Q4 2021 Bruker Corp Earnings Call
Speaker 1: you
Good day and welcome to the broker Corporation fourth quarter 2021 earnings call.
Speaker 2: Good day and welcome to the Bruker Corporation fourth quarter 2021 earnings call. All participants will be in listen only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero.
Participants will be in listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note. This event is being recorded I would now like to turn the conference over to Justin Ward Senior director of Investor Relations and corporate development. Please go ahead Sir.
Speaker 2: After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. And I'd like to turn the conference over to Justin Ward, Senior Director of Investor Relations in Corporate Development. Please go ahead, sir.
Thank you, Jason and good morning, everyone I would like to welcome everyone to broker corporations fourth quarter and full year 2021 earnings Conference call. My name is Justin Ward and I am brokers, New senior director of Investor Relations and corporate development.
Speaker 3: Thank you, Jason, and good morning, everyone. I would like to welcome everyone to Bruker Corporation's fourth quarter and full year 2021 earnings conference call. My name is Justin Ward, and I am Bruker's new Senior Director of Investor Relations and Corporate Development.
Speaker 3: I joined Bruker in January , and I'm looking forward to meeting many of you in early 2022. Joining me on today's call are Frank Glaukein, our president and CEO , and Gerald Herman, our executive vice president and chief financial officer.
I joined broker in January and I'm looking forward to meeting many of you in early 2022.
Joining me on today's call are Frank <unk>, our president and CEO and Gerald Herman Our executive Vice President and Chief Financial Officer.
Speaker 3: In addition to the earnings release we issued earlier today, during today's conference call we will be referencing a slide presentation that can be downloaded from the events and presentations section of Brooker's Investor Relations website.
In addition to the earnings release, we issued earlier today journey. During today's conference call, we will be referencing a slide presentation that can be downloaded from the events and presentations.
Section of brokers investor relation website.
Speaker 3: During today's call, we will be highlighting non-GAAP financial information.
During today's call, we will be highlighting non-GAAP financial information and.
Speaker 3: Reconciliations of our non-GAAP to GAAP financial measures are included in our earnings release and are posted on our website at ir.bruker.com.
Reconciliations of our non-GAAP to GAAP financial measures are included on our in our earnings release and are posted on our website at IR Dot <unk> Dot com.
Speaker 3: Before we begin, I would like to reference Bruker's safe harbor statement, which is shown on slide two of the presentation.
Before we begin I would like to reference <unk> Safe Harbor statement, which is shown on slide two of the presentation.
Speaker 3: During this conference call, we will make forward-looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainties, including those related to the ongoing COVID-19 pandemic, as well as ongoing supply chain logistics and inflation challenges.
During this conference call, we will make forward looking statements regarding future events and <unk>.
The financial and operational performance of the company that involve risks and uncertainties, including those related to the ongoing COVID-19, pandemic as well as ongoing supply chain logistics and inflation challenges.
Speaker 3: The company's actual results may differ materially from such statements.
The company's actual results may differ materially from such statements factors that might cause such differences include but are not limited not limited to those.
Speaker 3: Factors that might cause such differences include, but are not limited to, those discussed in today's earnings release and in our Form 10-K , as updated by our other SEC filings, which are available on our website and online.
Those discussed in today's earnings release and in our Form 10-K as updated by our other SEC filings.
Which are available on our website and on the SEC's website.
Speaker 3: Also note that the following information is based on current business conditions.
Also note that following the following information is based on current business conditions.
Speaker 3: and to our outlook as of today, February 11, 2022.
And to our outlook as of today February 11th 2022.
Speaker 3: We do not intend to update our forward-looking statements based on new information, future events, or for other reasons, except as may be required by law, prior to the release of our first quarter 2022 financial results expected in early May 2022.
We do not intend to update our forward looking statements based on new information future events or for other reasons, except as may be required by law.
Here to the release of our first quarter 2022 financial results expected in early May 2022.
Speaker 3: You should not rely on these forward-looking statements as representing our views or outlook as of any date after today.
You should not rely on these forward looking statements.
As representing our views or outlook as of any date after today.
We will begin today's call with Frank providing an overview of our business progress Gerald will then cover the financials for the fourth quarter and full year 2021 in more detail and share our fiscal year 2022, our financial outlook.
Speaker 3: We will begin today's call with Frank providing an overview of our business progress. Cheryl will then cover the financials for the fourth quarter and full year 2021 in more detail and share our fiscal year 2022 financial outlook.
Speaker 3: Now, I'd like to turn the call over to Bruker CEO , Frank Laukeen.
Now I'd like to turn the call over to broker CEO Frank Lockheed.
Speaker 4: Thanks, Justin. Great to have you at Bruker. As some of you know, we welcomed Justin a few weeks ago as our new Senior Director of Investor Relations and Corporate Development, and this is his first earnings call with us. Now, good morning, everyone, and thank you for joining us on today's earnings call.
Thanks, Justin Great to have you at broker.
As some of you know we welcome just in a few weeks ago as our new senior director of Investor Relations and corporate development and this is his first earnings call with US now good morning, everyone and thank you for joining us on today's earnings call.
Speaker 4: As you can see on slide four, Ruker's solid 11 percent organic revenue growth in the fourth quarter capped off a year of outstanding progress for the company.
As you can see on slide four.
<unk> solid 11% organic revenue growth in the fourth quarter capped off a year of outstanding progress for the company.
Speaker 4: Robust demand for our differentiated high-value instruments and solutions resulted in continued strong momentum in bookings and revenues despite meaningful supply chain challenges.
Robust demand for our differentiated high value instruments and solutions resulted in continued strong momentum in bookings and revenues.
Despite meaningful supply chain challenges.
Speaker 4: In fiscal year 2021, our BSI segment organic bookings and backlog both increased in the high teens percentage year over year.
In fiscal year 2021, our BSI segment organic bookings and backlog both increased in the high teens percentage year over year.
Speaker 4: Accordingly, we are ramping up significant CapEx investments for capacity and productivity, as well as substantial OpEx investments in commercial organizations and R&D for our project Accelerate 2.0 High Growth, High Margin initiatives.
Accordingly, we are ramping up significant capex investments for capacity and productivity as well as substantial opex and opex investments in commercial organizations and R&D for our project accelerate to Dido high growth high margin initiatives.
For the fourth quarter of 2021.
Speaker 4: BSI segment order bookings growth year-over-year was about 10% on an organic basis, driven by broad-based customer demand, with the U.S. demand being particularly strong.
BSI segment order bookings growth year over year was about 10% on an organic basis, driven by broad based customer demand with the U S demand being particularly strong.
Speaker 4: Brooker's Q4'21 revenues increased approximately 9% year-over-year to $684 million, and in comparison to a strong prior year, Q4 2020.
Brokers Q4, 'twenty, one revenues increased approximately 9% year over year to $684 million and in comparison to a strong prior year Q4 2020.
Speaker 4: On an organic basis, revenues increased 11.4 percent year over year, which included 11.8 percent organic growth in the BSI, Brooker Scientific Instruments Groups, and 6.8 percent at best net of intercompany elimination.
On an organic basis revenues increased 11, 4% year over year.
Which included 11, 8% organic growth in the BSI broker scientific instruments groups and six 8% at best net of intercompany eliminations.
Our Q4 'twenty, one non-GAAP gross margin decreased 50 bps year over year to 51, 2%, while our non-GAAP operating margin was 21.0% a decline of 150 bps from 22, 5% in Q4 'twenty 'twenty do.
Speaker 4: Our Q4-21 non-GAAP gross margin decreased 50 bps year-over-year to 51.2% while our non-GAAP operating margin was 21.0%, a decline of 150 bps from 22.5% in Q4 2020.
Speaker 4: due to accelerated commercial investments, unfavorable revenue mix, as well as supply chain challenges and inflation.
Two accelerated commercial investments unfavorable revenue mix as well as supply chain challenges and inflation.
In Q4 broker reported GAAP diluted EPS of <unk> 50 cents compared to <unk> 45 reported in the prior year period.
Speaker 4: In Q4, Bruker reported gap-diluted EPS of $0.50 compared to $0.45 reported in the prior year period.
On a non-GAAP basis Q4, 'twenty one diluted EPS was 59 cents an increase of <unk> from 58 cents.
Speaker 4: On a non-GAAP basis, Q4'21 diluted EPS was 59 cents, an increase of 1 cent from 58 cents in Q4 2020. In summary, Q4'21 was a quarter with continued momentum in bookings and backlog, with strong organic revenue growth and ramping investments in our Project Accelerate initiatives and operational excellence drive.
In Q4 2020 in.
In summary, Q4, 'twenty, one was a quarter with continued momentum in bookings and backlog with strong organic revenue growth and ramping investments in our project accelerate initiatives and operational excellence drive.
Speaker 4: On slide five, we show Brooker's performance for the full year 2021.
On slide five we show brokerage performance for the full year 2021 hour.
Speaker 4: our revenues increased by $430 million year-over-year, or by 21.7% to $2.42 billion. On an organic basis, fiscal year 21 revenues grew 19.1% year-over-year, comprised of 19.4% organic growth in BSI, and a 15.5% organic increase at best, net of intercompany elimination.
Our revenues increased by $430 million year over year or by 21, 7% to 2.42 billion.
On an organic basis fiscal year 'twenty, one revenues grew 19, 1% year over year comprised of $19 four organic percent organic growth in BSI and a 15, 5% organic increase at best net of intercompany eliminations.
Full year 2021, gross and operating margin as well as GAAP and non-GAAP EPS performance, all stepped up significantly year over year as our business recovered from the pandemic and accelerated strongly beyond pre pandemic levels.
Speaker 4: Full year 2021 growth and operating margin, as well as gap and non-gap EPS performance all stepped up significantly year over year as our business recovered from the pandemic and accelerated strongly beyond pre-pandemic levels.
In fiscal year 'twenty, one we experienced particularly strong organic growth in our proteomics microbiology, Biopharma and industrial research markets we.
Speaker 4: In fiscal year 21, we experienced particularly strong organic growth in our proteomics, microbiology, biopharma, and industrial research markets.
Speaker 4: We are very pleased with our 19% organic revenue growth.
We are very pleased with our 19% organic revenue growth.
Speaker 4: 240 BIPs year-over-year gross profit margin expansion, and 340 BIPs year-over-year operating profit margin expansion, and more than 50% EPI.
240 bps year over year gross profit margin expansion and 340 bps year over year operating profit margin expansion.
And more than 50%.
EPS growth in 2021.
Speaker 4: Our return on invested capital of 27.6% in 2021 was well above our long-term target of ROIC greater 20%. And it illustrates our differentiated business philosophy and entrepreneurial management process and culture, which we believe will resonate in times with higher inflation and increasing cost of capital.
Our return on invested capital of 27, 6% and 21 was well above our long term target of ROIC, greater 20% and it illustrates our differentiated business philosophy, and entrepreneurial management process and culture, which we believe will resonate and times with higher inflation.
An increasing cost of capital.
Please turn to slide six and seven where we highlight the full year 'twenty one performance of our three BSI groups and our best segment, all on a constant currency and year over year basis.
Speaker 4: Please turn to slide 6 and 7, where we highlight the full-year 21 performance of our three BSI groups and our best segment, all on a constant currency and year-over-year basis.
In 2021, the bio spin group revenue grew in the mid teens percentage year over year to 691 million <unk> saw strength in demand for its MMR.
Speaker 4: In 2021, the Biospin group revenue grew in the mid-teens percentage year over year to $691 million. Biospin saw strengthened demand for its NMR, preclinical imaging, and aftermarket offerings, while system installation activities recovered.
Preclinical imaging and aftermarket offerings, while system installation activities recovered.
Speaker 4: Biospin systems revenue were up strongly year over year, including revenue recognition on four gigahertz class NMR instruments.
<unk> systems revenue were up strongly year over year, including revenue recognition on four gigahertz class <unk> instruments in.
Speaker 4: In the fourth quarter, Biospin's PCI division acquired Molecubes, a Belgian company with innovative bench top preclinical nuclear molecular imaging systems.
In the fourth quarter <unk> PCI Division acquired molecule, a Belgian company with innovative bench top preclinical nuclear molecular imaging systems.
For the full year 2021.
Speaker 4: Cali group revenues increased in the low 20s percentage to 819.6 million with continued growth in our mass spectrometry and microbiology businesses and very strong performance in our FTIR near IR Raman molecular spectroscopy product line.
<unk> group revenues increased in the low twenties percentage to $819 $6 million with continued growth in our mass spectrometry and microbiology businesses and very strong performance in our FTIR near IR Raman molecular spectroscopy product lines.
Speaker 4: We saw strong revenue growth for our TIMSTOF Unbiased 4D proteomics and multiomics platform, which as we mentioned in our JP Morgan presentation in early January , exceeded 100 million in revenues in 2021.
We saw strong revenue growth for our Tim stuff unbiased 40, proteomics and multi omics platform, which as we mentioned are in our JP Morgan presentation in early January exceeded $100 million in revenues in 2021 rare.
Speaker 4: Revenue for other life science mass spec products like our research maldy top product line rebounded as well
Our revenue for other life science mass spec products like our research multi tav product line rebounded as well.
Microbiology and molecular diagnostics revenue grew year over year, driven by high demand for multi bio type of instruments and consumables. This was coupled with a recovery of our tuberculosis diagnostic TB diagnostics products. While during Q4 2021 revenue from our Sars Cov two PCR tests.
Speaker 4: Microbiology and molecular diagnostics revenue grew year over year, driven by high demand for multibiotyper instruments and consumables. This was coupled with the recovery of our tuberculosis or TB diagnostics products, while during Q4 2021, revenue from our SARS-CoV-2 PCR testing of 6 million, approximately 6 million, was down year over year from Q4 2020, as expected.
<unk> of $6 million, approximately 6 million was down year over year from Q4 2020 as expected.
Speaker 4: Full year 21 revenues for our IR near IR Raman molecular spectroscopy products were substantially higher year over year with strong execution as the global industrial, applied, and academic markets rebounded from 2020 and grew further.
Full year 'twenty, one revenues for our IR near IR Raman molecular spectroscopy products were substantially higher year over year with strong execution at the global industrial applied and academic markets rebounded from 2020 and grew further.
Speaker 4: Please turn to slide 7, full year 2021 broker nano revenues grew in the mid 20s percentage to 697.5 million.
Please turn to slide seven full year 2021 broker nano revenues grew in the mid twenties percentage to $697 5 million.
Speaker 4: Nano's industrial research, industrial and academic businesses rebounded strongly with industrial research outperforming.
<unk> industrial.
Research industrial and academic business businesses rebounded strongly with industrial research outperforming.
Speaker 4: Revenues of our advanced X-ray, nanosurfaces, and nanoanalysis tools all stepped up substantially versus 2020. Nano's microelectronics and semiconductor metrology tools performed very well in 2021 with ongoing strong bookings and backlogs.
Revenues of our advanced X Ray nano surfaces, and nano analysis tools, all stepped up substantially versus 2020 that was microelectronics and semiconductor metrology tools performed very well in 2021 with ongoing strong bookings and backlog.
Speaker 4: Life Science fluorescence microscopy revenue was up sharply year over year on product innovation and strong academic demand.
Life Science fluorescence microscopy revenue was up sharply year over year on product innovation and strong academic demand.
Speaker 4: Nano's 2021 revenue included an M&A contribution from our September 2020 acquisition of Canobie Biosciences' Spatial Biology Targeted Proteomics Tools and CRO service.
Now I know, it's 2021 revenue included an M&A contribution from our September 20 September 2020 acquisition of canopy Biosciences, spatial biology targeted proteomics tools and CRO services.
Speaker 4: Finally, full-year best revenue grew in the mid-teens percentage net of intercompany eliminations driven by contributions from big science projects and the recovery in MRI superconductor demand by our MedTech OEM customers.
Finally full year best revenue grew in the mid teens percentage net of intercompany eliminations driven by contributions from Big science projects and a recovery in MRI superconductor demand by our Meditech OEM customers best Superconductor demand appears healthy.
Speaker 4: Best superconductor demand appears healthy, but we continue to experience supply chain challenges due to material shortages and slow logistics.
But we continue to experience supply chain challenges due to material shortages and slow logistics.
Speaker 4: Moving to slides 8 and 9, 8 and 9, we continue to make good progress with our Project Accelerate 2.0 initiatives, which now represent about 54% of our total revenue.
Moving to slides eight and nine eight and nine we continued to make good progress with our project accelerate to Dido initiatives, which now represent about 54% of our total revenues.
Speaker 4: On slide 8, we highlight a recent majority in investment that closed in January 2022 and which enhances our proteomics solution.
On slide eight we highlight a recent majority investment that closed in January 2022, and which enhances our proteomics solutions pre.
Speaker 4: Preomics has developed innovative automation and sample preparation tools and consumables for use in unbiased deep proteomics.
<unk> was developed has developed innovative automation and sample preparation tools and consumables for use and unbiased deep proteomics.
Speaker 4: Preomic's new Beatbox device in combination with Bruker's Timstuff platform provides accelerated, deep and unbiased proteomics workflows for tissue biobanks or biopsy research.
<unk> new beat box device in combination with brokers Tim's top platform provides accelerated deepen unbiased proteomics workflows for tissue biobanks or biopsy research.
On slide nine we show two other recent technology acquisitions that closed in January and also enhance our proteomics initiative.
Speaker 4: On slide nine, we show two other recent technology acquisitions that closed in January and also enhanced our proteomics initiative.
Speaker 4: ProLab specializes in precision pumps, autosamplers, and nanoflow to capillary LC or CapLC.
Pro lab specializes in precision pumps auto samplers and nano flow two capillary LC or cap LLC.
Speaker 5: Systems to increase performance and robustness of 40 proteomics and 40 metabolome
Systems to increase performance and robustness of 40, proteomics and 40 Metabo low mix broker also acquired <unk> a company specializing in nano LC columns and components to optimize proteomics, which are used in brokers nano elute nano LC system.
Speaker 6: Bruker also acquired Pepcep, a company specializing in nano-LC columns and components to optimize proteomics, which are used in Bruker's nano-ELUT, nano-LC system, and by other manufacturers.
By other manufacturers.
Speaker 4: The expected fiscal year 2022 revenue from these three proteomics acquisitions is less than $10 million, but we believe these acquisitions have excellent growth potential, and because it's primarily consumables, they have high gross margin potential in the future and allow Bruker to offer more complete, unbiased 4D proteomics and multiomics solutions, including consumables, as well as higher performance in the future.
The expected fiscal year 2022 revenue from these three proteomics acquisitions is less than 10 million, but we believe these acquisitions have excellent growth potential and because its primarily consumables. They have high gross margin potential in the future and allow broker to offer more complete unbiased 40, proteomics and multi AUM.
<unk> solutions, including consumables as well as higher performance in the future.
Speaker 4: As we intend to invest in these separation and sample prep technologies, we expect these proteomics acquisitions to be approximately three to four cents dilutive in fiscal year 2022, which is incorporated in our fiscal year 22 guidance.
As we intend to invest in these separation and sample prep technologies, we expect these proteomics acquisitions to be approximately three to four.
Diluted in fiscal year, 2022, which is incorporated in our fiscal year 'twenty two guidance.
Slide 10 illustrates the historical perspective of our transformation over the last several years with expanding operating margins.
Speaker 4: Slide 10 illustrates a historical perspective of our transformation over the last several years with expanding operating margins.
Speaker 4: accelerating organic revenue growth and double-digit EPS CAGR all while maintaining return on invested capital greater than 20 percent, which has resulted in robust stakeholder and shareholder value creation.
Accelerating organic revenue growth.
And double digit EPS CAGR, all while maintaining return on invested capital greater than 20%, which has resulted in robust stakeholder and shareholder value creation. This is the result of our entrepreneurial entrepreneurial focus on innovating high value instruments and solutions.
Speaker 4: This is a result of our entrepreneurial focus on innovating high-value instruments and solutions combined with a continuous operational excellence drive. As a result, Bruker enters 2022 in its strongest position ever. We intend to further ramp our investments in the Project Accelerate 2.0 High Growth High Margin initiatives to ensure those opportunities continue to drive profitable growth in the years to come.
Combined with a continuous operational excellence drive.
As a result broker enters 2022 in its strongest position ever we intend to further ramp our investments in the project accelerate Trudeau high growth high margin initiatives to ensure those opportunities continue to drive profitable growth in the years to come.
Speaker 4: specifically to facilitate growth in our key opportunities in proteomics.
Specifically to facilitate growth in our key opportunities in proteomics.
Speaker 4: Spatial Biology, Biopharma, and Semiconmetrology, we plan to add incremental commercial and R&D investments of $20 to $25 million in 2022.
Spatial biology, Biopharma and Semicon metrology, we plan to add incremental commercial and R&D investments of $20 million to $25 million in 2022.
Speaker 4: included in our guidance, and of course, including the three proteomics acquisitions that I mentioned a moment ago. This also includes investments in ACQUITY and Canopy, if you recall our spatial biology ventures and previous acquisitions, as well as into the two smaller Semicon Metrology acquisitions we did in the second half of last year.
Included in our guidance and of course, including the three proteomics acquisitions that I mentioned a moment ago. This also includes investments in acuity and canopy. If you recall our special.
Our spatial biology ventures in previous acquisitions as well as into the two smaller semicon metrology acquisitions, we did in the second half of last year.
As the revenue contributions from these projects accelerate to that though initiatives increases further they are expected to pull up our operating margins and revenue growth rates further first towards our 2020 for medium term financial goals and then beyond.
Speaker 4: As the revenue contributions from these Project Accelerate 2.0 initiatives increases further, they are expected to pull up our operating margins and revenue growth rate further, first towards our 2024 medium-term financial goals, and then beyond.
Speaker 4: Finally, we have substantial balance sheet capacity to pursue disciplined strategic M&A with the right opportunity.
Finally, we have substantial balance sheet capacity to pursue disciplined strategic M&A with the right opportunities in summary, during 2021 broker delivered excellent progress towards its strategic and financial objectives. Our core businesses have rebounded strongly in our project accelerate high growth high margin.
Initiatives have performed performed very well.
Im pleased I am pleased with how well our teams responded to a challenging supply chain and logistics environment.
As we move through fiscal year 2022, our high backlog gives us good visibility on growth, we see meaningful areas for broker to develop market, leading positions with our innovative technology and commitment to serving our customers.
Let me now turn the call over to our CFO Gerald Herman who will review brokers financial performance and outlook in more detail Gerald. Thank you Frank and thank you everyone for joining us today I'd like to add my warm welcome to Justin as he joins our IR and corporate development team here at broker.
Pleased to provide more detail on brokers fourth quarter and full year 2021 financials, starting on slide 12.
In the fourth quarter of 2021 brokers revenue increased 9% to approximately $684 million, which reflects an organic revenue increase of 11, 4% year over year.
Speaker 3: We reported GAAP EPS at 50 cents per share compared to 45 cents in the fourth quarter of 2020.
We reported GAAP EPS of <unk> 50 per share compared to <unk> 45 in the fourth quarter of 2020.
On a non-GAAP basis, Q4, 2021, EPS was <unk> 59 per share an increase of <unk> compared to <unk> 58 in the fourth quarter 2020.
Our fourth quarter 2021, non-GAAP operating income grew one 9% off a strong comparison in the fourth quarter of 2020.
Speaker 3: Our fourth quarter 2021 non-GAAP operating increment grew 1.9% off a strong comparison in the fourth quarter of 2020.
Speaker 3: In the fourth quarter of 2021, our non-GAAP operating margin decreased 150 basis points year over year to 21 percent, principally due to the impact of accelerated investments, revenue mix, and supply chain pressure.
In the fourth quarter of 2021, our non-GAAP operating margin decreased 150 basis points year over year to 21% principally due to the impact of accelerated investments revenue mix and supply chain pressures.
Speaker 3: As Frank mentioned, the Bruker team executed very well in the fourth quarter, handling significantly higher volume despite COVID, supply chain shortages, and logistics delays.
As Frank mentioned, the broker team executed very well in the fourth quarter handling significantly higher volume, despite COVID-19 supply chain shortages and logistics delays.
We finished the fourth quarter with cash cash equivalents and short term investments of approximately $1 $1 $7 billion.
Speaker 3: We finished the fourth quarter with cash, cash equivalents, and short-term investments of approximately $1.17 billion.
Speaker 3: During the quarter, we used cash to ramp selected Project Accelerate 2.0 investments in our key strategic opportunities, fund capital expenditures, as well as the acquisition of molecules and our dividend program. You may recall that in May of 2021, our board approved a new two-year share repurchase authorization of up to $500 million, valid until May 2023.
During the quarter, we used cash to ramp selected project accelerate <unk> investments in our key strategic opportunities fund capital expenditures as well as the acquisition of molecules and our dividend program. You may recall that in May of 2021, our board approved a new two year share repurchase authorization.
Of up to $500 million valid until May 2023 in.
Speaker 3: In the fourth quarter, we repurchased approximately one million shares of Bruker's stock for a total consideration of $82 million.
In the fourth quarter, we repurchased approximately 1 million shares of broker stock for a total consideration of $82 million.
Speaker 3: For the full year 2021, our repurchases total 2.1 million shares for approximately $153 million.
For the full year 2021, our repurchases totaled $2 1 million shares for approximately $153 million.
Speaker 3: We generated $138.6 million of operating cash flow in the fourth quarter, which was partially offset by our CapEx investments, resulting in $110.2 million in free cash flow for the fourth quarter.
We generated $138 $6 million of operating cash flow in the fourth quarter, which was partially offset by our capex investments, resulting in a $110 2 million and free cash flow for the fourth quarter.
Speaker 3: This represents a $64 million decline from the fourth quarter of 2020 due to higher working capital associated with buffer inventories and our higher revenue level and related receivables.
This represents a $64 million decline from the fourth quarter of 2020 due to higher working capital associated with buffer inventories and our higher revenue level and related receivables.
Speaker 3: In the fourth quarter, we completed a private placement of approximately $500 million of 10-year notes carrying Euro-Franc-based fixed rates of approximately 1%.
In the fourth quarter, we completed a private placement of approximately $500 million of 10 year notes carrying euro front based fixed rates of approximately 1%.
Speaker 3: This provides us with further capital to continue to fund disciplined and strategic investments, both organic and inorganic, in key growth areas.
This provides us with further capital to continue to fund disciplined and strategic investments, both organic and inorganic in key growth areas.
Slide 13 shows the revenue bridge for the fourth quarter of 2021.
Speaker 3: Slide 13 shows the revenue bridge for the fourth quarter of 2021. As noted earlier, organic revenue in the quarter increased 11.4%. We had a positive revenue contribution from acquisitions of 0.3% and a foreign currency headwind of 2.8%.
Noted earlier organic revenue in the quarter increased 11, 4%, we had a positive revenue contribution from acquisitions of 0.3% and the <unk>.
Foreign currency headwind of two 8%.
Speaker 3: From an organic revenue growth perspective and compared to the fourth quarter of 2020, BioSpin's fourth quarter 2021 revenue decreased slightly due to an ultra-high field revenue mix headwind and the previous pull forward of approximately $15 million in China-related revenues into the third quarter of 2021.
From an organic revenue growth perspective, and compared to the fourth quarter of 2020, <unk> fourth quarter 2021 revenue decreased slightly due to an ultra high field revenue mix headwind and the previous pulled forward of approximately $15 million in China related revenues into the third quarter of 2020.
John .
Speaker 3: Nano organic revenue grew in the low 20% on strength in Nano's industrial research and academic business.
Nano organic revenue grew in the low 20% on strength in Nanos industrial research and academic businesses.
Speaker 3: CALID grew high teens percent with strong performance in life science mass spectrometry and the multi-biotyper franchise, partially offset by a year-over-year decline in SARS-CoV-2 testing revenue. Best revenue increased in the mid-single digits year-over-year, net of intercompany elimination.
<unk> grew high teens percent with strong performance in life science mass spectrometry and.
The multi biotech or franchise, partially offset by a year over year decline in Sars cov two testing revenue.
Best revenue increased in the mid single digits year over year net of intercompany eliminations.
Speaker 7: fourth quarter 2021 BSI systems revenue increased in the mid-teens percentage range organically while BSI aftermarket grew in the high single digits organically compared to the fourth quarter of 2020.
Fourth quarter 2021, BSI systems revenue increased in the mid teens percentage range organically, while BSI aftermarket grew in the high single digits organically compared to the fourth quarter of 2020.
Geographically and on an organic basis in the fourth quarter of 2021, our European revenue was up mid single digits percent year over year, North American revenue grew in the high 20% range and Asia Pacific grew in the mid single digits year over year rest of the world fourth quarter 2000.
Speaker 3: Geographically, and on an organic basis, in the fourth quarter of 2021, our European revenue was up mid-single digits percent year-over-year. North American revenue grew in the high 20 percent range, and Asia Pacific grew in the mid-single digits year-over-year. Rest of the world fourth quarter 2021 revenue was significantly higher year-over-year in the low 30 percent range.
'twenty, one revenue was significantly higher year over year in the low 30% range.
Speaker 3: Slide 14 shows our fourth quarter 2021 P&L performance on a non-gap basis.
Slide 14 shows our fourth quarter 2021, P&L performance on a non-GAAP basis.
Speaker 3: Fourth quarter, 2021 non-GAT gross margin of 51.2% decreased 50 basis points from 51.7% in the fourth quarter of 2020, driven principally by the impact of revenue mix and supply chain cost pressure.
Fourth quarter 2021, non-GAAP gross margin of 51, 2% decreased 50 basis points from 51, 7% in the fourth quarter of 2020, driven principally by the impact of revenue mix and supply chain cost pressures.
Speaker 3: The fourth quarter 2021 non-GAAP operating expenses were up 12.6% compared to the fourth quarter 2020 and reflected a significant ramp of commercial investments in Project Accelerate 2.0, including in proteomics and spatial biology.
The fourth quarter 2021, non-GAAP operating expenses were up 12, 6% compared to the fourth quarter of 2020 and reflected a significant ramp of commercial investments in project accelerate to dato, including in proteomics and spatial biology.
Speaker 3: Our fourth quarter 2021 non-GAAP operating margin of 21% was 150 basis points lower than the 22.5% in the fourth quarter of 2020, which was a high watermark for operating margin performance for us historically.
Our fourth quarter 2021, non-GAAP operating margin of 21% was 150 basis points lower than the 22, 5% in the fourth quarter of 2020, which was a high watermark for operating margin performance for us historically.
Speaker 3: Our fourth quarter 2021 year-over-year operating margin decline was driven by lower gross margin and higher investments in marketing and sales associated with building out our commercial teams.
Our fourth quarter 2021 year over year operating margin decline was driven by lower gross margin and higher investments in marketing and sales associated with building out our commercial teams for growth.
Speaker 3: For the fourth quarter of 2021, our non-GAAP effective tax rate was 34.4%, compared to 31.9% in the fourth quarter of 2020, primarily due to certain unfavorable discrete tax items.
For the fourth quarter of 2021, our non-GAAP effective tax rate was 34, 4% compared to 31, 9% in the fourth quarter of 2020, primarily due to certain unfavorable discrete tax items.
Weighted average diluted shares outstanding in the fourth quarter of 2021 152 million a reduction of approximately one 3 million shares or 1% from the fourth quarter of 2020, resulting from our share repurchase activity over the past year.
Speaker 3: Weighted average diluted shares outstanding in the fourth quarter of 2021 were $152 million, a reduction of approximately 1.3 million shares or 1% from the fourth quarter 2020, resulting from our share repurchase activity over the past year. And finally, fourth quarter 2021 non-GAAP EPS of 59 cents was up one cent compared to the fourth quarter of 2020.
And finally fourth quarter 2021, non-GAAP EPS of <unk> 59 was up <unk> <unk> compared to the fourth quarter of 2020.
Speaker 3: Slide 15 shows the year-over-year revenue bridge for the full year of 2021.
Slide 15 shows the year over year revenue bridge for the full year of 2021.
Speaker 3: Revenue was up $430 million or 21.7% including organic growth of an impressive 19.1%.
Revenue was up $430 million or 21, 7%, including organic growth of an impressive 19, 1% Act.
Speaker 3: Acquisitions added 0.4% to our top line, while foreign exchange was a 2.2% tailwind for the year. Frank has already covered the drivers for the 2021 revenue performance.
Acquisitions added <unk>, 4% to our top line, while foreign exchange was a two 2% tailwind for the year and Frank has already covered the drivers for the 2021 revenue performance.
P&L results for the full year 2021 are summarized on slide 16 for.
Speaker 3: P&L results for the full year 2021 are summarized on slide 16. For the full year, gross margin expanded 240 basis points to 51.1%, reflecting higher revenues, volume, leverage, and mix, while operating margin grew 340 basis points to 19.4% for much of the same reason.
For the full year gross margin expanded 240 basis points to 51, 1%, reflecting higher revenues volume leverage and mix, while operating margin grew 340 basis points to 19, 4% for much of the same reasons.
Speaker 3: The full year tax rate was 28%, similar to the 28.1% rate in 2020.
Our full year tax rate was 28% similar to the 28, 1% rate in 2020.
Turning to slide 17 in the full year 2021, we generated $194 million of free cash flow approximately $45 million lower than in 2020, which was a record cash flow year for broker.
Speaker 3: Turning to slide 17, in the full year 2021, we generated $190.4 million of free cash flow, approximately $45 million lower than in 2020, which was a record cash flow year for Brooker.
Speaker 3: Full year 2021 free cash flow benefited from higher net income, partially offset by higher working capital related to increased volume, buffer inventories, and the timing of receivables.
Full year 2021 free cash flow benefited from higher net income, partially offset by higher working capital related to increased volume buffer inventories and the timing of receivables.
Speaker 3: Our capital expenditures in the year reflects our continuing investments in growth capacity and productivity as part of our operational excellence drive.
Our capital expenditures in the year reflects our continuing investments in growth capacity and productivity as part of our operational excellence drive.
Our cash conversion cycle at the end of the fourth quarter 2021 was 208 days a reduction of 12 days compared to the fourth quarter of 2020, reflecting gradual improvement in our.
Speaker 3: Our cash conversion cycle at the end of the fourth quarter 2021 was 208 days, a reduction of 12 days compared to the fourth quarter of 2020, reflecting gradual improvement in our working capital cycle.
Working capital cycle.
Turning now to slide 19, given our strong bookings growth and record backlog in 2021, we expect solid growth in 2022.
Speaker 3: Turning now to slide 19, given our strong bookings growth and record backlog in 2021, we expect solid growth in 2022. Our outlook for 2022 includes organic revenue growth of 6 to 8% year over year.
Our outlook for 2022 includes organic revenue growth of 6% to 8% year over year we.
Speaker 3: We estimate a foreign currency headwind of about 2% with acquisitions contributing about 1% to growth.
We estimate a foreign currency headwind of about 2% with acquisitions contributing about 1% to growth. This.
Speaker 3: This is expected to lead to reported revenue growth for 2022 in a range of 5 to 7% compared to 2021.
This is expected to lead to reported revenue growth for 2022 in a range of 5% to 7% compared to 2021.
Given the dramatic improvement in non-GAAP operating margin, we delivered in 2021 and the significant additional investments in project accelerate to Don O opportunities, we intend to make in 2022.
Speaker 3: Given the dramatic improvement in non-GAAP operating margin we delivered in 2021 and the significant additional investments in Project Accelerate 2.0 opportunities we intend to make in 2022, we expect non-GAAP operating margin expansion for 2022 to moderate to a range of 30 to 60 basis points from the 19.4% level we delivered in 2021.
We expect non-GAAP operating margin expansion for 2022 to moderate to a range of 30 to 60 basis points from the 19, 4% level, we delivered in 2021.
Speaker 3: We also expect 2022 quarterly margin progression to return to its more historical norm and expect to see the first half operating margins about 500 to 600 basis points below the second half operating margins.
We also expect 2022 quarterly margin progression to returned to its more historical norm and expect to see the first half operating margins about 500 to 600 basis points below the second half operating margins.
On the bottom line. This adds up to non-GAAP EPS for 2022, and an estimated range of $2 29 to $2 33.
Speaker 3: On the bottom line, this adds up to non-GAP EPS for 2022 in an estimated range of $2.29 to $2.33, which would represent non-GAP EPS growth of 9% to 11% compared to 2021.
Which would represent non-GAAP EPS growth of 9% to 11% compared to 2021.
Speaker 3: This also represents 13% to 14% CAGR from our $1.57 pre-pandemic non-GAAP EPS level in the full year of 2019.
This also represents 13% to 14% CAGR from our $1 57 pre pandemic non-GAAP EPS.
EPS level in the full year of 2019.
Speaker 3: We're projecting a non-GAAP tax rate of approximately 28.5% for full year 2022. Other guidance assumptions are listed on the slide. Our full year 2022 ranges have been updated for foreign currency rates as of December 31st, 2021.
We're projecting a non-GAAP tax rate range of approximately 28, 5% for full year 2022.
Other guidance assumptions are listed on the slide our full year 2022 ranges have been updated for foreign currency rates as of December 31, 2021.
For the first quarter of 2022 this outlook implies organic revenue growth in the mid single digits on a year over year basis.
Speaker 3: For the first quarter of 2022, this outlook implies organic revenue growth in the mid-single digits on a year-over-year basis.
Speaker 3: we expect the first quarter to be impacted by two factors of note. First, continuing supply chain and logistics delays, which may result in the push out of certain shipments into later quarters. And secondly, we do not expect any gigahertz class NMR revenue in the first quarter of 2022, which compares with revenue from two gigahertz class systems in the first quarter of 2021.
We expect the first quarter to be impacted by two factors of note.
First continuing supply chain and logistics delays, which may result in the pushout of certain shipments into later quarters and secondly, we do not expect any gigahertz class into more revenue in the first quarter of 2022, which compares with revenue from two gigahertz class systems in the first quarter of <unk>.
'twenty one.
Speaker 8: On an annual basis, we expect to recognize four gigahertz class NMRs in 2022.
On an annual basis, we expect to revenue recognize four gigahertz class <unk> in 2022.
To wrap up our broker delivered strong bookings backlog and revenue growth in the fourth quarter capping off an exceptional year of financial improvements in 2021.
Speaker 3: To wrap up, Brooker delivered strong bookings, backlog, and revenue growth in the fourth quarter, capping off an exceptional year of financial improvements in 2021.
Speaker 3: We're carrying record backlog into 2022, giving us a high degree of confidence in our ability to deliver another solid financial performance in 2022. And with that, I'd like to turn the call over to Justin to start the Q&A session. Thank you very much. Thank you, Gerald. I'd now like to turn the call over to the operator to begin the Q&A portion of the call. As a reminder, to allow everyone time for questions, we ask that you limit yourself to one question and one follow-up.
We're carrying record backlog into 2022, giving us a high degree of confidence in our ability to deliver another solid financial performance in 2022.
And with that I'd like to turn the call over to Justin to start the Q&A session. Thank you very much.
Thank you Gerald.
I'd now like to turn the call over to the operator to begin the Q&A portion of the call as a reminder to allow everyone time for questions. We ask that you limit yourself to one question and one follow up.
Speaker 2: We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Speaker 2: Our first question comes from Dan Leonard from Wells Fargo. Please go ahead.
Our first question comes from Dan Leonard from Wells Fargo. Please go ahead.
Speaker 4: Thank you for the time. So just a couple on supply chain and logistics. First off, was there any meaningful amount of sales push from Q4 to Q1 as a result of supply chain and logistics challenges?
Thank you for the time, so just a couple on supply chain and logistics first off was there any meaningful amount of sales push from Q4 to Q1 as a result of supply chain and logistics challenges.
Speaker 4: Hi, Dan, Frank, I know there weren't really any, well, there weren't really any pushouts like a number that I can give you. But it is clear that supply chain and logistics put a break on the business. And so, you know, we're pleased with our organic growth in Q4. But
Hi, Dan It's Frank I know, there werent really any well they werent really any push outs like a number that I can give you.
But it is clear that supply chain and logistics put a break on the business and so.
We're pleased with our organic growth in Q4, but.
Speaker 4: With those limitations in that environment, more would not have been easily possible. But there is not a specific number of x million that got pushed out that would be impossible to delineate.
With those limitations in that environment more would not have been easily possible, but theres not a specific number of X million that got pushed out that's that's that would be impossible to delineate.
Speaker 3: And Frank, would you attribute any of your booking strength in 2021 to customer response to supply chain challenges? Maybe they're ordering farther in advance, so they typically would to allow for longer logistics, or would you attribute it all to just organic core momentum in the business?
And Frank would you attribute any of your bookings strength in 2021 that customer response to supply chain challenges, maybe they're ordering farther in advance. So they typically would allow for longer logistics or would you attribute it all to just organic core momentum in the business.
Speaker 4: You know, we don't really know. I know that question comes up from time to time. It's a good question. I mean, you know, certainly academic, hospital, diagnostic customers, they don't really order ahead of time. Might some industrial or some semiconductor metrology companies with longer lead times?
You know, we don't really know I know that question comes up from time to time to good question.
I mean, certainly I could that make hospital diagnostic customers. They don't really order ahead of time might some industrial or some semiconductor metrology companies with longer lead times.
Speaker 4: might they accelerate an order here or there? I can't exclude it. We don't have any specific evidence or information of that type, but I think it's probably a relatively minor effect, but there may be some of that out there. Understood.
Might they accelerate on order here or there I can't exclude it we don't have any specific evidence or information of that type, but I think it's probably a relatively minor effect, but there may be there may be some of that out there.
Understood. Thanks for the color.
Thank you Dan.
The next question comes from Patrick Donnelly from Citi. Please go ahead.
Speaker 2: The next question comes from Patrick Donnelly from Citi. Please go ahead.
Hey, guys. Thanks for taking the questions, maybe a little bit of a follow up on that just in terms of the margins might be for Gerald.
Speaker 9: Hey, guys, thanks for taking the questions. There might be a little bit of a follow-up on that. Just in terms of the margins, it might be for Gerald. Can you just talk about the moving pieces as we look to 22? Obviously, some increased investments. I assume the supply chain and inflationary pressures or maybe offsetting some of the underlying strength. And then, how much are you able to pass on on the pricing side? I'd be curious just the levers on the margin as you look towards that guide. Great.
Can you just talk about the moving pieces as we look to 'twenty. Two obviously some increased investments I assume a supply chain inflationary pressures or maybe offsetting some of the underlying.
Underlying strength and then how much are you able to pass on the pricing side I'd be curious just the levers on the margin as you look towards that guidance.
So first of all thanks for the question, where we're pretty encouraged by the strength of our order.
Speaker 3: We're pretty encouraged by the strength of our order.
Speaker 3: bookings performance in 2021 and we saw a very strong backlog, record backlog for bookers. So the strength of our business is there. I think the issue for us is
Bookings performance in 2021, and we saw very strong.
Backlog record backlog for brokers. So the strength of our business is there I think the issue for us is.
Speaker 3: more around timing from a logistics perspective, given some of the supply chain issues. There are clearly going to be some modest impact relative to that, and we see it – we expect to see it in the first half of 2022.
More around timing.
From a logistics perspective, given some of the supply chain issues.
There are clearly going to be some modest impact relative to that and we see it.
We expect to see it in the first half of 2022.
Speaker 3: That's what's driving us to lead to a little bit of color on the on our guidance is that we expect the
That's what's driving us to lead to a little bit of color on the on our guidance is that we expect.
Operating margin performance in the first half to be weaker than it is in the second half.
Speaker 3: operating margin performance in the first half to be weaker than it is in the second half.
So.
I guess I would just add that.
Speaker 10: I guess I would just add that, you know, we're very encouraged by the strength of the business. As far as your second question around inflation.
We're very encouraged by the strength of the business as far as your second question around inflation.
Speaker 3: I mean, we are, of course, like every other business, experiencing some degree of cost pressure that's coming from this whole supply chain process.
I mean, we are of course like every other business experiencing some degree of cost pressure that's coming from this whole supply chain process.
Speaker 3: Our view on this at the moment is that we've been able to navigate through it pretty effectively, I think, in the fourth quarter, and more fundamentally, we expect to do that in the, in 2022, you may know, we are pretty active in, you know,
Our view on this at the moment is that we've been able to navigate through it pretty effectively I think in the fourth quarter and more fundamentally.
We expect to do that in the in 2022.
You May know, we are pretty active in.
Presenting pricing changes into into the markets, where we feel we have flexibility to do that and that will be part of our strategy as we move through the rest of 2022, but we should keep in mind just to add to that that for us when we do when we do increase prices until that turns into revenue. There is a two to three quarter time delay so.
Speaker 3: presenting pricing changes into the markets where we feel we have flexibility to do that. And that will be part of our strategy as we move through the rest of 2022. But we should keep in mind, just to add to that, that for us, when we do increase prices until that turns into revenue, there is a two to three quarter time delay. So that's it.
So that's.
Speaker 4: That all supports everything that Gerald said. Also keep in mind that our pricing and our backlog is baked in, which is again why we think we'll go back to more of our historical pattern of lower margins in the first half and then higher margins in the second half, which is typical for us, but wasn't the case last year. But it has been historical.
That's all supports everything that Gerald said also keep in mind that our of our pricing and our backlog is baked in which is again why we think will government will go back to more of our historical pattern of lower margins in the first half and then higher margins in the second half, which is typical for us but wasn't the case last year.
But it has been historically.
Speaker 4: So we have a time delay in passing on these inflationary pressures via pricing.
So we have a time delay in passing on these inflationary pressures via pricing.
Speaker 9: That's helpful. And then, Frank, maybe just on kind of the funding outlook on the academic side for 22, you know, clearly feel pretty good about it, given, given the six to eight organic guide. But can you just talk about maybe the US and Europe in terms of the academic funding environment? You know, what you're hearing there and confidence level and the strength, you know, persistence.
That's helpful and then Frank maybe just on kind of the funding outlook on the academic side for 'twenty, two clearly feel pretty good about it given it can be six to eight organic guide can you just talk about maybe the U S and Europe in terms of the academic funding environment, Whats Youre hearing there and confidence level and the strength persisting here.
Speaker 4: Yeah, I mean, I hope that the what the Senate passed, but House delayed competitiveness act or or ICA, whatever it's called, will pass once it comes out of the committees. But of course, it's very difficult to predict Washington.
Yeah, I mean, I hope that the with the Senate passed but house delayed.
Competitive and this actor or whatever its called.
We'll pass once it comes out of the committees, but of course, it's very difficult to predict Washington.
Speaker 4: Even without that, I think the optimism and the funding for academic in the U.S. in general has been excellent, and obviously there could be a further boost. Now if that funding gets through, particularly with a lot of NSF, but also other funding for semiconductor industry and so on in the U.S.
We even without that I think the optimism and the funding for academic and in the U S. In general has been excellent and obviously there could be a further boost now if that funding get through particularly with a lot of NSF, but also other funding for semiconductor industry and so on in the U S.
Speaker 4: I wouldn't expect that money to reach us so quickly and even then it probably would be 2023 revenue, but of course we'll be very happy to have, you know, hopefully that can lead to bookings maybe in the second half of this year and, you know, hopefully another solid year than in 2023.
I wouldn't expect that money to reach us so quickly and even then they probably would be 'twenty 'twenty three revenue, but of course, we'll be very happy to have you know hopefully that can lead to bookings maybe in the second half of this year and hopefully another solid year than in 2023, but of course.
Speaker 4: So it's more of a good long-term outlook. The shorter-term outlook from backlog and near-term demand generally has been quite strong in almost all of our markets and most geographies, and certainly the major geographies.
So it's more of a good long term outlook at the shorter term outlook from backlog and near term demand generally has been quite strong.
Almost all of our markets and most geographies and certainly the major geographies.
Thanks, Mike.
Uh-huh.
Speaker 2: The next question comes from Puneet Suda from SVV Leerink. Please go ahead.
The next question comes from Puneet Suda from SVP Leerink. Please go ahead.
Yeah, Hi, Frank Thanks for taking the question and Justin Great to have you onboard so.
Speaker 11: Frank, thanks for taking the question and Justin, great to have you on board.
Speaker 12: My first question is really on, I mean, obviously, supply chain is a big topic here. Frank, which parts of the business would you say are more impacted versus others? The Timstoff, the UHF-NMRs, the Nano, what sort of, you know, could you maybe provide some clarity there? And any line of sight you have at this point in when these things are, you know, likely to improve based on your conversations across the industry?
My first question is really on I mean, obviously its up supply chain is a big topic here.
Frank.
Parts of the business would you say are more impacted versus others, but.
Tim source.
Uhm on Mars, B nano what sort of.
Could you maybe provide some clarity there.
Any line of sight do you have at this point and when these things are likely to improve based on your conversations across the industry.
Speaker 4: Great questions. I wish I had the crystal ball. I mean, we're saying at a minimum, it'll persist throughout the first half. That doesn't mean that we know that it stops after the first half. We just don't see it stop. You know, the first half, I'm sure the supply chain challenges continue. And then we just don't know for how long they will continue or whether they'll gradually abate. You know, we can speculate as much as anybody else, but we don't know.
Great questions I wish I had the crystal ball I mean, we're seeing at a minimum it will persist throughout the first half.
It doesn't mean that we know that it stops after the first half we just don't see it stopped in the first half of it I'm sure. The supply chain challenges continue and then we just don't know for how long they will continue or whether they will gradually abate, we can speculate as much as anybody else, but we don't know.
We have certainly baked that means two being challenging for the entire year in our in our outlook.
Speaker 4: We have certainly baked them into being challenging for the entire year in our outlook. Now, where do we – I mean, I think BEST is – you know, BEST has the –
Now where do we I mean, I think best is best had the.
Speaker 13: the most torpedoes in the water for their supply chain, so to speak, not to get too graphic here. They're managing through it very, very well, and then of course they have the two factories on two continents and multiple supply chains, but I think for them it's the most difficult. Managing really well so far, as are all of our businesses.
Most torpedoes in the water for their supply chain, so to speak not to get too graphic here. They are managing through it very very well and then of course they have the two factories on two continents and multiple supply chains, but.
But I think for them, it's the most difficult.
Managing really well so far as our all of our business and the second part is really electronics and chips and that can hit.
Speaker 14: And the second part is really electronics and chips.
Speaker 4: And that can hit all of our products, other than maybe some consumables that have electronics and chips. So that really.
All of our products other than maybe some consumables have electronics and chips.
So that really.
Speaker 4: is, you know, that just can affect absolutely any product line, and we are constantly actively managing that promise deliveries get pushed out all of a sudden by weeks and months.
Is.
You know that just can't affect absolutely any product line and we are constantly actively managing that promise deliveries get pushed out all of a sudden by weeks and months.
Some.
Speaker 4: minor component all of a sudden isn't available, and we have to figure out a way to get it somehow. So it's really very, very choppy waters and heavy lifting, and our teams are doing really, really well. But it is an extraordinary supply chain disruption out there, and it's incredibly hard work. So all the more admirable that they've done so well.
My inner component all of a sudden isn't available and we have to figure out a way to get it somehow so it's really very very choppy waters in heavy lifting and our teams are doing really really well, but it is an extraordinary supply chain disruption out there and it's incredibly hard work.
So all the all the more admirable that they've done so well.
Am.
Speaker 4: I think for us supply chain is, however, a quarterly cadence question rather than a question for the year. We feel really quite good about the year, but could something get pushed from one quarter into another? Yes, it can. So I think it's a short-term issue, probably throughout the year, but I don't think it fundamentally changes anything on how we progress on an annual cadence in our strategy.
I think for us supply chain is however, a quarter.
Orderly cadence question, rather than a question for the year, we feel really quite good about the year, but could something get pushed from one quarter into another yes. It can.
So I.
I think it's a short term issue may probably throughout the year, but I don't think it fundamentally changes anything on how we progressed in on.
On an annual cadence.
You know in our strategy that's our view.
Got it super helpful on that.
Speaker 11: Got it. Super helpful on that. And then, just my follow-up is on proteomics. I mean, obviously, TempSoft has been an excellent driver for you, a really remarkable growth in that instrument. I assume it's given, based on what you provided at the start of the year, you're probably nearing 450 installs or so here. So, maybe just tell us, at this point in time of the growth trajectory, what sort of growth we should imply for this platform, and do you have all the required accessories and capabilities around the instruments with these new acquisitions in terms of LC tissue capabilities and other capabilities that you've built in software around TempSoft?
And then just my follow up is on proteomics.
Obviously, Tim staff has been.
Excellent driver for you.
Really remarkable growth in that instrument.
I assume that given based on what you provided the started the year you probably nearing 450 installs or so here. So maybe just tell us at this point in time of the sort of the growth trajectory sort of what sort of growth. We should imply for this platform and do you have all the sort of the required assess.
Accessories and capabilities around the instruments with these new acquisitions in terms of <unk> tissue capabilities.
Other capabilities that you've built in and software around Tim's top thanks.
Speaker 11: Thanks.
Yes.
So first of all we continue to operate in an ecosystem on software will never have all of it in house, we have some software in house, our fast GPU.
Speaker 4: So, first of all, we continue to operate in an ecosystem on software. We'll never have all of it in-house. We have some software in-house, our fast GPU, Taser processing, and now our, you're familiar with that, obviously, our TIMS, DIAN, or D-I-N-N software, which is absolutely remarkable, particularly in conjunction with the
Pacer processing and now our <unk>.
Familiar with that obviously, our teams Diane or Dia and software, which is absolutely remarkable particularly in conjunction with that.
Speaker 4: the passive workflows, the data-independent workflows, but we also work with many, many other smaller software companies that are an essential part of our ecosystem. On the consumables and separations and aside, and we've made big strategic progress with these acquisitions.
Passive workflows the data independent workflows.
But we also work with many many other sorts of smaller software companies that are an essential part of our ecosystem.
On the consumables and separations and aside and we've made big strategic progress with these acquisitions, but they require further investments so they're a very good basis. So we probably saved ourselves three or four years in leapfrogging into these fields in organically.
Speaker 4: But they require further investment. So they're a very good basis. So we probably saved ourselves three or four years in leapfrogging into these fields inorganically. But now it's not all done. Now this requires further development, with these often smaller but very
But now it's not all done now this requires further development.
With these with these often smaller but very.
Speaker 4: you know great technology company and you know we're just looking forward to then offering more and more complete solutions uh...
Great technology companies and we're just looking forward to then offering more and more complete solutions.
At least on the consumables automation separation side of.
Speaker 4: At least on the consumables automation separation side, of course, we'll still use lots of software also from other companies in this ecosystem. With all of that, all into your very first question, Puneet, you know, I would just say that our 4D proteomics and 4D metabolomics is expected to grow well above the corporate average also going forward.
Of course, we will still use lots of software for also from from other companies in this ecosystem with all of that all in to your very first question Puneet.
I would just say that that hour or 40 proteomics.
And 40 Metabo low mix.
<unk> is expected to grow well above the corporate average also going forward.
Got it thanks.
Speaker 15: The next question comes from Jack Meehan from Nefron Research. Please go ahead.
The next question comes from Jack Meehan from Nephron Research. Please go ahead.
Speaker 16: Thank you, and good morning. My first question was, can you just talk about the 2022 guidance, just what the outlook assumes by segment for organic growth, and just a little bit more color on what you're thinking within the mid-single digits for the first quarter by segment as well?
Thank you and good morning.
So my first question was can you just talk about the 2022 guidance just what the outlook assumes by segment, where organic growth and just a little bit more color on what youre thinking within the mid single digits for the first quarter by segment as well.
Speaker 4: I don't think we're going to do it by quarter, but for the full year. Gerald, maybe you'll want to give some...
Yes, I don't think we're going to do it by quarter, but for the full year Gerald maybe you will you'll want to give some.
Speaker 3: Well, relative to the market segments themselves, I mean, I think you've heard Frank.
Well really rough ideas relative to the market segments themselves I mean, I think you.
<unk> heard Franks kind of positive view relative to the academic markets and how those are all playing out we had excellent.
Speaker 3: positive view relative to the academic markets and how those are all playing out. We had excellent strength in 2021 in the biopharma segment, and we expect to continue that as we move forward into 22. That's an area that, as you likely know, is a little bit underrepresented in Bruker, and we're driving hard to improve that strongly.
Strength in 2021 and the Biopharma.
Segment, and we expect to continue that as we move forward into 'twenty two.
An area that as you know is a little bit under represented in broker and we're driving hard to improve that strongly.
Speaker 3: The other areas that are very solid at the moment remain in the industrial research and industrial areas.
The other areas that are very solid at the moment remain in the industrial research and industrial areas. Obviously, we're on a very good track I think relative to our proteomics.
Speaker 3: Obviously, we're on a very good track, I think, relative to our proteomics area. These are all strong. You heard a little bit, I hope, in the J.P. Morgan conference around our multibiotyper performance in the microbiology and diagnostic space. So, actually, almost all our segments are strong.
Area. These are all strong you heard a little bit I hope in the JP Morgan conference around our multi bio type of performance in the microbiology and diagnostics space. So actually almost all our segments are.
From a from a group point of view that I think youll can continue to see the fastest organic growth from the nano and Calvert groups in 2022.
Speaker 4: From a group point of view, I think you can continue to see the fastest organic growth from the Nano and Calit groups in 2022.
Speaker 4: with BEST and Biospin also growing, but not quite as fast as Nano and Calit. That may help you with your modeling. And yes, since you asked about Q1-22, as I think we pointed out earlier, we will not have, the bBio group will not have any gigahertz system in Q1 revenue. That's moved to Q2 this year, 2022, whereas last year, 2020,
<unk> best in bio spin also growing but not as not quite as fastest nano and pallet that may help you with your modeling and yet since you asked about Q1 'twenty. Two is that I think we pointed out earlier, we will not have the b bio group will not have any gigahertz system in Q1 revenue.
Let's move to Q2.
This year 2022, whereas last year 2022.
Speaker 4: 2021. I'm sorry, we had two one gigahertz class systems in the first quarter. So be bio will be bio will
2021, I'm sorry, we had two one gigahertz class systems in the first quarter, So <unk> bio will.
B bio will.
Have a weaker Q1 2022 year over year, if you want some group guidance color so to speak.
Speaker 4: have a weaker Q1 2022 year-over-year, if you want some group guidance, group color, so to speak. They'll still have a good – Biospeed will have a good year for the year, but a weaker start at Q1.
Yes.
<unk> will have a good year for the year, but a weaker start in Q1.
Speaker 16: That is helpful and maybe just on that point to the mid single digit organic, you know, philosophy for the first quarter I actually thought that was pretty impressive because.
That is helpful and maybe just on that point to the mid single digit organic.
Philosophy for the first quarter I actually thought that was pretty impressive because.
Speaker 16: You know, those two the headwind from the two gigahertz systems is, you know, three or four points by my math and sounds like you're building in some.
As to the headwind from the two gigahertz systems is three or four points by my math and it sounds like you're building in some caution related to supply chain. So I was just curious if you could call out are.
Speaker 16: related to supply chain, so I was just curious if you could call out, are there any good guys that are contributing to that, or can you just comment on kind of the magnitude of the backlog you're entering the year with versus last year, just to talk about, you know, what's driving kind of the underlying above the full-year trend? Yeah, no, thank you. It is actually mid-single digits in Q1, given those two, you know, supply chain caution and the headwind from 2 gigahertz class system.
Are there any good guys that are contributing to that or can you just comment on kind of the magnitude of the backlog entering the year with versus last year.
Talk about what's driving kind of the underlying above the full year trend yeah. No. Thank you. It is actually a mid single digits in Q1, given those two you know supply chain caution and a headwind from two gigahertz class systems isn't that so thank you.
Speaker 4: Isn't bad, so thank you. It is mostly, I mean, Nano and Kaled will be the good guys in Q1 to use your language.
It is mostly not mean nano and <unk> will be the good guys in Q1 to use your language and.
Speaker 4: And indeed, those are also the businesses that had the highest backlog increase. Overall, our backlog at the end of 2021 was at record level.
And indeed those are also the businesses that had the highest backlog increase overall our backlog at the end of the 2021 was at record levels.
Speaker 4: uh... and uh... you know about two billion dollars which is amazing
And around $2 billion switches switches.
Amazing.
Thank you Frank.
Okay.
Speaker 2: The next question comes from Derek Brown from Bank of America. Please go ahead. Hey, good morning.
The next question comes from Derik de Brown from Bank of America. Please go ahead.
Hey, good morning, Thanks for taking my call.
Speaker 16: Hey, Gerald, can you talk a little bit about gross margin targets for the full year and pacing, and also just how FX is flowing through on the margins this year?
Gerald can you talk a little bit about gross margin targets for the full year and pacing and also just how FX is flowing through on the margins.
This year.
Speaker 3: Sure, you're referring to 2022, I think. 2022, yes, of course.
Sure you're referring to 2020 to 22 basis, yes, yes. So I think in our case you have seen we put up very strong.
Speaker 3: Yeah, so I think in our case, you see we put up very strong.
Speaker 3: gross margin performance in 2022. Again, this is part of our philosophy regarding the strength in our Project Accelerate 2.0 initiatives and the overall strength of the business at the moment. We expect most of that to continue into 2022, particularly Frank has highlighted the nano group with both industrial as well as semi-conductor performance helps on the gross margin line. In addition, we have a question, you know, we're still working hard on a whole range of sort of strengthening our performance in a number of other areas, including biopharma where we see good gross margin performance. So I guess what I would say relative to the phasing, our...
Gross margin performance in 2022 again this is part of our philosophy regarding the strengthen our project accelerate to dot O initiatives and the overall strength of the business at the moment, we expect most of that to continue.
Into 2022, particularly Frank has highlighted.
The nano group with both industrial as well as semi conductor performance helps on the gross margin line and in addition, we have a question.
We're still working hard on a whole range of strengthening our performance in a number of other areas, including Biopharma, where we see good gross margin performance. So I guess, what I would say relative to the phasing or.
Gross margin performances is really largely focused on mix you just heard a little bit about the ultra high field, which drops better.
Speaker 3: Growth margin performance is really largely focused on mix. You just heard a little bit about the ultra-high field.
Speaker 3: which drops better, you know, gross margin performance in, it's much better in the last part of the year, I'd say. We had very strong plans for the third and the fourth quarter on the gross margin side. So I think overall.
Gross margin performance in.
It's much better in the last part of the.
The year I'd say, we had very strong plans for the third and the fourth quarter on the gross margin side. So I think overall.
Speaker 3: very encouraged on what we see for the gross margin levels. But as you'll generally see, most of our operating margin improvement comes from gross margin improvement. It was about two-thirds in 2021. That's right.
Very encouraged on what we see for the gross margin levels, but thats youll generally see growth most of our operating margin improvement comments.
Comes from gross margin improvement that was about two thirds in 2021 right.
And.
Okay.
Speaker 4: I don't have an exact number or range, but it'll be more than half of our operating margin improvement, especially as we have considerable OPEX investments in commercial and R&D.
I don't have an exact number or a range, but it will be more than half of our operating margin improvement, especially as we have considerable opex investments in commercial and R&D.
Great.
Speaker 4: Derek, sorry, we don't guide specifically on gross margin, but we expect further progress there and most of our operating margin expansion this year, which is a bit more moderate than last year by choice. We're really benefiting last year. We kind of harvested in a big step up from many of the project-accelerated investments made.
We don't we don't guide Derrick sorry, we don't guide specifically on gross margin, but we expect further progress there in most of our operating margin expansion. This year, which is a bit more moderate than last year by choice.
Time too.
Benefiting last year, we kind of harvested and a big step up for many of the project accelerate investments made.
Speaker 17: years earlier and now we're really pushing the next wave of investments to continue to benefit towards 24 and then really beyond that as well.
Years earlier and now we're really pushing the next wave of investments to <unk>.
<unk> continued to benefit towards 24, and then really beyond that as well.
Speaker 16: So that's how we're thinking about it. And so then one follow-up, Gerald, just FX pacing on revenue.
Great sorry about it.
And then so then one follow up Gerald just FX pacing on revenues.
Speaker 3: Yeah, well, FX continues to be a little volatile, I guess I could say, even in the month of January , we've seen it up and down. You know, I think generally the way this works, as the US dollar strengthens against the euro and the franc, which is one of our major, you know, we're showing a foreign exchange
Yeah, well FX continues to be.
A little volatile I guess I could say even in the month of January .
We've seen it up and down.
I think generally the way. This works is the 400 as the U S dollar strengthens against the Euro and the Frank which is one of our major we're showing a.
Foreign exchange.
Headwind of about two 2% and we are getting a little bit of benefit.
Speaker 3: headwind of about 2%, and we are getting a little bit of benefit from some acquisitions and our guidance as well. This was on the revenue, right? On the revenue line, yes, yeah. So I think we can go through that in a little more detail if you'd like, but it's fairly similar to our normal scenario where the USD strengthens.
From some acquisitions in our guidance as well this was on the revenue on the revenue line, yes, yes.
So I think we can go through that a little more detail if you'd like but it's fairly similar to a normal scenario, where the USD strengthened.
Got it.
Frank just.
Speaker 16: How much of revenues are coming from Project Accelerate related products and projects right now, and how did those grow relative to the legacy business?
How much of your revenues are coming from project accelerate related products and projects right now and how did those grow relative to the legacy business.
Speaker 4: Yeah, it's about 54%, which was about even with 2020. In 2020, we took the big step up because our Project Accelerate businesses held up much better in 2020. And in 2020, the Project Accelerate became more than half of our revenue, about 54%.
It's about 54%, which was about even with 2020 in 2020, we took the big step up because our project accelerate businesses held up much better in 2021, and 2020 I'm sorry in 2020, the project accelerate became more than half of our revenue about 54%.
<unk>.
Speaker 4: And, uh, and, uh, they, uh.
And.
And they are.
Speaker 4: Sorry, and then yes, last year in 2020, they were also about 54%. Their growth has been higher than the corporate average.
Sorry.
And then yes last year in 2020, they were also about 54%.
Their growth has been higher than the corporate average.
Got it thank you.
Speaker 18: And so, but what that means is that our core business has also been very strong in 2021. So, you know, from x-ray tools to infrared applied market tools, many, many, all the way to best, right? Last year, it really was a beautiful alignment where not only project accelerated very well, but also our core tools did well in terms of revenue growth and margin expansion.
And so but what that means is that our core business has also been very strong in 2021.
So.
From X Ray tools too.
For Red applied market tools, many many of them to be all the way to best right.
Last year, it really was.
A beautiful alignment, where not only project accelerated very well, but also our core tools.
Did did well in terms of revenue growth and margin expansion.
Speaker 2: Our next question comes from Josh Waldman from Cleveland Research. Please go ahead.
Our next question comes from Josh Waldman from Cleveland Research. Please go ahead.
Speaker 9: Hey, thanks for taking my questions this morning. This is a couple for you. First, a quick follow up on FX. Gerald, did you quantify how much of the expected margin expansion is coming from FX?
Hey, Thanks for taking my questions. This morning, just a couple for you first of all a quick follow up on FX. Gerald did you quantify how much of the expected op margin expansion is coming from FX.
No we don't typically do that Josh.
Speaker 3: No, we don't typically do that, Josh, but you can see our overall story on the top line is reflected in our guidance slide. But it's also not a very large effect going forward. We highlighted in some years, Josh, when it's a big effect, right? We don't expect it on the operating profit margin to be a significant effect.
You can see our overall story on the top line is reflected in our guidance.
Slide, but it's also not a very large effects going forward I think we highlighted in some years, Josh when it has a big effect right. We don't expect it on the operating profit margin to be a significant effect.
Speaker 4: in 2022. So far, it has it has the you know, it has the headwind on the revenue minus 2%. But by the time you get to operating profit margin or EPS
In 2022, so far it has it has.
It has a headwind on the revenue minus 2%, but by the time you get to operating profit margin. Our EPS. It is not expected to be a major driver, hence we don't highlight it.
Speaker 19: It is not expected to be a major driver, hence we don't highlight it.
Got it got it Okay and then.
Speaker 9: Got it, got it. Okay, then, Frank, I wondered if you could provide an update on the VAT tax situation in China. Did you see any easing here or did this cause you to carry more revenue into 2022 than maybe you would have otherwise? And then, I guess, a view on China overall as you think about your guide and kind of your expectations there for 2022.
Wondering if you could provide an update on the bad tax situation in China did you see any easing here does this cause you to carry more revenue into 2022 than maybe you would've otherwise and then I guess.
Our view on China overall, as you think about your guide and kind of your expectations. There for 2022 would be helpful. Yes.
Speaker 3: Yeah, Josh, if you don't mind, I'll take that. It's Gerald. I guess we did see some relief relative to the whole tax certificate issues that started early in 2021 in China. Those have resolved themselves largely in many of the larger provinces in China, at least in the fourth quarter. And we're continuing to see improvement thus far in the first quarter of 2022. I mean, just generally speaking, just to frame it, the China business for us is around 15% of the total broker revenue. And it's a very important market for us. We had very solid growth.
Josh if you don't mind I'll take that.
It's Gerald I guess are we did see some relief relative to the full tax certificate issues that started early.
Early in 2021 in China.
Resolved themselves largely in many of the larger provinces in China at least in the fourth quarter and we're continuing to see improvement thus far in the first quarter of 2022.
Just generally speaking just to frame it the China business for US is around 15% of total broker revenue in.
So a very important market for us we had very solid growth.
Speaker 3: on both on the bookings as well as on the revenue side in 2021. And we're expecting to continue to see that level of growth in 2022.
On the bookings as well as on the revenue side in 2021, and we're expecting to continue to see that level of growth in 'twenty two.
The market conditions actually in China, even from a logistics perspective seemed.
Speaker 3: The market conditions actually in China, even from a logistics perspective, seem to be normalizing and...
Seem to be normalizing.
Speaker 3: So I'd say it's business as usual, despite some supply chain challenges.
So I'd say its.
Business as usual.
Despite some supply chain challenges.
Great I appreciate the color sure.
The next question comes from Tycho Peterson from J P. Morgan. Please go ahead.
Speaker 2: The next question comes from Tyco Peterson from J.P. Morgan. Please go ahead.
Okay.
Speaker 20: Frank, I've got a Tim's Top question. You know, you did the preomics investment. I know it's relatively small, but you had also done the Sear partnership in January . How do you think about those two since they seem to be solving for something very similar?
Frank has got a gamestop question.
You did the pre Omics investment I know, it's relatively small but you had also done this year partnership in January how do you think about those two since they seem to be solving for something very similar.
Well actually very different good question Tycho. So as you know it's here is very much focused on on plasma proteomics deep deep unbiased plasma proteomics.
Speaker 4: Well, actually, very different. Good question, though, Tycho. So as you know, Sierra is very much focused on plasma proteomics, deep unbiased plasma proteomics.
And.
Speaker 4: And, you know, we have a number of joint customers who exploit the SEER proteograph and then our TimStop, right, for exceptional depth and throughput on plasma proteomics.
And and we have a number of joint customers, who exploit the seer proteome graph and then our tim's tough right for exceptional depth and.
Throughput on plasma proteomics.
The.
Speaker 4: Consumables of preomic some of the consumables can be used in conjunction even with with But you know even by customers who have a proteograph and then it's very much focused with the beat box on on tissue homogenization and lysis and On on you know, let's say biopsy samples and things like that So, you know, they're they're complementary and mostly with a different focus
Consumables of preowned make some of the consumables can be used in conjunction even with with but even by customers who have a protein graph and then it's very much focused with a beat box on on tissue homogenization and licenses.
And on.
Let's say biopsy samples and things like that so they are complementary and mostly with a different focus.
Speaker 20: Okay. And then, as we think about your spatial portfolio with Canopy, Votara, Acuity, can you just talk a little bit about, you know, what we should be thinking about in terms of kind of milestones and, you know, business development for that portfolio this year?
Okay, and then as we think about your spatial portfolio with canopy Vitara acuity can you just talk a little bit about what we should be thinking about in terms of kind of milestones.
Our business development for that portfolio this year.
Speaker 4: The ACQUITY is easy. It's all R&D and development, and we're building up the two sites on West Coast, East Coast for ACQUITY, building up the team.
So acuity is easy, it's all R&D and development and we're building up the two sites on West Coast East Coast for acuity building up the teams working on you know.
Speaker 4: working on, you know, product and solution strategy. And the simple answer is don't expect any product revenue or product announcements yet in 2022. 2022 is all investment in acuity. And then, you know, a year from now, we'll talk about acuity then, you know, having
<unk> and solution strategy and the simple answer is don't expect any product revenue or product announcements yet in 2022 2022 is all investment at acuity.
And then a year from now we'll talk about acuity than having having first offerings, perhaps in 2023 cannot be very different.
Speaker 4: having first offerings perhaps in 2023. Cannot be very different, very much an investment year 2021. That's one of the areas where we're ramping up the commercial team.
Very much an investment year 2021, that's one of the areas, where we're ramping up the commercial teams as well as the R&D in preparation for.
Speaker 4: as well as the R&D in preparation for, you know, significant product news in 2022. So Canopy, moderate growth last year, lots of investments, but, you know, hopefully beginning the ramp or a more significant ramp, let's say at least in the second half of this year.
Significant.
Product news in 2022, so canopy moderate moderate growth last year.
Lots of investments, but hopefully beginning the ramp or its more significant ramp let's say at least in the second half of this year.
So.
Speaker 4: They're two different stories, two different areas of the spatial biology market canopy.
The two different stories to different areas of the spatial biology market canopy.
Canopy.
Speaker 4: Big investment last year, continued investment this year, particularly commercially, QED, all product development.
Big investment last year continued investment this year, particularly commercially.
All product development.
Speaker 20: And, you know, lastly, you're taking R&D up by 20, 25 million this year. Obviously, you just highlighted some of the spatial investments. But are there other areas that are maybe getting outsized R&D investment this year?
And lastly, you are taking R&D up by 2000 25 million this year.
Highlighting some special investments or are there other areas that are maybe getting outsized R&D investment. This year, it's actually not all R&D. This year. It's also a lot of it is commercial and canopy as an example, but there's a number of areas in proteomics spatial biology, but also in other areas, where we're ramping up our commercial capabilities to two <unk>.
Speaker 4: It's actually not all R&D this year, it's also a lot of it is commercial and canopies and example, but there's a number of areas in proteomics, spatial biology, but also in other areas.
Speaker 4: where we're ramping up our commercial capabilities to prepare for further accelerations in growth.
Payer for accelerated further acceleration and growth.
Speaker 4: So this is this this is not just R&D this time actually the commercial investments on the OpEx site
So this is this is not just R&D this time actually the commercial investments on the Opex side.
Speaker 4: of this extra 20 to 25 million. A bigger part is, you know, strategic marketing, commercial sales that counts. And there's also additional R&D, but it's a slightly smaller component.
This extra $20 million to $25 million a bigger part is strategic.
Strategic marketing commercial sales headcounts.
And there is also additional R&D, but it's a slightly smaller.
Component.
Okay. Thank you.
Speaker 4: We had done more of the R&D investments earlier, and we continue to do that. But now we also, for these products that we're launching and have launched, we're ramping up the commercial.
We had done more of the R&D investments earlier, and we continue to do that.
But now we also for these products that we're launching and have launched we're ramping up the commercial teams.
The next question comes from Dan Arias from Stifel. Please go ahead.
Speaker 2: The next question comes from Dan Arias from Stifel. Please go ahead.
Speaker 21: Morning guys, thanks for the questions. Frank, just to further the thought on Accelerate, for Accelerate 2.0, where are you assuming growth for the product and that initiative come in just under the 6% to 8% overall outlook? I think in June you had talked about high singles to low doubles, but that was for 22 through 24, so I'm just curious where you're thinking you start off there on growth just for this year.
Good morning, guys. Thanks for the questions Frank just to further the thought on accelerate for accelerate to know.
Where are you assuming growth for their products and that initiative come in just under the 6% to 8%.
Overall outlook.
I think in June you had talked about high single to low doubles, but that was for 'twenty two through 'twenty four so I'm just curious where you think that you start off there.
Growth just for this year.
So.
Speaker 4: This year, we would, again, expect our project accelerate 2.0 growth to be above the corporate average, which, as you've seen, is 6% to 8% is our guidance for organic growth for the corporate average.
This year, we would again expect our project accelerate <unk> growth to be above the corporate average, which as you've seen a 6% to 8% as our guidance for organic growth for the corporate average.
Speaker 4: But we don't expect a huge discrepancy as we had in 2020, but perhaps closer to 2021 where our other core businesses are also showing nice growth. So.
But we don't expect a huge discrepancy as we head into 2020, but.
Perhaps closer to 2021 where our other core businesses are also showing nice growth.
So.
Project accelerate above.
Speaker 4: above the average but not dramatically so because the core business is doing okay.
Above the average, but not dramatically so because the core business is doing okay.
Speaker 21: I'm just trying to square away the outlook in June for Accelerate 2.0 when you kind of put like a discrete range around that portfolio, high singles to low doubles. Should we think about this year being more high singles and then as some of these new opportunities come into the mix?
Okay. That's helpful.
Yes.
A little bit I just.
I'm just trying to square away the outlook in June for accelerated to point out when you kind of put like a discreet range around that portfolio high singles to low doubles should we think about this year being more high singles and then if some of these new opportunities come into the mix. That's when you get to low doubles for that portfolio or.
Speaker 2: That's when you get the low doubles for that portfolio or, you know, you'll have a range, you know, so, I mean, aftermarket is very solid grower, but it tends to be, you know, high single proteomics and, and spatial biology from a small base proteomics from a larger base, clearly expect double digit growth there.
You'll have a range you know so.
Aftermarket is a very solid grower, but it tends to be high singles.
<unk> will make fan and spatial biology from a small base proteomics from a larger base.
We expect double digit growth there.
Speaker 4: We have on semiconductor microelectronics, we expect very good, more like double digit growth.
We have.
On semiconductor microelectronics, we expect very good more like double digit growth.
Speaker 4: Last year, our microbiology business grew amazingly well, so...
Last year, our microbiology business grew amazingly well so.
Speaker 4: Sometimes when you have such strong growth the following year, maybe you're you're more back to the high single digits Although we haven't finalized that, you know, we have we'll see how that goes So I think the short answer would be yes The high single to double digit growth for project accelerate also makes sense for this year
Sometimes when you have such strong growth the following year, maybe youre more back to the high single digits, Although we havent finalized that.
We'll see how that goes.
I think the short answer would be yes, the high single to double digit growth for project accelerate also makes sense for this year.
Speaker 2: Yeah, okay, thank you for that. And then just Gerald. I neglected to say biopharma has just been very, very strong for us. I know we talk about more proteomics, facial biology, and maybe multibiotyper, because there isn't one product or one solution for biopharma, but the numerous, very differentiated, and pretty unique biopharma solutions that we have from NMR and mass spec primarily, but also from molecular spectroscopy.
Yeah. Okay. Thank you for that and then just Gerald I neglected to say Biopharma has been very very strong for us.
I know, we talk about more proteomics spatial biology, and maybe macro multi biotype are because there isn't one product or one solution for biopharma, but the numerous very differentiated and pretty unique biopharma solutions that we have <unk> and mass spec, primarily but also from molecular spectroscopy.
Speaker 4: have just done really, really well. And so our biopharma and applied, biopharma being the much larger part.
I've, just done really really well and so our biopharma and applied with Biopharma being the much larger part.
Speaker 4: starts to be around 18% or so of our revenue, and that's just grown very dramatically and with good margins as well in recent years.
<unk> to be around 18% or so of our revenue.
And that has grown very dramatically and with good margins as well and in recent years.
Thats.
Speaker 4: That and semiconductor metrology being so strong, maybe we're a little bit under the radar. I mean, they're not under the radar, but they're lower near the horizon, whereas proteomics, spatial biology, and microbiology probably get the bigger headlines. But those other two areas are strong as well.
That in semiconductor metrology being so strong maybe we're a little bit under the radar.
They're not under the radar, but theyre lower deal the horizon, whereas.
Proteomics spatial biology, and microbiology, probably get the bigger headlines, but those are the two areas are strong as well.
Speaker 9: And thank you. Thank you for the Q&A operator that will bring to an end the Q&A portion of the call as we are now past 930. So I wanted to thank everyone for joining us today. During the first quarter, BRUCA will participate in the SVB Lear Inc. Global Healthcare Conference.
And thank you. Thank you for the Q&A, operator that will bring to an end the Q&A portion of the call as we are now past 930. So.
I wanted to thank everyone for joining us today during the first quarter Brookfield will participate in the SDB Leerink Global Healthcare conference.
Speaker 9: BRCA's leadership team looks forward to meeting with you at an event or speaking with you directly during the quarter. Feel free to reach out to me to arrange a follow-up. Thanks and have a good morning, everybody.
Brokers leadership team looks forward to meeting with you at an AD an event or speaking with you directly during the quarter feel free to reach out to me.
To arrange a follow up.
And have a good morning, everybody.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker 11: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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