Qiagen N.V.

Ladies and gentlemen, thank you for standing by. I am Katie, your PGI call operator. Welcome and thank you for joining QIAGEN's Q2 2023 Earnings Conference Call Webcast. At this time, all participants are in a listen-only mode. Please be advised 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. If you would like to ask a question, you may press star followed by one on your touchstone telephone. Please press star key followed by zero 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, operator, and welcome to all of you, and thank you as well for joining this call. We appreciate your interest in QIAGEN. Our speakers today are Terry Bernard, our Chief Executive Officer, and Roland Sackers, our Chief Financial Officer. We also have Phoebe Lowe from the investor relations team here with us. This call is being webcast live and will be archived on the investor section of our website at www.kygen.com. You can also find a copy of the quarterly results press release and presentation on our website. We'll begin as usual with remarks from Terry and Roland and then have a Q&A session. Before we start, let's briefly go over our safe harbor statement. The views expressed during this conference call and the responses to your questions represent perspectives of management as of today, August 9, 2023. We will be making statements and providing responses to your questions that convey our intentions, beliefs, expectations, or predictions for the future. These forward-looking statements fall under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. They involve risks and uncertainties, and actual results may differ materially from those suggested by these forward-looking statements. Factors that could influence results are mentioned in our filings with the U.S. Securities and Exchange Commission. These filings are also available on the SEC's website and also our own website. KYGEN disclaims any intention or obligations to update any forward-looking statements. Additionally, we will be referring to certain financial measures not prepared following generally accepted accounting principles or GAAP. All references to EPS refer to diluted EPS. You can find the reconciliation of these nine gap financial measures to the most directly comparable gap measures in our press release and the presentation. I'd like to now hand over the call to Terry.

Thank you, Joan. And hello, good morning, good afternoon, or good evening, depending on where you are in the world, to all of you. And thank you for joining us. We are very pleased to report today our very solid results for the second quarter of 2023. As you have already heard from other companies this quarter, we are operating in an uncertain macro environment. Therefore, we are especially pleased with how our teams have remained focused and dedicated to executing on our goals. Our results are another confirmation of the strength and resilience of our business, the depth of experience and knowledge in our teams, and our agility in navigating through a dynamic environment. Now let me go to the top messages for today. First, we achieve our outlook for net sales growth and adjusted EPS for the second quarter, driven by strong sales in the base business. Net sales were $497 million at constant exchange rates and exceeded our outlook for at least $490 million. We saw some softness in capital spending for instrumentation. However, remember that our business is heavily weighted towards highly recurring consumables revenues. Over 85% of QIAgen sales are coming from high-margin consumables and related revenues. We saw 10% CER growth in non-COVID consumable sales with resilient broad-based demand across both customer classes, life science, and clinical diagnostics. In terms of profitability, adjusted earnings per share were 52 cents CER, which was above the outlook for at least 50 cents CER. Second key message. Our key pillars of growth progressed well in driving our base business. To call out just a few. Our market-leading quantifier on latent TB test delivered another outstanding quarter, generating 27% CER growth and crossing a significant milestone with quarterly sales rising above $100 million for the first time. we continue to see a very healthy conversion trend from the tuberculin skin test. This has clearly accelerated since the pandemic due to the benefits of Quantiferon requiring only one visit with a simple blood draw as opposed to two visits to a medical professional with a traditional skin test. The QIAstat syndromic testing platforms also did very well this quarter, with a solid increase in consumable cells for non-COVID applications. Our team did a great job in achieving a higher number of new placements over the second quarter of 2022. Another example is the QIAquity digital PCR system, which continued to benefit from increasing demand in the life science market, with significant sales growth in the second quarter. This was driven by both the growing demand for consumables and an ongoing high level of instrument placement. Third message. We saw a solid operating margin improvement in the second quarter while continuing to make important investments. Our adjusted operating income margin in the second quarter was 27.4%. We achieved this level while investing around 10% of sales into research and development, which is important, obviously, to create new relays of growth and support our midterm ambitions. And finally, fourth message, we are revising our full year outlook for 2023 to reflect the significant drop-off in COVID testing and the volatility in our OEM business which is driven by large-scale bulk orders. This is against the backdrop of a challenging macro environment. Our new outlook for net sales is for at least $1,970,000,000 CER, while the outlook for adjusted earnings per share is now set to at least $2.07 CER again. Roland, a bit later, will provide more color and perspectives in his remarks. Before I hand over to Roland, I would also like to discuss a change in our leadership team. QIAGEN is very pleased to welcome Nitin Sod, who will join QIAGEN in October as senior vice president, head of our life science business area, and member of the executive committee. Nitin joins us with over 20 years of experience in diagnostic and in life science. in companies like Perkin Elmer, Agilent, and most recently was serving as Chief Commissioner Officer at Adaptive Biotechnologies. We are very much looking forward to his fresh perspectives and key contribution in driving forward our life science business. Nitin is taking over this role from Thomas Vines, who has decided to step down as part of his plan to retire in 2024. Thomas will be working closely, obviously, with Nitin to support the transition. We are extremely grateful to Thomas for many contributions during his nearly 20 years at QIAGEN in many roles, in particular the development of the QIAGEN brand, and we wish him all the best in his future endeavors. Now I'd like to hand over to Roland to review our results in greater detail.