bruker corporation (nasdaq: brkr) · bruker corporation (nasdaq: brkr) 32nd annual j.p. morgan...

Bruker Corporation (NASDAQ: BRKR) 32nd Annual J.P. Morgan Healthcare Conference

Frank Laukien, President & CEO

Charles Wagner, EVP & CFO

Joshua Young, VP, Investor RelationsJanuary 15, 2014

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 g q y q , g g g , p

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, 2012, 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 2Innovation with Integrity

Agenda

1 Company Overview & 2014 Key Themes and Initiatives

3© Bruker Corporation

2 Innovation & Transformation

3 Restructuring, Financials & Investment Thesis


Company Profile

Bruker: the leading provider of high-performance scientific instruments and solutions for life science, diagnostic and applied markets.

KEY FIGURES

Founded in 1960

~$1.8B revenue

~6,700 employees


~6,700 employees

~82% of revenues outside of the US

~Direct sales organizations in 33 countries

~1,000 R&D professionals with strong track record of innovation

Bruker BioSpin

BrukerCALID

Bruker Materials

Bruker Scientific Instruments (BSI)

~94% revenue

Bruker Scientific Instruments (BSI)

~94% revenue

Bruker Energy & Supercon Technologies (BEST)

~6% revenue

Bruker Energy & Supercon Technologies (BEST)

~6% revenue


Our 3 BSI Groups have distinct capabilities and products, and serve complementary markets

Bruker Bruker Bruker Bruker


BioSpin CALID MAT BEST

1. Nuclear Magnetic Resonance (NMR)

2. Electron Paramagnetic Resonance (EPR)

3. Preclinical imaging incl. MRI, MPI, µCT, PET/SPECT/CT, optical molecular imaging

4. Compact MR systems

1. Life-Science and Applied MassSpectrometry

2. MS Diagnostics

3. GC and LC chromatography

4. FT-IR/NIR/Raman

5. CBRNE Detection

1. Atomic Force Microscopy (AFM)

2. X-ray Diffraction, Crystallography, XRF

3. Confocal Fluorescence Microscopy

4. Optical Metrology, Profilometry

5. Spark-OES, HH-XRF

6. EDS, EBSD, WDS, µXRF

1. LTS Superconductors

2. HTS Superconductors

3. ‘Big Science’ researchinfra-structure


Most of our revenues are from academic, government, industrial, pharma/biotech and diagnostics markets

Bruker

BioSpinBruker

CALIDBruker

MATBruker

BESTMARKETS SERVED MARKETS SERVED MARKETS SERVED MARKETS SERVED


MARKETS SERVED MARKETS SERVED MARKETS SERVED MARKETS SERVED

1. Academic & Medical Schools

2. Pharma & biotech

3. Government

4. Applied markets: food authenticity, clinical metabolomics, IVD research, industrial

1. Academic/government proteomics/metabolomiclife-science research

2. Clinical microbiology & molecular diagnostics

3. Pharma & biotech

4. Applied: enviro, food, forensics, energy, petrochem

5. Homeland Security

1. Industrial research and quality control

2. Microelectronics: semiconductor, LED, data storage, display

3. Academic & government

4. Cell biology & neuroscience

1. Healthcare (MRI)

2. Life-Science tools (NMR, EPR, FTMS)

3. Renewable energy research (e.g. ITER)

4. ‘Big Science’

Indicative: not representative of all products sold and industries served


Key Themes for 2014–2016:Innovation & Transformation

1 Bruker has a premium brand and an exceptional record of major product innovation and strong organic growth. We have achieved leadership positions in focused segments in LST.

2 We are expanding into fast-growing markets in molecular diagnostics preclinical imaging cell biology applied markets diagnostics, preclinical imaging, cell biology, applied markets, explosives detection, and microelectronics metrology.

3 We have embarked on a transformation with significant leadership, process, operations and system changes to drive operational excellence and strengthen our foundation.

4 We are restructuring to drive efficiency with goal to achieve significantly higher margins and cash flow over 5 years.


Key Initiatives for 2014:Innovation & Transformation

1 2014 priority: meaningful improvement in EPS and Cash Flow

2 Bruker plans major product introductions and is accelerating expansion into attractive, adjacent markets throughout 2014

3 After 18 months of implementing senior leadership (new CFO, 3 Group presidents), division presidents, senior operational finance and operations leaders, in 2014 we focus on Tier 2 & 3general, operational, M&S leadership, and their compensation

4 In 2014-2015, we continue operational excellence initiative with internal LEAN programs, and high-level outsourcing, which will transform how manufacturing is done at Bruker


Agenda

1 Company Overview & 2014 Key Themes and Goals





Product Innovation: MALDI Biotyper for Microbiology ID

INDUSTRY ISSUE:

The identification (ID) of microbial infections can take several hours or days using traditional methods

BRUKER INNOVATION: VALUE CREATED:


BRUKER INNOVATION:

MALDI Biotyper:a benchtop MALDI-TOF for clinical diagnostics to identify microbial infections in minutes

VALUE CREATED:

• Faster time-to-result (TTR)

• More differentiated information

• Lower cost per ID

• Improved antibiotic stewardship

• Dramatically reduced time and cost of hospitalization

• Likely improvements in outcome


Product Innovation: Ascend Aeon NMR magnets

INDUSTRY ISSUE:

Diminishing supply and availability of helium has led to increasing costs to maintain NMR magnets


VALUE CREATED:

• Independence from Helium supply situation

• Easier maintenance

• Smaller instrument size

BRUKER INNOVATION:

Ascend Aeon magnets:incorporates advanced refrigeration design to eliminate helium consumption


Market Innovation: Expansion into fast-growingProteomic & Metabolomic Molecular Diagnostics

We are entering molecular diagnostics, leveraging our proteomics and metabolomics MS and NMR tools:

• MALDI Biotyper transforming clinical microbiology with faster time-to-result, more specific ID and lower cost. Over 1,000 units in field. First claim cleared by FDA in Q4-13.

• In Europe, launching mass spec-based ClinTox sytem for clinical toxicology and drugs-of-abuse (DoA).

• Avance IVDr NMR being adopted for RUO in clinical metabolomics,cardiovascular disease, cancer metabolomics, newborn screening for inborn errors, adult longitudinal “metabolic passport”.

• Together with key collaborators, we are pioneering MALDI-TOF as clinical protein biomarker validation platform, and for future protein IVD.

• Pioneering MALDI Imaging for drug development and pathology research with key collaborators.

• EVOQ triple-quads for pain management, therapeutic drug monitoring, Vitamin D testing, etc.


Market Innovation: Expansion into fast-growing Preclinical Imaging and Cellular Imaging

We have emerged as leader in >$400M Preclinical Imaging market:

• #1 in preclinical MRI (#2 exited market in Q4-13)

• #1 in emerging preclinical MPI

• Preclinical uCT leader with SkyScan acquisition in 2012

• Emerging leader in PET/SPECT/CT (#1 announced exit in Q3-13)

• Acquisition of optical molecular imaging, transferred to Billerica in Q4-13.

Prairie acquisition in Q4-13 accelerates expansion into cell biology and neuroscience research (‘Brain Connectome’), complements Bio-AFMs:

• Ultima for multi-photon fluorescent imaging in live cells

• New Opterra for fast multipoint confocal imaging of dynamic biological events in cells


Transformation: 2013 was first year of a multi-year effort to transform Bruker and to reset its foundation

2012 2013 2014 2015 2016 2017

New Leadership & Organization• Simplified organizational structure• New leaders & incentive structures• Globalized approach to business

Incremental Profit Improvement


Incremental Profit Improvement• Better expense control• New structure & process improvements• Targeted outsourcing/restructuring

Sustained Profitable Growth• Additional supply chain initiatives• Improved resource allocation• IT investments & process change

Complement Innovation/Growth with Margin-Performance Culture• Incentives programs focus on profitability and cash flow • Greater visibility and accountability


Transformation: We have made significant progress in 2013 and will continue in 2014-2015

Organization/People Processes/Systems Restructuring/Efficiency

• New CFO and three new Group presidents

• 10 BSI operating divisions organized into 3 groups

• Incentive systems changed to have more emphasis on profit and cash flow

• Transitioning to global business model, from country/legal entity model

• Implementing new financial consolidation system

• Implementing and harmonizing ERP systems

• Continued CRM roll-outs

• Launched restructuring initiatives in all businesses

• Effectively managing OPEX

• Internal lean initiatives combined with outsourcing and selected divestitures

• Reduced HC by 300 via previously announced actions


Agenda

1 Company Overview & 2014 Key Themes and Goals





Our YTD revenue growth is roughly in-line with the broader life science tools market

Q3 2013 YTD Performance Organic revenue growth of 2.0%

1. CALID & BioSpin generate mid-single digit revenue growth

2. BMAT revenues decline mid-single digits, with 1.27 1.29

Revenues [$ m] +1%

Q3 YTD Performance

* Non-GAAP

© Bruker Corporation 17

weakness from APAC industrial customers3. BEST revenues grow low-single digits,

including effects of Rosatom license

Ex-Rosatom license, YTD operating margins down ~100 basis points, primarily due to Yen

Non-GAAP EPS of $0.46, compared to non-GAAP EPS of $0.54 in Q3-12 YTD

YTD 12 YTD 13

11.5%

9.6%

YTD 12

YTD 13

Operating Margin* -190 bps


We are taking actions in 2013 that are expected to drive meaningful cost savings in 2014

Facility ClosuresFacility

Closures OutsourcingOutsourcing DivestituresDivestitures Headcount ReductionsHeadcount Reductions


$15–20mof expected annualized savings in 2014


Transformation:Bruker CALID Group reducing costs & improving operations

Key 2013 Actions:• Narrowed CAM strategic focus and reduced operating expenses

• Closed CAM Netherlands manufacturing, and consolidated or outsourced production (Q4 2013)

• Impact: ~50 headcount plus inventory benefit


• Impact: ~50 headcount, plus inventory benefit

Additional 2014 Actions: impact TBA

• Divested/outsourced LSC machine shop in Germany (Q1 2014)

• Exiting small LSC manufacturing operation site in H1-2014

• Closing another small CAM manufacturing site in Q1-14

• Outsourcing of high-level assemblies in all four CALID divisions

Transformation:Bruker BioSpin Group ramped-up outsourcing activity

Key 2013 Actions:• Outsourced/divested Swiss electronics production and French power

supply production to partners in Q1-13

• Closed one pre-clinical imaging site in Q4-13


• Impact: ~100 headcount, plus inventory benefit


• Ongoing outsourcing of non-core cabling, electronics, machining, and assemblies

• Reorganization and rightsizing of R&D resources

Transformation:Bruker Materials Group reallocated investment & right-sized

Key 2013 Actions:• Right-sized BNS headcount in response to weak demand results (Q3

2013)

• Right-sized AXS and Elemental headcount to better reflect investment priorities (Q4 2013)


investment priorities (Q4 2013)

• Consolidating one AXS manufacturing operation

• Impact: ~150 headcount, plus modest inventory benefit


• Ongoing outsourcing of non-core cabling, electronics, machining, and assemblies

Transformation:BEST narrowed its strategic focus & drove profitability

Key 2013 Actions:• Discontinued iSFCL development project (Q2 2013)

• Discontinued CGM development project and closed German magnet operation (Q4-13)


• Reduced other overhead costs

• Impact: ~20 headcount


• Continue to drive operating margins higher

• LEAN initiatives in LTS wire manufacturing


A Strong Foundation

Why Invest in Bruker?

• Premier brand for high-performance life-science, diagnostics and analytical scientific instruments

• Strong innovation and expansion track record, taking concrete actions to improve profitability & cash flow


…with Realistic Upside Potential• Strong organic growth opportunities remain

• Profitability and cash flow improvements represent value

• Commitment to continuous improvement: further foundation building underway in terms of new management and processes, systems and operational excellence

• Excellent customer relationships and collaborations



www.bruker.com

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