Bruker Corporation (NASDAQ: BRKR) Q4 and FY 2013 Earnings Presentation Frank Laukien, President & CEO Charles Wagner, EVP & CFO Joshua Young, VP, Investor Relations February 18, 2014 Innovation with Integrity
Jan 27, 2015
Bruker Corporation (NASDAQ: BRKR)
Q4 and FY 2013 Earnings Presentation
Frank Laukien, President & CEO
Charles Wagner, EVP & CFO
Joshua Young, VP, Investor Relations February 18, 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, 2012, our most recent quarterly reports on Form 10-Q and
our current reports on Form 8-K. 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
Q4 & FY 2013 Business Update
© Bruker Corporation 3
14.1%
14.7%
Q4 2012
Q4 2013
Q4 Financials
Revenues [$ m]
Operating Margin*
Strong finish to 2013 driven by European academic
markets, solid BioSpin performance
+7%
+60 bps
* Non-GAAP
© Bruker Corporation 4
517
552
Q4 12 Q4 13
Q4 2013 Performance
Organic revenue growth of 6.2% y-o-y
1.Double-digit revenue growth in BioSpin
driven by NMR demand in Europe; Pre-
Clinical Imaging division rebounds
2.CALID revenues grow mid-single digits
3.BMAT revenues decline mid-teens due to
weakness in industrial markets,
particularly in Asia
Operating leverage drives 60 bps non-GAAP
operating margin expansion
11% non-GAAP EPS growth in Q4 2013
compared to Q4 2012
Free cash flow of $122M in Q4 2013
Revenues [$ bn]
Operating Margin*
Good revenue growth in life sciences, offset by
industrial weakness; FX headwinds lower profitability
+3%
* Non-GAAP
© Bruker Corporation 5
FY 2013 Performance
Organic revenue growth of 3.2%
1.BioSpin delivers high-single digit
revenue growth; double-digit growth in
bookings driven by high-field NMR
2.CALID grows mid-single digits driven by
strong performance of Optics Division
3.BMAT declines high-single digits
Non-GAAP operating margins decline by ~100
bps; changes in FX lowered operating
margins by more than 100 bps
Non-GAAP EPS of $0.77 compared to $0.83 in
FY 2012
Free cash flow increases by $34M y-o-y to
$95M
FY2013 Performance
1.79 1.84
FY 12 FY 13
12.2%
11.2%
YTD 12
YTD 13
-100 bps
Bruker BioSpin Group
Strong growth in both revenue and new order bookings
Performance driven by robust academic demand in Europe, Japan
Pre-Clinical Imaging Division rebounds and posts good growth for
the year as more large MRI installations are completed in Q4
Settlement with Perkin Elmer in Q1-14 in optical imaging
Outsourcing & divestiture milestones achieved in 2013
Bruker CALID* Group
Optics Division growth from new products Lumos and Tango
Life Science & Clinical Division’s growth driven by MALDI Biotyper
(MBT) and FTMS; FDA clears first MBT claim in Q4-13
CAM division: narrowing strategic focus and reducing costs
Restructuring milestones reached late in Q4-13
Q1-14: Combining commercial management of CAM and
LSC to optimize market coverage and improve efficiency
6 © Bruker Corporation
GROUP OVERVIEW:
FY 2013 Performance
* Chemical, Applied Markets, Life Science, In-Vitro Diagnostics, Detection
Bruker MAT Group
Substantial weakness in industrial markets and Asia, particularly in
semiconductor, data storage and microelectronics industry
New order bookings stabilized and grew in 2nd half of 2013
Bruker Nano Surfaces Division seeing good demand for AFM Fast
Scan, and new Fluorescence Microscopy products
Good execution on controlling costs and mitigating the effect s of
revenue decline on profitability
BEST Segment
Revenue growth of 8%; non-GAAP operating margin of 8.6%
includes $5.7 million in Rosatom license revenues
• Ex-Rosatom, FY13 revenue growth was 18% y-o-y
• Ex-Rosatom, FY13 non-GAAP operating margin was 4.9%
Solid improvement in profitability (ex-Rosatom), additional actions
taken should benefit FY14 performance
GROUP OVERVIEW:
FY 2013 Performance
7 © Bruker Corporation
Transformation: We have made significant progress in
2013 and will continue in 2014-2015
Leadership/Organization Processes/Systems Restructuring/Productivity
• New CFO and three new Group presidents
• 10 BSI operating divisions organized into 3 groups
• Incentive systems changed to have more emphasis on profit and cash flow
• Transitioning to global business model, from country/legal entity model
• Implementing new financial consolidation system
• Implementing and harmonizing ERP systems
• Continued CRM roll-outs
• Launched restructuring initiatives in all businesses
• Effectively managing OPEX
• Internal lean initiatives combined with outsourcing and selected divestitures
• Reduced HC by ~300 via previously announced actions
© Bruker Corporation 8
Q4 and FY 2013 Financial Update
© Bruker Corporation 9
NON-GAAP FINANCIAL PERFORMANCE:
Q4 2013 Overview
[$ m, except EPS] Q4 2013 Q4 2012 Δ
Revenues 552.1 517.3 7%
Operating Income 81.3 73.0 11%
Margin (%) 14.7% 14.1%
EPS 0.31 0.28 11%
Free Cash Flow 122.4 67.9 54.5M
Margin expansion driven by lower operating expenses
FY13 EPS benefits from lower tax rate
Improving cash flow reflects higher profitability and efforts to improve working capital efficiency
10 © Bruker Corporation
COMMENTS
[$ m] Dec 31,2013 Dec 31,2012 Δ
Net Cash/(Debt) 83.7 (26.6) 415%
Working capital (WC)* 822.6 831.2 -1%
WC-to-revenue ratio 0.45 0.46 -0.017
* WC = (Accounts Receivable + Inventory – Accounts Payable)
Q4 2012 Organic Currency Acquisition Q4 2013
Q4 2013 revenue bridge
Solid organic revenue growth to exit 2013
Positive currency impact primarily the result of a strengthening Euro
First quarter of BMAT revenues from Prairie acquisition
11 © Bruker Corporation
Q4 2013 DRIVERS
Q4 2013 Revenue bridge [$ m]
32.3 0.5 2.0
517.3
Organic Currency Acquisitions & Divestitures Total
6.2% 0.4% 0.1% 6.7%
Q4 2013 Revenue Growth for Bruker Corp.
552.1
Q4 2013 Non-GAAP Results
BioSpin and CALID drive higher revenues
Gross margins lowered by currency and mix
Solid control of discretionary spending drives lower Opex
Lower year-over-year tax rate driven by jurisdictional mix
12 © Bruker Corporation
COMMENTS [$ m] Q4 2013 Q4 2012 Δ
Total Revenues 552.1 517.3 7%
Gross Profit 248.3 246.4 1%
Margin (% of sales) 45.0% 47.6%
SG&A -117.9 -123.1 -4%
(% of revenues) 21.4%
23.8%
R&D -49.1 -50.3 -2%
(% of revenues) 8.9% 9.7%
Operating Income 81.3 73.0 11%
(% of revenues) 14.7% 14.1%
Net Income* 52.2
46.7 12%
EPS $0.31 $0.28 11%
Shares Outstanding 169.0 167.7 NM
Sum of items may not total due to rounding * Attributable to Bruker
Q4 2013 Reconciliation of GAAP to
Non-GAAP Results
[$ m] Q4 2013 Q4 2012
GAAP Operating Income 61.0 39.2
Restructuring Costs 11.7 0.5
Acquisition Related Costs 2.3 0.2
Purchased Intangible Amortization 5.4 5.8
Other Costs 0.9 27.3
TOTAL 20.3 33.8
Non-GAAP Operating Income 81.3 73.0
Non-GAAP Net Interest Income (Expense) & Other -7.2
-4.7
Non GAAP Profit Before Tax 74.1 68.3
Taxes -21.2 -21.1
Non-GAAP Tax Rate 28.6% 30.9%
Minority Interest -0.7 -0.5
Non-GAAP Net Income** 52.2 46.7
Non-GAAP EPS $0.31 $0.28
13 © Bruker Corporation
Sum of items may not total due to rounding ** Attributable to Bruker
FY 2013 Non-GAAP Results
[$ m] FY 2013 FY 2012 Δ
Total Revenues 1,839.4 1,791.4 3%
Gross Profit 832.5 851.3 -2%
Margin (% of sales) 45.3% 47.5%
SG&A -436.5 -437.0 NM
(% of revenues) 23.7%
24.4%
R&D -190.5 -195.3 -2%
(% of revenues) 10.4% 10.9%
Operating Income 205.5 219.0 -6%
(% of revenues) 11.2% 12.2%
Net Income* 129.3 138.3 -7%
EPS $0.77 $0.83 -7%
Shares Outstanding 168.5 167.4 NM
14 © Bruker Corporation
Sum of items may not total due to rounding * Attributable to Bruker
FY 2013 Reconciliation of GAAP to
Non-GAAP Results
[$ m] FY 2013 FY 2012
GAAP Operating Income 148.2 156.0
Restructuring Costs 25.3 0.9
Acquisition Related Costs 4.5 3.1
Purchased Intangible Amortization 20.7 22.0
Other Costs 6.8 37.0
TOTAL 57.3 63.0
Non-GAAP Operating Income 205.5 219.0
Non-GAAP Net Interest Income (Expense) & Other -26.0* -19.9*
Non GAAP Profit Before Tax 179.5 199.1
Taxes -48.5 -60.1
Non-GAAP Tax Rate 27.0% 30.2%
Minority Interest -1.7 -0.7
Non-GAAP Net Income** 129.3 138.3
Non-GAAP EPS $0.77 $0.83
15 © Bruker Corporation
Sum of items may not total due to rounding *Excludes $2.4 and $2.2 million of gains for 2013 and 2012 **Attributable to Bruker
Balance sheet
[$ m] Dec 31, 2013 Dec 31, 2012 Δ
Total Assets 1,988.3 1,856.4 7%
Equity 850.2 709.7 20%
Cash & Cash Equivalents 438.7 310.6 41%
Inventory 589.8 611.5 -4%
Intangible & Other Assets 256.9 263.1 -2%
Financial Debt 355.0 337.2 5%
Net Cash/(Debt) 83.7 (26.6) 415%
16 © Bruker Corporation
FY 2013 Cash Flow Statement
[$ m] FY 2013 FY 2012 Δ
Net Income 81.8 78.2 3.6
Depreciation & amortization 61.3 59.1 2.2
Changes in working capital -10.6 -52.3 41.7
Other 12.5 48.1 -35.6
Operating cash flow 145.0 133.1 11.9
Capital expenditures -50.3 -72.8 22.5
Free cash flow 94.7 60.3 34.4
17 © Bruker Corporation
2014 Guidance
© Bruker Corporation 18
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%
19 © Bruker Corporation
FY 2014 Guidance
Similar level of top-line growth from all three Groups: BioSpin, CALID, and BMAT
Less than $50M of capex spending
After strong Q4-13, Q1-14 financial performance expected to be similar to Q1-13 performance
Currency assumptions against US dollar: Yen/USD: 104 EUR/USD: 1.36
ASSUMPTIONS
Appendix
© Bruker Corporation 20
Q4 2013 GAAP Results
[$ m] Q4 2013 Q4 2012 Δ
Total Revenues 552.1 517.3 7%
Gross Profit 235.9 241.7 -2%
Margin (% of sales) 42.7% 46.7%
SG&A -118.3 -124.0 -5%
(% of revenues) 21.4% 24.0%
R&D -49.1 -50.3 -2%
(% of revenues) 8.9% 9.7%
Operating Income 61.0 39.2 56%
(% of revenues) 11.0% 7.6%
Net Income* 35.2 12.8 175%
EPS $0.21 $0.08 163%
Shares Outstanding 169.0 167.7 NM
21 © Bruker Corporation
Sum of items may not total due to rounding * Attributable to Bruker
FY 2013 GAAP Results
[$ m] FY 2013 FY 2012 Δ
Total Revenues 1,839.4 1,791.4 3%
Gross Profit 805.2 829.4 -3%
Margin (% of sales) 43.8% 46.3%
SG&A -437.9 -440.4 -1%
(% of revenues) 23.8%
24.6%
R&D -190.5 -195.3 -2%
(% of revenues) 10.4% 10.9%
Operating Income 148.2 156.0 -5%
(% of revenues) 8.1% 8.7%
Net Income* 80.1 77.5 3%
EPS $0.48 $0.46 4%
Shares Outstanding 168.5 167.4 NM
22 © Bruker Corporation
Sum of items may not total due to rounding * Attributable to Bruker
FY 2012 Organic Currency Acquisition FY 2013
FY 2013 revenue bridge
Organic Currency Acquisitions & Divestitures Total
3.2% -0.3% -0.2% 2.7%
23 © Bruker Corporation
YTD 2013 Revenue bridge [$ m]
57.1 -5.3 -3.8
1,791.4
FY 2013 Revenues for Bruker Corp.
1,839.4
Q4 2013 Cash Flow Statement
Strong free cash flow
Improvement in working capital primarily result of better management of inventory
Lower capex related to the timing of projects, and a concerted effort to reduce spending
24 © Bruker Corporation
COMMENTS [$ m] Q4 2013 Q4 2012 Δ
Net Income 35.9 13.3 22.6
Depreciation & amortization 15.9 16.6 -0.7
Changes in working capital* 22.0 -9.5 31.5
Other 57.6 70.5 -12.9
Operating cash flow 131.4 90.9 40.5
Capital expenditures -9.0 -23.0 14.0
Free cash flow 122.4 67.9 54.5
Q4 SEGMENT RESULTS:
BSI and BEST GAAP Performance
[$ m] Q4 2013 Q4 2012 Δ
REVENUE
Scientific Instruments (BSI) 511.0 482.1 6%
Organic Revenue Growth (%) 5.9% 9.2%
Energy & Supercon Technologies (BEST) 46.6 37.8 23%
Organic Revenue Growth (%) 17.4% 16.5%
Corporate Eliminations & Other -5.5 -2.6
Total Revenue 552.1 517.3 7%
OPERATING INCOME (LOSS)
Scientific Instruments (BSI) 54.9 34.5 59%
Energy & Supercon Technologies (BEST) 2.8 -0.6 566%
Corporate Eliminations and Other 3.3 5.3
Total Operating Income (Loss) 61.0 39.2 56%
25 © Bruker Corporation