Q4 2014 earnings slides final

Bruker Corporation (NASDAQ: BRKR)

Q4 2014 Earnings Presentation

Frank Laukien, President & CEO

Charles Wagner, EVP & CFO

Joshua Young, VP, Investor Relations February 19, 2015

Innovation with Integrity

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, 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, 2013, and our quarterly report on Form 10-Q for the period

ended September 30, 2014. 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.

Bruker Corporation

Safe Harbor & Reg. G Statement

© Bruker Corporation 2

Q4 & FY 2014 Business Update


$0.31

$0.30

Q4-13

Q4-14

Q4-14 Financials

Revenues [$ m]

Non-GAAP EPS

Q4-14 performance: lower revenue and EPS were

in-line with expectations

-8%

-3%


552

508

Q4-13 Q4-14

Q4 2014 Performance

Revenues decline -$44M, or -8%, year-over-

year

− Changes in foreign exchange rates lower

revenues by -$34M, or -6%

− CAM divestitures result in -$8M year-

over-year decline, or -1.4%

− Organic decline of -$3M, or -0.5%,

mostly due to BEST

Currency negatively impacted operating profit

by -$6M, compared to Q4-13

Non-GAAP EPS of $0.30 benefits from lower tax

rate in Q4-14, compared to Q4-13

$0.77

$0.75

FY 2013

FY 2014

FY 2014 Financials

Revenues [$ B]

Non-GAAP EPS

FY 2014 performance reflects currency headwinds &

softness in NMR and X-Ray markets

-2%

-3%


1.84

1.81

FY 2013 FY 2014

FY 2014 Performance

Revenue decline of -2% y-o-y; flat organic growth

1.BIOSPIN revenues flat; good year in

Pre-Clinical Imaging division offset by

second-half declines in NMR revenue

2.CALID revenues decline -5% driven by a

reduction in CAM revenues of -$22M; CAM

non-GAAP operating loss of -$27M lowers

profitability

3.NANO revenues decline -1% due to soft

industrial & semi markets

4.Low single-digit organic revenue growth in

Americas and flat in Europe, offset by mid-

single-digit revenue decline in Asia

Non-GAAP EPS declines by ($0.02) to $0.75,

including negative currency impact of ($0.08)

Bruker BIOSPIN Group ($623M revenue)

Revenues decline in NMR business, as demand for high-field

systems remains muted

Pre-Clinical Imaging Division delivers robust double-digit growth,

as demand for higher-field MRI systems drives growth

Good growth in the Americas offset by declines in Europe

Negotiating with worker’s councils to right-size BIOSPIN cost

structure in 2015; proposed global headcount reduction of ~9%,

and consolidation of German manufacturing sites

Bruker CALID Group ($554M revenue, incl. CAM)

LSC renamed to Daltonics Division; >20% growth for MALDI

Biotyper; former LSC Leipzig factory and CAM Fremont factory

consolidated into Daltonics Bremen factory

Optics Division delivers another year of profitable growth and

becomes most profitable business in Bruker portfolio

CAM Division restructuring expected to be completed in Q1-15;

expect $50M y-o-y revenue decline from CAM shut-down in FY15

Detection Division revenues decline primarily due to export license

delays; new order bookings remain strong

6 © Bruker Corporation

GROUP OVERVIEW:

FY 2014 Performance

Bruker NANO Group ($498M revenue)

Solid growth in Nano Surfaces and Nano Analytics divisions, as

academic and research markets strengthen

Prairie and Vutara acquisitions added ~$11M to revenue in FY-14

Bookings growing in Nano Surfaces Division during H2 as AFM and

life science products see increasing demand

Declines in AXS and Elemental divisions due to continued

weakness in industrial demand & Japan exposure

BEST Segment ($153M revenue)

Delivers 4% revenue growth despite delay of Rosatom pilot line

Robust new order bookings as result of long-term supply

agreements for superconducting wire for MRI

Existing, large ITER project coming to an end, but “Big Science”

demand remains healthy

GROUP OVERVIEW:

FY 2014 Performance


Bruker 2015 Priorities


Continue transformation of leadership, management processes, and systems

Execute BIOSPIN rightsizing and footprint consolidation

Accelerate further outsourcing of high-level assemblies in CALID and NANO

Re-accelerate profitable growth in portfolio with new products and by entering adjacent markets

Q4 2014 Financial Update


NON-GAAP FINANCIAL PERFORMANCE:

Q4 2014 Overview

[$ m, except EPS] Q4 2014 Q4 2013 Δ

Revenues 508.0 552.1 -8%

Operating Income 63.7 81.3 -22%

Margin (%) 12.5% 14.7%

EPS $0.30 $0.31 -3%

Free Cash Flow 62.2 122.4 -60.2M

Revenues are nearly flat, after adjusting for FX and CAM divestitures

Free cash flow decline is result of lower net income and tough y-o-y comparison

Working capital ratios improve as result of improved operations, outsourcing and currency changes

Net cash balance beginning to build


COMMENTS

[$ m] Dec 31,2014 Dec 31,2013 Δ

Net Cash 142.5 83.7 70%

Working capital (WC)* 694.6 822.6 -16%

WC-to-revenue ratio 0.38 0.45 -0.07

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

Q4 2014 Non-GAAP Results

FX reduces revenue by -$34M and gross profit by -$16M; no material effect on gross margin as % of revenues

Gross margins down due to business mix

Currency lowered total operating profit by -$6M

Lower tax rate in Q4-14 is result of jurisdictional mix and release of valuation allowances


COMMENTS [$ m, except EPS] Q4 2014 Q4 2013 Δ

Total Revenues 508.0 552.1 -8%

Gross Profit 223.2 248.3 -10% Margin (% of revenues) 43.9% 45.0%

SG&A -117.9 -117.9 NM

(% of revenues) 23.2%

21.4%

R&D -41.6 -49.1 -15% (% of revenues) 8.2% 8.9%


(% of revenues) 12.5% 14.7%

Tax Rate 20.0% 28.6% -860 bps

Net Income* 50.3 52.2 -4%

EPS $0.30 $0.31 -3%

Shares Outstanding 169.6 169.0 NM

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

Q4 2014 Reconciliation of GAAP and

Non-GAAP Results

[$ m, except EPS] Q4 2014 Q4 2013

GAAP Operating Income 44.5 61.0

Restructuring Costs 6.8 11.7

Acquisition Related Costs 1.0 2.3

Purchased Intangible Amortization 5.1 5.4

Other Costs 6.3 0.9

TOTAL 19.2 20.3

Non-GAAP Operating Income 63.7 81.3

Non-GAAP Net Interest Income (Expense) & Other -0.3* -7.2

Non GAAP Profit Before Tax 63.4 74.1

Taxes -12.7 -21.2

Non-GAAP Tax Rate 20.0% 28.6%

Minority Interest -0.4 -0.7

Non-GAAP Net Income** 50.3 52.2

Non-GAAP EPS $0.30 $0.31


*Excludes $0.7M of net losses for 2014 ** Attributable to Bruker

Sum of items may not total due to rounding

FY 2013 Organic Currency Acquisition FY 2014

$1,839.4 $1,808.9

FY 2014 revenue bridge

Organic revenue decline of -0.4%

CAM reduces FY14 organic revenue growth by nearly 1%

Big currency swings in Q4 drove overall negative currency effect for FY-14


FY 2014 DRIVERS

FY 2014 Revenue Bridge [$ m]

-$8.0 -$25.4 $2.9

Organic Currency Acquisitions & Divestitures Total

-0.4% -1.4% 0.1% -1.7%

FY 2014 Revenue for Bruker Corp.

FY 2014 Non-GAAP Results

Gross margins are flat y-o-y after adjusting for currency

Lower R&D spend reflects benefits of previous restructuring programs; investments in needed capabilities drove higher SG&A

Tax rate of 25.1% benefited from tax planning activities and reserve releases


COMMENTS


[$ m, except EPS] FY 2014 FY 2013 Δ

Total Revenues 1,808.9 1,839.4 -2%

Gross Profit 807.7 832.5 -3% Margin (% of revenues) 44.7% 45.3%

SG&A -449.1 -436.5 3%

(% of revenues) 24.8% 23.7%

R&D -174.2 -190.5 -9% (% of revenues) 9.6% 10.4%

Operating Income 184.4 205.5 -10% (% of revenues) 10.2% 11.2%

Tax Rate 25.1% 27.0% -190 bps

Net Income* 127.7 129.3 -1%

EPS $0.75 $0.77 -3%


FY 2014 Reconciliation of GAAP to

Non-GAAP Results

[$ m, except EPS] FY 2014 FY 2013

GAAP Operating Income 105.4 148.2

Restructuring Costs 36.1 25.3

Acquisition Related Costs 4.0 4.5

Purchased Intangible Amortization 20.2 20.7

Other Costs 18.7 6.8

TOTAL 79.0 57.3

Non-GAAP Operating Income 184.4 205.5

Non-GAAP Net Interest Income (Expense) & Other* -10.0 -26.0

Non GAAP Profit Before Tax 174.4 179.5

Taxes -43.8 -48.5

Non-GAAP Tax Rate 25.1% 27.0%

Minority Interest -2.9 -1.7

Non-GAAP Net Income** 127.7 129.3

Non-GAAP EPS $0.75 $0.77


Sum of items may not total due to rounding *Excludes $5.9 and $2.4 million of net gains for 2014 and 2013 **Attributable to Bruker

FY 2014 Cash Flow Statement

FY-14 free cash flow decline due to lower net income, partially offset by lower capex spending

Lower net income impacted by higher restructuring charges

Good progress on inventory, offset by higher receivables

Lower capex due to timing of projects; capex expected to be higher in FY-15


COMMENTS [$ m] FY 2014 FY 2013 Δ

Net Income 59.6 81.8 -22.2

Depreciation & amortization 59.7 61.3 -1.6

Changes in working capital* -1.6 -10.6 9.0

Other -3.4 12.5 -15.9

Operating cash flow 114.3 145.0 -30.7

Capital expenditures -33.8 -50.3 16.5

Free cash flow 80.5 94.7 -14.2

2015 Outlook


Changes in currency continue to be strong

headwind to revenue and EPS in 2015


FX y-o-y effect 2014* FX y-o-y effect 2015E**

Revenue Non-GAAP Op.Profit

EPS

($25m)

($17m)

($0.08)

Revenue Non-GAAP Op.Profit

EPS

($135m)

($22m)

($0.09)

*Difference between 2013 average FX rates and 2014 average FX rates **Difference between FX rates as of Jan 16, 2015 and average FX rates in 2014

FY 2015 Financial Outlook

Revenues (organic) Approximately +1% y-o-y

Non-GAAP Operating Margin >100 bps y-o-y

Non-GAAP EPS Approximately flat with 2014


Bruker FY 2015 Outlook

Changes in currency reduce revenues by 7-8%, with biggest impact in Q1-Q3

CAM related revenues decrease by $50M in 2015

Capex of approximately $45M

Tax rate: 26-28%

Current currency assumptions: Yen/USD: 1.17 EUR/USD: 1.16

2015 ASSUMPTIONS

Appendix


Q4 2014 GAAP Results

[$ m, except EPS] Q4 2014 Q4 2013 Δ

Total Revenues 508.0 552.1 -8%

Gross Profit 215.8 235.9 -9%

Margin (% of sales) 42.5% 42.7%

SG&A -118.5 -118.3 NM

(% of revenues) 23.3% 21.4%

R&D -41.6 -49.1 -15%

(% of revenues) 8.2% 8.9%


(% of revenues) 8.8% 11.0%

Net Income* 26.1 35.2 -26%

EPS $0.15 $0.21 -29%




Q4 2013 Organic Currency Acquisition Q4 2014

$552.1 $508.0

Q4 2014 revenue bridge

Organic revenue decline of -0.5% primarily result of lower BEST revenue in Q4-14

Currency effect of -$34M is the result of the dollar strengthening against nearly all global currencies in Q4

– Largest effects are vs. Yen and Euro

Net acquisitions & divestitures of -$7.1M is the net effect of the CAM divestitures and the acquisition of Vutara


Q4 2014 DRIVERS

Q4 2014 Revenue Bridge [$ m]

$-2.8 $-34.2 -$7.1

Organic Currency Acquisitions & Divestitures Total

-0.5% -6.2% -1.3% -8.0%

Q4 2014 Revenue for Bruker Corp.

Q4 2014 Cash Flow Statement

[$ m] Q4 2014 Q4 2013 Δ

Net Income 26.5 35.9 -9.4

Depreciation & amortization 12.1 15.9 -3.8

Changes in working capital* -4.4 22.0 -26.4

Other 35.1 57.6 -22.5

Operating cash flow 69.3 131.4 -62.1

Capital expenditures -7.1 -9.0 1.9

Free cash flow 62.2 122.4 -60.2


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

Balance sheet

[$ m] Dec 31, 2014 Dec 31, 2013 Δ

Cash, Cash Equivalents & Short-term Investments

497.5 438.7 13%

Financial Debt 355.0 355.0 NM

Net Cash 142.5 83.7 70%


[$ m] Dec 31, 2014 Dec 31, 2013 Δ

Total Assets 1,864.8 1,988.3 -6%

Working Capital* 694.6 822.6 -16%

Intangible & Other Long-Term Assets 248.6 256.9 -3%

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

FY 2014 GAAP Results

[$ m, except EPS] FY 2014 FY 2013 Δ

Total Revenues 1,808.9 1,839.4 -2%

Gross Profit 763.3 805.2 -5%

Margin (% of sales) 42.2% 43.8%

SG&A -451.0 -437.9 3%

(% of revenues) 24.9%

23.8%

R&D -174.2 -190.5 -9%

(% of revenues) 9.6% 10.4%


(% of revenues) 5.8% 8.1%

Net Income* 56.7 80.1 -29%

EPS $0.33 $0.48 -31%



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

Q4 SEGMENT RESULTS:

BSI and BEST GAAP Performance

[$ m] Q4 2014 Q4 2013 Δ

REVENUE

Scientific Instruments (BSI) 475.8 511.0 -7%

Organic Revenue Growth (%) 0.6% 5.9%

Energy & Supercon Technologies (BEST) 36.7 46.6 -21%

Organic Revenue Growth (%) -14.1% 17.4%

Corporate Eliminations & Other -4.5 -5.5

Total Revenue 508.0 552.1 -8%

OPERATING INCOME

Scientific Instruments (BSI) 51.3 54.9 -7%

Energy & Supercon Technologies (BEST) -7.6 2.8 371%

Corporate Eliminations and Other 0.8 3.3

Total Operating Income 44.5 61.0 -27%


Sum of items may not total due to rounding