Qiagen N.v. · NYSE:QGEN
Qiagen — Investor Day (November 2016)
25 slides from Qiagen's investor day presentation, Nov 15, 2016
Slide 1: Multiple drivers to improve returns and create greater value
Multiple drivers to improve returns and create greater value Roland Sackers Chief Financial Officer November 15, 2016 Sample to Insight 2016 Analyst & Investor Day 1
Slide 2: Disclaimer
Disclaimer Safe Harbor Statement: This presentation contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be forward looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended
Slide 3: Sample to Insight
Sample to Insight 2016 Analyst & Investor Day 3
Slide 4: U.S. HPV decline worse than expected
2013-2016: Net sales growth trends 2013-2016: Key challenges (At constant exchange rates to comparative year) U.S. HPV decline worse than expected – impact on sales and profitability 10% Restricted Life Sciences funding 8% Significant FX headwinds 6% 2013-2016: Major actions Portfolio transf
Slide 5: 2020 targets: Strong focus on sales growth and operational execution
2020: Net sales growth target 2020: Adjusted diluted EPS target (At constant exchange rates to comparative year) (In $ per share, at CER to comparative year) ~+7-9% CER >12% CER CAGR CAGR +6-7% CER ~$1.08-1.09 $ 1,281 m (~1.10-1.11 CER) +3% CER $1.05 ~$0.87-0.88 CER with restructuring 2015 2016 2016
Slide 6: Strategy: Multiple drivers to improve returns and create greater value
Invest in growth opportunities Allocate more resources to most attractive areas Generate operating leverage Optimize cost base while sustaining sales growth Step up operating cash flow Achieve ~$600 million target for 2020 Ensure disciplined capital deployment ? Invest in QIAGEN while increasing ret
Slide 7: “QIAGEN works Digital” roadmap
Growth drivers EGM expansion Digitalization QuantiFERON-TB Middle East (Dubai and Egypt) Exploit new business models GeneReader NGS System and Africa (South Africa) Digitalization of operating model universal NGS solutions Asia (Thailand) Big data and analytics QIAsymphony Social
Slide 8: Stronger “continuous improvement” mindset to deliver operational leverage
Key efficiency initiatives Adjusted operating expenses(1) (As % of net sales) 1 48% 49% ~46-47% Sales channel Increase sales per FTE ratio 47% 47% CER ~44-45% optimization and sales over OPEX ratio CER 2 Site Focus on key sites and consolidation reduce legal entities 3 Business Service Leverage shar
Slide 9: Manufacturing productivity gains
Manufacturing productivity gains Development cost structure Product cost index (As % of 2013 costs) MDX development employees (As % of total) Hilden Germantown ~40% Employees at other sites 100 100 95 ~75% ~60% Employees in 90 ~80-85 ~85-90 Centers of Excellence ~40% ~60% ~25% 2013 2016 2020 target
Slide 10: Setting a 2020 target to reach ~$600 million of operating cash flow
Cash flow considerations 2020: Operating cash flow target(1) (In $ millions) 1 ~$600 m Working capital management 2 ~$350 m Benefits of $318 m $288 m efficiency gains $259 m 3 Maintain DSOs with geographic expansion 4 Disciplined capex investments 2013 2014 2015 2016 2020 guidance target Setting a 2
Slide 11: 2017: Commitment to return $300 million
2012-2017: QIAGEN capital returns (In $ millions) ~$514 m Return considerations 2017: Commitment to return $300 million ~$250 million via synthetic share repurchase $387 m ~$300 m (completion in January) ~$272 m ~$50 m ~$50 million via open-market repurchases (completion by end of 2017) Mid-
Slide 12: Healthy leverage and capital structure to support business and increase returns
2013-2017: Leverage ratio(1) 2017-2024: Debt maturity overview (Multiple of net debt / EBITDA) (In $ millions) 2.0 U.S. Private Placement 2024 $27 m (3.9%) 1.6 2023 1.5 1.5 U.S. Private Placement 2022 $300 m 1.3 ~1.3 (3.75%) Cash convertible notes 1.1 2021 $300 m (0.875%) 1.0 2020 Cash convertible n
Slide 13: 2017 guidance: Goals for strong sales growth and adjusted EPS expansion
2017: Net sales guidance 2017: Adjusted diluted EPS guidance (At constant exchange rates to comparative year) (In $ per share, at CER to comparative year) ~$0.13- ~$1.25- Exiqon ~+6-7% CER ~+6-7% CER 0.16 CER ~$0.03 CER 1.27 CER acquisition ~1.08-1.09 (June 2016) ~1 p.p. Exiqon (~$1.10-1.11 CER) MO
Slide 14: Targeting leverage opportunities to generate double-digit adjusted EPS growth
2016-2020: Adjusted diluted EPS growth target (In $ per share, at CER to comparative year) Operational Non-operational Organic Gross Operating Tax Share sales growth margin expense ratio rate count >12% CER CAGR + Strong portfolio + Capacity + Sales channel - Higher profits + 2017 share expansion ut
Slide 15: Key assumptions: 2016-2020
Key assumptions: 2016-2020 (As of November 15, 2016) 2016 2017 2018-2020 Capital expenditure (PP&E) ~5% of sales ~5% of sales ~4-5% of sales Capital expenditure (Intangibles) ~1-2% of sales ~2-3% of sales ~2-3% of sales (Excluding acquired IP) Depreciation and amortization ~7% of sales ~7% of sales
Slide 16: Multiple drivers to improve returns and create greater value
Multiple drivers to improve returns and create greater value Sustain strong growth through targeted investments Sharpen focus on operational and financial leverage Maintain disciplined capital allocation strategy Sample to Insight 16
Slide 17: Appendix
Appendix Sample to Insight 17
Slide 18: Q3 2016: Consolidated Statements of Income (unaudited)
Q3 2016: Consolidated Statements of Income (unaudited) Three months ended Three months ended (In $ thousands, except share data) September 30, 2016 September 30, 2015 Net sales 338,685 314,561 Cost of sales 117,879 109,915 Gross profit 220,806 204,646 Adjusted gross profit 241,429 222,300 Operating
Slide 19: First nine months 2016: Consolidated Statements of Income (unaudited)
First nine months 2016: Consolidated Statements of Income (unaudited) Nine months ended Nine months ended (In $ thousands, except share data) September 30, 2016 September 30, 2015 Net sales 971,476 932,446 Cost of sales 355,025 329,388 Gross profit 616,451 603,058 Adjusted gross profit 683,248 666,0
Slide 20: Q3 2016 and 9M 2016: Reconciliation adjusted results
Q3 2016 and 9M 2016: Reconciliation adjusted results Net Gross Operating Pretax Income Tax Net Diluted (In $ millions, except EPS) sales profit income income tax rate income EPS(1) Third quarter 2016 Reported results 338.7 220.8 47.0 36.6 -2.9 8% 33.8 0.14 Adjustments Business integration and acquis
Slide 21: Q3 and 9M 2016: Currency impact
Q3 and 9M 2016: Currency impact Net sales Net sales Currency exposure Change (In $ m) (CER) (As % of CER sales) (In $ m) Third quarter 2016 U.S. dollar 143.6 143.6 42% 0.0 Euro 72.0 71.8 21% 0.2 British pound 25.7 30.2 9% -4.5 Japanese yen 12.6 10.6 3% 2.0 Other currencies 84.8 85.6 25% -0.8 Total n
Slide 22: 2016: Quarterly and YTD income statement summary
2016: Quarterly and YTD income statement summary (In $ millions, unless indicated) (Diluted EPS in $ per share) Q1 2016 Q2 2016 Q3 2016 Q4 2016 YTD 2016 Net sales 298.4 334.4 338.7 971.5 Net sales (CER) 305.6 338.1 341.8 985.5 Gross profit 184.7 210.9 220.8 616.5 Gross profit margin 62% 63% 65% 63%
Slide 23: 2015: Quarterly and YTD income statement summary
2015: Quarterly and YTD income statement summary (In $ millions, unless indicated) (Diluted EPS in $ per share) Q1 2015 Q2 2015 Q3 2015 Q4 2015 9M 2015 FY 2015 Net sales 298.4 319.5 314.6 348.5 932.4 1,281.0 Adjusted net sales 298.7 319.5 314.6 348.5 932.7 1,281.2 Adjusted net sales (CER) 324.8 348.
Slide 24: Consolidated Balance Sheets
Consolidated Balance Sheets Sept 30, Dec 31, Sept 30, Dec 31, (In $ thousands, except par value) 2016 2015 (In $ thousands, except par value) 2016 2015 Assets (unaudited) Liabilities and Equity (unaudited) Current assets: Current liabilities: Cash and cash equivalents 354,646 290,011 Accounts payabl
Slide 25: Consolidated Statements of Cash Flows (unaudited)
Consolidated Statements of Cash Flows (unaudited) Nine months ended Nine months ended Sept 30, Sept 30, Sept 30, Sept 30, (In $ thousands) 2016 2015 (In $ thousands) 2016 2015 Cash flows from operating activities: Cash flows from financing activities: Net income 69,545 78,484 Net proceeds from issua