Bruker Corporation (NASDAQ: BRKR) · separation (TIMS) for shotgun proteomics ... BioSpin Rightsizing Bruker NANO Bruker CALID BEST Rightsizing & Footprint Consolidation Outsourcing

© Bruker Corporation

Bruker drives profitable growth by enabling scientific discoveries and delivering high-performance analytical, life science and diagnostic solutions.

Innovation with Integrity

Bruker Corporation (NASDAQ: BRKR)

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 1995. 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.

© Bruker Corporation 2

BIOSPIN Group

BEST Group

NMR/EPR for Life-Science &

Pharma Research

Applied and Industrial NMR/EPR

Preclinical Imaging

Service & Life-Cycle Support

Mass Spectrometry for

• Proteomics & Metabolomics • Applied & Bio-Pharma Markets • Microbiology & Diagnostics

FTIR/NIR/Raman for Research & Applied Markets

CBRNE Detection for Security Applications

Service, Consumables & Software

Atomic Force Microscopy

Fluorescence Microscopy for Cell Biology & Neuroscience

X-Ray for Materials Research and QC

Next-Gen Semiconductor Metrology

Service & After-Market

Market Leader in Superconductors and Physics technologies for:

• Medicine: OEM MRI magnets and Particle Therapy

• Life Science Tools: NMR, EPR, MRMS and MRI

• Big Science & Fusion projects (e.g. CERN, ITER, SLAC)


NANO Group

CALID Group

Bruker Overview

Differentiated Leader in Attractive Analytical, Life Science and Diagnostic Tools Markets

• Founded in 1960, Bruker brand

stands for innovation.

• Market leader in high-value analytical technologies.

• FY2017 revenue: ~$1.77 billion

• R&D investment: ~9% of revenue

• ~6,000 employees worldwide

• 2018-2020 focus: Portfolio

Transformation and Operational Excellence

• Long-term oriented ownership:

~36% owned by insiders


Bruker creates shareholder value by:

Being well-positioned in attractive life science tools & diagnostic markets

Transforming our portfolio with a focus on six key high-growth, high-margin initiatives

Operational & Commercial Excellence

Bruker Core Values

Bruker Core Strategies

Portfolio initiatives and cost optimization drive profitable growth

Profitable Growth

Portfolio Cost

Commercial Excellence

Product R&D Excellence

Operational Excellence

• Proteomics & Phenomics

• Biopharma & Applied

• Microbiology & Diagnostics

• Neuroscience & Cell Microscopy

• Next-gen Nanotechnology

• After-Market: Services, Software

and Consumables (1)

Six Key High-Growth & High-Margin Initiatives:

5

Portfolio Transformation

Fundamentally reshaping the portfolio for faster growth & continued multi-year margin expansion

2017 results: About 25% of Bruker’s revenue Grew above LST market GMs & OMs above Bruker average


(1) Services, software and consumables, excluding Microbiology after-market & consumables.

2017 results: About 15% of Bruker’s revenue Lower GMs, higher OMs than Bruker average

Portfolio


Bruker’s timsTOFTM Pro with PASEF and Evosep ONE fast nanoLC for high-throughput proteomics research:

timsTOF Pro: unique dual-TIMS-QTOF with trapped ion mobility separation (TIMS) for shotgun proteomics

• PASEF provides higher speed and sensitivity with faster MS/MS mass resolution

Evosep One: novel Liquid Chromatography (LC) system for large cohort, MS-based proteomics

• For ~5 minute nanoLC runs at >90% MS utilization

Together: proteomics biomarker research and validation on >200 samples/day with >1,000 proteins quantified in ~5 min

Bruker is partnering with Evosep to further co-develop and co-market an integrated clinical research solution

Progress towards Clinical Proteomics at US HUPO 2018

Introducing an Integrated Clinical Proteomics Research Solution

Outsourcing

2013 2014 2015 2016 2017 2018 2019 2020

Bruker

BioSpin

Bruker NANO

Bruker CALID

BEST

Rightsizing

Rightsizing & Footprint Consolidation

Outsourcing

CAM Divestitures

Rightsizing & Footprint Consolidation

Outsourcing

Footprint Consolidation

Operational Excellence & Cost Optimization

• Product R&D Excellence

• Operational Excellence

• Lean Manufacturing

• Commercial Excellence

• ERP, CRM and productivity tools

From Transformation and Rightsizing (2013-2016)

to Operational & Commercial Excellence (2017-2020)


Cost

Bruker Key Objectives

1. Accelerate revenue growth:

Enhance our revenue growth rate over time with our portfolio transformation initiatives

Recent end market improvements in ACAD/GOV, Europe/US, global Industrial, Semi & Applied

2. Transform portfolio with focus on six high-growth, high-margin initiatives:

3. Sustain multi-year operating margin expansion:

Expand operating margin 75-100 bps per year, on average, over a multi-year timeframe

On-going commercial and operational excellence initiatives

2015-2017A: total Non-GAAP operating margin expansion of >500 bps over 3-year period

4. Disciplined capital allocation and high ROIC:

Quarterly dividend $0.04/share; 2-year $225M share repurchase authorized in May 2017

BRKR ROIC >20% (FY2017 and FY2016)


Proteomics & Phenomics

Biopharma & Applied

Microbiology & Diagnostics

Neuroscience & Cell Microscopy

Next-gen Nanotechnology Tools

After-Market: Services, Software

and Consumables

Non-GAAP operating margin and ROIC are non-GAAP measures. A reconciliation of these measures to the most directly comparable GAAP measures is available at the end of this presentation and on Bruker’s website at http://ir.bruker.com/investors/press-releases/earnings-releases/default.aspx

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

9

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.


www.bruker.com

10

Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (unaudited)


(in millions, except per share amounts)

2017 2016

Reconciliation of Non-GAAP Operating Income, Non-GAAP

Profit Before Tax, Non-GAAP Net Income, and Non-GAAP EPS

GAAP Operating Income 214.7$ 177.2$

Non-GAAP Adjustments:

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 Non-GAAP Adjustments: 61.4$ 60.7$

Non-GAAP Operating Income 276.1$ 237.9$

Non-GAAP Operating Margin 15.6% 14.8%

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 Attributable to Bruker 192.2 192.3

Weighted Average Shares Outstanding (Diluted) 159.1 162.2

Non-GAAP Earnings Per Share 1.21$ 1.19$

Twelve Months Ended December 31,

Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (Unaudited)



2017 2016

Reconciliation of GAAP and Non-GAAP Gross Profit

GAAP Gross Profit 813.0$ 742.5$





Other Costs 0.8 0.1

Total Non-GAAP Adjustments: 36.1 31.9

Non-GAAP Gross Profit 849.1$ 774.4$

Non-GAAP Gross Margin 48.1% 48.1%

Reconciliation of GAAP and Non-GAAP Tax Rate

GAAP Tax Rate 59.4% 13.0%


Tax Impact of Non-GAAP Adjustments -0.1% -1.0%

Tax Authority Settlements 0.0% 0.1%

Valuation Allowance Release 0.0% 3.7%

U.S. Tax Reform- Toll Charge -27.8% 0.0%

U.S. Tax Reform- Tax Rate Change -0.6% 0.0%

U.S. Tax Reform- Change in APB 23 -6.5% 0.0%

Other Discrete Items 0.6% -0.1%

Total Non-GAAP Adjustments: -34.4% 2.7%

Non-GAAP Tax Rate 25.0% 15.7%





2017 2016

Reconciliation of GAAP and Non-GAAP Interest & Other Income (Expense), net

GAAP Interest & Other Income (Expense), net (16.9)$ 0.4$


Bargain Purchase Gain (0.6) (9.2)

Non-GAAP Interest & Other Income (Expense), net (17.5)$ (8.8)$

Reconciliation of GAAP and Non-GAAP Earnings Per Share (Diluted)

GAAP Earnings Per Share (Diluted) 0.49$ 0.95$





Other Costs 0.03 0.04

Bargain Purchase Gain - (0.06)

Income Tax Rate Differential 0.33 (0.08)

Total Non-GAAP Adjustments: 0.72 0.24

Non-GAAP Earnings Per Share (Diluted) 1.21$ 1.19$

Reconciliation of GAAP Operating Cash Flow and Non-GAAP Free Cash Flow

GAAP Operating Cash Flow 154.4$ 130.8$


Purchases of property, plant and equipment (43.7) (37.1)

Non-GAAP Free Cash Flow 110.7$ 93.7$





2017 2016

Reconciliation of GAAP Revenue and Non-GAAP Revenue

GAAP Revenue as of Prior Comparable Period 1,611.3$ 1,623.8$


Acquisitions and divestitures 77.2 32.4

Currency 19.6 (8.3)

Organic 57.8 (36.6)

Total Non-GAAP Adjustments: 154.6 (12.5)

Non-GAAP Revenue 1,765.9$ 1,611.3$

Organic Revenue Growth 3.6% -2.3%

Reconciliation of Non-GAAP Return on Invested Capital (ROIC)

Non-GAAP Operating Income (from above) 276.1$ 237.9$

Less: Non-GAAP Income Tax Provision (from above) (64.7) (35.9)

Non-GAAP Operating Income after Tax 211.4$ 202.0$

Average Total Invested Capital:

Average Long-Term Debt 403.6$ 328.8$

Average Current portion of Long-Term Debt 10.1 10.4

Average Total Shareholders' Equity 713.3 713.0

Less: Average Cash and Cash Equivalents (333.7) (304.8)

Average Total Invested Capital 793.3$ 747.4$

Return on Invested Capital (ROIC) 26.6% 27.0%


Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures


For more information, visit Bruker’s website at http://ir.bruker.com/investors/press-releases/earnings-releases/default.aspx

With respect to the Company's outlook for 2018 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.

http://ir.bruker.com/investors/press-releases/earnings-releases/default.aspx






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Bruker Corporation (NASDAQ: BRKR) · separation (TIMS) for shotgun proteomics ... BioSpin Rightsizing Bruker NANO Bruker CALID BEST Rightsizing & Footprint Consolidation Outsourcing