roland sackers - qiagen · a global company total employees: 1599 americas < 50% of sales:...

W W W . Q I A G E N . C O MW W W . Q I A G E N . C O M- 1 -

Roland SackersChief Financial Officer

Cheri WalkerVP M&A North America

Cowen & Co.

Boston, March 6, 2006


Certain of the statements contained in this presentation may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's products and markets and operating results are forward-looking, such statements are based on current expectations that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations), variability of operating results, the commercial development of the DNA sequencing, genomics and synthetic nucleic acid-related markets, as well as the nucleic acid-based molecular diagnostics and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's products (including seasonal fluctuations), difficulties in successfully adapting QIAGEN’s products to integrated solutions and producing such products, the ability of QIAGEN to identify and develop new products and to differentiate its products from competitors, and the integration of acquisitions of technologies and businesses. For further information, refer to the discussion in reports that QIAGEN has filed with the U.S. Securities and Exchange Commission (SEC).

The following slides may contain certain summary information about QIAGEN N.V.’s operating income, net income, and earnings per share, which information is presented on a “non-GAAP financial measures”basis rather than in accordance with U.S. generally accepted accounting principles (“GAAP”). Please review QIAGEN’s recent press releases for information on the company’s operating income, net income, and earnings per share for specific periods presented on a GAAP basis. Such GAAP-basis information will also be contained in the company’s reports on Form 20-F and 6-K to be filed with or furnished to the U.S. Securities and Exchange Commission and which are available on QIAGEN’s homepage under www.QIAGEN.com.

Forward Looking Statements


New developments in DNA forensicsApr 22nd 2004

CRAIG HARMAN was drunk when, in May 2003, he killed Michael Little by throwing a brick from a motorway overpass. He had neither motive nor connection to the victim, meaning that, under normal circumstances, his crime would have been almost impossible to solve…

QIAGEN Technologies Behind the Headlines

January 7, 2006

From Roger Boyesin Salzburg

DNA solves the 250-year mystery of Mozart's skullMUSEUM staff in Salzburg refused for years to go near the case displaying the skull that had reputedly housed the brain of Wolfgang Amadeus Mozart.

GERM SENSORS

Money & Investing

By Peter Kang

02.13.06 Bird flu and bioterrorism threats are creating healthy opportunities for outfits that sniff out lethal bugs.

PRIVACY MATTERS By Jane Black

JUNE 26, 2003

Whose DNA Is It Anyway?Asking convicted felons to surrender their genetic privacy is one thing. TAKING `ROOTS' TO A DNA LEVEL

January 29, 2006

The chairman of Harvard University's Department of African and African-American Studies has just produced a four-part series for PBS, "African American Lives," in which DNA testing is used to trace the African ancestry of nine famous Americans.


Purification of Complex Biological Samples

DNADNASample PrepSample PrepBloodBlood

Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, Complement components, Nuclei, Rough endoplasmatic reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin,


Multiple QIAGEN Product Dimensions

Nucleic Acids/Genetic Information

Assays/ApplicationsBiological Samples


Focus and innovation

Leading market share and penetration

Science-driven culture

Brand excellence

Standard-setting technologies

Growing leadership in MDx

Strong and deep partnerships

QIAGEN’s Leadership


Instrumentsstrong growth in major BioRobot product lines

ConsumablesStrong new product lines4% growth from products launched in 2005

Other

88%

10%

Revenue Breakdown by Product Line


BioSprintEZ1

$28,000

BR M48 - M96BR 3000

$40,000-80,000

BR 8000 and UHT systems$70,000 and up

1 6 48 96 samples (manual)

Consumable and Automated Product Lines

1 6 48 96 (>20,000) samples (automated)


A Global Company

Total Employees: 1599

Americas< 50% of Sales: Sales/Marketing Force: 210

EuropeApprox 40% of SalesSales/ Marketing Force: 270

AsiaApprox 10% of SalesSales /Marketing Force: 50


Markets by Customer

Life Science Research

Academic Research Solid in most countriesUS solidEurope strongJapan outlook stronger

Pharma/Biotech Research Strong in US, softer in EUKey account management very successful

Applied Testing

Still small –but accelerating growth rates

Molecular Diagnostics

Direct sales strong growth,outlook strongOEM sales still off target

Academia 40%

Mkt. growth 5-7%

PharmaBiotech

25%Mkt. growth

7-9%

Applied Testing

10%Mkt. growth

20-30%

Molecular Testing

25%Mkt. growth

20-30%


Life Science Growth Drivers

Collection Stabilization Homogenisation Lysis Purification

Preanalytical Standardization

Cloning

Sequencing

Gene Expression

Arrays

Real Time PCR

Genotyping

DNA, RNA Assays

Mouse Knock-outs

PCR

Multiplex Assays

Bacteria

Blood

Viruses

Tissue

Swabs

Yeasts

Stool

Urine

Hair

Saliva

Standardized analytes

Standardized analytes


Life Science Research Market Leadership

Mar

ket s

hare

100%

Home Brew

Competitors

Preanalytical Technologies

Highest market share

Strong IP portfolio

Strong brand

Sales leadership

Standard-setting technologies

Significant barriers to entry

Stable, cash generating business


QIAGEN – One of the Strongest Brands in the Industry

The QIAGEN name is synonymous withsuperior performanceinnovative productshighest quality and reliabilitytrust

QIAGEN built this powerful brand with hard workmarket and technology competencespirit of innovationpassion for qualityfriendliness & commitment to customers

The QIAGEN brand is one of its most valuable company assets - it helps to attract new customersenter new markets keep the ones we havesell new products obtain premium pricesincrease barriers of entries

QIAGEN: Sample Technology and Assay CompetenceQIAGEN: Sample Technology and Assay Competence


Develop: Innovation Driving Growth

Industry average

QIAGENaverage

QIAGEN2005

Time

NewProducts

RatioInnovation

processes changed in 2004

QIAGEN = Innovation Leader

(products launched In same calendar year)


Organic Growth Rates

Industry average

QIAGEN2005

~5%

Total: ~9%

Leading Organic Growth Rates


Source: company estimates, various industry research reports

Food Pathogens

Food GMO

BioSecurity

QC PharmaPharmacogen.

Veterinarian

Human ID

Estimated market: >US$ 500 million (2008)

Applied Testing Markets


Total Diagnostics Markets


6%

Diabetes Care21%

Other IVD23%

Clinical Chemistry

14%

Immunochem25%

Near Patient Testing

11%

Source: company estimates for 2006, various industry research reports

$2 B Market


QIAGEN – a Leader in Molecular Diagnostics

Oncology 11%

Blood Banks/Other

25%

Genetic Testing 13%

Viral infections 39%

Non-Viral Infections

12%

Estimated market:> US$ 2 billion (2006)

Source: company estimates, various industry research reports

RocheGenprobeBayerQIAGENAbbottDigeneOthers .


QIAGEN MDx Strategy Evolution

Expanding portfolio of assays

Artus acquisition

PG Biotech acquisition

Setting standards in preanalytical solutions

Linking with tests (assays)

CE and FDA regulated products

Numerous strategic alliances

Impressive new product pipeline

More than 20 assay developers

>12 new assays to come in next 4 months


• CMV LC CE

• CMV RG CE

• CMV TM CE

• HSV 1/2 RG CE

• HSV 1/2 TM Abbott

• C. trachomatis TM CE

• C. trachmoatis RG CE

• C. trachomatis LC CE

• M. pneumoniae LC CE

• B. pertussis LC CE

• Enterovirus LC

• L. pneumophila LC

• SARS Coronavirus LC CE

• SARS Coronavirus RG CE

• SARS Coronavirus TM CE

• B. anthracis LC

• B. anthracis RG

• B. anthracis TM

• HAV LC CE

• HAV RG CE

• HAV TM CE

• WNV TM

• B. pertussis RG CE

• C. trachomatis Plus TM CE

• C. trachomatis Plus LC CE

• C. trachomatis Plus RG CE

• HIV-1 RG CE

• VZV RG CE

• Salmonella LC

• Salmonella RG

• Salmonella TM

• Campylobacter LC

• Campylobacter RG

• Campylobacter TM

• Dengue RG

• Influenza/H5 LC

• M. tuberculosis LC CE

• M. tuberculosis RG CE

• M. tuberculosis TM CE

• Malaria diff QC LC

• M. paratuberculosis LC CE

• Mycobac. diff LC CE

• Hemochromatosis LC CE

• Factor II/V LC CE

• HBV LC CE

• HBV RG CE

• HBV TM CE

• EBV LC CE

• EBV RG CE

• EBV TM CE

• Borrelia LC CE

• Influenza LC

• Orthopox LC

Representative but not complete list

QIAGEN Real Time PCR Assays


Shenzhen PG Biotech

SFDA approved to sell qPCR diagnostic kits

GMP manufacturing plant certified by SFDA for extrinsic diagnostic reagent in China

Only manufacturer in China possessing certificates for HIV, HCV and HBV necessary for blood banking testing

First company approved for PCR-based avian flu test for veterinarian and quarantine testing

Approx. US$ 4 million in 2006

Expect to close in 1H06


Molecular Diagnostics Growth Strategy

OEM Devel.

5%

OEM Sales15%

Direct Sales 80%

Direct Sales

Growing direct sales force > 40

No instrument dependency

Focus on pathogens

Market leader is developing countries

OEM Products

Integrated solutions

Assays, preanalytical, automation

> 15 Partners

>100 clinical trials using QIAGEN

> 50 clinical trials using PreAnalytiX

OEM development

Developing solutions for partners


Applied Biosystems

Abbott Laboratories

Roche Diagnostics


Applied Biosystems

Abbott Laboratories

Roche Diagnostics

Applied Biosystems

Roche AppliedScience

Bio-Rad,

Stratagene

Cepheid

Applied TestingLife Science Research

The Complete Solution

Open ArchitectureDetection Instrument

PCR Assay

PreAnalyticalSolution

Mirrored Capabilities


Corporate and Business Development

1. Develop 2. Partner 3. Acquire

Capabilities

Products

Channel


Executing on the Acquisition Strategy

Core Markets:Standardization &

Integration

Core Markets:Standardization &

Integration

Expand Markets:Establish New Standards

Expand Markets:Establish New StandardsNew Markets:

DisseminationNew Markets:Dissemination

3

1

Discovery Clinical phases

Plasmid

Cells

2

gDNA

RNA


Applied Markets

Academic research

BiomedicalResearch

Pharma

Personalized Medicine

Proteins

Routine use


Integrations Are A Key CompetencyIntegrations Are A Key Competency

Company Rationale DateRevenue

contribution ConsiderationMultiple

(12 months) Integration2006 Upfront Milestones Total x+1 2006 2007 Update

RNAture Sample Preparation May 05 0.5 neutral accretive

TianWei Sample Preparation June 05 1.5 2.0 2.0 4.0 2.7 neutral accretive

Nextal Sample Preparation June 05 3.0 9.7 4.5 14.2 4.7 neutral accretive

SuNyx Sample Preparation Aug 05 1.0 0.8 0.8 1.6 1.6slightlydilutive

accretiveproduct

introduction delay 2 mo

LumiCyte Sample Preparation Aug 05 2.0 3.0 4.0 7.0 3.5slightlydilutive

accretive

Eppendorf 5-Prime Sample Preparation Dec 05 6.0slightlydilutive

accretive just started

artusMolecular

DiagnosticsMay 05 15.0 27.6 11.6 39.2 2.6 accretive accretive

PG BiotechMolecular

DiagnosticsSep 05 4.0 14.5 0.0 14.5 2.2 neutral accretive not closed

Total 33.0 57.6 22.9 80.5 Ø 2.4

Accretion

notdisclosed

notdisclosed


PreAnalytical Solutions

2005 2006

Preanalytical Solutions

(Collection, stabilization, purification,

storage, processing

etc.)

Mission:

Absolute leadership

Develop

Partner

Acquire

• over 50 new products• record success: 4% of sales• increased tech. leadership• increased market leadership

• against homebrew• against competitors

• Procognia• Epigenomics• approximately 50 partnerships • about 15 new in 2005• over 10,000 citations in 2005

• RNAture• TianWei• Nextal• LumiCyte• SuNyX• Eppendorf 5-Prime

• very strong pipeline • for 2006• for 2007

• Improved partnering capabilities

• focused - strategic


Applied Testing

2005 2006

Applied Testing*)

(preanalyticalsolutions plus

test kits (assays))

Mission:

Create LeadershipPositions as Early Entrant

Develop

Partner

Acquire

• rapid response to avian flu• largest provider of tests• largest provider of test components

• forensics portfolio expanded• appl. testing sales channel

• artus diagnostics • PG Biotech

• focus areas defined• Leverage newly built channels

• seek more alliances• assays• channel

• focused – strategic• expand position

*) Forensics, veterinary, quality control in food, pharma and other manufacturing etc., biodefense etc.



2005 2006

MolecularDiagnostics

(preanalyticalsolutions plus

test kits (assays))

Mission:

Rapid Expansion

Develop

Partner

Acquire

• first 510ks (incl de novo!)• over 30 products launched• built sales channel

• 25 partnerships, new:• expanded Roche Veridex• Beckman Coulter Abbott

• Protedyne• Epigenomics

• artus diagnostics • PG Biotech• Eppendorf 5-Prime

• integrate key preanalyticalsolutions with assays

• strong pipeline • regulated products• leverage sales channel

• added partnering capabilities• increased focus on preanalytical solution plus assays

• focused – strategic• expand position


Market leadership in preanalytical solutions

Technology leadership in preanalytical solutions

Expanding leadership in protein sample preparation

Complete portfolio for all markets and segments

Leadership in research markets with PCR and other bioassay technologies

~4th largest molecular diagnostics company

QIAGEN‘s Leadership


Cash generating, solid core business

Highest market share

Industry leading growth

Standard setting technologies

Proven innovation engine

MDx springboard for future growth

Transactions for catalytic growth

Key Investment Considerations


Fiscal 2005 Financials

and

Guidance 2006


Increasing market leadership

vs. homebrew & competition

Increasing tech leadership

Rapidly grow MDX business

Done

Significant expansion

Grew into #4 in market

405-407 net sales

(guided Nov. 8, 2005)

0.44-0.47 EPS*

Operating margin: 24-26%

Financial Targets

Reached 409

(FX guidance rate)

Reached 0.45 cents EPS*

Operating margin: 26%

Target Achieved

Strategic Targets

Meeting Targets

Difficult year for industry – QIAGEN achieved targets

* excluding acquisition, restructuring, integration and related charges


20%

21%

22%

23%

24%

25%

26%

1 excluding the synthetic DNA business unit, sold in Q2 20042 excluding acquisition, restructuring, integration and related charges as well as amortization of

acquired IP

Strong earnings engine

QIAGEN Fiscal 2005

+ 11%+ 15%

+ 18% + 18%

US$360m

US$398m

24%

26%

US$59m

US$69m

US$0.39

US$0.46

Net sales1 Operating margin2 Net income2 EPS2

2004

2005


Operating margin: Focus on higher gross margin consumables Managed S&M and G&A costsGood base going forward

* excluding acquisition, restructuring, integration and related charges as well as amortization ofacquired IP

QIAGEN Margin Development

2004

2005

20%

21%

22%

23%

24%

25%

26%

Gross margin Operating margin* Net income margin*

67%

69%

24%

26%

15%

17%


2.5% foreign currency impact on revenues using Feb 15, 2005 guidance exchange rates

Operating income and net income protected by natural hedge

-10.1408.5398.4Total

-1.276.174.9Revenues other currencies

-3.037.7 34.7Revenues in JPY

-5.9127.7121.8Revenues in Euro

167.0167.0Revenues in US$

Change due to currencyGuidance ratesReportedIn US$ million

Currency Impact Actual to Guidance

Actual


Free cash flow computed using cash from operations less capital expendituresCash EPS computed using cash from operations divided by number of fully diluted shares

Operating cash flow plus 70%

0.360.61Cash EPS in US$ per share

41.077.5Free cash flow

12.613.7Capital expenditures

53.691.2Operating cash flow

-18.104.0Working Capital & others

23.025.0Depreciation & amortization

48.762.2Net income

FY 2004FY 2005In US$ millions unless indicated

QIAGEN Cash Flow Statement


2006 Guidance


~14%Revenues excluding FX impact2

~ 12%439 - 451398Revenues (MUS$)1

~18%26 – 28%26%Operating margin3

~16%0.52 – 0.550.46EPS in US$ per share3

Growth %2006E2005

Summary Income Statement 2005 – 2006

1 2006E based on FX 01/31/062 2006E based on FX 20053 excluding acquisition, integration and restructuring related charges as well as

amortization of acquired IP and equity-based compensation


Summary Revenue Statement 2004 – 2006

~ 10%9%406-418376346Organic growth

~ 12%5%439-451398381Reported revenues/Guidance

~ -2%-9FX impact1

~14%5%448-460398381Revenues FX rate 2005

-33-22-35Acquisitions/Divestments2

2006E2004Growth

05/06Growth04/05

2005In million US$

1 FX rate 2005 / FX rate 01/31/06 2 Revenues from the synthetic DNA business unit, sold in Q2 2004 and the divestment of pAlliance

as well as shifted revenues from PAXgene to BD announced in August, 2005


360

370

380

390

400

410

420

430

440

450

460

Revenues 2005 Volume + Price Acquisitions Exchange rateimpact

Revenues2006E

Organic Growth is Driving Revenues

0

Organic Growth ~ 10%

Acquisition and Divestmentrelated revenues

in 2005

In million US$

~33 ~ -9

22

~23

439- 451


Q12004

Q12005

Q12006E

Q22004

Q22005

Q22006E

Q32004

Q32005

Q32006E

Q42004

Q42005

Q42006E

0.12-0.13

in US$ per share*

0.12

0.100.110.100.10

0.08

0.11

0.13-0.14

0.15-0.16

0.13

QIAGEN GroupQuarterly EPS Growth 2004 - 2006

0.11-0.12

* all figures excluding acquisition, integration and restructuring related charges as well asamortization of acquired IP and equity-based compensation


185

173

165

155

Dec. 2003 Dec. 2004 Dec. 2005 Dec. 2006E

6367

5854

Dec. 2003 Dec. 2004 Dec. 2005 Dec. 2006E

Inventory Days

Receivables-DSO

Continuous decrease in

Inventory Days

Decrease to 54 DSO(Industry standard 70 days)

Managing Working Capital


30

34

3739

2003 2004 2005 2006E

6%

4%

6%

8%

2003 2004 2005 2006E

7%

6% 6% 6%

2003 2004 2005 2006E

7- 8%

CAPEX as % of sales Depreciation & Amortization as % of sales

R&D Expenses (MUS$)Excl. purchased intangible amortization

approx. 40

approx. 6%

QIAGEN GroupR&D and Capital Expenditures

Investing in R&D toboost Innovation


2005

Solid financial performance

Continued as dominant player in pre-analytics

Capitalized on strong growth in core business

Eight transactions for catalytic growth

Gained strong strategic momentum to shape molecular diagnostics markets

Expanded market penetration in Asia

2006

Strong growth in molecular diagnostics

Expand industry standard setter position

Leverage operational strength to further improve margins

Developing – Acquiring – Partnering

2005 Review and 2006 Outlook

roland sackers - qiagen · a global company total employees: 1599 americas < 50% of sales:...

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