Bruker Corporation ( BRKR) Bruker Corporation at Credit Suisse Annual Healthcare Conference Call November 11, 2011 10:00 am ET Executives Bill Knight - CFO & Interim COO Analysts Presentation Unidentified Analyst
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Recent acquisition in the US have created more of a balance. We now have several production facilities in the US and you can see the green dots, our production facilities the yellow dots, our sales marketing offices, we typically are direct in our markets with direct sales forces. In emerging markets, emerging countries we would typically start out with a distributor, but once we get a good foothold in that market area, we tend to go direct, we think to support our product lines and the technical knowledge that is required a direct market is or direct distribution is really the way to go.Bruker Corporation has two principle segments. Bruker Scientific Instruments or BSI and then Bruker Energy and Supercon Technologies. There is four major product groups, Bruker BioSpin which is the original company, the NMR Group. Bruker Materials which is much more of a material science company, not really a life science group. Bruker Daltonics is the Mass Spec Group primarily focused in life science, but the new Veeco or the CAM acquisition, the assets we got from Varian are in that group. That will broaden their focus into the chemical and applied markets, in our Military and Homeland Security Group is within Daltonics as well and Bruker Optics is our Molecular Vibrational Spectroscopy Group and it has a very diverse, probably the most diverse division within the company as far as product and market mix from healthcare to defense to life science, industrial, forensic. We updated these goals in our earnings call in October. We commented that for the first time as of June 30, we have a systems backlog in excess of $1 billion that continued into Q3 or there was a very modest growth in that. So we have significant backlog. Orders have been very strong this year, probably exceptionally strong in the industrial and material science group. We are looking at our 2011 revenue to be in the range of $1.62 billion to $1.64 billion. The BSI adjusted EPS is going to be in the $0.87 to $0.90 range. That’s an 11% earnings growth for that group.
Our medium goals through 2014 are to continue to grow the topline in excess of 10%. That will obviously help margin expansion and this is coming from new products. It’s coming from market share gains, but it is primarily going to be organic growth. We are not counting on any M&A type activity to achieve that, although I am certain as with Bruker’s historical trend, there will some type of M&A activity.The average adjusted operating margins, we expect to increase by a 100 basis points every year from 2012 through 2014. Our goal, our target is to be greater than 18% in 2014 and we expect our bottomline growth during those years to expand at a rate faster than the topline. Once a year, we take a look at how our markets are grouped, so these are 2010 numbers. When we have our Q4 earnings call and release, we will start to talk about what the 2011 numbers are. Bruker is still primarily a capital equipment company. Our system sales or 79% and service consumable software is 21%. We do not have a significant consumables business at the moment, not that we’re against that, but our technologies that we currently have in house don’t have a significant consumables stream. Now some of the recent acquisitions we’ve done, the GC business from Varian, we bought an HPLC company, a small HPLC company that I’ll talk about in a moment is going to provide some consumable stream and so in the coming years we hope to expand that a little bit. Our revenue by customer base, academic, medical is about 55%. Government is about 9%. What’s really growing is our industrial and applied business at 24%. Two or three years ago, that was around 17%. When we do publish the 2011 numbers, I expect to see some significant growth in that area. Read the rest of this transcript for free on seekingalpha.com