QIAGEN Third Quarter Conference Call October by jennyyingdi

VIEWS: 4 PAGES: 16

									                                         QIAGEN
                               Third Quarter Conference Call
                                     October 29, 2002

              Dr. Metin Colpan, Managing Director and CEO
               Peer M. Schatz, Managing Director and CFO



         Innovation Working for You
           01/15/98
           01/15/98                                         *
                                                            *
Page 1




             Forward Looking Statements
     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).




         Innovation Working for You
           01/15/98
           01/15/98                                         *
                                                            *
Page 2




                                                                                                                    1
             Note



           Note: The following slides contain certain summary information about QIAGEN N.V.’s operating income,
           net income, and earnings per share for the third quarter and first nine month of fiscal 2002, and the
           comparable periods of 2001, which information is presented on a “pro forma” basis rather than in
           accordance with U.S. generally accepted accounting priniciples (“GAAP”). Please review QIAGEN’s
           press release dated October 28, 2002, 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 report on Form 6-K to be filed with the U.S. Securities and Exchange
           Commission.




         Innovation Working for You
           01/15/98
           01/15/98                                        *
                                                           *
Page 3




             Welcome to QIAGEN’s
             Third Quarter Conference Call
                                            October 29, 2002

               Conference Call Outline:
                     - 20 min Presentation
                     - 40 min Q&A session




                                                               Due to time restrictions
                                                               we would like to ask for only
                                                               two questions per caller.



         Innovation Working for You
           01/15/98
           01/15/98                                        *
                                                           *
Page 4




                                                                                                                     2
                QIAGEN‘s product breakdown - worldwide

                             Consumables                                       (Q3 2002)
                             - exceeded Q3 targets           72%
                             - robust growth
                             - positive trends



                                  Others                            10%
                                                       5%                       Instruments
                                  - met Q3 targets           13%                - exceeded Q3 targets
                                  - Gene Therapy
                                                                                - re-acceleration
                                                      Synthetic Nucleic Acids - 7% growth Q3/Q2
                                                      - met Q3 targets          - new products for Q4
                                                      - flat revenues
                                                      - contribute loss
                                                      - Synthetic RNA attractive
         Innovation Working for You
           01/15/98
           01/15/98                                          *
                                                             *
Page 5




                QIAGEN Consumable Business:
                Continuous Strong Growth
                             80                                                            Others
                                                                                           Synthetic DNA
                             70
                                                                                           Instruments
                             60
          World-Wide Sales




                                                                                           Consumables
            US$ million




                             50
                             40
                                                                                           Consumables
                             30
                             20                      Consumables
                             10                         +24%
                              0
                                          Q3 2001                   Q3 2002

         Innovation Working for You
           01/15/98
           01/15/98                                          *
                                                             *
Page 6




                                                                                                           3
             The BioRobot 8000 MDx




                                                               Instruments




  • Lauch of the new clinical BioRobot Generation in Q3 2002
  • ultra-high throughput platform
         Innovation Working for You
           01/15/98
           01/15/98                      *
                                         *
Page 7




                                      BioRobot® M6 (GenoM-6)




                                                               Instruments




         Innovation Working for You
           01/15/98
           01/15/98                      *
                                         *
Page 8




                                                                             4
                Research Budget per Customer Segment




                           NIH Budget
                             Alone




          Innovation Working for You
            01/15/98
            01/15/98                             *
                                                 *
Page 9




                Entering the Next Stage: Functional Analysis

     2001 Discovery Genomics                 2002      Future Functional Genomics
          “Find the Gene”                                     “Understand the Function”

                                                                               Genotyping
                                                                               Clinical
                                                                               QPCR (ABI +21%)
                                                                               Microarray (AFFX +33%)




      pDNA
      from
     Bacteria                                Collection      +   Sample         +    PCR
                                             Stabilization       Preparation
         Sample
                          +     Sequencing
         Preparation                         $ 3.00              $ 3.50              $ 2.00

$ 0.30                                                       $ 8.50
          Innovation Working for You
            01/15/98
            01/15/98                             *
                                                 *
Page 10




                                                                                                        5
              Money Flows

               Academic Markets (>50% of QIAGEN’s customer base)
               • increased market and technology leadership, others exiting
               • budgets intact
               • trend away from sequencing to functional genomics and proteomics
                   very positive for QIAGEN




                   Sequencing                                      Functional Genomics
                   small market for QIAGEN                         substantial market for QIAGEN
                   low challenge on technology                     QIAGEN has substantial technology
                                                                   advantage
          Innovation Working for You
            01/15/98
            01/15/98                                        *
                                                            *
Page 11




              Money Flows
               Customers in Big Pharma (35% of QIAGEN’s customer base)
                                                 Analyst consensus 2003 on Revenue growth: 7%
                                                                   on R&D Budget growth: 5%



               • increased market and technology leadership, others exiting
               •   first indication on 2003 budgets: positive, comparable to 2001 growth rates
               •   contraction seems to be coming to an end
                   -> however, we will not increase guidance on this segment until more visibility
               •   trend away from sequencing to functional genomics and proteomics
                   very positive for QIAGEN
               •   less inclined to add new tools or brands: benefit for established brands: QIAGEN


          Innovation Working for You
            01/15/98
            01/15/98                                        *
                                                            *
Page 12




                                                                                                       6
              QIAGEN reduces Costs

               Customers in Big Pharma (35% of QIAGEN’s customer base)

                                                         QIAGEN Technologies provide
                                                         cost reduction through:

                                                         • reduction of labor time
                                                         • reduction of mistake costs
                      Labor                                    • standardised procedures
                                                               • technology advantage
                                                         • ease of use
                                          Labor
                                                         • highest efficiency with a
                                        QIAGEN
                   Off-the-Shelf                           portfolio addressing more than
                                        products
                    Chemicals                              80 different applications
                Traditional             QIAGEN
                 methods                solutions        • automation solutions

          Innovation Working for You
            01/15/98
            01/15/98                                 *
                                                     *
Page 13




              Money Flows

               Biotech Markets (15% of QIAGEN’s customer base)
                                            Top 10 Biotechnology Companies
                                            represent approximately 45% of total
                                            Biotech R&D Budget


               •     first indication on 2003 budgets positive
               •     trend away from sequencing to functional genomics and proteomics:
                     very positive for QIAGEN
               •     less inclined to add new tools or brands: benefit for standards and well
                     established brands: QIAGEN



          Innovation Working for You
            01/15/98
            01/15/98                                 *
                                                     *
Page 14




                                                                                                7
              Geographic distribution of revenue growth
              Q3 2001 to Q3 2002

    Europe
    Asia
    Other
      35 % Growth
      (25% Growth)


                                                        USA
                                                         11% Growth
                                                              (8% Growth)



          Innovation Working for You
            01/15/98
            01/15/98                          *
                                              *
Page 15




              Geographic distribution of net sales
                 Distributors           6%                     (Q3 2002)
                 Australia        1%

                 Japan            11%



                 UK          6%

                 Switzerland 4%                   US   55%

                   France         3%
                     Italy             1%

                      Germany           8%
                      Canada             2%
          Innovation Working for You
            01/15/98
            01/15/98                          *
                                              *
Page 16




                                                                            8
              QIAGEN adjusted Third Quarter Revenues

                   Reported                             77       63    22%
                     Consumables                        55       44    24%
                     Instruments                         8        8     1%
                     Synthetic Nucleic Acids            10        8    19%
                     Other                               4        3    25%

                   Adj. for Sept 11 (est.)              77       70     11%
                   Acquisition adj                      75       70      8%
                      Consumables                       54       46     17%
                      Instruments                        8       10    -17%
                      Synthetic Nucleic Acids           10       11     -9%
                      Other                              4        3      9%


          Innovation Working for You
            01/15/98
            01/15/98                             *
                                                 *
Page 17




              QIAGEN Revenue Growth by Customer Group
              in the United States Indicate Recovery


                                                Q3 2002      Q3 2001   Growth


               Revenues ($ million)              41.4         37.3       11%

                    Academic Research            23.2         20.1       15%
                    Pharmaceutical                7.9          7.5        5%
                    Biotech                      10.3          9.7        6%




                * All figures are estimates!

          Innovation Working for You
            01/15/98
            01/15/98                             *
                                                 *
Page 18




                                                                                9
              QIAGEN Third Quarter 2002

                                               Q3 2002        Q3 2001          Growth

               Revenues ($ million)             76.9            63.3                21%
               EBIT margin (%)                  17.0            16.0                 6%

               Operating Income ($ million)      12.9           10.1                28%
               Net Income ($ million)             7.3            6.2                18%

               EPS                              $ 0.05          $ 0.04              25%
               WA Number of Shares              146.0           144.9




          Innovation Working for You
            01/15/98
            01/15/98                            *
                                                *
Page 19




              QIAGEN Reported vs. Guidance


                          Guidance July 02     Actual     comment
      Revenues (US$m)                  74-76        77

      GM (%)                           ~67%      66%      higher instrument sales

      Operating Expenses               ~49%      49%      absolute number in US$ reached
      EBIT (%)                         ~18%      17%      impact of lower GM


      Net Income                       ~10%     9.5%      Impact of lower "Other" due to forex
      WA Shares (Millions)              145         145
      EPS (US Cents)                     5-6         5




          Innovation Working for You
            01/15/98
            01/15/98                            *
                                                *
Page 20




                                                                                                 10
              QIAGEN Nine Months 2002 *)

                                                                    9M 2002                9M 2001               Growth

               Revenues ($ million)                                   220.2                   192.5                14%
               Operating Income ($ million)                            40.9                    39.3                 4%
               Net Income ($ million)                                  23.6                    24.1                -2%

               EPS                                                    $ 0.16                  $ 0.17               -6%
               WA Number of Shares                                    145.8                    145.0

               Employees (approx.)                                    1,675                   1,552                 8%
               Cash, Marketable Securities
               ($ million)                                             63.7                 34.6


              (* figures excluding one-time charges related to the acquisitions of Genovision A.S.
                and Sawady Group of companies in 2002 as well as a gain on sale of a FA in 2001)

          Innovation Working for You
            01/15/98
            01/15/98                                                   *
                                                                       *
Page 21




              Employees September 30, 2002


                       US/                                                                                         Q3
                       Can        Ger UK           F Nor CH Aus                   JP NL Italy            Total   2001 Growth
  Production            174       303                       2 47                   23                     549      442     24
  R&D                    23       215                       9 29                                          276      267      3
  Sales                 213       139 38 24                   17           12      41                5    489      422     16
  Marketing              57        50     1                 4  4                    6                1    123      137    -10
  Admin                  93       105  4 5                  1 11             4      9     4          2    238      235      1

  Total                 560       812 42 30               16 108           16      79     4          8   1675    1503     11




          Innovation Working for You
            01/15/98
            01/15/98                                                   *
                                                                       *
Page 22




                                                                                                                                11
              Operating costs still high but big potential to
              Operating margin improvement

                                            9 months
                                            2002                         Operating costs
                                            Revenues        Growth YoY   as % of Revenues
                   ABI                              395.9          8%             29%
                   AFFX                              72.8         31%             57%
                   IVGN*                            323.1          5%             36%
                   MIL                              518.4          6%             39%
                   SIAL                             910.7          9%             30%
                   PerBio                           179.6         19%             27%
                   Average                          400.1         13%             36%

                   QGENF                            220.2         14%             49%

             * Only Molecular Biology Business Segment



          Innovation Working for You
            01/15/98
            01/15/98                                          *
                                                              *
Page 23




              Operating Margin improvement over next Quarters

             140                                                                   25%      Fixed Cost
                                                                                            Revenues
             120                                                                            Operating Margin
                                                                                   20%
             100

                                                                                   15%
              80


              60
                                                                                   10%

              40
                                                                                   5%
              20


               0                                                                   0%
                        Q4 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003


          Innovation Working for You
            01/15/98
            01/15/98                                          *
                                                              *
Page 24




                                                                                                               12
                                        QIAGEN Operating Margin improvement

                                        80
     Operating costs as % of Revenues




                                        60



                                        40



                                        20



                                         0
                                             1995   1996   1997   1998   1999       2000   2001 2002E 2003E

                            Innovation Working for You
                              01/15/98
                              01/15/98                                          *
                                                                                *
Page 25




                                        New production and office site in Hilden, Germany




                            Innovation Working for You
                              01/15/98
                              01/15/98                                          *
                                                                                *
Page 26




                                                                                                              13
              Strategic Options in Oligonucleotide Business



                        - Sell          ?

                        - Partner                 ?

                        - Keep and make profitable                     ?


          Innovation Working for You
            01/15/98
            01/15/98                                     *
                                                         *
Page 27




              Reorganisation proposed by Deutsche Börse

             Segments and Indices

                                         DAX

                                                             High Reporting
                                                               Standards
                                 Prime        Prime
                                Classical   Technology



                                       Domestic              Low Reporting
                                                               Standards




          Innovation Working for You
            01/15/98
            01/15/98                                     *
                                                         *
Page 28




                                                                              14
                              Reshaping the cash market
                              Strengthen investors confidence - highest European disclosure level




                                                                  INVESTOR
                            One Market                                        Strengthen investors confidence
                               Prime Standard                                 Clear and simple, lower monitoring
                               adopts NM role model for all                   costs
   Level playing fields




                               companies with international                   Prime standards allows selection
                               aspirations (Quarterlys,                       indices on clear regulatory level
                               international accounting)                      playing field




                                                                  DBAG
                                                                              Separates public function (regulator)
                                                                              from DBAG business operations
                                Standard                                      Issuers choose disclosure level
                                low cost listing alternative                  according to their financial needs
                                accounting to German              ISSUER      Clear and simple, lower signalling
                                Exchange Act                                  costs



   Source: Deutsche Börse

                          Innovation Working for You
                            01/15/98
                            01/15/98                               *
                                                                   *
Page 29




                              Implications for QIAGEN

                           we believe very positive
                           • QIAGEN trades alongside companies such as Bayer, Daimler and Siemens
                           • high listing standards of Neuer Markt expand into all Prime segments
                           • Fundamentals and industry focus, not trading platform focus
                           • Neuer Markt was not a meaningful benchmark any more, remaining
                              Neuer Markt-indexed funds should already have readjusted by now


                           QIAGEN intends to apply for addition to Prime Segment



                          Innovation Working for You
                            01/15/98
                            01/15/98                               *
                                                                   *
Page 30




                                                                                                                      15
              Highlights Third Quarter 2002
              • New production and office site
                in Hilden, Germany
              • PreAnalytiX Supply Agreement with GlaxoSmithKline
              • Supply Agreement expansion with Affymetrix
              • Launch of the
                     • new exciting clinical BioRobot MDx generation
                     • BioRobot M product line
                     • SensiChip platform
                     • LiquiChip platform
                     • first siRNA cancer oligo Set
               •
          Innovation Working for You
            01/15/98
            01/15/98                             *
                                                 *
Page 31




                                                                       16

								
To top