Qiagen N.V.

Ladies and gentlemen, thank you for standing by. I am Cassie, your PGI call operator. Welcome and thank you for joining QIAGEN's third quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. Please be advised that this call is being recorded at QIAGEN's request and will be made available on their internet site. The prepared remarks will be followed by a question and answer session. Please ask only one question. If you would like to ask a question, please press star 1 on your touchtone telephone. Please press the star key followed by the 0 for operator assistance. At this time, I would like to introduce your host, John Gilardi, Vice President, Head of Corporate Communications and Investor Relations at QIAGEN. Please go ahead.

Thank you very much and welcome to all of you to our conference call today. The speakers we have are Thierry Bernard, Chief Executive Officer of Kyogen and Roland Sackers, our Chief Financial Officer. Also joining us is Phoebe Lowe from our Investor Relations Team. Please note that this call is being webcast live and will be archived on the Investors section of our website at www.kyogen.com. Today we have an updated format for this call. We have decided to streamline the prepared comments and want to have more time to address your questions. So we'll first have some remarks from Thierry and Roland, summarizing our results and strategy update, and then move into the Q&A session. A presentation with details on our performance and financial information is available in the IR section of our website, along with the third quarter release. We will not be showing the slides during this call, but you have them as a reference material. Before we begin, let me cover, as usual, our safe harbor statement. This conference call discussion and responses to your questions reflect management's views as of today, November 4, 2021. We will be making statements and providing responses to your questions that state our intentions, beliefs, expectations, or predictions of the future. These constitute forward-looking statements for the purpose of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results that differ materially from those projected. Kaigen claims any intention or obligation to revise any forward-looking statements. For more information, please refer to our filings with the SEC, which are also available on our website. We will also be referring to certain financial measures not prepared in accordance with generally accepted accounting principles, or GAAP. Additionally, all the references to earnings per share refer to diluted EPS. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is available on our press release as well as in the presentation. I would like to now hand over the call to Thierry.

Thank you, John, and welcome to our conference call today. Thank you to everyone for joining. Before I begin, allow me please to first acknowledge the efforts our teams are continuing to make around the world as they balance the volatile demand for COVID-19 testing solution with the return of regular business. Our teams around the world have done an excellent job of effectively managing the shifting demand as the pandemic has progressed and they have responded quickly to the ever-changing needs of the market. It is through the ongoing dedication of all our chirogeners that we have delivered another very strong and clean Q3 quarter. Now on to our key messages for today. First and foremost, we have delivered a solid quarter with strong sales growth and adjusted EPS. As you have seen in our release, net sales grew 10% at constant exchange rates to $535 million. And this is well above our outlook for sales to be at the same level as in the third quarter of 2020. Our results were driven by better-than-expected sales in COVID-19 product groups, but also very strong trends in non-COVID demand. In the past, we have seen these product groups inversely related. As COVID testing increased, demand from products used in regular research and testing was decreasing. However, in the third quarter this year, we saw strong demand for QIAGEN solutions across both areas. and many more. Variant surges and diverse level of vaccinations have contributed to uneven recovery trends across the globe and we are seeing mixed demand coming from the various regions. As we move through the pandemic and COVID testing demands remain volatile, we are focused on executing on the sustainable growth of sales in our non-COVID product groups. So we are extremely pleased with the 17% CER growth delivered by these groups in the third quarter. Those results are again proving that QIAGEN remains relevant but not dependent on COVID-19 testing. Adjusted earnings per share were unchanged in the third quarter compared to the year-ago period at 58 cents at both CER and actual rates. This is way above the outlook for 52 to 53 cents per share CER. If we look at the first nine months of 2021, sales grew 25% at CER. Sales were up 28% at actual rates to $1.67 billion due to positive currency movements of around three percentage points against the U.S. dollars. Non-COVID product group sales grew 27% CER as demand continued to grow steadily throughout the year. Adjusted EPS for the first nine months of 2021 came at $1.88 per share CER again and $1.91 at actual rates. Our second message. Our five pillars of growth continue to perform well as we make good progress on our 21 ambitions. In sample tech, first, substantial demand for non-COVID sample preparation consumables delivered mid-single digit CER growth in the third quarter. This builds on our longstanding leadership in this important first step in any molecular biology lab process. We continue to expand our portfolio of consumables and we continue to launch new instruments to drive sustainable sales in sample tech. The best example this year is the EASID 2 connectivity fully automated sample preparation platform that we are planning to launch this year. On QIAQUITY digital PCR, our system continues to be used in a growing number of applications. An example related to COVID, for example, is wastewater testing in surveillance to the COVID-19 pandemic. Customer response for those systems remains extremely high as we work to further expand our application menu. Quanti-ferron tuberculosis. Our leading test for modern latent tuberculosis testing led our five pillars growth with 48% CER over the same quarter of the prior year. We are therefore extremely confident to at least reach our target of $255 million in $255 million for the year 2021. As you have seen, we continue to complete our portfolio in Quantiferon with the launch of our CAIA-rich Quantiferon TB test. This is a breakthrough test which will enable modern latent TB testing in low resources areas but very high burden, allowing expansion of quantiferon TB to those markets. In quarter three, demand for chiostat syndromic testing system and for pneumotics CoreLab PCR platform remains high, especially for respiratory testing, as multiplex tests are being increasingly utilized for diagnosing influenza-like illnesses as we move into the flu season. As an example, in response to a rising demand for low-plex testing, we have just released the Kyostat Diagnostic Respiratory 4-Plex CE-IVD test to aid in the identification of the common seasonal respiratory infections, flu A and B, RSV, combined with SARS-CoV. For pneumotics, we have just received a U.S. government grant to increase production of COVID-19 test consumables in our Michigan site. All of our five pillars of growth delivered solid sales in the third quarter, and we are on track to deliver on our sales target for 2021. They are all positioned for future growth as they not only serve the continuous need for COVID-19 research, but also enable important non-COVID-related discoveries and diagnostics. We continue to execute on a robust pipeline of menu expansion and new product launches, which puts us on a very strong trajectory to build additional value in our portfolios. Our third message. We maintain a very solid level of profitability in the third quarter and strong cash flow growth during the first nine months of 2021. We are moving forward with investment to accelerate our pillars of growth that are strengthening, of course, our growth prospects. And our final key message for today includes our upgraded outlook for the full year. We have upgraded the 2021 sales outlook to reflect the stronger than expected results for the third quarter. This is very consistent with what we said in July when we removed the volatility of COVID testing demand from our 2021 sales outlook. We are increasingly confident in our full-year target for over 20% CER growth in non-COVID product group and preparing for solid growth beyond the pandemic. With that, I would like to hand over to Roland.