Slide 1: Q3 2018 Earnings Presentation
Bruker Corporation (NASDAQ: BRKR) Q3 2018 Earnings Presentation Frank Laukien, President & CEO Gerald Herman, Chief Financial Officer November 1st, 2018 Miroslava Minkova, Director of Investor Relations & Corporate Development 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 within the meaning of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein
Slide 3: Q3 2018 & YTD Q3 2018 Business Update
Q3 2018 & YTD Q3 2018 Business Update 3
Slide 4: Q3 2018: Revenue growth drives operating leverage and strong EPS increase
Q3 2018: Revenue growth drives operating leverage and a strong year-over-year EPS increase Q3 2018 Performance Q3 Financials Revenues [$M] +7.1% Revenues increase +$31M, or +7.1%, y-o-y −Organic growth +7.0% y-o-y, with BSI up +6.5%, 466.6 435.6 and BEST up +11.1% −Acquisitions add +1.5% y-o-y −FX
Slide 5: YTD Q3 2018: Improved revenue growth and margin expansion drive EPS
Year-To-Date (YTD) Q3 2018: Improved revenue growth and healthy margin expansion drive EPS YTD Q3 2018 Performance YTD Q3-18 Financials Revenues [$M] +8.6% Revenues increase +$107M, or +8.6%, y-o-y −Organic growth +4.7% y-o-y, with BSI up +5.8%, 1,342 1,235 and BEST down -4.8% −Acquisitions add +0
Slide 6: YTD Q3 2018 Operating Performance: BioSpin and CALID
GROUP OVERVIEW: YTD Q3 2018 Operating Performance(1) Bruker BIOSPIN Group BIOSPIN revenue up low-single digits, driven by clinical, applied and after-market services businesses NMR systems revenue slightly above prior year with growth in applied and clinical phenomics research solutions PCI re
Slide 7: YTD Q3 2018 Operating Performance: NANO and BEST
GROUP OVERVIEW: YTD Q3 2018 Operating Performance(1) Bruker NANO Group NANO with double-digit revenue growth, driven by strong academic and industrial research, and contributions from acquisitions Strong increase at AXS with growth in industrial and academic markets Nano Surfaces and Nano Anal
Slide 8: Hain adds breadth to Bruker's microbiology & infectious disease diagnostics
VALUE-ADDED BOLT-ON ACQUISITION EXAMPLE: Hain adds breadth and new growth drivers to Bruker’s microbiology & infectious disease diagnostics portfolio • Established Hain MDx portfolio of mycobacteria tests for TB screening and resistance testing • MDx assay portfolio for microbial and viral pathogens
Slide 9: Selected Manufacturing and Final Test Moving to Penang, Malaysia
OPERATIONAL EXCELLENCE EXAMPLE: Selected Manufacturing and Final Test Moving to Bruker’s New Facility in Penang, Malaysia • New Bruker manufacturing, engineering and final-test center in Penang, Malaysia • Planned transfer of selected Bruker NANO products: • Lower operating costs for final assembly
Slide 10: 2018 Key Priorities
2018 Key Priorities Position company for further organic Revenue Growth Acceleration: drive Project Accelerate high-growth, high-margin initiatives Transform Portfolio by investing in Project Accelerate, while strengthening the core Sustain Margin Expansion with continued Operational & Commercial Ex
Slide 11: Q3 2018 & YTD Q3 2018 Financial Update
Q3 2018 & YTD Q3 2018 Financial Update 11
Slide 12: Q3 2018 Overview
NON-GAAP FINANCIAL PERFORMANCE: Q3 2018 Overview [$ m, except EPS] Q3 2018 Q3 2017(1) Δ COMMENTS Revenues 466.6 435.6 +7.1% Reported revenue +7.1%, organic growth +7.0% Non-GAAP Operating 83.3 65.8 +26.6% Operating income up Income +26.6% Margin (%) 17.9% 15.1% +280 bps Operating margin +280 b
Slide 13: Q3 2018 Revenue Bridge
Q3 2018 Revenue Bridge Q3 2018 DRIVERS Q3 2018 Revenue Reported revenue +7.1% Organic Currency Portfolio Total Organic revenue +7.0% driven by strong results at +7.0% -1.4% +1.5% +7.1% NANO and CALID and improved performance at BEST – BSI +6.5% organic Q3 2018 Revenue Bridge [$M] – BEST +11.1% o
Slide 14: Q3 2018 Non-GAAP Results
Q3 2018 Non-GAAP Results [$ m, except EPS] Q3 2018 Q3 2017(1) Δ COMMENTS Total Revenues 466.6 435.6 +7.1% Gross margin +140 bps: Gross Profit 229.8 208.3 +10.3% operating leverage, favorable Margin (% of revenues) 49.2% 47.8% +140 bps mix and operational improvements SG&A -104.7 -101.9 +3% (% of r
Slide 15: YTD Q3 2018 Revenue Bridge
YTD Q3 2018 Revenue Bridge YTD Q3 2018 DRIVERS YTD Q3 2018 Revenue Reported revenue +8.6% Organic Currency Portfolio Total Organic revenue +4.7%, driven primarily by NANO +4.7% +3.0% +0.9% +8.6% and CALID – BSI +5.8% organic – BEST down -4.8% YTD Q3 2018 Revenue Bridge [$M] organic (net of +$57.
Slide 16: YTD Q3 2018 Non-GAAP Results
YTD Q3 2018 Non-GAAP Results [$ m, except EPS] YTD 2018 YTD 2017(1) Δ COMMENTS Total Revenues 1,342.0 1,235.4 +8.6% Gross margin +80 bps on higher volume and favorable Gross Profit 646.2 586.1 +10% Margin (% of revenues) 48.2% 47.4% +80 bps mix, partially offset by negative FX translation SG&A -32
Slide 17: YTD Q3 2018 Cash Flow
YTD Q3 2018 Cash Flow [$ m] YTD 2018 YTD 2017 Δ COMMENTS Net Income 103.1 83.3 +19.8 YTD Q3-18 free cash flow $78.5M, +$59.1M y-o-y: Depreciation & amortization 48.3 48.2 +0.1 – Higher net income Changes in working capital* -54.6 -44.4 -10.2 – Increase in customer advances and favorable Other 10.6
Slide 18: FY 2018 Outlook
FY 2018 Outlook 18
Slide 19: FY 2018 Guidance: Updating revenue growth and non-GAAP EPS
FY 2018 Guidance: Updating revenue growth and non-GAAP EPS on solid YTD performance FY 2018 Guidance 2018 ASSUMPTIONS Organic revenue growth Revenue Growth y-o-y +6.5% to +7% +3.5% to +4% (previously +6.5%) (previously +3.5%) Acquisition revenue growth: Non-GAAP Operating +50 bps to +80 bps +1.5
Slide 20: Appendix
Appendix 20
Slide 21: Q3 2018 GAAP Results
Q3 2018 GAAP Results [$M, except EPS] Q3 2018 Q3 2017(1) Δ Total Revenues 466.6 435.6 +7% Gross Profit 222.6 198.9 +12% Margin (% of sales) 47.7% 45.7% SG&A -106.5 -102.7 +4% (% of revenues) 22.8% 23.6% R&D -41.8 -40.6 +3% (% of revenues) 9.0% 9.3% Operating Income 69.1 51.3 +35% (% of revenues) 14.
Slide 22: Q3 2018 Reconciliation of GAAP and Non-GAAP Results
Q3 2018 Reconciliation of GAAP and Non-GAAP Results [$M, except EPS] Q3 2018 Q3 2017(1) GAAP Operating Income 69.1 51.3 Restructuring Costs 2.5 4.6 Acquisition-Related Costs 2.8 0.7 Purchased Intangible Amortization 6.9 8.2 Other Costs 2.0 1.0 TOTAL 14.2 14.5 Non-GAAP Operating Income 83.3 65.8 Non-
Slide 23: YTD Q3 2018 GAAP Results
YTD Q3 2018 GAAP Results [$M, except EPS] YTD Q3-2018 YTD Q3-2017(1) Δ Total Revenues 1,342.0 1,235.4 +9% Gross Profit 627.2 559.8 +12% Margin (% of sales) 46.7% 45.3% SG&A -327.4 -303.3 +8% (% of revenues) 24.4% 24.6% R&D -128.6 -118.5 +9% (% of revenues) 9.6% 9.6% Operating Income 156.0 124.2 +26%
Slide 24: YTD Q3 2018 Reconciliation of GAAP and Non-GAAP Results
YTD Q3 2018 Reconciliation of GAAP and Non-GAAP Results [$M, except EPS] YTD Q3-2018 YTD Q3-2017(1) GAAP Operating Income 156.0 124.2 Restructuring Costs 6.7 8.5 Acquisition-Related Costs 3.9 9.4 Purchased Intangible Amortization 21.5 22.6 Other Costs 7.0 3.8 TOTAL 39.1 44.3 Non-GAAP Operating Incom
Slide 25: Q3 2018 Cash Flow
Q3 2018 Cash Flow [$ m] Q3 2018 Q3 2017 Δ COMMENTS Net Income 44.2 37.6 +6.6 Free cash flow of $16.1M, compared to $25.1M in Depreciation & amortization 15.9 17.1 -1.2 Q3-17: – Higher net income Changes in working capital* -59.7 -24.4 -35.3 – Increases in customer Other 27.1 5.0 +22.1 advances and
Slide 26: Balance Sheet
Balance Sheet [$M] Sep 30, 2018 Dec 31, 2017 Sep 30, 2017 Total Assets 1,889.1 1,948.5 1,961.5 Working Capital* 742.0 714.7 690.3 Intangibles, Net & Other 366.7 323.2 364.3 Long-Term Assets [$M] Sep 30, 2018 Dec 31, 2017 Sep 30, 2017 Cash, Cash Equivalents & 270.1 439.2 429.2 Short-term Investments
Slide 27: BSI and BEST GAAP Performance (Q3 2018)
Q3 2018 GAAP SEGMENT RESULTS: BSI and BEST GAAP Performance [$ m] Q3 2018 Q3 2017 Δ REVENUE Scientific Instruments (BSI) 417.1 390.6 +7% Organic Revenue Growth (%) +6.5% +4.2% Energy & Supercon Technologies (BEST) 50.9 46.1 +10% Corporate Eliminations -1.4 -1.1 Energy & Supercon Technologies (BEST),
Slide 28: BSI and BEST GAAP Performance (YTD)
YTD Q3 2018 GAAP SEGMENT RESULTS: BSI and BEST GAAP Performance [$ m] YTD Q3 2018 YTD Q3 2017 Δ REVENUE Scientific Instruments (BSI) 1,206.5 1,099.5 +10% Organic Revenue Growth (%) +5.8% +2.5% Energy & Supercon Technologies (BEST) 139.2 140.2 -1% Corporate Eliminations -3.7 -4.3 Energy & Supercon Te