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Bruker(BRKR) - 2024 Q4 - Earnings Call Transcript
BRKRBruker(BRKR)2025-02-13 20:22
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Financial Data and Key Metrics Changes - Bruker reported Q4 2024 revenues of 979.6million,a14.6979.6 million, a 14.6% year-over-year increase, with constant exchange rate (CER) revenue growth of 15.8% [16][35] - For the full year 2024, revenues increased by 13.6% to 3.37 billion, with CER revenue growth of 14% and organic growth of 4% [19][42] - Non-GAAP diluted EPS for Q4 2024 was 0.76,up8.60.76, up 8.6% from 0.70 in Q4 2023 [17][38] - Non-GAAP operating margin for Q4 2024 was 18.1%, matching Q4 2023, with a 300 basis point organic operating margin expansion [17][37] Business Line Data and Key Metrics Changes - BioSpin Group revenue for 2024 was 905.7million,withlowteenspercentagegrowthinCER,drivenbystrongperformanceinEuropeandtheAmericas[22]−CALIDGrouprevenuereached905.7 million, with low teens percentage growth in CER, driven by strong performance in Europe and the Americas [22] - CALID Group revenue reached 1.1 billion, with mid-teens percentage CER growth, primarily in microbiology and infection diagnostics [23] - Bruker NANO's revenue also hit 1.1billion,growinginthehighteenspercentageCER,supportedbysemiconductormetrology[24]−BESTrevenuesgrewinthelowsingledigitspercentage,drivenbyacceleratorandFUSIONtechnologies,butfacedsoftnessinclinicalMRIsuperconductors[25]MarketDataandKeyMetricsChanges−Americasrevenuegrewinthelowsingle−digitpercentage,whileEuropeanrevenueincreasedinthemid−teensrange,andAsiaPacificrevenuedeclinedinthehighsingle−digitpercentageyear−over−year[35]−Thecompanyexperiencedstrongmarkettrendsindiagnosticsandsemiconductormetrology,withsignsofabiopharmarecovery[14][35]CompanyStrategyandDevelopmentDirection−Brukerisfocusedonamultiyeartransformationintoagrowth−orientedindustryleader,emphasizinghighermarginpotentialandrapidEPSincreases[12][32]−Thecompanyaimsforconstantexchangeraterevenuegrowthof51.1 billion, growing in the high teens percentage CER, supported by semiconductor metrology [24] - BEST revenues grew in the low single digits percentage, driven by accelerator and FUSION technologies, but faced softness in clinical MRI superconductors [25] Market Data and Key Metrics Changes - Americas revenue grew in the low single-digit percentage, while European revenue increased in the mid-teens range, and Asia Pacific revenue declined in the high single-digit percentage year-over-year [35] - The company experienced strong market trends in diagnostics and semiconductor metrology, with signs of a biopharma recovery [14][35] Company Strategy and Development Direction - Bruker is focused on a multiyear transformation into a growth-oriented industry leader, emphasizing higher margin potential and rapid EPS increases [12][32] - The company aims for constant exchange rate revenue growth of 5% to 7% in 2025, with 3% to 4% organic growth and contributions from M&A [14][44] - Bruker is committed to a 140 basis point operating profit margin improvement in 2025, targeting non-GAAP EPS growth of 11% to 13% [14][45] Management's Comments on Operating Environment and Future Outlook - Management acknowledges uncertainty in the U.S. NIH and academic government market but remains confident in other growth drivers such as biopharma recovery and China stimulus funding [13][56] - The company expects a gradual recovery in the biopharma sector, with improvements anticipated in the first half of 2025 [77] - Management has built reasonable contingencies into their guidance to account for potential NIH funding reductions [110][112] Other Important Information - Bruker completed strategic acquisitions in 2024 to access large addressable markets, enhancing its portfolio with spatial biology, molecular diagnostics, and lab automation [31][32] - The company generated 189.9 million in operating cash flow in Q4 2024, with free cash flow of $151.1 million [39][40] - Bruker plans to return capital to shareholders through its existing share buyback program [40] Q&A Session Summary Question: Confidence in instrumentation sales despite NIH cuts - Management indicated that NIH funding is less than 5% of their exposure and has sufficient growth drivers outside the U.S. to support their guidance [54][56] Question: Academic government budget in Europe and China - Management noted that China is experiencing stimulus funding spread over multiple quarters, while Europe has shown reasonable performance [68][70] Question: Impact of NIH funding deterioration on margins and EPS - Management has modeled potential declines in NIH funding and believes they have built reasonable contingencies into their guidance [110][112] Question: Update on biopharma recovery timing - Management expects a gradual recovery in the biopharma sector, starting in the first half of 2025 [77] Question: Geographic concentration of backlog in BSI - The backlog is consistent with the company's geographic exposure, with a significant backlog level providing a cushion against uncertainties [83][84] Question: Operating margin expansion assumptions - Management targets around 140 basis points of expansion, factoring in organic headwinds and FX impacts [88][89]