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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
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Page 1: Q4 2013 Earnings Presentation

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

Page 2: Q4 2013 Earnings Presentation

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

Page 3: Q4 2013 Earnings Presentation

Q4 & FY 2013 Business Update

© Bruker Corporation 3

Page 4: Q4 2013 Earnings Presentation

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

Page 5: Q4 2013 Earnings Presentation

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

Page 6: Q4 2013 Earnings Presentation

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

Page 7: Q4 2013 Earnings Presentation

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

Page 8: Q4 2013 Earnings Presentation

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

Page 9: Q4 2013 Earnings Presentation

Q4 and FY 2013 Financial Update

© Bruker Corporation 9

Page 10: Q4 2013 Earnings Presentation

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)

Page 11: Q4 2013 Earnings Presentation

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

Page 12: Q4 2013 Earnings Presentation

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

Page 13: Q4 2013 Earnings Presentation

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

Page 14: Q4 2013 Earnings Presentation

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

Page 15: Q4 2013 Earnings Presentation

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

Page 16: Q4 2013 Earnings Presentation

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

Page 17: Q4 2013 Earnings Presentation

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

Page 18: Q4 2013 Earnings Presentation

2014 Guidance

© Bruker Corporation 18

Page 19: Q4 2013 Earnings Presentation

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

Page 20: Q4 2013 Earnings Presentation

Appendix

© Bruker Corporation 20

Page 21: Q4 2013 Earnings Presentation

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

Page 22: Q4 2013 Earnings Presentation

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

Page 23: Q4 2013 Earnings Presentation

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

Page 24: Q4 2013 Earnings Presentation

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

Page 25: Q4 2013 Earnings Presentation

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