Bruker Corporation (NASDAQ: BRKR)

Transcription

1 Bruker Corporation (NASDAQ: BRKR) Q4 and FY 2015 Earnings Presentation February 10, 2016 Frank Laukien, President & CEO Anthony Mattacchione, SVP & Interim CFO Joshua Young, VP, IR & Corporate Development Innovation with Integrity

2 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 Any forward-looking statements contained herein are based on current expectations, but are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including, but not limited to, risks and uncertainties relating to adverse changes in conditions in the global economy and volatility in the capital markets, the integration of businesses we have acquired or may acquire in the future, our ability to successfully implement restructuring initiatives, changing technologies, product development and market acceptance of our products, the cost and pricing of our products, manufacturing, competition, dependence on collaborative partners and key suppliers, capital spending and government funding policies, changes in governmental regulations, realization of anticipated benefits from economic stimulus programs, intellectual property rights, litigation, and exposure to foreign currency fluctuations and other risk factors discussed from time to time in our filings with the Securities and Exchange Commission. These and other factors are identified and described in more detail in our filings with the SEC, including, without limitation, our annual report on Form 10-K for the year ended December 31, 2014 and our quarterly reports on Form 10-Q for the periods ended March 31, 2015, June 30, 2015, and September 30, We will also be referencing non-gaap financial measures in this presentation. A reconciliation of non-gaap to GAAP results is available in our earnings press release and in this presentation. 2

3 Q4-15 & FY-2015 Business Update 3

4 Strong Q4-15 performance drives margin expansion and free cash flow generation Q Performance Revenue decline of -$30m, or -6% y-o-y FX headwinds lower revenue -8% y-o-y Organic revenue growth of +2.5% y-o-y Europe & Americas strongest regions Non-GAAP operating margin expands by +500 basis points y-o-y to 17.5% Non-GAAP EPS grows by +27% y-o-y Free cash flow of $138M up $76M compared to Q4-14 Substantially higher net income and lower working capital drive improvement Q4 Financials Revenues [$ m] Q4-14 Q4-15 Non-GAAP EPS Q4-14 $0.30-6% +27% Q4-15 $0.38 4

5 Improvement in FY-15 results reflects the initial benefits from our three-year Transformation FY-2015 Performance Revenue decline of -10% y-o-y, due to FX headwind (-10%) and changes in portfolio (-2%) After organic revenue decline in FY-14, return to organic revenue growth of +2.1% y-o-y in FY-15 - Europe grows high-single digits Full Year Financials Revenues [$ m] 1,809 1,624-10% Including +105 basis points due to 2014 CAM restructuring, FY-15 non-gaap operating margin expands +310 basis points y-o-y, well ahead of +150 bps guidance FY-14 Non-GAAP EPS FY % Non-GAAP EPS grows +19% to $0.89, despite currency headwind of ($0.09) Record free cash flow (FCF) of $195M increases by +$115 million over FCF of $81M in FY-14 FY-2014 FY-2015 $0.75 $0.89 5

6 GROUP OVERVIEW: FY 2015 Performance $547M revenue Bruker BIOSPIN Group Strong revenue growth for Nuclear Magnetic Resonance (NMR) in H after slow start to the year Preclinical imaging declines in both revenues and new order bookings NMR posts double-digit growth in new order bookings $493M revenue New pricing began to positively affect Q4-15 performance and will continue to be a contributor in FY-16 Bruker CALID Group Restructuring programs completed and will lower costs in FY-16 Bruker CALID Group Bruker CALID Group CALID delivers mid-high single digit organic revenue growth and significantly higher profitability due to operating leverage and CAM restructuring in 2014 Detection Division has exceptional year due to large transactions and newly launched explosives trace detection (ETD) products Balanced performance in Daltonics Division as most product lines grow y-o-y; MALDI Biotyper is fastest growing product line Optics Division sustains good performance despite weaker markets 6

7 GROUP OVERVIEW: FY 2015 Performance $460M revenue Bruker NANO Group Mixed top-line performance as strength in academic customer base and China is offset by weakness from industrial and semi customers AXS Division generates mid-single digit organic revenue growth and strong year-over-year profitability improvement Nano Surfaces Division posts a decline in revenue and profitability, but effectively manages expenses in a tough environment Low-teens organic revenue growth in Nano Analytics Division $134M revenue BEST Segment Reports +4% organic revenue growth and non-gaap operating margin of 9.0% Multi-year ROSATOM and DESY projects completed in Q4-15 Strong bookings and backlog as a result of long-term contracts for superconducting wire 7

8 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 strategic growth markets Reemphasize strong focus on customers, as well as on product and business innovation 8

9 Q4-15 & FY-2015 Financial Update 9

10 NON-GAAP FINANCIAL PERFORMANCE: Q Overview [$ m, except EPS] Q Q Δ Revenues % Operating Income % Margin (%) 17.5% 12.5% EPS $0.38 $ % Free Cash Flow $76M [$ m] Dec 31, 2015 Dec 31, 2014 Δ Net Cash % Working capital (WC) * % COMMENTS Significantly higher non- GAAP operating margin and free cash flow achieved Growth of non-gaap operating income flowed through to meaningful non- GAAP EPS growth Net cash position up, even with larger share buyback program since mid- November 2015 Excellent progress in reducing working capital year-over-year WC-to-revenue ratio * WC = (Accounts Receivable + Inventory - Accounts Payable) 10

11 Q revenue bridge Q Revenue for Bruker Corp. Organic Currency Portfolio Total +2.5% -7.8% -0.6% -5.9% Q Revenue Bridge [$ m] Q DRIVERS Organic revenue growth of +2.4% driven by strong performance in BEST Segment and growth in CALID Group Strong US dollar continues to drive most of the currency headwind $508.0M +$12.5 -$39.2 -$3.1 $478.2M CAM divestitures netted against Jordan Valley acquisition cause net negative portfolio effect Q Organic Currency Portfolio Q

12 Q Non-GAAP Results [$ m, except EPS] Q Q Δ Total Revenues % Gross Profit NM Margin (% of revenues) 46.6% 43.9% SG&A % (% of revenues) 21.4% 23.2% R&D % (% of revenues) 7.7% 8.2% Operating Income % (% of revenues) 17.5% 12.5% Tax Rate 19.1% 20.0% -90 bps Net Income* % EPS $0.38 $ % Shares Outstanding NM Sum of items may not total due to rounding COMMENTS Gross margin improvement driven by positive product mix, pricing gains, and restructuring actions Lower operating expenses due to FX translation, BioSpin restructuring and continued cost control CAM restructuring added +75 bps of op. margin Tax rate benefits from discrete items FX headwinds represent a (-$0.02) drag on EPS in Q4-15 * Attributable to Bruker 12

13 FY-2015 revenue bridge FY-2015 Revenue for Bruker Corp. Organic Currency Portfolio Total +2.1% -10.2% -2.1% -10.2% FY-2015 DRIVERS Organic revenue growth of +2.1% primarily driven by CALID Group FX reduces revenue by -$184M FY-15 Revenue Bridge [$ m] $1,808.9M +$36.4 -$ $37.1 $1,623.8M Portfolio reflects CAM divestitures and partial quarter of Jordan Valley acquisition FY-2014 Organic Currency Portfolio FY

14 FY 2015 Non-GAAP Results [$ m, except EPS] FY 2015 FY 2014 Δ Total Revenues 1, , % Gross Profit % Margin (% of revenues) 46.2% 44.7% SG&A % (% of revenues) 24.0% 24.8% R&D % (% of revenues) 9.0% 9.6% Operating Income % (% of revenues) 13.3% 10.2% Tax Rate 22.0% 25.1% -310 bps Net Income* % EPS $0.89 $ % Shares Outstanding NM COMMENTS Approximately half of 150 bps improvement in gross margin related to better operational and commercial practices; 60 bps improvement from CAM restructuring Opex reduction related to FX translation and absence of CAM EPS grew +19% from operating profit growth and lower tax rate Improving earnings quality: FCF represented 129% of non-gaap net income Sum of items may not total due to rounding * Attributable to Bruker 14

15 FY 2015 Cash Flow Statement [$ m] FY 2015 FY 2014 Δ Net Income Depreciation & amortization Changes in working capital* Other Operating cash flow Capital expenditures COMMENTS Free cash flow generated by higher earnings, reduction in working capital, and increase in customer deposits Change in Other primarily relates to timing of customer deposits and system acceptances Free cash flow * WC = (Accounts Receivable + Inventory - Accounts Payable) 15

16 2016 Outlook 16

17 FY-2016 Guidance FY-2016 Guidance Organic Revenue Growth Approximately +3% 2016 ASSUMPTIONS FY 2016 tax rate: 25%-28% Non-GAAP Operating Margin Expansion y-o-y Approximately +100 bps Fully diluted share count: 163M-165M shares Capex: ~$50M Non-GAAP EPS $ $1.02 Current currency assumptions: Yen/USD: 120 USD/EUR: 1.09 CHF/USD:

18 Appendix 18

19 Q GAAP Results [$ m, except EPS] Q Q Δ Total Revenues % Gross Profit % Margin (% of sales) 44.2% 42.5% SG&A % (% of revenues) 21.5% 23.3% R&D % (% of revenues) 7.7% 8.2% Operating Income % (% of revenues) 14.8% 8.8% Net Income* % EPS $0.36 $ % Shares Outstanding NM Sum of items may not total due to rounding * Attributable to Bruker 19

20 Q Reconciliation of GAAP and Non-GAAP Results [$ m, except EPS] Q Q GAAP Operating Income Restructuring Costs Acquisition-Related Costs Purchased Intangible Amortization Other Costs TOTAL Non-GAAP Operating Income Non-GAAP Interest & Other Income (Expense), net* * Non GAAP Profit Before Tax Non-GAAP Income Tax Provision Non-GAAP Tax Rate 19.1% 20.0% Minority Interest Non-GAAP Net Income** Non-GAAP EPS $0.38 $0.30 Sum of items may not total due to rounding *Excludes $0.7M of net losses for 2014 **Attributable to Bruker 20

21 FY 2015 GAAP Results [$ m, except EPS] FY 2015 FY 2014 Δ Total Revenues 1, , % Gross Profit % Margin (% of sales) 43.6% 42.2% SG&A % (% of revenues) 24.2% 24.9% R&D % (% of revenues) 9.0% 9.6% Operating Income % (% of revenues) 9.0% 5.8% Net Income* % EPS $0.60 $ % Shares Outstanding NM Sum of items may not total due to rounding * Attributable to Bruker 21

22 FY 2015 Reconciliation of GAAP and Non-GAAP Results [$ m, except EPS] FY 2015 FY 2014 GAAP Operating Income Restructuring Costs Acquisition-Related Costs Purchased Intangible Amortization Other Costs TOTAL Non-GAAP Operating Income Non-GAAP Interest & Other Income (Expense), net* Non-GAAP Profit Before Tax Non-GAAP Income Tax Provision Non-GAAP Tax Rate 22.0% 25.1% Minority Interest Non-GAAP Net Income** Non-GAAP EPS $0.89 $0.75 Sum of items may not total due to rounding * Excludes $0.2M of net losses for 2015 and $5.9M of net gains for 2014 **Attributable to Bruker 22

23 Q Cash Flow Statement [$ m] Q Q Δ Net Income Depreciation & amortization Changes in working capital* Other Operating cash flow Capital expenditures Free cash flow * WC = (Accounts Receivable + Inventory - Accounts Payable) 23

24 Balance sheet [$ m] Dec 31, 2015 Dec 31, 2014 Δ Total Assets 1, , % Working Capital* % Intangibles, Net & Other Long-Term Assets % [$ m] Dec 31, 2015 Dec 31, 2014 Δ Cash, Cash Equivalents & Short-term Investments % Financial Debt % Net Cash % * WC = (Accounts Receivable + Inventory - Accounts Payable) 24

25 Q4-15 GAAP SEGMENT RESULTS: BSI and BEST GAAP Performance [$ m] Q Q Δ REVENUE Scientific Instruments (BSI) % Organic Revenue Growth (%) 0.0% 0.6% Energy & Supercon Technologies (BEST) % Organic Revenue Growth (%) +31.7% -14.1% Corporate Eliminations Total Revenue % OPERATING INCOME Scientific Instruments (BSI) % Energy & Supercon Technologies (BEST) % Corporate Eliminations Total Operating Income % Sum of items may not total due to rounding 25