Call Outline. Forward Looking Statements. First Quarter 2007 Earnings Conference Call

Transcription

1 Call Outline May 8, 2007, 9:30am EDT, 14:30 GMT, 15:30 CET First Quarter 2007 Earnings Conference Call Conference Call Outline: 1) 30 min Presentation Peer M. Schatz, CEO Roland Sackers, CFO Dr. Solveigh Mähler, Director IR 2) 30 min Q&A session Due to time restrictions we would like to ask for a maximum of TWO questions per caller. Forward Looking Statements Safe Harbor Statement: 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, applied testing markets and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's products (including fluctuations for certain events including funding, budgets, and others), 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 or furnished to the U.S. Securities and Exchange Commission (SEC). Note: In the attached presentation, QIAGEN will use the term molecular diagnostics. The use of this term in reference to certain countries, such as the United States, is limited to products subject to regulatory framework. Current QIAGEN molecular diagnostics products are 34 EU CE IVD assays, six EU CE IVD sample preparation products, one 510k PAX RNA product, nine China SFDA IVD assays and 98 general purpose reagents. Regulation G: The following slides contain certain summary information about QIAGEN N.V. s sales, gross profit, operating income, net income, and earnings per share for the first quarter 2007, and the comparable period of 2006, 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 press release dated May 7, 2007, for information on the company s operating income, net income, and earnings per share for these periods presented on a GAAP basis. Such GAAP-basis information will also be contained in the company s reports on Form 20-F or Form 6-K to be filed with or furnished to the U.S. Securities and Exchange Commission

2 First Quarter 2007 Overview Financials Revenues US$127.9 m EPS* US$ 0.14 Net income growth* 17% Strategic Targets Strong overall revenue growth 18% Strong organic revenue growth 11% Increased market leadership and share Other Targets Executing on our strategy 13 new products in prove innovation success Catalytic acquisitions: adding egene s separation and analysis technology Integrations successful Gentra integration completed * excluding acquisition, integration and relocation related charges, amortization of acquired IP and equity-based compensation Strong Q1 and Outlook First Quarter 2007 Revenue Distribution By Product Groups By Geographic Regions By Customer Groups Consumables 15% growth 11% growth CER Asia 48% growth CER (driven by China) RoW 2% of sales Molecular Diagnostics Applied Testing 89% 13% 11% 27% 10% 46% 39% 24% Basic 38% Biomedical Other (1%) CER = Constant exchange rates Instruments 46% growth 40% growth CER Europe 14% growth CER North America 5% growth Pharmaceutical Industry Research Customer Group allocations based on estimates

3 Organic Growth Drivers in First Quarter 2007 US$m 130 ~ 5% ~ 18% ~ 2% 120 ~ 4% ~ 5% 110 ~ 2% Organic Growth 11% Revenues Q Price Volume New products Acquisitions Exchange rates Revenues Organic Growth - Outperforming the Industry* * Industry including.: Beckman, Bruker, Strategene, BioRad, Mettler, ABI, Affymetrix, Fisher, Walers, Thermo, Techne, Invitrogen, Sigma, QIAGEN, Millipore, Roche Applied Science, Tecan Source: Company data, Analyst reports New Product Introductions in Sample Technologies Sample Technologies for DNA processing: Puregene Product Line Generation Product Line EZ1 DSP DNA Blood Kit EZ1 DSP DNA Virus Kit Sample Technologies for protein processing Nextal QIA1/QIA2 microplates Automated solutions for Sample Technologies: QIAcube (first instruments shipped in late April) BioRobot EZ1 DSP Instrument Autopure LS Instrument Assay Technologies Assay Technologies - MDx: SBTexcellerator HLA Kits and Software Assay Technologies for Gene Expression: QuantiFast Probe PCR Kits QuantiFast SYBR Green PCR and RT-PCR Kits FastLane Cell RT-PCR Kits Assay Technologies - for RNAi: Rat Druggable Genome sirna Set V

4 State of the Art Logistic Center in Hilden/Germany Start of project: August 2006 Construction period: Approx. 7 months Investment: Approx. Euro 9m or $11,7m Seize: 61,000 sq ft in total Functions: Entirely integrated into fully automated logistics processes Capacity: Assembly of > kits/day Fast delivery of products worldwide Better serve our customers requests Meets highest standards and demands in regulatory safety environmental care Efficient and centralized manufacturing and logistics facility QIAGEN s M&A Strategy Following the Three Mega Trends 2007 RNAture 2006 Gentra Eppendorf 5-Prime Standardization of LumiCyte, Inc. Creating Preanalytical Solutions for Systems Biology SuNyx GmbH Nextal Biotechnologies Tianwei Times PG Biotech Co. Ltd. Disseminating Reach of Core Capabilities 2006 Genaco. artus GmbH

5 QIAGEN Successful Integrations Example: Gentra 12 Months Post-Acquisition Snapshot Stability data Consumable and instrument solutions Strong brand in growing niche. Sample in 1993 Same sample 2004 Complementary Core Growth Market Segment Nucleic acid purification from large volume blood samples Biobanking/DNA archiving Comparative genomic hybridization (CGH) in MDx Revenues Guidance for second half of 2006: US$ 6 million Revenues achieved in second half 2006: US$ 7.7 million Accretive Targets met: Integration completed in April 2007 as planned QIAGEN set standards in stabilization and purification of large scale blood samples Achieved leading position in biobanking and DNA archiving market segments Exceeded Expectations egene Acquisition egene s HDA DNA Analyzer system significantly improves the speed for nucleic acid separation and analysis Quality control of QIAGEN sample technologies Readout of QIAGEN assay technologies Consumables Instruments Software Broad potential in application/market segments core to QIAGEN. Molecular diagnostics Biomedical research Pharmaceutical industry Focused technology and product portfolio similar in nature to QIAGEN s Genetic analyzer instruments Cartridge kits Following our Acquisition Strategy Focused Consistent - Value Creating

6 Deal Structure Consideration Aggregate purchase consideration of ~ $34.0 M $0.65 in cash and QIAGEN common shares per share of egene stock 1 million shares QIAGEN stock plus cash component Acquisition-related charges Expected one-time charges: approx. US$0.01 in EPS in the second half 2007 Changes to guidance following closing: Revenues: approx. US$ 2.0 million in second half of 2007 US$ million in 2008 EPS adj.: Dilutive by approx. US$ 0.01 in second half 2007 Neutral to accretive in and beyond 2008 EPS adj. = excluding acquisition, integration and relocation related charges as well as amortization of acquired IP Great Asset Attractive Valuation First Quarter 2007 at a Glance Q Growth Net sales (US$ m) % Operating margin 1 26% 26% Net income (US$ m) % EPS (US$) excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) Net sales and EPS, adj. exceeding company s expectations

7 First Quarter 2007 Growth by Product Line Consumables Instruments Others Total 15% 46% -11% 18% CER 11% 40% -15% 13% CER = Constant exchange rates Delivering Strong Instruments Growth of 40% CER First Quarter 2007 Q Growth Net sales (US$ m) Operating income % Operating income % Net income % Net income % EPS (US$ per share) % EPS (US$ per share) % 1 excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) 18% 18% Revenue Growth

8 First Quarter 2007 Reported and Adjusted Figures Reported -15- Adjustments 1 Adjusted Net sales (US$ m) Operating income Net income EPS (US$ per share) Acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) 18% After Tax Profitability (adj.) Cash Flow Key Figures In US$ millions unless indicated Net income Depreciation & amortization Others Operating cash flow Capital expenditures Free cash flow Cash EPS in US$ per share Q Free cash flow computed using net cash from operating activities less capital expenditures Cash EPS computed using net cash from operating activities divided by number of fully diluted shares Inventory days : 151 Receivables DSO :

9 Q Assumptions All estimates for Q are based on FX January 31, 2007 Q Organic growth rate in Q2 ~10% Adjustments to operating income in Q2 SFAS 123R (US$m) Amortization of acquired IP (US$m) Restructuring and integration costs from prior year acquisitions (US$m) Revenues (US$m) EPS, adj.* ~2.7 ~ slightly higher than Q1 Guidance for 2007 Reaffirmed Positive Outlook * excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) at a Glance Strong first quarter good start into 2007 Revenues up 18% Strong organic growth of 11% Strong growth in instruments 40% CER Strong strategic momentum Exciting market environment egene acquisition Integration of acquired businesses on track QIAGEN Guidance on FY 2007 (based on guidance currency rates) Revenues (US$ millions) Operating margin 1 ~27% EPS (US$) excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) 2 not including impact of egene acquisition which, after closing, would increase sales by $2 million and reduce EPS in the second half of 2007 by $0.01 Well on Track

10 Questions & Answers Appendices Financials

11 Currency Impact Actual to Guidance Rate (01/31/07) First Quarter 2007 In US$ million Actual Guidance rate 01/31/07 Change due to currency Revenues in US$ Revenues in Euro Revenues in JPY Revenues other currencies Total* Only marginal foreign currency impact on revenue growth using QIAGEN s guidance rate dated January 31, 2007 First Quarter Q1 Reported 2007 Q1 Constant Currency 2006 Q1 Growth rates Constant Reported Reported Currency Gross margin 70% 69% 69% 18% 13% Gross margin 1 70% 69% 70% 17% 12% Operating income margin 23% 23% 23% 14% 10% Operating income margin 1 26% 26% 26% 18% 14% Net income margin 16% 16% 16% 13% 11% Net income margin 1 18% 18% 18% 17% 15% EPS in US$ per share % 8% EPS in US$ per share % 8% 1 excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R)

12 First Quarter 2007 Reported and Adjusted Figures In US$ millions unless indicated Operating income, reported Acquisition and integration related expenses Relocation and restructuring charges SFAS 123R Impact Amortization on acquired IP Operating income, adjusted Net income, reported Acquisition and integration related expenses Relocation and restructuring charges SFAS 123R Impact Amortization on acquired IP Net income, adjusted Weighted average number of diluted common shares EPS, reported in US$ per share EPS, adjusted in US$ per share ,199, Employees March 31, 2007 US/Can Europe Asia RoW Total Q1 07 Total Q1 06 Growth Production % R&D % Sales % Marketing % Admin Total , , ,641 25% 19% Asia: Increased from 142 employees in Asia end of Q Significant investments in dedicated sales forces