bear stearns 19th annual healthcare conference · -1-w w w . q i a g e n . c o m bear stearns 19th...
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Bear Stearns19th Annual Healthcare Conference
New York, September 11, 2006
Roland Sackers, CFOCheri Walker, Vice President Merger & Acquisitions NA
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Certain of the statements contained in this presentation may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's products and markets and operating results are forward-looking, such statements are based on current expectations that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations), variability of operating results, the commercial development of the DNA sequencing, genomics and synthetic nucleic acid-related markets, as well as the nucleic acid-based molecular diagnostics and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's products (including seasonal fluctuations), difficulties in successfully adapting QIAGEN’s products to integrated solutions and producing such products, the ability of QIAGEN to identify and develop new products and to differentiate its products from competitors, and the integration of acquisitions of technologies and businesses. For further information, refer to the discussion in reports that QIAGEN has filed with the U.S. Securities and Exchange Commission (SEC).
The following slides may contain certain summary information about QIAGEN N.V.’s operating income, net income, and earnings per share, which information is presented on a “non-GAAP financial measures”basis rather than in accordance with U.S. generally accepted accounting principles (“GAAP”). Please review QIAGEN’s recent press releases for information on the company’s operating income, net income, and earnings per share for specific periods presented on a GAAP basis. Such GAAP-basis information will also be contained in the company’s reports on Form 20-F and 6-K to be filed with or furnished to the U.S. Securities and Exchange Commission and which are available on QIAGEN’s homepage under www.QIAGEN.com.
Forward Looking Statements
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As the innovative market and technology leader, QIAGEN creates indispensable solutions that set standards in enabling access to content from any biological sample.
Our mission is to enable our customers to achieve outstanding success and breakthroughs in research, applied markets, drug development and molecular diagnostics. We thereby make improvements in life possible.
Our commitment to the markets we serve drives our innovation and leadership in all areas where solutions such as sample collection, stabilization, separation, purification, storage, handling and processing are required.
The exceptional talent, skill and passion of our employees are key to QIAGEN’s excellence, success and value.
QIAGEN Mission 2006
MarketLeader
AttractiveMarkets
FocusedPortfolio
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Purification of Complex Biological Samples
DNADNASample PrepSample PrepBloodBlood
Nucleolus, Polymerases, Ceramides, Chromosomes,
Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids,
Salts, Urea, Carbonic acids, Cofactors, Precursors,
Hemoglobins, Erythrocytes, Monocytes, Smooth
endoplasmatic reticulum, Macrophages, Thrombocytes,
Platelets, Lymphocytes, Basophils, Eosinophils,
Neutrophils, Megacaryocytes, Plasma, Clotting factors,
Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin,
Hemaglobins, Heptaglobins, DNA, Transferrin, Fibrinogen,
Serum albumin, tRNA, Salts, Polymerases, Centrioles,
Immunoglobulins, Carrier proteins, Cytokines,
Angiotensins, Chemokines, Bradykines, Plasma
membranes, Ribosomes, Actin, Vesicles, Complement
components, Nuclei, Rough endoplasmatic reticulum,
Nucleoli, Golgi apparatus, Glycoproteins, Microtubules,
Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin,
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Any content
Enabling Access to the Content of Any Biological Sample
AnyApplication
AnyBiologicalSample
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Revenues: 2005: $ 398 million 96–05 CAGR: 25%Net income: 2005: $ 69 million 96–05 CAGR: 33%1
EPS: 2005: $ 0.46 96–05 CAGR: 31%1
Product Range: Approx. 500 consumable products to collect,separate, purify, stabilize, store, amplify target analytes in samples (DNA, RNA, proteins, etc.)
Instrumentation
Molecular diagnostics and research test kits
IP (12/05): 409 issued patents, 321 pending patents
Over 500 patents under license
Customers: >400,000 customers in Academia,Industrial (Pharma/Biotech) and Diagnostics
Employees: >1.800 employees based in 19 subsidiaries
1 excluding acquisition, restructuring and related charges as well as amortization on acquired IP
QIAGEN at a Glance
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Academia (approx. 40% of revenues)
Europe strong (esp. Germany)
Asia strong: fast growth in China
Pharma/Biotech (approx. 25% of revenues)
Strong in US and in Europe
Focus on pharma
Focus on biomedical research
Applied testing (approx. 10% of revenues)
Established new channels
Diagnostics (approx. 25% of revenues)
Addressing today’s markets: pathogens
Addressing future opportunities: active in many biomarker
initiatives
Significant accomplishments in building sales channel
Focus on Growth – Momentum
Markets by Customer
AppliedTesting
10%Research40%
Pharma25%
25%
MolecularDiagnostics
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QIAGEN: Standards which EnableAccess to the Content of Any Biological Sample
Growth Drivers
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Financials
Intro
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QIAGEN: Standards which EnableAccess to the Content of Any Biological Sample
Financials
Growth Drivers
Growth Drivers
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1993 1994 1995 1996 1997 1998 1999 2000 2001
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Workflow in Life Sciences
CollectionStabilization
SamplePreparation
Assay Detection
Identical workflows in all areas of Life SciencesApplied Testing
Molecular Diagnostics
Life Science Research
Growth Drivers
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Leveraging Core Competencies
Research Applied Testing Molecular Diagnostics
“Prepare Sample”
(Preanalytical Solutions)
“Make Analyte Visible”
(Assay/Test)
“Detect”Open detection platforms
Same core expertise – different markets
“Detect”Open detection platforms
Growth Drivers
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Disseminating Technologies Into New Markets
Life ScienceResearch Markets
Applied TestingMarkets
Molecular DiagnosticsMarkets
QIAGEN Sample and Assay Technologies
Common Core Addressing 3 Markets
Growth Drivers
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QIAGEN – a Leader in Molecular Diagnostics
Estimated market:> US$ 2 billion (2006)Source: company estimates, various industry research reports
USD Sales inMolecular
Company Diagnostics
Roche 550Genprobe 300Bayer 120QIAGEN 115Digene 115Abbott 110Others
CepheidBiomerieuxBecton DickinsonCelera DxBeckmanInnogeneticsVeridexNanogenThird WaveExactetc.
QIAGEN is a leading player in molecular diagnostics
Source: company estimates, various industry research reports
Viral Infections39%
Non-Viral Infections12%
Genetic Testing13%
Oncology11%
Blood banksOthers25%
!
Growth Drivers
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QIAGEN artus Real-time PCR KitsComplete Portfolio for Relevant Infectious Diseases
CMV LC CECMV RG CECMV TM CEHSV 1/2 RG CEHSV 1/2 TM AbbottHHV 6 LC CEHHV 6 RG CEVZV RG CEC. pneumoniae TM CEC. pneumoniae RG CECandida RG CEAspergillus RG CEInfluenza LC CEM. pneumoniae LC CERSV LC CEAdenovirus LC CEB. pertussis LC CEEnterovirus LC CEEnterovirus RG CEEnterovirus TM AbbottL. pneumophila LC CEL. pneumophila RG CEMTB diff LC RUOMTB diff RG RUO
C. pneumoniae LC CEParainfluenza LC CEBorrelia LC CEHAV LC RocheHAV TM AbbottNorovirus LC CEWNV TM ASRInfluenza RG CERSV RG CEAdenovirus RG CEB. pertussis RG CEM. pneumoniae RG CENorovirus RG CEParainfluenza RG CEMTB diff TM CEB. pertussis RG CEC. trachomatis PLUS TM CEC. trachomatis PLUS TM LCC. trachomatis PLUS TM RGHCV LC CEHCV RG CEHIV-1 RNA RG CEGeneral bacteria detectionHHV-6 TM Abbott
L. pneumophila TM AbbottMalaria diff QC LCM. paratuberculosis LC CEM. diff LC CEM. diff TMM. diff RGHemachromatosis LC CEFactor II/V C LC CEDengue RGHTLV LCInfluenza TML. pneumophila TM AbbottMalaria diff QC LCM. paratuberculosis LC CEM. diff LC CEM. diff TMM. diff RGHemachromatosis LC CEFactor II/V C LC CEDengue RGHTLV LCInfluenza TM
Representative but not complete list
Growth Drivers
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Molecular Diagnostics Growth Strategy
Multiple, synergistic channels – focused direct sales resources
Direct sales
OEM developmentOEM sales
Direct Sales
Growing direct sales force > 40
No instrument dependency
Focus on pathogens
Market leader is developing countries
OEM Products
Integrated solutions, CE and FDA
Assays, preanalytical, automation
> 15 Partners
>100 clinical trials using QIAGEN
> 50 clinical trials using PreAnalytiX
OEM development
Developing solutions for partners
Growth Drivers
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Market leadership in preanalytical solutions
Technology leadership in preanalytical solutions
Expanding leadership in protein sample preparation
Complete portfolio for all markets and segments
Leadership in research markets with PCR and other bioassay technologies
~4th largest molecular diagnostics company
QIAGEN 2006
CollectionStabilization
SamplePreparation
Assay Detection
QIAGEN’s leadership ís growing along the value chain
Growth Drivers
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Growth Drivers
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40.000
60.000
80.000
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140.000
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220.000
240.000
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280.000
1993 1994 1995 1996 1997 1998 1999 2000 2001
QIAGEN: Standards which EnableAccess to the Content of Any Biological Sample Financials
Financials
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200
250
300
350
400
450
500
2001 2002 2003 2004 2005 2006E
QIAGEN Revenue Recognition 2001 – 2006E
5-year CAGR* = 13%
* CAGR 2001-2005
US$ millions
QIAGEN – Continuous double digit revenue growth rates
Financials
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QIAGEN Operating Margins 2001 – 2006E
QIAGEN – Strong operating margin improvement
15
17
19
21
23
25
27
29
2001 2002 2003 2004 2005 2006E
% of revenues
26%-28%
Financials
All figures excluding acquisition, integration and relocation related charges as well as amortizationof acquired IP and equity-based compensation (SFAS 123R)
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QIAGEN Net Income Recognition 2001 – 2006E
30
40
50
60
70
80
90
2001 2002 2003 2004 2005 2006E
5-year CAGR* = 24%
* CAGR 2001-2005
US$ millions
QIAGEN – Strong earnings engine
US$ 0.46EPS US$ 0.52-US$ 0.56
US$ 0.39US$ 0.32US$ 0.23US$ 0.25
Financials
All figures excluding acquisition, integration and relocation related charges as well as amortizationof acquired IP and equity-based compensation (SFAS 123R)
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0.30Cash EPS2
exceeded0.260.23-0.25EPS, adj. (US$)3
high end26%24-26%Operating margin, adj.2exceeded222209-215Net sales
ReportedTarget1In US$ millions unless indicated
QIAGEN well on track to achieve full year guidance
QIAGEN First Six Months 2006 at a Glance
1 based on quarterly guidance communicated by the company on May 9th
2 excluding acquisition, integration and relocation related charges as well as amortization ofacquired IP and equity-based compensation (SFAS 123R)
3 computed using net cash provided by operating activities divided by number of fully diluted shares
Financials
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80
90
100
110
120
RevenuesQ2 2005*
Price Volume Newproducts
Acquisitions/Divestments
Exchangerates
RevenuesQ2 2006
0
* Excluding revenues from the divestment of pAllianceand shifted revenues from PAXgene to BD announced in August, 2005
Organic Growth 10%
Divestment related revenuesin Q2 2005 approx. 2% of revenues
~ 2%
~ 4%
~ 4%
~ 13%~ 3%
US$M
New Products and VolumeDriving Organic Growth in Q2
Solid organic growth rate – Comparable to Q1 2006
Financials
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ConsumablesReported growth 15%
18% growth CER
Instruments5% growth CERgood growth in BioRobot product lines
Other (1%)
First Six Months 2006 Revenue Distribution
Asia9% of sales24% growth CER(driven by China)
RoW2% of sales
North America45% of sales
10% growth
Europe 44% of sales21% growth CER
90%
9%
CER = Constant exchange rates
Financials
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Gross margin driven by increasing high margin consumable business
QIAGEN Margin DevelopmentDriving Profitability
* excluding acquisition, integration and relocation related charges as well as amortization ofacquired IP and equity-based compensation (SFAS 123R)
Gross margin* Operating incomemargin*
Net income margin*
6M 2005
6M 2006 68%70%
26%24%
18%16%
+19%
+20%
+27%
Financials
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QIAGEN Guidance
109
101-104
Q1 2006
~18%0.52-0.56Guidance on EPS, adj.in US$ p. share*
~15%453-462121-124115-118Guidance on revenues
May 9, 2006
633Revenue contributionfrom acquisitions
113Actual
~12%439-451118-121112-115108-111Guidance on revenuesFeb 14, 2006
Growth yoy
FY 2006Q4
2006Q3
2006Q2
2006In US$ millionsunless indicated
Guidance for revenues and EPS for FY 2006
* excluding acquisition, integration and restructuring related charges as well as amortization ofacquired IP and equity-based compensation.
Financials
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Strong first six months 2006
Exceeded revenue targets
EPS YTD $0.26 (24% growth compared to 2005)
Operating income margin 26% (adj.)
Well on track to achieve full year guidance
Strategic positioning and momentum strong
Molecular Diagnostics
Applied testing
Focused on core competencies
Present in key markets directly (i.e. 2005 Asia expansion)
Strong growth engine
Developed: 39 new products in first six months 2006,approx. 4-5% of sales from new products
Partnered: >50 academic, >50 commercial partnerships
Acquired:
Gentra Systems - an accretive acquisition in Q2
Successful integrations: i.e. artus 12 month scorecard
Executing on Plans – Expanding – Setting Standards
Summary