BRKR - Earnings call 3 2023 | Bruker Corporation

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Operator

Ladies and gentlemen, thank you for attending today's conference call. I would now like to turn the call over to Justin Ward, Head of Investor Relations. Please go ahead.

Justin Ward

Thank you, and good morning. I would like to welcome everyone to Bruker Corporation's Third Quarter 2023 Earnings Conference Call. Ward, Corporate Bruker's Development. Justin Investor Director is and Relations name and Senior I'm of My

the and Joining Laukien, Gerald . CEO; of our on Herman, President Nano me today's President and Mark call our Executive Munch, and President; Executive Vice Corporate are Vice Frank Bruker and Group CFO. President

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

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

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

forward-looking related call, future such as as risks of actual from the well statements. conference we regarding inflation. The materially the and and making results risks to chain to those involve company's may supply be will uncertainties, operational differ statements financial this including geopolitical company performance logistics and and events wars During and that

Form that for December cause -- Factors SEC's which are as but website on discussed our our in period and differences are the today's updated the might website. earnings include, other XX in and and to, SEC filings, limited ending release not such of by those XXXX, XX-K available on

quarter financial law, required conditions and update February We outlook early note of please except our future results -- is as based to release not expected that other based be Also, XXXX for in to fourth the do to statements our intend the business information, reasons, following on of new current our prior by X, We today, on as events or XXXX. forward-looking may November XXXX. information

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

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

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

Frank Laukien

Thank call. quarter third everyone. has excellent morning, the for quarter, today's earnings continued organic good X year-to-date. XXXX Justin, double-digit Thank revenue joining us In third to consecutive Bruker on with you, and revenue quarters of growth growth deliver you

of of 'XX, organic quarter fourth to in revenue on anticipate us XXXX growth revenue the single-digit puts XXXX. For years growth. high double-digit we track for which organic X

have great In XX.X% market of We growth -- we demonstrated months and non-GAAP difficult believe industry-leading resilience year-to-date. is conditions and XXXX, with in what of the growth of we EPS revenue first X XX.X% -- organic

fiscal the our XXX for organic financial by XXXX for backlog results, raising at solid bps Given year-to-date year fourth growth and strong time guidance outlook quarter, we our revenue midpoint. this again, the are positive

our now present We as strategy solutions from to are innovation our We of as third to capabilities attribute pleased well significant to and X.X core us unique this our of with products XXXX. are report solid quarter resulting These Accelerate to which portfolio, Project yields financial weakness. our the results strategy, from in transformation. differentiated a resiliency the elements is shielding extent ongoing which demand

For bioprocessing, CROs, example, cetera. biopharma, et in COVID testing,

for in in demand Solutions, about confidence for We quarter. XXXX. us remain fourth gives growth Instruments the continued positive Bruker solid Science Life also Scientific which and and

recently investments tools, proteomics our consumables, applied services, have proteomic biology, software. well well cell investments neuroscience single scientific accelerated previously and we Project my in Mark and as We're discovery will making research colleague, as in solutions acquired excellence as transformative X.X talk in further about that. drug our XXXX, in year initiatives. in drivers growth and productivity. fiscal operational In as Accelerate acquired

Right.

it. to get Let's

organic an Scientific Bruker delivered Bruker Instruments, XX.X% XX.X% in rate X of 'XX, added reported included with XX.X%, and revenues good XX.X% which year-over-year constant of and BEST, an X.X%. quarter and implies Slide growth to third quarter XXXX, intercompany which while and organic Bruker's non-GAAP basis, FX revenues growth included increased of $XXX.X -- another BSI quarter at This of XX.X% On X.X%. XX.X% XX.X% from growth excellent the year-over-year. growth EPS Turning now. of growth increased In of tailwind organic to third eliminations. acquisitions year-over-year. our net segment exchange million.

is in to will margin of the of of margin and EPS good pretty EPS of a detail. $X.XX much In exactly of in operating albeit for non-GAAP compared offsetting strong reported in decrease Bruker drivers quarter a level $X.XX from 'XX. operating diluted later XXXX. 'XX, a discuss $X.XX, On basis, XXXX EPS third quarter XX.X% quarter headwind currency quarter. the 'XX. very was which tailwind margins quarter, a bps non-GAAP the third compared up the QX the our to had a quarter third third third was GAAP quarter Our profit XXX XX.X%, year-over-year third diluted of minus in $X.XX Gerald This $X.XX tax more in $X.XX a

X first on Slide months X. the to Moving

and see and growth excellent year-over-year, XX.X%. More intercompany basis, execution On increased by organic revenues first industry-leading non-GAAP $X.XX our EPS X revenues eliminations. organic XXXX You net scientific performance organic in with XX.X% in XXXX of an strong of the and revenue grew of organic XX.X% months growth of first Bruker's specifically, to growth of XX.X% XX.X% months first can X months and at growth consisting BEST, X instruments billion. XX.X% of revenue

the upper elevated and organically, Also, year-to-date remained BSI book-to-bill First backlog ratio BSI grew year-over-year of our Bruker CALID. and above our the X and X.X third the at digits end mid-single BioSpin order XXXX driven by remains strong for months bookings quarter in effect.

non-GAAP X. $X.XX the all currency. headwind X and GAAP you -- Slide growth months Our on EPS EPS of performance despite a XX% non-GAAP strong first And are and from can and XXXX margin summarized operating And gross see non-GAAP

a on invested months acquisitions. trailing non-GAAP was process Our by Bruker that our highlights and supplemented differentiated XX.X%, and organic management entrepreneurialism on measure disciplined XX selected return focus a metric capital, attractive growth

grew third and where X highlight constant Year-to-date, we performance quarter and high groups in million X from for we of X This in far $XXX year-over-year single-digit year-to-date the of our turn to had our currency this namely QX QX the and and a also percentage BioSpin Group of class was 'XX. on so X, in the revenue and Slide gigahertz comparison, NMR all included X scientific instruments basis. 'XX. Please And segment, revenue year, just BEST 'XX

new In by of research biopharma, across markets, to Bruker. months integrated and book the to well academic industrial 'XX, its X lab expect the data government applied solutions with on scientific X as division software the X -- In X software the platform, XXXX, months relatively Bruker quarter and way. in markets In saw the revenue or of first SciY as we something new gigahertz-class fourth and NMRs, that's growth

Right.

months business infrared teens platform well of X with and First applied as science million revenue infrared the in percentage strong XXXX, and our $XXX growth our as growth by life the had Group high of aftermarket mass spec growth near and in timsTOF the mass in Raman business. business strong optics driven CALID spectrometry

for and wins, press proteomics further know XD the which eventually HUPO Our were for launched both September, -- optics the nice and Korea in this announced optics X-dimensional, and for in very timsTOF high recent on business, ASMS this releases. tender recent of so-called very consumables XD year, airports, at in XXX next-generation and we timsTOF methods, Frankfurt our explained X Ultra trace over DE-tector that's unbiased business At in the unique fidelity advantageous. Zurich detectors we Congress in multiomics quite platform we timsTOF advances software the and explosive

solid for offset was by molecular to near the MALDI Infectious slightly final up revenue Disease Microbiology a of was Biotyper our demand now diagnostics X. modest as and revenue drop COVID-XX consumables

$XXX industrial global advanced X intelligence, in Slide now. gov, and grew aca metrology. revenue Bruker in semiconductor The strong end with Nano investments tailwinds metrology across to packaging AI, turn Year-to-date, markets, strong for was percentage including our and XXs semiconductor are low revenue tools. growth the Please artificial million,

Revenues product from acquisition includes a fourth the x-ray our and research also delivered of the revenue nanosurface months. fluorescence neuroscience Life in strong science tools at innovation 'XX and X Inscopix microscopy contribution strong now tools. on first up quarter advanced all growth was

tools by BeST year-to-date 'XX, key other the by demand. Advanced gains UV, customers in OEM revenues customers, and driven Finally, MRI demand Technologies our again, lithography by grew in revenue strong share science, superconductor large fusion in technologies by for for as growth eliminations, growth research OEM of often big from semiconductor semiconductor net mid-teens well driven EUV AI and intercompany percentage as extreme

Right.

to Munch, now we to Cellular take hand X. Nano who Mark Moving Over resetting I'll Mark Bruker to and to the Group take Analysis Cellular the highlight the Mark. Bruker delighted renamed the and and business. part and new Dr. this And acquisition now to Analysis PhenomeX Slides drove business. strategy pause, I'm rightsizing X a -- you, Presidents Bruker our over

Mark Munch

This We're PhenomeX. Thank you, of about new our business. acquisition Frank. excited

brought in therapy, valuable our [indiscernible] we the IsoPlexis Berkley complementary together amongst Accelerate also mentioned, and development, and Cellular these X.X and also it helps discovery, Accelerate growing unique ISOSpark Analysis now platforms: Frank segments of Analysis, our As to PhenomeX which XXXX Cellular and gene footprint a Bruker research is line initiative address Project Together, technologies X IVEI biopharma. X.X translational our research, was Tools. and clinical market and -- call rapidly Beacon platform Bruker antibody in Lights expanding cell cell Project OptoFluidics the fits perfectly therapy others. our initiative. This QX platform. It and merger

as tool, our for example, suspensions. tool as biology important an examining is cell Sellscape phenotypes well For and which Canopy spatial

for brings commercial of this And a so opportunity lot synergies.

happen which an October just valuation the which and our We and business was Slide million $XX acquisition is X, revenue. mostly roughly QX was to $XXX PhenomeX started XXXX. immediately of cost closed the in work some on for which to on Moving financial bridge rightsizing details optimizing structures, X, therefore this acquired XXXX, included loan, going million, to a give on Xx here attractive transaction

is our address run cross-selling to we spatial Initial year, and analysis than to of spoke for -- and these new and potential strong segments the are with somewhat existing that tools. I And per we of greater biology attractive with that. that cellar mentioned, rate the as about be the business see opportunities $XX million given we're We Many expected segments excited of market Bruker, this. so

these QX In businesses. cost We impact terms encourage $X.XX with we dilutive EPS XXXX, through work you we anticipate and XXXX ROIC. and help of XXXX, to quarter get significant optimization. to slightly rightsizing rapid here structure expect impact, to X being and links shown the and visit by a for non-GAAP we accretive double-digit dilutive Bruker long-term as the familiar

excited very the are these platforms. Thank to you. Frank. you, valuable here in We technology Back about . potential very

Frank Laukien

Thank Yes, recommend very you it's would think has Mark. a that website. minutes, few you much, are a actually if highly really I these informative. have very I cool links

So about thank the of business, reasons that a excited single with you, well key this attractive technologies biology for Mark all explained Mark. cell acquisition done. We're leading

So have the accelerated our in third in row summary, solid productivity. excellence for transformation and in as growth revenue a even X.X capacity organic and year investments its track in in on Accelerate is we EPS double-digit Project growth. as Bruker well operational of as

well right now. strategy Our exceedingly working dual is

commitment Bruker's the is result high-value solutions customers a fundamental of result of the So for as and innovating well our strong portfolio ongoing as growth transformation. to

world-class leadership in well execution position applications many outperformance. areas, biological and via with our continued process us Bruker combined technology for management Our

other February. expect early in we we fiscal report guidance results, 'XX year 'XX to will so when give years, financial As be in QX

growth our remain we that also please in we XXXX our XXXX, for which June However, solid 'XX Day. medium-term on and expect issued at targets, Investor organic to note we track deliver

Gerald Gerald. the review let Chief outlook. updated over will our our and in more much financial detail, Officer, -- So with our performance that, call to outlook me fiscal who 'XX Financial turn Herman,

Gerald Herman

share margin the starting in XX.X% XX.X% on per Thank partially XX offset and third the reported X foreign million, down $XXX $X.XX points. improvement to provide non-GAAP the the XXXX's EPS $X.XX an of us third quarter you, which $X.XX year-over-year in a On was was acquisition 'XX. of increased Bruker's by today. more the Gross first quarter the thank per third -- an compared Frank, some basis, Slide and negatively to The XXXX. increase QX XXXX, points and margin quarter XXX revenue financial revenue from XX, detail 'XX, quarter increase by basis We posted performance -- impacted you, and of $X.XX reflects in in and on XX of gross headwind quarter third to I'm months GAAP share, XXXX year-over-year. organic reported organic XX.X% pleased of joining everyone, EPS we of basis of performance Bruker's for exchange third of by points basis

XXXX non-GAAP X.X% cash year-over-year points and our foreign finished third basis quarter a the quarter well XXX We short-term third headwinds million. impacted operating Our increased from by the decreased with strong while exchange and non-GAAP approximately of acquisition income to margin operating 'XX. comparison cash, investments as challenging of and XX.X%, equivalents as $XXX

generated XXXX. the in X.X quarter. cash of $XX.X October flow During million the PhenomeX, third in repurchases million third investments, of used to discuss Accelerate quarter the closed acquisitions million of $XXX quarter, $XX and acquisition selected approximately we We cash operating I'll we share the third which of fund of Project X, later. about On

investments resulting operating Our of flow capital This third in cash the $XX.X 'XX. quarter $XX.X million million free million flow and of of $XX.X were free with compares of in 'XX. third expenditure in flow million, quarter the of $XX.X cash cash

the 'XX Both organic class reviewed had Compared earlier. shows to the the gigahertz for was up revenue. and BioSpin's digits. bridge Frank quarter 'XX, of XX in of 'XX quarter revenue as third 'XX, high Slide third X has NMR quarter third single QX XXXX revenue

or the X class fourth similar the X from fourth of to 'XX. revenue quarter expect NMRs quarter We in gigahertz 'XX

academic our semiconductor markets. industrial organic advanced revenue as driven the grew with by metrology range, performance as percentage grew business. strong mid-teens research, in organic percentage well microbiology Nano AI-driven single-digit strength CALID by in packaging revenue high Nano's and

the growth solid organic revenue of organic high BSI aftermarket. Geographically 'XX, an growth systems all Pacific the third percentage revenue European the Asia quarter the year-over-year. organic in range, grew and and revenue teens single-digit single-digit delivered percentage low with percentage, We basis third systems and in in in growth growth 'XX quarter our in of revenue Americas had on in teens in aftermarket low while percentage low grew teens

mid-XX% third For year-over-year. up region, EMEA our quarter was revenue 'XX

'XX, points XX non-GAAP basis XX quarter improvements decreased basis quarter of headwinds, XX.X% shows Non-GAAP in foreign offset points points. 'XX third from organic by the gross exchange of Slide impacted third the and performance our a partially XX gross of by XX.X% basis on of margin basis. acquisition-related P&L margin XXX

than from XXXX margins lower XXX 'XX, we of faced non-GAAP of of the difficult we The impacted margin third XX.X% acquisition strong operating margin margin. in exchange third third quarter by was were and as quarter points operating posted quarter comparison basis and the 'XX our XX.X% foreign to headwinds a

For $XXX.X of the share mostly to over million average third X.X% XX of Weighted XX.X% 'XX, million, was X.X in the our from third months. were 'XX, repurchases of in the the quarter quarter a the XX resulting shares from of tax trailing reduction or favorable quarter compared rate of by driven shares effective our third third mix. jurisdictional diluted non-GAAP outstanding quarter XX.X% 'XX,

of Finally, with $X.XX of offsetting foreign XX.X% from was to rate, a a compared quarter $X.XX 'XX $X.XX third favorable headwind. quarter up tax and XXXX the non-GAAP third exchange tailwind a EPS

of covered already resulting our growth for line, Slide revenue X% exchange X shows -- first XX.X%, reflecting top revenue was of XX.X% the -- first in $XXX the growth year-over-year. and was for added the XX of the while year-over-year a million XXXX. headwind, months. XX.X%. bridge up Acquisitions X.X% constant Frank X revenue The organic currency to Revenue foreign drivers months or

the the to Slide 'XX, Non-GAAP of XX, drivers slide. explained the and on third X the as largely first months on are P&L results 'XX summarized similar of for with quarter

generated on flow capital generated first 'XX, X XX. free We over months $XX $XX the of operating flow, profitability $XXX.X up cash over 'XX $XX Turning million to first other higher million favorable months the and of over 'XX items. Slide of million X first of X cash XXXX, about first the operating million months of lower cash up In we flow of on X the expenditures. now and higher about months

the positive XX. the outlook backlog increasing quarter, year-to-date Turning guidance now our our revenue solid we're year. results, for strong to In and fourth Slide for Given -- again

for Our to raising year revenue billion XX.X% revenue to of prior points guidance early year fiscal gave XXXX range XXX $X.XX an growth fiscal year-over-year. And XXX up now, 'XX updated in of we includes February. the $X.XX basis our points guidance by organic billion. the This from outlook a increase implies initial to XX.X% midpoint our of of guidance. from basis

to We now to constant year growth about to guidance expect currency and leads a currency now prior about margin This improvement points. Our of foreign contributions -- X.X% about acquisitions expectation revenue operating neutral to reported expect XX% from of XX of up our in basis and our the for organic growth. XXX points, We we of XXXX, is to revenue be XX%. revenue margins range basis in which operating

in, now combined XXX basis year foreign now operating non-GAAP from acquisitions, we we of to XXX cellular including acquired X, from For expect due as point business the points decline prior headwind the margins, basis October a analysis also exchange and a XXXX. all

by -- to fourth slightly that with be expected The business expected rightsizing we're business XXXX. of is cellular to most As only XXXX actions dilutive and discussed, the analysis previously cellular in the accretive such during the analysis quarter rapidly non-GAAP cost EPS

our The tool cell you another Cellular with time, Cellular accelerates its high and and entry solutions potential. believe be important research growth in revenue from into markets, margin Bruker. -- could As heard Mark, just Analysis therapy gene ROIC for business high biologics over differentiated we leveraging that Analysis

In $X.XX rightsizing EPS we year-over-year non-GAAP we growth guidance fourth $X.XX XX% business. including Cellular expect to guidance increasing bottom $X.XX the about be $X.XX, through of of to new $X.XX compared to up Accordingly, be the a Cellular that estimated dilutive for prior down EPS expect XXXX. excluding our as $X.XX or quarter we're fiscal to range line, to guidance, On XX% the to in year implies from XXXX, overall And -- range $X.XX of the range which business, EPS to to $X.XX of $X.XX, we prior the Analysis actually Analysis to work our non-GAAP non-GAAP our acquisition.

the Our assumptions assumptions listed other guidance guidance on are -- slide.

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

June Bruker. of Investor year targets outlook -- in medium-term Finally, Day for financial shared The at XXXX, I for XXXX fiscal our the

outlook QX our me those reconfirm gives financial to to year-to-date performance positive solid and including for Our for confidence targets, XXXX today commitment XXXX. growth

to up, Bruker the year organic We confident X growth quarter we and months 'XX -- So excellent revenue strong wrap in first and fiscal for delivered growth EPS outlook and the of XXXX. and in our beyond. remain

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

Justin Ward

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

to As questions, a and everyone that for we X question to you time follow-up. allow reminder, ask X .. limit yourself

Operator

first Puneet The of from line with comes Partners. . question Souda the Leerink Instructions] [Operator

Puneet Souda

Sure. Yes.

just here quarter So strong versus and industry the peers. very of backdrop I saying was a on congrats

So that's really great to see.

high Just growth in book-to-bill bookings on clarify the versus here based that of we're -- the quarters the wanted X bookings. the sort in mid-single-digit BSI you that provided. to for prior had year-to-date you question growth getting a double-digit single-digit on But

first I if third -- lower here? book-to-bill to was quarter the wanted in in Just mean, the check

nervousness what longer-term there seeing growth, out us for the And well? just you is about as to you're the maybe China, in it X% in growth XXXX the in fair market. think and just end algorithm Frank, help Could obviously, X% frame to given, still markets

Frank Laukien

give so, when signaled year. not do we've next obviously growth guidance, We'll guidance revenue we're 'XX solid guidance. to organic we give Happy Yes. Puneet, giving for

Anyway.

China in it weakness was of in Japan. which, So In Europe and and correct. so included strong. fairly there QX, in some The rest Americas course, and was the on, world, is bookings of

big other is China, that believe this was to that have was strong X. QX we X ticket And truly perhaps had we Remember, about in as some we funding. peers of in QX year-to-date, very book-to-bill items incremental so got some more funded normally it our bookings. unusual We struggle expected. as than effect might get that below

some pulled also But it was of forward.

China, And so is an right in and weakness there in we uneven also pattern China And that order we bit have Japan. now. QX, in a in saw but of China

a is -- X So for book-to-bill about we good very year-to-date forecast in in QX. have and bookings also

think around typically And we'll book-to-bill year. of for a QX. So the X we our comes our down the in bit backlog little before maintain always QX strong

single-digit few healthy demand, that in that's anyway, have are QX, to fact, very, like still real still revenue all hope mind, outlook significantly backlog. Keep You've conversion, the I heard the of customer very will backlog a most down will at 'XX. or you of organic I good elevated be going a know us, growth so for so those work addressed very bookings of orders, years we'll we into and take term your your backlog but and that extended a questions. in high

Puneet Souda

appreciate congrats longer I follow I the Frank. attractive on Analysis the and I And absolutely, up, PhenomeX term. definitely Yes, it. business. if could Cell mean,

you Analysis just have could the into about experience be you Cell now capital that with and Bruker? a equipment significant well selling You you'll positioning both with little see equipment research talk to high-end But pharma. high-end how within positioned bit

market a high now? instrument maybe bit X just may little timsTOF, given about right you changes behaviors in any sneak demos customer order a talk ongoing level of So in in on the or if the competitive dynamics could that? And high-res I potential

Frank Laukien

Yes.

instruments. we So love selling

develop Accelerate We X addressing of really antibody just we our we antibody them well in the Project like have you're can't without very The our as ways tool doing traditional is a another instrument, which the We Beacon refreshed very or well markets if is acquired just maybe that not the initiatives. depends it. in really better, developments key innovative development and faster well, by it but doing keep core, instruments. that with also Analysis high-end Cellular core only this,

those weakness right cell now very and of know we're to I gene markets, important for therapy, course, our push and in there's a accelerate a into of happy but markets. biologics bit And

this the So sometimes academic really, what of is right And course, maligned really good now, markets. we're at. it's, government

you're If right post-genomic that's development, areas. in you're And positioned trends, think spatial great. ourselves -- antibody, biology, stable the sell right line modification, if the proteomics we've is I which the on spot, cell post-translational in in

intelligence and the doing I add, we -- semiconductor and tools that from diversified, packaging you also to downturn biology, high-performance, strong. from should questions, I a it's and the some fully be for these with one advanced trends trends few trends remarkably know tends have more well. others be that is protel, a artificial a also high-end and There positioned the in we're buys the just ourselves that very mix are in we're packaging semi, or your but and industries, and others of technology but that our -- Nano bit AI technologies metrology to cyclical seeing really strong continue rebuilding the of trends spatial and are U.S. push semiconductor newer to really of group for geopolitical the macro are shielded not and Europe economic rebuilding their chip

questions others should portfolio, but We some well, sort right. probably new All products. of good exciting that's good in let get innovation, with as

Operator

of question from of the comes Bruin . Bank Derik America. next The with De line

Derik De Bruin

instrument your in terms some in -- know now. market, in And there don't some to you peers exposure much the Frank, been the going the of we're particularly concesitation of on buying a you like biopharma right understand to I has have dynamics trying have space. that. some but of as

on Could seeing pharma? have you what some after follow-up a just And color in provide . I that. incremental you're

Frank Laukien

it -- among budgets biopharma especially see so that getting CRO of not aggressively, we their down, instance, -- as for we being pretty slowing The Also, weak. runway cash and China see Yes. are being on. did NMR, some well. emerging that investments keep spends we'll for Biopharma are business on

So the bioproduction elsewhere, of that. very to you or see trends really we not much immune do we're some anything like don't

We have testing business. COVID little very

X ago god, just weren't you see they're a in of -- nicely, well. been biopharma. have you or we can some those We're many So we as confirm year nothing, weaknesses my years drivers growing were but ago, so we in -- other right? but if very We've biopharma, strong

So innovative the portfolio we're on we -- extremely high-performance compete firing We're very we confirm we and product but firing lines -- positioning some very lot cylinders, on well. have some other have that and all many We not really unique a of trends. cylinders, growth. some just

Derik De Bruin

stay I Can in And mean, going more industrial-focused market and industrial semis, Great. of markets I'm just some Chemical metrology to broader the seems alluded but are there. CapEx about commentary. that of chemicals to of spend about some -- places? the and some out macro on you other spending those what be, to those in customers? spend you sort talk

Frank Laukien

Yes.

need very areas is other and for industrial enough cetera, very computing a green there, in metrology metrology, see have industrial -- there's drivers research, and some that and advanced tech of really for some really things and green high-performance downturn there, seeing in fast-growing also So and again, we AI. General lot There's we other we there's spend, weakness but a in et and see a growth that that economy research you in memory we're battery then orders industrial, in we're us. economy. some green for orders. research, don't But noncyclical tech, some our hydrogen packaging also tech industrial materials. high-end strong been some very really good

neglecting core management think and refreshed just really We're , process. but not may to, we're we've they This investing [indiscernible] milking our I up share have there. how base of then gains add and cow. be And our the that we is part

-- well. has orders really done a division or AXS, a a some actually bit quite This been company like it's weaker. QX yes, so And right. China Bruker Yes,

-- a . industrial tech with research, again, -- setup and green but research So towards healthier industrial much within we right?

Derik De Bruin

that the over done years XX Yes, impressive with I've the Frank. covering been it's the stock. you've what portfolio been last

congrats. . So

Frank Laukien

go time there. back some We

Operator

The next of from Research. with question Josh Waldman of comes next comes from line the question the Josh Cleveland line -- The

Joshua Waldman

you. for X Just

remains backlog you on or provide update First, higher Is I said of normal kind opportunity? backlog you worth at elevated. than about Frank can months' X backlog? the Gerald, an it still of think

can medium you roll then growth as over And the the of down term? much backlog do we think kind how 'XX organic and into work impact annual

Gerald Herman

talking QX. -- than a we're our is for your Josh, were I about predictions because Yes. you, the pretty congratulations. backlog you so always we remains little thought than lower CFO's QX mean, had backlog quarter accurate Anyway, office

began So . as X.X all in so the year-end traditionally backlog months X before coaster and we X.X% -- backlog, months, we look roller than of higher maybe that. at had all or XXXX

right? multiyear be We're X year. point that can't from story, pump view, a -- in not and that out trying So we will capacity of all a to

So add be will it organic it to growth, multiyear our a story. but will

And right.

So be was assume can maybe would your some. that backlog I think at years or something right? normalized like I X that question,

Joshua Waldman

I a slowing assuming seeing you surprise? quarter? were mean China in provide mean more I is And could wondered guess, in end here any is Follow-up China a has what much in changed? I China? And by the you slowing? weaker the I trends context recent in on if there? Or outlook your you're did context on the decline how market months,

Frank Laukien

strong micro have little were orders right, we Yes. of in we that trend, these our assuming slowing QX. No, very a because

did weak orders was world in So the Japan, quite well QX, Rest as in of as well. relatively China

macro forward, there think QX Bruker of if us. forecast for I QX have weaker for in look this made bookings -- And that, weakness very I China overinterpreting significantly which the a with mean, year-to-date, a namely it's for I has see, special, little along strong into was bit slower but we is led double in China. we Year-to-date, tricky. to QX, partial in quarter order our will growth a pull But that's digits. has China why us, always

acknowledged significantly year-to-date, As there we very

Gerald Herman

revenue say different that just might quite the times I lead trend and is given backlogs.

are growing revenues the really still order added So just of nicely The in early the bolus there. the on to part year backlog.

take us still that to going while So for revenues. backlog to China convert in it's to a

the double the Frank in to the weakness So there. orders because QX in well is again, . orders. year-to-date, the referring that's forward pull of more the digits earlier But year, are up so is

Operator

line the John UBS. Sourbeer of from comes next The with question

John Sourbeer

I little on environment with just you and on just overall appreciate more high-end bit the could demand. maybe academic pharma government provide a is the for maybe color instrumentation color funding But customers? if specific

Frank Laukien

boom It's low pretty right? it you. grows fast John, at steadily as sometimes also thank at resilient digits. high mid-single times, I it Okay, is good, grows -- academic never -- generally just digits, by mean been but government single

were where I to are years depends research including centers. exposed cetera, medical medical I are. ago. you and more government, proteomics academic As academic than say, medical very answer mean we it always centers, much schools, we et research, really academic

techno think lipidomics trends the this days. that there. stronger are growth these scientific post-genomic a glycomics thing The And philanthropy -- the into here. funding Metabolomics and and much PTM, turing am and session way, trends, the well or the all think, of I we're between focus genomic just they And areas good things than proteomics, at remain that's just and I will cancer a in neuroscience I research. positioned NIH procedures very really post-genomic on and because these --

But for biology and we're drivers. our -- exposure into are cell positioned trends, beautifully spatial good greater post-genomic

we are important. this growing much modestly is So academic within funding where government more

we're and next well. there hopefully really, for really, so of think, decade therefore I were more, sweet or think, are in we're the the spot demand I the funding And really -- in as curve.

product prioritized great. of the our allocation with is So

John Sourbeer

when demand? out the but I you I not trends? any there look guess when months, on trying guiding more. get any that you look to was see you're anticipate mean, over you it. know do you changes I next I out year, for change in XX do Got this next

Frank Laukien

early really secular are I in and as I which or that, we has those think also changed but food do now. the company decades, is towards in a But, [indiscernible] trends call days couple still post-genomic it the analysis. call dramatically the exactly -- maybe could where except of you us think semiconductor post-genomic Right? age,

all China very tools. orders there heavily. budgets, in were NMR that then ACT. you Act, spectrometry Science, has European So a also A exposed Science microscopy, of timsTOFt have Act, to you year, been for mass high-end NIH you But lot China CHIPS some but the investing noise, might Life we're have early have I mean, slower our be this much. maybe CHIPS the directly NIH not

execute in the China project is that the as very West, and the So significant investment ourselves. in a of positioned is which the focus -- -- the means just big they that dwarf it case, be sometimes there's headline so often will to speak, we there investment, proteomics a this post-genomic on exactly all where have use -- if anything the we'll headline

John Sourbeer

on this dissynergies business. way Bruker or provide sneak you the be you I just color to quantify cross-selling of long-term could for what Appreciate willing the you think on Would to business PhenomeX, additional the could there? any that. Any that? any more provide opportunities be growth in cellular one rate If or could

Frank Laukien

on right. We're getting focusing cost structure right the now

as bit we're making greater So you've also dilutive. run our initially of is $XX it a focusing rate little million -- or on seen just

back maybe the and in business then the next And run, than good give our rates color than terms guidance can see when year. CAGR, very, very given over rather attractive do long and markets eventually it growth term, Bruker of long I'd higher to We you and -- growth that swing these in one average. think be, we will being a what even that

case think some the that because organic not may accretive we weakness, 'XX, In long be our But biopharma rate. it's right? of to growth term,

John Sourbeer

Appreciate it. .

Operator

from Citi. question the next Patrick . The Donnelly comes line with of

Patrick Donnelly

on headwinds, pieces headwind, not think the But moving the year. M&A into had the just for level, core next we Gerald, maybe start as the expansion. you've margin way our margins, to you're you the you op as high organic 'XX guidance. about understand FX this Obviously, giving year, one work

I XXX think guys -- you a flagged bps as

we be you algorithm see. talk that Obviously, dilution maybe is level But those should deal to So stripping you pretty what just as next flagged, the are you year? thinking moving guys into which high think about how from next you pieces? margin about as look aggressively, the year, out costs good

Gerald Herman

say, in in detail go of more we're the long term. that parts. of just Patrick, lot through stay to tuned. going here, We've We're a the got perhaps optimistic guess moving but I'd pretty some in February. Obviously, pieces seen you've

think I'll today. that leave at So I just it

for the call, 'XX back Patrick. come for February to you sure, want You

Patrick Donnelly

just the, is be Obviously, a year you I'll of that appreciate call a Frank, backlog it. when months think backlog above I on then kind China, But company? few X questions the we it, for about . And backlog, in maybe there. there. the I at China? are mean

is, over just I as what's these a And that order the concern quite given maybe are how often is sticky that if cancellations? isn't firm How happening areas? think of it see backlog there there's other with that backlog? visibility, as

I'd what China seen the curious, for backlog frame us be historically, you've specifically, be as you again, in it would helpful. And can there? up look if you

Frank Laukien

any usually rarely, No. payment And except see retain. for that And down I is mean have order if something -- ever, rare. extremely we like it then, course, or we Yes. very cancellations. a we that, -- of we

that When there had were in corrected I think the ago semiconductor have but or -- a allow we U.S. to year thereabouts. regulatory would delivered in be all have and changes of China, to with to we for

system. our in long all that's So

to the lot in don't corporate China I a good want it than that -- QX, -- is also higher has question. big-ticket with backlog backlog to quantify QX. The that into the our do bought above lot but is -- our through that that than granularly, systems. specifically. And in don't of that, a some average. Other good a there's bit We fact China also is little order go backlog call, China average

into Some go that of year. that even will some of has next --

yes, stronger. XX -- right? So bit for know what will and a is there's crisis, geopolitical other China think we Geopolitically, happen risk than the over backlog And we industry, the entire little a the years. next

that. see and order cancellations, terms Bruker risk Bruker in of But we just don't

-- things We our customers. to for really our We do try have instruments. make valuable great

reliable we company. so a are And

Operator

the The next comes JPMorgan. Vatnsdal with of line question from Rachel

Rachel Vatnsdal Olson

I Congrats the to some follow this in us on on you book-to-bill was here around China guys. of the give comments Could wanted what these orders. China quarter? strong up quarter weaker the

of really in to that us the more your just give orders? then weakness given flagged any started And and that, market on through you weaken when throughout XQ some continued Can see into you have has to October. peers color also

end there that seeing were specifically, types then any more of markets, types for types even where And you're weakness? or customer not product

Frank Laukien

So of We geographies, or at China -- give We were more half don't look more weekly down in daily order consumables bookings in patterns and can in major the acknowledge of that -- our don't month We in all we quarter. region. year-over-year Japan we third a elsewhere, maybe by QX, or always, like each the orders of . Right. book-to-bill and by in in country geographies right? model, get than business

described our quarter the probably have we just we So that and are asking type don't some just of that you people even within the trends about, -- don't data. in that see

for did weak, the So did not I'm year was and notice been we right. QX an I China CRO that -- in sure throughout CRO exception. business business had biopharma already and

that answer -- we which patterns, other see That's you but to your not vendors even going this That's questions . about of from color all lot weekly a get of about don't it. pattern more monthly or

Rachel Vatnsdal Olson

budget see any Have growth flush? to organic budget for any guys December XQ. enough. started wanted dynamics ask single-digit just that you your to are customer assumption plus conversations Fair high What's I really . you Yes. dynamic? that there. within or color on around orders then those that around Yes, And of assuming --

Frank Laukien

We've of is for these terms one been long to in this and a flush budget us. industry enigmatic time still

doesn't X really things I that. and companies more looking It that for again, and to -- never is us, and think of applies for it much and consumables the we're

to just point we're color on give a you data so that. good not And

any just budget realize. no years, just that way Bruker. we So other we have for have expectations That's doesn't work flush -- a it doesn't answer I like -- Bruker it because in specific at

things but look for can the frustrate flush So what and -- really. we Rachel, one will for want comment don't this in we not of you, budget or mean that to year isn't that I us there

. We that, have I into invites say. just don't the should

Operator

The line next Nephron the Jack from question comes Meehan of Research. with

Jack Meehan

I have question on wanted PhenomeX. to a

what detail I terms you little you're -- could the through just more on about talk to First, year-end, then maybe on focused just integration bit a clarify dilution on? And you're wanted of what commentary. where the in that doing

prior to is deal in the $X.XX So Or in it wanted XXXX. XQ? that clarify, I line to incremental to announced? slightly the to that the was relative you said trend getting is from dilutive just

Frank Laukien

things give turn the quarter as I'll headwind fully will that much February dilutive. dilutive. we have sure less not I'm in in next $X.XX being we much the the But by a 'XX guidance than dilutive a per over per slightly bolus we moment -- for less obviously, $X.XX . Again, the but slightly when than QX in what early year, implies question. is mean I that understood to Mark onetime but quarter

Now for I'll then to you. modeling, turn Sorry, things over your Mark,

in that assume guys, first not little but give less I modeling, going the much half bit We're want less dilutive. it. average, going don't 'XX. the on dilutive more it's it's -- your little in a a to do we For and to guidance to second half, just dilutive today be for

adjectives. I you numbers. know to would stick we why that's So like

turn least I you describe at you of may to and things and resetting Mark, qualitatively without with. can numbers, over rightsizing the strategy some

Mark Munch

that. of we're accelerating. at Sure. because all, -- we're faster already integration, of on but that. accelerating we're in a The types things They doing. were expertise, characterize of kind really terms we're Sure. And some good pace Yes. first our of doing Yes. pretty M&A

business lot the they of management of -- certainly, kind so over they where were strategy a the amount that's And kind also then have, doing where terms structure. crystallize that to getting the focus to overhead expense as things going of of in fair the then overhead serving. depreciation costs, process of sharpen Bruker of of well carrying is head we're is terms of in one on some a consolidation also and sites focus, in personnel and streamline not to of There's then and kind helpful. in highlighting unnecessarily per as count costs, the terms

where cost of just operationally number rapidly.. it the So a then across many optimizing and there's kind items and fronts doing pretty optimizing of we're business.

Frank Laukien

also at and of is acquisition. drove that, course, fantastic Mark the

good very at also integration. but strategic, very So

bit millions we cost we basis guidance Of course, well the that else that something unfortunately. more there I detail . Jack, of be, point? Or that jobs during tens And of February. give integration a XXX, hit affected will taking early out for did in over Stay annualized we're mean, of process. when number the on was an tuned on

Mark Munch

more one here Jack. Q&A, follow-up for maybe And the Yes.

Okay.

Jack Meehan

of impacted rollout timsTOF in Ultra the The life science spec sales might quarter. have mass

it out call CALID. didn't You within

effect Just . kind if short-term the actually rollout was customers had wondering initial reevaluated of as what could dampening a have they're buying?

Frank Laukien

Yes, that's true.

So the previous Orbitrap. Astral competitive than is more the

previously of same is taking out and are came from would Bruker an ultra at lot an a there people is time. they're that and have taking while ordered. the a So look just Astral, now and there they both

So introduction are market are but more coming closer spec as drill Ultra and the down look. . Still that a to has people are become proteomics pipeline taking through, demos orders into and the mass competitive. And people look. taking more and a high-end doing the detailed with a of really people We're Astral try introduction that. have lot

Justin Ward

operator, . maybe we'll questions, from caller. think, I actually, So think, X I take more

Operator

the final The from comes Absolutely. of Stifel. Dan with line question Arias .

Daniel Arias

as all? emerge portfolio. whether the any points trend a you've or seeming certain just being follow-up on I'm level, maybe a of friction there you've guys within when there. just to below curious customer demand evolve, points fairly range price groups to Frank, watched or break orders end thresholds on draw a instrument it certain a wide markets, above have friction comes more you less noticed or or at as

Frank Laukien

me I make Can want sure you example, the question. an I give Dan, to understand

Daniel Arias

sensitivity has that fall? seeing you product to you're points attached and out for -- customers that whether evolved the have Or ASP some in you I'm you're price market where thinking different time not draw or on lines, are order whether guys. book the them depending the gotten instrument lower? and seeing price to just Well, whether lines certain sensitivity the price happens has just about their Basically the

Frank Laukien

Yes.

have in just currency instruments. some budgeted like have effect and weakening, they're Sometimes, then we Israel have percent. the been yen drops most their for recently, currencies that And China about currencies some they people the before buy to the or of of for our

not brand-new that's trend. But a

wrestle we figure to a just with it's always time recent it with and things So deal of but the time. that, from It's not we trend. customers, one try to with really out the we

I that any talk our -- points had seen haven't I good any have realization. or not inflection pretty seen actually much. we didn't so. I price -- mean, portfolio We about

maybe inflation So slightly at keeps of up was least sort even turn We're positive. behind price now and price where realization realization inflation with previously.

has solid, our pricing our and power very So has solid. competitiveness remained remained

need -- be update anyway. the they'll answer question short so the again, to no. But the -- So answer would to

something price price We portfolio inflection or seen or any significant haven't excessive or sensitivity. really points

industries But I high that best what the gives buy mean, the for basis fab research semiconductor, ] price the or is billion the or the always you what's best [ important. you $X performance some they'll is, results that the sales lower-end need. There's depends works ultimately, the of as proteomic not lot it for right it, what -- now, funding end on a example. People and that's most best guys you proteomics going. -- opposed to lower of of want the is

Daniel Arias

and of carrying just for some -- application-specific some plan Frank, on Can additions could some map road terms lower-cost I sneak your I Berkeley . If more in . in helpful. one Does Lights, theirs? that may. Those for plans the That's sneak had in call could stuff. I portfolio. if just if instruments guys just forward Okay. of I

Frank Laukien

like Maybe year? to or early to until say. But defer you would comment Mark, next

Mark Munch

No, we can comment on it.

Beacon And platform, in launched kind Quest some terms Select the correct. by lower-priced is that's and way, they then that's of example, those and had expand markets. From to -- Beacon for helping -- new Beacon , will XXXX what no So of new a continue about, products in position the onward. and segments, the

. all of [indiscernible] of will part kind So our -- that those continue.

Operator

you. management to the back conference I would team. pass to Thank the over now like

Justin Ward

follow-ups, XX. Thank you, with to day. looks you Jefferies to note be everyone, do to during event presenting Bruker's a Conference and any fourth Herman, quarter. or November meeting at speaking to in great for free on Bruker's with . arrange me out CFO, at joining directly the the Please reach an have feel us to forward you And want will Gerald leadership today. I London team

Operator

That concludes today's conference you call. for participation. your Thank

You lines. may now disconnect your

Bruker (BRKR) 2 Nov 232023 Q3 Earnings call transcript