Bruker Corporation (NASDAQ: BRKR)
Q4 2017 Earnings Presentation
Frank Laukien, President & CEO
Anthony Mattacchione, SVP & CFO
Miroslava Minkova, Head of Investor Relations February 8, 2018
Innovation with Integrity
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 the Private Securities Litigation Reform Act of 1995.
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 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, 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, key
suppliers and contract manufacturers, capital spending and government funding policies, changes in
governmental regulations, the use and protection of intellectual property rights, litigation, 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 filings with the SEC, including,
without limitation, our annual report on Form 10-K for the year ended December 31, 2016 and
subsequently filed Quarterly reports on Form 10-Q. We expressly disclaim any intent or obligation to
update these forward-looking statements other than as required by law. 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
Business Update
Q4 2017 & FY 2017
3
Q4 2017 Performance
Revenues increase +$60M, or +12.8%, y-o-y
−Organic revenue +4.0% y-o-y, including +3.4% in
Scientific Instruments, and +11.6% in BEST segment
−Acquisitions add +3.6% y-o-y
−FX translation adds +5.2% y-o-y
Non-GAAP gross margin increases +120 bps y-o-y
Non-GAAP operating margin increases +130 bps y-o-y
Non-GAAP operating profit grows +20.4% y-o-y
GAAP net loss per share of $0.02, including US tax
reform effects, compared to EPS of $0.43 in Q4-16
Non-GAAP EPS of $0.51, an increase of 11%
compared to $0.46 in Q4-16
Q4 Financials
4
Revenues [$M]
470.3 530.5
Q4-16 Q4-17
Non-GAAP EPS
Q4 2017: Solid revenue growth, margin expansion
and Non-GAAP EPS growth
+12.8%
+11%
$0.46
$0.51
Q4-16
Q4-17
FY 2017 Performance
Revenue increase of +$155M, or +9.6%, y-o-y
−Organic revenue +3.6% y-o-y, including +2.7% in
Scientific Instruments, and +14.5% in BEST
−Acquisitions add +4.8% y-o-y
−FX translation adds +1.2% y-o-y
Non-GAAP gross margin consistent with FY 2016
Non-GAAP operating margin expands +80 bps y-o-y
Non-GAAP operating profit grows +16% y-o-y
GAAP EPS $0.49, compared to $0.95 in FY 2016
Non-GAAP EPS $1.21, compared to $1.19 in FY 2016
− Non-GAAP eff. tax rate 25.0% vs. 15.7% in FY 2016
FY 2017 ROIC of ~26.6%
FY Financials
5
Revenues [$M]
1,611 1,766
FY 2016 FY 2017
Non-GAAP EPS
FY 2017: Return to organic revenue growth and
continued operating margin expansion;
low FY 2016 tax rate limits non-GAAP EPS growth
+9.6%
+2%
$1.19
$1.21
FY 2016
FY 2017
Bruker BIOSPIN Group: FY 2017 Revenue $572M
BIOSPIN revenue modestly above prior year in constant currency;
operating margins lower, primarily due to less favorable mix
NMR revenue on par with FY 2016, with continued strong after-market
revenue growth with LabScapeTM and despite 1GHz revenue in 2016
PCI up slightly with good execution and PCI market recovery
CALID mid-single digit constant currency revenue growth, including
acquisitions (primarily InVivo); operating margins improve on higher
volume and 2016 restructuring
Daltonics revenue grows with European academic recovery and
strength in after-market services & consumables
Optics revenue grows; improved industrial, applied, academic demand
Detection revenue down due to large contracts in 2016
GROUP OVERVIEW:
FY 2017 Operating Performance
6
Bruker CALID Group: FY 2017 Revenue $499M
Bruker NANO Group: FY 2017 Revenue $513M
NANO low teens constant currency revenue growth, due to academic and
industrial recovery, growth in semiconductor metrology and acquisitions
AXS revenue up with European recovery, industrial and China demand
Semicon metrology revenue substantially higher with both technology
buys and market strength
Nano Surfaces revenue higher due to Hysitron acquisition
BEST Segment: FY 2017 Revenue $182M(1)
BEST revenue substantially higher, driven by both B-OST acquisition
(November 2016) and mid-teens organic growth
Demand for MRI superconductors and ‘Big Science’ projects drove BEST
results in FY 2017, including some project accelerations into 2017
B-OST results ahead of M&A targets; productivity investments on-going
GROUP OVERVIEW:
FY 2017 Operating Performance
7
(1) Net of intercompany eliminations. BEST Segment FY 2017 revenue prior to intercompany eliminations is $191M.
Innovation with Integrity
MULTI-YEAR PORTFOLIO TRANSFORMATION:
On track in 2017, with significant investments;
Further acceleration expected in 2018-2020
8
• Proteomics & Phenomics
• Biopharma & Applied
• Microbiology & Diagnostics
• Neuroscience & Cell Microscopy
• Next-gen Nanotechnology
• After-Market: Services,
Software and Consumables (1)
2017 results:
~25% of
revenue
grew above
LST market
GMs & OMs
above Bruker
average
2017 results:
~15% of
revenue
lower GMs,
higher OMs
than Bruker
average
(1) Services, software and consumables, excluding Microbiology after-market & consumables.
Six Key High-Growth & High-Margin
Initiatives:
2018 Key Priorities
Position company for further organic Revenue
Growth Acceleration: drive six key high-growth
initiatives
Transform Portfolio by investing in six key high-
growth, high-margin initiatives
Sustain Margin Expansion with continued
Operational & Commercial Excellence initiative
Continue to Strengthen Systems by harmonizing
processes, ERP and CRM platforms
Disciplined Capital Allocation for sustained
shareholder returns
9
Financial Update
Q4 2017 & FY 2017
10
NON-GAAP FINANCIAL PERFORMANCE:
Q4 2017 Overview
[$ m, except EPS] Q4-2017 Q4-2016 Δ
Revenues 530.5 470.3 +12.8%
Operating Profit 110.8 92.0 +20%
Margin (%) 20.9% 19.6% +130 bps
Non-GAAP EPS $0.51 $0.46 +11%
Free Cash Flow 91.3 79.7 +11.6M
[$ m] Dec 31, 2017 Dec 31, 2016 Δ
Net (Debt)/ Cash 23.6 88.6 -73%
Working capital (WC)* 714.7 598.2 +19%
WC-to-revenue ratio $0.40 $0.37 +8%
11
COMMENTS
Reported revenue +12.8%,
organic growth +4.0%
Operating profit up +20%
Operating margin +130 bps:
higher volume and operating
leverage, partially offset by
dilution from acquisitions and
FX
Free cash flow $91.3M, an
increase of 14.5% y-o-y
Use of cash for buybacks,
dividends and M&A results in
lower net cash position y-o-y
Working capital up +19%,
due to revenue growth,
acquisitions and FX
* WC = (Accounts Receivable + Inventory - Accounts Payable)
Q4 2016 Organic Currency Portfolio Q4 2017
$470.3M $530.5M
Q4 2017 Revenue Bridge
Organic Currency Portfolio Total
+4.0% +5.2% +3.6% +12.8%
Reported revenue +12.8%
Organic revenue +4.0%,
with strong growth at
NANO and BEST
– BSI +3.4% organic
– BEST +11.6% organic
(net of intercompany
eliminations)
Acquisitions add +3.6% to
revenue growth, primarily
Hysitron, B-OST and
InVivo
FX tailwind of $24.6M, or
+5.2%
12
Q4 2017 DRIVERS
Q4-2017 Revenue Bridge [$M]
+$18.8M +$24.6M +$16.8M
Q4 2017 Revenue
Q4 2017 Non-GAAP Results
[$ m, except EPS] Q4-2017 Q4-2016 Δ
Total Revenues 530.5 470.3 +12.8%
Gross Profit 265.0 229.5 +15% Margin (% of revenues) 50.0% 48.8% +120 bps
SG&A -110.7 -99.3 +11%
(% of revenues) 20.9%
21.1%
R&D -43.5 -38.2 +14% (% of revenues) 8.2% 8.1%
Operating Profit 110.8 92.0 +20%
(% of revenues) 20.9% 19.6% +130 bps
Tax Rate 24.5% 21.7% +280 bps
Net Income* 79.8 73.7 +8%
EPS $0.51 $0.46 +11%
Shares Outstanding 156.9 160.7 -2%
Gross margin +120 bps: volume and operating leverage, partially offset by negative FX
Opex increases driven by higher business volume, acquisitions and FX
Operating margin +130 bps: positive operating leverage, which more than offset ~100 bps of headwind from acquisitions and FX
Q4-17 tax rate 24.5% vs. 21.7% in Q4-16, which included valuation allowance reversals
EPS up +11% on revenue growth and operating leverage
Share count lower on share repurchases
13
COMMENTS
* Attributable to Bruker Sum of items may not total due to rounding
FY 2016 Organic Currency Portfolio FY 2017
$1,611.3M $1,765.9M
FY 2017 Revenue Bridge
Organic Currency Portfolio Total
+3.6% +1.2% +4.8% +9.6%
Reported revenue +9.6%
Organic revenue growth
+3.6%, with growth at
NANO, CALID and BEST
– BSI +2.7% organic
– BEST +14.5% organic
(net of intercompany
eliminations)
Acquisitions add +4.8% to
growth, primarily B-OST,
Hysitron and InVivo
FX adds $19.6M, or
+1.2%
14
FY 2017 DRIVERS
FY 2017 Revenue Bridge [$M]
+$57.8M +$19.6M +$77.2M
FY 2017 Revenue
© Bruker Corporation 15
FY 2017: Balanced Portfolio Across Three Scientific
Instruments Groups and Across Geographies
Life Science Research in Academia,
Medical Schools and Government
Pharma/Biopharma
Microbiology and Diagnostics
Applied Markets
Industrial & Semiconductor Metrology
Superconductors for Science &
Medicine
(1) For the last twelve months, ended Dec. 31, 2017. (2) Numbers may not add due to rounding.
32%
28%
29%
10%
BioSpin
38%
29%
4% 29%
75%
25%
Systems
CALID
NANO
BEST Service &
After-market (3) Americas
Europe
Rest of World
APAC
Bruker revenue breakdown, % of 2017 revenue(1)(2):
(3) Includes non-system revenue: services,
consumables, software and accessories as reported
in Bruker’s 10-K filings.
FY 2017 Non-GAAP Results
[$ m, except EPS] FY 2017 FY 2016 Δ
Total Revenues 1,765.9 1,611.3 +9.6%
Gross Profit 849.1 774.4 +10% Margin (% of revenues) 48.1% 48.1%
SG&A -410.3 -387.5 +6%
(% of revenues) 23.2%
24.0%
R&D -162.7 -149.0 +9% (% of revenues) 9.2% 9.2%
Operating Income 276.1 237.9 +16%
(% of revenues) 15.6% 14.8% +80 bps
Tax Rate 25.0% 15.7% 930 bps
Net Income* 192.2 192.3 NM
EPS $1.21 $1.19 +2%
Shares Outstanding 159.1 162.2 -2%
Gross margin on par with 2016. Volume and operating leverage at CALID and NANO offset by higher BEST revenue, BioSpin mix and FX
Operating margin +80 bps: operating leverage, which more than offset dilution from acquisitions & FX
FY 2017 effective tax rate 25% vs. 15.7% in FY 2016 (on 2016 tax reversals)
EPS up +2%; y-o-y tax effects moderate EPS growth, despite solid revenue and operating income growth
Share count lower on share repurchases
16
COMMENTS
* Attributable to Bruker Sum of items may not total due to rounding
FY 2017 Cash Flow
[$ m] FY 2017 FY 2016 Δ
Net Income 80.3 154.5 -74.2
Depreciation & amortization 63.9 54.3 +9.6
Changes in working capital* -65.5 -40.6 -24.9
Other 75.7 -37.4 +113.1
Operating cash flow 154.4 130.8 +23.6
Capital expenditures -43.7 -37.1 -6.6
Free cash flow 110.7 93.7 +17.0
Free cash flow up $17M
year-over-year:
– US tax reform non-cash
charge of $69M lowered
GAAP net income and
increased “other”
– Cash earnings ~$25M
higher than in 2016
– Working capital: significant
reduction in inventory,
offset by higher volume
related receivables
balances
– Higher bonus and
restructuring accruals
slightly offset by an uptick
in capital expenditures
17
COMMENTS
* WC = (Accounts Receivable + Inventory - Accounts Payable)
FY 2018 Outlook
18
FY 2018 Guidance
Revenue Growth y-o-y Approximately +7%
Non-GAAP Operating Margin Expansion y-o-y(1)(2)
+50 bps to +80 bps
Non-GAAP EPS $1.34 to $1.38
19
FY 2018 Guidance: Sustained organic revenue
growth, further operating margin expansion, solid
non-GAAP EPS growth
Organic revenue growth
approximately +3%
FX revenue tailwind:
approximately +4%
Non-GAAP tax rate: ~25%
Fully diluted share count:
~156M shares
Capex: ~$50M
FX assumptions based on
average rates in Jan. 2018:
USD = 110.9 Yen
EUR = 1.22 USD
CHF = 1.04 USD
2018 ASSUMPTIONS
(1) From FY17 non-GAAP operating margin of 15.6%.
(2) Includes approximately -70 bps of headwind from foreign currency translation.
Appendix
20
Q4 2017 GAAP Results
[$M, except EPS] Q4 2017 Q4 2016 Δ
Total Revenues 530.5 470.3 +13%
Gross Profit 255.2 220.4 +16%
Margin (% of sales) 48.1% 46.9%
SG&A -112.1 -100.1 +12%
(% of revenues) 21.1% 21.3%
R&D -43.5 -38.2 +14%
(% of revenues) 8.2% 8.1%
Operating Income 93.7 76.9 +22%
(% of revenues) 17.7% 16.4% +130 bps
Net Income (Loss)* (3.4) 69.0 -105%
(Net Losses per share) / EPS ($0.02) $0.43 -105%
Shares Outstanding 155.7 160.7 -3%
21
* Attributable to Bruker Sum of items may not total due to rounding
Q4 2017 Reconciliation of GAAP and
Non-GAAP Results
[$M, except EPS] Q4 2017 Q4 2016
GAAP Operating Income 93.7 76.9
Restructuring Costs 7.7 8.0
Acquisition-Related Costs 0.8 0.7
Purchased Intangible Amortization 7.0 5.5
Other Costs 1.6 0.9
TOTAL 17.1 15.1
Non-GAAP Operating Income 110.8 92.0
Non-GAAP Interest & Other Expense, net -4.6 2.3
Non GAAP Profit Before Tax 106.2
94.3
Non-GAAP Income Tax Provision -26.0 -20.5
Non-GAAP Tax Rate 24.5% 21.7%
Minority Interest -0.4 -0.1
Non-GAAP Net Income* 79.8 73.7
Non-GAAP EPS $0.51 $0.46
22
Sum of items may not total due to rounding *Attributable to Bruker
FY 2017 GAAP Results
[$M, except EPS] FY 2017 FY 2016 Δ
Total Revenues 1,765.9 1,611.3 +10%
Gross Profit 813.0 742.5 +9%
Margin (% of sales) 46.0% 46.1%
SG&A -415.9 -390.5 +7%
(% of revenues) 23.6% 24.2%
R&D -162.7 -149.0 +9%
(% of revenues) 9.2% 9.2%
Operating Income 214.7 177.2 +21%
(% of revenues) 12.2% 11.0% +120 bps
Net Income* 78.6 153.6 -49%
EPS $0.49 $0.95 -48%
Shares Outstanding 159.1 162.2 -2%
23
* Attributable to Bruker Sum of items may not total due to rounding
FY 2017 Reconciliation of GAAP and
Non-GAAP Results
[$M, except EPS] FY 2017 FY 2016
GAAP Operating Income 214.7 177.2
Restructuring Costs 16.2 20.8
Acquisition-Related Costs 10.2 11.1
Purchased Intangible Amortization 29.6 21.7
Other Costs 5.4 7.1
TOTAL 61.4 60.7
Non-GAAP Operating Income 276.1 237.9
Non-GAAP Interest & Other Expense, net -17.5 -8.8
Non GAAP Profit Before Tax 258.6 229.1
Non-GAAP Income Tax Provision -64.7 -35.9
Non-GAAP Tax Rate 25.0% 15.7%
Minority Interest -1.7 -0.9
Non-GAAP Net Income* 192.2 192.3
Non-GAAP EPS $1.21 $1.19
24
Sum of items may not total due to rounding *Attributable to Bruker
Q4 2017 Cash Flow
[$ m] Q4 2017 Q4 2016 Δ
Net Income (Loss) (3.0) 69.1 -72.1
Depreciation & amortization 15.7 13.9 +1.8
Changes in working capital* -21.1 -1.9 -19.2
Other 112.1 9.7 +102.4
Operating cash flow 103.7 90.8 +12.9
Capital expenditures -12.4 -11.1 -1.3
Free cash flow 91.3 79.7 +11.6
Free cash flow up $11.6M,
or +15% y-o-y:
– US tax reform non-cash
charge of $69M lowered
GAAP net income and
increased “other”
– Cash earnings higher
than in Q4-16
– Working capital: higher
volume related
receivables balances
– Higher bonus and
restructuring accruals
slightly offset by an
uptick in capital
expenditures
25
COMMENTS
* WC = (Accounts Receivable + Inventory - Accounts Payable)
Balance Sheet
[$M] Dec 31,
2017 Dec 31,
2016
Cash, Cash Equivalents & Short-term Investments
439.2 500.3
Financial Debt 415.6 411.7
Net Cash 23.6 88.6
26
[$M] Dec 31,
2017 Dec 31,
2016
Total Assets 1,948.5 1,808.4
Working Capital* 714.7 598.2
Intangibles, Net & Other Long-Term Assets
323.2 293.4
* WC = (Accounts Receivable + Inventory - Accounts Payable)
Q4 2017 GAAP SEGMENT RESULTS:
BSI and BEST GAAP Performance
[$ m] Q4 2017 Q4 2016 Δ
REVENUE
Scientific Instruments (BSI) 484.3 435.0 +11%
Organic Revenue Growth (%) +3.4% -0.3%
Energy & Supercon Technologies (BEST) 51.0 39.0 +31%
Corporate Eliminations -4.8 -3.7
Energy & Supercon Technologies (BEST), net of corporate eliminations Organic Revenue Growth (%)
46.2
+11.6%
35.3
-23.4%
+31%
Total Revenue 530.5 470.3 +12.8%
OPERATING INCOME
Scientific Instruments (BSI) 96.9 73.6 +32%
Energy & Supercon Technologies (BEST) 3.1 2.6 +19%
Corporate Eliminations -6.3 0.7
Total Operating Income 93.7 76.9 +22%
27
Sum of items may not total due to rounding
FY2017 GAAP SEGMENT RESULTS:
BSI and BEST GAAP Performance
[$ m] FY 2017 FY 2016 Δ
REVENUE
Scientific Instruments (BSI) 1,583.9 1,492.6 +6%
Organic Revenue Growth (%) +2.7% -1.7%
Energy & Supercon Technologies (BEST) 191.2 130.2 +47%
Corporate Eliminations -9.2 -11.5
Energy & Supercon Technologies (BEST), net of corporate eliminations Organic Revenue Growth (%)
182.0
+14.5%
118.7
-8.9%
+53%
Total Revenue 1,765.9 1,611.3 +10%
OPERATING INCOME
Scientific Instruments (BSI) 208.6 168.9 +24%
Energy & Supercon Technologies (BEST) 7.4 6.6 +12%
Corporate Eliminations -1.3 1.7
Total Operating Income 214.7 177.2 +21%
28
Sum of items may not total due to rounding
FY 2017 Non-GAAP EBITDA
[$M, except EPS] FY 2017 FY 2016 Δ
Non-GAAP Net Income* $192.2 $192.3 NM
GAAP Interest Expense, Net
14.6 12.9 +13%
Non-GAAP Income Tax Provision
64.7 35.9 +80%
GAAP Depreciation Expense
34.3 32.6 +5%
GAAP Amortization of Demonstration Inventories
1.2 16.5 -93%
Total Adjustments 114.8 97.9 +17%
Non-GAAP EBITDA $307.0 $290.2 +6%
29
* Attributable to Bruker Sum of items may not total due to rounding
FY 2017 Return on Invested Capital
[$M, except EPS] FY 2017 FY 2016 Δ
Non-GAAP Operating Income $276.1 $237.9 +16%
Non-GAAP Income Tax Provision
64.7 35.9 +80%
Non-GAAP Operating Income after Tax
211.4 202.0 +5%
Average Total Invested Capital:
Average Long-Term Debt 403.6 328.8 +23%
Average Current Portion of Long-Term Debt
10.1
10.4 -3%
Average Shareholder’s Equity 713.3 713.0 NM
Less Average Cash and Cash Equivalents
333.7 304.8 +9%
Total Average Invested Capital 793.3 747.4 +6%
Return on Invested Capital 26.6% 27.0% -0.4%
30
* Attributable to Bruker Sum of items may not total due to rounding