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© 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)
1
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, 2017, 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 & Phenomics • 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: MRI and Particle Therapy • Life Science Tools: NMR, EPR,
MRMS and MRI • Big Science & Fusion projects (e.g.
CERN, ITER, SLAC)
© Bruker Corporation 3
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
• ~6,200 employees worldwide
• 2018-2020 focus: Portfolio Transformation and Operational Excellence • Long-term oriented ownership:
~36% owned by insiders
BRUKER HOLDS #1 OR #2 MARKET POSITION FOR ~70% OF OUR PRODUCT PORTFOLIO
© Bruker Corporation
Market Leading Positions in Scientific Instruments
NMR & EPR
Spectroscopy
Preclinical Imaging: MRI,
MPI, PET/SPECT, microCT
MALDI BioTyper for Microbiology
Atomic Force Microscopy
4
Mass Spec Imaging,
MALDI-TOF & MRMS
X-Ray Diffraction Next Gen Semicon Metrology
BEST Superconductors
& Big Science Physics
FTIR/NIR Spectroscopy
& Microscopy
Atomic Force Microscopy (AFM)
Next-Gen X-ray & AFM
Semiconductor Metrology
X-Ray Diffraction (XRD)
& Crystallography
Bruker Key Objectives
1. Accelerate revenue growth:
Enhance our revenue growth rate over time with our portfolio transformation initiatives
Sustained end market improvements in ACAD/GOV, global Industrial & Applied markets
2. Transform portfolio with six high-growth, high-margin Project Accelerate initiatives:
3. Sustain multi-year operating margin expansion:
Expand operating margin 75-100 bps per year, on average, over a multi-year timeframe
Ongoing 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)
© Bruker Corporation 5
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
© Bruker Corporation 6
Bruker creates shareholder value by:
Being well-positioned in attractive life science tools & diagnostic markets
Transforming our portfolio with a focus on six high-growth, high-margin Project Accelerate 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 Tools
• After-Market: Services, Software
and Consumables (1)
Project Accelerate Initiatives:
7
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
© Bruker Corporation
(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
Progress with Portfolio Transformation:
timsTOF Pro and scimaX: Enabling Technologies for Clinical Proteomics, Clinical Phenomics & BioPharma
Structural Biology by GHz-Class NMR
© Bruker Corporation 8
Portfolio
New products and novel workflows to
fundamentally change life science research by
mass spec: • Revolutionary timsTOF™ Pro with PASEF opens
ultra-high sensitivity and high-throughput proteomics
• New scimaX enables high-throughput phenomics by FIA-MRMS
Both are enabling technologies for clinical
proteomics and clinical phenomics research
“The development of the scimaX will surely
be a game-changer for ultra-high resolving
power mass spectrometry.”
Professor Joseph A. Loo, UCLA Biological Chem.
David Geffen School of Medicine
Progress with Portfolio Transformation:
timsTOF Pro for 4D LC-TIMS-MS/MS with PASEF in
proteomics research
Structural Biology by GHz-Class NMR
9
Portfolio
Melvin Park, Inventor of TIMS; Matthias Mann, Inventor of PASEF
Courtesy of Prof. M. Mann
Ushering in a new era for ultra-high sensitivity and high-throughput proteomics
© Bruker Corporation
Progress with Portfolio Transformation:
Advantages of timsTOF Pro with Online PASEF
Structural Biology by GHz-Class NMR
10
Portfolio
Courtesy of Prof. M. Mann
1 50x improvement in
signal-to-noise ratios 2 Proven robustness 3 High speed with
sensitivity 4 Predicting the utility of
CCS values
© Bruker Corporation
Progress with Portfolio Transformation:
MRMS launch at ASMS 2018
Structural Biology by GHz-Class NMR
© Bruker Corporation 11
Portfolio
• ESI & MALDI (1 sec switch)
• Industry-leading mass resolution
(20 million extreme resolution)
• Routine, broadband Isotope Fine
Structure (IFS) research
• Best ExD dissociation toolbox
• Novel Bruker Maxwell Magnet Technology
(conduction cooled)
• No liquid N2 or Helium fill
• No quench ducts
• Small footprint
• 7Tesla, 2XR detection
MS Imaging for
drug development
Native MS for
Biopharma
Petroleomics,
DOM, core labs
Magnetic Resonance Mass Spectrometry (MRMS)
Metabolomics &
Clinical Phenomics
Progress with Portfolio Transformation:
Hain acquisition adds breadth and new growth drivers to Bruker’s microbiology & diagnostics portfolio
Portfolio
© Bruker Corporation 1996
FluoroType®: 2012
PCR with melting curve analysis
High-precision
real-time PCR: 2018
DNA•STRIP GenoType tests
• Established Hain MDx portfolio of mycobacteria tests for TB screening and resistance testing
• MDx assay portfolio for microbial and viral pathogens
• New Fluorocycler™ XT system and work-in-progress Liquid Array™ assays for cost-effective syndromic panels
• Q4-18E post-closing revenue: $6M - $8M(1)
• 2019E non-GAAP EPS accretion: +$0.01 to +$0.02
Liquid Array™
panels: 2019E and beyond
(1) Based on 10/16/2018 close. 12
Operational Excellence Example:
New products and operational excellence drive growth at Optics Portfolio
Solid foundation built on product innovation,
operational and commercial execution
Steady stream of new products targeting attractive
academic, applied and industrial markets
• New INVENIO intelligent FT-IR spectrometer for research use
• MIRA milk analyzer for expansion in food analysis solutions
• Future QCL-based IR microscopes for biologic tissue analysis and materials science research
13 © Bruker Corporation
Operational Excellence
QCL-based IR microscope
MIRA milk analyzer for the determination
of fat, protein and lactose
INVENIO innovative, next-generation FT-IR
Operational Excellence Example:
Selected Manufacturing and Final Test Moving to Bruker’s New Facility in Penang, Malaysia
Portfolio
• New Bruker manufacturing, engineering and final-test
center in Penang, Malaysia
• Planned transfer of selected Bruker NANO products:
• Lower operating costs for final assembly and
test and local third-party subassembly
production
• Establish low-cost design resources
• Operational in 2019
• 2021E NANO Group revenue from Penang:
>$50M
14 © Bruker Corporation
Operational Excellence
$0.70
$0.86
YTD FY 2017YTD FY 2018
Non-GAAP EPS
Bruker Year-To-Date 2018 financials(1)
Improved revenue growth and healthy margin expansion drive EPS
13.6% 14.5%
Non-GAAP Operating Margin
$1,235Mil
$1,342Mil
Revenues
+90 bps +23% +$107M (+8.6%)
YTD FY 2017 YTD FY 2018
© Bruker Corporation
* Non-GAAP gross margin, non-GAAP operating margin, and non-GAAP EPS are non-GAAP measures. Reconciliations of these measures to the most directly comparable GAAP measures are available at the end of this presentation and on Bruker’s website at http://ir.bruker.com/investors/press-releases/earnings-releases/default.aspx
15
(1)For the nine months ended September 30, 2018 and 2017.
FY 2018 Guidance
Revenue Growth y-o-y +6.5% to +7%
Non-GAAP Operating Margin Expansion y-o-y(2)(3)
+50 bps to +80 bps
Non-GAAP EPS $1.36 to $1.40
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FY 2018 Guidance(1): Good revenue growth, further
operating margin expansion
Organic revenue growth:
+3.5% to 4%
Acquisition revenue growth: +1.5%
FX revenue tailwind: +1.5%
Non-GAAP tax rate: ~25%
Fully diluted share count:
~157M shares
Capex: ~$40M to $45M
FX assumptions
(Sept. 28, 2018 rates):
USD = 113.6 Yen
EUR = 1.16 USD
CHF = 1.02 USD
2018 ASSUMPTIONS
(1) As of Bruker’s November 1st, 2018 earnings conference call.
(2) From a FY17 non-GAAP operating margin of 15.9% (following a reclassification of pension expense on the company’s FY 2017 GAAP and non-GAAP financial statements as a result of the adoption of ASU No. 2017-07).
(3) Includes approximately -70 bps of headwind from foreign currency translation.
© Bruker Corporation
© Bruker Corporation
www.bruker.com
17
Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (unaudited)
© Bruker Corporation 18
(in millions, except per share amounts)
2018 2017 (1)
Reconciliation of Non-GAAP Operating Income, Non-GAAP Profit Before
Tax, Non-GAAP Net Income, and Non-GAAP EPS
GAAP Operating Income 156.0$ 124.2$
Non-GAAP Adjustments:
Restructuring Costs 6.7 8.5
Acquisition-Related Costs 3.9 9.4
Purchased Intangible Amortization 21.5 22.6
Other Costs 7.0 3.8
Total Non-GAAP Adjustments: 39.1$ 44.3$
Non-GAAP Operating Income 195.1$ 168.5$
Non-GAAP Operating Margin 14.5% 13.6%
Non-GAAP Interest & Other Expense, net (11.5) (16.1)
Non-GAAP Profit Before Tax 183.6 152.4
Non-GAAP Income Tax Provision (47.0) (38.7)
Non-GAAP Tax Rate 25.6% 25.4%
Minority Interest (1.5) (1.3)
Non-GAAP Net Income Attributable to Bruker 135.1 112.4
Weighted Average Shares Outstanding (Diluted) 157.2 159.9
Non-GAAP Earnings Per Share 0.86$ 0.70$
Nine Months Ended September 30,
(1) The Company adopted Accounting Standards Update (ASU) 2017-07 as of January 1, 2018 under the retrospective approach. Accordingly, the 2017 income statement accounts have been restated to reflect ASU 2017-07.
Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (Unaudited)
© Bruker Corporation 19
(in millions, except per share amounts)
2018 2017 (1)
Reconciliation of GAAP and Non-GAAP Gross Profit
GAAP Gross Profit 627.2$ 559.8$
Non-GAAP Adjustments:
Restructuring Costs 0.8 1.6
Acquisition-Related Costs 1.6 5.6
Purchased Intangible Amortization 16.6 18.4
Other Costs - 0.7
Total Non-GAAP Adjustments: 19.0 26.3
Non-GAAP Gross Profit 646.2$ 586.1$
Non-GAAP Gross Margin 48.2% 47.4%
Reconciliation of GAAP and Non-GAAP Tax Rate
GAAP Tax Rate 28.7% 23.7%
Non-GAAP Adjustments:
Tax Impact of Non-GAAP Adjustments -0.2% 1.5%
U.S. Tax Reform- Toll Charge -2.6% 0.0%
Other Discrete Items -0.3% 0.2%
Total Non-GAAP Adjustments: -3.1% 1.7%
Non-GAAP Tax Rate 25.6% 25.4%
Nine Months Ended September 30,
(1) The Company adopted Accounting Standards Update (ASU) 2017-07 as of January 1, 2018 under the retrospective approach. Accordingly, the 2017 income statement accounts have been restated to reflect ASU 2017-07.
Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (Unaudited)
© Bruker Corporation 20
(in millions, except per share amounts)
2018 2017 (1)
Reconciliation of GAAP and Non-GAAP Earnings Per Share (Diluted)
GAAP Earnings Per Share (Diluted) 0.65$ 0.51$
Non-GAAP Adjustments:
Restructuring Costs 0.04 0.05
Acquisition-Related Costs 0.03 0.06
Purchased Intangible Amortization 0.14 0.14
Other Costs 0.04 0.02
Income Tax Rate Differential (0.04) (0.08)
Total Non-GAAP Adjustments: 0.21 0.19
Non-GAAP Earnings Per Share (Diluted) 0.86$ 0.70$
Reconciliation of GAAP Operating Cash Flow and Non-GAAP Free Cash Flow
GAAP Operating Cash Flow 107.4$ 50.7$
Non-GAAP Adjustments:
Purchases of property, plant and equipment (28.9) (31.3)
Non-GAAP Free Cash Flow 78.5$ 19.4$
Reconciliation of Impact of Adoption of ASU 2017-07
Cost of revenues (1.3) (2.0)
Selling, general and administrative (0.4) (0.5)
Research and development (0.5) (0.7)
Interest and other income (expense), net 2.2 3.2
Net Impact to Net Income and Earnings per Share: - -
Nine Months Ended September 30,
(1) The Company adopted Accounting Standards Update (ASU) 2017-07 as of January 1, 2018 under the retrospective approach. Accordingly, the 2017 income statement accounts have been restated to reflect ASU 2017-07.
Bruker Corporation Reconciliation of GAAP to NON-GAAP Financial Measures (Unaudited)
© Bruker Corporation 21
(in millions)
2018 2017
Reconciliation of GAAP Reported Revenue Growth to Organic Revenue Growth
GAAP Revenue as of Prior Comparable Period 1,235.4$ 1,141.0$
Non-GAAP Adjustments:
Acquisitions and divestitures 11.2 60.4
Currency 37.6 (5.1)
Organic 57.8 39.1
Total Non-GAAP Adjustments: 106.6 94.4
Non-GAAP Revenue 1,342.0$ 1,235.4$
Organic Revenue Growth 4.7% 3.4%
Nine Months Ended September 30,
Total Bruker
For more information, visit Bruker’s website at https://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.