Slide 1: Q4 2018 Earnings Presentation
Bruker Corporation (Nasdaq: BRKR) Q4 2018 Earnings Presentation Frank Laukien, President & CEO Gerald Herman, Chief Financial Officer February 11, 2019 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 Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
Slide 3: Q4 2018 & FY 2018 Business Update
Q4 2018 & FY 2018 Business Update 3
Slide 4: Q4 2018: Solid revenue growth and margin improvement
Q4 2018: Solid revenue growth and margin improvement Q4 2018 Performance Q4 Financials Revenues [$M] +4.4% Revenues increase +$23M, or +4.4%, y-o-y −Organic growth +3.4% y-o-y, with BSI up +2.1%, 553.6 530.5 and BEST up +17.6% −Acquisitions add +3.2% y-o-y −Negative FX translation of -2.2% y-o-y
Slide 5: FY 2018: Improved organic revenue growth and continued margin expansion drive strong EPS growth
FY 2018: Improved organic revenue growth and continued margin expansion drive strong EPS growth FY 2018 Performance FY Financials Revenues increase +$130M, or +7.3%, y-o-y Revenues [$M] +7.3% −Organic growth +4.3% y-o-y, with BSI up +4.7%, and BEST up +0.9% 1,766 1,896 −Acquisitions add +1.6% y-o-
Slide 6: FY 2018 Operating Performance
GROUP OVERVIEW: FY 2018 Operating Performance(1) Bruker BIOSPIN Group BIOSPIN revenue up low single digits, driven by biopharma, clinical research, applied and after-market business NMR systems revenue slightly above prior year with growth in biopharma, applied and clinical phenomics solutions
Slide 7: FY 2018 Operating Performance
GROUP OVERVIEW: FY 2018 Operating Performance(1) Bruker NANO Group NANO with high-single digit revenue growth, driven by solid performance in academic and industrial research, and contributions from acquisitions Strong increase at AXS with growth in industrial and academic markets Good growth
Slide 8: Roadmap for Project Accelerate: Reshaping our portfolio for faster growth and higher margins
ROADMAP FOR PROJECT ACCELERATE: Reshaping our portfolio for faster growth and higher margins 2018 2019E 2020E 2021E 2022E 2023E Proteomics & timsTOF Pro Proteomics, 1.0 GHz NMR Phenomics Mass spec based Phenomics, 1.2 GHz NMR Advanced NMR and MS solutions for biologics and small molecule drug discov
Slide 9: Important New Neuroscience and Cell Biology Products Launched in Q4 2018
UPDATE ON PROJECT ACCELERATE: Important New Neuroscience and Cell Biology Products Launched in Q4 2018 Mouse spermatocyte courtesy of Jackson Labs Fluorescence Microscopy • Simultaneous, all-optical stimulation and imaging platforms for Optogenetics Neuroscience research • Next-gen Multiphoton, Supe
Slide 10: Strategically Focused M&A: 2018 M&A supports Project Accelerate
STRATEGICALLY FOCUSED M&A: 2018 M&A supports Project Accelerate, improves operating margin mix and strengthens core Higher Growth IRM2 Organic Revenue Growth Rate Lower Growth Support Core Business Transform Portfolio (ACCELERATE) Hain Diagnostics and Mestrelab Research are majority interest acquisi
Slide 11: Bruker Key Objectives 2019-2023
Bruker Key Objectives 2019-2023 1. Accelerate revenue growth • Enhance organic revenue growth with Project Accelerate initiatives Proteomics & Phenomics After-Market Biopharma & Applied 2. Transform portfolio with six high-growth, high-margin Project Accelerate initiatives Next-gen Nanotech Microbio
Slide 12: Q4 2018 & FY 2018 Financial Update
Q4 2018 & FY 2018 Financial Update 12
Slide 13: Q4 2018 Overview
NON-GAAP FINANCIAL PERFORMANCE: Q4 2018 Overview [$ m, except EPS] Q4 2018 Q4 2017(1) Δ COMMENTS Revenues 553.6 530.5 +4.4% Reported revenue +4.4%, organic growth +3.4% Operating Profit 122.8 112.4 +9.3% Operating profit up +9.3% Margin (%) 22.2% 21.2% +100 bps Operating margin +100 bps; Non-G
Slide 14: Q4 2018 Revenue Bridge
Q4 2018 Revenue Bridge Q4 2018 DRIVERS Q4 2018 Revenue Reported revenue +4.4% Organic Currency Portfolio Total Organic revenue +3.4%, with uptick at BEST +3.4% -2.2% +3.2% +4.4% – BSI +2.1% organic – BEST +17.6% organic (net of intercompany Q4 2018 Revenue Bridge [$M] eliminations) +$18.2M -$12.
Slide 15: Q4 2018 Non-GAAP Results
Q4 2018 Non-GAAP Results [$ m, except EPS] Q4 2018 Q4 2017(1) Δ COMMENTS Total Revenues 553.6 530.5 +4.4% Gross margin +90 bps, driven by Gross Profit 282.5 266.0 +6% operational improvements at Margin (% of revenues) 51.0% 50.1% +90 bps CALID and BioSpin SG&A -114.9 -110.5 +4% Opex higher on se
Slide 16: FY 2018 Revenue Bridge
FY 2018 Revenue Bridge FY2018 DRIVERS FY 2018 Revenue Reported revenue +7.3% Organic Currency Portfolio Total Organic revenue +4.3%, driven primarily by NANO +4.3% +1.4% +1.6% +7.3% and CALID – BSI +4.7% organic – BEST +0.9% organic FY 2018 Revenue Bridge [$M] (net of intercompany +$76.0M +$25.5
Slide 17: FY 2018 Non-GAAP Results
FY 2018 Non-GAAP Results [$ m, except EPS] FY 2018 FY 2017(1) Δ COMMENTS Total Revenues 1,895.6 1,765.9 +7.3% Gross margin +70 bps; higher Gross Profit 928.7 852.1 +9% volume and favorable mix, Margin (% of revenues) 49.0% 48.3% +70 bps partially offset by negative FX translation SG&A -437.4 -409.
Slide 18: FY 2018 Cash Flow
FY 2018 Cash Flow [$ m] FY 2018 FY 2017 Δ COMMENTS Net Income(1) 181.0 80.3 +100.7 2018 free cash flow of $190.5M, +$79.8M y-o-y: Depreciation & amortization 64.9 63.9 +1.0 – Higher net income Changes in working capital(2) -59.1 -65.5 +6.4 – Increase in customer advances Other(1) 52.9 75.7 -22.8 –
Slide 19: FY 2019 Outlook
FY 2019 Outlook 19
Slide 20: FY 2019 Guidance: Further organic revenue growth and operating margin improvement, solid EPS growth
FY 2019 Guidance: Further organic revenue growth and operating margin improvement, solid EPS growth FY 2019 Guidance 2019 ASSUMPTIONS Organic revenue growth: Revenue Growth y-o-y +6% to +7% +4% to +5% Acquisition revenue growth: approximately +4% Non-GAAP Operating +70 bps to +100 bps Constant
Slide 21: Appendix
Appendix 21
Slide 22: Q4 2018 GAAP Results
Q4 2018 GAAP Results [$M, except EPS] Q4 2018 Q4 2017(1) Δ Total Revenues 553.6 530.5 +4% Gross Profit 272.8 256.2 +6% Margin (% of sales) 49.3% 48.3% SG&A -117.3 -111.9 +5% (% of revenues) 21.2% 21.1% R&D -44.8 -43.1 +4% (% of revenues) 8.1% 8.1% Operating Income 106.4 95.3 +12% (% of revenues) 19.
Slide 23: Q4 2018 Reconciliation of GAAP and Non-GAAP Results
Q4 2018 Reconciliation of GAAP and Non-GAAP Results [$M, except EPS] Q4 2018 Q4 2017(1) GAAP Operating Income 106.4 95.3 Restructuring Costs 2.7 7.7 Acquisition-Related Costs 3.4 0.8 Purchased Intangible Amortization 7.4 7.0 Other Costs 2.9 1.6 TOTAL 16.4 17.1 Non-GAAP Operating Income 122.8 112.4 N
Slide 24: FY 2018 GAAP Results
FY 2018 GAAP Results [$M, except EPS] FY 2018 FY 2017(1) Δ Total Revenues 1,895.6 1,765.9 +7% Gross Profit 900.0 816.0 +10% Margin (% of sales) 47.5% 46.2% SG&A -444.7 -415.2 +7% (% of revenues) 23.5% 23.5% R&D -173.4 -161.6 +7% (% of revenues) 9.1% 9.2% Operating Income 262.4 219.5 +20% (% of reven
Slide 25: FY 2018 Reconciliation of GAAP and Non-GAAP Results
FY 2018 Reconciliation of GAAP and Non-GAAP Results [$M, except EPS] FY 2018 FY 2017(1) GAAP Operating Income 262.4 219.5 Restructuring Costs 9.4 16.2 Acquisition-Related Costs 7.3 10.2 Purchased Intangible Amortization 28.9 29.6 Other Costs 9.9 5.4 TOTAL 55.5 61.4 Non-GAAP Operating Income 317.9 28
Slide 26: Q4 2018 Cash Flow
Q4 2018 Cash Flow [$ m] Q4 2018 Q4 2017 Δ COMMENTS Net Income(1) 77.9 (3.0) +80.9 Free cash flow of $112.0M, compared to $91.3M in Depreciation & amortization 16.6 15.7 +0.9 Q4-17: – Higher net income Changes in working capital(2) -4.5 -21.1 +16.6 – Partially offset by higher Other(1) 42.3 112.1 -
Slide 27: Balance Sheet
Balance Sheet [$M] Dec 31, 2018 Dec 31, 2017 Total Assets 2,128.6 1,948.5 Working Capital(1) 762.3 714.7 Intangibles, Net & Other 553.7 323.2 Long-Term Assets [$M] Dec 31, 2018 Dec 31, 2017 Cash, Cash Equivalents & 322.4 439.2 Short-term Investments Financial Debt 341.1 415.6 Net Cash (18.7) 23.6 (1
Slide 28: BSI and BEST GAAP Performance
Q4 2018 GAAP SEGMENT RESULTS: BSI and BEST GAAP Performance [$ m] Q4 2018 Q4 2017(1) Δ REVENUE Scientific Instruments (BSI) 500.5 484.4 +3% Organic Revenue Growth (%) +2.1% +3.4% Energy & Supercon Technologies (BEST) 55.6 51.0 +9% Corporate Eliminations -2.5 -4.9 Energy & Supercon Technologies (BEST
Slide 29: BSI and BEST GAAP Performance
FY 2018 GAAP SEGMENT RESULTS: BSI and BEST GAAP Performance [$ m] FY 2018 FY 2017(1) Δ REVENUE Scientific Instruments (BSI) 1,707.0 1,583.9 +8% Organic Revenue Growth (%) +4.7% +2.7% Energy & Supercon Technologies (BEST) 194.8 191.2 +2% Corporate Eliminations -6.2 -9.2 Energy & Supercon Technologies
Slide 30: FY 2018 Non-GAAP EBITDA
FY 2018 Non-GAAP EBITDA [$M, except EPS] FY 2018 FY 2017 Δ Non-GAAP Net Income(1) $220.4 $192.2 +15% GAAP Interest Expense, Net 11.4 14.6 -22% Non-GAAP Income Tax Provision 78.5 64.7 +21% GAAP Depreciation/Amortization of 37.0 35.5 +4% Demo Inventory Expense Total Adjustments 126.9 114.8 +11% Non-GA
Slide 31: FY 2018 Return on Invested Capital
FY 2018 Return on Invested Capital [$M, except EPS] FY 2018 FY 2017 Δ Non-GAAP Operating Income $317.9 $280.9 +13% Non-GAAP Income Tax Provision 78.5 64.7 +21% Non-GAAP Operating Income after 239.4 216.2 +11% Tax Average Total Invested Capital: Average Long-Term Debt 369.1 403.6 -9% Average Current