Good day, and welcome to the Bruker Corporation First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Miroslava Minkova, Senior Director of Investor Relations and Corporate Development. Please go ahead.

Thank you, Sarah. Good morning, everyone. I would like to welcome everyone to Bruker’s First Quarter 2021 Earnings Conference Call. My name is Miroslava Minkova, Senior Director of Investor Relations and Corporate Development. Joining me on today’s call are Frank Laukien, our President and CEO; and Gerald Herman, our Executive Vice President and Chief Financial Officer. In addition to the earnings release we issued earlier today, during today’s conference call, we’ll be referencing a slide presentation. The PDF of this presentation can be downloaded from the Latest Results section on Bruker’s Investor Relations website. During today’s call, we’ll be highlighting non-GAAP financial information. A 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. Before we begin, I would like to reference Bruker’s safe harbor statement, which we show on Slide 2. During the course of 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 worldwide semiconductor chip and other supply shortages. The company’s actual results may differ materially from such statements. 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 on the SEC’s website. Also note that the following information is related to current business conditions and to our outlook as of today, May 5, 2021. We do not intend to update our forward-looking statements based on new information, future events or for other reasons prior to the release of our second quarter 2021 financial results expected in early August 2021, except for any forward-looking statements regarding medium-term outlook that we may share at our upcoming Investor Day in June. Therefore, you should not rely on these forward-looking statements as representing our views or outlook as of any date subsequent to today. We will begin today’s call with Frank providing a business summary. Gerald will then cover the financials for the first quarter in more detail. Now I’d like to turn the call over to Bruker’s CEO, Frank Laukien.

Thank you, Miroslava. Good morning, everyone, and thank you for joining us on today’s call. Bruker had an excellent first quarter with a strong start to 2021. We saw a significant recovery in many of our businesses previously impacted by the pandemic. Our Project Accelerate initiatives continued to deliver strong growth and value. And our financial performance stepped up accordingly, reflecting strength in competitive business and end market dynamics. We also continue to make progress in the expansion of Project Accelerate, which we now call Project Accelerate 2.0. So Q1 first quarter 2021 revenues grew 30.8% to approximately $555 million. Foreign currency translation was a tailwind of 6.2%, while acquisitions added 0.8% to revenue growth in the quarter. On an organic basis, Bruker’s revenues increased 23.8% year-over-year from a pandemic impact at Q1 2020 when our revenues were down approximately 8% organically. The reported and organic revenue increases in Q1 of 2022 reflected strong demand for our high-performance life science tools, scientific instruments and diagnostic solutions with continued uptake of our Project Accelerate growth initiatives and a strong recovery in end markets globally. Our first quarter ‘21 non-GAAP gross margins stepped up 460 bps year-over-year, while our non-GAAP operating margin reached 18.4% from 7.6% in the first quarter of 2020. The improvements reflect our revenue and volume increase, positive operating leverage and higher Project Accelerate revenue in the mix. In the first quarter of 2021, Bruker reported GAAP diluted earnings per share of $0.37. On a non-GAAP basis, first quarter ‘21 diluted EPS were $0.44, more than tripling compared to $0.14 in the first quarter of 2020. First quarter 2021 order bookings for Bruker’s scientific instruments groups grew mid-teens organically year-over-year. This reflected continued strong order growth for our innovative proteomics and biopharma solutions and a strong recovery in our…

Thank you, Frank. I’m pleased to join you today and review Bruker’s first quarter 2021 financial highlights starting on Slide 10. Bruker’s revenue increased 30.8% to approximately $555 million in the first quarter of 2021, which includes an organic revenue increase to 23.8%. We reported GAAP EPS of $0.37 per share compared to $0.07 in the first quarter of 2020. On a non-GAAP basis, Q1 2021 EPS was $0.44 per share, an increase of 214% from $0.14 in the first quarter of 2020. Our first quarter 2021 non-GAAP operating income and non-GAAP operating margin stepped up significantly year-over-year given the increased revenue and volume. Coupled with our disciplined management of expenses, this resulted in a significant drop-through to the bottom line as our first quarter 2021 non-GAAP operating margin reached 18.4% compared to 7.6% in the first quarter of 2020. At the end of the first quarter 2021, our balance sheet cash and liquidity position remained healthy and improved sequentially from the fourth quarter of 2020. We ended the first quarter with $746.8 million in cash, cash equivalents and short-term investments and a modest net debt position. During the quarter, we again used cash to fund strategic capital investments, our stock buyback program and our dividend. In the first quarter of 2021, we repurchased approximately 531,000 shares of Bruker stock for a total of $32.8 million. We have completed our share buyback authorization, which was valid until mid-May of 2021. Free cash flow in the first quarter of 2021 was a healthy $73.3 million. And our working capital to revenue ratio improved relative to December 31, 2020, driven by efficiency gains. Slide 11 shows the revenue bridge for the first quarter 2021. As noted earlier, organic revenue in the quarter increased 23.8%. We had a positive revenue contribution from acquisitions…

Thank you, Gerald. I would now like to turn the call over to the operator to begin the Q&A portion. Operator, we are ready to begin the Q&A.

[Operator Instructions] Our first question comes from Doug Schenkel with Cowen.

This is Chris on for Doug. Gerald, I think updated full year organic revenue growth guidance implies that the average 3-year stack growth rate in Q2, Q3 and Q4 collectively is just 2%. I know you increased full year guidance beyond the Q1 revenue beat, but the stacked growth rate is well below the 8% you just delivered in Q1, even if we adjust for the 2 gigahertz systems. So with that in mind, I am curious, how conservative you think updated guidance is and if there are any other factors we should consider as we update our models?

We can’t follow your numbers. They don’t agree with our numbers.

I guess said differently, if you just look at a stacked growth rate in Q1 of ‘21, you just put up, I think.

What’s the stack rate?

That stack growth rate of 8% is just lower than what guidance implies for the rest of the year. So I’m curious, there are any factors we should consider as we update our models. Or how conservative you think updated guidance is for the balance of the year?

We think the guidance is reasonable and they still don’t follow the numbers that you’re citing to us because they don’t coincide with our numbers. But we think our guidance for the second quarter and for the remainder of the year is reasonable.

Okay. We could follow up after. But my second question. Frank, could you just help us contextualize the market opportunity for the FT-NMR system? Does that replace some of the lower magnetic field strength NMR systems you have? Or is that more complementary?

Good question. Yes. No, I think it’s a new -- still rather small market segment. There are some other companies, smaller companies out there that have been in that market. We’re sort of a little bit of a late follower here. But I think we now have a very good second-generation high-performance, very stable, highly automated product, with a lot of benefits. So it’s its own little market niche. I think it’s almost -- I don’t think it will cannibalize the superconducting NMR market, of 400 megahertz or above. That’s just a different performance envelope. But I think for the first time, and that’s really what we were aiming for, it makes a Benchtop, FT-NMR, something that you could put into any lab, just you could put a little GC or LC mass spec into single or triple quad or a little FTIR Benchtop system into any analytical or chemistry or teaching lab. And NMR always was pretty much mostly relegated to central research facilities with a few exceptions to that. And I think we’re really breaking that paradigm. So I think it just adds -- the NMR is incredibly useful, but it wasn’t as easily and broadly accessible to all sorts of chemistry labs as it now is becoming. So I think it’s a very -- it’s a small niche, but I think it has very -- a lot of growth potential for the future.

Our next question comes from Puneet Souda with SVB Leerink.

This is Scott following on for Puneet. So I want to talk about single-cell proteomics. You guys kind of mentioned in a call actually held with us about a single-cell proteomic instrument that’s delayed the launch in 2022. Is it based on a breakthrough paper from the Mann Group? I don’t want to front run the Investor Day, but maybe just more high level how you’re thinking about the system and how it fits into the portfolio with Canopy and some of the other initiatives you guys have ongoing in the single cell arena.

Yes, Scott, that’s a good one. In fact, of course, we are doing single-cell targeted proteomics. That’s not so unique and there’s not many companies that can do it. We’re one of them with our Canopy Biosciences investment and single-cell targeted proteomics primarily for clinical and translational research on both fresh frozen and FFP tissue or on suspended cells, is something that we’re doing, and we have very nice panels for that now. That’s why we did that Canopy acquisition. However, unbiased, bottoms up, if you like, unbiased single-cell proteomics that’s quantitative and beyond just a few signals, that’s really novel. And having that with a large number of protein groups and peptides identified was in that seminal paper that you just mentioned by the Mann Group. And yes, so we’re developing that system. We hope to launch that in early 2022, and it really is a new scientific capability single-cell proteomics, which goes with spatial proteomics within a tissue. You’ll obviously want to cut out individual cells. If you have a tissue with some laser capture, micro dissection mechanism. That’s not a Bruker’s tool, but these tools are out there. And then looking at these cells in an unbiased way, and not only the few targeted things that you can look at today. But -- and of course, also then things that targeted can’t give you, you want to look at post-translational modification. Phosphorylation is tremendously important in cancer and in tissue microenvironment. Similarly, cell-surface glycosylation is something that’s tremendously important, all the things that only unbiased proteomics realistically can give you. So it’s really a new -- it’s going to be a very important new open window that’s opening up for spatial and single-cell science in general. I think the biology is tremendously important because single-cell proteomics is far more quantitative than single-cell RNA. It’s great because that technology is out there. But because of low coffee numbers, it’s not biologically quantitatively very meaningful, and we’re big believers in quantitative biology. So stopping there, the instrument will be a very dedicated niche high-end system, probably around the $1 million mark. But we think there will actually be quite a bit of demand for that. I don’t say it’s going to be a volume product, but in certain specialized markets, I think it will be very well received and we’re getting inquiries and first orders already.

Okay, great. Yes. That was very helpful. If I could go back to the NMR business, you guys have had very good success placing these systems in recent years and having some strong momentum here. But, it seems like U.S. and APAC, maybe adopt maybe particularly with the gigahertz class. What are the main barriers of adoption for these regions? And do you expect these regions to kind of represent the next leg of growth for the NMR business? Maybe how does the Fourier 80 announcement today maybe accelerate on that adoption in this week?

Yes. So yes, 2 good questions, both NMR-related. Gigahertz NMR, I mean Asia Pacific and the U.S. or the Americas, but U.S. in particular, are way behind. And I think there’s a lot of momentum in the community and also hopefully in the federal funding agencies, and some other privately foundation-funded efforts to improve that. And so we’re somewhat optimistic that some of the various approaches to raising NIH and NSF funding, how that will be negotiated in the end, nobody knows. But it does seem that all the telltale signs seem to be there for some substantial increases in funding, benefiting many areas. But potentially also, that’s what would be required from NIH, DOE, NSF and perhaps others in the U.S. to provide funding for this badly needed infrastructure which -- where indeed Europe has moved first. And by the way, growth in Europe isn’t over yet, even just last -- No. In Q4, we had another order in Europe in Switzerland, and so there’s still European activity as well. The Fourier 80, of course, is a very different budget item, right? That’s more around the low $100,000 level. So that comes out of many, many budgets. And I think from colleges to chemistry or pharma research to forensic labs. There are many, many, many labs that previously just would have said, "Look, I can only send samples to a centralized facility, and maybe I’ll do that or I don’t. I just use mass spec or FTIR. But now if I could also get NMR data pretty easily, and in my own lab with a little Benchtop system that I don’t need to worry about. I think that just opens up a broader new market. And there, I don’t think it’s geographic. We started in Europe, we’re now launching in the U.S. and Canada. We just want to make sure that we -- that product has excellent, excellent reputation for and overcoming a lot of the shortcomings that the first-generation products that are out there in terms of performance and stability can really fully fulfill the promise. So we’re taking it slow, but I think it’s going to be -- it is a very high quality, highly automated, very high stability product that I think hopefully will be a joy to use and own.

Our next question comes from Derik De Bruin with Bank of America.

A couple of questions, Frank, Gerald. I guess the first one, just a margin question. You did 17.6% adjusted operating margin in 2019. Guidance this year basically assumes 18.1%, 18.5%. I guess the question is sort of like, how do we think about the margins as we go into 2022 there? I mean you’ve been tracking somewhere in the 70 to 100 basis point increases. I realize that you’re doing some incremental investments and things going on, but is that -- is this -- can you -- how do you expect to grow from sort of like the numbers this year on the margin?

Well, first, Derik, we’re pretty pleased with what we delivered for the first quarter coming off of a pretty solid fourth quarter performance on the operating margin side, especially given we saw pretty significant foreign exchange headwind in the operating margin, for the first quarter. So I’m not going to -- I can’t comment specifically on 2022. We’ll talk -- please join us for the Virtual Investor Day, and we’ll talk more about those forward years. But I mean I can say we’ve talked a little bit about it in the prepared remarks here today is, we are seeing some good end market recovery in many areas that we didn’t see even a year ago. We’ve got a pretty innovative product portfolio, and we’re seeing some good uptick there both in revenue performance as well as in order performance so far. So we’re pretty optimistic on the operating margin line, but there’s still a few quarters to go before we talk too much about 2022.

I mean initially in February, we thought we’d bounce back to 2019 margins. Now we’ve raised that, as you’ve seen this morning, to where we think we can exceed 2019 operating margin with a 50 bps headwind from currency. And if you like, 100 bps headwind that -- which is a choice because we’re investing 10% instead of 9% in R&D. And I think we’re delivering very good margin expansion, but we’re also investing in growth. So it’s that balance, and with our shareholders, we generally discuss that from time to time when we have individual meetings. And they’re all very comfortable with our long-term strategy of delivering good operating margin expansion year-over-year, obviously disrupted by -- in 2020. And -- but also not absolutely optimizing that in any given year, but really also focusing on the growth opportunities, and that remains our philosophy. And so we expect to generally continue our margin expansion, of course. But again, we’re not focusing on the fastest margin expansion possible but on investing in our future and our profitable growth opportunities while delivering gradual annual margin expansion in -- I’m not saying numerically, but in a pattern that you’ve seen from us for many years, except for 2020.

Great. That’s really helpful. And just one quick follow-up. We’re getting a lot of questions on the semiconductor markets, metrology markets. In 2 ways, the ultimate potential on sort of this chip shortage and what it could mean for your business, both from a revenue potential. And also, is there any risk to the chip shortage on impacting your supply chain, and you not being able to get materials to manufacture given some of your high-tech items? Just some color on both the supply and demand curve on the metrology and semiconductor side.

Yes. Right. And let me add to that. Of course, we have a semiconductor and metrology and microelectronics tools business. And that business, as we said, is one of our Projects Accelerate -- or a significant part of one of our Project Accelerate initiatives. It has very good margins, incremental margins, and it has been on a very good trajectory, and that continues. It had greater than 30% organic growth year-over-year in Q1. So it’s -- we’re benefiting from all of that. Now -- but to your risk question, we do acknowledge there are risks, and it -- in terms of operating environment, the supply chain risks on chips, you read about it from the automobile industry, and we’re all working that very, very, very hard. So I think it’s an additional risk. We have taken that into account in our guidance for the year. But we also put it out as an additional highlighting that risk factor. There’s a lockdown in the pandemic, right? You don’t never know quite what happens with the variance, and now there is also the supply chain risk. I’m pretty confident that in Q2, we’ve got everything aligned to deliver, and we’re also confident with Q3 and Q4. But having said that, there are additional risks. And it’s a lot more work to get all your chips and boards and everything delivered. And even -- it even goes beyond electronics. I think the present industrial boom is affecting logistics and shipping and sometimes wooden pallets and other materials. So we’re taking into account, but we’re working it very hard to make it happen. So hopefully, it won’t become an issue, but it is an additional risk factor.

Our next question comes from Jack Meehan with Nephron Research.

I wanted to dive a little bit more into CALID. So over 20% growth, I’m getting closer to 30%, but I was wondering if you could talk about the relative performance of proteomics within that. In the past, you’ve talked about kind of the S-curve of the timsTOF row. Just -- do you have any updated thoughts around how the order book is going and where you think you are on that curve?

Yes. So it’s going well. So now when I talk about proteomics, I have to say that’s the unbiased proteomics, i.e., the timsTOF business that you asked about. We also have the targeted proteomics with Canopy, which is much smaller so far, for us at least. Unbiased proteomics, timsTOF Pro. Again, orders and revenue, very nice and your year-over-year growth greater than 30%. So above the corporate average, which was high even in Q1. So it’s one of our growth drivers, and both orders and revenue look very, very good with a lot of the new capabilities that we had announced and that I even highlighted early in the call. We’re in a health -- in the beginning of the steeper part of the S curve there, I would think.

Great. I want follow-up also on CALID, the COVID tailwinds, it’s not huge, but I was just curious what you were seeing there. I think $7 million was a little lighter than what you previously talked about. Do you think this is starting to fade as the cases come down?

Yes. No, definitely. I mean we had close to $14 million in Q4. So the $7 million -- around $7 million of COVID testing, which for us is essentially all PCR, the PCR assays and PCR extraction, antigen testing, that market is flooded, and though we have 2 product offerings out, that’s not much -- getting much traction. And so we’re focusing -- refocusing mostly on the PCR testing and associated. But at $7 million, that was lighter and sequentially down, and we don’t have very high expectations for it for -- we expect that to remain below $10 million or so in Q2, and then we’ll see. But it’s definitely coming down as far as we can tell. And some of that is going to antigen testing, although not everybody is fully pleased with the -- antigen testing plays a role, but it’s a flooded market with oversupply as far as we can tell. So we’re probably not going to enter that in a very serious way. But we will further refine our PCR portfolio. We had the flu testing, the 4 panel -- winter 4 panel, there wasn’t a lot of need for that because there was essentially no flu season in Europe this winter. Good for the population. And we’re obviously also looking at -- we now have an RUO version that we’re testing in Europe of a variant version. So we think that will be suitable for the market as we proceed. But overall, we -- that is down sequentially. And that’s fine with us. At least we don’t have really much of a tailwind there at all, which for next year or even for the second half of the year, it just never was a very large part of our revenue.

Our next question comes from Tycho Peterson with JP Morgan Securities.

Frank, I want to dig into the BioSpin instrument a little bit. Just curious how much of the strength there you think was pent-up versus new customer wins. Can you talk as to how much of the revenues came out of backlog versus new business wins as well?

Well, for BioSpin in any given quarter, most of it comes out of backlog. But orders in BioSpin were also healthy. So as I said, for all -- the number I have is for all the BSI groups together, all 3 of them together, organic year-over-year order growth was in the mid-teens. And the BioSpin was healthy. But of course, in any given quarter, you can pretty much assume that 80% of BioSpin’s revenue comes out of the ending backlog of the previous quarter, even pretty much other than service and aftermarket. So yes, BioSpin looks good.

And then on Nano, I appreciate the comments on kind of the semiconductor shortage in the near term. One of the questions we’ve gotten is just with infrastructure on the table here and things like broadband buildout and upgrading the electrical grid. Is there an opportunity there, do you think, for the Nano business to the extent you do cap with some of the petro dollars?

Yes. I mean the opportunity for -- I mean the risk hasn’t really materialized for us, but we’re aware of it, just as we’re aware of risk -- the lockdown risks. But the opportunity is very substantial. So our semiconductor and microelectronics business in the Nano Group -- almost all in the Nano Group has really expanded very, very nicely with excellent growth last -- second half of last year, also, again, continuing greater than 30% organic growth. Much greater than that in the first quarter of this year and really good bookings. So we think that’s -- that has -- that’s not one of the lingering questions. We think that’s really going to be -- I mean that’s going to be positive for as far as we can see, which is sort of throughout this year. But the longer-term trends, I mean semiconductor is somewhat cyclical, although the cycles aren’t what they used to be. They’re much longer. And the long-term trends from artificial intelligence to 5G to -- I mean you name it, there’s cloud-based computing and many, many, many other drivers, working from home, being one of them, make that runway look very, very healthy and very long. Plus there is a lot of new investment in new technologies, 7-, 5-mil nanometer greater 3D stacking, more layers, which all cater to our strength. So very optimistic about our semiconductor metrology business.

Okay. And then a follow-up on cellular. Acuity, you’re doing is a majority investment. Can you just talk as to why that was the right strategy as opposed to acquiring? I know it’s early, and then how we think about that in relation to Canopy, just around the broader spatial and in situ offering?

Yes. I mean there was nothing to acquire yet. That’s a business to be built, right? It’s a true start-up, and we found some very talented and enthusiastic people that are likely to join Acuity from the group that did that work in an academic setting. So those folks want to be entrepreneurial and do a startup. And instead of sending them to the usual VC funding route, they chose Bruker as a majority investor. And of course, we can also help them as a strategic majority investor with a lot of infrastructure and not just capital. So that combination, including some of our key super resolution microscopy products that are actually the basis for some of the Acuity Spatial Genomics solutions that are then more molecular biology-oriented and software and services and so on together, I think, make for a much, much faster start for Acuity than if that truly was a day 1, here’s a bunch of money, some seed money, get going. So I think we can -- it’s not a running start, but it also will not have the typical lead times of another startup. So we’re excited about that, and we think that we’ll tell you more about it on the Investor Day. Will it contribute meaningfully this year? No, of course, not. But it’s also not going to be 3 or 4 or 5 years before that ever sees its first revenue. We’re hoping. And so it’s -- I think it’s a fantastic and very creative way of getting into some of the most important new areas in science and spatial genomics in a rather unique way and also in a somewhat unique and clever business model that Mark Munch and colleagues are driving for us here from the Bruker Nano Group, very exciting.

Okay. That’s helpful. And then one quick one for Gerald before I hop off. The increase in operating margin guidance, 210 to 250 basis points. Should we assume 2/3 of that is still from the gross margin line? I know that was kind of the rough rule of thumb.

Yes. I think that’s reasonable. We still see very solid gross margin performance in the next few quarters. So I think that’s a reasonable assumption for sure.

Our next question comes from Dan Brennan with UBS.

Great. Maybe the first one, just broadly on the academic and government market, Frank. What are you seeing from -- probably some of the delays that were happening during 2020, given the pandemic? Have you seen much of a catch-up yet in terms of instrument orders? And how would you characterize the overall environment given the increased funding that we’re seeing globally in that space?

Yes. Well, I think we still have a little bit of discrepancies. I mean China and Europe really did very, very well in academic funding and orders as well. And TOF still lagging a little bit behind, although pretty promising signals now people believe there’s going to be a rebound and then just healthy NIH, NSF, et cetera, type spending. And I think the universities will then also become more optimistic and from faculty hiring to whatever allocation of their budgets. So I think there’s optimism in the U.S., but that optimism still needs to translate into numbers and could -- that may still take until the second half of the year. The U.S. academic market is recovering, but it’s not nearly as strong as China and Europe has been. And then Japan, still very anemic and we’ll need to see how that plays itself out and whether that’s related -- comes after the Olympics or whatever. So we don’t have really good clarity there. Plus a few places, like India, of course, having other problems that are far more severe. So It’s generally quite good, but Europe and China are particularly good; U.S. lagging; and Japan and India unclear or weak. So that gives you a bit of a geographic color to that otherwise pretty strong academic and government funding rebound that we see. Even with those areas of weakness or questions, it’s really quite healthy.

And I believe in the last downturn, coming out of it, you discussed kind of the delayed reaction maybe to your business given the timetable at which grants need to be written And then grants get rewarded and then money gets spent. So I’m just trying to think sort of within your guidance this year and as we think ahead beyond 2021, is there a potential really for maybe a significant step-up in growth beyond just comps given the spending levels from this catch-up on academic and the increased funding, or…?

There’s potential for sure, but it remains to be seen. We think that a lot of our -- when funding comes back from NIH and NSF and, of course, similar funding institutions worldwide, right, the question is, are we -- are our instruments in proteomics in spatial, in structural biology, NMR, et cetera, are they in the sweet spot? Generally, rising tide is good for all boats. But I think we also positioned ourselves to where a lot of our key instruments are in the sweet spot of funding. So -- but that also remains to be seen when big funding waves. Maybe an NSF or so come until they get into programs, into grant programs to individual investigators, and they then purchase an instrument that takes a while. It can take actually 6 to 12 months, so. But on the other hand, having all the strength that we have already. And then in my opinion, a pretty good chance that U.S. academic spending will come -- become quite strong, possibly in the second half of this year. That could be a nice driver for us for next year.

Great. And then just maybe one on the balance sheet, obviously, in great shape. I’m just wondering -- you had this consistent kind of tuck-in M&A strategy. Does that continue going forward? Is there anything larger on the horizon? Can you just give us a flavor of what we can expect from that aspect?

Yes. No, nothing large on the horizon. And obviously, there’s a lot of businesses out there right now that are -- were -- it’s challenging to figure out what valuations would be. For instance, if they have a big COVID bolus or -- some companies are still early in their early revenue or no revenue yet. So difficult to -- we’re really very disciplined as an acquirer also in terms of value and we have -- we’re blessed in having such incredible organic growth opportunity that you’re not likely to see us -- yes, I’ll never rule anything out, but you’re not likely to have us focus on M&A because of some COVID headwind or something like that. Quite on the contrary, we’re very much focusing on Project Accelerate and operational excellence, and we think that can develop -- deliver excellent further performance improvements and growth without the risks from a valuation and operational point of view from doing a lot of frantic M&A activity. So you won’t be seeing -- you’re very likely not going to see that from Bruker. Do we need to wrap it up? I think we have time for one last question.

And that question will come from Brandon Couillard with Jefferies.

Just a 2-part question for you, Gerald. Free cash flow is off to a great start in a seasonally weak first quarter. What are you penciling in for the balance of the year? And then the tax rate is going up again. Going back to the Analyst Day 2 years ago, you talked about runway to If we bring that down into the low 20s. Is that still a relevant sort of midterm bogey?

Yes. Well, let me answer the -- your last question first, if I may. Relative to the tax rate, we did move our non-GAAP tax rate for guidance up for the full year, and that’s largely driven by the strength of our European businesses, particularly in Germany. That carries a very high tax rate. So we think it’s prudent to move what we currently see in the overall mix from a jurisdictional perspective. So that’s what’s driving the current thinking around guidance for 2021. I would say, we haven’t at all given up on further movements in the tax planning strategies that we have here at Bruker, and we’re still executing through on those. But as I said earlier, the management of how it all plays out from the business so far appears to be more leaning towards those higher tax rate jurisdictions. And then on your first question relative to cash flow, we actually had a very solid fourth quarter of 2020 and another good strong cash flow performance in the first quarter. Some of this has to do with timing and of course, including in this particular quarter, we had some improvements, I guess, I would say, in a couple of areas that are significant. It probably takes a longer conversation than we have today to go through that. But in general, I’m pretty optimistic about our cash flow improvement capabilities and how we delivered on that over the last couple of quarters.

This concludes our question-and-answer session. I would like to turn the conference back over to Miroslava Minkova for any closing remarks.

Thank you for joining us today. During the second quarter, Bruker will participate in the Bank of America, UBS and Jefferies Virtual Healthcare Conferences. In addition, we’ll be hosting a virtual Investor Day on Thursday, June 17, with registration information forthcoming. We look forward to meeting you at 1 of these events during the quarter. Thank you. And have a nice day.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.