Bruker Corporation · NASDAQ:BRKR
Bruker — J.P. Morgan Healthcare Conference 2016
28 slides from Bruker's conference presentation, Jan 11, 2016
Slide 1: Bruker drives profitable growth by enabling breakthrough discoveries
Bruker drives profitable growth by enabling breakthrough discoveries & development of new applications that improve the quality of human life © Bruker Corporation Innovation with Integrity
Slide 2: Safe Harbor Statement
BRUKER CORPORATION Safe Harbor 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 herein are
Slide 3: Key Messages in 2016
Key Messages in 2016 1 Bruker is a differentiated leader in attractive life science and diagnostics tools markets, and our brand stands for innovation 2 We focus on profitable growth in four strategic growth areas 3 We will drive margin expansion and cash flow as we transition from Transformation to
Slide 4: Agenda
Agenda 1. Company Overview 2. Profitable Growth Strategy 3. From Transformation to Operational Excellence 4. Financial Overview © Bruker Corporation 4
Slide 5: Bruker's instruments enable customers to explore life and materials
Bruker’s high-performance scientific instruments and high-value analytical and diagnostic solutions enable our customers to explore life and materials at … Microscopic Small Molecule and Cellular and and Nano-Scales Protein Levels Sub-Cellular Levels © Bruker Corporation 5
Slide 6: Bruker overview
Bruker overview: Percentage of revenue*: • FY2015E revenue ~$1.6 billion • ~10% R&D investment Europe • ~75% of revenues from scientific and diagnostic instrumentation 41% • ~6,000 employees worldwide • Going from Transformation to Operational Excellence phase • Stable and profitable growth 26% orie
Slide 7: Bruker is organized in three key Groups
Bruker is organized in three key Groups: Bruker BioSpin Group Bruker CALID Group Bruker NANO Group - NMR/EPR for Research & Pharma - Mass Spectrometry for - Atomic Force Microscopy - Applied, Industrial & Clinical MR Proteomics & Metabolomics - Fluorescence Microscopy for - Preclinical Imaging A
Slide 8: Bruker serves large markets & a global customer base
Bruker serves large markets & a global customer base Key Markets Largest Customer Segments Pre-Clinical Other Academic & Government Imaging 10% Nuclear Magnetic 7% Resonance 25% Industrial Diagnostics 7% Pharma/Biopharmaceutical Optical Spectroscopy 10% Mass Spectrometry Diagnostic Labs/Hospitals At
Slide 9: Leading market positions for more than 60% of product portfolio
Bruker has leading market positions for more than 60% of our product portfolio #1 or #2 market position for: NMR/EPR & Preclinical MALDI ID in Atomic Force FT-IR/NIR Metabolomics Imaging & Microbiology Microscopy X-Ray Diffraction MALDI Imaging X-ray Metrology © Bruker Corporation 9
Slide 10: Agenda
Agenda 1. Company Overview 2. Profitable Growth Strategy 3. From Transformation to Operational Excellence 4. Financial Overview © Bruker Corporation 10
Slide 11: Investing in four strategic areas with attractive growth
We are investing in four strategic areas that have attractive growth and defensible, high-margin opportunities Life Science Nano-Analysis, Molecular Microscopy & Research Materials Research Applied Clinical Research, Markets & Microbiology & Pharma Diagnostics © Bruker Corporation 11
Slide 12: Life Science Molecular Research
Life Science Molecular Research EXAMPLE: Intrinsically Disordered Proteins (IDPs) • IPDs turn out to be prevalent in nature, and play many key roles in molecular and cell biology, but are difficult to analyze (www.darkproteome.org) • IDPs are abundant in cancer, neurodegenerative diseases, CVD/diabe
Slide 13: Applied Markets & Pharma
Applied Markets & Pharma EXAMPLE: Food/Beverage Safety & Authenticity • Bruker NMR, MS and IR/NIR instruments are critical to ensuring the quality, authenticity and safety of a variety of foods we eat and products we use • For example, high-value honey and high-end wines are subject to mislabeling a
Slide 14: Nano-Analysis, Microscopy & Materials Research
Nano-Analysis, Microscopy & Materials Research EXAMPLE: Next-Gen Semiconductor Metrology • Mobility, cloud computing and big data demand ever smaller and more powerful computer chips • Chip & memory makers require next-gen nano- metrology to ensure product yield and quality • Bruker next-gen AFM and
Slide 15: Clinical Research, Microbiology & Diagnostics
Clinical Research, Microbiology & Diagnostics EXAMPLE: MALDI Biotyper & TissueTyper: • Bruker has pioneered the MALDI Biotyper to ID bacteria and yeasts more quickly and accurately • Time-to-Result and expansive ID libraries are of great clinical and economic value in microbiology • Bruker has launc
Slide 16: Agenda
Agenda 1. Company Overview 2. Profitable Growth Strategy 3. From Transformation to Operational Excellence 4. Financial Overview © Bruker Corporation 16
Slide 17: Key changes during the 3 year Transformation
During our 3 year Transformation we made key changes to our organization, systems & commercial capabilities Organization & Systems Commercial -Reorganized; new leaders -Applications-based marketing -Clear performance metrics & incentives -Reorganization of sales forces -Integrated management process
Slide 18: Initiatives to reduce costs and improve efficiency
In its Transformation, Bruker has executed important initiatives to reduce costs and improve efficiency Outsourcing/ Resource Portfolio Facilities Procurement IT Systems Allocation • Divested/shut • Exited small plants • Professionally • New management • Operating down unprofitable and streamlined m
Slide 19: New senior managers and board members in H2 2015
We have continued to attract very experienced senior managers and board members in H2 2015 SENIOR MANAGEMENT Dr. René Dr. Dietrich Christian Lenggenhager Hauffe Busch President EVP Bruker Daltonics VP, Finance BioSpin Group Life Science Mass Spec BioSpin Group PREVIOUS: PREVIOUS: PREVIOUS: Mettler-T
Slide 20: Focus on Operational Excellence & Lean
After 3 years of Transformation and Restructuring, Bruker will now focus on Operational Excellence & Lean 2013 2014 2015 2016 2017 2018 Outsourcing Bruker BioSpin Bruker’s next Phase: Rightsizing Outsourcing Operational Excellence Bruker NANO • Lean manufacturing Rightsizing & Footprint Consolidatio
Slide 21: Agenda
Agenda 1. Company Overview 2. Profitable Growth Strategy 3. From Transformation to Operational Excellence 4. Financial Overview © Bruker Corporation 21
Slide 22: Strong currency headwinds in each of the past three years
Despite facing strong currency headwinds in each of the past three years . . . FX year-over-year effect on Non-GAAP EPS -$0.08 -$0.10 -$0.10 2013 2014 2015E © Bruker Corporation 22
Slide 23: Improvements in profitability and free cash flow
. . .we are nonetheless delivering solid improvements in our profitability and free cash flow Non-GAAP Non-GAAP Non-GAAP Free Cash Flow Gross Margin Operating Margin EPS 11.5% $0.51 $57M 46.1% $0.46 44.9% 9.3% $18M +120 bps +220 bps +11% +$39M Q3-14 YTD Q3-15 YTD © Bruker Corporation 23
Slide 24: Progress in improving working capital efficiency
We have made good progress in improving our working capital efficiency $1,400 0.60 $1,200 0.46 $1,000 0.38 0.40 $832m $800 $633m $600 0.20 $400 $200 $- 0.00 2012 2013 2014 Q3-15 YTD Working Capital Working Capital to Revenue Ratio © Bruker Corporation 24
Slide 25: Share buyback initiated
Improved performance and a strong balance sheet have enabled us to initiate a share buyback Free Cash Flow Net Cash as a % of Revenue $161M 5.0% SHARE BUYBACK PROGRAM • A two-year share $87M repurchase program of up to $225M started in mid- 1.4% November 2015 +3.6% +85% Q3 YTD 2014 Q3 YTD 2015 © Bru
Slide 26: Several years of margin expansion opportunity ahead
We believe we have several years of meaningful margin expansion opportunity ahead of us Bruker Non-GAAP Operating Margins ~11.7%* 10.2% 2016–2020 continue to close gap with peers 2014 2015E 2016 2017 2018 2019 2020 *FY15 guidance for operating margin expansion 150 basis point or more © Bruker Corpor
Slide 27: Key Messages in 2016
Key Messages in 2016 1 Bruker is a differentiated leader in attractive life science and diagnostics tools markets, and our brand stands for innovation 2 We focus on profitable growth in four strategic growth areas 3 We will drive margin expansion and cash flow as we transition from Transformation to
Slide 28: www.bruker.com
www.bruker.com © Bruker Corporation 28