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Bruker Corporation (



Citi 2012 Global Health Care Conference Call

February 29, 2012 9:30 AM ET


Frank Laukien – President and CEO


Frank Laukien

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Thank you very much Rameez, I’m so pleasure to be at the Citi’s Global Healthcare Conference. Good morning everyone, thank you very much for joining us today.

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Let me give you briefly draw your attention to our Safe Harbor Statement and jump right in. We – many of you are familiar with us, some of you are not that familiar with us. We have a pretty clear business philosophy and financial philosophy. We’re looking for fast profitability growth primarily really focused on organic growth. We’re not a very acquisitive company. We have – we keep a very solid low leverage balance sheet and we’re very much focused on high return invested capital. We’re presently in the low 20s and return on invested capital and try to take that back up to the high 20s.

Very much a company that has an excellent brand for high performance innovative instruments in the life science tools and increasingly also in the diagnostic space at least in selected areas. Very much an innovative company, we spent quite a bit on R&D. We have – I think we have the best new product development engine of any of the larger diversified companies in our space and we have a lot of fast profitable growth to show for it and I’ll take you back to that in a moment.

10 years ago, when the company went public or 12 years ago rather, we were still somewhat distribution limited today, we’re absolutely can go toe-to-toe with any of our slightly larger competitors. So we’re absolutely diversified, internationally diversified in a lot of applications and markets and that’s why throughout the last few years and this year, I think we’re going to be – we’re so resilient in terms of our ability to maintain this rather rapid growth with margin improvements.

And this is a little bit of picture that I was alluding to earlier. We are originally a European company, but we have growth in the United States and a number of acquisitions particularly the two acquisitions in 2010 that I’ll talk about a little bit in my later slides. We are very much a transatlantic company in terms of manufacturing an R&D footprint and of course we also sell quite a bit in Asia. We outsource a lot of Asia although we don’t really own factories there.

Our key markets are listed in the lower right. I’m not going to go through them all. I think you’re either familiar with them or you can read them. Again I think the take-home message here is simply, we are quite diversified. We’re not the only depending on NIH or on European Academic Funding, which by the way is stronger than most people here expect. And have really attained via our targeted product development but also via the acquisitions and bolt-ons over the last few years, really very excellent diversifications and I think the numbers simply prove that. And I’ll get back to that point.

One thing that I’d like to stress, while we’re not in the genomic space which admittedly is an interesting space, although for us we’ll keep that as a spectator sport, we really are benefiting from a lot of tailwinds from what I would call strong secular trends that in a variety of ways are driving our business. The trend really in genomics is to post genomics into epigenetics and to systems biology and protean (ph) mix and that very much caters to our strengths.

The fundamental move to most R&D investment in pharma and biotech and going into biologics again caters to our strengths. Those are the type of animal (ph) and primarily mass spectrometers that are being used for looking at biologics, for looking at quality control for submitting FDA submissions and so on. So those are some very, very big trends. Those are 20 years trends that are – that are again very much – that we’re benefiting from very much.

Outside of the life sciences, the – we got a lot of the early orders for the first tool that go into the new 450 millimeter fab lines of the semiconductor industry. The shrinking nanotech and semiconductor feature size is absolutely work in our favor. The field is moving towards us. Our atomic force microns to PN X-ray analysis systems do not struggle with smaller feature sizes where there is a lot of other traditional technologies but other companies are simply running out of steam and the physics doesn’t work anymore.

In other areas, in molecular diagnostics, in clinical microbiology, we’ve engineered a paradigm change of doing that with mass spectrometry with our so-called MALDI Biotyper which is to really become a huge success, very good margin product for us and has again last year, grown something like 50% or 60% after doubling for a few years in a row before that.

And there are other examples, the last being our less than 10% at best segment for which we have been S1 on sales (ph) is the growing by leaps and bounds I’ll come back to that in a moment as well. Providing unique superconductivity enabled tools from healthcare to large energies – to fundamental energy research to energy and smart grid applications that are only beginning to emerge, so a bright picture with very strong demand drivers and rather diversified demand drivers.

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