BRKR - Earnings call transcript Q1 2021

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Operator

Good day, and welcome to the Bruker Corporation First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Miroslava Minkova, Senior Director of Investor Relations and Corporate Development. Please go ahead.

Miroslava Minkova

Thank you, Sarah. everyone. morning, Good to Earnings like to First Bruker’s I Call. welcome XXXX Conference Quarter would everyone My Minkova, is Development. name Miroslava and Investor Corporate Relations Senior Director of

me and Chief our Officer. Frank Gerald Joining our Financial call CEO; Herman, President and and Laukien, Vice Executive today’s on President are

Relations conference The from to addition Investor PDF on presentation be downloaded today’s of Latest release be Results referencing Bruker’s earlier today, we this In we’ll issued a the section earnings during the call, website. slide presentation. can

During are call, non-GAAP and information. our today’s website be we’ll financial to release our A highlighting non-GAAP our at GAAP reconciliations ir.bruker.com. are earnings included of posted on financial measures in

to Before harbor Bruker’s safe we X. we like statement, begin, I reference show would which on Slide

prior of statements ongoing XX-K other conference may are as make that statements. statements financial second on release May new and The the earnings to our company’s cause intend these XXXX. our quarter but updated to our date future this Factors outlook include, not XXXX, the and differences to, our based outlook August on that Investor not that ongoing the We results our note today. statements differ information and our which for the website. today, forward-looking such involve other should limited of upcoming such will in we statements those may supply worldwide XXXX or regarding to shortages. Form the discussed for and information, semiconductor COVID-XX update including conditions operational of is SEC’s following early uncertainties, by X, events on related Day our at share are regarding any in course as on materially subsequent release SEC medium-term financial reasons those today’s as in events filings, to performance the not might actual as from views forward-looking June. forward-looking website our business available rely to Also and call, related in or to as of outlook risks current forward-looking and you pandemic During of representing company as that other future the we Therefore, expected any results except well chip and do

We will begin financials Frank the a quarter will for in cover providing today’s more the first call summary. business with detail. then Gerald

Now Laukien. I’d the Frank turn like over to to call CEO, Bruker’s

Frank Laukien

start you us with you, today’s Thank quarter Miroslava. thank many morning, We by impacted excellent saw of a recovery call. significant first and a everyone, to strong on for pandemic. joining businesses had the XXXX. an Good Bruker previously our in

stepped initiatives deliver market to and competitive dynamics. Accelerate growth accordingly, our reflecting And in and up Project continued financial end value. Our strong business performance strength

which in make now Accelerate of to call the also progress We Project Project X.X. continue we Accelerate, expansion

So quarter million. $XXX to QX first XXXX approximately revenues XX.X% grew

were reflected was uptake continued QX end solutions diagnostic Foreign growth of a a initiatives On QX revenues The down organic our XX.X% X.X% organically. translation while approximately a scientific Accelerate instruments in XXXX in recovery and reported revenue globally. strong tools, and markets our increases and science life with for high-performance Project of strong growth demand organic tailwind increased an acquisitions pandemic currency basis, revenues year-over-year of XXXX when the quarter. to added from at Bruker’s in impact X% revenue our X.X%,

XXXX. our volume per in revenue positive a bps stepped were reported share while diluted reached first year-over-year, mix. and first margin than non-GAAP ‘XX $X.XX $X.XX, improvements first leverage quarter and compared GAAP reflect XXXX. of quarter gross $X.XX. operating diluted in from X.X% non-GAAP in up first higher Our On In increase, EPS of The tripling of more XXX of quarter quarter our to Bruker quarter operating revenue margins the Project basis, XX.X% the the non-GAAP earnings XXXX, the ‘XX first Accelerate

grew biopharma This research our instruments applied XXXX strong scientific for and mid-teens organically businesses. Bruker’s recovery also innovative microelectronics year-over-year. remained proteomics semiconductor and solutions First industrial reflected academic, bookings growth a robust. Demand and continued order in and metrology quarter groups for for strong our systems order

in publication suggested are single-cell we that which Genomics, increase to a values, liquid first -- in deep, XD plasma and has Harvard timsTOF progress March, announced property University by cancer Spatial with solutions. Nature At protein timsTOF We collision the using a proteomics Mann the quarter, During Fabian single-cell large-scale unbiased detail that on biomarker conference Ting Acuity our long-term in proteomics Spatial in late US The results cross-sections, Professor unique the molecular identification. further using of published certain and X we platform Wu’s areas Communications innovations and essential and diagnostics. ions. will discuss researchers as peptide significant exciting biopsy spatial made unique new spatial March, CCS, is an Matthias In Theis of next February methods. majority the accurate Theis Acuity a believe the development is unbiased in of In majority of I collision and the Professor that intrinsic investment biology, Genomics Genomics Bruker. proteomics potential, can plasma Spatial HUPO confidence and proteomics, in core later in cross-section of biology and TIMS/PASEF peptide IP, company the growth an described, presented more exclusive groups call. on for to in proteogenomics or multiomics made group formation particularly Acuity with new XXXX, publication researchers, for frontier by Mann seminal lab. license microbiology at

microbiology U.S. in rollout blood Kit, identification cultures. directly our IVD fungi diagnostics of from we the the and and began FDA-cleared Sepsityper bacteria of business, MBT the Finally, rapid for positive

are X.X are initiatives our Accelerate with pleased how very We unfolding. Project

I excellence XX. These should Last will but by business and June these operational on dive planned operational into We gains continue do we programs. Slide deeper and of further and the and least, our X groups currency instruments slides X in X Day at now, Virtual With no productivity our ‘XX a a please highlights a and XXXX our scientific performance support turn quarter reinvestments beyond. -- BEST and where provide means first to of basis. year-over-year that, on segment, constant do drive further in to on areas all Investor turn

revenue X.X system, customer BioSpin both included strongly and million, XXXX mid-XXs X.X quarter demand customer up in BioSpin First a and and acceptance Europe. was $XXX.X gigahertz the of group gigahertz grew deliveries percentage, revenue in instrument system of improved. a as system

markets, and aftermarket industrial recover also to quarter, as solutions applied During BioSpin’s the BioSpin’s demand strengthening well. in addition began software academic revenues and for to grew.

CALID strong First increased million. science demand XXs Group life high revenues and the for reflected quarter spectrometry mass XXXX for to $XXX.X molecular growth in at spectroscopy FTIR/NIR/Raman The CALID products. percentage

proteomics order mass from During unbiased also revenue robust higher diagnostics our on revenue diagnostic XD and products. for the quarter, other see for to growth while spec SARS-CoV-X products contributions was and continued timsTOF platform, demand we improved. Microbiology molecular

rebound amid Revenues $XXX.X spectroscopy remain academic research the and industrial, percentage Nano academic and semiconductor now. the increased saw Nano’s XXXX, strengthened million. turn the down products first approximately of sequentially lines were higher from incremental year-over-year our $X a molecular its for year-over-year, Slide and business. ramps to applied of quarter a quarter product all During revenue from quarter, in excellent metrology million, XXXX. for X growth COVID fourth markets. Bruker revenues In Nano Demand microelectronics in was Please virtually products sharply but industrial to and product recovering new the mid-XXs testing strong.

September Canopy strongly stabilized. First advanced X-ray revenue first proteomics also quarter modest revenues acquisition. Biosciences, XXXX, quarter XXXX grew contribution revenues single-cell and year-end Surface nano-analysis of targeted our XXXX year-over Nano included In from Nano the a Nano’s

higher good quarter microscopy significantly demand. growth. year-over-year, finally, compared and grew semiconductor on metrology microelectronics First first was XXXX quarter revenue but with very to fluorescence XXXX order And Nano’s revenue healthy slightly

to BEST. on the BEST Big projects. in contributions grew from in the Moving mid-single BEST of eliminations Science first quarter net XXXX on intercompany digits, revenue

for quarter, in attributed XXXX, year. pandemic first began a superconductor BEST the primarily demand to underlying to after slowdown the care and During for recover MRI products health last

X. applications, refills. this cryogen The with the XX high-field has U.S. and enhanced equipped system Americas or Moving for academic is so Fourier like industrial, is therefore, system and does NMR cost, higher-performance and space pharmaceutical Benchtop to recent to an permanent and cryogen it system, have for to need featuring Slide of no not the FT-NMR applied The believe next-generation, democratize systems. as Fourier gradient spectroscopy range of We NMR labs share requirements is superconducting XX in routinely would on markets. some Benchtop automation magnet, of to options. applications teaching highlights a I broad rollout the poised a industry-leading

could Such Acuity by biology development. important into problems a subcellular programs and aims in for research genomics Acuity on forward XXXX, questions spatial was understanding by March Acuity a drive spatial sharing state, new frontier X-dimensional In Turning XD an in upcoming developed address with basic help Acuity discovery. information structure complex to more cell function. insights Slide in and oncology, type, see innovations example, open chromatin that addition of methods investment analysis Bruker. and makes multiomics Capabilities is area X. X-dimensional our and genetics to of Genomics situ he’s formed a cell the leverages Spatial cell technology, professor possible enabled neuroscience Wu, which include, regulatory Medical portfolio. the resolutions. Day. Acuity -- majority at and to single OligoFISSEQ our for the single-cell and Ting the in Investor the cell lab emerging cell and transcription, of a at Professor in the and We at School, look which biology deeper at and specifically discoveries it to Harvard pathogenesis genome fundamental to this and

our off initiatives businesses me So in quarter recovery saw start. reiterating strong to let a first our our got high-growth most continued Accelerate a to Project of us by conclude and core XXXX We deliver. that

As R&D drive call, already X.X, support time, this our our we discussed are core February same partially and businesses. reflected on are to operational which growth excellence programs, and the At in CapEx. Accelerate recovery our investments continue business Project further planning of the of we the strong to also year our in including

release. is our I revenue I press at our you We a you many in operating for from expansion June. position, pandemic outlook XXXX very our see exciting fiscal the year that non-GAAP to and strong forward in EPS, non-GAAP emerging Investor am look are updating as Bruker Virtual opportunities further margin from Day confident can on growth, and raising our

call in will detail. the review Gerald? over turn our to Gerald and our quarter performance first XXXX now CFO, me financial Herman, Let guidance who

Gerald Herman

in XX.X%. of On million reported Thank We you in Bruker’s of highlights share, $XXX Slide of per revenue to EPS of first $X.XX a first the quarter was from EPS XXXX basis, includes increase the you, GAAP share XXXX compared Bruker’s organic XX.X% XXXX, quarter today non-GAAP XXXX. revenue in Frank. and first review $X.XX I’m $X.XX $X.XX XXXX. join an quarter which on increase pleased XX. QX XXX% to of increased financial first to an quarter the to starting per approximately

quarter volume. and end modest liquidity quarter the quarter the revenue quarter cash, XXXX, and our to $XXX.X At up first XXXX. a first quarter first ended sequentially XXXX our position of the Our reached income short-term from X.X% XXXX non-GAAP cash operating improved of first first and given investments management cash compared margin significantly the balance fourth We XX.X% and stepped as in margin of quarter operating equivalents to the increased line debt a this with and net our significant in disciplined operating Coupled resulted and the million year-over-year drop-through in XXXX. healthy with expenses, position. sheet remained non-GAAP non-GAAP bottom the of

buyback a During dividend. the to approximately XXXX, again our In of million. quarter of stock Bruker the for stock XXX,XXX we fund cash first total investments, quarter, of capital shares strategic we and repurchased our used program $XX.X

And million. Free to valid XXXX, quarter quarter which XXXX. cash shows the by was to in working have healthy revenue XXXX efficiency completed the buyback our authorization, first mid-May XX, was the of XX December until We XXXX. first our a flow relative capital ratio gains. revenue bridge improved Slide driven of $XX.X share for

range NMRs, in on compared to XXXX, basis also for earlier and organic revenue of revenue from the From earlier, organically, the high was the each gigahertz range Systems increased the the organic quarter P&L XXXX. in range, an of low organically revenue increased of in XX% reviewed BioSpin contribution in was grew while of tailwind XX to the our mid-XX% class of mid-single revenue first XX% call. Geographically, slightly and X.X% quarter groups XX% revenue the the revenue the and eliminations. this XX.X%. high in a and Frank primary Asia BSI Slide up drivers mid-XX% X.X%. XX% CALID currency revenue X Pacific BEST perspective, North on range. performance grew noted aftermarket revenue including and approximately in Nano had Rest first shows the quarter the foreign the increased digits, grew in mid-single close range. our European a has revenue already grew increased intercompany basis. organic revenue net X revenue quarter As in in first world of year-over-year. revenue XXXX the acquisitions of in positive a digits. We an XX%, higher non-GAAP increased American

basis gross higher quarter Accelerate driven mix. the on increased from XXXX, by leverage first quarter non-GAAP volume XXXX increased of XX.X% the and revenue XX.X% of in The XXX points margin first Project

added few expenses to portfolio, to quarter QX volume experienced operating compared high-performance of the non-GAAP the first X.X% quarter Over which higher the increased past we to years, of capabilities new our now we’ve XXXX. the in improvements first addition solid instrument margin XXXX. in XXXX delivering are

quarter. investments, of in year. expenses a quarter, planned as the the a which the remainder significant up in foreign cost the over P&L impact ramp headwind way reflect Our we We did operating through Project first first in the significant solid quarter the X.X exchange will Accelerate our that in not anticipate management navigated

gross As XXXX. favorable our operating to significantly reflects for margin the of quarter. up in improved quarter compared year-over-year percentage non-GAAP operating first first a points XX.X%, leverage us first a over stepped record margin result, XXXX quarter level XX to the higher and This revenue,

basis quarter. our exchange absorbed the headwind margin in We an on approximate point also XX foreign operating

finally, to tax non-GAAP jurisdictional the of repurchase first was XXXX of primarily of and million XXXX, X.X of and by shares average months. up first EPS diluted For XXXX, Weighted mix. the in or the effective resulting from higher from to our compared XXXX XXXX, from million, discrete XX.X% significantly And XXX.X of first over past stepped our the primarily rate quarter approximately XX $X.XX the XXXX, activity the quarter X.X% revenue reduction the due were margins. quarter quarter in of XX.X% driven quarter first $X.XX share in a first outstanding shares up of non-GAAP items first quarter

to XX. Turning Slide

sharply free Our XXXX cash first income higher the flow quarter net in was $XX.X million, reflecting year-over-year.

from and cash First expenditures. capital quarter timing of also tax lower year-over-year slightly benefited as income XXXX items flow other as the payments well

days, reduction improvements Our the payables was cash conversion the of days at days and a XXXX XX compared cycle our decrease to to quarter due of first The outstanding. days the XXXX. first inventory cash end XXX was of and process quarter of collection strengthening in

related other pandemic. supply to We the as risks emerging significant the continue major from risks, chain manage chip to semiconductor shortages in new to with recover order economies carry supply inventory and

to now XX. Slide Turning

for raising and XXXX start guidance we to favorable year strong reflect business. are We our in to see our trends our the

While be including and out we related to across the supply markets for products those rule major and to risks, solutions to demand pandemic cannot the recovering. portfolio, appear or have our chain, our end strengthened further

an representing percentage increase organic from For to February revenue points guidance. our XX% of fiscal of expect XX%, XXXX, now growth we X

drivers to expand be projection We contribute to slight for non-GAAP revenue of our XX% is the growth, margin a growth. our increase Baked expect into an XXXX XX primary to points this X% of to This our projected BSI will to in XXX X basis of the to growth now now This is XX% to reported to that compared expected revenue reported compared to earlier. points XXXX. XXX basis XX% now prior XXXX. Foreign this assumption groups approximately compared tailwind the calibrates operating range the currency is continue to from outlook. approximately approximate reduction a X% XXXX

we we foreign foreign point points basis estimate full year XXXX, approximately our on favorable call. the headwind headwind the XX exchange of more margin, February than a For XX operating in projected currency basis now

non-GAAP $X.XX the investment to also XX% range of R&D $X.XX EPS increase assume an year bottom XXXX. compared from XX% pre-pandemic non-GAAP margin initiatives. projected XXXX. On non-GAAP continue as we EPS EPS approximately expect a expansion to of and non-GAAP growth X.X revenue of non-GAAP level Project a $X.XX full represents in XXXX our mid- the representing and we to By This EPS Accelerate investments growth and between compared guidance XXXX, February in in increased XX% fund to line, operating range to growth high-teens $X.XX,

increasing XX%. the our the in to a for rate of projection full tax This with are anticipate Other now XXXX updated XX. year. slide, listed for jurisdictional change is exchange the are revenue approximately non-GAAP our we as rate to assumptions for We assumptions April XXXX on mix along foreign due

our we like While some quarterly to additional add second color provide expectations to the guidance, I’d quarter. for not do

XXXX, saw biopharma, weak than strength, This, demand X.X strengthening Given with second first up, industrial in key performance end revenue we semiconductor quarter year-over-year. in currently in market In quarter, the with products Project and second investments, first proteomics, ramp-up quarter XXXX markets. many again we margin competitive then improvements first markets. to quarter the revenue sequential may XXXX position anticipate the particularly began XXXX. EPS of of applied, we the any To our quarter in expect Unlike and quarter wrap the growth second for due from systems greater research lighter operating with class or Accelerate result organic our the excellent in our do performance an XX% of comparisons combined in gigahertz XXXX, we be not to quarter planned reasons. financial quite timing relatively second strong,

deliver cash first Our margin, in portfolio, innovative and well the year-over-year combined in end product recovering flow with us quarter. positioned markets, revenue, strong to EPS improvements

we call took to on for the Day that, upcoming very calls. on with and further strengthen future also our start the operating you to turn took to Investor earnings Thank our We up expected a beyond, to our in are in you strategic Miroslava we in actions and outlook the session. meaningful look investments sound updating I’d financial Virtual over and and Q&A full year. step to like And much. The forward performance XXXX XXXX

Miroslava Minkova

to the begin over portion. operator call now Q&A the I Thank you, are Gerald. we turn would the to to Operator, Q&A. like to the begin ready

Operator

Instructions] Our from [Operator question Doug comes first with Schenkel Cowen.

Chris Lin

This increased I is if the QX think updated stacked year beyond that rate for below just collectively implies guidance beat, in in stack know is you I growth is for just revenue Chris growth even revenue we guidance rate the X-year you on QX year X% but Doug. and X average X%. full Gerald, systems. QX gigahertz organic growth full the well the adjust delivered QX, the QX,

in you as consider conservative any if am other curious, we that updated update should with is factors mind, think we how guidance I and are there models? So our

Frank Laukien

We with can’t follow agree numbers. your They don’t numbers. our

Chris Lin

I differently, at a look just guess ‘XX, if put just up, rate of growth in I think. QX you you said stacked

Frank Laukien

What’s the stack rate?

Chris Lin

is rate growth just the the stack implies what for guidance X% year. lower of of rest than That

guidance balance the So Or the how consider curious, as there are updated we update think models. is any we you of I’m conservative for our factors should year?

Frank Laukien

for follow numbers. quarter that is numbers still of the you’re to don’t guidance think year our us don’t second the coincide guidance reasonable. for the reasonable with citing we our and and remainder they the is the because But think they We

Chris Lin

the strength lower question. Or Okay. replace help could just the the second opportunity that up of FT-NMR is us We Does Frank, field complementary? some follow systems system? that have? magnetic contextualize NMR could for market you you my But after. more

Frank Laukien

are I in No, think There out Yes. been smaller market. companies, rather -- some have there that still a question. new Good it’s market small other that companies segment.

of a very benefits. a product, now a a of little very highly lot have follower think second-generation bit I with stable, late We’re high-performance, here. sort of good But we automated

own its it’s niche. little market So

or that it really a we of I or performance XXX first it’s a that That’s aiming a any megahertz always breaking cannibalize or will FTIR just LC and mostly think or that’s system mass or for, into central think you almost NMR market, time, it to superconducting lab. Benchtop paradigm. don’t we’re And what exceptions I Benchtop, were makes could into the -- spec put think much a chemistry And analytical you could triple envelope. lab, single I think or FT-NMR, NMR quad a into facilities But little little something few any for I just teaching put above. different research that. the to pretty relegated really with GC was

So as useful, easily -- broadly incredibly and I think is labs NMR of all chemistry to it as accessible it the becoming. now just sorts it adds is but wasn’t

I has So think -- very it growth I it’s small think future. a -- potential very but a it’s niche, the for lot of a

Operator

question Leerink. Puneet Souda comes with from next SVB Our

Scott Mafale

This is Scott for following on Puneet.

So to single-cell about I talk want proteomics.

system actually kind to held that’s delayed Is a don’t call in of instrument a in You arena. paper the the portfolio from guys front thinking the how level and some into of you’re guys with ongoing maybe breakthrough Canopy based it cell XXXX. launch Mann and it the run more have Investor about I Day, Group? the fits a high with want just the single initiatives about on you but single-cell how the proteomic us in other mentioned

Frank Laukien

Yes, a good that’s one. Scott,

single-cell we that not doing and can are many proteomics. course, companies targeted In of there’s unique That’s so it. not fact, do

that we’re with we that we very for and nice panels Biosciences suspended that them now. That’s proteomics investment or research translational and both clinical on acquisition. single-cell something Canopy doing, why our Canopy targeted and cells, have fresh frozen and on for FFP of is primarily tissue did one We’re

large it was up, We And a is so that by seminal number XXXX, hope protein which beyond and really a proteomics Group. paper we’re unbiased, and that’s spatial proteomics with unbiased identified few system. early with a that’s goes you proteomics, if new signals, just peptides really single-cell that quantitative developing in bottoms of However, like, yes, and novel. launch groups that a And mentioned that just capability that to tissue. you scientific Mann in single-cell the having within

out You’ll obviously cells. cut individual want to

also a out then course, micro can’t these tools dissection at of that’s but have And give -- cells you you you, are the give something want you. a microenvironment. an important that today. only targeted tremendously with the some then you is look there. things to unbiased Similarly, tissue cell-surface look and mechanism. all few things realistically way, unbiased in glycosylation If not looking at in only tremendously can That’s tool, capture, these post-translational things laser Phosphorylation that not tissue modification. and in targeted cancer can that proteomics important, at is But Bruker’s and

new a science -- very going to up be spatial really opening new open window for it’s important in So it’s that’s a and single-cell general.

low biology. numbers, RNA. the think because than quantitative single-cell out far not It’s we’re because very tremendously and believers is coffee is technology biology there. because meaningful, quantitative important great in is that it’s of more proteomics quantitatively single-cell I big But biologically

the it specialized dedicated in be there I inquiries say getting markets, a going that. very volume think to it’s we’re I probably but be million certain will and quite well received don’t mark. of and product, very first orders high-end will already. a So actually be the a think demand will stopping But around for there, system, $X we instrument bit niche be

Scott Mafale

regions? these today regions go growth week? these accelerate to leg the guys NMR great. I in the good recent have in very XX you to Yes. you expect systems helpful. business, barriers NMR like having here. of are does If had how APAC, Fourier these could maybe maybe of for gigahertz Maybe adopt on class. the maybe was What strong But, the next back the that do and years success adoption kind of it announcement main adoption some the represent with momentum And particularly for Okay, placing business? seems this That U.S. and very

Frank Laukien

Yes.

I Gigahertz also both I but questions, U.S. NMR-related. and NMR, improve funding momentum good the Pacific X in or lot behind. that. yes, way mean federal and particular, think a Asia the foundation-funded So community efforts agencies, the U.S. the of are privately there’s And and to in in Americas, other some hopefully

the that substantial that so telltale how seem different low to also, be for Switzerland, in the another level. still end, nobody some funding, Europe where in all No. around NSF the so QX, approaches U.S. needed that badly But will DOE, right? as this over that’s the in for funding be more some others And required negotiated potentially raising yet, XX, it order and has just And activity Europe various infrastructure signs somewhat perhaps areas. isn’t NIH provide the seem But we’re in there’s knows. is That’s optimistic would even NSF benefiting first. of and -- increases very we in $XXX,XXX many a budget Fourier funding, which -- in the there item, European what Europe and well. NIH, indeed to to be growth moved from by The way, had of last does course, In

forensic that worry many many, But or or that said, to my FTIR. don’t get to I to lab centralized samples "Look, maybe labs need with just facility, that if to And budgets. pharma and research little chemistry or Benchtop own There only I colleges comes many, that of just from previously labs. I many many, out think So would can a have are could I’ll data system in and spec pretty I use don’t. about. NMR easily, mass a I now I also do send

Canada. in I market. don’t launching up in think think it’s sure And a the there, we’re Europe, to broader now make We I geographic. want new just just We that that opens U.S. started and out we promise. excellent, are the really shortcomings performance of excellent lot the the in -- products stability and a that can of overcoming fulfill has that there that for reputation first-generation fully product terms and

joy So think that a taking be very stability to we’re to automated, use high -- it’s it slow, a very I highly it own. going think hopefully I high quality, product and be but is will

Operator

Our Bank next Bruin Derik from comes question America. with of De

Derik De Bruin

just I question. couple questions, margin Frank, guess one, A Gerald. the first of a

You is point and how I this I XXX been operating grow incremental we is investments things the -- Guidance of numbers some but XX.X%, assumes is of basis I in doing going -- on in can tracking how sort expect did XX into do -- do that basically to XXXX. there? XX.X%. increases. like you realize sort XX.X% you’re margin? mean to adjusted you like, XXXX go think the from guess margin the margins this this we you’ve on, the somewhere that the as question year about year

Gerald Herman

Well, delivered pleased first, performance the quarter. quarter the we operating we saw for pretty side, the significant Derik, margin, first a first with solid exchange off quarter headwind the operating of for pretty pretty especially fourth foreign what margin in coming given we’re on

I’m to So on we’ve can’t going bit -- But us XXXX. can little well portfolio, talk far. ago. seeing more good many the we some I I in the is, we’ll didn’t for end forward about areas We’ll a and not a some that order market revenue those uptick please even Virtual and as year pretty we -- prepared there it say here join are I good as so talk in got performance specifically in talked Day, a both seeing today innovative Investor mean product We’ve recovery comment see about remarks years. in performance we’re

operating on much to before the too line, talk XXXX. we optimistic a about there’s few So margin we’re still go but pretty quarters

Frank Laukien

to in XXXX I thought we February, mean bounce margins. initially back we’d

a XXXX instead I raised seen as in that bps growth. bps investing because which expansion, R&D. currency. we’ve we to is Now from can where think exceed headwind XXX investing if you XX% good this with we’re choice of operating we’re headwind but -- we like, X% a And morning, that, XX think delivering very margin in we’re also you’ve And margin

opportunities, discuss long-term growth from So but time -- philosophy. when and year-over-year, very we all that shareholders, individual obviously operating optimizing our our really And our that we -- and but And given to comfortable it’s balance, XXXX. time also on with strategy of also they’re generally focusing that not good disrupted have meetings. that expansion margin the remains delivering any in by in with year, absolutely

possible to for And our not fastest But future investing growth gradual on XXXX. pattern for again, in on many annual not saying years, numerically, delivering in us I’m focusing but from opportunities expansion, generally profitable course. while our margin margin a so -- expansion seen you’ve we and expansion of expect the except that continue margin but in our we’re

Derik De Bruin

That’s one helpful. Great. quick just And really follow-up.

both get risk what markets, And the some mean getting of on on the business, for to to chip ultimate on metrology color revenue Just supply In shortage also, a the shortage demand this given ways, manufacture and chain, items? some not your could and any to impacting and on being potential materials is lot the chip metrology questions and from your able markets. supply semiconductor of you the on sort both potential. it of your semiconductor X high-tech a curve We’re there side.

Frank Laukien

that. to add Yes. let Right. me And

greater of as tools we course, business, part and said, initiatives. our microelectronics It of have or of XX% It on a very margins, significant in Of business. trajectory, semiconductor QX. has year-over-year And -- and one and had good it Projects one our Project incremental organic continues. a than has is Accelerate growth that and Accelerate a margins, we metrology that very good been

of we’re -- from all benefiting it’s that. So

from your are it industry, and we we’re on acknowledge supply but the very, chips, terms question, -- risks, all automobile operating environment, risks very, of that it to risk -- working and about hard. you the chain do there in Now very read

additional it’s I risk. So an think

have in work You pandemic, we’re get into confident electronics. in we There’s a highlighting it and everything But aligned goes I’m the don’t the -- confident for never it now also lot with even variance, we’ve supply quite all additional with also also your and what risk. as chips an deliver, having risk pretty lockdown beyond QX, chain that even there And guidance that, more And QX everything year. taken But delivered. factor. out the is to to risks. are account got know additional put it’s that right? in We and said QX. a happens our boards and there the that and

affecting industrial wooden and the logistics and present pallets sometimes shipping is think materials. I other and boom

hard it to very So we’re we’re working make into happen. account, taking but it

won’t hopefully, risk it become So an additional it an is issue, factor. but

Operator

Nephron from Meehan with Jack question next comes Research. Our

Jack Meehan

into a I wanted more to dive little bit CALID.

XX% but getting S-curve you the the could the about to about within talked row. that. talk if proteomics timsTOF of XX%, kind of closer over So wondering growth, past, I’m was I relative performance In of the you’ve

and have on book thoughts curve? order around is where think you any going how Just updated are you you -- that the do

Frank Laukien

Yes.

going it’s So well.

say you I business I the when proteomics, unbiased about talk now proteomics, that to So that’s timsTOF about. the asked i.e., have

We targeted at greater for growth much orders and so which proteomics nice is timsTOF smaller XX%. Canopy, your Again, very revenue, the Pro. least. have also with than and Unbiased year-over-year far, proteomics, us

above the in which average, was corporate high QX. So even

one we in our the of revenue had even a growth I capabilities and of both the that call. with and orders good it’s and announced highlighted So very, drivers, early very new that look lot

health the there, curve We’re think. part I the in a -- in beginning would of steeper of the S

Jack Meehan

CALID, want what was but I follow-up curious Great. huge, I COVID also on there. seeing were not it’s just you the tailwinds,

think lighter is fade come a what cases this down? you I about. talked was $X think as little Do the to million you than starting previously

Frank Laukien

we mean in to No, Yes. I had close QX. $XX million definitely.

and offerings So COVID the is have product around essentially traction. market much testing, is -- which PCR, -- all and for getting $X X PCR that’s of million million assays testing, much us the extraction, though not we flooded, that antigen out, PCR $X

PCR for far have associated. expectations high see. on we as and so And very million focusing and it down, that But can down we in below coming for as lighter or testing sequentially the that to -- so we’re But expect $XX QX, we’ll tell. then and -- at it’s don’t $X refocusing definitely remain and mostly was million, we

of flooded can oversupply going with -- is it’s some tell. far we but plays is fully antigen as testing, role, although not that pleased testing market with everybody as And a the a antigen to

Europe a testing, flu looking at -- that of for further obviously essentially panel to for flu refine wasn’t the RUO not of in this probably we’re panel, the a PCR in now also we’re winter testing need enter season lot Good that the -- we our going X that We there portfolio. So X very will serious way. had But we version. there no a we’re version variant in because winter. And have Europe population. was an

for at revenue. At as So a really much part we the of or of But just which don’t tailwind that And us. -- it never that our market fine is was half second will large that’s of we think next very even year we suitable with for the have we least all, year, there overall, down proceed. sequentially. be for a the

Operator

Our next with question comes Tycho JP Peterson Morgan Securities. from

Tycho Peterson

bit. Frank, the BioSpin I to into dig want little a instrument

there new curious the Just talk customer came versus Can pent-up much of new strength wins. much of revenues was the versus out well? of how think as how wins you as you business backlog to

Frank Laukien

most in Well, BioSpin in backlog. it of for given healthy. of also BioSpin any comes out quarter, But orders were

year-over-year together, mid-teens. healthy. them organic So order said, BioSpin is the have -- than service groups pretty aftermarket. previous all XX% of was BSI But quarter, growth revenue out for of and other together, X the that And for BioSpin’s of as of in quarter, given the any I you the the of was assume the comes even all number I course, backlog much can much ending in all pretty

BioSpin yes, good. looks So

Tycho Peterson

near kind And then on in shortage Nano, I appreciate semiconductor term. the comments the the of on

of gotten is Is think, there cap just the Nano electrical dollars? to table petro here for you an the like One broadband the buildout and with of extent you things the there, do business some and opportunity grid. do the with we’ve infrastructure the upgrading questions on

Frank Laukien

we’re the substantial. of aware us, I aware opportunity -- of it, risk mean the is materialized the for mean risks. I but lockdown the opportunity risk we’re But -- very really Yes. hasn’t for just as

business our semiconductor that XX% has and quarter growth. expanded of continuing very, bookings. greater and Nano all Group half really Group of Much with almost than year, first -- last in very last the excellent greater in year in again, nicely good the really growth this So microelectronics Nano second the organic than -- also,

we going has new there’s that year. mean this name one being look them, many somewhat We the of you from to XG they home, and not I working questions. to the of greater I can They’re positive Plus -- So for really that’s to from used technologies, nanometer long. which drivers, XD is think the mean very computing one much that’s artificial that’s that’s there aren’t cycles is very, runway to it, But many, see, longer. X-, our lot cyclical, trends very the think throughout what be although we be. a And cater as in sort long-term cloud-based intelligence -- layers, as trends, -- going investment X-mil to far be to which I of -- longer-term lingering and is more mean strength. healthy that many, all new make other stacking, of semiconductor

business. our about metrology very optimistic So semiconductor

Tycho Peterson

as relation on how then Canopy, and cellular. you in the majority doing spatial think just know broader to situ was that Acuity, right early, we around you’re just why strategy talk to the in about opposed investment. Okay. a as it’s a Can that And and to is then follow-up acquiring? I offering?

Frank Laukien

built, there did group was It’s Yes. be people we to true nothing to that acquire likely academic enthusiastic that and found start-up, and right? business to that an work a join mean very yet. are some talented the I That’s Acuity in a setting. from

capital. of a VC those them And a can startup. chose majority to as of want So strategic they investor lot infrastructure instead of entrepreneurial course, we also not as do be to and them a Bruker a help funding with usual folks and route, majority the just And sending investor.

than for together, resolution actually much, and of including that make the a was Genomics Acuity on So seed that of microscopy some and that key money, so I then bunch molecular if are products the solutions think, faster truly day for of X, super a some software our a are start biology-oriented Acuity going. basis some for that get combination, more and money, services much here’s Spatial

times the So I think startup. another a it start, not will -- also can lead we it’s typical not but running of have

on it contribute sees more No, the X and X be before about its we’ll think not this you that not. excited about So ever to Day. of or tell Investor it’s year? Will years meaningfully also revenue. we that course, that, X But or first it going we’re

We’re hoping.

spatial exciting. it’s and very I a most -- are areas business Nano that creative also important way driving of very getting way rather somewhat Munch in Bruker science Mark colleagues think a in in of model new the and And and and so here fantastic Group, into for from and us unique unique clever genomics some it’s the a

Tycho Peterson

basis was off. we Okay. And helpful. XXX That’s then assume margin guidance, kind operating of increase line? margin in X/X thumb. for one still rough from one The hop gross rule is know that of Should to Gerald the I that quick points. I XXX before the of

Gerald Herman

Yes.

in I next think margin that’s reasonable. the few performance We still solid gross quarters. very see

So for I sure. that’s think a assumption reasonable

Operator

Brennan with Our from UBS. Dan next question comes

Dan Brennan

pandemic? globally yet seeing of you overall increased that in Have were that that seen the instrument Maybe catch-up happening you space? seeing And a of -- from funding terms the characterize government the we’re on orders? Great. in would environment of one, just given the you and much how during probably given academic broadly the delays the market, first What Frank. are some XXXX,

Frank Laukien

believe and cetera, think their TOF think Yes. just well. still little I budgets. pretty And China more discrepancies. signals NSF, have healthy and whatever really of rebound bit Well, well I very a type spending. faculty optimistic we still there’s in NIH, and to going then people to bit little a very, and although promising also behind, Europe et now as a the funding of from did mean I And hiring will allocation lagging be then universities academic become orders

still then the needs related market and I see to need So we’ll Olympics of as and very that not numbers still or nearly it’s half itself Europe been. optimism take could Japan, -- to And anemic and comes that U.S., strong out plays as but that’s -- in may academic until has is how the that whether translate but whatever. and year. after second China optimism still The think the into U.S. the there’s recovering,

course, don’t Plus good we like really severe. having there. far other So of places, India, more a clarity problems have few that are

Japan unclear and weak. Europe It’s quite and U.S. China but good, are India particularly So generally or lagging; good; and

questions, bit So or rebound of otherwise that government healthy. we really Even see. those weakness color pretty that academic gives quite geographic that it’s strong a funding of to and you areas a with

Dan Brennan

And downturn, I in And discussed gets grants at believe of to money kind and written the coming timetable delayed rewarded which to out grants the spent. you the be it, need reaction maybe your then last of given business then get

maybe of potential within your So I’m step-up significant just the guidance increased levels academic think is ahead just beyond sort year this the and really funding, there a a to think given in catch-up for or…? trying spending beyond this on comps from as XXXX, and we growth

Frank Laukien

There’s funding. et a sweet of spatial, proteomics the when similar right, in spot? where potential our I all of are to the institutions rising NMR, it and, in in is, the NIH funding key positioned for sweet we our in of structural from ourselves are comes are tide instruments boats. NSF sure, instruments lot question good in -- is back that -- our worldwide, a of think they we and lot cetera, but for think course, funding are But be remains to Generally, seen. spot biology, also We

programs grant will already. And and good U.S. my chance waves. but into or to they Maybe us in other in quite -- a year. next That then could pretty of on the for driver the that that possibly this strong, all half year. have academic spending second opinion, we nice having become be hand, come the a seen for funding that then to a So into take when get months, investigators, takes But actually NSF be can -- XX also while. that remains purchase big so. an to X come until It they instrument an so programs, individual strength

Dan Brennan

horizon? anything give you Great. great forward? this And Does then obviously, of -- there M&A just the consistent kind going just sheet, that a can we had that of Is what you maybe aspect? one tuck-in flavor in us on balance continue Can strategy. just shape. on I’m larger wondering the expect from

Frank Laukien

there -- out figure challenging what it’s be. large horizon. would -- were are obviously, businesses And on out to a right of Yes. nothing lot that there’s No, the now valuations

are they bolus a or yet. big have if early revenue in revenue instance, early no some -- or still For companies COVID their

of very you’re we’re you’re of likely likely not and terms out, incredible I’ll to -- Project difficult because as to -- Quite focus to risks on operational M&A deliver improvements operational contrary, can without doing growth of that think very rule further frantic COVID value some -- on on much have such disciplined develop lot have excellence, we’re we and yes, a see focusing organic we’re point M&A excellent -- anything something a valuation having like from acquirer also the never and of and Accelerate in performance us really and in blessed the from view headwind that growth an So not activity. opportunity we but that. or us

Do So won’t think you I from very one question. you’re -- need to for up? seeing be have likely going wrap we we to last that not it see Bruker. time

Operator

question Brandon that from with Couillard come Jefferies. And will

Brandon Couillard

are tax rate off in then quarter. Just to is a What a X-part cash weak the a going first seasonally flow question balance of the for the up is great And start you again. penciling for you, year? in Gerald. Free

bogey? If into XXs. sort midterm about down bring a of Going still years low talked the Is back Day we that to to the Analyst X ago, relevant runway that you

Gerald Herman

non-GAAP first, in our of let very the rate for Relative we up if the full Well, answer driven tax Germany. for tax guidance me tax Yes. may. European carries rate. That that’s the a by last question I largely businesses, did year, strength rate, move the your and -- our particularly to high

prudent we from mix jurisdictional to currently it’s think see overall So a we the in perspective. what move

driving So cash I say, XXXX. how at on the have executing earlier, I tax haven’t given we that’s here we’re strategies it said and through planning But all that further still around from at flow strong question would in those. the the fourth a movements up out what’s for on management your And guidance Bruker, the leaning current solid thinking so actually as we flow, cash to those higher far of plays appears all had of jurisdictions. and another to very XXXX relative first first good on quarter the more towards tax performance quarter. then business we in rate be

conversation we I has this quarter, do of would some timing including had guess, improvements, that I I’m longer through how It course, over are couple in significant. flow delivered a to of pretty we and say, this with about on go that. of of in we to optimistic cash probably couple that But our today takes general, Some than improvement the capabilities particular a areas and have quarters. last in

Operator

to turn like Minkova closing Miroslava would the remarks. back I session. question-and-answer our any concludes for over This to conference

Miroslava Minkova

joining Thank today. us for you

second participate Virtual and Healthcare the America, will quarter, Bruker in Bank Conferences. the Jefferies During UBS of

X In nice XX, registration forward these virtual at with Investor hosting meeting Thank be the We addition, you forthcoming. we’ll June you. look Day have during a quarter. on information Thursday, to of day. events a And

Operator

now you presentation. today’s for attending has conference The Thank concluded.

now may You disconnect.

Bruker (BRKR) 8 May 212021 Q1 Earnings call transcript