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Bruker Corporation (NASDAQ: BRKR)

Q2 2017 Earnings Presentation

Frank Laukien, President & CEO

Anthony Mattacchione, SVP & CFO

Miroslava Minkova, Head of Investor Relations August 3, 2017

Innovation with Integrity

BRUKER CORPORATION

Safe Harbor & Reg. G 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.

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 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, our ability to successfully implement restructuring

initiatives, changing technologies, product development and market acceptance of our products, the cost

and pricing of our products, manufacturing, 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, litigation, 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 filings with the SEC, including,

without limitation, our annual report on Form 10-K for the year ended December 31, 2016 and

subsequently filed Quarterly reports on Form 10-Q. We expressly disclaim any intent or obligation to

update these forward-looking statements other than as required by law. 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.

2

Business Update

Q2-2017 & H1-2017

3

Q2-2017 Performance

Revenue increase of +$43M, or +11.6% y-o-y in

comparison with weak Q2-16

− Acquisitions add +5.8% y-o-y

− FX lowers revenue by -1.8% y-o-y

− Organic revenue up +7.6% y-o-y, with growth at

CALID, BioSpin and very strong BEST growth

Non-GAAP gross margin decreases -100 bps y-o-y

Non-GAAP operating margin expands +170 bps y-o-y

GAAP EPS of $0.15, compared to $0.09 in Q2-16

Non-GAAP EPS of $0.23, compared to $0.20 in Q2-16

− Non-GAAP eff. tax rate 24.2%, vs. 12.0% in Q2-16

Q2 Financials

4

Revenues [$M]

372 415

Q2-16 Q2-17

Non-GAAP EPS

Q2-2017: Solid revenue, operating income and

EPS growth year-over-year

+11.6%

+15%

$0.20

$0.23

Q2-16

Q2-17

H1-2017 Performance

Continued y-o-y improvements in European orders,

and evidence of improved industrial demand

Revenue increase of +$53M, or +7.1% y-o-y

− Acquisitions add +5.5% y-o-y

− FX lowers revenue by -1.8% y-o-y

− Organic revenue up +3.4% y-o-y, with growth at

BioSpin, CALID and strong growth at BEST

Non-GAAP gross margin about flat y-o-y

Non-GAAP operating margin expands +90 bps y-o-y

GAAP EPS of $0.28, compared to $0.23 in H1-16

Non-GAAP EPS of $0.41, unchanged from H1-16

− Non-GAAP eff. tax rate 27.2%, vs. 15.0% in H1-16

H1 Financials

5

Revenues [$M]

747 800

H1-16 H1-17

Non-GAAP EPS

H1-2017: Back to positive organic growth,

operating margins higher

+7.1%

0%

$0.41

$0.41

H1-16

H1-17

Bruker BIOSPIN Group

BIOSPIN low single digit constant currency revenue growth; operating

margins lower on mix

NMR steady, despite challenging comp (including 1GHz NMR revenue

in Q1-16)

PCI revenue improves with good Q2 execution; PCI market recovery

encouraging

Continued strong after-market revenue growth with LabScapeTM

CALID low single digit constant currency revenue growth; operating

margins significantly better y-o-y, with improving revenue and 2016

restructuring

Daltonics up mid single digits in constant currency; 2016 restructuring

drives higher margins

Optics revenues grow in mid single digits; operating margins higher;

evidence of improved applied and industrial markets

Detection revenue down due to large Middle East contract in Q1-16

GROUP OVERVIEW:

H1-2017 Operating Performance

6

Bruker CALID Group

Bruker NANO Group

NANO mid single digit constant currency revenue growth, helped by

Hysitron acquisition (January 2017); improvements in industrial and

European orders

AXS revenue strengthens significantly after weak 2016; higher academic

and industrial volume, plus 2016 restructuring drive margin expansion

Semiconductor metrology (‘Semi’) revenue and margins below prior year

due to lower opening backlog; orders up and expect good H2-17 in Semi

Nano Surfaces revenue grows with Hysitron addition

BEST Segment

BEST revenue substantially higher, with >20% organic growth plus

inorganic growth from B-OST acquisition (November 2016); BEST

gross margin is inherently lower than BSI gross margins;

Demand for superconducting materials and timing of large research

projects drive BEST results

B-OST performance on target; productivity investments will take time

GROUP OVERVIEW:

H1-17 Operating Performance

7


Innovation and Portfolio Expansion in Microbiology:

IR BiotyperTM Solution for Microbial Strain Typing

8

New IR BiotyperTM Solution

Unique benchtop system for microbial

strain typing based on FT-IR spectroscopy

For in-house workflows in hospital

hygiene and healthcare infection control

testing

Complementary to MALDI Biotyper®

microbial ID workflow

Launched at ASM Microbe 2017 in June


Value-creating M&A and Portfolio Transformation in

Cell Biology and Neuroscience:

New Luxendo™ Light-Sheet Microscopy Product Line

9

Luxendo Light-Sheet Microscopy:

Proprietary single plane illumination

microscopy (SPIM) reduces acquisition

times compared to confocal microscopy

For live cell imaging, SPIM reduces

photo-toxicity on living specimen

Enables new research in embryology,

live-cell imaging, and neuroscience

Complements Bruker products in multi-

photon and super-resolution cell and

neuroscience fluorescence microscopy

Bruker acquired Luxendo in May 2017

2017 Key Priorities

Resume Revenue Growth via a combination of

organic growth and M&A contributions

Sustain Margin Expansion as we continue our

Operational & Commercial Excellence journey

Continue to Strengthen Systems and insights by

harmonizing processes, ERP and CRM platforms

Invest in profitable growth: six key high-growth,

high-margin initiatives for portfolio transformation

Thoughtfully Deploy Capital for sustainable

shareholder returns

10

Financial Update

Q2-2017 & H1-2017

11

NON-GAAP FINANCIAL PERFORMANCE:

Q2-2017 Overview

[$ m, except EPS] Q2-2017 Q2-2016 Δ

Revenues 414.9 371.7 +11.6%

Operating Income 51.7 40.0 +29%

Margin (%) 12.5% 10.8% +170ps

Non-GAAP EPS $0.23 $0.20 +15%

Free Cash Flow -26.8 8.9 -35.7m

[$ m] Jun 30, 2017 Jun 30, 2016 Δ

Net Cash 9.5 77.4 -88%

Working capital (WC)* 653.8 589.9 +11%

WC-to-revenue ratio $0.39 $0.36 -8%

12

COMMENTS

Reported revenue +11.6%,

strong organic growth

Operating margin up +170

bps y/y

2016 restructuring

contributes to operating

margin expansion

EPS up 15% despite

unusually low Q2-16 tax rate

Free cash flow -$26.8M

Use of cash for buybacks,

dividends and M&A result in

lower net cash balance

Working capital up +11%

with acquisitions

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

Q2 2016 Organic Currency Portfolio Q2 2017

$371.7M $414.9M

Q2-2017 Revenue Bridge

Organic Currency Portfolio Total

+7.6% -1.8% +5.8% +11.6%

Reported revenue

+11.6%

Organic revenue up

+7.6%, reflecting y/y

increases at CALID,

BioSpin and BEST

B-OST, Hysitron and

InVivo acquisitions add

+5.8% to revenue growth

FX negative by -$6.8M, or

-1.8%

13

Q2-2017 DRIVERS

Q2-2017 Revenue Bridge [$M]

+$28.4M -$6.8M +$21.6M

Q2-2017 Revenue for Bruker Corporation

Q2-2017 Non-GAAP Results

[$ m, except EPS] Q2-2017 Q2-2016 Δ

Total Revenues 414.9 371.7 +11.6%

Gross Profit 193.3 176.9 +9% Margin (% of revenues) 46.6% 47.6% -100 bps

SG&A -100.9 -100.1 +1%

(% of revenues) 24.3%

26.9%

R&D -40.7 -36.8 +11% (% of revenues) 9.8% 9.9%


(% of revenues) 12.5% 10.8% +170 bps

Tax Rate 24.2% 12.0% +1220 bps

Net Income* 36.1 32.6 +11%

EPS $0.23 $0.20 +15%

Shares Outstanding 160.4 162.4 -1%

Gross margin down -100 bps:

– Higher BEST revenue with inherently lower gross margins

– BioSpin mix with more low field NMR in Q2-17

R&D up 11% y/y on selected investments and acquisitions

Operating margin up +170 bps, with volume and operational improvements at Daltonics & AXS

Q2-2017 effective tax rate of 24.2% up from 12% in Q2-16 (2016 valuation allowance reversals)

EPS up 15% y/y as revenue growth and higher operating margins more than offset challenging tax comparison

Share count lower on share repurchases

14

COMMENTS

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

H1 2016 Organic Currency Portfolio H1 2017

$747.1M $799.8M

H1-2017 Revenue Bridge

Organic Currency Portfolio Total

+3.4% -1.8% +5.5% +7.1%

Reported revenue +7.1%

Organic revenue growth

+3.4%, reflecting growth

at BioSpin, CALID and

BEST

B-OST, Hysitron and

InVivo acquisitions add

+5.5% to revenue growth

FX negative by -$14.1M,

or -1.8%

15

H1-2017 DRIVERS

H1-2017 Revenue Bridge [$M]

+$25.5M -$14.1M +$41.3M

H1-2017 Revenue for Bruker Corporation

H1-2017 Non-GAAP Results

[$ m, except EPS] H1 2017 H1 2016 Δ

Total Revenues 799.8 747.1 +7.1%

Gross Profit 376.7 352.3 +7% Margin (% of revenues) 47.1% 47.2% -5 bps

SG&A -197.5 -192.1 +3%

(% of revenues) 24.7%

25.7%

R&D -78.3 -72.9 +7% (% of revenues) 9.8% 9.8%


(% of revenues) 12.6% 11.7% +90 bps

Tax Rate 27.2% 15.0% 1220 bps

Net Income* 66.0 66.9 -1%

EPS $0.41 $0.41 0%


Gross margin flat. Higher Daltonics and AXS volume offset by more BEST revenue, and BioSpin mix effects

Operating margin up +90 bps, with higher revenue and operational improvements at Daltonics and AXS

H1-2017 effective tax rate 27.2% vs. 15.0% in H1-16 (2016 valuation allowance reversals); full FY17 rate ~25%

EPS flat y/y despite unusually low effective tax rate in H1-16

Share count lower due to share repurchases

16

COMMENTS


H1-2017 Cash Flow

[$ m] H1-2017 H1-2016 Δ

Net Income 45.7 38.4 +7.3

Depreciation & amortization 31.1 26.7 +4.4

Changes in working capital* -20.0 -15.0 -5.0

Other -41.4 -46.0 +4.6

Operating cash flow 15.4 4.1 +11.3

Capital expenditures -21.1 -17.2 -3.9

Free cash flow -5.7 -13.1 +7.4

Y-o-y free cash flow

improvements driven by:

– Operating cash flow

higher due to higher net

income and lower tax

payments

– Uptick in capital

expenditures

17

COMMENTS


2017 Outlook

18

FY 2017 Guidance

Revenue Growth y-o-y +4.5% to +6.0%

Non-GAAP Operating Margin Expansion y-o-y(1)(2)

+40 bps to +70 bps

Non-GAAP EPS $1.08 - $1.12

19

FY 2017 Guidance: Adjusting Outlook for Mid-Year

Performance and Changes in FX

Organic revenue growth of

+1.5% to +2% (updated)

Acquisition revenue

growth: +3.5% to +4%

FX revenue headwind:

-0.5% to 0% (updated)

Non-GAAP tax rate: ~25%

Fully diluted share count:

~160M shares (updated)

Capex: ~$45M

FX assumptions as of

June 30, 2017:

USD = 112.4 Yen

EUR = 1.14 USD

CHF = 1.04 USD

2017 ASSUMPTIONS

(1) From a FY16 non-GAAP operating margin of 14.8%.

(2)Includes approximately -40 bps cumulative negative effect from 2016 and 2017

acquisitions. Excluding acquisitions, Bruker underlying non-GAAP operating margin

expected to expand by +80 bps to +110 bps in FY 2017.

Appendix

20

Q2-2017 GAAP Results

[$M, except EPS] Q2 2017 Q2 2016 Δ

Total Revenues 414.9 371.7 +12%

Gross Profit 183.4 170.1 +8%

Margin (% of sales) 44.2% 45.8%

SG&A -102.8 -100.9 +2%

(% of revenues) 24.8% 27.1%

R&D -40.7 -36.8 +11%

(% of revenues) 9.8% 9.9%



Net Income* 23.4 14.5 +61%

EPS $0.15 $0.09 +67%


21


Q2-2017 Reconciliation of GAAP and

Non-GAAP Results

[$M, except EPS] Q2 2017 Q2 2016

GAAP Operating Income 33.5 20.4

Restructuring Costs 3.8 3.7

Acquisition-Related Costs 5.9 8.1

Purchased Intangible Amortization 7.5 5.4

Other Costs 1.0 2.4

TOTAL 18.2 19.6

Non-GAAP Operating Income 51.7 40.0

Non-GAAP Interest & Other Expense, net -3.3 -2.6

Non GAAP Profit Before Tax 48.4 37.4

Non-GAAP Income Tax Provision -11.7 -4.5

Non-GAAP Tax Rate 24.2% 12.0%

Minority Interest -0.6 -0.3

Non-GAAP Net Income* 36.1 32.6

Non-GAAP EPS $0.23 $0.20

22

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

H1-2017 GAAP Results

[$M, except EPS] H1 2017 H1 2016 Δ

Total Revenues 799.8 747.1 +7%

Gross Profit 359.8 336.9 +7%

Margin (% of sales) 45.0% 45.1%

SG&A -200.9 -193.6 +4%

(% of revenues) 25.1% 25.9%

R&D -78.3 -72.9 +7%




Net Income* 45.0 38.1 +18%

EPS $0.28 $0.23 +22%


23


H1-2017 Reconciliation of GAAP and

Non-GAAP Results

[$M, except EPS] H1 2017 H1 2016

GAAP Operating Income 71.1 54.4

Restructuring Costs 3.9 7.5

Acquisition-Related Costs 8.7 10.0

Purchased Intangible Amortization 14.4 10.8

Other Costs 2.8 4.6

TOTAL 29.8 32.9

Non-GAAP Operating Income 100.9 87.3

Non-GAAP Interest & Other Expense, net -9.3 -8.2

Non GAAP Profit Before Tax 91.6 79.1

Non-GAAP Income Tax Provision -24.9 -11.9

Non-GAAP Tax Rate 27.2% 15.0%

Minority Interest -0.7 -0.3

Non-GAAP Net Income* 66.0 66.9

Non-GAAP EPS $0.41 $0.41

24

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

Q2-2017 Cash Flow

[$ m] Q2 2017 Q2 2016 Δ

Net Income 24.0 14.8 +9.2

Depreciation & amortization 16.0 13.5 +2.5

Changes in working capital* -20.5 -13.7 -6.8

Other -36.7 3.5 -40.2

Operating cash flow -17.2 18.1 -35.3

Capital expenditures -9.6 -9.2 -0.4

Free cash flow -26.8 8.9 -35.7

Free cash flow lower y/y

driven by:

– Increased use of cash for

working capital needs

– Timing of customer

advances

– Timing of incentive

compensation payments

(in Q2-17 vs. in Q1-16)

25

COMMENTS


Balance Sheet

[$M] Jun 30,

2017 Dec 31,

2016 Jun 30,

2016

Cash, Cash Equivalents & Short-term Investments

440.3 500.3 420.4

Financial Debt 430.8 411.7 343.0

Net Cash 9.5 88.6 77.4

26

[$M] Jun 30,

2017 Dec 31,

2016 Jun 30,

2016

Total Assets 1,912.9 1,808.4 1,720.5

Working Capital* 653.8 598.2 589.9

Intangibles, Net & Other Long-Term Assets

360.5 293.4 268.3


Q2-17 GAAP SEGMENT RESULTS:

BSI and BEST GAAP Performance

[$ m] Q2-2017 Q2-2016 Δ

REVENUE

Scientific Instruments (BSI) 362.5 345.8 +5%

Organic Revenue Growth (%) +4.4% -8.7%

Energy & Supercon Technologies (BEST) 54.0 28.5 +89%

Organic Revenue Growth (%) +43.2% -8.9%

Corporate Eliminations -1.6 -2.6

Total Revenue 414.9 371.7 +11.6%

OPERATING INCOME

Scientific Instruments (BSI) 30.5 18.9 +61%

Energy & Supercon Technologies (BEST) 3.0 1.4 +114%

Corporate Eliminations 0.0 0.1

Total Operating Income 33.5 20.4 +64%

27

Sum of items may not total due to rounding

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