Payable)
Q1 2015 Organic Currency Portfolio Q1 2016
$353.5M $375.4M
Q1 2016 revenue bridge
Organic Currency Portfolio Total
+5.6% -0.9% +1.5% +6.2%
Organic revenue growth
of +5.6% driven by
strong performance in
BioSpin and CALID
Groups
First full quarter of
Jordan Valley acquisition
drives portfolio effect
12
Q1 2016 DRIVERS
Q1-2016 Revenue Bridge [$ m]
+$19.8 -$3.0 +$5.1
Q1 2016 Revenue for Bruker Corp.
Q1 2016 Non-GAAP Results
[$ m, except EPS] Q1 2016 Q1 2015 Δ
Total Revenues 375.4 353.5 +6%
Gross Profit 175.4 167.1 +5% Margin (% of revenues) 46.7% 47.3%
SG&A -92.0 -94.1 -2%
(% of revenues) 24.5%
26.6%
R&D -36.1 -37.2 -3% (% of revenues) 9.6% 10.5%
Operating Income 47.3 35.8 +32%
(% of revenues) 12.6% 10.1%
Tax Rate 17.7% 27.2% -950 bps
Net Income* 34.3 23.1 +48%
EPS $0.21 $0.14 +50%
Shares Outstanding 164.3 169.7 -3%
Gross margin: increase
in BioSpin volume, mix,
price, and restructuring
effects; offset by lower
NANO volume and
unfavorable mix in CALID
Continuing focus on
operating expense
leverage
Audit settlement and
jurisdictional mix in Q1
lower tax rate
Share buyback program
commenced in November
2015 results in lower
share count
13
COMMENTS
* Attributable to Bruker Sum of items may not total due to rounding
Q1 2016 Cash Flow Statement
[$ m] Q1 2016 Q1 2015 Δ
Net Income 23.6 6.9 +16.7
Depreciation & amortization 13.2 13.5 -0.3
Changes in working capital* -1.3 30.5 -31.8
Other -49.5 -23.9 -25.6
Operating cash flow -14.0 27.0 -41.0
Capital expenditures -8.0 -5.7 -2.3
Free cash flow -22.0 21.3 -43.3
Y-o-Y free cash flow
comparison driven by:
– Higher customer
advances due to strong
NMR orders in Q1-15
– Higher 2015 bonus
payments paid in Q1-16
– Tax payments in Q1-16
associated with 2015
cash repatriation
14
COMMENTS
* WC = (Accounts Receivable + Inventory - Accounts Payable)
2016 Outlook
15
FY-2016 Guidance
Organic Revenue Growth Approximately +3%
Non-GAAP Operating Margin Expansion y-o-y
Approximately +100 bps
Non-GAAP EPS $0.97 - $1.02
16
FY-2016 Guidance - Unchanged
FY 2016 tax rate:
25%-28%
Fully diluted share
count: 163M-165M
shares
Capex: ~$50M
Current currency
assumptions:
Yen/USD: 113
USD/EUR: 1.14
CHF/USD: 0.960
2016 ASSUMPTIONS
Appendix
17
Q1 2016 GAAP Results
[$ m, except EPS] Q1 2016 Q1 2015 Δ
Total Revenues 375.4 353.5 +6%
Gross Profit 166.8 160.2 +4%
Margin (% of sales) 44.4% 45.3%
SG&A -92.7 -94.6 -2%
(% of revenues) 24.7% 26.8%
R&D -36.1 -37.2 -3%
(% of revenues) 9.6% 10.5%
Operating Income 34.0 15.2 +124%
(% of revenues) 9.1% 4.3%
Net Income* 23.6 6.5 +263%
EPS $0.14 $0.04 +250%
Shares Outstanding 164.3 169.7 -3%
18
* Attributable to Bruker Sum of items may not total due to rounding
Q1 2016 Reconciliation of GAAP and
Non-GAAP Results
[$ m, except EPS] Q1 2016 Q1 2015
GAAP Operating Income 34.0 15.2
Restructuring Costs 3.8 3.3
Acquisition-Related Costs 1.9 0.2
Purchased Intangible Amortization 5.4 5.2
Other Costs 2.2 11.9
TOTAL 13.3 20.6
Non-GAAP Operating Income 47.3 35.8
Non-GAAP Interest & Other Income (Expense), net -5.6 -3.5
Non GAAP Profit Before Tax 41.7 32.3
Non-GAAP Income Tax Provision -7.4 -8.8
Non-GAAP Tax Rate 17.7% 27.2%
Minority Interest 0.0 -0.4
Non-GAAP Net Income* 34.3 23.1
Non-GAAP EPS $0.21 $0.14
19
Sum of items may not total due to rounding *Attributable to Bruker
Balance sheet
[$ m] Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Cash, Cash Equivalents & Short-term Investments
420.5 468.3 492.3
Financial Debt 302.2 265.8 353.6
Net Cash 118.3 202.5 138.7
20
[$ m] Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Total Assets 1,739.8 1,730.0 1,771.7
Working Capital* 598.4 584.6 614.4
Intangibles, Net & Other Long-Term Assets
275.4 267.4 238.3
* WC = (Accounts Receivable + Inventory - Accounts Payable)
Q1-16 GAAP SEGMENT RESULTS:
BSI and BEST GAAP Performance
[$ m] Q1 2016 Q1 2015 Δ
REVENUE
Scientific Instruments (BSI) 350.4 327.5 +7%
Organic Revenue Growth (%) +6.2% -3.6%
Energy & Supercon Technologies (BEST) 27.2 27.5 -1%
Organic Revenue Growth (%) +0.2% -4.1%
Corporate Eliminations -2.2 -1.5
Total Revenue 375.4 353.5 +6%
OPERATING INCOME
Scientific Instruments (BSI) 33.0 13.7 +141%
Energy & Supercon Technologies (BEST) 0.0 1.0 -100%
Corporate Eliminations 1.0 0.5
Total Operating Income 34.0 15.2 +124%
21
Sum of items may not total due to rounding