Qiagen N.V.

Thank you, Katie, and welcome all of you, and thank you for joining our call today. The speakers are Terry Bernard, our Chief Executive Officer, and Roland Sackers, our Chief Financial Officer. Also joining us today is Phoebe Lowe from the IR team. Please note that this call is being webcast live and will be archived on the investor section of our website at www.kyogen.com. Today we will first have some remarks from Terry and Roland, and then move into the Q&A session. A presentation with details on our performance is available in the IR section of our website, along with the quarterly release. We will not be showing the slides during this call, but we encourage you to review the slides in conjunction with the discussion. Before we begin, let me cover, as usual, our safe harbor statement. This call discussion and responses to your questions reflect the views of management as of today, February 8, 2023. We will be making statements 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. KYGEN disclaims any intention or obligation to revise any forward-looking statements. For more information, please refer to our filings with the U.S. Securities and Exchange Commission, and these 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. All references to EPS refer to diluted EPS. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in our press release and presentation. With that, I'd like to now turn over the call to Terry.

Thank you, John, and obviously welcome everyone and a big thank you all for joining us. We are pleased to report a solid close to the year with a performance in the fourth quarter of 2022 that again exceeded our outlook. Our teams at QIAGEN are doing a great job in showing their capabilities to proactively respond to new developments with agility and to execute successfully in a volatile environment. As a very important point before we move on, Our quarterly report including the news that Rick Bright has been appointed as a new member of the Scientific Advisory Board of QIAGEN. As many of you may know, Rick is an American immunologist who is an expert in vaccine, drugs, and diagnostic development with a significant public health track record. We are pleased to add his deep expertise to our team of advisors. let me go through the top messages for today. First, we exceeded our outlook for net sales growth and adjusted EPS, both for the fourth quarter and for the full year 2022. Once again, the primary driver was double-digit CER sales growth in our non-COVID product groups, and 75% of the outlook beat for both the fourth quarter and full year 2022 came from sales in non-COVID product groups, while sales for product use in COVID testing declined as expected for both the fourth quarter and the full year over the 2021 period. Net sales for the fourth quarter were $531 million at CER, and exceeded our outlook for at least $520 million sales. Our non-COVID product groups delivered 15% CER growth over the fourth quarter of 21 and represented 87% of our total sales. For the full year 2022, we also exceeded our outlook for net sales, with results of $2.26 billion at CER. This was above our outlook for about $2.25 billion. Our non-COVID business performed well throughout the year with 14% CER growth for 2022. Sales of products used in COVID testing, as expected, declined significantly and finished the year at $498 million CER compared to $704 million in 2021. Adjusted earnings per shares for the fourth quarter were 55 cents CER, above the outlook for at least 50 cents CER. For the full year 2022, adjusted EPS was $2.46 CER, and this was also above the outlook for about $2.40 per share at CER. Roland will later cover the results at actual rates, and as you saw in the press release, this impacted by significant currency headwinds. Our second key message. Our teams executed on key goals in 2022, to advance our sample-to-insight portfolio. We are very pleased to report that all five pillars of growth exceeded their respective sales goals. Our three new platforms, KayaStat Diagnostics, Numodics, and KayaQuity, all achieved the goals we set for instrument placements. We also saw solid demand trends for consumables and instruments in our sample technology portfolio. Our quantiferon franchise continued to grow and broke through the milestones of $300 million of annual sales and exceeded the 2022 target as well. I will later walk you through an update on the 2022 achievement later. As a third key takeaway message, our cash flow continued at a high level for the year, allowing us to invest into the business to increase shareholder value. Operating cash flow for 2022 rose 12% to $715 million, while free cash flow increased 30% over 2021 to $586 million. Those results highlight our ability to generate strong cash flow while investing to support our growth ambitions as part of a very disciplined capital allocation strategy. A prime example is the recent acquisition of Verogen. QIAGEN, as you know, has been very active in human identification for the last 20 years, primarily thanks to our sample technologies portfolio. Adding Verogen means that we are creating the most complete workflow, from sample prep to genomic analysis for human identification and forensics based on next-generation sequencing. This is really the type of merger and acquisition that we are focusing on, deals that are extremely synergistic with our portfolio and enhance our growth profile. Lastly, we have taken a prudent approach to our outlook for 2023, given the macroeconomic trends while continuing to expect double-digit CER sales growth in the non-COVID portfolio. For 2023, we expect sales of at least $2.05 billion at constant exchange rates and for adjusted EPS of at least $2.10 CER. We continue to feel confident in achieving the double-digit CER growth target for our non-COVID product groups for the new year 2023, while also planning for a significant decline in COVID-19 sales. We also recognize the volatility of the current environment and the impact it can have on some parts of our business. So while we recognize this ongoing volatility in the market, we are confident in this outlook for the full year 2023. Our teams all over the world are ready to again deliver on our full year goals with a great portfolio. a solid pipeline of instruments and customer knowledge to support our growth ambitions. I would like now to hand over to Roland for a review of our financial performance for the year 2022.

Thank you, Thierry. Hello, everyone, and thank you for me as well for joining us today. Let me start with a review of our results for the fourth quarter and the full year 22, and then move on to the outlook later in the call. For the fourth quarter, net sales were $498 million at actual rates. This results over the year ago period represented a 14% decline at actual rates due to the expected currency headwinds of about 5 percentage points. In the fourth quarter, we again saw better than expected growth in our non-COVID product groups with these sales up 15% CER over the year ago period. For the full year 2022, non-COVID sales were up 14% CER and in line with our outlook for double-digit CER growth. As expected, sales from the COVID product group declined over 60% CER from the first quarter of 2021 and were also down about 30% for the full year to US$470 million at actual rates. Consumables and related revenues fell 11% CER in the fourth quarter over the year-ago period, showing the impact of the decline in COVID-19 product sales. Instrument sales were much stronger in the fourth quarter of 2022, rising 6% CER. This shows the traction our new systems are gaining in the post-pandemic environment. In terms of sales among the four product groups, let's start with sample technologies. This product group represents the heart of our portfolio and contributes about one-third of total sales. This product group continued the trend of solid growth in non-COVID sales throughout 2022 and this sales rose at high single-digit CR rate in the fourth quarter over the year-ago period. For 2022, Non-COVID sales in this product group rose at a mid-single-digit CR rate and represented a large majority of full-year results. This result exceeded the 2022 overall sales target for at least $750 million at CER. Diagnostic Solutions is our second product group and represented about one-third of sales in 2022. The key driver in this group was the Quantiferon franchise. These sales rose 15% CER in the fourth quarter in all regions and supported the 21% CER growth for the full year over 21. This led to our teams exceeding the full year sales goal for at least 310 million US dollars at CER. We also reached a milestone for Quantiferon in 22 surpassing $2 billion of accumulative sales since acquisition in 2011. For Kayastat DX, we continue to see increasing demand for system placements and growing consumables usage around the world. More than half of the Kayastat DX sales in 22 came from the healthy non-COVID demand. Full year sales for Kayastat DX exceeded the target for at least 85 million US dollars at CER. For NeumodX, the decline in sales for 22 reflected the fact that about two-thirds of sales came from COVID-19 testing. However, NeumodX sales still exceeded the 22 target for at least 80 million dollars at CER and driven by sequential quarterly growth in non-COVID applications from the third quarter to the fourth quarter of 22. In the PCR Nucleic Acid Amplification product group, which represents more than 15% of total non-COVID product group sales rose about 20% CER compared to a significant decline in the COVID-19 product groups. Chiacuity is our entry into digital PCR and is included in this product group. These sales grew at a strong double-digit CER pace for both. the fourth quarter, and the full year, as full-year sales exceeded the 2022 target for over $55 million at CER. A key driver was the ongoing solid placement trends that reached over 1,300 total placements at the end of 2022. We also saw increasing consumer sales, which was supported by the recent launch of new assets for biopharma customers. In the Genomics NGS product group, which represents more than 10% of the total non-COVID product group, sales were also higher over the fourth quarter of 2021. This performance was led by our QIAGEN digital insight bioinformatics business and the expansion of our offering in terms of universal NGS for use with any sequencer. Looking at sales on a geographic basis, All three regions had lower sales in the fourth quarter of 22 over the year-ago period and also in most regions on a full-year basis for 22. This was due to the significant decline in COVID-19 sales. However, all three regions had solid non-COVID sales growth trends at constant exchange rates. In the Americas, non-COVID product group sales in the fourth quarter rose more than 10% CER over the year-ago period and led by solid gains in the US. In the Europe, Middle East, Africa region, it was a similar situation with non-COVID product group sales rising over 20% CER. The top performing countries in terms of non-COVID sales included Germany, France, Spain, and the United Kingdom. In the Asia Pacific Japan region, sales in the non-COVID product groups rose about 7% CER in the fourth quarter, and we are also up 8% CER for the full year over 2021. Sales in China rose in 2022, and this is a big achievement by our teams, given that the country was essentially in lockdown during most of the year. This was driven by sales of sample preparation kits, OK, now it seems better again. OK. Sales in China rose in 22, and this is a big achievement by our teams, given that the country was essentially in lockdown during most of the year. This was driven by sales of sample preparation kits and enzymes in the first half of the year related to the COVID environment. We continue to closely monitor the situation as the local market landscape evolves. For the rest of the income statement, I would like to focus on results for the full year of 2022. The adjusted operating income margin was 30.6% of sales in 2022 compared to 33.5% in 2021. This was mainly due to our decision to accelerate investments into the business to support further growth opportunities. Turning to the components, the adjusted cost margin was 67.7% of sales in 2022, down slightly from 67.9% in 2021. The trends for 22 included favorable margin developments for Kyastat DX due to higher utilization and improvements in cartridge production. At the same time, we have opportunities to improve the gross margin, in particular by driving better utilization of production capacity. R&D investments rose to 8.9% of sales from 8.4% in 21 as we continue our investments during 22, especially into new tests for our systems. Sales and marketing expenses rose in 2022, reaching 22.1% of sales compared to 20.3% in 2021. The 2022 results reflected a higher level of commercialization activities after the slowdown during the pandemic, as well as incremental investment into the five pillars of growth in light of the strong non-COVID sales trends. In terms of general administrative expenses, These rose slightly to 6.1% of sales from about 5.7% in 2021 as we are seeking efficiency gains while making significant investments into our IT infrastructure and cybersecurity. Adjusted EPS for 2022 was $2.46 at CER and above the outlook for at least $2.40 CER. Results at actual rates were $2.38 due to the strong currency headwinds. The adjusted tax rate for 2022 was 18% and at the same level as in 2021. Turning to cash flow for full year 2022, operating cash flow rose 12% over 2021 to $750 million thanks to the solid business expansion. Free cash flow rose at a faster 30% pace to $586 million. This was due to a combination of the higher operating cash flow along with a reduction in the level of purchases of property, plant, and equipment after a period of higher levels in 2020 and 2021. These investments fell to 6% of sales in 22 from 8.4% in 21. In terms of our balance sheet, Our total consolidated net debt stood at $443 million at the end of 2020 compared to $876 million at the end of 2021. This reflects the solid cash flow trends while at the same time repaying debt at maturity. As a result, our leverage ratio stood at 0.5 times net debt to adjusted EBITDA at the end of 2022 compared to 0.9 times at the end of 2021. In terms of capital deployment, we continue to take a disciplined approach that has served us well. We are using our healthy balance sheet to strengthen our business through investments and targeted M&A, while also considering ways to increase returns through share repurchase programs. In terms of M&A activities, we have completed two bolt-on acquisitions recently. This involves the purchase of blood in 2022 to further develop our enzyme production capabilities and the acquisition of VeroGene in January of this year to advance our human identification and forensic capabilities. We continue to review additional acquisition opportunities with a keen focus on strategic fit and financial discipline in terms of prices. We are also reviewing ways to increase returns through share repurchase programs and will consider these options as the year progresses. I would now like to hand back to Thierry.