090210 Q4FY08 CC [Schreibgesch tzt] · MDx: Mexican SSA launched HPV screening program MDx: QIAGEN...

- 1 -QIAGEN Q4/FY 2008 Earnings CC, February 10, 2009 Sample and Assay Technologies

February 10, 20099:30am ET, 14:30 GMT, 15:30 CET

Fourth Quarter & Fiscal Year 2008 Earnings &

2009 Guidance Conference Call

Conference Call Outline:

1) 30 min PresentationPeer M. Schatz, CEORoland Sackers, CFODr. Solveigh Maehler, Director IR

2) 30 min Q&A sessionDue to time restrictions we would like to ask for a maximum of TWO questions per caller.

Call Outline


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 geneticvaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's products (including fluctuations from 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, the management of intellectual property, 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).

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 fourth quarter and fiscal 2008, and the comparable period of 2007, 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 February 9, 2009, 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.

Forward Looking Statements


� Exceeded revenues guidance US$893.0 M� Strong organic revenue growth

� Overall 13%� MDx growth, HPV a strong driver >20%

� EPS, adj. reached high end US$ 0.80� Operating income, adj. growth 54%� Record revenues from 12 mo new products 5%� Underlying fundamental momentum

� 2009 launches include: QIAsymphony AS , QIAgility, PyroMark, EZ1 Advanced XL, RotorGene Q, QIAxtractor

� MDx: Mexican SSA launched HPV screening program

� MDx: QIAGEN leading SPIDIA project

� >80 new products in 2008: focus on automation,genotyping, and functional analysis5 new MDx assays launched

Strategic and Other

Financials

Fiscal Year 2008Overview

Adjusted figures exclude business integration and relocation related charges as well as amortization of acquired intangibles and equity-based compensation (SFAS 123R). EPS 2008 includes a non-cash tax charge of US$ 0.01 from revaluation of acquired tax positions.


Guidance1

Nov. 11, 2008 Reported

Net sales reported (US$M) 893

Net sales at guidance rate (US$M)1 901 – 906 909 exceeded

EPS, adj. (US$)2 0.79 - 0.80 0.80 high end

Exceeded on Revenue Guidance

1 Based on January 31, 2008 foreign currency exchange rates2 Excluding business integration and relocation related charges, amortization of acquired intangibles and

equity-based compensation as well as including a non-cash tax charge ofUS$ 0.01 from revaluation of acquired tax positions in EPS, adj.

Fiscal Year 2008Key Performance Metrics


Fiscal Year 2008 Revenue Distribution

RoW

Americas49% growth50% growth CER

Europe21% growth17% growth CER

By Product Groups By Geographic Regions

88%

11%

50% 37%

10%

Others

CER = Constant Exchange Rates

Sample and Assay Technologies� 36% growth� 34% growth CER

Instruments� 51% growth� 52% growth CER

Asia24% growth16% growth CER


300

400

500

600

700

800

900

1000

RevenuesFY 2007

Price Volume Newproducts

Acquisitions Exchangerates

RevenuesFY 2008

0

Organic Growth 13%

~ 2%

~ 5%~ 6%

~ 37%~ 22%

US$M

Fiscal Year 2008Growth Drivers

New Products and Volume Drive Strong Organic Growth

~ 2%


2008 2007 Growth

Net sales (US$M) 893.0 649.8 37%

Operating income (US$M), adj.1 252.7 164.3 54%

Operating margin, adj.,1 28% 25%

Net income (US$M), adj.1,2 163.3 111.5 47%

EPS (US$), adj.1,2 0.80 0.63 27%

Financial Performance Exceeded Expectations

Fiscal Year 2008At a Glance

1 Excluding business integration and relocation related charges as well as amortization of acquired IP andequity-based compensation (SFAS 123R)

2 Including a non-cash tax benefit of US$ 0.02 per share in 2007 and including a non-cash tax charge of US$ 0.01 per share from revaluation of acquired tax positions in 2008


In US$ millions unless indicated 2008 2007

Net income 89.0 50.1

Depreciation & amortization 105.7 62.6

Purchased in-process R&D 1.0 25.9

Others, net (27.8) (53.8)

Operating cash flow 167.9 84.8

Capital expenditures (39.4) (34.5)

Free cash flow1 128.5 50.3

1 Free cash flow computed using net cash from operating activities less capital expenditures

Fiscal Year 2008Cash Flow and Balance Sheet Key Figures

In US$ millions unless indicated As of 12/31/2008

Cash and cash equivalents 333

Net debt 644

Near term payment obligations(next 12 months) 25

Equity ratio 51%

Net debt / EBITDA, adj. ratio 2.2


Q4 2008 Q4 2007 Growth

Net sales (US$M) 237.2 210.2 13%

Net sales (US$M); CER 253.5 210.2 21%

Operating margin, adj.2 28% 25%

Net income (US$M), adj.2,3 43.7 32.0 36%

EPS (US$), adj.2,3 0.22 0.16 38%

Financial Performance Exceeded Expectations

Fourth Quarter 2008At a Glance

1

1 US$ 256 million using January 31, 2008 foreign currency exchange rates 2 Excluding business integration and relocation related charges as well as amortization of acquired IP and

equity-based compensation (SFAS 123R) 3 Including a non-cash tax charge of US$ 0.01 per share from revaluation of acquired tax positions in 2008


Agenda: Updates and News

Molecular DiagnosticsStrong current market position and future

Applied TestingMultiple segments, strong potential

Pharmaceutical IndustryDiscovery challenging, development strong

Academic MarketsSource of innovation, target for stimulus

New Product Introductions


Molecular DiagnosticsStrong Current Market Position & Future

QIAGEN‘s Position

� Strong brand, good reputation, large infrastructure

� Critical assays, assays with a lot of penetration potential

� Focused on broad portfolio and laboratories conducting MDx

� Among fastest growing companies in MDx >25%

Market Situation

� High market growth of 15-20%

� Decentralization of Molecular Diagnostics continues

� Market strong, capital constraints for smaller hospitals (QIAGEN´s

sales and growth are primarily from larger centers and labs)

Opportunities

� Selling breadth

� Demand for efficiency: automation and process optimization

� Novel markers - Innovation is key success factor

� Personalized medicine


Molecular DiagnosticsSPIDIA: MDx Sample Technology Standards

� SPIDIA (EU project)

− Standardization and improvement of generic Pre-analytical tools and procedures for In-vitro DIAgnostics

− Four year project

− Total budget > €13 million

− QIAGEN leads the consortium,

− 16 companies and institutions from 11 countries

� Sample Technologies: collection, handling, processing

� Standards/guidelines

− For diagnostic labs, doctors’ practices, hospitals

− To significantly increase utility and potential of IVDs


Applied TestingMultiple Segments, Strong Potential

QIAGEN‘s Position

� Focus segments: Genetic ID, Veterinary, Biosecurity

� Growing assay portfolio, new: complete platforms

� Strong partnerships established

Market Situation

� Molecular methods further disseminated in applied fields

� Market growth 15+%

� Overall testing markets today ~10% of MDx market volume

Opportunities

� Leverage strong installed base of instrumentation

� New, expanded offerings from sample to result

� Geographic expansion: Asia, Latin America, Middle East

� Benefit from synergies with MDx


Pharmaceutical IndustryDiscovery Challenging, Development

QIAGEN‘s Position (approx 20% of sales)

� Unique offering „Research – Pharma – Diagnostic“ Continuum

� Dedicated sales channel

� Personalized medicine: Several collaborations in progress

Market Situation

� Molecular methods are penetrating the complete R&D value chain

� Personalized medicine and Pharmaco-Diagnostics now reality

� Discovery (10-12% of Q): early stage, “blue sky” is constrained

� Drug development (8-10% of Q): strong

� Service organizations & academia supporting efforts

Opportunities

� Portfolio expansion into clinical areas

� New platforms

� Strength in oncology assays


Academic MarketsSource of Innovation

QIAGEN‘s Position

� In most segments QIAGEN with #1 or #2 position

� Among fastest growing companies in academic market

� Strong brand and good reputation

Market Situation

� New U.S. administration with focus on innovation, Europe committed

� Scientific knowledge in Life Sciences increasing exponentially

� New hot topics emerging faster and faster: miRNA, Epigenetics

Opportunities

� Innovation and quality leader

� High growth areas: e.g. miRNA, Epigenetics

� Stimulus packages big upside


QIAgility

� Assay setup� Highly versatile

RotorGene Q

� Performance-leading real timePCR cycler

QIAxtractor

� Sample processor� Highly affordable� Compact� Broad menu

QIAsymphony AS

� fully integratedassay setup

EZ1 advanced XL

� 14 channel EZ1

PyroMark

� Pyrosequencing� Optimized for MDx

New Launches – More at our Analyst Meeting

And a broad suite of consumables and assays as well


EZ1 advanced + QIAgility + Rotor-Gene Q

■ Complete workstation – from sample to result■ Solutions starting approx. $60‘000■ Fully automated, molecular lab

QIAsymphony■ SP: primary sample to purified analyte: Jan 08■ AS: purified analyte to prepared test: Jan 09■ Integrated detection coming

■ Price approx. $95‘000■ Fully automated, molecular lab

PyromarkTM Q24

■ Launched in January 2009■ Genetic and methylation testing, pathogen genotyping■ 1-24 samples in 15 minutes■ 1-5 US per RUO assay

New Launches – More at our Analyst Meeting


Sample Preparation Assay Set Up Detection

Low Throughput

Modules

Endpoint (qualitative) PCR

QIAxcel

Medium-High Throughput

Modules

Multiplexing

LiquiChip

Medium Throughput

Fully integrated System

Real time (quantitative) PCR

RotorGene

High resolution sequence detection and quantification

PyroMark

Multiple Detection Capabilities

~400


Sample Preparation Assay Setup Detection

Low Throughput

Modules(10-100/day)

Medium-HighThroughputModules

(50-250/day)

IntegratedSystem

(QIAsymphony)(50-250/day)

Consumables

Sample Technologies Assay Technologies

Complete Throughput Range

High ThroughputScreening

(QIAensemble)(250-6000/day)


Based on FX 01/31/09 2009E

Revenues (US$M) 920 - 970

Operating margin, adj.1 ~29%

EPS in US$ per share, adj.1,2 0.88 - 0.94

Summary Income Statement 2008 – 2009

2009E Based on Constant Fx Rates 2008 2009E Growth

Revenues (US$M) 893 990 - 1,040 11% - 16%

Operating margin, adj.1 28% ~29%

EPS in US$ per share, adj.1,2 0.80 0.92 - 0.98 15% - 23%1 Excluding business integration and relocation related charges as well as amortization of acquired IP and

equity-based compensation (SFAS 123R) 2 EPS 2008 includes a non-cash tax charge of US$ 0.01 from revaluation of acquired tax positions

Approx. -7% Currencies Impact on Revenues Expected


FX Hedge Situation Changed

� Weak USD against most currencies � Negative cost impact for EUR (Germany)� Positive revenue impact in a broad range

of currencies like GBP, SEK, CAD, KRW, MYR, TRY, BRL, ...

� Long lasting currency pattern development over more than 1.5 years

Jan 2007 Sep/ Oct 2008 Nov 08 Today

Currency mix equals to zero bottom line effects

� Strong USD against most currencies except JPY

� USD strength against EUR is less distinctive than against revenue dominated currencies

� Smaller positive cost impact for Euro (Germany) compared to negative revenue impact in a broad range of currencies like GBP, SEK, CAD, KRW, MYR, TRY, BRL

Actual FX rates are factored in guidance EPSwith 4% headwind


Currencies Impact on 2009 FY GuidanceConstant to Guidance Fx Rates

Impact on Guidance

Impact on 2009

Foreign currencies

Revenues(US$ M)

EPS, adj.(US$ per share)

Americas~ 50% of revenues

USDCAD, BRL,MXN

~ (9) ~ (0.01)

Europe~ 37% of revenues

EURCHF, TRY,SEK, GBP

~ (65) ~ (0.03)

Asia~ 10% of revenues

CNY, MYR,HKC, KRW,SGD, JPY

~ + 4 only marginal

Guidance atConstant exchange rates

990 - 1,040 0.92 - 0.98

Total impact of currencies ~ (70) ~ (0.04)

Guidance atGuidance rate (31/01/2009)

920 - 970 0.88 – 0.94


FY 2009E

Organic growth up to ~ 14%

Adjustments to operating income in 2009

SFAS 123R (US$M) 10 - 12

Amortization of acquired IP (US$M) ~ 68

Business integration related chargesfrom 2008 acquisitions (US$M) 11 - 14

Tax rate 27% - 30%

Weighted average number of fully diluted shares outstanding (based on NASDAQ closing price as of 31/01/09 of US$17.15)

~205 M

Increase of weighted average number of fully diluted shares outstanding / Increase of share price

~1M shares /US$1.00

FY 2009 Assumptions


2009E Based on FX 01/31/09 Q1 2008 Q1 2009E

Revenues (US$M) 207 215 - 225

EPS in US$ per share, adj. 0.18 0.19 - 0.20

Summary Income Statement Q1 2008 – Q1 2009

Adjusted figures exclude business integration and relocation related charges as well as amortization of acquired intangibles and equity-based compensation (SFAS 123R).

Q1 2009 Assumptions Q1 2009E

Adjustments to operating income in Q1 2009

SFAS 123R (US$M) ~3

Amortization of acquired IP (US$M) ~ 17

Business integration related charges (US$M) ~ 5


2008

� Strong financial performance

� Exceeded revenue guidance

� High end of EPS guidance

� Strong momentum

� Expanded market and technology leadership

� Innovation: >80 new products launched

2009

� Positive outlook for 2009Revenue Guidance 2009: US$M 920 – 970EPS, adj. Guidance 2009: US$ 0.88 – 0.94

� Going for growth, with prudent expense management

� Strong pipeline with exciting new product launches

2008 Review and 2009 Outlook

QIAGEN Analyst and Investor DayFebruary 12, at the Four Seasons Hotel, New York


Questions & Answers


Appendices Financials


54% Operating Income Growth (adjusted)

In US$ millions unless indicated FY 2008 FY 2007 Growth

Net sales 893.0 649.8 37%

Gross profit 599.7 433.6 38%

Gross profit, adj.1 650.8 460.4 41%

Operating income 145.7 83.1 75%

Operating income, adj.1 252.7 164.3 54%

Net income 89.0 50.1 78%

Net income, adj.1,2 163.3 111.5 47%

EPS (US$ per share) 0.44 0.28 57%

EPS (US$ per share), adj.1,2 0.80 0.63 27%

Fiscal Year 2008Profit & Loss Statement


2 Including a non-cash tax benefit of US$ 0.02 per share in 2007 andincluding a non-cash tax charge of US$ 0.01 per share from revaluation of acquired tax positions in 2008


Translating Revenue Growth Into Strong Adjusted Margin Improvement

FY 2008 FY 2008 FY 2007 Growth rates

ReportedConstantCurrency Reported Reported

ConstantCurrency

Gross margin 67% 67% 67% 38% 35%

Gross margin, adj.1 73% 72% 71% 41% 38%

Operating income margin 16% 16% 13% 75% 71%

Operating income margin, adj.1

28% 28% 25% 54% 52%

Net income margin 10% 10% 8% 78% 71%

Net income margin, adj.1,2 18% 18% 17% 47% 43%

EPS in US$ per share 0.44 0.42 0.28 57% 50%

EPS in US$ per share, adj.1,2

0.80 0.78 0.63 27% 24%

Fiscal Year 2008


2 Including a non-cash tax benefit of US$ 0.02 per share in 2007 andincluding a non-cash tax charge of US$ 0.01 per share from revaluation of acquired tax positions in 2008


FY 2008 FY 2008 CER

Consumables 36% 34%

Instruments 51% 52%

Others -20% -22%

Total 37% 35%

Total organic 13%

Fiscal Year 2008Growth by Product Line

CER = Constant Exchange Rates

Delivering Strong Organic Growth of 13%


Approx. -2% Foreign Currency Impact on Revenues(using Jan 31, 2008 guidance exchange rates)

In US$ million Reported Guidance ratesChange due to currency

Revenues in US$ 410.3 410.3

Revenues in Euro 233.0 235.3 -2.3

Revenues in JPY 41.9 42.3 -0.4

Revenues in GBP 48.4 51.7 -3.3

Revenues other 1

currencies 159.4 169.3 -9.9

Total 893.0 908.9 -15.9

Fiscal Year 2008Currency Impact Actual to Guidance

Actual

1 = CAD, TRY, SEK, CHF, AUD, BRL, CNY, MYR, SGD, KRW, HKD, BRL, MXN


Fiscal Year 2008Adjusted and Reported Figures

In US$ millions unless indicated Adjusted Reported

Net sales 893.0 893.0

Acquisition related charges (within COS) 1.4

Amortization of acquired IP (within COS) 48.7

SFAS 123R impact 1.0

Gross profit 650.8 51.1 599.7

Add back operating impact:


Business integration related expenses 30.9

Purchased in-process research & development 1.0

Relocation and restructuring charges 1.2

Amortization of acquired IP (incl. COS) 63.1

SFAS 123R impact (incl. COS) 9.4

Operating income 252.7 107.0 145.7

Add back net income impact:





Acquisition triggered impairment 2.5

Amortization of acquired intangibles 41.9


Net income 163.3 74.3 89.0


29 % Operating Income Growth (adjusted)

In US$ millions unless indicated Q4 2008 Q4 2007 Growth

Net sales 237.2 210.2 13%

Gross profit 157.5 138.8 13%

Gross profit, adj.1 171.9 151.9 13%

Operating income 40.4 25.0 62%

Operating income, adj.1 66.6 51.8 29%

Net income 24.7 15.0 65%

Net income, adj.1,2 43.7 32.0 36%

EPS (US$ per share) 0.12 0.07 71%

EPS (US$ per share), adj.1,2 0.22 0.16 38%

Fourth Quarter 2008Profit & Loss Statement


2 Including a non-cash tax charge of US$ 0.01 per share from revaluation of acquired tax positions in 2008


In US$ million Reported Guidance ratesChange due to currency

Revenues in US$ 107.5 107.5

Revenues in Euro 57.2 64.3 -7.1

Revenues in JPY 11.8 11.3 +0.5

Revenues in GBP 10.1 12.8 -2.7

Revenues other currencies1 50.6 60.5 -9.9

Total 237.2 256.4 -19.2

Fourth Quarter 2008 Currency Impact Actual to Guidance

Actual

1 = CAD, TRY, SEK, CHF, AUD, BRL, CNY, MYR, SGD, KRW, HKD, BRL, MXN

Approx. -7.5% Foreign Currency Impact on Revenues(using Jan 31, 2008 guidance exchange rates)


Fourth Quarter 2008Adjusted and Reported Figures

In US$ millions unless indicated Adjusted Reported

Net sales 237.2 237.2


Amortization of acquired IP (within COS) 13.2


Gross profit 171.9 14.4 157.5

Add back operating impact:





Amortization of acquired IP (incl. COS) 17.0

SFAS 123R impact (incl. COS) 3.1

Operating income 66.6 26.2 40.4

Add back net income impact:





Amortization of acquired intangibles 12.2


Net income 43.7 19.0 24.7


Americas Europe Asia RoWTotal2008

Total2007 Growth

Production 260 382 57 56 755 650 16%

R&D 111 378 20 20 529 461 15%

Sales 437 392 253 33 1,115 925 21%

Marketing 74 121 19 4 218 229 -5%

Admin 138 209 60 17 424 397 7%

Total 1,020 1,482 409 130 3,041 2,662 14%

Employees December 31, 2008


Appendices Guidance


0.560.63

0.80

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

2006 2007 2008 2009E

in U

SD

0.88-0.94

465.8

649.8

893.0

0

100

200

300

400

500

600

700

800

900

1,000

2006 2007 2008 2009E

in M

US

D

920-970

QIAGEN GroupRevenue and EPS Growth 2006 - 2009

All figures excluding business integration and relocation related charges as well as amortization of acquired IPand equity-based compensation (SFAS 123R). EPS 2007 includes a non-cash tax benefit of US$ 0.02 andEPS 2008 includes a non-cash tax charge of US$ 0.01 from revaluation of acquired tax positions.

CAGR2006-2009 = ~27%

CAGR2006-2009 = ~18%

Revenues

EPS adjusted


R&D as % of salesInvesting in

future growth

S&M as % of salesEfficient sales

structure in place.

G&A as % of salesSynergy increase.

Operating Marginas % of sales

Increase of global instruments share.

QIAGEN GroupIncreasing Operating Efficiencies

10% 11% 9% 8%

25% 25% 25% 24%

9% 10% 11% 12%

26% 25% 28% 29%

2006 2007 2008 2009E

All figures excluding business integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R)


61

60

61

60

2006 2007 2008 2009E

Inventory Days

Receivables-DSO Industry standard 70 days

Managing Working CapitalAnnual Average Key Figures

All figures to be read asannual average.

154

143

147

145

2006 2007 2008 2009E


42

65

97

115

2006 2007 2008 2009E

6%

9%

7%

8%

2006 2007 2008 2009E

CAPEX as % of sales Depreciation & Amortization as % of sales

R&D Expenses (US$m)

QIAGEN GroupR&D and Capital Expenditures

6%

10%

12% 12%

2006 2007 2008 2009E

Dep.

4%

Amr.

8%

Dep.

4%

Amr.

6%

Dep.

4%

Amr.

2%

Dep.

4%

Amr.

8%

*

* Excluding investments in site extension

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090210 Q4FY08 CC [Schreibgesch tzt] · MDx: Mexican SSA launched HPV screening program MDx: QIAGEN...

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