Bruker Corporation (NASDAQ: BRKR) Credit Suisse Healthcare Conference Mark Munch, President, BMAT Group Joshua Young, VP, Investor Relations November 13, 2013
Bruker Corporation (NASDAQ: BRKR)
Credit Suisse Healthcare ConferenceMark Munch, President, BMAT Group
Joshua Young, VP, Investor RelationsNovember 13, 2013
Bruker Corporation Safe Harbor 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, 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, 2012, our most recent quarterly reports on Form 10-Q and
our current reports on Form 8-K. We expressly disclaim any intent or obligation to update these forward-
looking statements other than as required by law.
© Bruker Corporation 2
Agenda
3© Bruker Corporation
1 The Bruker Story
2 Financial Update
3 Overview of BrukerMaterials Group (BMAT)
Key Messages
1 We are a premium brand with a track record of innovation and strong leadership positions in a large, attractive industry: life science tools
2 We have embarked on a period of significant managerial, operational, and system changes to modernize our infrastructure & drive efficiency
3 We are restructuring our business to drive higher margins and cash flow over the next 5 years
Company Profile
Bruker: The leading provider of high-performance scientific instruments and solutions for life science, diagnostic and applied markets.
Founded in 1960
$1.79B revenue
~6,700 employees
~82% of revenues outside of the US
~Direct sales organizations in 33 countries
~1,000 R&D professionals with strong track record of innovation
KEY FIGURES
Bruker BioSpin
BrukerCALID
Bruker Materials
Bruker Scientific Instruments
(BSI)
~94% revenue
Bruker Scientific Instruments
(BSI)
~94% revenue
Bruker Energy & Supercon Technologies
(BEST)
~6% revenue
Bruker Energy & Supercon Technologies
(BEST)
~6% revenue
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Bruker’s ownership profile has changed over 5 years
7© Bruker Corporation
70%
34%
30%
66%
2008 2013
Public
Laukien Family
The Top 10 Shareholders hold 53% of the shares
Ownership Profile
Top Shareholder Percentage
11.74%
3.47%
3.29%
3.01%
1.97%
1.88%
1.87%
1.70%
1.65%
1.57%
T. Rowe Price
Fidelity
Wellington
Harris
J.P. Morgan
Select Equity Group
Wells Capital
Boston Trust
Pyramis
OppenheimerFunds
Top 10 Shareholders
Nearly 80% of our revenues are generated outside of the United States
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United States
Europe
Rest of World
Asia Pacific
2012 revenues
We have distinct capabilities and leadership positions in many product lines
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Bruker
BioSpinBruker
CALIDBruker
MATBruker
BEST
1. Nuclear Magnetic Resonance (NMR)
2. Electron Paramagnetic Resonance (EPR)
3. Preclinical imaging incl. MRI, µCT, PET/SPECT, optical molecular imaging
1. Life-Science and Applied MassSpectrometry
2. MS Diagnostics
3. GC and LC chromatography
4. FT-IR/NIR/Raman
5. CBRNE Detection
1. Atomic Force Microscopy (AFM)
2. X-ray Diffraction, Crystallography, and Fluorescence
3. Optical Metrology, Profilometry
4. Spark-OES, handheld XRF
5. EDS, EBSD
1. LTS and HTS Superconductors
2. Superconductingdevices
3. ‘Big Science’ research infra-structure
Indicative: not representative of all products sold and industries served
$1,305
$1,652
$1,791 $1,773-$1,791
Little incremental profitability despite strong revenue growth since 2010
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$0.72 $0.82 $0.83
$0.72- $0.76
2010 2011 2012 2013E
+$468–$486m
Flat -+$0.04
We expect to exit 2013 with non-GAAP operating margins roughly equivalent to five years ago
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10.5%
11.9%
13.8%
11.9% 12.2%
10.8%
2008 2009 2010 2011 2012 2013E
* 2013 operating margins represent mid-point of guidance
Non-GAAP Operating Margin
*
2012 2013 2014 2015 2016 2017
2013 is the first year of a multi-year effort to transform Bruker
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New Leadership & Organization Simplified organizational structure New leaders & incentive structures Globalized approach to business
Incremental Profit Improvement Better expense control Evaluation: structure & processes Targeted outsourcing/restructuring
Sustained Profitable Growth Additional supply chain initiatives Improved resource allocation IT investments & process change
Complement Innovation/Growth with Margin-Performance Culture Incentives programs focus on profitability and cash flow Greater visibility and accountability
We are taking actions in 2013 that are expected to drive $15M to $20M of cost savings in 2014
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• Closing CAM plant/R&D facility in Europe• Closing BEST CGM business unit in Europe• Closing BMI plant
Q4 2013 Facility
Closures
• On-going outsourcing of BioSpin and other Groups’ non-core manufacturing
• Power Electronics divestiture in Q1
Outsource& Divest
• BMAT H2 13 headcount reduction of ~150• Single-site consolidation of AXS factory• Reducing fixed costs in all BMAT divisions
AdditionalH2-2013 Actions
• Ensure timely execution of 2013 programs• Analyzing additional restructuring
opportunities for 2014 and beyond
Next Steps
15.5%
10.8%
Q3 12
Q3 13
Q3 Financials
Revenues [$ m]
Operating Margin*
Weak industrial markets, decline in BioSpinrevenues and tough y-o-y comparison drive results
-2%
-470 bps
* Non-GAAP
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448 439
Q3 12 Q3 13
Q3 2013 Performance
Organic revenue decline 2.4% year-over-year
1.Weak industrial demand leads to low-single digit decline of BMAT revenues
2.BioSpin performance affected by double-digit decline in its Pre-Clinical Imaging Division’s revenue
3.BEST Q3 13 revenue down due to ~$16M Rosatom license transaction in Q3 12
Y-o-y non-GAAP operating margin decline primarily driven by ~$16M in operating income contribution from Rosatom in Q3 12
Non-GAAP EPS of $0.20, compared to non-GAAP EPS of $0.28 in Q3 12
YTD 2013 Non-GAAP Results
[$ m] YTD 2013 YTD 2012 ΔTotal Revenues 1,287.3 1,274.1 1%
Gross Profit 584.2 604.9 -3%Margin (% of sales) 45.4% 47.5%
SG&A -318.6 -313.9 1%
(% of revenues) 24.7% 24.6%
R&D -141.4 -145.0 -2%(% of revenues) 11.0% 11.4%
Operating Income 124.2 146.0 -15%(% of revenues) 9.6% 11.5%
Net Income* 77.1 91.6 -16%
EPS $0.46 $0.54 -15%
Shares Outstanding 168.4 167.3 NM
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Sum of items may not total due to rounding* Attributable to Bruker
Bruker FY 2013 Guidance
Revenue Growth (reported) -1% to 0%
Restructuring Costs ~$20-$25M
Non-GAAP Tax Rate ~25%-27%
Non-GAAP EPS $0.72 - $0.76
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Lowering FY 2013 Guidance
Full year revenues of $1,780M to $1,800M, reflect assumption for organic revenue growth of 0% to 1%
BMAT Q4 13 revenue down double-digits y-o-y, compared to strong Q4 12
Rosatom revenue of $5.7M in FY2013 down from $16.4M in FY2012
Currency assumptions against US dollar: Yen/USD: 98 EUR/USD: 1.35
ASSUMPTIONS
BMAT Profile
Bruker Advance X-ray Solutions Division
(AXS)
Bruker Advance X-ray Solutions Division
(AXS)
Bruker Nano Surfaces Division
(BNS)
Bruker Nano Surfaces Division
(BNS)
Bruker Nano Analytical Division
(BNA)
Bruker Nano Analytical Division
(BNA)
Bruker Elemental Division
(BEL)
Bruker Elemental Division
(BEL)
Over $500M Revenue
~60% Industrial
~40% Academic/Gov’t
~24% N Amer; 32% Europe; 44% APAC/Japan
~Over 280 R&D professionals
KEY FIGURES
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Application Areas and Markets Served in the BMAT Group
Academic / Gov’t research
– Material Science
– Life Science
Industrial materials research
– Metals / Ceramics
– Polymers / Composites
– Electronic materials
Microelectronics
– Semiconductor wafer
– Semiconductor packaging
– Display
– Data storage
Green technology
– HBLED
– Solar
– Battery
Heavy industries processing
– Metals processing / Refractories
– Cement
– Metal scrap
Materials finishing
– Metals finishing
– Polymer coatings
Minerals / Mining / Petrochem
Medical materials
Pharmaceutical
Mining
August 2013 20Bruker Confidential
Bruker Nano SurfacesUnmatched Imaging and Metrology Performance
World’s highest performance AFMs, 3D optical microscopes, stylus profilers, and mechanical testers
– Atomic Force Microscopy
– Provides unmatched nanoscale characterization of electrical, magnetic, compositional and material properties
– Dimension FastScan, MultiMode 8, Dimension Icon, BioScope Catalyst, Dimension FastScan Bio, Innova, Dimension Edge, Insight 3DAFM, InSight-450 3DAFM
– 3D Optical Microscopy
– Offers unrivaled rapid, non-contact measurement of surface texture and roughness
– ContourGT systems, NPFLEX, SP9900+, HD9800+
– Stylus Profilometry
– Measures thin film roughness, step heights and stress– Dektak XT, Dektak XTL
– Tribology and Mechanical Testing
– Measures friction, wear and material mechanical properties with highest accuracy under widest range of conditions
– UMT-1/-2/-3
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Dektak XT
Dimension FastScan
ContourGT-I
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Bruker AXSWorld’s Leading Analytical X-ray Systems for Materials Research
Innovative biological and chemical crystallography, bulk material and surface sensitive X-ray diffraction, X-ray scattering, and wavelength and energy dispersive X-ray fluorescence analysis for heavy industries, semiconductor, and life sciences
– X-ray Diffraction and Scattering
– Offers materials characterization and quality control of crystalline or non-crystalline materials (i.e., powders, solid blocks, thin films or liquids)
– D8 ADVANCE, D8 DISCOVER, D8 FABLINE, D2 PHASER, N8 HORIZON, NANOSTAR, MICRO Series, D4 ENDEAVOR
– Single Crystal X-ray Diffraction (SC-XRD)
– Provides accurate and precise measurements of molecular dimensions unmatched by other science techniques
– D8 QUEST, D8 VENTURE, SMART X2S, MICROSTAR
– X-ray Micro Computed Tomography (Micro-CT)
– Non-invasive 3D X-ray microscopy– SKYSCAN 1272/1172/1173/1174/1176/1178/2011/2140
– X-ray Fluorescence (XRF)
– Combines highest accuracy and precision with simple and fast sample preparation for elemental analysis
– S8 LION, S8 DRAGON, S8 TIGER, S8 TIGER ECO, S2 RANGER
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D8 ADVANCE
SKYSCAN 1172
S8 TIGER
D8 QUEST
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Bruker ElementalComplete Portfolio of Element Analysis
Innovative solutions to elevate quality and process control for wide range of customers in metal processing and chemical industries
– Optical Emission Spectrometers (OES)
– Analyze directly and simultaneously chemical elements, from sub-ppm to percentage levels, from pure metals trace analysis to high alloyed grades
– Q4 Mobile, Q8 CORONADO, Q6 COLUMBUS, Q8 MAGELLAN
– CS/ONH Analyzers
– Analyze rapidly and simultaneously carbon, sulfur, oxygen, nitrogen and hydrogen in a wide variety of solid materials
– G4 ICARUS CS HF, G8 Galileo ONH, G4 Phoenix DH
– Handheld X-ray Fluorescent (XRF) Spectrometers
– Analyze quantitatively and non-destructively nearly any element, from magnesium to uranium, in diverse applications, including metal analysis, scrap sorting, mining and exploration, and environmental screening
– S1 TITAN, S1 SORTER, Tracer III Series, Tracer IV Series, S1 TURBO SD/SDR
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Q8 MAGELLAN
G4 ICARUS S1 TITAN
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Bruker Nano AnalyticalAdvanced Analysis in Electron Microscopy
A powerful and broad range of systems for energy-dispersive (EDS) and wavelength-dispersive (WDS) X-ray spectrometry, electron backscatter diffraction analysis (EBSD), as well as micro-X-ray fluorescence and micro computed tomography for electron microscopes. Plus micro-XRF instruments.
– EDS, WDS, EBSD
– QUANTAX EDS for SEM/TEM, QUANTAX WDS, QUANTAX WDS EBSD
– Micro-XRF and Micro-CT for SEM
– QUANTAX Micro-XRF, Micro-CT for SEM
– Micro-XRF and TXRF
– Micro-XRF provides highest spatial resolution with spot sizes down to 25um, and TXRF is only X-ray technology with detection limits in low ppb range
– M4 TORNADO, M1 MISTRAL, M1 ORA, S2 PICOFOX, ARTAX
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QUANTAX EDS
M4 TORNADO
QUANTAX Micro-XRF
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A Strong Foundation
Premier brand for high-performance life-science, diagnostics and analytical scientific instruments
Strong innovation track record, taking concrete actions to improve profitability & cash flow
Excellent customer relationships and collaborations
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…with Realistic Upside Potential
Strong organic growth opportunities remain
Profitability and cash flow improvements represent value
Commitment to continuous improvement: further foundation building underway in terms of new management and processes, systems and operational excellence
Why Invest in Bruker?