Slide 1: Bruker Corporation Q3 2016 Earnings Presentation
Bruker Corporation (NASDAQ: BRKR) Q3 2016 Earnings Presentation Frank Laukien, President & CEO Anthony Mattacchione, SVP & CFO November 2, 2016 Miroslava Minkova, Head of Investor Relations Innovation with Integrity
Slide 2: Safe Harbor & Reg. G Statement
BRUKER CORPORATION Safe Harbor & Reg. G Statement 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 he
Slide 3: Q3 2016 & YTD 2016 Business Update
Q3 2016 & YTD 2016 Business Update 3
Slide 4: Q3-2016: Strong y-o-y margin and EPS expansion despite slow demand
Q3-2016: Despite continued slow demand, Bruker delivered strong y-o-y margin and EPS expansion Q3-2016 Performance Q3 Financials Revenues [$M] -1% Revenue decline of -$2M, or -0.6% y-o-y − Jordan Valley acquisition added +1.6% y-o-y − foreign exchange added +0.2% y-o-y 396 394 Organic revenue do
Slide 5: YTD Q3-2016: Operational improvements drive margin expansion and EPS growth
YTD Q3-2016: Operational improvements drive +130 bps operating margin expansion and EPS growth YTD Q3-2016 Performance YTD Financials Revenue decline of -$5M, or -0.4% y-o-y Revenues [$ m] flat − Jordan Valley acquisition adds +2.0% y-o-y − FX lowers revenue by -0.1% y-o-y 1146 1141 Organic reve
Slide 6: YTD Q3-2016 Operating Performance: BioSpin and CALID
GROUP OVERVIEW: YTD Q3-2016 Operating Performance Bruker BIOSPIN Group Mid-single-digit (MSD) revenue growth and strong margin expansion NMR benefits from better pricing, mix and 2015 restructuring PCI stabilizes with improving orders after a weak 2015 Good applied markets demand for NMR Foo
Slide 7: YTD Q3-2016 Operating Performance: NANO and BEST
GROUP OVERVIEW: YTD Q3-2016 Operating Performance Bruker NANO Group Low-single-digit (LSD) revenue decline (incl. Jordan Valley) due to weak European academic funding and weak global industrial markets AXS business revenue and margin weakness, additional factory consolidation and restructuring a
Slide 8: New targeted PCR Assays and rapid Syndromic Panels
CALID ACQUIRES ASSETS FOR SYNDROMIC PANEL DEVELOPMENT: New targeted PCR Assays and rapid Syndromic Panels to complement successful MALDI BioTyper™ platform • Bruker’s Microbiology business has acquired infrastructure and IP for nucleic acid testing (NAT) assay development and manufacturing • Hired e
Slide 9: 2016 Key Priorities
2016 Key Priorities Continue Margin Expansion as we transition from three-year Transformation to phase of Operational & Commercial Excellence • Additional factory consolidations and restructuring actions in 2016 with goal of >$10M annualized savings by H2-17 Strengthen systems and insights by harmon
Slide 10: Q3 2016 & YTD 2016 Financial Update
Q3 2016 & YTD 2016 Financial Update 10
Slide 11: Q3-2016 Non-GAAP Financial Performance Overview
NON-GAAP FINANCIAL PERFORMANCE: Q3-2016 Overview [$ m, except EPS] Q3-2016 Q3-2015 Δ COMMENTS Revenues 393.9 396.1 -1% Operating margin up +160 bps y-o-y on operational Operating Income 58.6 52.8 +11% improvements, despite modest revenue decline Margin (%) 14.9% 13.3% +160 bps Additional factory
Slide 12: Q3 2016 Revenue Bridge
Q3 2016 Revenue Bridge Q3 2016 DRIVERS Q3 2016 Revenue for Bruker Corporation Organic revenue decline driven by weak European Organic Currency Portfolio Total academic and global industrial markets -2.4% +0.2% +1.6% -0.6% Jordan Valley acquisition and adoption of X-ray semiconductor metrology Q3
Slide 13: Q3 2016 Non-GAAP Results
Q3 2016 Non-GAAP Results [$ m, except EPS] Q3 2016 Q3 2015 Δ COMMENTS Total Revenues 393.9 396.1 -1% Gross profit margin expansion driven by NMR Gross Profit 192.6 182.7 +5% pricing, BBIO 2015 Margin (% of revenues) 48.9% 46.1% +280 bps restructuring, strong Optics execution and operational SG&A -
Slide 14: YTD Q3-2016 Revenue Bridge
YTD Q3-2016 revenue bridge YTD 2016 DRIVERS YTD Q3-2016 Revenue for Bruker Corp. Revenue essentially flat y-o-y with acquired Organic Currency Portfolio Total Jordan Valley revenue -2.3% -0.1% +2.0% -0.4% Organic revenue decline of -2.3% due to weak European academic and global industrial market
Slide 15: YTD Q3-2016 Non-GAAP Results
YTD Q3-2016 Non-GAAP Results [$ m, except EPS] YTD 2016 YTD 2015 Δ COMMENTS Total Revenues 1,141.0 1,145.6 0% Gross profit margin expansion driven by NMR Gross Profit 544.9 528.2 +3% pricing, mix and 2015 Margin (% of revenues) 47.8% 46.1% +170 bps restructuring actions. SG&A -288.2 -287.7 NM Nano
Slide 16: YTD Q3-2016 Cash Flow
YTD Q3-2016 Cash Flow [$ m] YTD 2016 YTD 2015 Δ COMMENTS Net Income 85.4 42.9 +42.5 Y-o-y free cash flow comparison driven by: Depreciation & amortization 40.4 40.0 +0.4 – Higher cash earnings offset by working capital Changes in working capital* -38.7 11.4 -50.1 needed to fund Q4, restructuring a
Slide 17: FY2016 Outlook
FY2016 Outlook 17
Slide 18: FY-2016 Guidance: raising margin expansion and non-GAAP EPS
FY-2016 Guidance: tweaking revenue, raising margin expansion, raising non-GAAP EPS on margins and tax benefits Revised FY-2016 Guidance 2016 ASSUMPTIONS Organic revenue decline: Reported Revenue Approximately -1% ~ -3% Growth Acquisition revenue growth: ~ +2% Non-GAAP Operating 100 bps or more M
Slide 19: Appendix
Appendix 19
Slide 20: Q3 2016 GAAP Results
Q3 2016 GAAP Results [$M, except EPS] Q3 2016 Q3 2015 Δ Total Revenues 393.9 396.1 -1% Gross Profit 185.2 167.5 +11% Margin (% of sales) 47.0% 42.3% SG&A -96.8 -96.1 +1% (% of revenues) 24.6% 24.3% R&D -37.9 -34.3 +10% (% of revenues) 9.6% 8.7% Operating Income 45.9 28.2 +63% (% of revenues) 11.7% 7
Slide 21: Q3 2016 Reconciliation of GAAP and Non-GAAP Results
Q3 2016 Reconciliation of GAAP and Non-GAAP Results [$M, except EPS] Q3 2016 Q3 2015 GAAP Operating Income 45.9 28.2 Restructuring Costs 5.3 12.7 Acquisition-Related Costs 0.4 1.2 Purchased Intangible Amortization 5.4 5.1 Other Costs 1.6 5.6 TOTAL 12.7 24.6 Non-GAAP Operating Income 58.6 52.8 Non-GA
Slide 22: YTD Q3-2016 GAAP Results
YTD Q3-2016 GAAP Results [$M, except EPS] YTD 2016 YTD 2015 Δ Total Revenues 1,141.0 1,145.6 Flat Gross Profit 522.1 497.1 +5% Margin (% of sales) 45.8% 43.4% SG&A -290.4 -289.2 Flat (% of revenues) 25.5% 25.2% R&D -110.8 -109.0 +2% (% of revenues) 9.7% 9.5% Operating Income 100.3 75.0 +34% (% of re
Slide 23: YTD 2016 Reconciliation of GAAP and Non-GAAP Results
YTD 2016 Reconciliation of GAAP and Non-GAAP Results [$M, except EPS] YTD 2016 YTD 2015 GAAP Operating Income 100.3 75.0 Restructuring Costs 12.8 21.2 Acquisition-Related Costs 10.4 -1.4 Purchased Intangible Amortization 16.2 15.5 Other Costs 6.2 21.2 TOTAL 45.6 56.5 Non-GAAP Operating Income 145.9
Slide 24: Q3 2016 Cash Flow Statement
Q3 2016 Cash Flow Statement [$M] Q3 2016 Q3 2015 Δ COMMENTS Net Income 47.0 12.9 +34.1 Y-o-Y free cash flow comparison driven by: Depreciation & amortization 13.7 13.3 +0.4 – Restructuring related inventory increases and Changes in working capital* -23.7 -3.0 -20.7 payments Other -1.1 30.9 -32.0 O
Slide 25: Balance sheet
Balance sheet [$M] Sep 30, 2016 Dec 31, 2015 Sep 30, 2015 Total Assets 1,797.9 1,730.0 1,842.9 Working Capital* 613.4 584.6 633.2 Intangibles, Net & Other Long-Term 291.8 267.4 224.1 Assets [$M] Sep 30, 2016 Dec 31, 2015 Sep 30, 2015 Cash, Cash Equivalents & Short-term 441.5 468.3 532.3 Investments
Slide 26: BSI and BEST GAAP Performance
Q3-16 GAAP SEGMENT RESULTS: BSI and BEST GAAP Performance [$ m] Q3 2016 Q3 2015 Δ REVENUE Scientific Instruments (BSI) 361.5 366.6 -1% Organic Revenue Growth (%) -3.5% 9.3% Energy & Supercon Technologies (BEST) 35.5 32.9 +8% Organic Revenue Growth (%) +8.1% -2.6% Corporate Eliminations -3.1 -3.4 Tot