q317 earnings slides

Bruker Corporation (NASDAQ: BRKR)

Q3 2017 Earnings Presentation

Frank Laukien, President & CEO

Anthony Mattacchione, SVP & CFO

Miroslava Minkova, Head of Investor Relations November 2, 2017

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

Q3 2017 & YTD Q3-2017

3

Q3-2017 Performance

Revenue increase of +$42M, or +10.6% y-o-y

− Acquisitions add +4.8% y-o-y

− FX translation adds +2.4% y-o-y

− Organic revenue up +3.4% y-o-y, driven by CALID

and NANO, as academic markets, particularly Europe,

and global industrial markets improve

Non-GAAP gross margin decreases -130 bps y-o-y due

to expected M&A dilution, FX and mix

Non-GAAP operating margin decreases -10 bps y-o-y

Non-GAAP operating profit grows +10% y-o-y

GAAP EPS of $0.23, compared to $0.29 in Q3-16

Non-GAAP EPS of $0.29, compared to $0.32 in Q3-16

− Non-GAAP eff. tax rate 22.6%, vs. 6.3% in Q3-16

Q3 Financials

4

Revenues [$M]

394 436

Q3-16 Q3-17

Non-GAAP EPS

Q3-2017: Good revenue and operating profit growth,

EPS declines on tax comparisons

+10.6%

-9%

$0.32

$0.29

Q3-16

Q3-17

YTD Q3-2017 Performance

Revenue increase of +$94M, or +8.3% y-o-y

− Acquisitions add +5.3% y-o-y

− FX translation lowers revenue by -0.4% y-o-y

− Organic revenue up +3.4% y-o-y, with growth at all

three BSI groups and BEST segment

Non-GAAP gross margin declines -50 bps y-o-y

Non-GAAP operating margin expands +60 bps y-o-y

Non-GAAP operating profit grows +13% y-o-y

GAAP EPS $0.51, compared to $0.52 YTD Q3-16

Non-GAAP EPS $0.70, compared to $0.73 YTD Q3-16

− Non-GAAP eff. tax rate 25.3%, vs. 11.4% YTD Q3-16

YTD Q3 Financials

5

Revenues [$M]

1,141 1,235

YTD 16 YTD 17

Non-GAAP EPS

YTD Q3-2017: Improved organic revenue growth,

further operating margin expansion, 2016 tax rate

affects EPS comparisons

+8.3%

-4%

$0.73

$0.70

YTD 16

YTD 17

Bruker BIOSPIN Group

BIOSPIN low single digit constant currency revenue growth; operating

margins lower, due primarily to less favorable mix

NMR revenue slightly higher despite 1GHz system revenue in Q1-16

PCI grows with good Q2/Q3 execution and PCI market recovery

Continued strong after-market revenue growth with LabScapeTM

CALID mid-single digit constant currency revenue growth, including

InVivo acquisition; operating margins higher y-o-y on better revenue

performance and 2016 factory restructuring

Daltonics revenue up; improved European academic and microbiology

businesses

Optics revenue grows; improved applied and industrial demand

Detection revenue down on comparison with large contract in Q1-16

GROUP OVERVIEW:

YTD Q3-2017 Operating Performance

6

Bruker CALID Group

Bruker NANO Group

NANO high single digit constant currency revenue growth, driven by

academic and industrial market improvements and Hysitron acquisition;

AXS revenue higher on industrial growth and European recovery

Semicon metrology revenue higher on technology buys and market

strength

Nano Surfaces higher, primarily due to Hysitron acquisition

BEST Segment

BEST revenue substantially higher, driven by B-OST acquisition in

November 2016, and strong Q2-17 organic growth; BEST gross margin

inherently lower than Scientific Instruments segment gross margins;

MRI demand for superconductors and ‘Big Science’ projects drive BEST

results

B-OST performance ahead of target; productivity investments on-going

GROUP OVERVIEW:

YTD Q3-2017 Operating Performance

7

Innovation with Integrity

INNOVATION AND PORTFOLIO TRANSFORMATION:

Innovative products in proteomics and microbiology

8

Unique dual-TIMS-QTOF mass spectrometer with

trapped ion mobility separation (TIMS), now for

shotgun proteomics

Optimized for PASEF method: higher speed and higher

sensitivity with higher MS/MS mass resolution

timsTOFTM Pro with PASEF introduced at HUPO in

September 2017

Fungiplex Candida assay for rapid molecular

detection of invasive candidiasis expands Bruker’s

Invasive Fungal Disease (IFD) market

Launched in October 2017 with CE-IVD

Direct from blood, plasma or serum

MERLIN acquisition adds capabilities in antibiotic

resistance testing and specialty antibiotic

susceptibility testing

timsTOFTM Pro for Proteomics Fungiplex® Candida PCR Assay, MERLIN AST/ART products

2017 Key Priorities

Accelerate Revenue Growth via a combination of

organic growth and M&A contributions

Sustain Margin Expansion as we continue our

Operational & Commercial Excellence journey

Continue to Strengthen Systems and insights by

harmonizing processes, ERP and CRM platforms

Invest in profitable growth: six key high-growth,

high-margin initiatives for portfolio transformation

Thoughtfully Deploy Capital for sustainable

shareholder returns

9

Financial Update

Q3-2017 & YTD Q3-2017

10

NON-GAAP FINANCIAL PERFORMANCE:

Q3-2017 Overview

[$ m, except EPS] Q3-2017 Q3-2016 Δ

Revenues 435.6 393.9 +10.6%

Operating Profit 64.4 58.6 +10%

Margin (%) 14.8% 14.9% -10bps

Non-GAAP EPS $0.29 $0.32 -9%

Free Cash Flow 25.1 27.1 -2.0M

[$ m] Sept 30, 2017 Sept 30, 2016 Δ

Net (Debt)/ Cash (51.3) 76.6 -167%

Working capital (WC)* 690.3 613.4 +13%

WC-to-revenue ratio $0.40 $0.38 -5%

11

COMMENTS

Reported revenue +10.6%,

organic growth +3.4%

Operating profit up +10%

Operating margin -10 bps:

volume and operational

improvement at CALID &

NANO, offset by dilution from

M&A, FX and BioSpin mix

Free cash flow +$25.1M

Use of cash for buybacks,

dividends and M&A, and

credit facility borrowings,

result in a net debt position

vs. a net cash position in

Q3-16

Working capital up +13%

with acquisitions and FX

* WC = (Accounts Receivable + Inventory - Accounts Payable)

Q3 2016 Organic Currency Portfolio Q3 2017

$393.9M $435.6M

Q3-2017 Revenue Bridge

Organic Currency Portfolio Total

+3.4% +2.4% +4.8% +10.6%

Reported revenue +10.6%

Organic revenue up

+3.4%, reflecting y-o-y

increases at NANO and

CALID

Acquisitions add +4.8% to

revenue growth, primarily

from B-OST, Hysitron and

InVivo

FX positive by $9M, or

+2.4%

12

Q3-2017 DRIVERS

Q3-2017 Revenue Bridge [$M]

+$13.6M +$9.0M +$19.1M

Q3-2017 Revenue

Q3-2017 Non-GAAP Results

[$ m, except EPS] Q3-2017 Q3-2016 Δ

Total Revenues 435.6 393.9 +10.6%

Gross Profit 207.4 192.6 +8% Margin (% of revenues) 47.6% 48.9% -130 bps

SG&A -102.1 -96.1 +6%

(% of revenues) 23.4%

24.4%

R&D -40.9 -37.9 +8% (% of revenues) 9.4% 9.6%

Operating Profit 64.4 58.6 +10%

(% of revenues) 14.8% 14.9% -10 bps

Tax Rate 22.6% 6.3% +1630 bps

Net Income* 46.4 51.7 -10%

EPS $0.29 $0.32 -9%

Shares Outstanding 158.7 161.5 -2%

Gross margin down -130 bps:

– Dilution from OST acq. and FX

– BioSpin product and geographic mix

SG&A and R&D increases driven by acquisitions and FX

Operating margin down -10 bps: gross margin dilution offset by operational improvements at CALID & NANO

Operating profit +10% with revenue growth

Q3-2017 tax rate 22.6% vs. 6.3% in Q3-16 (on 2016 tax reversals)

EPS down -9% due to y-o-y tax comparison

Share count lower on share repurchases

13

COMMENTS

* Attributable to Bruker Sum of items may not total due to rounding

YTD 2016 Organic Currency Portfolio YTD 2017

$1,141.0M $1,235.4M

YTD Q3-2017 Revenue Bridge

Organic Currency Portfolio Total

+3.4% -0.4% +5.3% +8.3%

Reported revenue +8.3%

Organic revenue growth

+3.4%, reflecting growth

at all three Scientific

Instruments Groups and

the BEST segment

Acquisitions add +5.3% to

revenue growth, primarily

from B-OST, Hysitron and

InVivo

FX negative by -$5.1M, or

-0.4%

14

YTD Q3-2017 DRIVERS

YTD Q3-2017 Revenue Bridge [$M]

+$39.1M -$5.1M +$60.4M

YTD Q3-2017 Revenue

YTD Q3-2017 Non-GAAP Results

[$ m, except EPS] YTD Q3-17 YTD Q3-16 Δ

Total Revenues 1,235.4 1,141.0 +8.3%

Gross Profit 584.1 544.9 +7% Margin (% of revenues) 47.3% 47.8% -50 bps

SG&A -299.6 -288.2 +4%

(% of revenues) 24.3%

25.3%

R&D -119.2 -110.8 +8% (% of revenues) 9.6% 9.7%

Operating Income 165.3 145.9 +13%

(% of revenues) 13.4% 12.8% +60 bps

Tax Rate 25.3% 11.4% 1390 bps

Net Income* 112.4 118.6 -5%

EPS $0.70 $0.73 -4%


Gross margin down -50 bps y-o-y. Operational improvements at CALID and NANO more than offset by higher BEST revenue, BioSpin mix and FX

Operating margin +60 bps: CALID and NANO volume leverage and operational improvements, partially offset by dilution from acquisitions & FX

YTD Q3-2017 effective tax rate 25.3% vs. 11.4% in YTD Q3-16 (on 2016 tax reversals)

EPS down -4% due to y-o-y tax effects

Share count lower on share repurchases

15

COMMENTS


YTD Q3-2017 Cash Flow

[$ m] YTD Q3-17 YTD Q3-16 Δ

Net Income 83.3 85.4 -2.1

Depreciation & amortization 48.2 40.4 +7.8

Changes in working capital* -44.4 -38.7 -5.7

Other -36.4 -47.1 +10.7

Operating cash flow 50.7 40.0 +10.7

Capital expenditures -31.3 -26.0 -5.3

Free cash flow 19.4 14.0 +5.4

Y-o-y free cash flow

improvement driven by:

– Higher operating cash

flow

– Partially offset by an

uptick in capital

expenditures

16

COMMENTS


FY 2017 Outlook

17

FY 2017 Guidance

Revenue Growth y-o-y +8% to +8.5%

Non-GAAP Operating Margin Expansion y-o-y(1)(2)

+70 bps to +100 bps

Non-GAAP EPS $1.17 to $1.20

18

FY 2017 Guidance: Raising Outlook for Operating

Performance and Updates in FX

Organic revenue growth of

+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 = 112.7 Yen

EUR = 1.18 USD

CHF = 1.03 USD

2017 ASSUMPTIONS

(1) From a FY16 non-GAAP operating margin of 14.8%.

(2) Includes approximately -40 bps cumulative negative effect from 2016 and 2017

acquisitions.

Appendix

19

Q3-2017 GAAP Results

[$M, except EPS] Q3 2017 Q3 2016 Δ

Total Revenues 435.6 393.9 +11%

Gross Profit 198.0 185.2 +7%

Margin (% of sales) 45.5% 47.0%

SG&A -102.9 -96.8 +6%

(% of revenues) 23.6% 24.6%

R&D -40.9 -37.9 +8%

(% of revenues) 9.4% 9.6%


(% of revenues) 11.5% 11.7%

Net Income* 37.0 46.5 -20%

EPS $0.23 $0.29 -21%


20


Q3-2017 Reconciliation of GAAP and

Non-GAAP Results

[$M, except EPS] Q3 2017 Q3 2016

GAAP Operating Income 49.9 45.9

Restructuring Costs 4.6 5.3

Acquisition-Related Costs 0.7 0.4

Purchased Intangible Amortization 8.2 5.4

Other Costs 1.0 1.6

TOTAL 14.5 12.7

Non-GAAP Operating Income 64.4 58.6

Non-GAAP Interest & Other Expense, net -3.6 -2.9

Non GAAP Profit Before Tax 60.8 55.7

Non-GAAP Income Tax Provision -13.8 -3.5

Non-GAAP Tax Rate 22.7% 6.3%

Minority Interest -0.6 -0.5

Non-GAAP Net Income* 46.4 51.7

Non-GAAP EPS $0.29 $0.32

21

Sum of items may not total due to rounding *Attributable to Bruker

YTD Q3-2017 GAAP Results

[$M, except EPS] YTD Q3-2017 YTD Q3-2016 Δ

Total Revenues 1,235.4 1,141.0 +8%

Gross Profit 557.8 522.1 +7%

Margin (% of sales) 45.2% 45.8%

SG&A -303.8 -290.4 +5%

(% of revenues) 24.6% 25.5%

R&D -119.2 -110.8 +8%




Net Income* 82.0 84.6 -3%

EPS $0.51 $0.52 -2%


22


YTD Q3-2017 Reconciliation of GAAP and

Non-GAAP Results

[$M, except EPS] YTD Q3-2017 YTD Q3-2016

GAAP Operating Income 121.0 100.3

Restructuring Costs 8.5 12.8

Acquisition-Related Costs 9.4 10.4

Purchased Intangible Amortization 22.6 16.2

Other Costs 3.8 6.2

TOTAL 44.3 45.6

Non-GAAP Operating Income 165.3 145.9

Non-GAAP Interest & Other Expense, net -12.9 -11.1

Non GAAP Profit Before Tax 152.4 134.8

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* 112.4 118.6

Non-GAAP EPS $0.70 $0.73

23

Sum of items may not total due to rounding *Attributable to Bruker

Q3-2017 Cash Flow

[$ m] Q3 2017 Q3 2016 Δ

Net Income 37.6 47.0 -9.4

Depreciation & amortization 17.1 13.7 +3.4

Changes in working capital* -24.4 -23.7 -0.7

Other 5.0 -1.1 +6.1

Operating cash flow 35.3 35.9 -0.6

Capital expenditures -10.2 -8.8 -1.4

Free cash flow 25.1 27.1 -2.0

Free cash modestly below

Q3-16:

– Change in deferred

income tax balances in

Q3-16

– Increased use of cash for

accounts receivable

– Timing of customer

advances

– Timing of payroll and

accruals

24

COMMENTS


Balance Sheet

[$M] Sept 30,

2017 Dec 31,

2016 Sept 30,

2016

Cash, Cash Equivalents & Short-term Investments

429.2 500.3 441.5

Financial Debt 480.5 411.7 364.9

Net (Debt) Cash (51.3) 88.6 76.6

25

[$M] Sept 30,

2017 Dec 31,

2016 Sept 30,

2016

Total Assets 1,961.5 1,808.4 1,797.9

Working Capital* 690.3 598.2 613.4

Intangibles, Net & Other Long-Term Assets

364.3 293.4 291.8


Q3-2017 GAAP SEGMENT RESULTS:

BSI and BEST GAAP Performance

[$ m] Q3-2017 Q3-2016 Δ

REVENUE

Scientific Instruments (BSI) 390.6 361.5 +8%

Organic Revenue Growth (%) +4.2% -3.5%

Energy & Supercon Technologies (BEST) 46.1 35.5 +30%

Organic Revenue Growth (%) -9.7% +8.1%

Corporate Eliminations -1.1 -3.1

Total Revenue 435.6 393.9 +11%

OPERATING INCOME

Scientific Instruments (BSI) 43.1 43.3 NM

Energy & Supercon Technologies (BEST) 1.8 2.7 -33%

Corporate Eliminations 5.0 -0.1

Total Operating Income 49.9 45.9 +9%

26

Sum of items may not total due to rounding