Qiagen N.V.

Please stand by. Your conference is about to begin. Good day. I'm Melinda, your PGI call operator. Welcome and thank you for joining QIAGEN's fourth quarter 2023 earnings conference call webcast. 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. If you'd like to ask a question, you may press star followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. At this time, I'd 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 a welcome to all of you today who are joining us for this call. We appreciate your interest in QIAGEN. Our speakers today are Terry Bernard, our Chief Executive Officer, and Roland Sackress, our Chief Financial Officer. We also have Phoebe Lowe from the IR team with us. This call is being webcast live and will be archived on the Investors section of our website at www.qiagen.com. You can also find a copy of the quarterly results press release in the presentation on our website. We'll begin with some remarks from Terry and Roland, followed by a Q&A session. Before we start, let me note that we are going to have an analyst and investor day on Monday, June 17th in New York. An invitation to the event will be going out in the next few weeks, but please mark this in your calendars. And also before we start, let's briefly go over the safe harbor statement. The views expressed during this conference call and the responses to your questions represent the perspectives of management as of today, February 7th, 2024. We will be making statements and providing responses to your questions that convey our intentions, beliefs, expectations, and 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 available on the SEC website and also on our website. QIAGEN disclaims any intention or obligation to update any forward-looking statements. Additionally, we will refer to certain financial measures not prepared following generally accepted accounting principles or GAAP. All references to EPS refer to diluted EPS. You can find a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in our press release and presentation. Now I'd like to hand over the call to Terry.

Thank you, John. Hello and good morning, good afternoon or good evening, depending on where you are in the world. And thank you once again for joining us. Thank you for your continuous interest in our company, QIAGEN. We come to you today reporting another solid year and a strong performance in the fourth quarter. Amid the dynamic macro environment, our teams continue to execute, delivering solid sales and installed base growth. This is a further testament to how our strategy of balance and focus has positioned our portfolios well to expand our leadership in both life sciences and molecular diagnostics. Let me go through the key messages for today as we dive into the details. First, we exceeded our outlook for net sales and adjusted EPS for the fourth quarter and achieved our full year outlook. Net sales for the fourth quarter were at $503 million at CER, which exceeded our outlook for at least $500 million. Our non-COVID-based business delivered one of the top performances in the industry with 8% CER sales growth over the prior fourth quarter. This was driven by ongoing strong demand for consumer malls that accounted for over 85% of total sales. Net sales for the full year were $9.97 billion at CER, and this was on point for our sales outlook for 2023. Our non-COVID sales also grew 8% CER compared to the year 2022. Adjusted earnings per share for the fourth quarter were $0.55 CER, above the outlook for at least $0.53 CER. For the full year, adjusted diluted EPS were $2.09 CER and above the outlook for at least $2.07 CER. Our second key message. Our teams executed well to deliver growth and build value in our portfolio, achieving some important milestones in our pillars of growth. First, sample technologies capped the year with 6% CER growth in non-COVID-related sales and over 1,500 new automation systems placed in the market in 2023. The QuantiFerron latent TB test reached more than $400 million of annual sales for the first time and also had three consecutive quarters of sales above $100 million during the year. The Chiastate syndromic testing platform grew 7% CER in non-COVID sales for the full year 2023 and passed several key milestones. Over 1 million cartridges of Chiastat were shipped in 2023 and driven by double digit CER sales growth outside the US. Globally, full year sales of meningitis and GI, our gastrointestinal panel, doubled compared to 2022. In addition, the fourth quarter saw the highest number of quarterly placements for the year, and bringing the total number of cumulative placements to over 4,000 systems. The Kayaquiti digital PCR system also performed well, delivering double-digit full-year sales growth at constant action rates and met the milestone of over 2,000 cumulative placements. Our third message. We again delivered a high level of profitability as we remain dedicated to investing into research and development. The adjusted operating income margin rose to 28% in the fourth quarter, even as we continue to invest in expanding menus and driving innovation in our portfolio, with about 9% of our sales going into research and development. And our last point. we have initiated full year 24 outlook taking into account the volatile macro environment against the solid trends of our non-COVID business. For 2024, we have set an outlook for at least $2 billion of sales at CER and for adjusted APS of at least $2.10 CER again. Roland will give you more details on our outlook assumptions later in the call. Before I hand over to Roland, I would like to welcome our two new members to our supervisory board. In March, Eva van Pelt will be joining the board, bringing with her an extensive experience in our industry. Most recently, Eva served as co-CEO of Eppendorf, a privately held German life science company. and before held previous positions with Siemens, Accenture, Hitachi Data System, and Leica Microsystem. A month later, in April, Bert van Meurs will also be joining the board. Bert is currently a member of the executive committee at Royal Philips NV in the Netherlands, where he is leading their image-guided therapy business, as well as the precision diagnosis business. We are pleased to have Bert's industry experience, but also his knowledge of operating in the Netherlands. They both will be a very valuable addition to our diverse board, and we are looking forward to their contribution.