BRKR - Earnings call 4 2023 | Bruker Corporation

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Operator

Good morning, everyone, and welcome to the Bruker Corporation Fourth Quarter 2023 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. Please go ahead.

Justin Ward

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

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

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

During be GAAP shown Reconciliations measures the of earnings today's will begin, of like reference our on are our I presentation. information. call, non-GAAP financial ir.bruker.com. To to posted Bruker's we highlighting in website Slide are non-GAAP financial release is safe on X at would which our harbor to and included statement,

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

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

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

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

Frank Laukien

XX.X% year-over-year. Thank another XXXX XXXX Good quarter Justin. finished you joining everyone, Bruker earnings excellent on you, morning, quarter thank today's with and growth for organic call. revenue growth including of us revenue fourth

full the testament resiliency growth globe entrepreneurialism. XXXX the difficult we XX.X% industry-leading was and our conditions. Moreover, revenue to execution organic strategy XXXX, across under our culture strong of third the growth Bruker revenue a delivered double-digit colleagues of For year to year differentiated organic which and consecutive remarkable innovation our of and market shows consistency disciplined

fiscal year-over-year, capacity in we EPS bolt-on also solid productivity investing delivered and a XXXX, and selected non-GAAP acquisitions. Importantly, R&D, in all strategic in while significantly XX.X% growth

formerly and new of refer BCA For Bruker those which cellular business, to as known track we our analysis as PhenomeX. keeping

quarter $X.XX in forecasted dilution. of a of As we EPS fiscal fourth 'XX, had bolus non-GAAP

almost XXXX. Accordingly, Excluding in $X.XX fiscal QX closed a In did 'XX. cost year anticipated pro XX.X%. we dilution EPS major BCA, fiscal acquisition 'XX, in at restructuring and with in cutting October fiscal X, per non-GAAP EPS our to to non-GAAP on 'XX forma of grew BCA to significant quarter dilution significantly profitability BCA quarterly the and just year BCA after year fiscal immediately $X.XX 'XX, year drop expected in further be reduced the 'XX expect we

to of with XXXX, for year leader above-market a and the a Bruker to as organic the positive entered fiscal EPS and growth. solid financially we momentum, year emerge non-GAAP the outlook and a revenue achieve at bookings strong again post-genomic look we era As backlog

we X% of year non-GAAP growth to of are guidance X% compared 'XX organic year to revenue growth our fiscal announcing X% EPS 'XX. fiscal to and for today Accordingly, X% both

the from organic XX.X%, which and organic best solid basis, in organic an growth eliminations, our XX.X% X. pro 'XX, revenue revenue Scientific while of reported in Slide X.X%. BSI, million, of revenues Bruker quarter to XX.X% implies fourth or currency Instruments QX EPS CER, This a constant increased and of year-over-year. excellent revenues XX.X% of delivered year-over-year exchange In growth of forma Bruker's growth growth included On included segment intercompany growth. acquisitions increased which XX.X% X%. to now $XXX.X Turning added 'XX non-GAAP segment. Net tailwind rate, our XX.X%

non-GAAP 'XX primarily as PhenomeX other and was and margin dilutive XX.X%, due 'XX acquisition to quarter XXX well fourth was points, the from QX M&A headwinds in as down which currency. Our operating basis

this margin bps. effect of than Altogether, more combined our organic offset operating XXX plus expansion

operating QX of margin organic operational of Project EPS diluted reported expansion is success to in initiatives. excellence In $X.XX strong $X.XX Bruker Our 'XX, QX the 'XX. of and Accelerate compared evidence of GAAP of our

included QX an PhenomeX from of $X.XX 'XX, Our acquisition our gain acquisition.

EPS X.X% QX due of basis, from the acquisition PhenomeX to 'XX in the down primarily non-GAAP diluted was 'XX, QX in a $X.XX, quarter $X.XX On 'XX. fourth

growth minus plus in QX the initial 'XX. in Excluding delivered Bruker QX pro dilution X.X% BCA forma EPS of 'XX, of $X.XX non-GAAP year-over-year

X. our to 'XX performance year Slide on full Moving

and growth in for On of intercompany basis, to net XX.X% fiscal eliminations. scientific with of XX.X%. More and increased non-GAAP grew industry-leading Bruker's solid consisting of in plus XX.X%, specifically, best revenues revenues XXXX excellent organic XX.X% by growth even an organic of EPS growth XX.X% year-over-year, growth at BCA organic non-GAAP You year excluding forma can EPS pro $X.XX of 'XX, plus organic revenue strong instruments billion. see execution XX.X% performance growth and XX.X%

increased and flow GAAP by cash BCA also non-GAAP Our a fourth Slide see $X.XX of and headwind on growth gross XX.X% are performance you operating the $XX note EPS from XXXX margin non-GAAP summarized non-GAAP and solid XXXX all quarter. EPS our in can year-over-year. million X. And despite that free I'll

or markets XX.X%, return differentiated our strategic that X highlights measure BioSpin we process gigahertz and IDS Slide instruments Madison. early-stage NMR XX NMR or supplemented Bruker acquisitions. Please our in year-over-year. in gigahertz Group a in scientific first across fourth turn fiscal year systems Ohio bolt-on the teens exchange on at metric and growth a solutions trailing as States fiscal exchange CER, industrial BioSpin division. We innovation X.X 'XX, class the University rate. academic installed from technology biopharma, and of the in management quarter growth the entrepreneurial percentages and and on highlight applied new well months United million X X BEST and integrated research each State and or disciplined constant data revenue Our by invested focus we government, was had non-GAAP capital, 'XX selected the as In X.X University performance 'XX fiscal 'XX, rate, $XXX of 'XX. of to the in in segment And revenue at where groups of our NMR constant our the the grew X, organic Wisconsin gigahertz of at and saw

with solutions academic Revenues Nano mass Bruker surfaces, of CALID showed strong by grew and X-ray Biotyper strong for near and ear and for molecular tools broadband rate life of artificial spectrometry intelligence 'XX, was semiconductor high strong revenue teens For a growth year from group aftermarket Please markets, solid of growth. metrology percentage as revenue timsTOF driven research to infrared our government growth Consumables million X 'XX revenue had advanced with exchange our 'XX, and as growth well contributions well business science including Nano $XXX platform core final Disease offset drop in constant modest up research Slide and $XXX in slightly microscopy across and tools. strong exchange percentage our as also turn and and diagnostics million, was revenue megatrend our as our packaging the QX in by a revenue business. Microbiology the industrial academic scoping semiconductor growth government, for as strong advanced Infectious acquisition applied rate, was spectrometry teens was growth the solid in revenue to now. is and up ferritin COVID-XX on optics in high MALDI Fiscal X. our demand the mass neuroscience in constant tailwind tools. Fluorescence Nano metrology. The

by as tools ultraviolet support by well Finally, XXXX mid-teens net intercompany driven big strong percentage eliminations, as superconductor of the OEM of in the EUV and gains lithography demand in customers customers, fusion intelligence grew share in new best growth for AI research artificial revenues extreme semiconductor large demand. all by OEM MRI key science, or our by and technologies

leadership single in fields to well we're structural, of our this as we and that you we Morgan a beyond X, acquisitions which portfolio. me post our cell, both X, those I our course, on era, a Healthcare detail to fill summaries what not as in and, genomic Let quantitative biology. I presentation of interaction to Slide X multiomics dwell read On but many you where saw different and this, we move had leadership, slide of Slide will you your invite closed technology solutions familiar mean of by genomics, emerging that's including slide genomics, includes outlining now at JP the who Conference, for which, the which strengthen in gaps have at but February leisure. spatial, more therefore, quick in that portfolio early is

about we acquired $X Osaka, Japan, in Nanophoton fiscal revenue. you year company left, that On million the a with will 'XX in see

only with in specialist and They research research and Applications so very semiconductors Japan and Korea, really going in are resolution but of will exceptional well battery research are these drama academic do we well as as outside speed, research. from and microscopy systems as sensitivity, industrial far, well, spatial in from user-friendly and they're performance-leading Japan offered a Korea products and primarily since inspecting workflows think Romanoscopy. nanomaterials

United preclinical X-ray fluorescent, lines States to imaging and we preclinical LLC Arizona, optical -- be in should for and complement or go bioluminescent Spectral research vivo PCI for Imaging imaging disease imaging. our optional preclinical here This and vivo Differently, imaging, customers. our welcomed with to in in Instruments, acquired our Tucson, solutions enhances by product

delivered high-value productivity to [indiscernible] In as our as solid Bruker as in X.X summary, Bruker me our well EPS its in we growth accelerated solutions growth ongoing in growth the So and demand. well meet let transformation up. have our of to capacity 'XX, is revenue commitment portfolio innovating in result fundamental strategic a wrap for and of organic production strong as excellent as transformation. Project even things Accelerate investments growing

areas and applications many in a with era. management for as process outperformance position post-genomic leader well technology continued Our an emerging world-class biological in execution the and leadership combined Bruker us excellent

medium-term year 'XX acquisitions, we more outlook year bolt-on for QX the achieve earlier financial our now and strategic non-GAAP optimistic year recent that, year to me 'XX Herman, our healthy Gerald in and X XXXX. With our 'XX, already given we review detail 'XX fiscal communicated outlook growth selected our performance guidance strong and are who fiscal Now as in and can full let revenue CFO, turn Bruker's year call in provide fiscal 'XX as now EPS our and Gerald? our fiscal previously assumptions. will well year that over

Gerald Herman

GAAP GAAP and organic to everyone, reported $XXX.X an Thank in net $X.XX a XXXX. The or the division, EPS provide the XX.X% of bargain thank quarter XXXX year-over-year. Bruker's nontaxable quarter EPS fourth detail some us $X.XX GAAP reflects from more to Bruker to starting you, reflects XXXX performance, and per Cellular and acquired of share acquisition pleased the you, Analysis 'XX, I'm cash increased $X.XX a quarter joining quarter reporting Phenomix This XXXX, the today. which consideration revenue called fourth gain Slide paid. of now increase fourth BCA. line XX.X% compared fourth the diluted over quarter includes financial million, Frank, XX. In In fourth for the of for represents identifiable of purchase gain of full Bruker's on revenue year purchase reported gain Bruker's assets of excess on

acquired NOLs. related Included in or or to tax assets operating deferred losses, net assets acquired the

expected these NOLs effect was year-over-year. present rate these NOLs of the accounting, quarter non-GAAP tax 'XX in forward of GAAP are acquisition benefits dilutive $X.XX, the in a the EPS $X.XX comparison down fourth fourth to annually. On basis, challenging significant modest going X.X% a to from the well of be our of as 'XX, very much quarter more While as diluted is primarily for Phenomics $X.XX QX tax due the value

organic X.X% gross in M&A of points exchange gross Excluding pro of fourth by by and offset EPS BCA, was the margin delivered XX Bruker forma foreign quarter performance growth margin of about headwinds, partially non-GAAP down the basis quarter 'XX basis XX year-over-year points expansion in fourth impacted negatively year-over-year. 'XX. Non-GAAP year-over-year of

increased XXX strong the margin margin while foreign as non-GAAP quarter in points operating income and basis BCA, decreased primarily exchange points more XXX to Our of headwinds, X.X%, 'XX. XX.X%. And organic year-over-year of from basis acquisition year-over-year than operating very operating fourth fourth quarter XXXX offset non-GAAP expansion

PhenomeX, Our fourth operating margin, quarter was non-GAAP XXXX XX.X%. excluding pro forma

We equivalents of cash finished million. and cash, the fourth short-term quarter approximately with investments $XXX

cash Accelerate investments, approximately share We million the fourth X.X used of capital fund of During $XXX.X fourth repurchases quarter, selected we $XX in the flow quarter expenditures cash and generated operating of Project to million. XXXX.

solid fourth revenue organic all in the the revenue Americas free grew quarter We organic quarter quarter cash delivered XX expenditure for million growth were basis of BSI aftermarket about X.X% of flow capital Slide fourth organic in percentage. of with driven 'XX, in 'XX. systems bridge XX.X% improvements cash an the growth on growth teens quarter quarter revenue, 'XX, investments revenue million in capital our 'XX. This year-over-year. Geographically the in $XXX in in flow the and revenue Our better fourth the by performance of shows million, of of in in the in and 'XX $XX.X resulting over working quarter. fourth the $XX reflects fourth

revenue grew the Pacific the Asia range revenue percentage mid-teens grew while year-over-year. all in European XX% in

margin 'XX revenue points by the fourth a organic margin XX partially For gross XXXX improvements we shows foreign region, acquisition XX% BCA our posted from strong XX offset foreign gross XXX basis. margin primarily of quarter impacted the quarter in as was XXXX basis by margin fourth Fourth and and XXXX XX.X% the year-over-year. Slide year-over-year. non-GAAP Non-GAAP organic XXX of basis lower margin exchange exchange P&L performance high single-digit acquisition of in quarter quarter points of about percentage XX.X% of our EMEA than quarter headwinds, basis basis fourth decreased from offset was expansion non-GAAP up operating 'XX operating more than fourth XX.X% XX points. on performance headwinds points

quarter repurchases Weighted rate resulting XX shares fourth year to by of fourth in discrete in period. shares $XXX of average diluted outstanding the million the was a trailing tax XX.X% of 'XX, X.X% favorable from an were quarter XXXX the quarter For XXXX, or driven 'XX our the quarter in X.X of the fourth from share of over effective the reduction mostly million, XX.X% a prior months. item non-GAAP fourth our unusually onetime low compared

BCA. fourth of XXXX compared Finally, non-GAAP down EPS was a quarter of X.X% headwind with 'XX, $X.XX to the from quarter $X.XX fourth

Excluding from foreign XX growth X.X% 'XX XXXX. XXXX year-over-year. tailwind, revenue fiscal non-GAAP after year-over-year. to line, headwind resulting dilutive reflecting non-GAAP while exchange of BCA, bridge was X.X% year incorporates to our expect up shows in non-GAAP of top in cost added EPS guidance our was exchange the revenue the XXXX, quarter major X.X% the our and XX.X%, $X.XX actions In we EPS to full constant full XX.X% $XXX be much million fourth year-over-year rate for of BCA. Slide a year organic year of XX.X%. less Acquisitions EPS up Revenue growth our was BCA at

P&L of explained with Non-GAAP of the for slide. the are Slide results on XXXX on drivers similar the fourth full as summarized XX quarter XXXX year the to

up about performance. We cash $XXX.X higher cash full up lower of year $XX and flow of cash $XX capital from flow XXXX working operating on Turning In generated the from flow to and of million on generated million XXXX, capital million Slide about in improved we XX. operating XXXX XXXX free million $XXX expenditures.

and XX. portfolio an above-market solid Slide entered to stronger even with achieve backlog to the growth. now again Turning We year

we revenue XXXX. of year guidance fiscal XX% X% reported for XXXX representing of range $X.XX billion a includes, to $X.XX Our are to growth initiating of billion, outlook to compared

yet an This implies acquisitions to of have revenue to X% X% estimated guidance exchange closed. tailwind not rate growth. guidance growth year-over-year, acquisitions exchange of announced of that in revenue XX% contributing excludes organic growth X% potential XXXX. This year X% assumes to with foreign That full revenue X% constant any

XXX in For improvement we points. organic XXXX, points strong operating in basis of following expect about about XXXX, operating improvement operating margin of XX basis organic margins XXXX

the expect basis headwind For point to from we all XXX decline operating combined margins, and due exchange about point from non-GAAP in, prior basis XX a year acquisitions. an foreign

non-GAAP On on in the the XXXX bottom or line, the $X.XX compared we're guiding listed for Other range EPS of to X% are XXXX. $X.XX guidance of to assumptions to EPS growth X% slide. non-GAAP to

foreign for ranges as XX, updated quarterly XXXX been of on January currency have for XXXX. rates year. phasing additional year One the full note Our

only quarter fourth quarter of exceptionally organic sequentially and an modestly first which strong expect revenue quarter to was first be above quarter. the below XXXX, 'XX the first of We

expect XXXX exchange headwinds. softer margin quarter first operating and driven and also the acquisition We by BCA performance in other foreign of dilution

revenue the operating expected XXXX. to in organic Our is margin and performance strengthen remainder of

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

strong EPS we guidance our you a full over above-market to and and positioned the session. portfolio turn XXXX I'd earlier EPS in in of revenue organic reach and financial very again with will To financial growth results up, Our Thank non-GAAP you for and the Q&A and year well confidence Bruker to performance XXXX. differentiated growth call that likely delivered gives year targets in to strength XXXX. to Justin like XXXX, deliver much. healthy And that, XXXX we're XXXX our revenue start non-GAAP wrap medium-term

Justin Ward

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

Operator

[Operator Instructions]

today Patrick question from Citi. comes first Donnelly Our from

Patrick Donnelly

the side. just deals these you I on earnings Gerald slipping on from in -- maybe confidence see. earnings particularly, Can to about on XX% talk comment, year accretive? side, deal talk level notable. pull last nice just some on has the it's the the of think pieces moving really you the this well, to almost against of some that 'XX margins pull-forward Can year growth it on see. Obviously, nice implies headwinds to there, been just that particularly forward and the as very Is LRP earnings about and the side, Frank, that obviously, that

$XXX more just year $XXX that on, again, get million approaching I some a to million, number early. wanted So color

Frank Laukien

result wonderful. and Indeed, while which can or pretty look a are Yes. at organic the Thank under on guidance. we we delivered to away 'XX and moderate EPS organic -- improvement operating these the 'XX -- on away. margin headwinds we've -- improvement execution. are you, seen, we gross really you've strategic speak, forward stronger accepted It's the of optimistic combined again, abate. as year currency and good by some of to healthy headwinds that -- non-GAAP as strong trends is results are we're XXX hood, And over so pull go continuing margin revenue pretty the or healthy M&A pleased some and temporary Patrick. the that that and the go all of bps. Operating And solid as Then organic side, these either and of indeed give

So indeed, we 'XX. expect without EPS a 'XX also significant step-up commenting on in numbers, but we're and very expecting in

Patrick Donnelly

and help just book term backdrop. academic Frank, you how of order seeing how order least market, to academic that's of what market, in maybe talk thinking health No, you're a the But term. and lot in about Can between to that. about near the that pressures thinking be on U.S. expectations? Okay. have you're high-level it about the should there? the on the China overall at you near that again, helpful. see even out Obviously, the what maybe out We've you're And just appears given just resolution there, some trends, the noise. continuing on questions the encouraging gotten And

Frank Laukien

gladly. Yes,

in better it see So but was a QX, China, growth dramatic in super In years was reported can bookings, QX, particular. after in great QX. what good. of have a academic we QX and government. in what wasn't strong, larger had peers I bookings in also QX growth in other bit it was air and bookings than very from may pretty pocket Revenue solid. And QX mean I strong an nothing

book-to-bill far our for So QX X.X. from BSI was

others to and solid least, government went a the academic over pretty very defensible all so was the revenue China down. down, It's geographies one way looks various COVID, So but time okay, at course, growth biopharma bookings areas only are of at even not went -- solid. of when the not backlog for

our in the So well it's really just one and with of businesses areas. of other many areas our of strong doing been along markets. Actually, diagnostics about most are all quite

Operator

from Our Research. next Josh Cleveland Waldman question comes from

Joshua Waldman

side, if you Maybe what that for margin organic on the takes X% organic XX the to you the Is on Two and on the X% bit normally margin guide Gerald, could bps. margin a of starting wondering more you. curious growth. would unpack puts expect about

price, Just other pieces number? wondering structure the within how are impacting cost mix, that maybe moving

Gerald Herman

Yes, it's have the to and probably I'd item. generally, -- but are it's acquisition most take pricing actions, other puts initiatives material not of continue a takes underway that, and play significant, We, number that's specifically. Phenomix Josh, into of that that say impact we the the of course,

Frank Laukien

Just bps. of about XX organic the expense

Justin Ward

Yes.

there's just PhenomeX. to of of the margin So related a the distortion timing to on lot clarify,

will a of an that year recall become we QX. So of organic because of on or you're basically op That beginning margin a was 'XX quite beginning there the margins. margin acquired acquisition QX drag tailwind and next that anniversarying it

as in early margin So an most year, place will of will loss be that the acquisition taking characterized Phenomix where part drag. the the op be of still

So that the with of it no Does acquisition, and to the really Josh. of make just that do mix has categorization timing sense?

Joshua Waldman

and revenue 'XX at sense. I this the more, that year. I think Is the on of kind by off makes mean EPS one it guess margin target margins. a Gerald, pulling forward the And like Yes, I sounds you're point? target Yes. the table

Frank Laukien

a reach that pull that, table, forward off mid-XXs not think advance pull in think we margin just the the 'XX to and all likely profit operating It's further But plenty can That into we looks we it's to that don't it's be of at with 'XX can target. but in table. non-GAAP take of Josh. years. I'll No, not the margin subsequent the forward. room more without We operating

Derik De Bruin

Got it.

then my And Frank, Okay. was BioSpin. on follow-up,

Just can many class any class gig curious provide how systems included for context gig wondering on And the are or performing? thoughts then or the gig is guide X sub-X in 'XX? how one the you non

Frank Laukien

Yes.

I think X -- the again, for second And systems. looking X in as again basically in what 'XX. and 'XX, sorry, we're to so to 'XX question? X was -- And at in I'm same X class gigahertz part of your

Derik De Bruin

non Yes. XXX I like how wondering maybe was of up just the so maybe kind to X-gig [indiscernible] class,

Frank Laukien

doing great. growth them No, of most the a Yes. you had some if in strong ultra-high very -- mean, field the that's of or number 'XX, got recall I rework. in needed QX, delayed because was

came in X So expect to in quarter, 'XX. spread the X of them in and of that in, the systems more evenly 'XX, last we

the health biopharma so the And not by and and academic in field, the excellent, well in applied core most ultra-high applications was other BioSpin imaging. applications bookings that growth driven clinical by of preclinical -- really biology structural of as and been and structural functional research the revenue has markets, as

great. is BioSpin Formula sort just that one of the X, it's ultra-high field system. field and It's So an is doing like enumerate can the story not story. ultra-high

the field interesting, So ultra-high it's the it's business. not but businesses, very most of

Operator

Souda Puneet from comes question next Leerink Partners. from Our

Puneet Souda

as announced of far, So to just have the the How acquisitions fiscal been I forward is XXXX of the they sort much sort clarify pull of that so wanted that just on and of targets. FY assumptions? I and wanted in to -- ask organic approval. 'XX. materialized included regulatory Alitec those in Is But that It's pending not yet about well. become should acquisition the

sizable us that's for a update you that, on could you? So acquisition

Frank Laukien

Yes.

not in our B forward 'XX medium-term revenue. established Alitec, pull that neither included 'XX announce clearly, have of our targets nor potential revenue previously and that to And EPS non-GAAP very for guidance in Camps we 'XX. had are So acquisitions or closed our our

and good not speed -- margin very and growth 'XX 'XX, And EPS in in growth those numbers. primarily also an very development. So driven expected which is therefore, developments and Alitec good the Camps organic B forward, in primarily is pull are then organic by

of side, the believe On XXXX course, that not in the for the revenue about is that revenue by goal or it's so for acquisition. I our million BCA but PhenomeX driver. helps, somewhat $XX aided

acquisitions, the that of were there for right many other was simply with have both extent, fair to them they some were our time often ways, some were seem And portfolio. to to And sides. Those, in but regard as in some relatively been selected touch that in acquisitions could you now while valuations been we've market as size. know, for tractions, a -- with years. acquisitions technology number feasible find companies have The moderate where this complement you them they

Puneet Souda

your Got Then it. overall the is just at a year? What that I competes if how highlight expectation could higher resolution Frank, timsTOF's for high-end portfolio with question may year? of competitor on this the What's expectation a maybe ask. sort timsTOF. high is timsTOF, launch Maybe, growth growth you that was And Helpful. for level, announced given there last is year? this

Frank Laukien

and our timsTOF Since there product, and product. continued course, other Yes. competitor, is our We've And price various to competitive our the that's product the a a competitive a Astra Ultra performance version the launch by and of to new market. flex some business, is grow imaging, traction on capabilities but with MALDI including and really that's we and are timsTOF the performing point well. acknowledge but of platform other as new well, in getting the all imaging they competition, glycomics there applications. And

issue. probably internal our course, not traditional franchise but Of the Orbitrap that competition, that's of most see is

dynamics, market. Unfortunately, a steady to XXXX. growing healthy not growing far zero-sum and PhenomeX expect a continue but a very this with we in game, and that to expect is we growth market So as as in continued we well do fundamental tell can

Operator

Our Stifel. next question comes from from Dan Arias

Daniel Arias

is? Gerald that to done conservative looks it a here, a you're mean so Frank, you've say dozen or would from a half on nonconservative that you X-point or assets. contribution I the got M&A how or you've like deals guiding

you you brakes assumed the of pump growth now to to you've kind when expectation Did just modeled Have to So of put support the the relative look you some some you're them, XXXX. to for trying curious Just them? because at have macro? I'm context expectations you what the because growth able acceleration that there.

Frank Laukien

don't revenue to little No, That's of comes X% which Cinemex just middle we're of of than super in fairway mathematical a what fairway, neither the conservative that's a have the number other out why that's bit, acquisitions, adds very aggregate. middle out. a -- nor significant is up the but acquisitions get BCA, have at the the now these mostly the figuring a acquisitions. figure It bullish. we closed Again, the that other of

So conserve I no -- that conservative, bullish think on were nothing overly one.

Derik De Bruin

in of Most of year. QX sort year. of so closed year other this or of most closed ones of beginning last -- of Keep end PhenomeX the mind, transactions very these very in

situation. a revenue have we it's The So of growth underlying Frank as said, assumptions acquired businesses, that don't sell. within aggressive those comp

Gerald Herman

businesses, of are working through, we're these of most And healthy course, genomics is that course, of the issue. the X

Daniel Arias

Correct.

thinking bit Okay. you outlook? just in on doing well that on may tough and Helpful. you a academic And I Frank, way of what's then, thing under your academic, guys the similar of are you're spirit funding to sort But mean about there. the Europe conditions, do prior a be the point. down just things maybe Patrick's in question can macro

I basis, you're a XQ. in XX% think on up reported

expect if we in should what So XXXX Europe 'XX? compare we to

Frank Laukien

and is positioned just political or well I in country might funding or very something decade situation the their post-genomic proteomics, X. And about positioned a constantly era, continuing really be so countries very Europe. in depending iconic, mean, particularly it I the -- it. strongly there, well level, right? that, and And don't for more steadily smaller are in to you usually, it's epidemic think China, level. overall this And increasing. just or downs Yes. governmental internet the are European And political debate get relatively R&D the U.S., importantly the resolutions. In But always at have in clearly Japan what in does There's budgets gridlock it item, allocated major budgets. I more not mean, visibility both Those the European name is economies into next They on to. will and the increasingly healthy you and lipidomics, drivers much favoring Europe, is things metabolomics, the ups academic some are we at in stable. and Europe, or we much, government have European

So that much fundamental in funded read a too very the gorgon, our high at government secular may that level. budgets Era national is supports a level is at trend than growth the that growth you much but academic the overall higher one post-genomic much

I in It's artificial of that the the -- is post-genomic intelligence. that the era think reallocation

megatrends big Bruker the next probably decade. the So for for

Daniel Arias

Okay.

not So Germany you see conditions, something as loop now. right the that the to Frank, conversation, red close just thought. on a recessionary flag macro

Frank Laukien

growth Germany No, and the of is yellow And bumbling of clear. along strong. not it's flag. Europe yes, has but 'XX, a mean, pretty either been engines I strong one not that all probably growth in

Operator

John from from question Our next comes UBS. Sourbeer

Patrick Donnelly

to greater just were break Congrats you I on on region, than And and the quarter. book-to-bill? the on if want one by any one below just that was guess, the book-to-bill for China don't you color out ex real was around out to [indiscernible] expectations additional drove I the that book up know to there bill. it BSI region follow I China but

Justin Ward

to clarify, arc. Maybe

So overall BSI That includes X. book-to-bill China. was above actually

is in well. book-to-bill got BSI overall year obviously stimulus. that China was because of we was from But as China. of the again, And QX, the Now really focused orders in did but have including X, above bolus we QX bolus in below X last some

Gerald Herman

the that say, in And third fourth quarter in where we particular would I bit had, relative would recovery China of I saw challenges to a a quarter the market. some

bookings was So there some improvement from a perspective, there.

Michael Ryskin

And outlook for for visibility customers there from the into backlog and the the China a year? here the hearing year, are starting that follow-up, I Any on sentiment market what expectations on just just there. as you guess

Frank Laukien

I China think is Good I tends And to have not that mean, And visibility. academic And backlog a the government XXXX. there's note do we that. We for than investment entire that that. say the perhaps that commitment I different least we're visibility the would market for where their for be our strong. industry continues and

a -- other So to peers. after orders China very we we have don't have BSI was first a half, well bit to visibility we're of we China more compared other while recovery positioned. don't think But than QX QX, strong in the

Justin Ward

different mix China quite in have do we But reminder. as a a

and XX% just So Frank is academic our bright one end mix the about in spots. government, China of market as which, is mentioned,

weakness only in about mix Our China really concentrated biopharma XX%. That's the is on. revenue is where

Frank Laukien

that not, And China in QX. in we least we at away go did Biopharma

Operator

comes question next Our from Doug Wolfe Schenkel Research. from

Douglas Schenkel

The to backlog. first of course point over QX, I touch at wanted to topic of X talked you months on X some having backlog. is the I about believe

X%. to the norm is closer think I

can if an is And So that I'm that down people bit? on embedded just a comment this there curious is you where into guidance comes assumption now?

Frank Laukien

Yes.

reading to And wold months down bite, we a closer to For has bit your that's little still come elevated. which enjoy X.X now.

come will that, next years. X So to over we the expect down X that

into backlog various our we Mostly, and down but at for of end mentioned, that months built fiscal was particular, X.Xx, without I we secular said, 'XX. Order a guidance here, Doug, trends also year the in X.X we some expect it, our that above that come it will have quantifying it's expect But by of seems. the also that as driven given further. reasonable So 'XX. is bit momentum, it

Douglas Schenkel

So down it's a come bit. little

No, helpful it's -- that's to to not helps, sure that's but driver make just a growth. major not Okay. it

about there, a just the M&A picture. -- On love take can on of helpful. focus of step that's just all real and back quick. on I questions there. So I activity Lots this bigger would lots think touch to

in about new gaps markets. so opportunities? these as identifying kind the we you Or they Why moving these, about going quickly? you portfolio? think so of they are are kind How into are many And of filling

but quickly? and hear philosophy kind so there, behind of love a logic there's just the to active I lot would just so the getting So

Frank Laukien

a is answer the and little questions, good of Very both.

without is of the of negotiated, of the it in deals of these closed of we've companies. We've some or round them half 'XX second in second all, when that them, been of of third will First deals with And thinking right? together pull was valuations the an spree, was in finally, way, an any in it's unusual various right process And finally the on or We're we've in it right, sellers end the on some it to been for a literally 'XX. areas, just unusual most and and fine. not were -- fair, working some aligned obviously way, literally but these in February, buying able January just known years. buyers and be just on both stars for we

pace it's that This very So different type acquisitions. expect don't a not I to strategic Bruker. We unusual. of do selected continue. is

or Photon. in portfolio like fill or them our at of clearly fees holes in our SII tornado gaps or Swiss Some even gaps

real markets. I they're beautiful those to have They mean companies lines. not some demonstrated globally acting market Now least at traction, any not don't with have us Kemp and new in our demonstrated them products, We pending lines. can consumer further QC they will chemicals of and areas and help The acquisitions cosmetics fill product biopharma, that, degrade and fully have way. or in They But usually, product in and into in even automation. of traction They gaps technology. R&D globally. take margin C

others, are would right? molecular Hologic a biology, diagnostics X molecular those a with a adjacent. MALDI Those primarily the and Abeta disease diagnostics. competitors. hold a very Tier but new but competitor, Allitas not make us way, we've bigger play. Tier it solid and with a but will sample-to-answer areas brochures In get are Biotyper infectious So It in been much small in X

infectious nicely disease lot on on MALDI of the molecular Biotyper viral focused a versus detection. it that's, of diagnostics, to again, there's So infectious not our new bacteria viral to disease franchise, complementary expands very and detection us not but course,

long-term gaps So late it of this continue. That's don't markets in late fair these pace very might unusual. high while reasonable the line where founders adjacencies be are in and or 'XX compromises frequency with for providing product 'XX, valuation seems course, permitting But to valuations market and really valuations expect our do, that or that on ROIC companies come very, others has to exiting. to to in that support, again,

Operator

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

Derik De Bruin

clarify, to from just couple Gerald, questions I of clients. just got a

book-to-bill comment for year? about You being and far not greater than QX X in the X full said was from the was your then

Gerald Herman

above both and -- fourth the quarter above X. X a as Actually, well book-to-bill full the was of year above --

Derik De Bruin

it. Got

Allitech the speed mean Just chem those on because bit I mean those profitability disclosed assuming talk the have wanted about those those right? to we're like the going of those to you in there, revenues clarify another that. Are guide step now I and that deals, going are you come when businesses? Basically, basically see general tech back how your profitable a And we -- down those. right idea not the businesses? little right? in, margin, to is Can just a

Frank Laukien

'XX. they're said guide if And nor earlier, with 'XX a as on give release just more just not our to in I both have not we details -- more that have to the each forward, They're or Derry, we want of We then gun. them, those. when in close profitable. we said when detailed we'll Pull the -- jump press don't

Derik De Bruin

get are some worry with And clarify out just there, just I into starting on questions competition people geopolitical risks and I'm pushbacks. times. one just to one. of China going just profitability final couple on I what's China your about And starting do and the you've the guess, from wanted risk sort right how it. thoughts. then going and about, sales geopolitical to to of market a called comment. about obviously, Got semiconductor now? the you broad just your in of what's think sort like investors

Frank Laukien

risks of the geopolitical for Russian happening war Hamas us and war Ukrainian a like some Well, is and Israel, point for at Taiwan code war spreading. action more or around some these potential

opposed of not. how or So it's it's to and growing conflicts fast related as not to is China -- sort wars

conflict that war some risk conflicts highlighting is that or industry growing narrowly and next slowing, It's with Taiwan unprecedented X level is decade. economy risk a But of over they at mean the maybe we're everybody that the So and by an spending helps. they facing That's than why possible point that. rather we are and in increased of geopolitical an facing.

Derik De Bruin

instrumentation I sales. restricting was trade, in R&D, of Yes. just thinking Well, more about terms bridal

trade might going. was I'm So some from I questions just like getting on That's sense into metrology and the some China investors be tools that, that your pushback. where things there

Frank Laukien

were there certain metrology years advanced most X you restrictions may in about ago, on semiconductor additional that some China. Remember, semiconductor remember selling Yes. jewels

on if recall. there our was into And the But that a course, ago, restrictions, couple model. some And I of are contract Taiwan, facing. industry that's there new risk was baked long geopolitical course, the if that if so of a were is of there of implemented years those

what that's Derik. so And mean that, by we

Operator

Our next...

Justin Ward

take final I one we'll think Operator, question, operator.

Operator

final from Our Brandon Couillard comes question Jefferies. from

Patrick Donnelly

Frank, BioSpin. the IDS business you within mentioned

accelerate lab I guess, Just how a have what curious differentiate And in crowded do need software in space? to the you you what around vision else you think like software? you seems pretty

Frank Laukien

crowded, or them older but haven't acquired well of of all it's previously that concepts. these some assets some Yes, done

can lab we and -- into that with right? we agnostic, think scientific of a that of portfolio that the now digitization solutions integrating, scientific have potential. air We some lab bring and software. think And breath assets excellent we some has and nice we fresh potential provide some So extent, are vendor good software to growth margin acquired

that X.X this of about have in some IDS. ago U.K. we like one pending ago, did already in Chemspeed have we from the software already acquisitions and Some and software the of year also benefit the automation the we'll the components optimal acquisitions years a potential assets

that lot know other of need don't So things. we a

business. did pull QC a software think quietly we're getting we serious the get together needed managed build together and to assets and that or we I for lab

with always pleased all, gross of with just of then, good we're a good, if operating growth trying course, something first nice like, good growth, margin and aftermarket margin strengthen but early So to you revenue Still potential. days, that. very we're and potential.

S. Brandon Couillard

more one for then And Gerald.

couple embedding cash And how for flow weeks? the And For we've rounds year? are few about a conversion debt expense done in the interest the think year, last what for the do free you in you guide? of

Gerald Herman

your answer From me just -- question last let a first.

sharply XXXX from improved cash position for actually 'XX. Our flow

You number. saw that added almost to we million $XXX

pretty I'm encouraged So about we are. where

a pleased performing. that's how with from initiatives of of that Some management We've number had there. We're coming is improvement. capital working

So going up our $XX improve the interest an our -- million the guiding that to period. say terms for also we're overall continue little in of 'XX year. cost guess expectation the we're for a somewhere during also that interest, is million to from that, especially XXXX, in I'd full that to perspective above I $XX bit

Justin Ward

Yes.

right? little to last bit, closer year, expense bit $XX come the. into will little interest come million, So a obviously, a will up it So up it's

Gerald Herman

Yes.

that Just quite some there the it, overall for haven't rate investors institutional activities, favorable. is some seen with and particularly financing additional picture coupon those have rate interest announced rate we

somebody So is. not giant -- Well, The is it are bigger these as think numbers. as overall impact

Frank Laukien

them And only final we acquisition, Brandon, only is which of for larger close, the comment, some from funding. maybe a we need these for one. or Allitec things -- when when a to funded pull If get instance, and we

kicks these So business... can the expense interest interest the we additional only expense additional in that time get and to profitability we some if from extent when that

Gerald Herman

draw We them as required.

Frank Laukien

Some -- them of Good question, required, we anyway though. delayed dates have drawdown draw as some them of and

Justin Ward

you joining Bruker's reach with follow-ups. to Please to during free if at event. meeting have that, you Have me With to first forward day. a you feel team We're directly the want for leadership an speaking great everyone out to we right. today. looks any thank quarter. with to All us

Operator

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

You may lines. your disconnect now

Bruker (BRKR) 13 Feb 242023 Q4 Earnings call transcript