QIAGEN Sample and Assay Technologies DRKW German Investment Seminar New York, January 13, 2009 Roland Sackers Chief Financial Officer - 1 -
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, 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 over a specific period and the comparable period, 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 releases 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 -
Intro Complex sample Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, 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, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, trna, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, DNA, Complement components, Nuclei, Rough endoplasmatic reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, 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, Transferrin, Fibrinogen, Serum albumin, trna, Salts, Polymerases, Centrioles, DNA, 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, 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, DNA, Hemaglobins, Heptaglobins, 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, 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, Talin,... Sample Technologies Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, 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, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, trna, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, DNA, Complement components, Nuclei, Rough endoplasmatic reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, 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, Transferrin, Fibrinogen, Serum albumin, trna, Salts, Polymerases, Centrioles, DNA, 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, 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, DNA, Hemaglobins, Heptaglobins, 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, 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, Talin,... Pure Analyte DNA Assay Technologies Target Detected Yes No Information - 3 -
QIAGEN at a Glance Intro Revenues: 2007: $ 650 million 04 07 CAGR: 22% Net income: 2007: $ 112 million 04 07 CAGR 24% 1 EPS: 2007: $ 0.63 04 07 CAGR: 17% 1 Product Range: >500 consumable products Sample technologies: to collect, separate, purify, isolate, stabilize and store samples Assay technologies: to make such isolated target information (DNA, RNA, proteins, etc.) visible Instrumentation for above consumables Customers (>400,000) Academic research Pharma/Biotech Applied Testing (veterinary, forensics, biodefense etc.) Molecular Diagnostics IP (08/07): >1 500 patents (550+ issued, 480+ pending, 500+ licensed) Employees: >3 000 employees based > 30 subsidiaries 1 excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) - 4 -
Sample and Assay Technologies Intro Technology Leadership Sales Strength MDx Appl. Testing Pharma Biomedical Research Inside Sales E-commerce M A R K E T S Growth Drivers Financials 280.000 260.000 240.000 220.000 200.000 180.000 160.000 140.000 120.000 100.000 80.000 60.000 40.000 20.000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001-5 -
Sample and Assay Technologies Technology Leadership Technology Leadership Sales Strength MDx Appl. Testing Pharma Biomedical Research Inside Sales E-commerce M A R K E T S Growth Drivers Financials 280.000 260.000 240.000 220.000 200.000 180.000 160.000 140.000 120.000 100.000 80.000 60.000 40.000 20.000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001-6 -
QIAGEN Sample Technologies Enabling Access to the Content of Any Biological Sample Technology Leadership Any Biological Sample Any Application Any Analyte - 7 -
QIAGEN Assay Technologies Read-out of Content of Any Biological Sample Technology Leadership Molecular Diagnostics gdna Integrated systems (QIAsymphony) QIAxcel LiquiChip RotorGene QIAensemble Applied Testing Pharma Any Analyte RNA pdna vna Detection on Automated Platforms Proteins Others (rt)pcr Multiplex WGA HC HDA RNAi Methylation analysis Sample Technologies Life Science Research Information read-out - 8 -
QIAGEN Consumables Manual use or Automated on QIAGEN Instruments Technology Leadership Consumables Instruments Sample Technologies - Forensics - Clinical 50 cm 5 cm - Everywhere - Pharma Assay Technologies - Molecular Diagnostics 20 cm - 9 -
QIAGEN Technology and Innovation Leader Technology Leadership R&D at QIAGEN: Approx. 11% of sales >500 employees in R&D Germany, U.S., Switzerland, Singapore and China Chemistry, biology, physics, engineering and others Fast, proven innovation cycles: 4-5%-points of sales growth comes from new products launched in last 12 months - 10 -
QIAGEN has Significant Marketing and Sales Power Sales Strength Technology Leadership Sales Strength MDx Appl. Testing Pharma Biomedical Academia Inside Sales E-commerce M A R K E T S Growth Drivers Financials 280.000 260.000 240.000 220.000 200.000 180.000 160.000 140.000 120.000 100.000 80.000 60.000 40.000 20.000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001-11 -
Significant Sales and Marketing Power Sales Strength Europe Approx 34% of Sales Sales and Marketing Force: 493 America Approx 51% of Sales: Sales and Marketing Force: 486 Asia Approx 9% of Sales Sales and Marketing Force: 265 S P E C I A L I S T S Channels MDx Appl. Testing Pharma Biomedical Research Inside Sales E-commerce M A R K E T S > 1,250 Sales and Marketing Professionals - 12 -
Revenue Distribution Third Quarter 2008 Sales Strength By Product Groups By Geographic Regions Sample and Assay Technologies 26% growth 23% growth CER America 28% growth 28% growth CER Europe 21% growth 14% growth CER 86% 51% 34% 13% 9% Others CER = Constant Exchange Rates Instruments 88% growth 83% growth CER RoW Asia 27% growth 20% growth CER - 13 -
Organic Growth Drivers Third Quarter 2008 Sales Strength US$ M 250 ~ 13% ~ 4% ~31% 200 ~ 2% ~ 7% ~ 5% 150 Organic Growth 14% (HPV 20%, MDx overall comparable) 1000 Revenues Q3 2007 Price Volume New products Acquisitions Exchange rates Revenues Q3 2008 Industry Leading Organic Growth - 14 -
QIAGEN is Addressing Key Growth Markets Growth Drivers Technology Leadership Sales Strength MDx Appl. Testing Pharma Biomedical Research Inside Sales E-commerce M A R K E T S Growth Drivers Financials 280.000 260.000 240.000 220.000 200.000 180.000 160.000 140.000 120.000 100.000 80.000 60.000 40.000 20.000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001-15 -
Disseminating Technologies Into Four Markets Growth Drivers Molecular Diagnostics Applied Testing Pharma Life Science Research SAMPLE Technologies ASSAY Technologies Product and Technology Continuum - 16 -
Leading Position Multiple Growth Drivers Growth Drivers Molecular Diagnostics Applied Testing Pharma Life Science Research ~45% of sales Sample Technologies PCR assays OEM HPV ~7% of sales Veterinary Forensics Bio defense Food Testing ~20% of sales Discovery Development ~$28% of sales Public Private SAMPLE Technologies ASSAY Technologies Product and Technology Continuum - 17 -
Current Developments in Target Markets Growth Drivers Academia (approx. 28% of revenues*) Stable/positive outlook for 2009 in US and EU No short term reprioritization expected Fiscal stimulus initiatives emphasize research Pharma/Biotech (approx. 20% of revenues*) Discovery: blue sky research Development: Phases I and thereafter Molecular testing: reducing risks = reducing costs Applied Testing (approx. 7% of revenues*) Stable government demand (forensics and vet) Quality control in food production and life stock reduces costs MDx (approx. 45% of revenues*) Early detection reduces costs MDx is transforming a US$30 billion market HPV market only 25% penetrated in US, only 6% in EU * Nine months revenue breakdown by customer group including Corbett Economically Robust Markets - 18 -
Leading in Molecular Diagnostics Growth Drivers Sales in MDx: approx. 45% of sales #1 (excluding blood banking and viral load monitoring) Sample technologies: proven standard Molecular Diagnostics Assay technologies: unparalleled breadth (>120 assays) PCR and real-time PCR assays Multiplexing leader: QIAplex Leading in key assay areas (HPV) Broad platform base Regulated portfolio global and growing 5 FDA (PMA approved or 510k cleared) products 38 CE-marked assays, 6 CE-marked sample preparation products 9 SFDA approved assays 98 general purpose reagents - 19 -
Global In Vitro Diagnostics Market By Segment (2006E) Growth Drivers In Vitro Diagnostics Estimated market volume: ~US$ 33B (2006) CAGR 2006 2010: 7% Molecular Diagnostics Estimated market volume: ~US$ 2.4 billion (2006) CAGR 2006 2010: 17% Hematology CAGR 3.9% Other CAGR 3.5% Immuno-assays CAGR 4.7% Clinical Chemistry CAGR 2.6% Molecular Diagnostics US$ 2.4B CAGR 17.0% Blood banks Others Viral Infections Microbiology CAGR 5.7% Blood Glucose CAGR 11.5% Oncology Genetic Testing Non-Viral Infections Hemostasis Coagulation CAGR 10.2% Point of Care CAGR 10.9% MDx: Fastest Growing Segment in In-Vitro Diagnostics Note: IVD market estimates vary by source and range between ~$29B $35B Source: RBC Capital Markets, Nature Biotechnology (August 2006), Digene internal reports, Recap, Kalorama, BioCentury, L.E.K. Analysis - 20 -
Significant Untapped Potential for HPV Testing Growth Drivers Increased global awareness of the link between HPV and cervical cancer U.S. Current tests: ~ 8.4M Penetration: ~ 22% Europe Current tests: ~ 2.0M Penetration: ~ 6% Accelerated adoption into medical guidelines Vaccine campaigns promote awareness New genotyping tests expand market to include HPV positive patients Significant untapped potential within developing countries Infrastructure + breadth of combined offering key Asia/Latin America: Current tests: 0.9M Penetration: ~ 3% Europe ~ $350M Asia/Latin America ~ $280M U.S. ~ $490M Total: >$1.1 billion Market penetration based on number of Pap Smear Tests performed Substantial Growth Potential - Increasing Awareness - 21 -
K-ras: An Emerging Blockbuster in Theranostics Growth Drivers K-ras: Key element in normal cell growth pathway Critical element for EGFR inhibitor drugs First EGFR inhibitor drugs for colon cancer >140 trials ongoing for EGFR inhibitors K-ras gene often mutated (leads to resistance) Lung cancer 15% - 20% Pancreas cancer up to 90% Colon cancer 35% - 45% Therefore: need for theranostic tests! Current market: Colon/rectum cancer: >1 million incidences, 50% mortality Some laboratory developed tests Some other tests in Europe using PCR The QIAGEN test based on pyrosequencing: Identifies known and unknown mutations Covers key mutations in several key gene sections Easy set up Very fast direct signal Can add more gene mutations related to the pathway - 22 -
QIAGEN Strong Financial Base Exciting Model Financials Technology Leadership Sales Strength MDx Appl. Testing Pharma KAM Biomedical Research Inside Sales E-commerce M A R K E T S Growth Drivers Financials 280.000 260.000 240.000 220.000 200.000 180.000 160.000 140.000 120.000 100.000 80.000 60.000 40.000 20.000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001-23 -
Revenues 2004 2008E Financials US$ millions 900 800 700 600 500 400 300 200 CAGR 2004-2007 = 22% 100 2004 2005 2006 2007 2008E Revenues excluding the synthetic DNA business unit, sold in Q2 2004 Expected revenues for 2008 based on January 31, 2008 FX rates QIAGEN Continuous Double Digit Revenue Growth Rates - 24 -
Net Income 2004 2008E Financials 170 160 150 140 130 120 110 100 EPS Adj. US$ millions 90 80 70 60 50 CAGR 2004-2007 = 24% 2004 2005 2006 2007 2008E US$ 0.39 US$ 0.46 US$ 0.56 US$ 0.63 US$ 0.79- US$ 0.80 All figures excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) QIAGEN Strong Earnings Engine - 25 -
Third Quarter 2008 Key Performance Metrics Financials Guidance 1 Feb. 12, 2008 Reported Net sales (US$ M) 225-230 231 exceeded 2 EPS, adj. (US$) 3 0.19-0.20 0.21 exceeded 1 based on January 31, 2008 foreign currency exchange rates 2 US$ 232 million using January 31, 2008 foreign currency exchange rates 3 adjusted figures exclude acquisition, integration and relocation related charges, amortization of acquired intangibles and equity-based compensation (SFAS 123R) Exceeded on Revenue and EPS Guidance - 26 -
Third Quarter 2008 Cash Flow and Balance Sheet Key Figures Financials In US$ millions unless indicated Q3 2008 Q3 2007 Net income (loss) 20.8 (7.3) Depreciation & amortization 28.1 19.8 Purchased in-process R&D 0.8 25.9 Others, net (18.2) (10.8) Operating cash flow 31.5 27.6 Capital expenditures (11.3) (8.9) Free cash flow 1 20.2 18.7 In US$ millions unless indicated As of 9/30/2008 Cash and cash equivalents 326 Net debt 658 Near term payment obligations (next 12 months) 25 Equity ratio 51% Net debt / EBITDA, adj. ratio 2.3 1 Free cash flow computed using net cash from operating activities less capital expenditures - 27 -
Solid Financial Position Financials Cash distribution Conservative investment approach Strong bank group Debt positions No need for near-term debt re-financing Long-term debt matures 2011-2013 Currency exposure P&L naturally US$/Euro hedged Interest rate coverage Attractive spreads locked in in 2007 Natural hedge on floating interest rates Floating interest for excess debt (US$200 M) swapped for fixed rates Conservative Investment and Hedging Strategy - 28 -
Key Investment Considerations Summary Leading, focused: sample and assay technologies Strong financial performance Strong organic growth rate Proven innovation leadership in industry Successful acquisition track record Core competency drives growth opportunities MDx Pharma<->MDx Applied Testing Leading catalytic acquisitions to expand: Sample and assay technology leadership Regional footprint - 29 -