Q4 15 earnings slides final

Bruker Corporation (NASDAQ: BRKR)

Q4 and FY 2015 Earnings Presentation

Frank Laukien, President & CEO

Anthony Mattacchione, SVP & Interim CFO

Joshua Young, VP, IR & Corporate Development February 10, 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, 2014 and our quarterly reports on Form 10-Q for the periods ended March 31, 2015, June

30, 2015, and September 30, 2015. 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 © Bruker Corporation

Business Update

Q4-15 & FY-2015


Q4-2015 Performance

Revenue decline of -$30m, or -6% y-o-y

− FX headwinds lower revenue -8% y-o-y

Organic revenue growth of +2.5% y-o-y

− Europe & Americas strongest regions

Non-GAAP operating margin expands by +500 basis

points y-o-y to 17.5%

Non-GAAP EPS grows by +27% y-o-y

Free cash flow of $138M up $76M compared to Q4-14

− Substantially higher net income and lower

working capital drive improvement

Q4 Financials


Revenues [$ m]

508 478

Q4-14 Q4-15

Non-GAAP EPS

Strong Q4-15 performance drives margin

expansion and free cash flow generation

-6%

+27%

$0.30

$0.38

Q4-14

Q4-15

FY-2015 Performance

Revenue decline of -10% y-o-y, due to FX headwind

(-10%) and changes in portfolio (-2%)

After organic revenue decline in FY-14, return to

organic revenue growth of +2.1% y-o-y in FY-15

- Europe grows high-single digits

Including +105 basis points due to 2014 CAM

restructuring, FY-15 non-GAAP operating margin

expands +310 basis points y-o-y, well ahead of

+150 bps guidance

Non-GAAP EPS grows +19% to $0.89, despite

currency headwind of ($0.09)

Record free cash flow (FCF) of $195M increases by

+$115 million over FCF of $81M in FY-14

Full Year Financials


Revenues [$ m]

1,809 1,624

FY-14 FY-15

Non-GAAP EPS

Improvement in FY-15 results reflects the initial

benefits from our three-year Transformation

$0.75

$0.89

FY-2014

FY-2015

-10%

+19%

Bruker BIOSPIN Group

Strong revenue growth for Nuclear Magnetic Resonance (NMR) in H2

2015 after slow start to the year

Preclinical imaging declines in both revenues and new order bookings

NMR posts double-digit growth in new order bookings

New pricing began to positively affect Q4-15 performance and will

continue to be a contributor in FY-16

Restructuring programs completed and will lower costs in FY-16 Bruker CALID Group

Bruker CALID Group

Bruker CALID Group

CALID delivers mid-high single digit organic revenue growth and

significantly higher profitability due to operating leverage and CAM

restructuring in 2014

Detection Division has exceptional year due to large transactions and

newly launched explosives trace detection (ETD) products

Balanced performance in Daltonics Division as most product lines

grow y-o-y; MALDI Biotyper is fastest growing product line

Optics Division sustains good performance despite weaker markets

GROUP OVERVIEW:

FY 2015 Performance


$547M revenue

$493M revenue

Bruker NANO Group

Mixed top-line performance as strength in academic customer base

and China is offset by weakness from industrial and semi customers

AXS Division generates mid-single digit organic revenue growth and

strong year-over-year profitability improvement

Nano Surfaces Division posts a decline in revenue and profitability,

but effectively manages expenses in a tough environment

Low-teens organic revenue growth in Nano Analytics Division

BEST Segment

Reports +4% organic revenue growth and non-GAAP operating

margin of 9.0%

Multi-year ROSATOM and DESY projects completed in Q4-15

Strong bookings and backlog as a result of long-term contracts for

superconducting wire

GROUP OVERVIEW:

FY 2015 Performance


$460M revenue

$134M revenue

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


Financial Update

Q4-15 & FY-2015


NON-GAAP FINANCIAL PERFORMANCE:

Q4-2015 Overview

[$ m, except EPS] Q4-2015 Q4-2014 Δ

Revenues 478.2 508.0 -6%

Operating Income 83.7 63.7 +31%

Margin (%) 17.5% 12.5%

EPS $0.38 $0.30 +27%

Free Cash Flow 138.2 62.2 +$76M

[$ m] Dec 31, 2015 Dec 31, 2014 Δ

Net Cash 201.6 142.5 +41%

Working capital (WC)* 584.6 694.6 -16%

WC-to-revenue ratio 0.36 0.38 -0.02


COMMENTS

Significantly higher non-

GAAP operating margin and

free cash flow achieved

Growth of non-GAAP

operating income flowed

through to meaningful non-

GAAP EPS growth

Net cash position up, even

with larger share buyback

program since mid-

November 2015

Excellent progress in

reducing working capital

year-over-year

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

Q4 2014 Organic Currency Portfolio Q4 2015

$508.0M $478.2M

Q4-2015 revenue bridge

Organic Currency Portfolio Total

+2.5% -7.8% -0.6% -5.9%

Organic revenue growth

of +2.4% driven by

strong performance in

BEST Segment and

growth in CALID Group

Strong US dollar

continues to drive most

of the currency headwind

CAM divestitures netted

against Jordan Valley

acquisition cause net

negative portfolio effect


Q4-2015 DRIVERS

Q4-2015 Revenue Bridge [$ m]

+$12.5 -$39.2 -$3.1

Q4-2015 Revenue for Bruker Corp.

Q4 2015 Non-GAAP Results

[$ m, except EPS] Q4 2015 Q4 2014 Δ

Total Revenues 478.2 508.0 -6%

Gross Profit 222.8 223.2 NM Margin (% of revenues) 46.6% 43.9%

SG&A -102.4 -117.9 -13%

(% of revenues) 21.4%

23.2%

R&D -36.7 -41.6 -12% (% of revenues) 7.7% 8.2%


(% of revenues) 17.5% 12.5%

Tax Rate 19.1% 20.0% -90 bps

Net Income* 64.4 50.3 +28%

EPS $0.38 $0.30 +27%

Shares Outstanding 168.7 169.6 NM

Gross margin

improvement driven by

positive product mix,

pricing gains, and

restructuring actions

Lower operating

expenses due to FX

translation, BioSpin

restructuring and

continued cost control

CAM restructuring added

+75 bps of op. margin

Tax rate benefits from

discrete items

FX headwinds represent

a (-$0.02) drag on EPS

in Q4-15


COMMENTS

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

FY-2014 Organic Currency Portfolio FY-2015

$1,808.9M $1,623.8M

FY-2015 revenue bridge

Organic Currency Portfolio Total

+2.1% -10.2% -2.1% -10.2%

Organic revenue growth

of +2.1% primarily

driven by CALID Group

FX reduces revenue by

-$184M

Portfolio reflects CAM

divestitures and partial

quarter of Jordan Valley

acquisition


FY-2015 DRIVERS

FY-15 Revenue Bridge [$ m]

+$36.4 -$184.4 -$37.1

FY-2015 Revenue for Bruker Corp.

FY 2015 Non-GAAP Results

[$ m, except EPS] FY 2015 FY 2014 Δ

Total Revenues 1,623.8 1,808.9 -10%

Gross Profit 751.0 807.7 -7% Margin (% of revenues) 46.2% 44.7%

SG&A -390.1 -449.1 -13%

(% of revenues) 24.0%

24.8%

R&D -145.7 -174.2 -16% (% of revenues) 9.0% 9.6%


(% of revenues) 13.3% 10.2%

Tax Rate 22.0% 25.1% -310 bps

Net Income* 151.0 127.7 +18%

EPS $0.89 $0.75 +19%


Approximately half of

150 bps improvement in

gross margin related to

better operational and

commercial practices; 60

bps improvement from

CAM restructuring

Opex reduction related

to FX translation and

absence of CAM

EPS grew +19% from

operating profit growth

and lower tax rate

Improving earnings

quality: FCF represented

129% of non-GAAP net

income


COMMENTS


FY 2015 Cash Flow Statement

[$ m] FY 2015 FY 2014 Δ

Net Income 104.9 59.6 +45.3

Depreciation & amortization 53.3 59.7 -6.4

Changes in working capital* 38.9 -1.6 +40.5

Other 32.1 -3.4 +35.5

Operating cash flow 229.2 114.3 +114.9

Capital expenditures -34.2 -33.8 -0.4

Free cash flow 195.0 80.5 +114.5

Free cash flow generated

by higher earnings,

reduction in working

capital, and increase in

customer deposits

Change in “Other”

primarily relates to

timing of customer

deposits and system

acceptances


COMMENTS


2016 Outlook


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


FY-2016 Guidance

FY 2016 tax rate:

25%-28%

Fully diluted share

count: 163M-165M

shares

Capex: ~$50M

Current currency

assumptions:

Yen/USD: 120

USD/EUR: 1.09

CHF/USD: 0.999

2016 ASSUMPTIONS

Appendix


Q4 2015 GAAP Results

[$ m, except EPS] Q4 2015 Q4 2014 Δ

Total Revenues 478.2 508.0 -6%

Gross Profit 211.5 215.8 -2%

Margin (% of sales) 44.2% 42.5%

SG&A -103.0 -118.5 -13%

(% of revenues) 21.5% 23.3%

R&D -36.7 -41.6 -12%

(% of revenues) 7.7% 8.2%


(% of revenues) 14.8% 8.8%

Net Income* 61.4 26.1 +135%

EPS $0.36 $0.15 +140%




Q4 2015 Reconciliation of GAAP and

Non-GAAP Results

[$ m, except EPS] Q4 2015 Q4 2014

GAAP Operating Income 70.7 44.5

Restructuring Costs 8.1 6.8

Acquisition-Related Costs -3.3 1.0

Purchased Intangible Amortization 5.3 5.1

Other Costs 2.9 6.3

TOTAL 13.0 19.2

Non-GAAP Operating Income 83.7 63.7

Non-GAAP Interest & Other Income (Expense), net* -3.4 -0.3*

Non GAAP Profit Before Tax 80.3 63.4

Non-GAAP Income Tax Provision -15.3 -12.7

Non-GAAP Tax Rate 19.1% 20.0%

Minority Interest -0.6 -0.4

Non-GAAP Net Income** 64.4 50.3

Non-GAAP EPS $0.38 $0.30


Sum of items may not total due to rounding *Excludes $0.7M of net losses for 2014 **Attributable to Bruker

FY 2015 GAAP Results

[$ m, except EPS] FY 2015 FY 2014 Δ

Total Revenues 1,623.8 1,808.9 -10%

Gross Profit 708.6 763.3 -7%

Margin (% of sales) 43.6% 42.2%

SG&A -392.2 -451.0 -13%

(% of revenues) 24.2% 24.9%

R&D -145.7 -174.2 -16%




Net Income* 101.6 56.7 +79%

EPS $0.60 $0.33 +82%




FY 2015 Reconciliation of GAAP and

Non-GAAP Results

[$ m, except EPS] FY 2015 FY 2014

GAAP Operating Income 145.7 105.4

Restructuring Costs 29.3 36.1

Acquisition-Related Costs -4.7 4.0

Purchased Intangible Amortization 20.8 20.2

Other Costs 24.1 18.7

TOTAL 69.5 79.0

Non-GAAP Operating Income 215.2 184.4

Non-GAAP Interest & Other Income (Expense), net* -17.5 -10.0

Non-GAAP Profit Before Tax 197.7 174.4

Non-GAAP Income Tax Provision -43.4 -43.8

Non-GAAP Tax Rate 22.0% 25.1%

Minority Interest -3.3 -2.9

Non-GAAP Net Income** 151.0 127.7

Non-GAAP EPS $0.89 $0.75


* Excludes $0.2M of net losses for 2015 and $5.9M of net gains for 2014 **Attributable to Bruker

Sum of items may not total due to rounding

Q4 2015 Cash Flow Statement

[$ m] Q4 2015 Q4 2014 Δ

Net Income 62.0 26.5 +35.5

Depreciation & amortization 13.3 12.1 1.2

Changes in working capital* 27.5 -4.4 31.9

Other 46.8 35.1 11.7

Operating cash flow 149.6 69.3 +80.3

Capital expenditures -11.4 -7.1 -4.3

Free cash flow 138.2 62.2 +76.0



Balance sheet

[$ m] Dec 31, 2015 Dec 31, 2014 Δ

Cash, Cash Equivalents & Short-term Investments

468.3 497.5 -6%

Financial Debt 266.7 355.0 -25%

Net Cash 201.6 142.5 +41%


[$ m] Dec 31, 2015 Dec 31, 2014 Δ

Total Assets 1,730.9 1,864.8 -7%

Working Capital* 584.6 694.6 -16%

Intangibles, Net & Other Long-Term Assets

268.2 248.6 +8%


Q4-15 GAAP SEGMENT RESULTS:

BSI and BEST GAAP Performance

[$ m] Q4 2015 Q4 2014 Δ

REVENUE

Scientific Instruments (BSI) 438.9 475.8 -8%

Organic Revenue Growth (%) 0.0% 0.6%

Energy & Supercon Technologies (BEST) 42.5 36.7 +16%

Organic Revenue Growth (%) +31.7% -14.1%

Corporate Eliminations -3.2 -4.5

Total Revenue 478.2 508.0 -6%

OPERATING INCOME

Scientific Instruments (BSI) 65.0 51.3 +27%

Energy & Supercon Technologies (BEST) 5.4 -7.6 +171%

Corporate Eliminations 0.3 0.8

Total Operating Income 70.7 44.5 +59%


Sum of items may not total due to rounding

Investor Relations

Q4 15 earnings slides final