Q3 2014 earnings slides final

Bruker Corporation (NASDAQ: BRKR)

Q3 2014 Earnings Presentation

Frank Laukien, President & CEO

Charles Wagner, EVP & CFO

Joshua Young, VP, Investor Relations November 6, 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

© Bruker Corporation 2

Q3 & YTD 2014 Business Update


$0.20

$0.14

Q3-13

Q3-14

Q3-14 Financials

Revenues [$ m]

Non-GAAP EPS

Q3 2014 revenue and profitability down

year-over-year

-4%

-30%


439

420

Q3-13 Q3-14

Q3 2014 Performance

Revenues decline 4% y-o-y

1.BioSpin and BMAT Group revenues decline,

due to weak year-to-date orders

2.CALID revenue decline driven by CAM

restructuring

3.Revenue declines across Asia more than

offset good growth in the Americas

4.BEST delivered strong revenue growth

Non-GAAP EPS decline of 30% y-o-y driven by

lower revenue and higher tax rate in Q3-14

$0.46

$0.46

YTD 2013

YTD 2014

Q3-14 YTD Financials

Revenues [$ B]

Non-GAAP EPS

Q3-14 YTD performance adversely affected by

demand, CAM restructuring, and currency

+1%

flat


1.29 1.30

YTD 2013 YTD 2014

Q3-14 YTD Performance

Revenue growth of 1% y-o-y

1.BioSpin revenue growth of 2%, led by

strength in Pre-Clinical Imaging division

2.BMAT revenue decline of 1% driven by

weak semi & data storage demand

3.CALID revenue decline of 1% due to $15M

CAM decline, timing of Detection projects

4.Low single-digit revenue growth in Europe,

mid-single digit growth in Americas, offset

by high-single digit revenue decline in Asia

Non-GAAP EPS flat y-o-y, including negative

currency impact of $0.04

FCF improves by $46M, totaling $18M for YTD

2014, compared to ($28M) for YTD 2013

Bruker BioSpin Group

Revenue decline in NMR partially offset by growth in Pre-Clinical

Imaging Division

Good growth in the Americas offset by declines in Europe & Asia

After generating above-market growth from 2010-2013, NMR

demand has slowed; YTD NMR order bookings decline y-o-y

In process of identifying actions to right-size BioSpin cost

structure; Agilent exit from NMR market may benefit 2015

Bruker CALID Group

LSC Division growth driven by Q-TOF products and MALDI Biotyper

Optics Division continues healthy growth and improved profitability

Detection Division negatively impacted by export license delays

CAM Division revenues decline by $10M y-o-y in quarter

Good progress on CAM restructuring: ICP-MS products sold to

Analytik Jena in September; GC products sold to TechComp on

October 31st; restructuring and product transfer ongoing

6 © Bruker Corporation

GROUP OVERVIEW:

Q3 2014 Performance & Outlook

Bruker MAT Group

BMAT Group revenue declines high-single digits

Revenue declines across 3 of 4 Divisions

Semiconductor & data storage demand remains weak

Steep decline in Asia offsets growth in Europe & Americas

Demand sluggish from Minerals & Mining and Metals markets

Bookings growing in Nano Surfaces Division, but AXS Division

bookings remain weak

Continued investment in the life science/cell biology markets

BEST Segment

Strong revenue growth driven by healthcare and ‘Big Science’

customers

Higher profitability also due to recent expense reductions and

restructuring actions

GROUP OVERVIEW:

Q3 2014 Performance & Outlook


Commitment to transforming Bruker for

better performance


• Continue existing transformation to drive towards operational excellence: redesign-to-cost; outsourcing; procurement initiatives; restructuring, etc.

• Committed to making investments that drive innovation and enable entry into new growth markets

• Complete the CAM Division restructuring in H1-15

• Execute plans for right-sizing BioSpin in H1-15

Q3 2014 Financial Update


NON-GAAP FINANCIAL PERFORMANCE:

Q3 2014 Overview

[$ m, except EPS] Q3 2014 Q3 2013 Δ

Revenues 419.8 439.0 -4%

Operating Income 35.9 47.3 -24%

Margin (%) 8.6% 10.8%

EPS $0.14 $0.20 -30%

Free Cash Flow 3.6 28.3 -24.7M

Lower revenue reflects weak YTD bookings and a $10M revenue decline in CAM Division

Profitability decline due to lower revenues, despite good control over spending

Solid improvements in working capital reflects lower inventory and FX benefits

Continue to maintain healthy net cash position


COMMENTS

[$ m] Sep 30,2014 Dec 31,2013 Δ

Net Cash 87.1 83.7 4%

Working capital (WC)* 737.2 822.6 -10%

WC-to-revenue ratio 0.40 0.45 -0.05

* WC = (Accounts Receivable + Inventory – Accounts Payable)

Q3 2013 Organic Currency Acquisition Q3 2014

$439.0 $419.8

Q3 2014 revenue bridge

Organic revenue decline of $21.2M, as revenue in all three Groups declines

Strengthening dollar in September drove the slight revenue headwind; bigger impact expected on Q4-14 revenues

Acquisition impact from prior acquisitions of Prairie and Vutara in BMAT Group


Q3 2014 DRIVERS

Q3 2014 Revenue Bridge [$ m]

$-21.2 $-1.5 $3.5

Organic Currency Acquisitions & Divestitures Total

-4.8% -0.4% 0.8% -4.4%

Q3 2014 Revenue for Bruker Corp.

Q3 2014 Non-GAAP Results

Gross margins are down primarily due to lower volumes and negative mix

Operating expenses remain well-controlled, despite investments in new capabilities

Q3-13 had an unusually low tax rate due to jurisdictional mix of profits and certain discrete items


COMMENTS [$ m] Q3 2014 Q3 2013 Δ

Total Revenues 419.8 439.0 -4%

Gross Profit 185.5 198.2 -6% Margin (% of sales) 44.2% 45.1%

SG&A -107.5 -105.4 2%

(% of revenues) 25.6%

24.0%

R&D -42.1 -45.5 -7% (% of revenues) 10.0% 10.4%


(% of revenues) 8.6% 10.8%

Tax Rate 27.0% 20.0% 700 bps

Net Income* 23.8 33.8 -30%

EPS $0.14 $0.20 -30%

Shares Outstanding 169.6 168.7 NM

* Attributable to Bruker Sum of items may not total due to rounding

Q3 2014 Reconciliation of GAAP and

Non-GAAP Results

[$ m] Q3 2014 Q3 2013

GAAP Operating Income 4.9 31.5

Restructuring Costs 16.2 8.6

Acquisition Related Costs 1.4 1.3

Purchased Intangible Amortization 5.1 5.1

Other Costs 8.3 0.8

TOTAL 31.0 15.8

Non-GAAP Operating Income 35.9 47.3

Non-GAAP Net Interest Income (Expense) & Other -2.2* -4.7

Non GAAP Profit Before Tax 33.7 42.6

Taxes -9.1 -8.5

Non-GAAP Tax Rate 27.0% 20.0%

Minority Interest -0.8 -0.3

Non-GAAP Net Income** 23.8 33.8

Non-GAAP EPS $0.14 $0.20


*Excludes $6.3M of net gains for 2014 ** Attributable to Bruker

Sum of items may not total due to rounding

Q3-13 YTD Organic Currency Acquisition Q3-14 YTD

$1,287.3 $1,300.9

Q3-14 YTD revenue bridge

Growth in BioSpin offset by declines in CALID and BMAT on YTD basis

Stronger Euro versus dollar on YTD basis drives positive currency contribution

BMAT acquisitions of Vutara and Prairie drive a positive 0.8% revenue contribution


Q3-14 YTD DRIVERS

Q3-14 YTD Revenue Bridge [$ m]

-$5.2 $8.8 $10.0

Organic Currency Acquisitions & Divestitures Total

-0.4% 0.7% 0.8% 1.1%

Q3-14 YTD Revenue for Bruker Corp.

Q3-14 YTD 2014 Non-GAAP Results

Gross margins are down primarily due to changes in foreign exchange rates

Operating margins are down ~90 basis points due to changes in foreign exchange rates

Tax rate is consistent with full year guidance of 25-28%


COMMENTS


[$ m] Q3-14 YTD Q3-13 YTD Δ

Total Revenues 1,300.9 1,287.3 1%

Gross Profit 584.5 584.2 NM Margin (% of sales) 44.9% 45.4%

SG&A -331.2 -318.6 4%

(% of revenues) 25.5% 24.7%

R&D -132.6 -141.4 -6% (% of revenues) 10.2% 11.0%

Operating Income 120.7 124.2 -3% (% of revenues) 9.3% 9.6%

Tax Rate 28.0% 25.9% 210 bps

Net Income* 77.4 77.1 NM

EPS $0.46 $0.46 NM


Q3-14 YTD Reconciliation of GAAP to

Non-GAAP Results

[$ m] Q3-14 YTD Q3-13 YTD

GAAP Operating Income 60.9 87.2

Restructuring Costs 29.3 13.6

Acquisition Related Costs 3.0 2.2

Purchased Intangible Amortization 15.1 15.3

Other Costs 12.4 5.9

TOTAL 59.8 37.0

Non-GAAP Operating Income 120.7 124.2

Non-GAAP Net Interest Income (Expense) & Other* -9.7 -18.8

Non GAAP Profit Before Tax 111.0 105.4

Taxes -31.1 -27.3

Non-GAAP Tax Rate 28.0% 25.9%

Minority Interest -2.5 -1.0

Non-GAAP Net Income** 77.4 77.1

Non-GAAP EPS $0.46 $0.46


Sum of items may not total due to rounding *Excludes $6.6 and $2.4 million of net gains for 2014 and 2013 **Attributable to Bruker

Q3-14 YTD Cash Flow Statement

Cash conversion cycle improves by 29 days compared to Q3-13

– DIO: 230

– DSO: 60

– DPO: 48

– CCC: 241

Capex spending is down significantly y-o-y


COMMENTS [$ m] Q3-14 YTD Q3-13 YTD Δ

Net Income 33.1 45.9 -12.8

Depreciation & amortization 47.6 45.4 2.2

Changes in working capital* 2.8 -32.6 35.4

Other -38.5 -45.1 6.6

Operating cash flow 45.0 13.6 31.4

Capital expenditures -26.7 -41.3 14.6

Free cash flow 18.3 -27.7 46.0

2014 Guidance


Bruker’s revised FY 2014 Guidance

Revenues (reported) $1.81 - $1.84 billion

Non-GAAP EPS $0.72 to $0.78


Bruker FY 2014 Guidance

FX changes reduce Q4-14 revenue by 4% y-o-y

Excluding currency impact, Q4-14 revenue flat or declining y-o-y due to CAM restructuring and YTD demand weakness

Tax rate: 25-28%

Wide EPS range due to potential variability in Q4-14 results

Capex expected to be around $40M in FY2014

Current currency assumptions: Yen/USD: 110 EUR/USD: 1.26

ASSUMPTIONS

Appendix


Q3 2014 GAAP Results

[$ m] Q3 2014 Q3 2013 Δ

Total Revenues 419.8 439.0 -4%

Gross Profit 167.3 193.2 -13%

Margin (% of sales) 39.9% 44.0%

SG&A -108.0 -105.7 2%

(% of revenues) 25.7% 24.1%

R&D -42.1 -45.5 -7%

(% of revenues) 10.0% 10.4%


(% of revenues) 1.2% 7.2%

Net Income* 5.5 16.6 -67%

EPS $0.03 $0.10 -70%




Q3-14 YTD GAAP Results

[$ m] Q3-14 YTD Q3-13 YTD Δ

Total Revenues 1,300.9 1,287.3 1%

Gross Profit 547.5 569.3 -4%

Margin (% of sales) 42.1% 44.2%

SG&A -332.5 -319.6 4%

(% of revenues) 25.6%

24.8%

R&D -132.6 -141.4 -6%

(% of revenues) 10.2% 11.0%


(% of revenues) 4.7% 6.8%

Net Income* 30.6 44.9 -32%

EPS $0.18 $0.27 -33%



Sum of items may not total due to rounding * Attributable to Bruker

Balance sheet

[$ m] Sep 30, 2014 Dec 31, 2013 Δ

Cash, Cash Equivalents & Short-term investments

442.3 438.7 1%

Financial Debt 355.2 355.0 NM

Net Cash 87.1 83.7 4%


[$ m] Sep 30, 2014 Dec 31, 2013 Δ

Total Assets 1,910.6 1,988.3 -4%

Working Capital* 737.2 822.6 -10%

Intangible & Other Assets 245.9 256.9 -4%

* WC = (Accounts Receivable + Inventory - Accounts Payable)

Q3 2014 Cash Flow Statement

Lower profit, higher working capital are the primary drivers of y-o-y difference in free cash flow


COMMENTS [$ m] Q3 2014 Q3 2013 Δ

Net Income 6.3 16.9 -10.6

Depreciation & amortization 17.6 15.2 2.4

Changes in working capital* -16.0 9.0 -25.0

Other 5.6 -2.6 8.2

Operating cash flow 13.5 38.5 -25.0

Capital expenditures -9.9 -10.2 0.3

Free cash flow 3.6 28.3 -24.7

Q3 SEGMENT RESULTS:

BSI and BEST GAAP Performance

[$ m] Q3 2014 Q3 2013 Δ

REVENUE

Scientific Instruments (BSI) 383.4 410.6 -7%

Organic Revenue Growth (%) -7.1% 0.6%

Energy & Supercon Technologies (BEST) 40.0 32.5 23%

Organic Revenue Growth (%) 22.6% -27.1%

Corporate Eliminations & Other -3.6 -4.1

Total Revenue 419.8 439.0 -4%

OPERATING INCOME

Scientific Instruments (BSI) 0.8 33.8 -98%

Energy & Supercon Technologies (BEST) 3.9 -0.8 588%

Corporate Eliminations and Other 0.2 -1.5

Total Operating Income 4.9 31.5 -84%


Sum of items may not total due to rounding