Bruker Corporation (Nasdaq: BRKR)€¦ · 1. Accelerate revenue growth. 3. Drive. Operational...

© Bruker Corporation

Bruker drives customer success and profitable growth by enabling scientific discoveries and delivering high-performance analytical, life science, pharmaceutical and diagnostic solutions.

Innovation with Integrity

Bruker Corporation (Nasdaq: BRKR)

Bruker Corporation Safe Harbor StatementAny statements contained in this presentation that do not describe historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Security Exchange Act of 1934, as amended, including statements regarding management’s expectations for future financial and operational performance, expected growth and business outlook; statements regarding our business and investment focus; expected success of our portfolio or technology investments; and payments of any future dividends. Forward-looking statements are based on current expectations, forecasts and assumptions of our management and are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, 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; fluctuations in foreign currency exchange rates; implementation of strategies forimproving our operating margins, profitability and cash flow; changing technologies; product development and market acceptance of our products; the cost and pricing of our products; competition; dependence on collaborative partners, key suppliers and contract manufacturers; capital spending and government funding policies; changes in governmental regulations; the use and protection of intellectual property rights and other risk factors discussed from time to time in our filings with the Securities and Exchange Commission, or SEC. These and other factors are identified and described in more detail in our most recent reports filed with the SEC, including, without limitation, our annual report on Form 10-K for the year ended December 31, 2018, 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.

2© Bruker Corporation

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Bruker OverviewDifferentiated Leader in Attractive, Diverse Life Science and Diagnostic Tools Markets

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NANO GroupAdvanced X-Ray Atomic Force MicroscopyFluorescence MicroscopySurface Analysis SystemsSemiconductor Metrology

CALID GroupLife Science Mass SpecMicrobiology & DiagnosticsOptical SpectroscopySecurity Applications

• Founded in 1960, Bruker brand stands for innovation

• Market leader in high-value scientific instruments and analytical solutions

• FY 2018 revenue: ~$1.9 billion

• R&D investment: ~9% of revenue

• >6,500 employees worldwide

• 2019-2023 dual strategy:Project Accelerate and

Operational Excellence

• Long-term oriented ownership: about 1/3 owned by Laukien family shareholders

BIOSPIN GroupMagnetic Resonance: NMR, EPR, preclinical MRIand PET/MR

BEST GroupSuperconductors for Science & MedicineBig Science /Fusion

Life Science Research in Academia, Medical Schools and Government

Pharma & Biopharma

Microbiology & Molecular Diagnostics

Applied Markets

Industrial Research & Semiconductor Metrology

Superconductors for Science & Medicine

Bruker revenue breakdown, % of FY 2018 revenue(1):

(1) For the twelve months ended Dec. 31, 2018


37%

29%

4%

30%

Europe

APAC

Americas Rest of World

4%

Bruker Key Objectives for 2019-2023

4Non-GAAP operating margin and ROIC are non-GAAP measures. A reconciliation of these measures to the most directly comparable GAAP measures is available at the end of this presentation and on Bruker’s website at https://ir.bruker.com/financial-info/quarterly-results/default.aspx

2. Transform portfolio with six high-growth, high-margin Project Accelerate initiatives

1. Accelerate revenue growth

3. Drive Operational Excellence, sustain multi-year margin expansion

4. Disciplined capital deployment and high ROIC

• Enhance organic revenue growth with Project Accelerate initiatives

• Expand operating margin 75-100 bps per year, on average, over a multi-year timeframe• Ongoing commercial, product R&D and operational excellence initiatives

• Strategically focused M&A in support of dual strategy• Quarterly dividend $0.04 per share and periodic share repurchases• BRKR ROIC >20%

Proteomics & Phenomics

Biopharma & Applied

Microbiology & Diagnostics

Neuroscience & Cell Biology

Next-gen Nanotech & Semi Tools

After-Market


2018 2019E 2020E 2021E 2022E 2023E

Proteomics & Phenomics

Biopharma & Applied

Microbiology & Diagnostics

Neuroscience & Cell Microscopy

Next-gen Nanotech & Semi Tools

Aftermarket

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Portfolio Transformation Reshaping our portfolio for faster growth and higher margins*

Portfolio


timsTOF Pro Proteomics, 1.0 GHz NMR

Advanced NMR and mass spec solutions for biologics and small molecule drug discovery, development and QA/QCFTIR, NIR, Raman, NMR and mass spec solutions for applied markets, e.g. food analysis

MALDI Biotyper & consumables ramp, Bruker-Hain MDx assays

2P+ multiphoton, lattice light sheet microscopy, SPIM ramp

Unique X-ray metrology and automated AFM tools

Services & consumables

Mass spec based Phenomics, 1.2 GHz NMR

Blood culture ID, susceptibility testing, Liquid Arrays™

Further next-gen microscopy products

XCD ramp

Scientific software expansion

* Chart shows approximate timeline for financially relevant contributions from Project Accelerate initiatives and product cycles.

UPDATE ON PROJECT ACCELERATE:

First 1.1 GHz High-Resolution NMR Magnet for Structural Biology Introduced at ENC 2019

New World Record: Stable, high-resolution 1.1 GHz NMR

superconducting magnet

• Unique low-/high-temperature superconductor hybrid magnet

• In early 2019, key collaborators demonstrated scientific benefits of this novel

enabling technology for structural biology, IDPs and molecular dynamics research

in cell biology and pathobiology

• Bruker now has orders for nine 1.2 GHz NMRs in EuropeETH Zurich, Switzerland CERM - MR Center at the University

of Florence, Italy

Technical University,Munich, Germany

Center for Biomolecular MR in Frankfurt, Germany

Max Planck Institute for Biophysical Chemistry in Goettingen, Germany

Leibniz-Forschungsinstitut in Berlin, Germany (New)

CNRS, UCCS - UGSF Lille, France

Utrecht University;The Netherlands

Forschungszentrum Juelich, Germany

New BioSolids CryoProbe

• For investigation of membrane proteins or disease aggregates at physiological

temperatures

• 3x - 4x boost in sensitivity

• Convenient automatic tuning, matching and magic-angle adjustment

Sample of kinesin, a 349-residue protein forming a large complex with microtubules

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UPDATE ON PROJECT ACCELERATE:

timsTOF™ Pro at US HUPO and EUPA 2019: Progress in TIMS/PASEF Methods for Record-breaking Throughput and Ultra-High Sensitivity in 4D Proteomics

• Next-gen 4D Proteomics: 4D ‘match between runs’ and DIA-PASEF using Collision Cross-

Sections (CCS) for exceptional completeness, key for diagnostics

• High-throughput plasma proteomics research: 192 plasma samples from septic shock patients measured in 2 days, with 11.5 minute LC gradients on 100 ng samples

• 4D Lipidomics & 4D Metabolomics: large-scale, accurate, reproducible CCSs are game-changing

• Award Winning: timsTOF Pro won EUPA 2019 Technology Award

timsTOF Pro driving transition from $1,000 to $100 proteome for robust pharmaco-proteomics, and large-cohort (>1,000) clinical research and validation

timsTOF Pro suitable for single-cell proteomics (SCP) and ultra-high sensitivity cancer proteomics research

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Q1 2019 Performance Year-over-Year

Revenues increase +$30M, or +6.9%−Organic growth +5.5%, with BSI up +5.5%, and

BEST up +5.4%−Acquisitions add +6.0%−Constant currency growth +11.5%−Negative FX translation of -4.6%

Non-GAAP gross margin increases 140 bps

Non-GAAP operating margin increases 125 bps, including strong ~80 bps FX tailwind in Q1

GAAP EPS of $0.20, compared to $0.17 in Q1-18

Non-GAAP EPS of $0.28, an increase of 16.7% compared to $0.24 in Q1-18

Q1 Financials

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Revenues [$M]

Non-GAAP EPS

Q1 2019: Solid revenue growth, margin improvement and EPS growth

+6.9%

+17%

*Reconciliations of non-GAAP to GAAP financial measures are available in our earnings press release and at the end of this presentation. Y-o-y: year over year. Bps: basis points

Bruker 2015 to 2018 FinancialsAccelerating revenue growth and healthy margin expansion drive EPS

$1.62B $1.61B

$1.77B

$1.90B

FY 2015 FY2016 FY 2017 FY 2018

Revenue

(1)Non-GAAP operating margin and non-GAAP EPS are non-GAAP measures. Reconciliations of these measures to the most directly comparable GAAP measures are available at the end of this presentation and on Bruker’s website at https://ir.bruker.com/financial-info/quarterly-results/default.aspx


13.5%

15.0%

15.9%

16.8%

FY 2015 FY2016 FY 2017 FY 2018

Non-GAAP Operating Margin(1)

$0.89

$1.19 $1.21

$1.40

FY 2015 FY2016 FY 2017 FY 2018

Non-GAAP EPS(1)

https://ir.bruker.com/financial-info/quarterly-results/default.aspx

FY 2019 Raised Guidance

Revenue Growth y-o-y +7% to +8%

Non-GAAP Operating Margin Expansion y-o-y(1)

+90 bps to +120 bps

Non-GAAP EPS $1.57 to $1.61(+12% to +15% y-o-y)

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Updated FY 2019 Guidance*: Further organic revenue growth and operating margin improvement, solid EPS growth

Organic revenue growth: +4.5% to +5.5%

Acquisition revenue growth: approximately +5.0%

Constant currency revenue growth: +9.5% to +10.5%

FX revenue headwind: approximately -2.5%

Non-GAAP tax rate: ~25%

Fully diluted share count: ~157M shares

Capex: approx. $80M

FX assumptions (Mar. 31, 2019 rates):

USD = 110.8 Yen EUR = 1.12 USD CHF = 1.00 USD

2019 ASSUMPTIONS

(1)From FY18 non-GAAP operating margin of 16.8%.

*Guidance updated May 2, 2019

Interested in learning more about Bruker?

Join us at our Investor Day: To request an invitation email:Thursday, June 20, 2019 [email protected]

Nasdaq MarketSite, New York City

8:00 am -1:00 pm

(Doors open at 7:30 am)


Bruker Investor Day


www.bruker.com

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Q1 2019 Reconciliation of GAAP and Non-GAAP Results Y-o-Y

[$M, except EPS] Q1 2019 Q1 2018

GAAP Operating Income 41.9 38.1

Restructuring Costs 4.0 3.5

Acquisition-Related Costs 4.9 1.0

Purchased Intangible Amortization 10.1 6.8

Other Costs 1.4 3.5

TOTAL 20.4 14.8

Non-GAAP Operating Income 62.3 52.9

Non-GAAP Interest & Other Expense, net -3.5 -2.3

Non GAAP Profit Before Tax 58.8 50.6

Non-GAAP Income Tax Provision -14.4 -12.0

Non-GAAP Tax Rate 24.5% 23.7%

Minority Interest 0.1 -0.4

Non-GAAP Net Income* 44.5 38.2

Non-GAAP EPS $0.28 $0.24

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

Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (unaudited)

© Bruker Corporation 14

(1)The Company adopted Accounting Standards Update (ASU) 2017-07 as of January 1, 2018 under the retrospective approach. Accordingly, the 2015, 2016 and 2017 income statement accounts have been restated to reflect ASU 2017-07.

(in millions, except per share amounts)2015 (1) 2016 (1) 2017 (1) 2018

Reconciliation of Non-GAAP Operating Income, Non-GAAP Profit Before Tax, Non-GAAP Net Income, and Non-GAAP EPSGAAP Operating Income 160.2$ 181.8$ 219.5$ 262.4$ Non-GAAP Adjustments:Restructuring Costs 29.3 20.8 16.2 9.4 Acquisition-Related Costs (4.7) 11.1 10.2 7.3 Purchased Intangible Amortization 20.8 21.7 29.6 28.9 Other Costs 13.9 7.1 5.4 9.9 Total Non-GAAP Adjustments: 59.3$ 60.7$ 61.4$ 55.5$

Non-GAAP Operating Income 219.5$ 242.5$ 280.9$ 317.9$ Non-GAAP Operating Margin 13.5% 15.0% 15.9% 16.8%Non-GAAP Interest & Other Expense, net (21.8) (13.4) (22.3) (17.7)Non-GAAP Profit Before Tax 197.7 229.1 258.6 300.2

Non-GAAP Income Tax Provision (43.4) (35.9) (64.7) (78.5) Non-GAAP Tax Rate 22.0% 15.7% 25.0% 26.1%Minority Interest (3.3) (0.9) (1.7) (1.3)

Non-GAAP Net Income Attributable to Bruker 151.0 192.3 192.2 220.4

Weighted Average Shares Outstanding (Diluted) 169.1 162.2 159.1 157.2

Non-GAAP Earnings Per Share 0.89$ 1.19$ 1.21$ 1.40$

Twelve Months Ended December 31,

Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (Unaudited)




Reconciliation of GAAP and Non-GAAP Gross ProfitGAAP Gross Profit 711.2$ 745.3$ 816.0$ 900.0$ Non-GAAP Adjustments:Restructuring Costs 21.2 11.0 5.6 2.6 Acquisition-Related Costs 2.5 2.1 5.7 3.9 Purchased Intangible Amortization 18.7 18.7 24.0 21.6 Other Costs - 0.1 0.8 0.6 Total Non-GAAP Adjustments: 42.4 31.9 36.1 28.7Non-GAAP Gross Profit 753.6$ 777.2$ 852.1$ 928.7$ Non-GAAP Gross Margin 46.4% 48.2% 48.3% 49.0%

Reconciliation of GAAP and Non-GAAP Tax RateGAAP Tax Rate 18.0% 13.0% 59.4% 26.0% Non-GAAP Adjustments:Tax Impact of Non-GAAP Adjustments -1.5% -1.0% -0.1% -0.6%Tax Authority Settlements -0.8% 0.1% 0.0% 0.0%Valuation Allowance Release 6.8% 3.7% 0.0% 0.0%U.S. Tax Reform- Toll Charge 0.0% 0.0% -27.8% -2.7%U.S. Tax Reform- Tax Rate Change 0.0% 0.0% -0.6% 0.1%U.S. Tax Reform- Change in APB 23 0.0% 0.0% -6.5% 3.5%Other Discrete Items -0.5% -0.1% 0.6% -0.2% Total Non-GAAP Adjustments: 4.0% 2.7% -34.4% 0.1%Non-GAAP Tax Rate 22.0% 15.7% 25.0% 26.1%






Reconciliation of GAAP and Non-GAAP Earnings Per Share (Diluted)GAAP Earnings Per Share (Diluted) 0.60$ 0.95$ 0.49$ 1.14$ Non-GAAP Adjustments:Restructuring Costs 0.18 0.13 0.10 0.06 Acquisition-Related Costs (0.03) 0.07 0.06 0.05 Purchased Intangible Amortization 0.12 0.14 0.19 0.18 Other Costs 0.08 0.04 0.04 0.06 Bargain Purchase Gain - (0.06) - - Pension Settlement Charge 0.06 - - - Income Tax Rate Differential (0.12) (0.08) 0.33 (0.09) Total Non-GAAP Adjustments: 0.29 0.24 0.72 0.26 Non-GAAP Earnings Per Share (Diluted) 0.89$ 1.19$ 1.21$ 1.40$

Reconciliation of GAAP and Non-GAAP Interest & Other Income (Expense), netGAAP Interest & Other Income (Expense), net (32.2)$ (4.2)$ (21.7)$ (17.7)$ Non-GAAP Adjustments:Bargain Purchase Gain - (9.2) (0.6) - Pension Settlement Charge 10.2 - - - Sale of Product Line 0.2 - - - Non-GAAP Interest & Other Income (Expense), net (21.8)$ (13.4)$ (22.3)$ (17.7)$






Reconciliation of GAAP Operating Cash Flow and Non-GAAP Free Cash FlowGAAP Operating Cash Flow 229.2$ 130.8$ 154.4$ 239.7$ Non-GAAP Adjustments:Purchases of property, plant and equipment (34.2) (37.1) (43.7) (49.2) Non-GAAP Free Cash Flow 195.0$ 93.7$ 110.7$ 190.5$

Reconciliation of Non-GAAP Return on Invested Capital (ROIC)

Non-GAAP Operating Income (from above) 219.5$ 242.5$ 280.9$ 317.9$ Less: Non-GAAP Income Tax Provision (from above) (43.4) (35.9) (64.7) (78.5)Non-GAAP Operating Income after Tax 176.1$ 206.6$ 216.2$ 239.4$

Average Total Invested Capital:Average Long-Term Debt 310.1$ 328.8$ 403.6$ 369.1$ Average Current portion of Long-Term Debt 0.7 10.4 10.1 9.3Average Total Shareholders' Equity 752.3 713.0 713.3 830.6Less: Average Cash and Cash Equivalents (293.3) (304.8) (333.7) (323.7) Average Total Invested Capital 769.8$ 747.4$ 793.3$ 885.3$

Return on Invested Capital (ROIC) 22.9% 27.6% 27.3% 27.0%




For more information, visit Bruker’s IR website at https://ir.bruker.com/financial-info/quarterly-results/default.aspx

With respect to the Company's outlook for 2019 non-GAAP operating margin, non-GAAP EPS and non-GAAP tax rate, we are not providing the most directly comparable GAAP financial measures or corresponding reconciliations to such GAAP financial measures on a forward-looking basis, because we are unable to predict with reasonable certainty certain items that may affect such measures calculated and presented in accordance with GAAP without unreasonable effort. Our expected non-GAAP operating margin, tax rate and EPS ranges exclude primarily the future impact of restructuring actions, unusual gains and losses, acquisition-related expenses and purchase accounting fair value adjustments. These reconciling items are uncertain, depend on various factors outside our management’s control and could significantly impact, either individually or in the aggregate, our future period operating margins, EPS and tax rate calculated and presented in accordance with GAAP.


(2) The restatement for ASU 2017-07 below reflects the impact to the Non-GAAP financial statements. The GAAP financial statements for the twelve months ended December 31, 2015 also reflected a reclassification of $10.2 million related to pension settlements charges.


Reconciliation of Impact of Adoption of ASU 2017-07 (2)

Cost of revenues (2.6) (2.8) (3.0) (2.1) Selling, general and administrative (0.7) (0.7) (0.7) (1.1) Research and development (1.0) (1.1) (1.1) (0.7) Interest and other income (expense), net 4.3 4.6 4.8 3.9 Net Impact to Net Income and Earnings per Share: - - - -


https://ir.bruker.com/financial-info/quarterly-results/default.aspx

Bruker Corporation (Nasdaq: BRKR)€¦ · 1. Accelerate revenue growth. 3. Drive. Operational...

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