Innovation with Integrity. November 15, Bruker Corporation

Transcription

1 Bruker drives profitable growth and margin expansion by enabling scientific discoveries and by delivering highperformance analytical, life science and diagnostic solutions November 15, 2017 Innovation with Integrity

2 Bruker Corporation Safe Harbor 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 Forward-looking statements are based on current expectations, forecasts and assumptions of our management and are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, 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; fluctuations in foreign currency exchange rates; implementation of strategies for improving our operating margins, profitability and cash flow; changing technologies; product development and market acceptance of our products; the cost and pricing of our products; competition; dependence on collaborative partners, key suppliers and contract manufacturers; capital spending and government funding policies; changes in governmental regulations; the use and protection of intellectual property rights and other risk factors discussed from time to time in our filings with the Securities and Exchange Commission, or SEC. These and other factors are identified and described in more detail in our most recent reports filed with the SEC, including, without limitation, our annual report on Form 10-K for the year ended December 31, 2016, our most recent quarterly reports on Form 10-Q and our current reports on Form 8-K. We expressly disclaim any intent or obligation to update these forward-looking statements other than as required by law. 2

3 Key Messages & Financial Objectives 1. Bruker is a differentiated leader in attractive markets for analytical, life science and diagnostic tools, and our brand stands for innovation: Market leader in unique, high value technologies: NMR, MALDI-TOF, MALDI BioTyper, FTMS, AFM, XRD & Superconductors Fundamental Portfolio Transformation towards six major opportunities with higher growth and sustainable higher margins 2. We expect to continue our revenue growth: Recent end market improvement (Academic in Europe and the US, Global Industrial) On track to resume organic revenue growth in 2017, plus incremental M&A contributions Goal to move towards LST & DX market growth in We target multi-year operating margin expansion: In , achieved +460 bps of 2-year cumulative non-gaap operating margin expansion In 2017, targeting bps operating margin expansion (including -40 bps M&A headwind) Operational Excellence and Portfolio Transformation are key drivers of margin expansion Goal: expand operating margin bps per year, on average, over a multi-year timeframe 4. We aim for high ROIC by investing in high-value innovation and disciplined M&A BRKR Non-GAAP ROIC >20% in both FY16 and FY15 3

4 Bruker Overview Founded in 1960 FY2016 revenue: ~$1.6 billion R&D investment: ~9% of revenue ~75% of revenue from scientific and diagnostic instruments ~6,000 employees worldwide After major restructuring and Transformation in , on to Portfolio Transformation and Operational Excellence phases Long-term oriented ownership: ~36% owned by insiders Quarterly dividend: ~$0.04/share Announced two-year $225M share repurchase in May 2017 Three Primary Life Science Tools Groups with Global Footprint Revenue breakdown, % of LTM revenue (1) : BEST Americas 10% NANO Europe 29% BioSpin 33% 28% 37% 5% 29% 29% Rest of World CALID APAC (1) For the last twelve months, ended Sept. 30, 2017 Service & After-market 25% Systems 75% Large, diverse end markets: Life Science Research in Academia, Medical Schools and Government Pharma/Biopharma Diagnostic Labs & Hospitals Applied Markets Industrial & Next-Gen Semicon Metrology Superconductors for Science & MRI 4

5 Three Life Science Tools & Diagnostics (LST & DX) Groups BRUKER HAS #1 OR #2 MARKET POSITION FOR >60% OF PRODUCT PORTFOLIO NMR/EPR & NMR Phenomics Preclinical Imaging & MALDI Imaging MALDI BioTyper Atomic Force Microscopy FT-IR/NIR, X-Ray Diffraction (XRD), Next-Gen Semicon Metrology BioSpin Group ~33% of LTM (1) revenue NMR/EPR for Life-Science Research & Pharma Applied, Industrial & Clinical MR Preclinical Imaging Services & Life-Cycle Support (1) For the last twelve months, ended Sept. 30, 2017 CALID Group ~29% of LTM (1) revenue Mass Spectrometry for Proteomics & Metabolomics Applied & Pharma Microbiology & Pathology FT-IR/NIR/Raman for Applied Markets CBRNE Detection for Security Service, Consumables & Software NANO Group ~28% of LTM (1) revenue Atomic Force Microscopy Fluorescence Microscopy for Cell Biology & Neuroscience X-Ray for Materials Research, QC Next-Gen Semicon Metrology Service & After-Market business 5

6 Bruker Year-To-Date FY 2017 financials (1) Improved revenue growth and further operating margin expansion, 2016 tax rate affects EPS comparisons $1,141 Mil Revenues $1,235 Mil Non-GAAP Gross Margin 47.8% 47.3% Non-GAAP Operating Margin 12.8% 13.4% Non-GAAP EPS $0.73 $0.70 +$94M -50 bps +60 bps -4% YTD FY 2016 YTD FY 2017 (1) For the nine months ended Sept. 30, 2017 and 2016 * Non-GAAP gross margin, non-gaap operating margin, and non-gaap EPS are non-gaap measures. Reconciliations of these measures to the most directly comparable GAAP measures are available at the end of this presentation and on Bruker s website at 6

7 FY 2017 Guidance: Return to organic revenue growth, sustain operating margin expansion (1) FY 2017 Guidance Revenue Growth y-o-y +8% to +8.5% Non-GAAP Operating Margin Expansion y-o-y (2)(3) +70 bps to +100 bps Non-GAAP EPS $1.17 to $1.20 (1) As of November 2, 2017 (2) From a FY2016 non-gaap operating margin of 14.8%. (3) Includes approximately -40 bps cumulative negative effect from 2016 and 2017 acquisitions ASSUMPTIONS Organic revenue growth: +2.5% to +3% Acquisition revenue growth: +4.5% FX revenue tailwind: +1% Non-GAAP tax rate: ~25% Fully diluted share count: ~159M shares Capex: ~$45M FX assumptions as of September 30, 2017: USD = Yen EUR = 1.18 USD CHF = 1.03 USD 7

8 Portfolio Transformation Starting to move the needle in 2018 and beyond Six Key High-Growth & High-Margin Initiatives: Growth Phenomics & Proteomics Portfolio Cost Biopharma & Applied Microbiology & Diagnostics Neuroscience & Cell Microscopy Next-gen Nanotechnology Tools Commercial Excellence Product R&D Excellence Operational Excellence After-Market: Services, Software & Consumables 8

9 Portfolio Transformation Phenomics & Proteomics Phenomics by NMR Proteomics & Phenomics by Mass Spec Structural Biology by GHz-Class NMR NMR for phenomics research International Phenome Center Network (IPCN) with Bruker as key NMR partner Phenomics to grow rapidly in next decade in clinical research and diagnostics timstof TM Trapped Ion Mobility, impact II & maxis II UHR-QTOFs TIMS is game-changing for high-throughput clinical proteomics and MS-based phenomics Structural biology with dynamics and function Unique for Intrinsically Disordered Proteins (IDPs) Recent breakthroughs in biological solid-state NMR for membrane proteins and protein aggregates (e.g. in neurodegeneration) NEW at HUPO (September 2017): timstof TM Pro with PASEF for shotgun proteomics NEW Platform at ENC (March 2017): Next-gen Avance NEO 9

10 Portfolio Transformation Biopharma & Applied Market Biopharma: rapiflex MALDI PharmaPulse Label-free ultra-high throughput MS-screening on millions of compounds in pharma drug discovery Accelerates drug discovery Applied Markets: NMR FoodScreeners Bruker NMR, MS and FT-IR/NIR instruments used for quality, authenticity and safety testing in food analysis NMR HoneyScreener and WineScreener : detect and quantify ingredients in short, automated, high-value and low-cost analyses Biopharma: MALDI Drug Imager Extreme resolution Magnetic Resonance Mass Spectrometry (MRMS) for MALDI Imaging in drug & metabolism imaging biomarker discovery in cancer research NEW Biopharma solutions at ASMS 2017: SCiLS Lab and SCILS Cloud Industry-leading software for large-scale, multicenter MS Imaging research NEW applied markets solution at ASMS (June 2017): ToxTyper 2.0E Routine forensic toxicology of hundreds of compounds in minutes 10

11 Portfolio Transformation Microbiology & Diagnostics Clinical Microbiology: MALDI Biotyper MALDI Biotyper identifies bacteria, yeasts and fungi more accurately and with short time-to-result (TTR) Global installed base ~2,600 systems Comprehensive development roadmap: gold standard ID ID from positive blood culture in sepsis select antibiotic resistance & susceptibility assays syndromic panels NEW Consumable Products in 2017: MBT Star -Carba IVD: CE-IVD assay for mass spec-based antibiotic resistance testing on MALDI Biotyper High-value PCR Assays (no culture): Fungiplex Aspergillus, Fungiplex Candida and Carbaplex Resistance CE-IVD assays NEW System at ASM Microbe (June 2017): IR Biotyper For strain typing and infection control in hospital hygiene laboratories Clinical Research: MALDI TissueTyper rapiflex MALDI Mass Spec enabling MS Imaging in pathology translational research to complement IHC 11

12 Portfolio Transformation Neuroscience & Cell Microscopy Next-gen Optogenetics & Super-Resolution Cell Microscopy Simultaneous, all-optical stimulation and imaging platforms for neuroscience research Multi-cell brain research: decode neural connectivity and networks Deep 3D super-resolution microscopy for livecell research Recent Bruker Nano Acquisition (May 2017): Luxendo light sheet microscopy Proprietary single plane illumination microscopy (SPIM) technique Reduces phototoxicity on living specimens Enables new research in embryology, live-cell imaging, brain development, optogenetics Mouse spermatocyte courtesy of Jackson Labs 12

13 Portfolio Transformation Next-Gen Nanotechnology Tools Next-Gen Nanotechnology: X-Ray Semiconductor Metrology Logic and memory makers require next-gen nano-metrology tools to ensure yield and quality Bruker next-gen atomic force microscopy (AFM) and X-ray metrology tools are key for advanced nodes and 3D chip structures 13

14 $ millions Fast Growing After-Market Business Services, Software and Consumables Focus on After-Market revenue BIOSPIN NANO CALID 350 Focus on Service CALID

15 From Transformation and Rightsizing ( ) to Operational & Commercial Excellence ( ) Bruker BioSpin Bruker NANO Bruker CALID BEST Outsourcing Rightsizing Outsourcing Rightsizing & Footprint Consolidation Outsourcing CAM Divestitures Footprint Consolidation Rightsizing & Footprint Consolidation Operational Excellence & Cost Optimization Product R&D Excellence Lean Manufacturing Commercial Excellence ERP, CRM and Process 15

16 Portfolio Transformation: Fundamentally reshaping the portfolio for fast growth & continued multi-year margin expansion Six Key High-Growth & High-Margin Initiatives: Growth Phenomics & Proteomics Biopharma & Applied 2017 est.: About 25% of Bruker s revenue Portfolio Cost Microbiology & Diagnostics Neuroscience & Cell Microscopy Next-gen Nanotechnology Tools Growing above LST market GM & OM above BRKR average Commercial Excellence Product R&D Excellence Operational Excellence After-Market: Services, Software & Consumables 16

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18 Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (unaudited) (in millions, except per share amounts) Reconciliation of Non-GAAP Operating Income, Non-GAAP Profit Before Tax, Non-GAAP Net Income, and Non-GAAP EPS Nine Months Ended September 30, GAAP Operating Income $ $ Non-GAAP Adjustments: Restructuring Costs Acquisition-Related Costs Purchased Intangible Amortization Other Costs Total Non-GAAP Adjustments: $ 44.3 $ 45.6 Non-GAAP Operating Income $ $ Non-GAAP Operating Margin 13.4% 12.8% Non-GAAP Interest & Other Expense, net (12.9) (11.1) Non-GAAP Profit Before Tax Non-GAAP Income Tax Provision (38.7) (15.4) Non-GAAP Tax Rate 25.4% 11.4% Minority Interest (1.3) (0.8) Non-GAAP Net Income Attributable to Bruker Weighted Average Shares Outstanding (Diluted) Non-GAAP Earnings Per Share $ 0.70 $

19 Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (Unaudited) (in millions, except per share amounts) Nine Months Ended September 30, Reconciliation of GAAP and Non-GAAP Gross Profit GAAP Gross Profit $ $ Non-GAAP Adjustments: Restructuring Costs Acquisition-Related Costs Purchased Intangible Amortization Other Costs Total Non-GAAP Adjustments: Non-GAAP Gross Profit $ $ Non-GAAP Gross Margin 47.3% 47.8% Reconciliation of GAAP and Non-GAAP Tax Rate GAAP Tax Rate 23.7% 4.3% Non-GAAP Adjustments: Tax Impact of Non-GAAP Adjustments 1.5% -2.4% Tax Authority Settlements 0.0% 1.7% Valuation Allowance Release 0.0% 9.3% Other Discrete Items 0.2% -1.5% Total Non-GAAP Adjustments: 1.7% 7.1% Non-GAAP Tax Rate 25.4% 11.4% 19

20 Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (Unaudited) (in millions, except per share amounts) Nine Months Ended September 30, Reconciliation of GAAP and Non-GAAP Interest & Other Income (Expense), net GAAP Interest & Other Income (Expense), net $ (11.8) $ (11.1) Non-GAAP Adjustments: Bargain Purchase Gain (1.1) - Non-GAAP Interest & Other Income (Expense), net $ (12.9) $ (11.1) Reconciliation of GAAP Operating Cash Flow and Non-GAAP Free Cash Flow GAAP Operating Cash Flow $ 50.7 $ 40.0 Non-GAAP Adjustments: Purchases of property, plant and equipment (31.3) (26.0) Non-GAAP Free Cash Flow $ 19.4 $ 14.0 Reconciliation of GAAP Revenue and Non-GAAP Revenue GAAP Revenue as of Prior Comparable Period $ 1,141.0 $ 1,145.6 Non-GAAP Adjustments: Acquisitions and divestitures Currency (5.1) (1.9) Organic 39.1 (26.2) Total Non-GAAP Adjustments: 94.4 (4.6) Non-GAAP Revenue $ 1,235.4 $ 1,141.0 Organic Revenue Growth 3.4% -2.3% 20

21 Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (in millions, except per share amounts) Reconciliation of Non-GAAP Return on Invested Capital (ROIC) Non-GAAP Operating Income (from above) $ $ Less: Non-GAAP Income Tax Provision (from above) (35.9) (43.4) Non-GAAP Operating Income after Tax $ $ Average Total Invested Capital: Average Long-Term Debt $ $ Average Current portion of Long-Term Debt Average Total Shareholders' Equity Less: Average Cash and Cash Equivalents (304.8) (293.3) Average Total Invested Capital $ $ Return on Invested Capital (ROIC) 27.0% 22.3% With respect to the Company's outlook for 2017 non-gaap operating margin, non-gaap EPS and non-gaap tax rate, we are not providing the most directly comparable GAAP financial measures or corresponding reconciliations to such GAAP financial measures on a forward-looking basis, because we are unable to predict with reasonable certainty certain items that may affect such measures calculated and presented in accordance with GAAP without unreasonable effort. Our expected non-gaap operating margin, tax rate and EPS ranges exclude primarily the future impact of restructuring actions, unusual gains and losses, acquisition-related expenses and purchase accounting fair value adjustments. These reconciling items are uncertain, depend on various factors outside our management s control and could significantly impact, either individually or in the aggregate, our future period operating margins, EPS and tax rate calculated and presented in accordance with GAAP. For more information, visit Bruker s website at 21