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© Bruker Corporation Bruker drives profitable growth and margin expansion by enabling scientific discoveries and by delivering high- performance analytical, life science and diagnostic solutions Innovation with Integrity

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Page 1: Bruker drives profitable growth and margin expansion by ... · 3/3/2017  · results to differ materially from those indicated, including, but not limited to, risks and uncertainties

© Bruker Corporation

Bruker drives profitable growth and margin expansion by enabling scientific discoveries and by delivering high-

performance analytical, life science and diagnostic solutions

Innovation with Integrity

Page 2: Bruker drives profitable growth and margin expansion by ... · 3/3/2017  · results to differ materially from those indicated, including, but not limited to, risks and uncertainties

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, 2016, 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

Page 3: Bruker drives profitable growth and margin expansion by ... · 3/3/2017  · results to differ materially from those indicated, including, but not limited to, risks and uncertainties

2017 Key Messages & Financial Objectives

1. Bruker is a differentiated leader in attractive markets for analytical, life science and diagnostic tools, and our brand stands for innovation:

Market leader in unique, high value technologies: NMR, MALDI-TOF, MALDI BioTyper, FTMS, AFM, XRD & Superconductors

Major growth opportunities: Phenomics, Proteomics, Biopharma, Food Analysis, Microbiology, Neuroscience, Structural Biology/IDPs, Next-Gen Semiconductor Metrology

2. We expect to accelerate revenue growth:

Resume revenue growth in 2017 via a combination of organic growth and M&A contributions

Accelerate towards LST & DX market growth rates in 2018 & beyond

3. We will continue to leverage our transformation to drive margin expansion:

2015-2016: delivered 460 bps of 2-yr cumulative Non-GAAP operating margin expansion

In 2017, we are targeting an additional 40-70 bps of Non-GAAP operating margin expansion (incl. a -40 bps headwind from acquisitions)

Long-term goal to expand operating margin 75-100 bps on average per year over a multi-year timeframe

4. We aim for high ROIC by investing internally in high-value innovation and our entry into new markets, complemented by disciplined M&A.

© Bruker Corporation 3

Page 4: Bruker drives profitable growth and margin expansion by ... · 3/3/2017  · results to differ materially from those indicated, including, but not limited to, risks and uncertainties

Bruker Overview • Founded in 1960

• FY2016 revenue: ~$1.6 billion

• R&D investment: ~9% of revenue

• ~75% of revenue from scientific

and diagnostic instruments

• ~6,000 employees worldwide

• After major restructuring and Transformation now on to Operational Excellence phase

• Long-term oriented ownership: ~35% owned by insiders

• Quarterly dividend: ~$0.04/share

• Non-GAAP ROIC: >20% in both FY16 and FY15

35%

29%

28%

8%

BioSpin

Three Primary Life-Science Tools Groups with Global Footprint Revenue breakdown (FY 2016):

36%

29%

5% 30%

CALID

NANO

75%

25%

Systems

Academic & Government

Pharma/Biopharma

Diagnostic Labs & Hospitals

Applied Markets

Industrial & Next-Gen Semicon Metrology

Large, diverse end markets:

© Bruker Corporation

BEST

Service & After-market

Americas

Europe

Rest of World

APAC

4

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Bruker Technology Portfolio & Key Markets

Differentiated, high-performance scientific instruments, analytical tools and diagnostic solutions

Microscopic & Nano-Scales

Cellular & Sub-Cellular Levels

Small Molecule & Protein Levels

Enabling research and analysis of life and materials at:

Nuclear Magnetic Resonance (NMR)

Mass Spectrometry

X-Ray Analysis Atomic Force

Microscopy (AFM)

FT-IR/NIR/Raman Spectroscopy

Microbiology

Preclinical Imaging

…plus other Life-Science Tools (LST)

© Bruker Corporation 5

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BioSpin Group ~$563M FY2016 revenue

• NMR/EPR for Life-Science Research & Pharma

• Applied, Industrial & Clinical MR

• Preclinical Imaging

• Services & Life-Cycle Support

NANO Group ~$455M FY 2016 revenue

• Atomic Force Microscopy

• Fluorescence Microscopy for

Cell Biology & Neurosciences

• X-Ray for Materials Research, QC

• Next-Gen Semicon Metrology

• Service & After-Market business

CALID Group ~$475M FY2016 revenue

• Mass Spectrometry for

• Proteomics & Metabolomics • Applied & Pharma • Microbiology & Pathology

• FT-IR/NIR/Raman for Applied Markets

• CBRNE Detection for Security

• Service, Consumables & Software

BRUKER HAS #1 OR #2 MARKET POSITION FOR MORE THAN 60% OF OUR PRODUCT PORTFOLIO

© Bruker Corporation

Bruker Scientific Instruments (BSI) Segment

Three Life Science Tools & Diagnostics (LST & DX) Groups:

NMR/EPR & NMR Phenomics

Preclinical Imaging & MALDI Imaging

MALDI BioTyper FT-IR/NIR, X-Ray Diffraction (XRD),

Next-Gen Semicon Metrology

Atomic Force Microscopy

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Standalone BEST in 2016(1): ~$124M in revenue

Supplier of superconductors and physics technologies for

MedTech: OEM MRI magnets

Life Science Tools: NMR, FTMS, Preclinical MRI

Big Science: CERN, ITER, National Labs

Differentiated, high-field YBCO 2nd-gen HTS technology

European manufacturing, access to European markets

© Bruker Corporation

Bruker Energy & Supercon Technologies (BEST) Segment In Nov. 2016, BEST acquired OST for $17.5M Becoming a Global Leader in Superconductors

BEST, including OST, in 2017 and beyond:

A global leader in superconducting materials

Capacity & flexibility to serve OEM MRI and Science customers better

Drive productivity, economies of scale and margin improvements

Secures critical superconductor supply for Bruker BioSpin

Standalone OST in 2016E(2): ~$50M in revenue

Supplier of superconductors for MRI magnets, CERN, DOE

Unique Rod Restack Process (RRP) conductor portfolio

US manufacturing & supply chain

Good access to US and Chinese markets

Faced operational and market

challenges in 2016

7

(1) BEST revenue for FY 2016 excluding OST contributions between Nov. 17, 2016 and Dec. 31, 2016. (2) Pro forma standalone OST revenue for FY2016.

Page 8: Bruker drives profitable growth and margin expansion by ... · 3/3/2017  · results to differ materially from those indicated, including, but not limited to, risks and uncertainties

Bruker 2016-2018 From Transformation to Operational Excellence:

2013 2014 2015 2016 2017 2018

Bruker BioSpin

Operational Excellence

• Lean manufacturing

• Continued outsourcing

• Better business processes

• Commercial excellence

• ERP & CRM enhancements

Bruker NANO

Bruker CALID

BEST

Outsourcing

Rightsizing

Rightsizing & Footprint Consolidation

Outsourcing

CAM Divestitures

Rightsizing & Footprint Consolidation

Outsourcing

Footprint Consolidation

© Bruker Corporation 8

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Bruker Financial Overview Despite end market and FX headwinds, Bruker is delivering strong margin expansion and EPS growth

(1.7%) (10.2%) (0.8%)

(12.0%)

(10.0%)

(8.0%)

(6.0%)

(4.0%)

(2.0%)

+0.0%

0

500

1000

1500

2000

2014 2015 2016

Reported Revenue In $m

10.2%

13.3%

14.8%

0

0.2

0.4

0.6

0.8

1

1.2

0.0%

5.0%

10.0%

15.0%

2014 2015 2016

Non-GAAP Operating Margin

$81

$195

$94

0

0.2

0.4

0.6

0.8

1

1.2

$0

$50

$100

$150

$200

2014 2015 2016

Free Cash Flow In $m

$0.75 $0.89

$1.19

0

0.2

0.4

0.6

0.8

1

1.2

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

2014 2015 2016

Non-GAAP EPS

~460 bps of Non-GAAP Operating Margin expansion over 2 years

© Bruker Corporation

Double-digit Non-GAAP EPS CAGR over 2 years

** Non-GAAP operating margin, non-GAAP EPS and Free Cash Flow are non-GAAP measures. Reconciliations to the most directly comparable GAAP measures are available on Bruker’s website at http://ir.bruker.com/investors/press-releases/earnings-releases/default.aspx

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Bruker FY 2016 financials

Continued strong margin expansion and profitability improvements

46.2%

48.1%

Non-GAAP Gross Margin

13.3%

14.8%

Non-GAAP Operating Margin

$0.89

$1.19

Non-GAAP EPS

$258M

$290M

Non-GAAP EBITDA

+190 bps +150 bps +34% +$32M

FY 2015 FY 2016

© Bruker Corporation

* Non-GAAP gross margin, non-GAAP operating margin, non-GAAP EBITDA and non-GAAP EPS are non-GAAP measures. Reconciliations of these measures to the most directly comparable GAAP measures are available on Bruker’s website at http://ir.bruker.com/investors/press-releases/earnings-releases/default.aspx

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Working Capital Efficiency

& Disciplined Capital Allocation

$832m

$598

0.46

0.37

0.00

0.20

0.40

0.60

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

2012 2013 2014 2015 2016

Working Capital Working Capital to Revenue Ratio

SHARE BUYBACK PROGRAM

• BRKR share repurchase of $225M

authorized in November 2015 was

completed in December 2016

QUARTERLY DIVIDEND

• Bruker pays a quarterly dividend of

$0.04 per share

COMPLEMENTARY M&A

• In 2016 and early 2017, closed

acquisitions for ~$71M

• Projected revenue from these

acquisitions in 2020: $90-115M

© Bruker Corporation 11

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FY 2017 Guidance

Revenue Growth y-o-y +1.5% to +2.5%

Non-GAAP Operating Margin Expansion y-o-y(2)(3)

+40 bps to +70 bps

Non-GAAP EPS $1.05 - $1.09

FY 2017 Guidance: Return to organic revenue growth,

continue operating margin expansion(1)

Organic revenue growth: +1% to +2%

Acquisition revenue growth: +3.5% to +4%

FX revenue headwind: -3% to -3.5%

Non-GAAP tax rate: ~25%

Fully diluted share count: ~161M shares

Capex: ~$45M

Average Jan. 2017 rates:

USD = 115.1 Yen

EUR = 1.06 USD

USD = 1.01 CHF

2017 ASSUMPTIONS

(1) As issued during the company’s 4Q-16 conference call on February 13, 2017.

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

(3)Includes approximately -40 bps cumulative negative effect from 2016 and January 2017 acquisitions. Excluding acquisitions, Bruker underlying non-GAAP operating margin expected to expand by +80 bps to +110 bps in FY 2017.

© Bruker Corporation 12

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© Bruker Corporation

www.bruker.com