Bruker Corporation ( BRKR) JPMorgan Global Healthcare Conference Call January 09, 2012 02:30 pm ET Executives Stacey Desrochers - Treasurer & Director, IR Collin D'Silva - President, Bruker Chemical Analysis Division Mark Munch - President, Bruker Nano Surfaces Division Analysts Tycho Peterson - JPMorgan Presentation Tycho Peterson - JPMorgan
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Bruker Corporation provides high-performance scientific instrument tools to diverse markets. We have premier brands with leading market shares in key markets. We are a proven innovator with extensive IP and product portfolio. We have an outstanding global distribution and service network and we are extremely focused on product innovations.This slide shows our global network, the green circles are our production which as you can see are significantly in Europe, primarily in Germany, Switzerland and France and then in the United States. The yellow circles are sales and distribution offices throughout the world. As you can see we are all over the world and in all the markets in which we serve. Some of the key markets which we serve are life science, clinical research, pharma or biotech, materials research, forensic, security, QA/QC. Some of things we have benefited from are some secular mega trends with post-genomics, biologics, membrane protein, microbiological MALDI IDs to name a few. The total addressable market for the life science analytical tools is approximately $47 billion. Our BSI segment serves approximately $8 billion of those addressable markets. To break that down a little bit more for you, our Bruker BioSpin Group serves approximately $1 billion of addressable markets with our NMR, EPR and pre-clinical MRI products. Our Bruker Daltonics Group serves approximately $4 billion of those addressable markets with our life science mass spec, our chemical and applied mass spec products along with our GC and LC separation techniques and detection products. Our Bruker MAT or Materials Group addresses $2 billion of those markets with our X-ray Diffraction, fluorescence and metrology tools along with the Atomic Force Microscopy, spark-OES and Stylus and optical metrology products. Our Bruker Optics Group serves approximately $1 billion of those addressable markets with our FT-IR products, near infrared, Raman and detection products as well.
We spend a significant amount of our revenue on R&D, we traditionally spend 10% to 12% of our revenue on R&D and this has resulted in extremely good product innovations over the last few years. As you can see by the bottom chart, we have produced in excess of 90 new products over the last three years. This has driven our high organic growth within the past few years as well.For the first three quarters of 2011 we had organic growth of 7%. Bruker Corporation also has a very solid balance sheet. Our intangible asset ratio, which is defined as goodwill and other intangibles as a percent of total assets is the best as compared to our competitors. Our tangible book value, which is calculated as shareholders equity minus goodwill and other intangibles is also a very good one compared to our competitors. Some other metrics. So I would like to show you today our revenue as I talked about a little bit ago. It was driven significantly by our product innovations and as you can see, has continued to grow over the last few years and has resulted in good adjusted operating income and EPS growth. Just as a reminder, this slide shows some of our Q3 year-to-date 2011 numbers. Bruker Corporation revenue was $1.177 billion or 32% increase, which was 24% FX adjusted increase. Our BSI Group continued to increased our gross margins to 49% for the first three quarters of 2011 as compared to 48.5% for the first three quarters of 2010. And our BEST Group had revenue of $79.8 million as compared to $61.2 million or a 38% increase year-over-year. I would quickly like to talk about the preliminary and unaudited numbers we provided in an 8-K earlier this morning of our Q4 estimated revenue. We estimate that to be $465 million which will be 11% year-over-year increase which would get us to $1.64 billion for the full-year 2011. We are extremely pleased with this. This is the high end of the guidance we gave for the full year during our Q3 call. Read the rest of this transcript for free on seekingalpha.com