Earnings call transcript Q3 2022

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Operator

Good morning, everyone and welcome to the Bruker Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Please also note, today's event is being recorded.

At this time, I'd like to turn the floor over to Justin Ward, Senior Director of Investor Relations and Corporate Development. Sir, please go ahead.

Justin Ward

Thank you. morning. Good to Bruker like XXXX third everyone call. earnings welcome would Corporation's to quarter I Justin I Ward Director is name My and Relations Corporate of am and Development. Investor Senior Bruker's

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

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

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

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

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

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

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

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

Frank Laukien

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

Turning earnings on of above of to revenue Slide call. delivered XXXX growth XXXX, well X. robust our quarter XX.X%, QX provided third outlook mid-single-digit In organic the Bruker the

greater supply saw QX, was Our second operational well some if quarter, segment experienced delays, demand from book-to-bill logistics. teams in Europe. high-value supply differentiated XXXX With have and life delays And our due made up despite headwinds third for a scientific solutions. we science again where revenue ratio and instruments quarter to and you we lingering chain good strong Scientific our our executed We Instruments now X. in than somewhat weaker recall, conflict again lockdowns chain China for and the logistic

reported of XX.X% a constant intercompany currency growth for Bruker's implies XX% included rate BEST, This XX.X% Instruments year-over-year million, acquisitions organic Scientific at very growth of organic XX.X% to year-over-year. minus a despite XXXX, headwind in the growth revenues of from X.X%. quarter quarter increased and net while added increased which strong an exchange third On eliminations, growth the For revenues basis, X%. X.X% organic of $XXX.X

margin while 'XX non-GAAP third year-over-year bps an operating to XXX margin year-over-year. Our XX.X%, non-GAAP XXX quarter bps increase XX.X%, was of gross increased

Accelerate core tailwinds. margin well and X.X drive gross as currency from Our inflation clearly is our as margin from pricing volume headwinds, benefiting expansion, excellence Project operational despite leverage, mix our

Project additional OpEx the third to R&D biology. we able investments in commercial deliver capabilities, particularly operating in strong proteomics spatial Importantly, previously margin in announced despite and X.X expansion Accelerate were our and quarter,

In quarter basis, up reported quarter third from in up diluted of EPS $X.XX GAAP quarter Bruker drivers 'XX 'XX third $X.XX discuss of per non-GAAP later. and $X.XX, diluted reported 'XX. share Gerald was EPS earnings of quarter 'XX, of $X.XX, a will the the the On for from margins third in third and the

on So investments our as opportunities even plans, the the demand and spatial see in in proteomics we third tools. to again Biopharma, saw semiconductor and for and Project infectious certain research cancer biology products margin as disease diagnostics, in summary, Accelerate quarter executed Applied, as OpEx expansion, solid 'XX of we X.X differentiated robust capitalize well in major

for to now quarter year-to-date see me 'XX. X, -- performance of months can Slide Bruker's the apologize, the look Slide third first Let moving at performance I X C you and

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

Scientific year-to-date order growing year-over-year groups our double growth Instruments Geographically, First mid-teens digits and quarter Americas Europe were bookings by with X X Bruker's the APAC, single XXXX digits. third order were organically. led XXXX in months in BSI bookings for

and in operating initiatives. Our and are despite X high all Accelerate pleased XX our our And EPS operating planned expansion are X. first Project with and on summarized months and margin very non-GAAP performance investments we inflation bps the XXXX margin GAAP Slide non-GAAP gross year-over-year,

return our a of process result management us on focus organic selected puts was strong our growth, measure, believe and entrepreneurialism supplemented invested on is non-GAAP We which XX-month acquisitions. industry. Our the and our XX.X% leaders Bruker trailing by the this disciplined amongst capital, bolt-on in

basis. third X we Instruments BEST segment, of highlight currency and our X Slide year-over-year and groups Scientific all constant performance quarter a base currency on XXXX and Please our of turn where year-to-date the to X,

first well percentage-wise. X For months revenue X the in grew gigahertz-class year the X of note, business. or $XXX X means We strong in gigahertz-class compared of revenues expect months X systems revenue with months the X first full was the in growth there Group expected revenue X which recognized saw in first the in robust Please XXXX, as are BioSpin Services NMR and for fourth of digits Preclinical and quarter. the BioSpin Imaging as the mid-single XXXX XXXX. X now to X the million XXXX were in Support in in growth NMRs

CALID. Moving to

XXXX, aftermarket slowing Group For months of $XXX revenue science the the million with of mass double-digit still growth X revenue life CALID strong microbiology in first increased chain with supply spectrometry low and percentage execution. delays but

for timsTOF and growth bookings. particular, XD-Proteomics, demand applications and Epiproteomics in double-digit Metabolomics, saw revenues platform, year-over-year Our in with in robust

Please turn to Slide X now.

well percentage for tools our months currency constant first grew months, X strong delivered a growth Revenues Nano and $XXX.X For was in of revenue Bruker tools innovation Science metrology in Science basis. academic very advanced while our demand. X-ray of Bruker and also first backlog. for Surfaces Life research NANO NANO's with growth, million microelectronics and 'XX, X high and microscopy bookings the strong teens grew. the the Life fluorescence result revenue product on showed business semiconductor performed the year-to-date

months but customers. X high appears BEST of execution first net BEST by in chain to grew percentage, intercompany MRI excellent demand and difficult driven XXXX healthy supply teens demand the navigate we through under by continue OEM eliminations, revenue strong conditions Finally, issues. superconductor adverse

we our highlight X, instruments. Slides important innovations some to X Moving applications and and of

order acquire course, we BioMS, but proteomics emerging research example proteomics single-cell all purchases X they X, developed test. biological we're immunopeptidomics, research. were X institutes slide, Swedish timsTOF delighted for that systems advance sample in in of recent clinical proteomics broader etcetera, to infrastructure workflows and for sorted The to but low very highlight national They by timsTOF FFPE for for case as, cells sections, timsTOF obtained plasma for going laboratory success a for also and mass of consortium also cell timsTOF really specific such clinical SCPs and high-throughput On nice did of proteomics tissue Slide single spectrometry. very generally HTs used future used and also a for tissue amounts,

to Switching we about magnets. Often, X. Slide talk

sensitivity there NMR complex larger important very really let resolution proteins developed read, a other you new intrinsically talk dramatic probe a very And allows for of NMR that a that's intrinsically enabled novel a the great the and in reached by a to I very systems, and being pathobiologically that Arthanari and these disordered There experiment is by insensitive Professor very disordered more increased special a proteins. of normally, really We've for and want technology, structural very liquids expansion nucleus is significantly Here, but proteins. XXN-TROSY coworkers. I'll applicability X-millimeter nice other research protein Cryoprobe and Hari to including -- statement probes. here the more about with particular, for XXN, biology functional science

used amyloid for many applications NMR solid-state NMR, diseases per this or kilohertz it's second. MAS, questions. there Pintacuda the it instance, Lyon, not completely at On to been Professor has the radio structural we which with new France Angle concerned, biological rotates significantly research as XXX,XXX neurodegenerative cellular disease Guido in this membrane is push that high-field disease of other are enhances Anyway, biology solid-state times that dramatic with mechanical for ability side, Magic and is imagine biology probe something and far frequency. and for probe, by Spinning, rotation, XXX further And NMR unique proteins, fundamental and as progress biology

Bruker and we're strong So a after growth third organic into what quarter this nonfinancial doing, delivered summary, good in expansion. excursion with margin

for for XXXX, differentiated we difficult resilient believe remains the and our with the strong solutions, environment macro demand products in our make the backlog, forecast also While year. combined strong coming to quite Bruker will that

of We our XXXX report the to fourth quarter February. in expect we when year results guidance give fiscal for 'XX

CFO, details. call over With the to Gerald that, our further turn let Herman, me for Gerald?

Gerald Herman

and detail third Slide to joining XXXX pleased Frank more performance, on us thank you, on financial you, year-to-date starting I'm quarter for Bruker's Thank XX. and today. everyone, provide

the EPS per a quarter compared to increase third EPS third increase an which the We year-over-year. $XXX $X.XX non-GAAP the we $X.XX of $X.XX of organic million XXXX XXXX. quarter to X.X% quarter share, quarter was increased revenue an the in On In third reported per Bruker's of from X.X% of of represents basis, of GAAP posted revenue reported XX.X% XXXX, $X.XX in third share XXXX.

operating XXXX our in quarter operating points our margin gross than increased third expanding XX.X%, operational XX.X% leverage more basis offsetting Accelerate expense X.X operating with increase non-GAAP to Project non-GAAP margins and investments. increased XXX year-over-year Our income and

We with the $XXX and cash finished approximately cash million. quarter of equivalents third

Project million X.X investments, approximately Accelerate ramp for fund for year-to-date, used $XXX third and we $XX repurchased During share we expenditures X.X cash we capital purchased selected In million. fund quarter XXXX, shares the And of repurchases. million the to shares quarter, X.X million.

As X.X shares in the full for We $XX.X repurchases million approximately third of flow year cash XXXX. million of XXXX, the $XXX generated in reminder, operating million. of totaled our a quarter

free from resulting third cash flow were flow the of $XX.X free million, million. in This $X.X Our an investments $XX.X quarter cash for of of third XXXX capital increase the XXXX. of in expenditure quarter is million

Slide earlier. strength XX third revenue organic bridge 'XX difficult quarter of in in businesses. by as XXXX, Nano slightly discussed XXXX, quarter businesses. comparison and XXXX growth. percentage, the of XX% a XX% down Compared grew quarter in shows organic to Life by over third revenue organic Mass driven the in the Nano's from was Optics range, revenue third the the mid-teens for semiconductor low both quarter driven and third strong of with BioSpin revenue the grew CALID Science growth Spectrometry industrial

quarter basis percentage. The the teens revenue and grew XXXX. in the on to revenue organic revenue XXXX, organically mid-teens Instruments the third aftermarket in a BSI single third high Scientific of in quarter while digits grew the Geographically XXXX grew our quarter Americas of third compared of systems percentage,

which grew Rest Pacific our quarter, double had European as digits, year-over-year. of the the growth small double-digit while we in mid-single the revenue categorize low is In low World Asia it, all in grew revenue organic third the percentage digits.

operating from shows and P&L partially of a third margin towards our XX.X% was pricing currency our the quarter Project quarter XXXX, Accelerate gross XXXX third operating XX.X% points XXX we high-margin XX.X% as and in leverage than gross offset XXXX, tailwinds, performance basis Non-GAAP XX benefiting Project XXXX quarter points XXX mix, higher of inflation. and basis from investments non-GAAP the basis. the of initiatives. partially on offset marketing non-GAAP XX.X% X.X increased in Slide third volume margin higher delivered sales of our Accelerate increased X.X high-growth, benefits, margins margin by

supply In and ongoing logistics the our to XXXX, operating revenues ramp, second marketing quarter outpaced despite in challenges. contrast of ramp expense and sales chain the

compared X.X XX.X% average For our XXXX XX reduction to shares the the third million unfavorable due items. of third of were diluted of third resulting was shares outstanding past from unusually approximately share in effective of tax tax Weighted of over XXX.X our the third XX.X% of low effective quarter months. the million, quarter XXXX, the XXXX, repurchases non-GAAP quarter rate quarter primarily a discrete rate an tax or in to X.X% from XXXX,

non-GAAP up Finally, XXXX. was of a the of $X.XX quarter to EPS quarter third XXXX third X.X% strong compared

to the for XX already year-to-date revenue a results of the performance. X the XXXX year-over-year first XX.X%. Slide was drivers the XXXX X.X% to while Frank up has the our quarter of the XXXX third X.X%, months foreign explained P&L the are XX, the as million of or drivers Non-GAAP summarized bridge of XXXX. first Slide covered $XX.X was months organic And slide. X largely top similar X.X% shows growth on line, Acquisitions for and headwind. for exchange added with Revenue on reflecting

million free months first the of months expenditures million $XX.X of our XXXX flow capital In of capital, in cash Turning together free the flow XXXX, of XXXX. working cash increased capacity free to we with facility generated first year-over-year. cash expansion and $X.X reduced XX. Higher in flow X investments Slide to compared X year-to-date

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

to Turning now XX. Slide

operating growth organic stronger EPS holding of has X backlog, Reported exchange been and we're our the revenue expansion decreased in guidance our full XXXX growth full-year guidance while XXXX the Given strength a for and for year. margin and growth headwind. our due increasing in the first to significant revenue revenue bookings months foreign

to U.S. of major of dollar a prior X%. headwind now year estimate our revenue now from guidance for guiding due XX% X%, we're to growth currency Our X% to updated organic outlook against guidance to X% fiscal prior includes most XXXX following: stronger now up from X% year-over-year, the of foreign We up our a currencies.

contribute acquisitions reported to our lead X.X% X.X%. now to expect to full-year revenue We unchanged XXXX a from of to growth, And is guidance. this to in range about prior growth X.X% expected

up XX margin our of XXXX, XX basis level XX.X% of versus expansion increasing non-GAAP basis in in guidance from to points of our implies XX operating prior XX XX.X% margins We're expansion XXXX. points. operating to non-GAAP XX.X% our to This guidance to

range for non-GAAP at to we EPS line, rate to $X.XX We non-GAAP non-GAAP approximately bottom slide. of $X.XX our fiscal which year on assumptions the year are the On for represents X% growth the XXXX, tax to are XX% holding estimated Other XXXX. XX.X% EPS at guidance fiscal XXXX. listed compared project a of

XXXX Our XX, currency have foreign September year been as updated rates ranges fiscal XXXX. for of

quarter we fourth the background, chain the constrain logistics, quarter. revenue organic supply and to color add quarter, year-over-year To fourth mid-single-digit risks fourth that anticipate our in expect we still to geopolitical With upper currently performance. growth continuing

up, performance. continued quarter and bookings wrap organic To growth delivered Bruker revenue of another solid solid

on expansion lines. the margin gross encouraging posted also both operating We and

delivered of under excellent teams quarter challenging execution conditions. another Our

I'd call turn to over you the Thank the like start Q&A Justin with very to to session. much. And that,

Justin Ward

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

Operator

Instructions] today comes Jack [Operator from question Our Meehan Nephron. first from

Jack Meehan

talk delivery, about about trending? how like like you're little Wanted levels? down it than quarter a and Can still to when you median think more what here. fourth about caution better normalized Obviously, could expected more you're in And talk sounds you that's to chain back a the come supply third came little the but bit to quarter. this just seeing time expressing the

Frank Laukien

Jack. Yes, is Frank. This

on is and chain issues, are is is hope logistics it less -- issues inflation becoming difficult Supply the horizon, getting severe. a still better there while situation. the logistics So

of getting but isn't normalize chain the some that there's it's logistics quickly. so supply next better guesstimating And not worse with half has year clearly in situation getting We're improved always and may maybe that exceptions. that second

now. months more high that's down. by depends probably As average. X would bring nearly little We'd bring an We to about Scientific high next Instruments, that couple bit we bit. over X of for down downturn, it unusually difficult then months years provide gives us to on of demand to right of as guess I if a backlog that or optionality like stays And little excellent X if would XXXX predict, a to a the was that an our it's healthy, it that then see more a cushion us. for obviously, It

it we how time. view So that's at this

Jack Meehan

been little There's you're what demand notably maybe investment semiconductor weaker companies see dig there? around bit chips other things you over the I and the you in because wanted Nano seeing to new in some mixed then demand about, maybe the talk performance some into of And and market. some XX%. side, a on here more organic from with also science terms signals Can real Great. signals but growth

So Bruker what just signs, mean how these all do you in end market? -- just this does given it for

Frank Laukien

fabs and in backlog. but little Science of course, restrictions Yes, be excellent semiconductor with investment mixed and with are goes chips we on continue are CHIPS little that some approvals technology and to sell very, with will new we delays seen have in so export bit a types semiconductor as the perhaps additional getting this Those a there offsets export but technology down strongly. some call Act also in into a delay slowing signals indeed, there's which very anymore. be great is About equipment a to will technology a and It to That's buys, Capacity and to for there of you've might China at we metrology excellent possible what still lot pricing course, of some There memory in buys as lead question. -- semiconductor innovations. half metrology is And the certain them. of memory not -- U.S. of on. bit minimum,

really And act and until but beginning be million [ph]. by more $XXX of will a see a will that, million, way, think also support we'll most the next we to to And revenue is P&L that that think, to materializes buying provide probably although tailwind and industry in year. the there $XXX I us, for some in us Europe, We're general. a begin single tailwind strong as

coming mitigating bit coming in are high-growth least business U.S. that So the factors will and and think given investments to us. for to for sure, us we at that or are in backlog of feel We but a is to having there it's high-margin, a many in a that are that significantly also half technology buys a overall, major begun have slowdown good downturn and -- from that lesser the business a about Europe. extent very there

mix that's if the you So picture, like.

Operator

question from Citi. from Donnelly next comes Our Patrick

Patrick Donnelly

Frank, the there your follow a maybe that segments Jack's you the to elsewhere. up backlog. macro high little of into there. bit of see do others, if typically backlog does down, I sticky play slow you, given to about going How relative to I on little you backlog? you have inflates go the a question 'XX. guys options kind tend probably it bit, you to think pretty it Customers given the talked mean don't To point, in. benefits

just that. to rates? to then the you how little year, your So compared you more year? year piece, FX do And for only then much how next the visibility does about typical the starts think current bit other into Gerald, current about moving And backlog given next talk maybe give a

Frank Laukien

All right. start. Yes, Pat. I'll Thanks,

it and for year. is Russia often from couple Ukraine immaterial it order year, do markets sticky. backlog once year cancellations. last year, really would completely a well, basically rare payments So last orders had as revenue we this -- very backlog have We dropping percent that, of financially -- down any is and This seems like really, headwind us and extremely up us. and quite yes, people we also that our there be from purchase If with

it we to delays see Next or possible metrology X% not may being year, certain semiconductor to deliver headwind X% China. a to from equipment

us. headwind next certainly And a And be delays. may less pretty we mostly, estimating but to it for we're be than bit of it's year are a that manageable So one, expecting for X%.

Having X X to our we down backlog, said X and certainly, add years, backlog. all for highest we'd to ever of we about X Instruments but the like in to of that months strong not That's had all reach over X months. we've below really Scientific bring that that, year with

as So trajectory that I -- my our, I really makes in And the quite think progress is have smoothens we'll I the that, this making excellent think, us very think, But P&L share Project for really in earlier with year Accelerate on I and along out XXXX excellent statements, prepared revenue a many a and resilient said market areas. gains progress initiatives, of really good defense. if we're many, bit.

Gerald Herman

exchange, And conditions in your under Gerald, the that markets exchange wish the foreign XXXX. It's quarter. foreign volatility. that Clearly, for I just U.S. will this strengthen add regarding Pat, the in dollar to itself current stage. to would predict I quite question could stabilize continues at and it's I the last place I'm not

So to about exchange XXXX But I'm at this ready quite not stage. foreign you... for talk

Frank Laukien

same We rather, September thing, the But our rate, or don't on how I right speculate we XX rates prediction. today's October usually, and make just and rates X formally we guess, take make that's that.

So predict we don't FX, we don't.

Patrick Donnelly

it but will I No, there... -- then, be a Yes. guess see be And mean, bit Frank, like seemed Right. of happens. headwind a that what I

Frank Laukien

to have Oh, acknowledge no, revenue, most recent year Yes. -- we are that beginning as the it will just of rates be the at a the But somewhat assume we headwind that. of rates. we whatever

Patrick Donnelly

we And of the a during just quarter, backdrop, amount given decent the questions on got macro. Frank, Europe the then,

You guys results put good there. up

just growth. work double-digit what given macro low 'XX, you're perspective there? academic What give some you about just Maybe the way like conversations, our as that fears Europe? into think in I hearing we looks customer us out called market

Frank Laukien

in research, don't research We in Yes. the see in really -- life any disease academic Europe. science, in I investments mean,

in the Europe U.S. China in strongly, Also in some strong. of very that see course, to geographies. and but Biopharma particularly other investments continue and also also continue We

products are greatly it's it's you Europe industry, not we're but of So obvious, Plus, for type our be most so if products of exaggerated. look yes, think the that our I of they're probably quite X concerns making, thing type healthy. year-to-date the of and our -- one for Instruments about XXXX for -- not over the in that XX% for may first is, years about Europe kind -- months, revenue at very for XXs the the mix different Scientific recently Americas. few Bruker That X as Scientific for Instruments. at the XX% from then Europe, as same for for was the Americas. and a high they're ago, is now for it's the full Europe mid-XXs year It

in are we that exposed, we grown XX% has Americas, been. would not revenue. of like, to It's significantly have I with about proteomics, just other our traditionally so academic is biopharma Bruker the products quite you as under So a Europe, that the milestone so with different remember, Yes. a for and as many at than us Bruker have Americas our in least. same historically guess, we that That's Europe year-to-date, about at you revenue and if

Operator

SVB comes from Our next question Souda Puneet from Securities.

Puneet Souda

I could or confident X of fourth -- of to the last first now the one, were you saying X So be gigahertz X clarify, gigahertz it quarter. quarter, NMRs want X. you're in But the just

but in the And strong get about you're numbers are So the gigahertz fourth magnets Is of acceptance how here of the we what about the of XXXX? think sort USF just obviously, in want that? sense of instrument? quarter? gating [ph] it that thinking And how of a is the to of sort should sort sort

Frank Laukien

correct, have That's year. would yes. X initially We thought this we

the which hedging X to by systems And a tests. and final X quarter. manufactured implies bit X are saying in Now passed we're these X little to have fourth

the them. So gating timing not the that's to item it install by but takes

that And is them, course, some be of rework done. of needs to there some

why or quarter the that's we're that's X full X year. the for fourth and guiding So to X X to in systems

similar go around possible, manufacturing We XXXX we going yes, know, we're systems is per is we run up different fourth that's quarter going guidance, first as X our in but seems we probably be so of over to next to to not them -- for that's systems gigahertz, have only haven't will into rate. it's -- different -- X.X move -- as the of giving course, you But year guidance addition that And would quarter that, be technology, right, the deal. also gigahertz attracts. probably all in slightly big have then our to if one of the time, X that's if not baked we that's year, in -- which a we're

our the revenue we can overall, guidance, implied our raised are mean, the fourth we I pretty year full confident the reach and implied for growth -- at on XXXX. quarter for color the and guidance level least organic

to balance shift if us let exact timing. the tend now, X So I that in wouldn't Not worry us speak. does year. quarter. X or the X that worry, so here let but into fourth Right We anticipating to it's to next be about we're flippant

Puneet Souda

one you, is then more obviously, and And Frank and maybe X. one great. brief just out, X book-to-bill then you pointed as for for Okay, Gerald. a months Backlog, than strong just

of characterize what can it is segmentation Is Bruker just So -- large a Meaning bit -- in with a sort to markets a versus largely that where end more of we and it presence have this about how little Bruker backlog? some Biopharma again, Industrial you revenue is across geography levered Europe. have you versus representation revenue? and of seen

this pointed sort as the backlog. you And the is to trying just characterize sticky. pretty So of out,

to op there. want just a I And picture Gerald, margin, So, then, of us. get obviously, ahead significantly

that the about a into little talk XXXX? sort sustainability you can Just of of bit

Frank Laukien

Yes.

excellent an to and you stronger it's because Applied we're don't clear most yet. any frustrate Industrial Europe see is Puneet, So -- expected. have I would mean We question. don't than excellent, this chips some is than at in some would in despite headline stronger many slowdown CapEx point metrology on. expected. investments memory and Semiconductor news about patterns is perhaps so have and

Europe is has really there very see really non-semiconductor yes, we sensitive yet picture macro markets don't for so or and strong more us. applied year. much mixed markets, a continued continued the far, also for clearly So are headline of solidly. industrial it China news such as more but And macroeconomically, solidly. has quite

on a So it's what in data. see we on our see a disconnect or the own between Internet newspapers versus bit of what the we

data, bit going in this more planning So year strong a year, what really it's we're far, boom. including than into But our strong last year next seeing was quite a of a cautiously This in own year. into was our we're very more in our bookings. so year all

very all asked So you we're not carefully obviously and the good a they have lot we because to same are just be questions. looking learned questions very and

Gerald Herman

the were would comment mean not going the extremely completely XX.X% we what It's in obviously, Gerald. operating quarter in just it's I period. solid, third X.X point performance. lot margin Project about I'm you with a drop may that a Puneet, the I the it on at for. see our Operating was the Accelerate margin remarks, that has to would us EBIT. pointed I We'll I do to as pretty quarter, out. where with we're comment performance margin well as to speaking, XXXX we generally also little we my hoping that clearly of profit I quite But on If had in through takes catch operating prepared bit line. February. you for direction out, strong encouraged down for say, this moving stage. volume as mean mix talk if didn't more

Frank Laukien

But look quarter. at year-to-date the not at X results,

bit supply a have allow end, You we boost met a had bit then than and weaker We exceeded But liked. in but did logistics was would would a our consensus We second achieve QX. and quarter more. we have the from chain of that to not that. towards liked remember that

of more informative the really quarter, at looking the So year, quarter focusing X it's even any first like quarters X average it's the of if than very on a QX. good

Puneet Souda

Got on -- despite it. Super And the helpful. congrats backdrop. again

Frank Laukien

Thank you.

Gerald Herman

Thank you.

Operator

from question next from Stifel. comes Our Dan Arias

Dan Arias

there a applications? for is side so, is of sounds on follow-up What demand high some Benchtop just the Frank, different? to the seeing high for question curious now. I BioSpin. how wanted And different are I Applied the noticeably on like pretty Just end? growth you strong portfolio mean market the from if it field ask if right

Frank Laukien

good Yes, Thank Dan. you, question.

bit. not Benchtop and for food a split clinical XXX food of me is, XXX Benchtop But systems, research the there research our the system, very There's let overall, at -- or growth challenging. our business, much we've this and and -- that Benchtop supply is course, our more some limitations. analysis, we NMR good system mid-field have that's megahertz, is so research because typically far good year our Applied but managed some of supply Benchtop slowdowns and with business also is backlog. applied so chain screener chain IBD larger Applied megahertz So some clinical but is good why little being superconducting demand

point. not some ramp magnet into of a of Some that's materials would amount, have in other production product that tiny, liked. this the that go much line mind, tiny tiny of allowed and us BioSpin the as Keep at we to things as part have

the future. for one it's course, that promise holds Of

last think business for not would and well. solid, that. quite margin So And it's much superconducting we We It's as to along the is the and liked BioSpin that business doing and the has primarily growing PET/MR, very, chain going some the is clinical XXXX, not chugging business. Applied consumables year. but service least, normalize nice it's and Preclinical PET/CT, double not Imaging supply very research, in that's but very primarily fast business forget NMR which very is and to MRI, just at the single-digit to growth. nice, as high point of very a this And in demand have digits larger

Dan Arias

Yes.

as power, the approaches, etcetera. mean, in that baseline winter draw conversation? guess I mean, about apologies labs, then coming are do whether beating sort lot have dead your the at is of curious specifically energy customers and concerns But just the just sort on of I'm that And I up I that a talking Or sites especially just Okay. issues is of and... Europe. about the noise horse for physics people that

Frank Laukien

mean, no, center in No, in and everywhere in Germany in it's Europe. Switzerland, no. Absolutely, everywhere but Europe, front I also

impact. limit the significant inflation a inflation taxpayer, very inflation decided there. that government, that very put much -- and pay for industry, But there now, German of therefore, overall sorry, the lid to for the the much, in electricity well thank including The consumers Europe. governments, cost as is and is you a the have cap and So as basically on energy just have

Now some industries them, whatnot for to investments. moving there, locations structural and from to glassblowing and some fertilizer to down in other their brewing beer it's to are the fundamental of them world. slowing They're

structural. not it's us, For

a we drivers, inflation Inflation expansion. margin they headwind sure, year, it's us, to are driver an this for For our acknowledge. which

for situation at compensated, I its seen, drivers. ironic However, than finds many more supplies are in we've itself you've other mean Germany overcompensated as the that And point, with this gas full. positive we've that

French starting through least power Of or back coming back winters course, good before mostly online it's online at the to The winter. from last nuclear maintenance are have but plants position. they a the

look everybody weeks is energy have there down dire investments and I don't ago. is when -- quite might X making quite as as and X summer it more I heating. Nonetheless, risk. cooling, So temperature next it need in looked solar We're think than photovoltaic mean, is we additional tiling doesn't or warmer we're honestly, so for Bruker. saving the and and dressing

multiple could it's risk. a think if I be messy right, what the we it's I affected be But and have that risk, mean to Bruker, factories simultaneously. worst wouldn't So

cold had in the we the down of the at in or with due to a way, winter. power If keep QX, some or by our can moving. outages happen week, point, in would very some wildfires had ago the And a to earthquakes for years one California factories others shut same when Texas

is risk manageable. is there yes, is risk, it is and there elevated But inflation. So there

would next worried the from kind I to a Could that's think not plan there and Bruker's that. because with looking different actually elements, quantitatively manageable business of year's the next type and is about it's I'm that not for I at worst-case I'm something concerned of consider really that QX year's plan. move risk. of business low scenario overall QX really in Yes, picture. that probability? But as

Dan Arias

is breweries the All that we can through. make it ask

Frank Laukien

Luckily, a non-European And there's breweries plenty yes. few them. there's but of

Operator

from Our Josh next from question Waldman Research. Cleveland comes

Josh Waldman

question quarter. follow-up. headwinds funnel Two grew see trying I third It strong. has digits for I a opportunity to might a or I'm guess, the broad-based obviously last Frank, order starting I believe your been you in and there quite Bookings year-to-date. anything the we over months quarters? in growth bit up with as look in orders is several conversations you. new rationalize over with normalization backlog curious, the mean strong double are on the the guess a comments purchasing again lead sounds in of a next like here XX just or customers out we with macro recently. trends that to high-level

Frank Laukien

Well, there a growing. we're is I think --

Our backlog growing. is

is the But even for in Scientific there 'XX. beginning was was was growth right? order Instruments a year-over-year within Our that, The book-to-bill in growth, 'XX faster of faster X. slowdown growth than the greater in and

essentially the geographies key with that really our as conditions a Biopharma geographies that's So us doing healthy you very see But many half in strongly, is or like -- Biopharma of even is doing I is with is I strength anymore. still tool macro not see a -- as booming is Proteomics non-booming growth and tools the it's because it our it's the being could in not XXXX not also -- first We're cite. as booming as healthy portfolio. all well used year. a very growth really, well, to way semiconductor, nice of in fast characterize but quite well. very -- most is -- very, bit again, not the it it for a the you in all being It bookings and examples -- proteomics fast anymore other very, of wouldn't of and

a see first growth I've used that use slowdown. to you last word; in want the don't year. see I growth don't gradual compared and So, the -- now to But see you a lesser high very word. that you half

we anymore QX very, see acknowledge up is high still as in the a we very the markets growth then. and And further. setup intake they really the growth industrial backlog indeed, just X and months, next, here, that know, more greater sensitive XX, So excellent. with still And I don't in live is that. and backlog. our in order see than -- not backlog the book-to-bill along Instruments did XX But expect quite Scientific mean healthy will will we But our the is applied point economically I growth which right? was off they but don't go would lower that's

wouldn't but it's healthy very not I -- times still boom anymore. it's So

Josh Waldman

up in that the cost be much look how margins. like 'XX? Could about Got it. talk in margins on the thinking Then, I follow-up on That's just quarter ahead versus price in backlog, performance progression and how in your nice was looks abate And cost in here contribution based op you you margin helpful. fourth guess a what a on starting to 'XX, to to through helpful. Gerald, that starting mix show 'XX QX. on expectation you the would price the for Obviously, to impact price price then P&L? comment of as you're How the

Gerald Herman

-- we've good question. Yes,

we price for stronger bit the to the be performance. But case us, cost we've inflation in case latter pressure for an move that certainly and calls. the of fundamentally, discussed as realization. But And little prior just the do of helping So headwind the this part net 'XX was of part think, 'XX. fundamentally, a continues early see is we on And we realization price I seeing 'XX. through are margin still that

quarter do not And the I we Yes, speaking, we the take we actions for to in markets continue solid. but the also in very are positioned been to only generally which well can I so. future, feel really performance for We XXXX. fourth think that's pricing wherever including has the think important

performance reflected in over margin quarters. the couple of see the gross the numbers You last

Operator

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

Nisarg Shah

on This is for Nisarg Derik.

So I demand. Biotyper [ph] wanted about to start asking off

about inflationary are think how and seeing we later hospitals should As placements pressures, there?

Frank Laukien

microbiology business. I if Frank. it's is MALDI question This the the So Biotyper understood correctly, clinical

year before So significant the instrument Russia we earlier also from And consumables XXXX, consumables growing growth their for year, but large Last year-over-year is year, had and CDC it's from revenue control year and with some business MALDI year-to-date. significant orders and in disease last exceptionally Biotyper, last continued very were year orders -- deliveries some very this down had with the mostly in good just Biotyper MALDI some last we center in China, deals some The year. but for nicely. that. we

up So this year microbiology as strongly is last overall, clinical not but year. as

Nisarg Shah

you're quarter, mentioned from anything earlier Got any catch-up you this then of on spend forward some chain you in constraints year. supply up this And XQ? looking in following Are it. the to seeing

Frank Laukien

as there's instruments of Yes, us a Those flush. catching or budget Nobody business affect primarily that that or some consumables than that. as told aware as of lot they're tend don't us aftermarket of more XX% things with to sort a we're not has companies. some up really a backlog much

So it. know. we of -- I wouldn't were aware not It's not

Operator

comes next Vatnsdal Our question from JPMorgan. from Rachel

Rachel Vatnsdal

like in then? how downturns your let's can So rate big cancellation what following to you economic the continues a locked of up order just to on about to you prior book And backdrop macro the visibility, So would how be? can of your earlier about if some deteriorate, maybe risk comments just then cancellations and that that compare order book talk is? say look

Frank Laukien

Yes. to immaterial and nil. it's expect now, pretty it we then a be immaterial It's -- answer. next essentially to It's simple

we but usually it just cancellations. don't from our keep I doesn't short suffer -- backlog if Sorry,

Rachel Vatnsdal

Got it.

one me. for that's And last Okay, then helpful.

cadence, looking quarter. organic XX% you're growth almost growth. you at Just XQ, during expecting And mid-single-digit guys for then the the upper did quarterly that

well? kind as saw? So of that pent-up And you XQ forward the walk the How pull and on can seeing demand I demand some much us growth you this of but quarter? are from was from you understand chain XQ any supply constraints there's some lumpiness from and XX% XQ of then, puts takes the through

Frank Laukien

a Rachel, are look XX% year, as We're to at in been nicely consensus We're at overperform X% QX. guiding able measure. meaningful QX. don't earlier, look I to barely meeting Year-to-date organic QX, year-to-date. because continued in for QX, XX.X% at at don't said always some obviously, look We've there is to only the risks. growth

quarter other supply each and still is and challenge. chain lockdown whatnot -- a So and

prudently. That's account, comments. into that I or And take Bruker we really to the year-to-date. understand my hopefully, is to key the So look at year think the

Gerald Herman

One time Maybe question. one have for final we more question.

Operator

question Brandon final comes from our Couillard And Jefferies. from today

Brandon Couillard

of specifically organic Gerald. does growth, that for you rate? exclude BSI the couple speak order third to And quarter you, ultra-high orders? a Can any just housekeeping items Just the field

Frank Laukien

In -- in So in I in think, and housekeeping orders had, -- none on item. understood, I Brandon. that QX QX the X we ultra-high field

Gerald Herman

That's right.

Frank Laukien

And X well, if the address then BSI book-to-bill two was questions. that greater than QX in as

Brandon Couillard

impact of currency Okay. was on And the then third the and Gerald, in what gross margin quarter? operating expansion

Gerald Herman

speaking, we've before, got gone foreign think But generally through Brandon. this exchanges, I volatility. maybe it's

headwind I the -- revenue think we've talked a had the about when the line. we on U.S. dollar strengthens,

have the our and the categories EPS to We down operations gross when foreign gets operating line. it generally favorability because both some it's of neutral in the expense and pretty

at some the So down think exchange quarter see case. related the... I favorability think the foreign that's bottom generally to Again, line. than, third I did But in the we other that's

Frank Laukien

if bit If little may, more poses it, you a think about broadly. I

our is guidance, yes, is is though an it raised small which that of do a those EPS even you and from a currency EPS, seen at we instance, bit we margin haven't guidance Margin, you've we margin offset. the headwind our this do small, year. have it's you we tailwinds And from although inflation for why EPS correct. that, to -- and If look time acknowledge relatively nearly have headwinds, EPS, FX get some by higher.

Gerald Herman

right. That's

Frank Laukien

Hope that helps.

Operator

we'll question-and-answer any floor that, the back I'd with closing remarks. management like end to turn gentlemen, to and today's over session. ladies team the And for

Justin Ward

Bruker's you joining with Please event quarter. meeting team follow-ups. or leadership Yes. me feel a to arrange out with any an speaking to day. you us at to fourth reach Have the great during to for directly forward looks today. Thank you free

Operator

you presentation. that, and ladies we'll for today's conference conclude thank gentlemen, call with And and We do joining.

You may disconnect your now lines.

Bruker (BRKR) 3 Nov 222022 Q3 Earnings call transcript