Q2 2014 Earnings Slides

Bruker Corporation (NASDAQ: BRKR)

Q2 2014 Earnings Presentation

Frank Laukien, President & CEO

Charles Wagner, EVP & CFO

Joshua Young, VP, Investor Relations August 6, 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

Q2 & YTD 2014 Business Update


$0.18

$0.21

Q2 13

Q2 14

Q2 Financials

Revenues [$ m]

Non-GAAP EPS

Operating performance in Q2 was in line with

expectations

+1%

+17%


455 457

Q2 13 Q2 14

Q2 2014 Performance

Revenue growth of 1% y-o-y, compared to

strong Q2 2013

1.Mid-single digit growth in BioSpin and solid

BEST performance drive revenues

2.CALID declines mid-single digits due to

weak CAM performance & Detection delays

3.BMAT flat, following good Q1 2014

Non-GAAP operating margin down by 20 basis

points y-o-y, due to higher opex spending

Non-GAAP EPS growth of 17% y-o-y

Free cash flow (FCF) improves by $29M, with

$5M in Q2 2014, compared to ($23M) in Q2

2013

$0.26

$0.32

H1 2013

H1 2014

H1 Financials

Revenues [$ m]

Non-GAAP EPS

In H1 2014 we have delivered a solid combination of

revenue growth, margin expansion and higher FCF

+4%

+23%


848 881

H1 2013 H1 2014

H1 2014 Performance

Revenue growth of 4% y-o-y

1.Low to mid-single digit growth from all

Groups

2.BEST revenues up 12%

3.Mid-single digit revenue growth in Asia

and Europe

Non-GAAP operating margin expands by 50

basis points y-o-y

Non-GAAP EPS growth of 23% y-o-y

FCF improves by $71M, totaling $15M in H1

2014, compared to ($56M) in H1 2013

Bruker BioSpin Group

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

Americas; Asia growth benefits from 2013 Japanese stimulus

Revenue recognized from installation of world’s first horizontal 21

Tesla magnet for FT-ICR at NHMFL in Tallahassee, FL

Pre-Clinical Imaging (PCI) Division growth driven by solid

performance from Molecular Imaging products

Lower 2H 2014 revenue outlook due to higher percentage of order

bookings occurring later in the year than originally planned

Bruker CALID Group

Mid-single digit revenue decline; weak CAM and Detection results

LSC Division drives low-single digit growth; successful ASMS launch

MALDI Biotyper business continues strong growth

Solid uptake in US; approval from Chinese FDA

CAM Division performance suffers as restructuring efforts begin

CAM expects ~$20M y-o-y revenue drop in H2 2014

Detection Division Q2 revenues impacted by export license delays

6 © Bruker Corporation

GROUP OVERVIEW:

Q2 2014 Performance & Outlook

Bruker MAT Group

BMAT Group revenues flat, compared to Q2 2014

Academic & research markets are healthy

No pickup in demand from microelectronics markets

Flat Q2 BMAT bookings contribute to lower outlook for H2

Bruker Nano Surfaces Division growth from Prairie acquisition,

while AXS and Elemental divisions post weaker 2nd quarter

Completed Vutara acquisition: fast 3D super-resolution technology

strengthens Bruker’s cellular fluorescence microscopy portfolio

BEST Segment

Revenue growth of 12% and non-GAAP operating margin of 10.9%

Good growth in low temperature superconducting wire for MRI

magnets and big science & energy research applications

Most of 2014 growth and profitability achieved in 1st half

Customer has delayed delivery of Rosatom pilot line to Russia, so

~$10M drops out of Q3 2014 revenue plan

GROUP OVERVIEW:

Q2 2014 Performance & Outlook


Q2 2014 Financial Update


NON-GAAP FINANCIAL PERFORMANCE:

Q2 2014 Overview

[$ m, except EPS] Q2 2014 Q2 2013 Δ

Revenues 457.4 454.9 1%

Operating Income 52.7 53.3 -1%

Margin (%) 11.5% 11.7%

EPS 0.21 0.18 17%

Free Cash Flow 5.4 -23.2 28.6M

Q2’14 revenues in line with expectations after strong Q1’14, and compared to relatively strong Q2’13

Currency headwind and SG&A spending result in slightly lower operating margins y-o-y

Continued improvement in working capital helps to improve free cash flow


COMMENTS

[$ m] Jun 30,2014 Dec 31,2013 Δ

Net Cash 101.9 83.7 22%

Working capital (WC)* 789.5 822.6 -4%

WC-to-revenue ratio 0.42 0.45 -0.03

* WC = (Accounts Receivable + Inventory – Accounts Payable)

Q2 2013 Organic Currency Acquisition Q2 2014

454.9 457.4

Q2 2014 revenue bridge

Stronger Euro is primary driver for positive currency contribution

Acquisition benefit relates to BMAT acquisition of Prairie Technologies’ fluorescence microscopy products


Q2 2014 DRIVERS

Q2 2014 Revenue Bridge [$ m]

-9.9 10.3 2.1

Organic Currency Acquisitions & Divestitures Total

-2.2% 2.3% 0.5% 0.6%

Q2 2014 Revenue Growth for Bruker Corp.

Q2 2014 Non-GAAP Results

Gross margin benefits from positive mix, particularly in BioSpin Group

SG&A expenses higher due to selling and marketing investments; $2M of increase due to currency

Lower R&D reflects restructuring actions taken in lower growth businesses

Good EPS growth over comparably strong Q2’13


COMMENTS [$ m] Q2 2014 Q2 2013 Δ

Total Revenues 457.4 454.9 1%

Gross Profit 211.8 206.5 3% Margin (% of sales) 46.3% 45.4%

SG&A -114.6 -106.7 7%

(% of revenues) 25.1%

23.5%

R&D -44.5 -46.5 -4% (% of revenues) 9.7% 10.2%


(% of revenues) 11.5% 11.7%

Tax Rate 30.0% 31.1% -110 bps

Net Income* 34.9 29.9 17%

EPS $0.21 $0.18 17%

Shares Outstanding 169.5 168.4 NM

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

Q2 2014 Reconciliation of GAAP and

Non-GAAP Results

[$ m] Q2 2014 Q2 2013

GAAP Operating Income 35.4 43.5

Restructuring Costs 10.7 1.8

Acquisition Related Costs 0.5 0.3

Purchased Intangible Amortization 4.8 5.1

Other Costs 1.3 2.6

TOTAL 17.3 9.8

Non-GAAP Operating Income 52.7 53.3

Non-GAAP Net Interest Income (Expense) & Other -2.3 -9.3*

Non GAAP Profit Before Tax 50.4 44.0

Taxes -15.1 -13.7

Non-GAAP Tax Rate 30.0% 31.1%

Minority Interest -0.4 -0.4

Non-GAAP Net Income** 34.9 29.9

Non-GAAP EPS $0.21 $0.18


* Excludes $1.5M of gains ** Attributable to Bruker Sum of items may not total due to rounding

H1 2013 Organic Currency Acquisition H1 2014

848.3 881.1

H1 2014 revenue bridge

H1 2014 y-o-y revenue growth in line with initial expectations

Positive currency benefit primarily due to the strong Euro, especially in Q2’14

All Groups generate low to mid-single digit growth in H1 2014, compared to H1 2013


H1 2014 DRIVERS

H1 2014 Revenue Bridge [$ m]

16.0 10.3 6.5

Organic Currency Acquisitions & Divestitures Total

1.9% 1.2% 0.8% 3.9%

H1 2014 Revenue Growth for Bruker Corp.

H1 2014 Non-GAAP Results

[$ m] H1 2014 H1 2013 Δ


Gross Profit 399.0 386.0 3% Margin (% of sales) 45.3% 45.5%

SG&A -223.7 -213.2 5%

(% of revenues) 25.4% 25.1%

R&D -90.5 -95.9 -6% (% of revenues) 10.3% 11.3%

Operating Income 84.8 76.9 10% (% of revenues) 9.6% 9.1%

Tax Rate 28.5% 29.9% -140 bps

Net Income* 53.6 43.3 24%

EPS $0.32 $0.26 23%



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

H1 2014 Reconciliation of GAAP to

Non-GAAP Results

[$ m] H1 2014 H1 2013

GAAP Operating Income 56.0 55.7

Restructuring Costs 13.1 5.0

Acquisition Related Costs 1.6 0.9

Purchased Intangible Amortization 10.0 10.2

Other Costs 4.1 5.1

TOTAL 28.8 21.2

Non-GAAP Operating Income 84.8 76.9

Non-GAAP Net Interest Income (Expense) & Other* -7.5 -14.1

Non GAAP Profit Before Tax 77.3 62.8

Taxes -22.0 -18.8

Non-GAAP Tax Rate 28.5% 29.9%

Minority Interest -1.7 -0.7

Non-GAAP Net Income** 53.6 43.3

Non-GAAP EPS $0.32 $0.26


Sum of items may not total due to rounding *Excludes $0.3 and $2.4 million of gains for 2014 and 2013 **Attributable to Bruker

Balance sheet

[$ m] Jun 30, 2014 Dec 31, 2013 Δ

Cash, Cash Equivalents & Short-term investments

457.6 438.7 4%

Financial Debt 355.7 355.0 NM

Net Cash 101.9 83.7 22%


[$ m] Jun 30, 2014 Dec 31, 2013 Δ

Total Assets 2,003.9 1,988.3 1%

Working Capital* 789.5 822.6 -4%

Intangible & Other Assets 245.1 256.9 -5%

* WC = (Accounts Receivable + Inventory - Accounts Payable)

H1 2014 Cash Flow Statement

Cash conversion cycle improves by 7 days compared to Q2’13

– DIO: 229

– DSO: 57

– DPO: 42

– CCC: 244

Lower Capex reflects timing of projects; expect acceleration of spending in H2 2014


COMMENTS [$ m] H1 2014 H1 2013 Δ

Net Income 26.8 29.0 -2.2

Depreciation & amortization 30.0 30.2 -0.2

Changes in working capital* 18.8 -41.6 60.4

Other -44.1 -42.5 -1.6

Operating cash flow 31.5 -24.9 56.4

Capital expenditures -16.8 -31.1 14.3

Free cash flow 14.7 -56.0 70.7

2014 Guidance


Bruker’s revised FY 2014 Guidance

Revenue Growth (reported) 1% to 2%

Non-GAAP Tax Rate ~29%-30%

Non-GAAP EPS $0.78 to $0.81


Updated FY 2014 Guidance

Lowering guidance due to additional CAM weakness after restructuring announcement, drop-out of Rosatom pilot line revenue in Q3’14, and reduced H2 growth outlook in BioSpin and BMAT Groups

Less than $50M of capex expected in FY2014

Expect revenues in H2 2014 to be flat y-o-y

Anticipate very weak Q3’14 and sequentially stronger Q4’14

Current currency assumptions: Yen/USD: 101 EUR/USD: 1.37

ASSUMPTIONS

Appendix


Q2 2014 GAAP Results

[$ m] Q2 2014 Q2 2013 Δ


Gross Profit 200.5 201.6 -1%

Margin (% of sales) 43.8% 44.3%

SG&A -115.0 -107.1 7%

(% of revenues) 25.1% 23.5%

R&D -44.5 -46.5 -4%

(% of revenues) 9.7% 10.2%


(% of revenues) 7.7% 9.6%

Net Income* 16.4 22.9 -28%

EPS $0.10 $0.14 -29%



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

H1 2014 GAAP Results

[$ m] H1 2014 H1 2013 Δ


Gross Profit 380.2 376.1 1%

Margin (% of sales) 43.2% 44.3%

SG&A -224.5 -213.9 5%

(% of revenues) 25.5%

25.2%

R&D -90.5 -95.9 -6%

(% of revenues) 10.3% 11.3%

Operating Income 56.0 55.7 1%

(% of revenues) 6.4% 6.6%

Net Income* 25.1 28.3 -11%

EPS $0.15 $0.17 -12%



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

Q2 2014 Cash Flow Statement

Improved free cash flow is the result of continued improvements in working capital and lower capital expenditures


COMMENTS [$ m] Q2 2014 Q2 2013 Δ

Net Income 16.8 23.3 -6.5

Depreciation & amortization 14.8 15.0 -0.2

Changes in working capital* 1.8 -21.1 22.9

Other -20.4 -23.9 3.5

Operating cash flow 13.0 -6.7 19.7

Capital expenditures -7.6 -16.5 8.9

Free cash flow 5.4 -23.2 28.6

Q2 SEGMENT RESULTS:

BSI and BEST GAAP Performance

[$ m] Q2 2014 Q2 2013 Δ

REVENUE

Scientific Instruments (BSI) 421.5 421.6 NM

Organic Revenue Growth (%) -2.5% 7.7%

Energy & Supercon Technologies (BEST) 41.4 37.1 12%

Organic Revenue Growth (%) 6.3% 40.0%

Corporate Eliminations & Other -5.5 -3.8

Total Revenue 457.4 454.9 1%

OPERATING INCOME

Scientific Instruments (BSI) 31.2 39.6 -21%

Energy & Supercon Technologies (BEST) 4.4 6.6 -33%

Corporate Eliminations and Other -0.2 -2.7

Total Operating Income 35.4 43.5 -19%


Sum of items may not total due to rounding

Q2 2014 Earnings Slides

Investor Relations

Transcript of Q2 2014 Earnings Slides