BRKR - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to the Bruker's Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Justin Ward, Senior Director of Investor Relations and Corporate Development. ahead. go Please

Justin Ward

Director afternoon. Bruker Good My like welcome Bruker's to is Development. and Thank Second I Quarter to Senior am I Corporation's Ward, Call. Investor XXXX everyone Relations Justin Corporate you. and would of Earnings name Conference

Herman, today's Gerald Executive me CEO; on our and and are call Joining Vice Laukien, President Frank President and our CFO.

will from that earnings today, section Investor during Events call, we In can Presentations earlier today's presentation slide downloaded issued addition be release to of a we Relations the the and website. be referencing conference Bruker's

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

statement, presentation. on X Before we begin, I would like is harbor of slide which the to safe reference shown Bruker's

The financial by new and be and for December this expected our events differ uncertainties, in November we forward-looking not XXXX, call, and available note of discussed and XXXX. and involve reasons, for on conditions financial inflation such based and regarding and make today's company prior as of August quarter that, chain, logistics those the performance outlook statements current including future is might risks XXXX. website pandemic are information related risks, as the early Also, release Factors other our and that forward-looking to, Form our that do conference information, release include, required to During except as XXXX updated following third on the materially such or ending as our our not to in actual which to our may differences challenges. the filings, statements. statements cause based those We but earnings X, geopolitical the from the SEC's of the by results on other update COVID-XX SEC website. are energy today, operational and results period and XX-K supply in company's on may future limited – events will law, please business to XX, intend

should statements as as views date forward-looking any outlook after our or of on other not You necessarily today. rely these representing

today's in providing quarter an overview share cover more We the and with Gerald year business for first second call will begin detail progress. will half XXXX our Frank financials XXXX of of updated outlook. the and financial fiscal then

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

Frank Laukien

quarter everyone, earnings you, thank XXXX Good you for on Thank afternoon, call. today's Justin. and joining second us

revenue X, bookings our in XXXX, growth. XXX the was despite growth. organic quarter performance second delivered In the high-value in growth product by solutions, portfolio strong and solid from compelling Turning again X.X% bookings headwinds conflict slide in differentiated, revenue supply instruments the our second science and innovations logistics our in operational saw The growth and outpacing across Bruker several of chain to China, organic as organic we robust above We revenue momentum bookings demand of consensus. for quarter, our significant and excellent life strong again the evidenced bps launched came delays, and scientific growth organic lockdowns with Europe.

up our our of greater Bruker double Instruments For segment, or than book-to-bill Scientific bookings organic remained percentages XXXX, X%. quarter ratio BSI the second were BSI And year-over-year. digits

growth of BSI XX.X% BEST, to in X.X%. exchange XX.X% and second included X.X% quarter minus at growth constant This of implies eliminations, organic of despite XXXX growth Finally, strong X.X% intercompany net acquisitions added which FX while our revenues year-over-year. from million, BSI an organic backlog X.X%, increased remains X.X%. rate $XXX.X year-over-year reported a very increased basis, high. Bruker's On revenues headwind

XX operating bps margin margin quarter non-GAAP decrease of to XX.X%, gross non-GAAP XX.X%, while year-over-year. increased bps Our year-over-year XXXX XXX a second was

investments second In Bruker Our the despite as OpEx X.X well reported expense, products planned the XXXX. quarter currency well for profit compared quarter margins and benefiting investments offset and XXXX will $X.XX, demand saw as diluted by discuss as again from Gerald In from diagnostics, Commercial our differentiated operating the of the EPS second X.X, a headwinds, we major of inflation second second in in leverage was quarter and disease the more volume on clearly our later our earnings of D infectious On for to XXXX, to reported of the OpEx opportunities ramped expansion markets, quarter capabilities. in basis, than $X.XX in second research R& gross our applied up and spatial GAAP gross expansion, and share XXXX Accelerate EPS of In XXXX. tailwinds. per margin Project strong Accelerate margin summary, of the $X.XX as biopharma, $X.XX second drivers tools. mix quarter biology Project quarter, $X.XX Accelerate as capitalize proteomics from in diluted non-GAAP semiconductor Project cancer is margin X.X was in on.

to slide on Moving X.

performance the of see Bruker's half can first for You XXXX.

at $X.XXX basis, eliminations. revenues Our revenues revenues net XX.X% Instruments Scientific On X.X% an growth increased of and in organic – intercompany organic grew by of X.X% organic billion. BEST X.X% year-over-year, growth to consisting

remained book-to-bill double Bruker's digits double first bookings XXXX half BSI First year-over-year organically all Scientific year-over-year ratio half were major the Geographically, X.X. and for XXXX our Instruments digits up X our grew in half above order regions. for groups first bookings organically order

with and are gross solutions. margin non-GAAP of the and XXXX and products our non-GAAP particularly margins which slide value Our half GAAP pleased first EPS and summarized year-over-year, speaks all to bps expansion and operating XXX are five, performance this our gross we on

digits measure, XX.X%, the Bruker industry. XX-month on invested our return result highlight the on groups Group our puts the million us half our BioSpin revenue Scientific first we disciplined where supplemented turn currency is on In BEST leaders grew capital, half and $XXX in non-GAAP our growth, three of Instruments segment, single high six strong selected and XXXX, basis. and a XXXX and acquisitions. the the system of organic among Please constant in performance was process of note management focus in 'XX was half half first was trailing percentage. year-over-year to gigahertz the entrepreneurialism of seven, We there by of slides the first Our NMR a recognized to which of 'XX. X all in and our revenue believe this first in bolt-on compared X class and Please

BioSpin continue X BioSpin in saw We Applied and Markets quarter growth in revenue fourth class in in in and the expect bookings innovations in the and as with robust revenues and as in new XX% Services quarter. note from Support. we laboratories. first of discovery structural in gigahertz of more third BioSpin X NMRs growth X.X X achieved functional single-story expect magnet months XXXX, quarter the our for make second biology well include gigahertz to six of excess GigaHertz drug X to accessible organic the NMR XXXX.

XX advanced Switching also system applied our pharmaceutical applications Benchtop in broader enable Fourier capabilities We to FT-NMR launched analysis. to on and CALID. markets

spectrometry the Group first also the revenue strong half delays in million with or slowing CALID single-digit chain supply increased revenue high of but $XXX science For with of growth and XXXX, percentage revenue mass CALID life in the Group aftermarket, execution. microbiology the

as Our and Biotyper includes timsTOF the a and on proteomics. later epiproteomics and quarter, higher slide. recovery our enhanced system, second saw XD delivered unbiased More metabolomics. This on we consumables. HT, revenue In with and more in range, that for dynamic driven coupled diagnostics in plasma products. platform high coverage launched MALDI peptide the a throughput tissue for demand fourth-generation XX-bit novel tuberculosis accurate timsTOF molecular strong was proteomics, growth, quantitation proteomics throughput instrument demand in robust Microbiology our TIMS-XRcell digitizer a applications a XD for that greater gradual by

We to XXXX Please are now. Array excited selected launch to ECCMID slide come year. X this at with panels the in turn syndromic about later more April Liquid next-generation of

First again, research in in innovation up on surfaces Science half million a best-in-class the for our semiconductor Nano's Nano's well, mid-teens Canopy performed quantitation. and Nano $XXX launched all Nano instrument revenue subsidiary backlog. microelectronics XXXX, and sharply remain half. and x-ray Bruker industrial markets semiconductor fluorescence and the Revenues microscopy metrology resolution tools grew strong. biology with strong delivered strong ChipCytometry CX our advanced product first metrology percentage. Life tools for strong growth and in spatial throughput high And with Nano CellScape bookings and and demand. next-generation revenue was subcellular was

by demand chain appears first the XXXX OEM and superconductor healthy, revenues grew through intercompany net our gains teens navigate logistics to Finally, driven share but eliminations, strong and demand percentage we MRI BEST BEST continue supply customers. in by of challenges. high half

and Moving to X X. slides

about which, our we single-story gigahertz recent total XX% all in gigahertz Calvin our with slide Project to Magnet. came reminder, continue We On good second in that compact represented Accelerate as X.X highlight initiatives, a make for quarter for – XXXX, revenues. the X, X.X orders three in, X progress of

orders and by And reduces which You The of a quite – in product quite researchers almost for and gigahertz to -- lab, fits very, structural single metabolomics. consumption as came This conference access even also and pharmaceutical Both the all a orders Japan three – much That's well from these individual clearly pleased footprint, deliver in these a April. a even research that marvel into universities received two of see powerful install. our really that. is individual now as fundamental them at subsequent pathology little in obviously NMR, this of launch smaller the and early companies, were system. with easier story biology very, importantly, order compact We're technological Spain. it guy very very to and has to It from middle. two-thirds. in in quarter it's enables more and helium research biology second PIs,

is, that which for very high we members essential, also I percentage proteomics, quantified workhorse in detail, cross metabolomics proteomics. higher of the to a ASMS and in with of course, June particularly and excellence, from and rates, at has certainly terms throughput platform slide inevitable number for identified family and one proteins think, won't in that a plasma the launched our in of on the applications through the Minneapolis discovery of XXXX, I this from latest platform. launched but HT that now be can was without conference antigen one reactivity. of discovery we sort suffering Moving of It performance, numbers X, and but really important in is also timsTOF for go false suitable peptides and slide as higher for the timsTOF ultimate

greater is of the units per paid of And second is $XXX end of of XXXX, As bit units. an update, than end of than installed of greater our June, rate as quarter of XX base timsTOF the our revenue run a as now million annum. the total X

So excellent growth and progress. excellent continued

again instruments So our strong in across for summary, experienced our Bruker demand portfolio. differentiated and solutions

in continue will X.X, review Project high-margin turn well, CFO, let investments our and and who in initiatives Gerald Our more infrastructure to Accelerate QX performance to we R&D now compelling fiscal opportunity Commercial XXXX over in Herman, our Gerald? detail. areas. and With high-growth, financial outlook me call performed Bruker's our the that, ramp in

Gerald Herman

to a second million, and you, per thanks, was quarter of detail the the X.X% everyone, the increase $X.XX per us of pleased $XXX of an basis, the second EPS performance XX. of slide to second more XXXX. provide some Bruker's GAAP QX Frank, second non-GAAP $X.XX to XXXX reported revenue X.X% on EPS share, $X.XX joining increased approximately quarter We XXXX, increase from of of share in $X.XX revenue reflects Thank in On organic for quarter XXXX year-over-year. XXXX. Bruker's starting financial compared reported an on today. quarter In which X.X% I'm

by XX Our XX.X%, QX Accelerate and to income equivalents second short-term Project margins quarter million. X.X with We operating decreased decreased expanding year-over-year investments our margin gross X.X% than finished operating more offset and cash approximately the with basis investments. non-GAAP of cash, points XXXX planned non-GAAP our $XXX

repurchases. share capital Project investments ramp fund expenditures, relevant several the and strategically quarter, cash we to X.X selected key investments, Accelerate During inorganic technologies, complete in fund used

You Board for for quarter through of million approved $XXX million million to shares share up that year-to-date, shares of May XXXX, our $XXX repurchase million. authorization we in a may X.X recall In and the million XXXX, two-year XXXX. nearly approximately $XX approximately repurchased we repurchased May second X

the tax a also full year As shares flow totalled $XXX year payments for and XXXX, timing our was of We cash XXXX, repurchases ramp million inventories supply the second X.X in in of revenue build impacted to to of Operating cash planned approximately $XX.X protect as in million. chain half for risks. of as our the the customer used the by of against well advances. million quarter reminder, operating second largely

capital in second in quarter decrease million. cash in with cash aftermarket of to in of in the this as quarter CALID revenue chain second BioSpin's earlier. revenue Systems as percentage, of the the compares was Nano second grew of benefited high quarter low and gigahertz percentage. driven an XXXX supply one investments to revenue on percentage quarter Slide the XXXX. strength QX flow the the of XX a where the range X.X the organic XXXX. decrease group compared research high for quarter second Our percentage million one, XXXX, semiconductor our free organic revenue XXXX were revenue $XX.X grew BSI high $XX.X and the single-digit XXXX, industrial million, businesses. the in for in second This quarter by quarter quarter from revenue XXXX both the second XXXX second of issues. Geographically recognition XXXX, NANO's mid-single-digit by resulting organically, second of XXXX. grew the wasn't free there in single-digit the percentage, of expenditure bridge in Compared second organic in quarter discussed the revenue constrained North of organic flow single-digit in $X.X system American and in grew of shows and of increased double-digits basis,

percentage low Asia growth, Pacific low the in while had range, grew European year-over-year. all XX% single-digit revenue

points XXXX in second was it, supply basis expansion which leverage higher-growth, our of QX as margin is Accelerate than initiatives. chain XX, operating range. QX lower offset basis. we non-GAAP QX and Accelerate offset investments performance the logistics points Slide more of was volume Non-GAAP sales currency of XX the revenue XXX Project XXXX in to delivered in increased XX.X% the invest tailwind, XXXX, quarter XXXX by XX.X% XX.X% declined XXXX, inflation. categorize small basis our margin percentage as from World, benefiting on from X.X high-teens margin mix, than non-GAAP partially and X.X of margin P&L Rest in gross a increased and by shows gross marketing our XX% Our to higher-margin Project

ramp, OpEx due and quarter first expected and quarter call, our outpaced As XXXX, in supply in second to sales ramp noted the marketing delays. of revenue our our particularly chain

the for for XX, the the tax the of quarter quarter already as of first half diluted tax of second $XX of organic second with the For finally, shares drivers effective shares line, has growth million, million past foreign summarized over outstanding XXXX, primarily XX.X% of XXXX the XXXX. Non-GAAP the was on resulting compared second XXXX, due in drivers XXXX XXXX. second of the results top X.X%. was a up to while of the headwind $X.XX our Acquisitions unfavorable Slide from a months. added up X.X XXXX, largely our of And compared to XX.X% quarter the Frank half non-GAAP were XXX.X reduction the was slide and rate the half on of X.X%, quarter of for and first to from EPS or discrete explained of revenue share the Revenue was our of XX similar average XXXX. to XXXX bridge slide. the million items. in are QX X.X% X.X% quarter Weighted XX non-GAAP repurchases second XXXX shows quarter to covered second exchange or first X.X% X% year-over-year reflecting P&L

positive million half free we first $XX.X the to $X.X cash flow in used compared flow now cash XXXX. million free slide of In XX. half XXXX, of first of Turning of to the

used the supply First build facilitate was other free tax address t flow revenue second half also risks. cash use timing ramp half by impacted XXXX was principally to the and inventory to to of payments. chain and

as meet days, QX to chain to XXXX. Our days our And we an second carry to was of cash XXXX end cycle from of as quarter growing the supply XXX of excellent XX well inventory at to elevated increase bookings. risks the backlog manage conversion continue compared

now slide Turning XX. to

strength our reported growth full XXXX for backlog, of outlook reducing stronger while growth headwind. the revenue we're and XXXX, organic the in exchange first revenue the guidance growth maintaining revenue bookings for Given in record high for half year our our single-digit due a to and foreign

updated the Our of the outlook for year full includes XXXX now following.

estimate dollar a revenue no headwind guidance year-over-year. to of currency currencies. growth prior X% to US prior of on headwind stronger foreign We First, guidance of major foreign our approximately our against of stronger now organic the X%, exchange basis change than a X.X% most X%

We expect X.X%. guidance. from about to our now is contribute to X.X% growth, to of growth unchanged revenue reported in May lead X.X% range This to to a Acquisitions X expected

chain throughout supply expect half the of to logistics We and continue second delays XXXX.

guidance We are in the in level from of points XXXX. basis XX.X% operating our of maintaining margin XX XXXX XX expansion to

On fiscal non-GAAP estimated XXXX. reiterate represent XX% EPS of projecting $X.XX to guidance to year which non-GAAP year on XXXX. EPS slide. to rate listed of the X% range non-GAAP $X.XX for line, a are XXXX, tax We're of approximately our for assumptions full XX.X% the bottom we would compared Other growth

to Our non-GAAP our of rates delays as to anticipate unusual XXXX. third been give XXXX but XX%. year-over-year, not June XX, we you tax XXXX, quarter up from digits foreign favorability EPS EPS, on and some quarter expect quarter XX% third do growth. XXXX mid-single color sequentially have logistics non-GAAP we the the of down repeat quarter XXXX revenue third with be the for On to organic full by updated supply XXXX second to year quarter of expect To third chain currency ranges impact the and year-over-year

full EPS, to non-GAAP year or the for change just organic we quarter outlook growth fourth heard, revenue you've as in XXXX. our this XXXX catch up As does not expect of

Bruker to continued and bookings another revenue finally, So and up, solid backlog. organic strong wrap solid of growth delivered quarter

also to posted I'd Justin to encouraging as the that, our to teams under over conditions. very start very call turn quarter much. like session. We gross remarkable delivered expansion challenging the you margin With execution in Q&A Thank the

Justin Ward

hank operator to of the the to portion to Instructions] I'd over begin turn [Operator like the you, now the call call. Q&A Gerald.

Operator

Thank you.

Please begin the go question of from will comes Bruin Our first session. Merrill now [Operator We Bank Instructions] ahead. De Derik of Lynch. question-and-answer America

Mike Ryskin

Ryskin on quick is guys. got follow-up. guide Mike Hey, Derik. updated then a and on This the for one a I

guidance, got First, to the make on want I right. sure I this

seems the in biggest it in So change is the like because assumption change the guide unchanged. is points unchanged. the main and your now is higher or M&A is unchanged guide the guidance organic margin X.X really, FX

the Just revenue range, of So I'm we're the lines the EPS guide? missing? reported to in well. nonoperating somewhere given as something will the there in would more of how this the impacted able Or end headwind, terms be maintain lower you the points are is some of wondering, Is just end rounding you that X.X just higher adjusted in that numbers range? EPS think

Gerald Herman

Yeah.

Gerald So here. it's

assumption correct. So all, first is of your

are modifying the only the We foreign exchange to guide. element

growth The reiterating other those. both organic elements, we're non-GAAP EPS revenue holding, and

question, the that's think. So of first I part your

gross at activity with We've including we quarters and of organic are I revenue line two story margin that. that over our pretty that. solid, and we're quite of on But chain EPS yes, continuing are post through cost On those to believe comfortable the the the the a given on comfortable some seen quarters, some second numbers we are we're challenges. fronts, fundamentally, And part, now. OpEx pressures EPS to management, solid supply facing obviously excellent around where think, on you've continue we heard we're two side, number

Mike Ryskin

the and you strong you book-to-bill clarity for some just us across sort going able be business? the I Could flow conversion? follow-up, a going Okay. backlog, the do book-to-bill on most you us of commentary through through All orders those business. little demand revenues? are then And bit X.X, to positive of guess, continue on Can to to how right. backlog of think of the When on have to really you to comments convert over walk the on that's give

Frank Laukien

typical than Well, for first revenue to of tends the half. margins is seasonality. and Mike, as terms second us, half the in terms typical stronger of That's be our in

We expect that.

be stronger be As strong. heard, will think as you not up. just us will in We QX QX helping catch

done. it's prevail supply year, still isn't be mean conversion I and to be and are this not but normalized mean, this issues chain So there the always we remainder of out logistics backlog carry for - yet certainly going isn't think this I and going backlog, year. to I as

we into some to also of backlog, that expect somewhat next expect be that carry of high may Some unusually backlog year. to - we

Mike Ryskin

Thanks. Okay.

Operator

ahead. from comes Puneet Securities. question go next Souda SVB Please of The

Puneet Souda

thanks Frank, taking for for thanks and Gerald, question. the

on the you there -- margin peer you Germany, well. terms have didn't companies in the line I and one, see to as there? trying can so I from that, you impact op just wanted impact, understand any if saw what geographically that to talked first quantify want operations perspective, expecting So EPS I as of from I an that just hear have companies pointed check wanted to And of about your -- Some you and you on out, China. sort just sizable to such? just in I'm are energy challenges

Gerald Herman

about situation. I'll first If take China and the of can talk I more Gerald. Frank it's part intelligently may, question Puneet, your regarding German

say, into respect with the teams order little China under the much quarter. saw I a too very read us in in had We the quarter, would performance, China, challenging strong don't terms in to conditions. perspective but second lockdowns. the performance the of so performance that. from We first performed softness in a solid extremely quarter the revenue China for of I lot in well very So a logistics despite

There's over the but understand half further some the that So, opened that into up open improve second our there, execute things still or is challenges ground up. year. beginning expectation to have on the is will we of as what time are that, we

we've got to for a backlog And on are second half able going logistics are to of the We be lot improve certainly, to year. the of execute there. anticipating

Frank Laukien

just the think guided and why guidance. we year, I think I EPS, with expansion and to that's we with -- EPS -- the think we feel were prudent our comfortable can continue way for we And in we that's, margin I

now. mean, known. risks. It's Germany, well gas some are energy additional As Europe to has all I some and there risks additional risks

we, of have don't Bruker, use processes really at gas. any significant all, First that natural

So this not us. is a for primary problem

Of course, in or et gas. in that companies there's other chemistry metallurgy cetera, or use

-- So into a but areas, for there conceivably problems it's direct it primary certain in a year, chain perhaps could increasing in risk supply therefore risk Bruker. not is perhaps the second next for or it's

electricity In not heavy energy we terms or need but user, continuous of we're rationing, a of course, power.

an there So incremental is risk.

Germany, We everybody Europe energy, saving else in in particular. on in course, are, like and of

chain. a inflation We additional extent. that and we very so remains are it supply government, managers from risks quite California pandemic now factory Europe. buffered consumers in have But anticipate any chain not we buffered is supply -- rolling but risk. who even is But blackouts risk, or are course, challenges certainly Energy although or that going much between German the are most and steps And that additional energy for this dynamic some environment some of of honestly, and to some costs ago. anticipated And in by industry fires of do is sometime presently, what rationing protecting up, take. energy there anything not different a some can there's taking like we that -- due had the of prudent for our to or even winter, years

Europe. Second that. other tier not energy exist. contingency of And manage supply and they on to primarily affected, course, in doing eye chain We and lots acknowledge it. an risks but planning of keeping through we're We're we're

Puneet Souda

one Got three Riken. gigahertz, very just orders on from That's Frank. the it. that helpful, you one EVO, X.X had, Ascend And

larger think three of these a So being three those? instead ordered you -- should four four ultra-high when NMRs do now to number book? for frequency you to current order given And being the order the assume given XXXX, can deliver we maybe

Frank Laukien

capacity of separate The gives is right? X.X, course, gigahertz course, a of that in for addition. two-story, and insight, the we gigahertz capacity now, us systems, Good with those. capacity, X.X almost certain some more question we X.X have The for

principle. capacity many in doubled So our than ways, in more we've

So just effect Calvin it 'XX that to there's delighted on, XXXX, to are have an two-story the kind that but does some now doesn't single-story and the essentially now, help been and us not magnets early magnets. right we're on going showing universities, interest project And four have or Pacific companies two biological yet country and like larger lines, going we research structural And this other for then needs very biology countries or if and this well, high-end a those, a, of are tool. will or into Asia disease Japan there in of research. two case, many into Spain biopharma that even need functional XXXX,

year, great that don't take while. that we start a product So for But a it's think that line. revenue this of course, we expect will in that

Puneet Souda

Got it.

you. right. All Thank Okay.

Operator

Brandon from ahead. Jefferies. Please go Couillard comes question next of The

Brandon Couillard

the Frank, afternoon. the on you've ramp first revenue the already of the Good the like and I half placed installed update platform, thanks. XX systems Hey, base in timsTOF appreciate on looks year.

customer speak where to base the introduction installed could on will and timsTOF us and let's base three go the you update could broader to Just curious, if new you whether a platform, appeal the years? that ultimately then say, system over for think next the HT two,

Frank Laukien

Okay. you, Well, Brandon. thank

will timsTOF future those the HT -- that's timsTOF part some of orders. orders HT timsTOF will in Pro, So the -- be in the

it's So additive. But so a product that's not -- further line. strengthening the of purely

find throughput robust powerful it's the and all and will more that dynamic and customers particularly HT think even higher high particularly even in of I plasma proteomics range. customers

who for a strategy, quite be pursues all plasma I particularly proteomics for So it's or multiomic attractive. for biomarkers, liquid for research, cancer think going to biopsy anybody

pushing add broader and just block broader building platform. another yet it's additional So flywheel our capabilities to to timsTOF the again

revenue I expect Your a issues, order into first line performance. to some chain is continues here, is product further. ramp And of us. our obviously, therefore, units our product for due even we mean, shipped, that it observations And half be, put even higher in about or supply the performance growth revenue numbers than to correct. to double-digit line

out this track we is workflows, So new continue bring very all to software. and on much new

know, investments proteomics. take invested developed we automation. That out, and consumables add you becomes it a companies lot gets will that but rolled also us of in time broader and little prep and gets bit a until to a more As and sample gets

Brandon Couillard

really the you that an on impact on year understand just the FX the clarify, incremental for actually And help a full the follow-up us is Gerald. tailwind the Just year. Can so OPM to topline, of Thanks. margins? for currency line headwind

Gerald Herman

Brandon. Sure, Yes.

strengthens have has quite some not But quarter. line, quarter-by-quarter Euro And Brandon, it it we it's US the near way as the think with both strongly. currencies. against the And a those pretty that's revenue gross operating movements. down of lot fundamentally, other this, result these a end or you EPS net works and neutral. USD also to variability second we the likely against but we get end actually just in on have us, and a -- margin Franc, we know speaking, up time as variability in -- get have generally described, the a We By it's Just this seen dollar favorability and only I with in we you of as up for the tailwind line, margin. when particular especially you've the headwind quarter

but complicated, the picture. it's So big that's generally

Frank Laukien

been while, so actions because place year, on. In take this they for addition inflation from and to high that, backlog we and a -- logistics costs, have have we have into headwind the Bruker, have while put a pricing we

for full to XX maybe to an have year, between maybe to is -- we margins and FX full that the be on XXX year, net to bps more that estimating of inflation XX range. up the bps XX headwind could for more headwind the in a XX tailwind So up bps maybe

year. headwind it's net a offsetting, to but So partially it's margins this

Brandon Couillard

Great. Thanks.

Gerald Herman

You're welcome.

Operator

The next Please Nephron from question go Meehan Jack is of Research. ahead.

Jack Meehan

Thanks. Good to afternoon. on I CALID. just wanted start

impact talked You of of quarter. the ballpark to something $XX possible a in the it was know chain revenue quantify million good about $X envelope the I that's the have just some if million. constraints supply not? might don't Is My back been? or like what to

Frank Laukien

have because don't want to like I'm not up don't but -- for set break tens it's -- QX quantify For into Bruker, not delays for want into we But we it QX into to everything it, more and we'll Bruker high a of millions. groups, more Obviously QX, of was revenue had had it you what would not millions. overall, separate QX, it of then have CALID almost books, had revenue. tens it's from been, from was -- -- we and

So will think QX that until out. again probably effect sorts an it's in and kind itself that of meaningful. in have we'll And be we QX that

that quarter millions and of of our be because I obviously, supply once going every we And is good Nonetheless, rate. delays growth is next think so backlog that's still quite always tens we while, high some that's from site year. why But with of and dollars a logistics, all chain have, of in revenue that we and a book-to-bill have to customer entirely isn't organic that's strong, in, quarter. to have. so our ready, a but

of it's good. continues. We're is still doing chain amount and the it which well, that still demand, competitiveness. extremely is and certain supply that's not It's is I there it's disarray I and there, logistics. call disarray not not but it is challenging. disruption, mean wouldn't -- a but So strong, certainly

Jack Meehan

Yes, MALDI. it wanted I sense. And to talk makes about then

automation, coming over shortages. it this think the the year. year? I to how hearing about trending AACC, just how staff and possible I about instrument talk going they're for of So I out XXX big play land lab where the this talked Is you year? wondering was MALDI going one given to just microbiology this out are placements in you last is themes was of is just know to

Frank Laukien

year. don't last be in I be of the exceptionally Also, end some little what it by had year, as growth, we had unit that so -- Biotyper year, the had We know will we year, obviously. early the will Russia. It's Last year business strong. MALDI a this strong not -- we into

that to there. business going already And with and happen -- there not are Czech are be more in year. we there's we've that ECCMID So other be launched solutions least, for going the we Republic subsidiary to automation that's more this MALDI at more no our some automation. Europe further for automated. workflows MALDI at And developed Obviously,

need for $X get the the manual has to repetitive least more approval. is more that field that standard, is far, and don't it you lot be semi agree of although that towards doesn't automated, laborious automation. So but of can been at they automated and partially trend look almost is always only a the One regulatory absolutely less, most we million some sample-to-answer some automation, But that. steps, if we have have solutions,

And of have So the in pipeline. is Europe some other launched of been forward approval. look with to more approval We'll in eventually. regulatory markets then, for the course, regulatory now those

and best-in-class, to in days more with instruments, So the the capabilities the we're instrument assays come. although Development we we but is agree software just proteomics. and do automation not as of the really support We're to basically, also to and solutions and availability trend, only improving these that. the and automation it responding

Operator

Cleveland next ahead. The of from question go is Research. Josh Please Waldman

Josh Waldman

and Hey, given Thanks guys. supply CALID. of the deck second been half rest for in I chain be noted you have seems when optics are the the Frank, of Have guide, we to improvement? it areas taking the implied using. at look constraints commenting What seen business? we questions. conservative the on about comps guess sequential my

think? in. largely you do Is that's guide, kind -- a in of you We have pricing more coming giving be chain prudent it you the leading supply to

Frank Laukien

that. It's far. division coming that supply is And every Absolutely. buffers and things But That's problems chain. have playing so -- it, nobody wakamo basically goes only that haven't immune like to it's keep inventory but is with that. more exactly we mentioned And up. we

I -- Bruker are it. use where it's all yes, we or affects And businesses some would materials. mean But it's I invest, in pervasive mean, our managing say So mentioned just we're other electronics extremely always even teams all delays more it's and really I and there think Optics I but but only not that the issues. were -- well. delays really,

is not I it far, so say would that And getting better yet.

So that yet. we're not saying that -- we're seeing not

being we of also certainly of the so we'll year, this also supply backlog also conversion some could into without but of -- think still -- XXXX. do to chain -- only by good the perhaps supply we year go and next will that have limitations, end we're a year. thing is some have choice, of early chain it good by more second the limitations. But really good last that we But but prudent. half backlog are which why into not this And going will year, we We think until why more is and

Josh Waldman

progression remainder it. talk I materialized the in thinking Gerald, margin year? Got the how could and of And wondered quarter cost you versus you're if about expectations through the through your second how

Gerald Herman

I'm repeat sorry, your part just question? hear earlier of I you it? your didn't Can

Josh Waldman

you but Yes. as quarter versus could wondered materialized the maybe OpEx if your well? in how I second picking costs on comment expectations mainly,

Gerald Herman

still essentially Sure, important certainly in second and R&D it I may see in so the call as of and second to I are quarter. But saw as EPS played initiatives. generally terms well. our were expecting the delivered line, quarter. in X.X EPS Project in we our out. in that, first Josh, the how say that's that the our investing quarter, think, say, We did inflation that I outpace also think we you example, -- some would sales speaking, Accelerate heavily, pressures, fundamentally, communicated consensus of the the revenue I you marketing performance we in And OpEx, in would we line quarter we and earnings cost recall, in have solid for

describing. speaking, handled chain that generally with issues that especially the Frank heard you our think, teams some well, I of supply just

quarter very I the occurred the cost third heard, probably expect issues, in I dampened be quarter the just to quarter. obviously, as to we supply So how very, larger. quarter, pleased have similar, we're going then I'm going think, a third management little overall, think to means in with is second and fourth deliver the the by And have chain be you to which something

Josh Waldman

it. Appreciate right. All

Gerald Herman

Sure.

Operator

Cowen. Max The next Please of from question ahead. comes Masucci go

Max Masucci

In divestitures do that and on type of feel the questions. you of taking see similar bases for this covered you've strategy? Accelerate like strategy X.X? you executed Perkins earlier the potential Perkin Thanks week, light and pursue sort divestiture X.X under Or Project to already do a business

Frank Laukien

earlier, not But don't divestitures. business. big Yes. disproportionately is businesses. we're some really have And there very any fine. any Max, We're where Even no, areas which with investing, happy obviously, are we we're planning legacy our

grow we et cetera. with and everything have fields, and businesses have some We high-margin in we core opportunities is biology, proteomics, core business in areas try new to particularly spatial

well. continue But smaller Project core as 'XX and a then, do pruning not wasn't did to have example very some some We We time divestitures more there Accelerate topic are And XXXX stopped we in we many and didn't large-scale yes, what for that's did around of particular business we since are this year, did before do even in. no, us. some did some X.X, It frame. that product divestitures you've businesses So but lines well some to investing continue healthy pruning. quite have quite and looks that last -- done really pruning. we our or I cited, the think

of growth. it glory only Of But our bit up very the strong other gross pull is If course, that working. microbiology. accelerate where That formula also have fundamentally side. Projects Accelerate, Accelerate. a little course, it's margins is. are core technologically working, and core we all a business could because And a didn't in is helps base to business there we of be many we have a that's And lot multi-top I the Project examples that wouldn't

businesses good So that. at not are looking our and we're

we of Project have mix good Accelerate. core think a and I

Max Masucci

more One Got for it. me.

operational pace Like the around Project us you're continued supporting the some and teams out X.X. give just called proactive making of investment additional detail Accelerate can where You you in Commercial the slightly and a specialized adds just towards approach and some sales of might for more your that require metabolomics approach? proteomics your headcount out general offerings newer presence Commercial building spatial

Frank Laukien

You named them.

lipidomics flavors in and investing software investments -- it have in by Commercial is going now. investment. spatial different course, into not many Optimal of acquisition Canopy additional bit spatial Metabolomics but also quite capabilities biology and There's closely related. the have of different investment. proteomics. those So are ongoing Then that's And any yes product Acuity the biopharma. CX a biology that's still also next with we to proteomics with year an also we're

for it's really think also the investments on those side it's the sales working application to good marketing parallel but all well And most those us. biopharma and I So developing biology the Commercial That's then it's think specialized products. also that in proteomics stuff. products infrastructure where support the leverage -- have we why multiomics are -- spatial I the Commercial that's selling teams

right right have to we now invest. continue mix think the I but certainly

commitments. for I we our us and margin can and sense think deliver think this makes EPS I complete

to both So we're able do and to we're both. do really trying

Max Masucci

Great. lot. Thanks a

Frank Laukien

Thank you, Max.

Operator

go question from of Please Rachel is next JPMorgan. ahead. Vatnsdal The

Rachel Vatnsdal

Hi. Thanks taking the for question.

quarter. that first region on grew So Europe low up single digits this

recessionary So us to can academic you're these And and seeing the do able specifically you walk funding and year? you through in of expect some grow then what government Europe concerns? of on that what in to be market this really light

Frank Laukien

you were area part I'm focused missed on? We sorry what Rachel? particular that

Rachel Vatnsdal

Yes.

are quarter. growth just anticipating the Europe? Europe in for a you this if academic walk Europe government in us can through funding digits single you and And then, wondering for low you're year? the specifically for was So seeing environment from what I what

Frank Laukien

expected. what second seen half like than growth. Europe major for what we've of growing to the year. -- sort in This of we slowest the year We're that the other rest not necessarily is geography we world. And cited change that's expecting We've of continue

to Europe year. to in with also in so or generally affected Europe and Europe and energy those defense in be the low level the funding reasonably research long seem be steady Western presumably commitments Central much maintained. pricing digits in doesn't quite they also be refugees So to countries academic the are because so in mid-single for healthy. major European strongly interact tend to term at more the government it it's continues Academic or It and to individual is funding tends the not more and spending, where government of economies and and Europe really

Gerald Herman

this thing Rachel for Europe half. first order the performance here you're bookings category that for of actually segments was describing quite other only in The is solid I'd the add the

bookings we're -- experiencing in growth not we're good So that area.

Rachel Vatnsdal

Great. the And around of back comments some a half on of follow-up year. the earlier for your the assumptions then

expecting making growth that spite in organic XQ. some you're of for fact referenced, you'll up you that of chain in that but on planning in said that pressures supply the You the XQ be mid-single-digit

you're sounded anticipating it like of However, also continue the to XXXX. supply some into headwinds chain

other as just XQ And you thing chain from can they budget seasonality So, Thank for will soften headwind? those that's assuming XQ, comments really flushes any clarify in you. then and strength a or supply when outside driving think you you any that XQ? are incremental

Frank Laukien

more they that they more of budget to that maybe three, often to later. discuss tends months flush you're delivered then is Usually nine that's get something an then like get tend but that things effect us for six, good as orders and more that doesn't of not often We if if relevant. you're Bruker consumables question. Good a affect very be company much

the So stronger you that's continue effect less that And supply QX chain the the to we We math. do even of year. than for know expect all for with the logistics of nonetheless of we delays QX us. and looks in. remainder us Yes, an -- for

how as it -- seen that's why that margins adds up and to think organic year growth and on certainly full -- maintained And that's our EPS. we've so, guidance I you've we've that

Operator

is question Patrick of Please from Citi. The Donnelly next go ahead.

Unidentified Analyst

for This on Hi. Jason is Patrick.

pressure some there. you. for you question one noted Just On inflation,

more to the way specifically due So I'm across about dynamics? of the those half And just raw second curious think passing materials freight what sequentially? price right and Thanks. is to you're some still backlog labor seeing

Frank Laukien

certainly probably see the of the we've us of half next still bit taken the the second most to pricing year, of bit that help getting the half modest of in little digits year. the second first it's of year, below help us more in are than at the the and but some most that to half, XXX pricing beginning tailwind in fairly a middle beginning in that more single -- but of beginning the We're will pricing of we're actions of pricing low again year little then bps. that But improvements

logistics labor. mean I those and The for materials other inflation granular some on. comment and see too probably us obviously to of question effects. on That's

costs effects Other And yes logistics areas don't be I of think some probably that will be some I that mean and down. everywhere. spiking come there remains there's to all You see seen. permanent. will of

Operator

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

Justin Ward

Thank us for today. you everyone joining

third Have during Our with or you leadership evening. arrange to speaking quarter. follow-up. great at team event feel to you the me a with to Please any reach free to meeting forward out looks directly an

Operator

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

now may You disconnect.

Bruker (BRKR) 4 Aug 222022 Q2 Earnings call transcript