Bruker q1 2014 earnings presentation final

Bruker Corporation (NASDAQ: BRKR)

Q1 2014 Earnings Presentation

Frank Laukien, President & CEO

Charles Wagner, EVP & CFO

Joshua Young, VP, Investor Relations May 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

© Bruker Corporation 2

Q1 2014 Business Update


$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%


393 424

Q1 13 Q1 14

Q1 2014 Performance

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

Non-GAAP Operating margin expands by 160

basis points; operating expense control more

than offsets currency impact on gross margins

38% non-GAAP EPS growth in Q1 2014

compared to Q1 2013

Free cash flow improves by $42M, totaling $9M

in Q1 2014 compared to ($33M) in Q1 2013

Bruker BioSpin Group

Mid-single digit revenue growth, with strongest growth in Asia

Pacific, continued growth in Europe

Quarter-to-quarter fluctuations in product/geographic mix

Pre-Clinical Imaging Division posts a strong quarter driven by MRI

revenue growth; improving molecular imaging trends

Outsourcing programs in Germany and France on track

Bruker CALID Group

Double-digit growth in revenues, compared to weak Q1 2013

Optics and Life Science & Clinical (LSC) Divisions drive growth

Optics: new products Tango and Lumos well-accepted

LSC: MALDI Biotyper good momentum, Q-TOF products

perform well; divested Leipzig machine shop in Q1 2014

CAM Division posts weak performance; Sales management

combined with LSC in Q1 2014; review of cost structure underway

Detection Division revenues dip due to export license delays

5 © Bruker Corporation

GROUP OVERVIEW:

Q1 2014 Performance

Bruker MAT Group

BMAT Group delivers mid-single digit revenue growth, compared

to a weak Q1 2013

General industrial markets stabilize, but no recovery yet in

microelectronics markets

Research and academic markets remain healthy

BAXS, BNS, and BNA Divisions all grew, compared to Q1 2013;

BNS benefited from fluorescence microscopy acquisition

Profitability improved compared to Q1 2013, as operating

expenses were reduced by second–half 2013 restructuring actions

BEST Segment

Revenue growth of 12% and non-GAAP operating margin of 8.0%

Growth benefits from revenue timing, and margin benefits from

2013 cost initiatives

Contract renewals with key MRI customers for superconducting

wire

GROUP OVERVIEW:

Q1 2014 Performance


Q1 2014 Financial Update


NON-GAAP FINANCIAL PERFORMANCE:

Q1 2014 Overview

[$ m, except EPS] Q1 2014 Q1 2013 Δ

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

Revenue growth in all BSI Groups and at BEST

Operating margin expansion, driven by control of operating expenses

EPS growth of 38%

Free cash flow of $9 million


COMMENTS

[$ m] Mar 31,2014 Dec 31,2013 Δ

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 – Accounts Payable)

Q1 2013 Organic Currency Acquisition Q1 2014

393.4 423.7

Q1 2014 revenue bridge

Revenue growth driven by Europe and Asia

Minimal net currency impact, with stronger Euro offset by weaker Yen and other currencies

Benefit from BMAT acquisition of Prairie Technologies’ fluorescence microscopy products, completed in September 2013


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

Gross margin decline of 140 bps primarily due to currency impact

Y-o-y impact of Yen devaluation lessens in Q2 2014 and beyond

Expense control and 2013 restructuring drive 300 bps decline in operating expense

Tax rate of 25.5% is below full-year 2014 expectation, due to timing of discrete items


COMMENTS [$ m] Q1 2014 Q1 2013 Δ

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%


(% 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 Bruker Sum 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



Balance sheet

[$ m] Mar 31, 2014 Dec 31, 2013 Δ

Cash & Cash Equivalents 454.0 438.7 3%

Financial Debt 354.8 355.0 NM

Net Cash 99.2 83.7 19%


[$ m] Mar 31, 2014 Dec 31, 2013 Δ

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

Inventory DIO improved by 30 days vs. Q1 2013

– Still room for improvement

Cash flow benefit from timing of payments

Capex now at a more normalized level


COMMENTS [$ m] Q1 2014 Q1 2013 Δ

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


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%


FY 2014 Guidance

No change to full-year guidance

Revenue growth of all three BSI Groups similar to total company growth

Less than $50M of capex

Q2-14 financial performance expected to be similar to relatively strong Q2-13

Current currency assumptions: Yen/USD: 103 EUR/USD: 1.38

ASSUMPTIONS

Appendix


Q1 2014 GAAP Results

[$ m] Q1 2014 Q1 2013 Δ

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%


(% 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



Q1 SEGMENT RESULTS:

BSI and BEST GAAP Performance

[$ m] Q1 2014 Q1 2013 Δ

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%


Sum of items may not total due to rounding

Bruker q1 2014 earnings presentation final

Investor Relations

eps q1

weak q1

brkr q1

q1 financials revenues

revenue bridge revenue

mri revenue growth

continued revenue growth

growth benefits