Slide 1: Bruker Corporation Q2 2016 Earnings Presentation
Bruker Corporation (NASDAQ: BRKR) Q2 2016 Earnings Presentation Frank Laukien, President & CEO Anthony Mattacchione, SVP & CFO Stacey Desrochers, Treasurer & Director of August 2, 2016 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: Q2 2016 & H1 2016 Business Update
Q2 2016 & H1 2016 Business Update 3
Slide 4: Despite revenue decline in Q2, we expanded gross profit margin and grew EPS
Despite revenue decline in Q2, we expanded gross profit margin and grew EPS Q2-2016 Performance Q2 Financials Revenues [$ m] -6% Revenue decline of -$24M, or -6.1% y-o-y − Jordan Valley acquisition adds +3.1% y-o-y Organic revenue decline of -9.2% y-o-y, driven 396 372 primarily by delays in Eur
Slide 5: Operational improvements and acquisition result in margin expansion on flat H1 revenue
Operational improvements and acquisition result in gross and operating margin expansion >100 bps on flat H1-16 revenue, EPS grows >25% y-o-y; H1-2016 Performance H1 Financials Revenues [$ m] 0% Revenue decline of -$2M, essentially flat y-o-y − FX lowers revenue by -0.4% y-o-y 749 747 − Jordan Vall
Slide 6: Group Overview: H1 2016 Performance
GROUP OVERVIEW: H1 2016 Performance Bruker BIOSPIN Group Achieved mid-single-digit (MSD) revenue growth and continued margin expansion NMR benefits from volume, pricing, mix, and 2015 restructuring Good applied markets demand for NMR FoodScreeners™ and for NMR metabolic research systems in int
Slide 7: Group Overview: H1 2016 Performance
GROUP OVERVIEW: H1 2016 Performance Bruker NANO Group LSD revenue decline due to European academic funding delays and very weak industrial markets Semiconductor metrology revenue more than doubles with Jordan Valley acquisition and rapid adoption of X-ray tools by major customers AXS with weak
Slide 8: Exciting new products for life-science research, applied and bio-/pharma markets
ANALYTICA & ASMS CONFERENCE ANNOUNCEMENTS IN MAY AND JUNE 2016: Exciting new products for life-science research, applied and bio-/pharma markets SENTERRA™ II timsTOF™ rapifleX™ TOF/TOF Raman Microscope used in Breakthrough novel Intact protein analysis for laboratories for forensics, Trapped I
Slide 9: 2016 Key Priorities
2016 Key Priorities Continue Margin Expansion as we transition from our three-year Transformation phase to our next phase of Operational & Commercial Excellence Strengthen systems and management insights by harmonizing business processes and ERP platforms Accelerate profitable growth in four strateg
Slide 10: Q2 2016 & H1 2016 Financial Update
Q2 2016 & H1 2016 Financial Update 10
Slide 11: Q2-2016 Overview
NON-GAAP FINANCIAL PERFORMANCE: Q2-2016 Overview [$ m, except EPS] Q2-2016 Q2-2015 Δ COMMENTS Revenues 371.7 396.0 -6% Flat operating margin despite MSD revenue Operating Income 40.0 42.9 -7% decline. EPS increased due Margin (%) 10.8% 10.8% to share buyback. Positive free cash flow of Non-GAAP
Slide 12: Q2 2016 revenue bridge
Q2 2016 revenue bridge Q2 2016 DRIVERS Q2 2016 Revenue for Bruker Corp. Organic revenue decline of -9.2% driven by Organic Currency Portfolio Total academic funding delays in Europe and Japan, -9.2% 0.0% +3.1% -6.1% weakening industrial markets, and lower MALDI Biotyper sales in China and the US Q
Slide 13: Q2 2016 Non-GAAP Results
Q2 2016 Non-GAAP Results [$ m, except EPS] Q2 2016 Q2 2015 Δ COMMENTS Total Revenues 371.7 396.0 -6% Gross profit margin expansion driven by NMR Gross Profit 176.9 178.4 -1% revenue growth, price Margin (% of revenues) 47.6% 45.1% increases, favorable mix, 2015 BBIO restructuring, SG&A -100.1 -98.
Slide 14: H1 2016 revenue bridge
H1 2016 revenue bridge H1 2016 DRIVERS H1 2016 Revenue for Bruker Corp. Revenue essentially flat y-o-y with the acquired Organic Currency Portfolio Total Jordan Valley revenue -2.2% -0.4% +2.3% -0.3% Organic revenue decline of -2.2% driven by same dynamics affecting Q2 results H1-2016 Revenue Br
Slide 15: H1 2016 Non-GAAP Results
H1 2016 Non-GAAP Results [$ m, except EPS] H1 2016 H1 2015 Δ COMMENTS Total Revenues 747.1 749.5 0% Gross profit margin expansion driven by Gross Profit 352.3 345.5 +2% same dynamics as in Q2 Margin (% of revenues) 47.2% 46.1% SG&A -192.1 -192.1 0% Operating expenses (% of revenues) 25.7% 25.6%
Slide 16: H1 2016 Cash Flow Statement
H1 2016 Cash Flow Statement [$ m] H1 2016 H1 2015 Δ COMMENTS Net Income 38.4 30.0 +8.4 Y-o-y free cash flow comparison driven by: Depreciation & amortization 26.7 26.7 0.0 – Increased BioSpin, BEST, and Jordan Valley Changes in working capital* -15.0 14.4 -29.4 inventory needed for H2 Other -46.0
Slide 17: 2016 Outlook
2016 Outlook 17
Slide 18: Lowering Revenue Guidance, Maintaining EPS Guidance
Lowering Revenue Guidance, Maintaining EPS Guidance Revised FY-2016 Guidance 2016 ASSUMPTIONS Organic revenue Reported Revenue Growth Approximately flat decline: ~ -2% Acquisition revenue growth: ~ +2% Non-GAAP Operating Approximately 75 - 100 bps Margin Expansion y-o-y FY 2016 tax rate: 20% -
Slide 19: Appendix
Appendix 19
Slide 20: Q2 2016 GAAP Results
Q2 2016 GAAP Results [$ m, except EPS] Q2 2016 Q2 2015 Δ Total Revenues 371.7 396.0 -6% Gross Profit 170.1 169.4 NM Margin (% of sales) 45.8% 42.8% SG&A -100.9 -98.5 2% (% of revenues) 27.1% 24.9% R&D -36.8 -37.5 -2% (% of revenues) 9.9% 9.5% Operating Income 20.4 31.6 -35% (% of revenues) 5.5% 8.0%
Slide 21: Q2 2016 Reconciliation of GAAP and Non-GAAP Results
Q2 2016 Reconciliation of GAAP and Non-GAAP Results [$ m, except EPS] Q2 2016 Q2 2015 GAAP Operating Income 20.4 31.6 Restructuring Costs 3.7 5.2 Acquisition-Related Costs 8.1 -2.8 Purchased Intangible Amortization 5.4 5.2 Other Costs 2.4 3.7 TOTAL 19.6 11.3 Non-GAAP Operating Income 40.0 42.9 Non-G
Slide 22: H1 2016 GAAP Results
H1 2016 GAAP Results [$ m, except EPS] H1 2016 H1 2015 Δ Total Revenues 747.1 749.5 NM Gross Profit 336.9 329.6 +2% Margin (% of sales) 45.1% 44.0% SG&A -193.6 -193.1 NM (% of revenues) 25.9% 25.8% R&D -72.9 -74.7 -2% (% of revenues) 9.8% 10.0% Operating Income 54.4 46.8 +16% (% of revenues) 7.3% 6.
Slide 23: H1 2016 Reconciliation of GAAP and Non-GAAP Results
H1 2016 Reconciliation of GAAP and Non-GAAP Results [$ m, except EPS] H1 2016 H1 2015 GAAP Operating Income 54.4 46.8 Restructuring Costs 7.5 8.5 Acquisition-Related Costs 10.0 -2.6 Purchased Intangible Amortization 10.8 10.4 Other Costs 4.6 15.6 TOTAL 32.9 31.9 Non-GAAP Operating Income 87.3 78.7 N
Slide 24: Q2 2016 Cash Flow Statement
Q2 2016 Cash Flow Statement [$ m] Q2 2016 Q2 2015 Δ COMMENTS Net Income 14.8 23.1 -8.3 Y-o-Y free cash flow comparison driven by: Depreciation & amortization 13.5 13.2 +0.3 – Inventory increases Changes in working capital* -13.7 -16.1 +2.4 – Dividend payment – Large estimated tax Other 3.5 -21.7 +
Slide 25: Balance sheet
Balance sheet [$ m] Jun 30, 2016 Dec 31, 2015 Jun 30, 2015 Total Assets 1,720.5 1,730.0 1,820.4 Working Capital* 589.9 584.6 642.2 Intangibles, Net & Other Long-Term 268.3 267.4 232.8 Assets [$ m] Jun 30, 2016 Dec 31, 2015 Jun 30, 2015 Cash, Cash Equivalents & Short-term 420.4 468.3 493.6 Investment
Slide 26: BSI and BEST GAAP Performance
Q2-16 GAAP SEGMENT RESULTS: BSI and BEST GAAP Performance [$ m] Q2 2016 Q2 2015 Δ REVENUE Scientific Instruments (BSI) 345.8 366.2 -6% Organic Revenue Growth (%) -8.7% 0.6% Energy & Supercon Technologies (BEST) 28.5 30.8 -7% Organic Revenue Growth (%) -8.9% -8.1% Corporate Eliminations -2.6 -1.0 Tot