Bruker Corporation (NASDAQ: BRKR)
Q4 and FY 2015 Earnings Presentation
Frank Laukien, President & CEO
Anthony Mattacchione, SVP & Interim CFO
Joshua Young, VP, IR & Corporate Development February 10, 2016
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 as that term is defined in 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 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, 2015. 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 © Bruker Corporation
Business Update
Q4-15 & FY-2015
3 © Bruker Corporation
Q4-2015 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 $76M compared to Q4-14
− Substantially higher net income and lower
working capital drive improvement
Q4 Financials
4 © Bruker Corporation
Revenues [$ m]
508 478
Q4-14 Q4-15
Non-GAAP EPS
Strong Q4-15 performance drives margin
expansion and free cash flow generation
-6%
+27%
$0.30
$0.38
Q4-14
Q4-15
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
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
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 $81M in FY-14
Full Year Financials
5 © Bruker Corporation
Revenues [$ m]
1,809 1,624
FY-14 FY-15
Non-GAAP EPS
Improvement in FY-15 results reflects the initial
benefits from our three-year Transformation
$0.75
$0.89
FY-2014
FY-2015
-10%
+19%
Bruker BIOSPIN Group
Strong revenue growth for Nuclear Magnetic Resonance (NMR) in H2
2015 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
New pricing began to positively affect Q4-15 performance and will
continue to be a contributor in FY-16
Restructuring programs completed and will lower costs in FY-16 Bruker CALID Group
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
GROUP OVERVIEW:
FY 2015 Performance
6 © Bruker Corporation
$547M revenue
$493M 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
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
GROUP OVERVIEW:
FY 2015 Performance
7 © Bruker Corporation
$460M revenue
$134M revenue
2016 Key Priorities
Continue Margin Expansion as we transition
from our three-year Transformation phase to
our next phase of Operational & Commercial
Excellence
Strengthen systems and management
insights by harmonizing business processes
and ERP platforms
Accelerate profitable growth in four strategic
growth markets
Reemphasize strong focus on customers, as
well as on product and business innovation
8 © Bruker Corporation
Financial Update
Q4-15 & FY-2015
9 © Bruker Corporation
NON-GAAP FINANCIAL PERFORMANCE:
Q4-2015 Overview
[$ m, except EPS] Q4-2015 Q4-2014 Δ
Revenues 478.2 508.0 -6%
Operating Income 83.7 63.7 +31%
Margin (%) 17.5% 12.5%
EPS $0.38 $0.30 +27%
Free Cash Flow 138.2 62.2 +$76M
[$ m] Dec 31, 2015 Dec 31, 2014 Δ
Net Cash 201.6 142.5 +41%
Working capital (WC)* 584.6 694.6 -16%
WC-to-revenue ratio 0.36 0.38 -0.02
10 © Bruker Corporation
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 = (Accounts Receivable + Inventory - Accounts Payable)
Q4 2014 Organic Currency Portfolio Q4 2015
$508.0M $478.2M
Q4-2015 revenue bridge
Organic Currency Portfolio Total
+2.5% -7.8% -0.6% -5.9%
Organic revenue growth
of +2.4% driven by
strong performance in
BEST Segment and
growth in CALID Group
Strong US dollar
continues to drive most
of the currency headwind
CAM divestitures netted
against Jordan Valley
acquisition cause net
negative portfolio effect
11 © Bruker Corporation
Q4-2015 DRIVERS
Q4-2015 Revenue Bridge [$ m]
+$12.5 -$39.2 -$3.1
Q4-2015 Revenue for Bruker Corp.
Q4 2015 Non-GAAP Results
[$ m, except EPS] Q4 2015 Q4 2014 Δ
Total Revenues 478.2 508.0 -6%
Gross Profit 222.8 223.2 NM Margin (% of revenues) 46.6% 43.9%
SG&A -102.4 -117.9 -13%
(% of revenues) 21.4%
23.2%
R&D -36.7 -41.6 -12% (% of revenues) 7.7% 8.2%
Operating Income 83.7 63.7 +31%
(% of revenues) 17.5% 12.5%
Tax Rate 19.1% 20.0% -90 bps
Net Income* 64.4 50.3 +28%
EPS $0.38 $0.30 +27%
Shares Outstanding 168.7 169.6 NM
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
12 © Bruker Corporation
COMMENTS
* Attributable to Bruker Sum of items may not total due to rounding
FY-2014 Organic Currency Portfolio FY-2015
$1,808.9M $1,623.8M
FY-2015 revenue bridge
Organic Currency Portfolio Total
+2.1% -10.2% -2.1% -10.2%
Organic revenue growth
of +2.1% primarily
driven by CALID Group
FX reduces revenue by
-$184M
Portfolio reflects CAM
divestitures and partial
quarter of Jordan Valley
acquisition
13 © Bruker Corporation
FY-2015 DRIVERS
FY-15 Revenue Bridge [$ m]
+$36.4 -$184.4 -$37.1
FY-2015 Revenue for Bruker Corp.
FY 2015 Non-GAAP Results
[$ m, except EPS] FY 2015 FY 2014 Δ
Total Revenues 1,623.8 1,808.9 -10%
Gross Profit 751.0 807.7 -7% Margin (% of revenues) 46.2% 44.7%
SG&A -390.1 -449.1 -13%
(% of revenues) 24.0%
24.8%
R&D -145.7 -174.2 -16% (% of revenues) 9.0% 9.6%
Operating Income 215.2 184.4 +17%
(% of revenues) 13.3% 10.2%
Tax Rate 22.0% 25.1% -310 bps
Net Income* 151.0 127.7 +18%
EPS $0.89 $0.75 +19%
Shares Outstanding 169.1 169.5 NM
Approximately half of
150 bps improvement in
gross margin related to
better operational and
commercial practices; 60
bps improvement from
CAM restructuring
Opex reduction related
to FX translation and
absence of CAM
EPS grew +19% from
operating profit growth
and lower tax rate
Improving earnings
quality: FCF represented
129% of non-GAAP net
income
14 © Bruker Corporation
COMMENTS
* Attributable to Bruker Sum of items may not total due to rounding
FY 2015 Cash Flow Statement
[$ m] FY 2015 FY 2014 Δ
Net Income 104.9 59.6 +45.3
Depreciation & amortization 53.3 59.7 -6.4
Changes in working capital* 38.9 -1.6 +40.5
Other 32.1 -3.4 +35.5
Operating cash flow 229.2 114.3 +114.9
Capital expenditures -34.2 -33.8 -0.4
Free cash flow 195.0 80.5 +114.5
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
15 © Bruker Corporation
COMMENTS
* WC = (Accounts Receivable + Inventory - Accounts Payable)
2016 Outlook
16 © Bruker Corporation
FY-2016 Guidance
Organic Revenue Growth Approximately +3%
Non-GAAP Operating Margin Expansion y-o-y
Approximately +100 bps
Non-GAAP EPS $0.97 - $1.02
17 © Bruker Corporation
FY-2016 Guidance
FY 2016 tax rate:
25%-28%
Fully diluted share
count: 163M-165M
shares
Capex: ~$50M
Current currency
assumptions:
Yen/USD: 120
USD/EUR: 1.09
CHF/USD: 0.999
2016 ASSUMPTIONS
Appendix
18 © Bruker Corporation
Q4 2015 GAAP Results
[$ m, except EPS] Q4 2015 Q4 2014 Δ
Total Revenues 478.2 508.0 -6%
Gross Profit 211.5 215.8 -2%
Margin (% of sales) 44.2% 42.5%
SG&A -103.0 -118.5 -13%
(% of revenues) 21.5% 23.3%
R&D -36.7 -41.6 -12%
(% of revenues) 7.7% 8.2%
Operating Income 70.7 44.5 +59%
(% of revenues) 14.8% 8.8%
Net Income* 61.4 26.1 +135%
EPS $0.36 $0.15 +140%
Shares Outstanding 168.7 169.6 NM
19 © Bruker Corporation
* Attributable to Bruker Sum of items may not total due to rounding
Q4 2015 Reconciliation of GAAP and
Non-GAAP Results
[$ m, except EPS] Q4 2015 Q4 2014
GAAP Operating Income 70.7 44.5
Restructuring Costs 8.1 6.8
Acquisition-Related Costs -3.3 1.0
Purchased Intangible Amortization 5.3 5.1
Other Costs 2.9 6.3
TOTAL 13.0 19.2
Non-GAAP Operating Income 83.7 63.7
Non-GAAP Interest & Other Income (Expense), net* -3.4 -0.3*
Non GAAP Profit Before Tax 80.3 63.4
Non-GAAP Income Tax Provision -15.3 -12.7
Non-GAAP Tax Rate 19.1% 20.0%
Minority Interest -0.6 -0.4
Non-GAAP Net Income** 64.4 50.3
Non-GAAP EPS $0.38 $0.30
20 © Bruker Corporation
Sum of items may not total due to rounding *Excludes $0.7M of net losses for 2014 **Attributable to Bruker
FY 2015 GAAP Results
[$ m, except EPS] FY 2015 FY 2014 Δ
Total Revenues 1,623.8 1,808.9 -10%
Gross Profit 708.6 763.3 -7%
Margin (% of sales) 43.6% 42.2%
SG&A -392.2 -451.0 -13%
(% of revenues) 24.2% 24.9%
R&D -145.7 -174.2 -16%
(% of revenues) 9.0% 9.6%
Operating Income 145.7 105.4 +38%
(% of revenues) 9.0% 5.8%
Net Income* 101.6 56.7 +79%
EPS $0.60 $0.33 +82%
Shares Outstanding 169.1 169.5 NM
21 © Bruker Corporation
* Attributable to Bruker Sum of items may not total due to rounding
FY 2015 Reconciliation of GAAP and
Non-GAAP Results
[$ m, except EPS] FY 2015 FY 2014
GAAP Operating Income 145.7 105.4
Restructuring Costs 29.3 36.1
Acquisition-Related Costs -4.7 4.0
Purchased Intangible Amortization 20.8 20.2
Other Costs 24.1 18.7
TOTAL 69.5 79.0
Non-GAAP Operating Income 215.2 184.4
Non-GAAP Interest & Other Income (Expense), net* -17.5 -10.0
Non-GAAP Profit Before Tax 197.7 174.4
Non-GAAP Income Tax Provision -43.4 -43.8
Non-GAAP Tax Rate 22.0% 25.1%
Minority Interest -3.3 -2.9
Non-GAAP Net Income** 151.0 127.7
Non-GAAP EPS $0.89 $0.75
22 © Bruker Corporation
* Excludes $0.2M of net losses for 2015 and $5.9M of net gains for 2014 **Attributable to Bruker
Sum of items may not total due to rounding
Q4 2015 Cash Flow Statement
[$ m] Q4 2015 Q4 2014 Δ
Net Income 62.0 26.5 +35.5
Depreciation & amortization 13.3 12.1 1.2
Changes in working capital* 27.5 -4.4 31.9
Other 46.8 35.1 11.7
Operating cash flow 149.6 69.3 +80.3
Capital expenditures -11.4 -7.1 -4.3
Free cash flow 138.2 62.2 +76.0
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* WC = (Accounts Receivable + Inventory - Accounts Payable)
Balance sheet
[$ m] Dec 31, 2015 Dec 31, 2014 Δ
Cash, Cash Equivalents & Short-term Investments
468.3 497.5 -6%
Financial Debt 266.7 355.0 -25%
Net Cash 201.6 142.5 +41%
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[$ m] Dec 31, 2015 Dec 31, 2014 Δ
Total Assets 1,730.9 1,864.8 -7%
Working Capital* 584.6 694.6 -16%
Intangibles, Net & Other Long-Term Assets
268.2 248.6 +8%
* WC = (Accounts Receivable + Inventory - Accounts Payable)
Q4-15 GAAP SEGMENT RESULTS:
BSI and BEST GAAP Performance
[$ m] Q4 2015 Q4 2014 Δ
REVENUE
Scientific Instruments (BSI) 438.9 475.8 -8%
Organic Revenue Growth (%) 0.0% 0.6%
Energy & Supercon Technologies (BEST) 42.5 36.7 +16%
Organic Revenue Growth (%) +31.7% -14.1%
Corporate Eliminations -3.2 -4.5
Total Revenue 478.2 508.0 -6%
OPERATING INCOME
Scientific Instruments (BSI) 65.0 51.3 +27%
Energy & Supercon Technologies (BEST) 5.4 -7.6 +171%
Corporate Eliminations 0.3 0.8
Total Operating Income 70.7 44.5 +59%
25 © Bruker Corporation
Sum of items may not total due to rounding
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