Bruker drives profitable growth by enabling breakthrough … · 2018-04-05 · These and other...

© Bruker Corporation

Bruker drives profitable growth by enabling breakthrough discoveries & development of new

applications that improve the quality of human life

Innovation with Integrity

BRUKER CORPORATION

Safe Harbor 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,

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, 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


Key Messages in 2016

1 Bruker is a differentiated leader

in attractive life science and

diagnostics tools markets, and

our brand stands for innovation

2 We focus on profitable growth in

four strategic growth areas

3 We will drive margin expansion

and cash flow as we transition

from Transformation to our next

phase of Operational Excellence

3


1. Company Overview

2. Profitable Growth Strategy

3. From Transformation to Operational Excellence

4. Financial Overview

Agenda

4


Bruker’s high-performance scientific instruments and high-value

analytical and diagnostic solutions enable our customers to explore

life and materials at …

Microscopic and Nano-Scales

Cellular and Sub-Cellular Levels

Small Molecule and Protein Levels

5


Bruker overview:

• FY2015E revenue ~$1.6 billion

• ~10% R&D investment

• ~75% of revenues from scientific and diagnostic instrumentation

• ~6,000 employees worldwide

• Going from Transformation to Operational Excellence phase

• Stable and profitable growth oriented ownership:- Founded more than 55 years ago- RoIC & shareholder value focus- ~35% of company owned by insiders

41%

26%

4%

29%Americas

Europe

Rest of World

Asia Pacific

Percentage of revenue*:

*as of Q3-15 YTD

6


Bruker is organized in three key Groups:

Bruker BioSpin Group- NMR/EPR for Research & Pharma- Applied, Industrial & Clinical MR - Preclinical Imaging- Services & Life-Cycle Support

Bruker NANO Group- Atomic Force Microscopy- Fluorescence Microscopy for

Cell Biology & Neurosciences

- X-Ray for Materials Research, QC- Next-Gen Semicon Metrology

Bruker CALID Group - Mass Spectrometry for

Proteomics & Metabolomics Applied & Pharma Clinical Microbiology, IVD

- FTIR/Raman for Applied Markets- CBRNE Detection for Security

~$450m* in Revenue~$550m* in Revenue ~$480m* in Revenue

*FY 2015 estimates 7


Bruker serves large markets & a global customer base

Key Markets Largest Customer Segments

Nuclear Magnetic Resonance

25%

Mass Spectrometry

18%

X-Ray 13%

Atomic Force Microscopy

10%

Optical Spectroscopy

10%

Diagnostics7%

Pre-Clinical Imaging

7%

Other10%

Academic & Government

Industrial

Pharma/Biopharmaceutical

Diagnostic Labs/Hospitals

Applied Markets

8

NMR/EPR &

Metabolomics

Preclinical Imaging &

MALDI Imaging

MALDI ID in Microbiology

Atomic Force Microscopy

FT-IR/NIR

X-Ray Diffraction

X-ray Metrology

#1 or #2 market position for:


Bruker has leading market positions for more than

60% of our product portfolio

9


1. Company Overview




Agenda

10


We are investing in four strategic areas that have attractive growth and defensible, high-margin opportunities

Life Science Molecular Research

Applied Markets & Pharma

Nano-Analysis, Microscopy & Materials Research

Clinical Research, Microbiology & Diagnostics

11


Life Science Molecular Research

EXAMPLE:

Intrinsically Disordered Proteins (IDPs)

• IPDs turn out to be prevalent in nature, and play many key roles in molecular and cell biology, but are difficult to analyze (www.darkproteome.org)

• IDPs are abundant in cancer, neurodegenerative diseases, CVD/diabetes, viral diseases and their pathogenic functions are not yet well understood

• Ultra-high field NMR is the key technology to study the biological function of IDPs, and may be key to unravelling Alzheimer, Parkinson, etc. pathogenesis

12

EXAMPLE:

Food/Beverage Safety & Authenticity

• Bruker NMR, MS and IR/NIR instruments are critical to ensuring the quality, authenticity and safety of a variety of foods we eat and products we use

• For example, high-value honey and high-end wines are subject to mislabeling and adulteration

• NMR HoneyScreener ™and NMR WineScreener ™ can quantify very many ingredients in short, single measurements, thereby ensuring purity and origin


Applied Markets & Pharma

13

EXAMPLE:

Next-Gen Semiconductor Metrology

• Mobility, cloud computing and big data demand ever smaller and more powerful computer chips

• Chip & memory makers require next-gen nano-metrology to ensure product yield and quality

• Bruker next-gen AFM and X-ray metrology tools are essential for development and production at advanced nodes and for new 3D chip structures


Nano-Analysis, Microscopy & Materials Research

14

Clinical Research, Microbiology & Diagnostics


EXAMPLE:

MALDI Biotyper & TissueTyper:

• Bruker has pioneered the MALDI Biotyper to ID bacteria and yeasts more quickly and accurately

• Time-to-Result and expansive ID libraries are of great clinical and economic value in microbiology

• Bruker has launched the MALDI TissueTyper for clinical research in anatomical pathology & oncology

15


1. Company Overview




Agenda

16


During our 3 year Transformation we made key changes to

our organization, systems & commercial capabilities

CommercialOrganization & Systems

-Reorganized; new leaders-Clear performance metrics & incentives

-Integrated management processes-Improving financial & ERP systems

-Applications-based marketing-Reorganization of sales forces

-New CRM & sales management-Improved pricing practices

17


In its Transformation, Bruker has executed important

initiatives to reduce costs and improve efficiency

PortfolioOutsourcing/

Facilities Procurement IT SystemsResource Allocation

• Divested/shut down unprofitable product lines

• Bolt-on M&A: preclinical imaging, cell biology & X-Ray semicon metrology

• Exited small plants and streamlined production

• Outsourcing non-coremanufacturing (on-going)

• Professionally manage spending to take advantage of scale

• New management reporting system

• Multi-year ERP improvement program underway

• Operating spending well-managed

• Reinvestment in important capabilities andfunctions

18


We have continued to attract very experienced

senior managers and board members in H2 2015

SENIOR MANAGEMENT

Dr. René LenggenhagerPresidentBioSpin Group

PREVIOUS:

Mettler-Toledo

Dr. DietrichHauffeEVP Bruker DaltonicsLife Science Mass Spec

PREVIOUS:

Qiagen, Dionex

ChristianBuschVP, FinanceBioSpin Group

PREVIOUS:

Novartis

JohnOrnell

PREVIOUS:

CFO, Waters

Dr. Hermann Requardt

PREVIOUS:

CEO, Siemens Healthcare

Dr. RobertRosenthal

CURRENT:

CEO, Taconic Biosciences

BOARD OF DIRECTORS

19


After 3 years of Transformation and Restructuring,

Bruker will now focus on Operational Excellence & Lean

2013 2014 2015 2016 2017 2018

Bruker BioSpin Bruker’s next Phase:

Operational Excellence

• Lean manufacturing

• Continued outsourcing

• Lean footprint

• Better business systems

• Commercial excellence

Bruker NANO

Bruker CALID

BEST

Outsourcing

Rightsizing

Rightsizing & Footprint Consolidation

Outsourcing

CAM Divestitures

Rightsizing & Footprint Consolidation

Outsourcing

Footprint Consolidation

20


1. Company Overview




Agenda

21


Despite facing strong currency headwinds in each

of the past three years . . .

-$0.10

-$0.08

-$0.10

2013 2014 2015E

FX year-over-year effect on Non-GAAP EPS

22


. . .we are nonetheless delivering solid improvements in

our profitability and free cash flow

44.9%

46.1%

Non-GAAPGross Margin

9.3%

11.5%

Non-GAAPOperating Margin

$0.46

$0.51

Non-GAAPEPS

$18M

$57M

Free Cash Flow

+120 bps +220 bps +11% +$39M

Q3-14 YTD Q3-15 YTD

23


We have made good progress in improving

our working capital efficiency

$832m

$633m

0.46

0.38

0.00

0.20

0.40

0.60

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

2012 2013 2014 Q3-15 YTD

Working Capital Working Capital to Revenue Ratio

24


Improved performance and a strong balance

sheet have enabled us to initiate a share buyback

• A two-year share

repurchase program of up

to $225M started in mid-

November 2015

SHARE BUYBACK PROGRAM

$87M

$161M

Net Cash

+85%

Q3 YTD 2014 Q3 YTD 2015

1.4%

5.0%

Free Cash Flowas a % of Revenue

+3.6%

25


We believe we have several years of meaningful margin

expansion opportunity ahead of us

10.2%

~11.7%*

2014 2015E 2016 2017 2018 2019 2020

Bruker Non-GAAP Operating Margins

2016–2020continue to close gap with peers

26

*FY15 guidance for operating margin expansion 150 basis point or more


Key Messages in 2016

1 Bruker is a differentiated leader

in attractive life science and

diagnostics tools markets, and

our brand stands for innovation

2 We focus on profitable growth in

four strategic growth areas

3 We will drive margin expansion

and cash flow as we transition

from Transformation to our next

phase of Operational Excellence

27


www.bruker.com

28

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