Bruker Corp at Citi Medtech and Life Sciences Access Day Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Patrick Donnelly - Citi - Analyst : Gerald, maybe the elephant in the room, we can just start on NIH, US academic, new headlines almost on a daily basis, rarely positive. So I guess what's your sense as to what's happened these last few weeks, the NIH, you have the indirect piece. What are you guys hearing from customers? What's the right way to just think about the impact of Bruker? Because again, obviously, the sentiment on the US I got to make pieces negative. We heard from one peer last night and saying it got worse as this year started. So -- yes, maybe I'll turn it over to you to just give us a quick backdrop.

Question: Patrick Donnelly - Citi - Analyst : Yes. Okay. That's a helpful overview. I guess when you think about where you finish the turbulence, I think you called it for the 1Q orders, I guess, is that what you're seeing, it's been a couple of months now, I guess, for 1Q. Again, this feels like it's intensified a little bit over the past month or so. What are those customer conversations been like? Is it very much a -- we need to get some level of certainty before we move forward? What are the instrument conversations -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 7:30PM, BRKR.OQ - Bruker Corp at Citi Medtech and Life Sciences Access Day

Question: Patrick Donnelly - Citi - Analyst : Okay. Yes. And I guess just to kind of think about the financial impact, I mean, I know you guys have a backlog, the orders are absolutely -- I guess, would you think of the near-term revenue and EPS impacting more limited and the impact being more on the bookings backlog side? What's the right way to frame up what you're seeing and how quickly that could --

Question: Patrick Donnelly - Citi - Analyst : Yes. So I mean, I guess, just taking a look at what you just said there in terms of the build of revenue as you work here. Does this the past 1.5 months in the academic change anything in terms of the level of confidence? Does it change maybe the way how you get there? I know you guys typically build in some level of cushion? Are we now -- maybe some of that cushion is gone and again, areas like biopharma and semis that -- there was conservatism of those step-up and academic eases, maybe what's the right way to think about just that -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 7:30PM, BRKR.OQ - Bruker Corp at Citi Medtech and Life Sciences Access Day

Question: Patrick Donnelly - Citi - Analyst : Okay. And maybe one last one on U.S. academic and then we'll move plenty of other things to talk about. But I guess in your conversations, you mentioned the proposal process, which as we saw in 1.0, as you mentioned there was some big numbers and what was actually implemented quite different. I guess from your conversations from your guys' view, what changes -- what gets a level of stability into U.S. academic, uncertainty right now. It's headlines, right? Is the volatility. Do we just need to get past the proposal and then see what's actually implemented? And then even if it is lower, maybe it's higher just that knowledge and transparency to what's happening to step back in? What's your view?

Question: Patrick Donnelly - Citi - Analyst : Yes. So it sounds like maybe a couple of quarters of order -- is that -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 7:30PM, BRKR.OQ - Bruker Corp at Citi Medtech and Life Sciences Access Day

Question: Patrick Donnelly - Citi - Analyst : Okay. Okay. Fair enough. And then, yes, I mean, maybe we can talk to some other parts of the portfolio. Again, you mentioned biopharma. I know you guys are leaning to it too more. It feels like maybe that can pick up and offset some of this. So -- maybe talk about what you're seeing in that market and what you're hearing. And what verticals are doing well for you guys there?

Question: Patrick Donnelly - Citi - Analyst : Yes, for sure. I mean -- and you mentioned NanoString touched that. I think you guys are run rating a little over $100 million, $110 million --

Question: Patrick Donnelly - Citi - Analyst : Yes. I guess maybe talk about the moving pieces against some intros down at AGBT What you're seeing there and we can certainly get into the margin dilution at some point. But I guess, a, the technology offering and confidence at $110 million, and then just the litigation IP landscape would be helpful to talk through --

Question: Patrick Donnelly - Citi - Analyst : Okay. And then, yes, maybe just the dilution talk through. Obviously, you guys talked a little bit about what to expect for '25 and then going forward to be help just to talk through the leverage on the cost side -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 7:30PM, BRKR.OQ - Bruker Corp at Citi Medtech and Life Sciences Access Day

Question: Patrick Donnelly - Citi - Analyst : Yes. Okay. And then maybe the semi business. I mean, you mentioned that, obviously, a nice area to be in a I think that posted teens growth last year, 8% or so of revs. So maybe just talk through, I guess, what -- obviously, it's pretty clear with the uplift or I think it's about half the time to some of the AI stuff that's going up. But what's the right way to think about just the potential for that business as we work our way forward again? You mentioned a nice positive offset, if any?

Question: Patrick Donnelly - Citi - Analyst : Yes. No, sure. I mean -- and you mentioned, obviously, the margin profile of that business. Margin is always a discussion with you guys. I think in terms of the guide, you talked about 140 bps or so this year. So maybe just talk through the key levers, again, I means semis are going to help, obviously. But maybe the key levers both on the cost side and then the revenue growth and just the confidence in that margin expansion opportunity. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 7:30PM, BRKR.OQ - Bruker Corp at Citi Medtech and Life Sciences Access Day

Question: Patrick Donnelly - Citi - Analyst : Yes. And I guess on the margins, you mentioned revenue obviously is that more of a second half weight. How do you think about the margins as we work our way through the year? What's the right way to think about --

Question: Patrick Donnelly - Citi - Analyst : Yes. And I know you guys have talked about that you gave that LRP 125 bps a year of margin. I guess where are the continued opportunities, I think that's a multiyear 3 years -- How do you think about the key opportunities to continue to drive obviously, well above peers in terms of that expansion --

Question: Patrick Donnelly - Citi - Analyst : Yes. And I guess to your point in terms of having room on the cost side, you mentioned a few other times where you were able to pull levers. I guess when you think about this backdrop where there's all this fear, at least from the outside, what's your ability, your confidence level on the earnings number to protect that if there is volatility on the orders and top line -- obviously, you guys put out a number this year. So just curious in terms of the confidence level there and how much are you about the protected on the margins?

Question: Patrick Donnelly - Citi - Analyst : Yes. Okay. And then maybe you just mentioned ELITech, that was a deal pretty well received, again, relatively nice accretion on that front. Maybe just talk about the progress on that deal? What the accretion looks like? Obviously, it was helpful last year. Curious what about it this year is, but yes, what's the reception and what's --

Question: Patrick Donnelly - Citi - Analyst : And again, I mean, the accretion part, it seems like it's been nicely --

Question: Patrick Donnelly - Citi - Analyst : Yes. That would be nice. And then -- yes, we haven't spent a ton of time on China. I know you guys called out some stimulus stores then it was about $15 million

Question: Patrick Donnelly - Citi - Analyst : What's the way to think about the pace of activity? What's baked in guide? Maybe just walk us through

Question: Patrick Donnelly - Citi - Analyst : Yes. I guess to that point, I mean, I know when there were the import licenses in January was a big discussion point around you guys. I guess what -- I know -- it's always been -- there's always been delays shipping into China for you guys. It's particularly new, but what have you seen since then? Is it incrementally disruptive or whatsoever --

Question: Patrick Donnelly - Citi - Analyst : Yes. And then maybe just on the tariff side, both China and then there's rumors, headlines about Europe as well. Obviously, you guys have a significant presence in Europe. How are you kind of handling what the headlines say, what's the right way to just think about the potential impact, if there --

Question: Patrick Donnelly - Citi - Analyst : Okay. We're right at the end of time. We covered a lot of ground. Thanks, Gerald.