Earnings call transcript Q2 2023

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Operator

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. [Operator Instructions].

At this time, I would like to introduce your host, John Gilardi, Vice President, Head of Corporate Communications and Investor Relations at QIAGEN. ahead. go Please

John Gilardi

and you operator, appreciate all you, of interest Thank well welcome for thank as QIAGEN. We joining and in you, to this your call.

and Bernard, Our are Officer. our Roland Sackers, Chief speakers our Thierry Executive today Financial Chief Officer;

Loh the have Investor the our at Investors This section Phoebe with and will Relations webcast www.qiagen.com. is of being We live here be us. from also team call archived on website

our press also We'll find of release Q&A a a usual and remarks begin website. results with Roland on can as You and and the presentation session. copy Thierry quarterly have from then

Before as during our this over today, XXXX. of we the to safe expressed and call The represent the August responses X, views briefly start, conference let's your management harbor of go questions statement. perspectives

by and available forward-looking website safe also materially and Reform suggested intention Securities any the be update the predictions or and providing to our beliefs, forward-looking Commission. your our and differ website. risks to statements provisions Securities any for influence are our filings these mentioned statements. the actual SEC's those statements. with Private U.S. could Factors Exchange XXXX. harbor will of filings convey QIAGEN results uncertainties, making Litigation disclaims These fall responses may questions results intentions, on Act that We of under from the are also They that expectations in own and involve or forward-looking future. obligations These statements the

to to EPS. certain not All accounting financial or prepared refer measures following Additionally, diluted references accepted we principles will referring generally GAAP. to be EPS

comparable most release our presentation. press and measures non-GAAP financial You can find in reconciliation the measures GAAP to the the these directly of

now Thierry. hand the I'd like to call to over

Thierry Bernard

you on you, you thank in and of are world where depending or morning, evening, you, good to and joining afternoon for us. all Thank the good good John, hello,

of the results report our We very XXXX. to quarter are very second solid for today pleased

our this companies dedicated in executing quarter, environment. focused other are uncertain from macro we heard already have have Therefore, on an how operating and we you As teams with remained are goals. pleased our to especially

are teams through Our resilience depth our agility and confirmation of in and in of of our dynamic the our and experience strength environment. knowledge navigating results business, a another the

go top for Now let me messages the to today.

First, spending rates achieved sales at adjusted strong in sales for our for least second for million outlook Net $XXX softness and we We quarter, business. some outlook our sales net base EPS exceeded capital instrumentation. for saw by constant $XXX growth in exchange were the at the driven and million.

that and diagnostics. towards QIAGEN revenues. However, revenues. demand is both business non-COVID weighted consumable from remember our heavily highly related high-margin coming clinical science life classes, customer of are and resilient CER XX% consumables growth across in saw consumables Over sales with We recurring broad-based sales XX%

of profitability, per $X.XX In was for adjusted outlook terms $X.XX which at least share CER. CER, earnings the was above

Second of progressed call a key To driving business. message, in our pillars few. our base just growth well out key

rising CER generating test above and with a $XXX crossing Our milestone latent delivered sales another QuantiFERON for TB time. significant XX% quarterly quarter, market-leading first million the outstanding growth

medical to very visit to due only professional test. healthy the the requiring This skin blood traditional to opposed benefits since QuantiFERON conversion continue a visits a from has X the a to clearly We with skin see X accelerated pandemic tuberculin as draw simple of test. trends with a

increase well testing for very sales QIAstat also platforms consumable applications. solid with did this The a syndromic non-COVID quarter in

a new achieving number higher did great of of over second job in the placements a quarter XXXX. Our team

placement. an growth market in in driven demand the significant of Another ongoing example by This sales with the quarter. consumables life QIAcuity benefit instrument is second both and for to from continued demand the the which was growing high system, digital science level PCR increasing

operating Third second while saw improvement continuing investments. important message, the a margin to we solid make quarter in

operating in We XX% new of level investing second this development, relays our achieved ambitions. sales and around margin into to important, while support midterm of Our was income which growth XX.X%. quarter create is the obviously, adjusted research and

message, for revising in are a the our backdrop significant This And and is finally, volatility our full we XXXX against fourth reflect to of large-scale outlook bulk business, which environment. macro orders. challenging in is year OEM testing COVID by the the drop-off driven

for provide sales share least $X.XX outlook more now per is set $X.XXX is for remarks. to again. while in CER for perspectives and outlook net CER color Roland bit at his later new Our least will adjusted billion the at earnings a

recently, change to who like to Sood, will Vice would over hand at business QIAGEN Officer join Senior team. leadership area of diagnostic I as Agilent Roland, in Committee. in also was is companies Chief I as of Science experience life Nitin and in October Head in joins welcome XX of member years with QIAGEN most Life Nitin Adaptive and like a PerkinElmer, the Before Commercial our Executive serving us pleased over to our discuss science President, Biotechnologies. and in very

forward our perspectives looking Science in and Life much to contribution his business. very fresh are key We driving forward

Thomas over from Thomas obviously, with Schweins, support of will to be the this role who part as taking has plan retire his step to down is Nitin working in decided Nitin to transition. XXXX. closely,

years endeavors. brand, particular, grateful for in his extremely roles, future nearly his many wish of best in in development we during the and all XX the QIAGEN him many the Thomas to at We contribution are QIAGEN

review like detail. to to over our greater Roland I'd results Now in to hand

Roland Sackers

Hello, everyone.

I long career First all, for QIAGEN. to like of over his impactful thank Thomas contributions at also would his and significant

then first views and of half the will and first quarter share discuss on year the some I outlook. second our results for our

in quarter constant and release, net of sales the exchange XXXX million USD at at saw second press were XXX our rates. USD you for As million rates XXX actual

strong CER XX% million of product representing sales with impact that little year revenues. $XXX movements, experienced growth second had well from quarter. X% up COVID-XX Given to in over declined groups the X% which total ago sales currency substantial and compared there the was sales period, a Non-COVID to

In at CER up a biotech declined be first year. the continue fact, single-digit Instrument spending. rate in XX% were and sales sales this as CER customers academic low to conservative half non-COVID the for capital of

to molecular we contracts commitments. good continue our multiyear customers. placement and consumable These consumable agreements our rental diagnostic helps among to that for a trends part linked agreements reagent business secure see are future However, of are normal

to of about growth Among over saw decline. second which Diagnostic X% with testing our the this of a sales. sales. also product X We represents X/X healthy represented led overall solutions, non-COVID technologies, start well product CER products, in to group. have about XX% which group sales tough the and group, sample groups, comparison continue this very our of against in COVID-XX product This within let's represents demand, a X/X drop-off total

conversion mentioned amidst QuantiFERON above the strong the growth we ongoing skin sales XX% test the As test. TB was latent the earlier, delivering CER regions traditional driver main all from with

NeuMoDx, is expect growth In rose XXX the group sales from especially in This light of sales performance This in non-COVID expectations million the CER of USD system to due USD we the of XXX prior the full testing. syndromic first on over dynamic includes also XX% year on for XXXX, applications. This the global of saw QIAstat-Dx north now non-COVID half million. the a the platform first of level in in our we to clinical In quarter decline significant half in growth due second in again COVID seen testing XXXX. headwinds have increased high testing second basis, integrated double-digit sales the non-COVID a revenues. quarter Europe. PCR utilization against revenues these the

year new placements, sales saw and COVID decline double-digit non-COVID on growth to due view and cautious in more we for rapid in this CER more testing. we sales the While a taken have significant NeuMoDx

XX our over sales for target 'XX As a is result, for new in million. USD

product full At QIAcuity the This also XX factor down tracking This for XX% in our XXXX third-party the contributing year to second PCR/Nucleic amplification time, revised was to acid to CER. the least sales Sales sharp at group. the in the same well million. USD quarter OEM are to customers. goal sales on outlook. the PCR was drop-off due towards digital Moving a were

particularly increasing quarter, growth the consumables dynamic from for pull-through Here, we placements. biopharma driven saw by

product rate group were growth product NGS-based applications business first identification for a sales business. and through Insights incremental next-generation Verogen above this NGS, the half year. year. second Also last performance, our growth the delivering The of for in products growth Digital sequencing supporting used QDI the of outstanding from of QIAGEN double-digit at into in bioinformatics and platform-agnostic CER quarter this forensics expansion human and the start acquisition is the for an Genomics CER which group had XX% The includes our

East, but Among product in compared PCR declined digital CER to groups. at by biopharma In This decline test non-COVID a countries overall while a drivers a to Americas were COVID-XX Moving products this here, the and XX% which were mid-single demand Pacific/Japan non-COVID U.S. X% slightly were the China, due Middle in sales the in Kingdom grew The QuantiFERON-TB declined XX% Results France. to sales sales the second to double-digit quarter the In CER 'XX, basis. and CER CER led declined revenues CER at drop-off Africa from rose solid the a of region, sales region. the overall sales Europe, accounts pandemic than sales, more the of for for Asia and X% top-performing CER about QX 'XX. sales sales of pace. quarter the the X% rate Among the in for for QIAcuity sales showed key the on grew headwinds region United the for the 'XX. COVID-related saw led offsets currently geographic we second digit But overall non-COVID systems. about

X% impact The COVID-XX go of operating the same income drop-off The reflecting base was operating the percentage period USD sequential now income and margin overall sales statement. first million due reflected showed of income and related capacity from down through lower points from of gross sales the to the in levels sales. Adjusted in adjusted 'XX was and This 'XX, manufacturing the the from X.X the the a of XXX quarter lower Let's rest about quarter adjusted of sales second revenues. to XX.X% 'XX the XX.X% margin of utilization. down the improvement was the lower period.

expect level to same the at the adjusted year. of gross continue the margin for We rest

to higher expenses range rising into business, pace as second in trending full ago were through X.X% especially see to were engagement, slightly XX.X% investments the seek XX% than digital investments from marketing R&D quarter a from XX.X% the year administrative at of a more in majority 'XX rising X.X% year. to these ago and X% for slightly and continued 'XX, sales. of QX 'XX period. in gain organically year which period the from expenses in than sales of the invested sales. into for we channels, the as to represented We the account customer about QX high lower effectiveness we General impact in XX.X% sales of and and now Sales

Here, benefits resources reallocating in to we up the continue to service Philippines, cybersecurity. the systems built see we teams at also have IT Poland our and into and key while hubs step investments shared of

out outlook. $X.XX our were our quarter at and close outlook $X.XX at rates constant for with exchange these adjusted statement, The for was second income shares, To count adjusted line million rate and the the CER. in EPS was the XX% share at above tax least XXX and

Operating first the cash USD Turning the from reflect XXX 'XX sales to million free for was levels cash and half the 'XX. profit flow. USD 'XX flow the of was XXX and lower cash of period same million. flow half for first of Results

in in the increase to higher 'XX seen This due include the capital our results as the As product flow requirements. current working is environment. to call macro availability of inventories is balance for as cash increase inventories. sheet the quarter, first mentioned the to in adequate ensure we for well decision the This and terms

Continuing our of XX consolidated net of balance at as at the end XXX with 'XX. debt compared million USD sheet, June the total to million stood XXX USD

means of about net end billion at X.X was X.Xx the adjusted debt the of X.Xx quarter Our 'XX. EBITDA USD $X.X compared our This second liquidity to ratio about 'XX. leverage that billion at at at remained to the compared December to about the end end position of

proceeds, sheet a Even of repayment. will year our cash million $XXX a policies. using the reaching debt for in a use and continue disciplined support this proceeds of approximately the repayment, we third capital business to this of terms of have allocation balance maturity quarter have healthy portion with and In these expansion we to

hand I now to would to like back Thierry.

Thierry Bernard

strategy key growth Roland. And allow the midterm thanks, to and and for to the this growth opportunities. This focus Many based customers is a meaningful our and across targeted Life take on our Diagnostics to review and portfolio minutes at highly generate Molecular ability please attractive balance basis Sciences on few aspects above-market serving me point, our of to in returns.

a through key our that shore walk me business. points up Let couple

remember First from the rest high-margin of see that recurring QIAGEN our highly XX% of foundation revenues. over consistently sales on all, coming consumables. of We total

Our a carry environment, and of are topics the longer-term in of And some balanced is used closed the of a kits a consumables. drive range that solid Sciences also Molecular products But well have manually, healthy, a wide portfolio healthy margin. across use mind automation so prep challenging broad opportunities expansion. for in are keep system sales of there despite real our where gross sample markets Life some current of Those of outlook. the Diagnostics, our these more both

good into Life is translational For research health already medicine, therapy ready target as the funding microbiome disease, and can gene response, like care. advances the example, we to And an of and attractive to capture topics the residual research way and see diseases support continuum areas of cell in clinical immune we those areas in opportunities. oncology. and QIAGEN oncology and make customers levels liquid key biopsy, to or infectious Many minimum more their across ability target continue here, positioned we hot Sciences, where

future is and more In patient in clearly life a and the leader technologies. being that are QIAGEN molecular fact, increase molecular and since ever science, more clear diagnostic, the in testing It keystone molecular both of a for clinical is growth to is clear pandemic, applications research utilized more care. quality than

In stages our well are growth commercialization leveraging position strong with potential. pillars, we early as leadership products as significant in

the applications obviously, than foundation and have This preparation First the microbiome standard molecular of growth research expect sample CAGR above-market portfolio. the gold to as in solid kits, continues every almost workflow kits example, portfolio as continually implement growth our while both front are CRISPR. technologies last have instrument biopsy, to technologies, liquid used in the clinical well which less to such capture emerging of market reason And mid-single-digit again low- upgrade in QIAGEN which core in no automation once robust, Sample the we or comprehensive in evolving sales delivered few midterm sample leverages labs. years perspective. we in to lead

leadership TB The growth very latent double-digit has on good Our is been strong second base franchise. a pillar for delivering with the sizable QuantiFERON QuantiFERON reason.

Tecan, with fourth using but XXX Now Hamilton the with people been on DiaSorin, the generation partnership for and test. of more and of enhanced automation through with screened acquisition since Well the have than million billion Cellestis. QuantiFERON our has QIAGEN sales generated over it $X also date to cumulative

old with Our the effort national antiquated test. skin modern latent this specialized the have screening critical ongoing teams relationships test to commercial entities built transition in from TB to blood

Moving to pillars stage. early X commercialization our in

broader the pandemic. value for a and high COVID during infectious testing, from in excellent top to as taken much for boost to utilization disease they a And the respiratory expand on key position systems testing for received were syndromic in NeuMoDx, while context system their has are QIAstat those menu used platform. certainly continue platform, customers we Our lies quickly those based among QIAstat some a differentiators. as

is It with its as the results and market quantitative the provide on analysis more treatment recent to already it sample market. preparation, very for brings #X targeted value on the upfront no added operate to PCR-based have positioned decision. clinical Some easy capability

testing already unmatched true offer random-access of are have platform next-level other U.S., broadest in in loading markets available. technology the the same we In mark, running to and seen the support the which we as NeuMoDx At developing test. the and most have test the for response. menu Europe one delays CE capabilities priority core the time, a accepting some laboratory-developed of menu pandemic consequence sample with testing

in platforms of especially Those the for are systems novel address hours. last in And of line under labs our QIAGEN PCR samples. the companies up down democratizing result QIAcuity to digital to the as instruments platform. bringing the launched customers time volume PCR. PCR scaling technology, pillar Those wider the X integrated digital customer needs important high with And for of base. well processing are way the rapidly menu as internally with partnering of low-volume in digital all biopharma expanding assays emerging developed to users academia, we from with applications growth,

Looking in market forward, enter a be will to clinical key the the FDA submission milestone XXXX.

we portfolios on sharp has our leading And by is areas. focus anchored position. on have high-growth while growth a QIAGEN core they targeted pillars, where business are Our

which X and for preparation we As solutions, identification included top human an provider example, a sample kits. have PCR are

leveraging the bring which Verogen early we expand resolution into recent as are cases those solve to and offering XXXX, acquisition is new with position We application to this next-generation now affected. sequencing-based ways of

also considered top next-generation and sequencer. businesses, any years. as of strong QIAGEN the solution growth provider market taken share recent bioinformatics, bioinformatics is with QIAGEN In delivered for significant a we and especially consumable have Insight in Digital those for most use

Precision is for able offer company with partnerships biotech PCR, example to guide help PCR over next-generation probably pharma to And has and Another diagnostic companies pharma quantitative XX sequencing Medicine. only and company. we to treatment modalities are companion the digital decisions. QIAGEN

give capitalizing our more this And now potential. opportunities more XXXX. challenging to well delivering to to So And this you on that you committed are and may portfolio leveraging we summary growth. midterm are while with diverse brief see by a to markets positioned back than be teams helps attractive our year this in expected, details Roland growth bit on attractive for outlook

Roland Sackers

Thierry. you, Thank

third the Let quarter. on more perspectives for and me for 'XX outlook also provide updated our

of our least This X.XX CER. to sales As exchange USD for compared goal billion at we least billion constant USD earlier, rates. at the noted X.XX prior year at full outlook have revised

driven dynamic X mainly significant is of revision coming factors: testing our orders customers. as OEM COVID well large in as by bulk Our drop-off volatility the from

test million. of USD sales about new assessment XXX of XXX million RNA. sales have in In XXXX, Remember that initial reduced level from we our mainly of for to million XXX to the were for for terms in about USD and sample redeployed a USD COVID-XX were USD XXX for pandemic, XXXX, had obtaining we during use technologies these that use products million

it understand approaching we that products. for pre-pandemic So are to baseline important is the these

an in is the we our to seen area OEM have regards In this volatile. be business, that past, can as

are against our of in bulk volatility This plans. customer certainly patterns results. initial terms involves impacts customer that which seeing non-COVID this COVID order orders, sales year We business large-scale and both

In The terms light year. how regions, was in keeping we expected market economy. develops Chinese trends are eye of and sequential in the this taking of an on more of improvement the the time during China that is

for a year, more second of the are than So cautious we half view 'XX. of taking the at start the

over flat least now time, the resilient growth non-COVID than expectations are strength We expect groups remain We of portfolio peers. with see for sales of the base CER. our our in expecting product consumables. XXXX. industry-leading At is now the X% healthy by HX of higher at China business non-COVID same our driven demand to growth of sales we many sales This

healthy year. remainder instrument We level anticipating of are placements for also the a of the

contribution rates. we profitability, constant exchange have outlook with the In reduced consideration terms for adjusted EPS into $X.XX of revised at of least at taken the sales

the first half into in such benefits second cost taking to the having very balancing to business. top accelerated priority disciplined investments of R&D see during half. been when the while from we activities the year also approach as have remains This certain We investing a expect a

Moving quarter. to the third

$XXX are at share per for CER. at outlook at of be CER. Adjusted sales $X.XX net expected Our share to also per is least earnings least million

impact and XXXX. year adjusted currency both based As neutral rates on expect X, we the August as for net and for EPS sales of movements the on a full

net For EPS. impact the a sales tailwinds on neutral expect third quarter, of to up we on percentage X points adjusted and

to back to I would like Thierry. hand now

Operator

check muted, your We're function. mute not you're you could hearing if if you. Thierry,

Thierry Bernard

Yes. muted. I sorry. was I'm

message, quickly, very of quarter amid delivered macro first in second to challenging we XXXX. results summarize the strong trends, So

outlook for EPS. our sales net We both and adjusted have achieved

solid powerful position the solution to business consumable through among From QuantiFERON, anchored of Second, or our areas technology teams our our QIAstat a both Sciences in companies Life leveraging by established leadership across new Molecular emerging and to one or the customers sample our QIAcuity, portfolio. Diagnostics driven in This are performance our profiles serving was by has sector. as top differentiated lab and deliver portfolio ability workflows. such growth

using through and we to volatility the level our XXXX value are Third, sheet full in balance our ordering among to adjusting investment. two, significant year we our And outlook for one, maintain high continue to a of reflect: and are in and customers. testing; nonorganic the profitability organic create lastly, drop of COVID-XX healthy OEM

business QIAGEN, midterm well one believe growth the Against the delivering we this portfolio set. potential our positioned that the in goals we highest in remain have profile backdrop, is are currently of our the of industry. growth confident base company, and on that We deliver to

successfully on will of dedication track us our our current through help navigate record goals, with of to environment. Our executing macro combined the the teams

I'd to and the back hand you that, John Thank for session. like your operator attention, you. the With to Q&A for thank

Operator

Instructions]. [Operator

Our with from Patrick first question Citi. comes Donnelly

Unidentified Analyst

for Patrick. This on is

seeing the and perspective? between kind in from quarter, large So decline And of X% What funding parse you pharma is you biotech there a customers in in a science saw are trends? biopharma I emerging CER quarter. anything life to the out saw

Thierry Bernard

. Thanks,

First especially environment for science, of overall that we healthy. all, remains the life consider for extremely funding,

example, We seen of into cuts CDC or major budget, for have the not organizations. other

Second, pharma exposed other or companies biopharma we than less are probably many to over-inventory.

a But demand the softening our sometime trends we overall, in not activities. are biotech of some for affected moment. that much at QDI by We bioinformatic those seen have

Operator

Manesiotis. We'll take question next Odysseas our from

Odysseas Manesiotis

years makes on able In TB. on comfortable one to side position What market test your better you on a be similar ask to the of a you'll this immunoassay maintain to your back? scenario, peers compared launched QuantiFERON. one that few want largest to I HPV So yours

Thierry Bernard

with have a first increase example position, partnership and our very it's potential the good planning Odysseas. a of prepared This for question, all, this we this automation leadership behind probably future is tests. company of and back-end And of I the our of But DiaSorin very was competition. would the a rationale say, good with

In addition Tecan. this automation with Hamilton we to front-end partnership partnership, built or

on As most for the have as latent result, automated the of a market. today, workflow we TB

publication Second, a brand QuantiFERON. side, on the the are education, people XX extremely many side is all QIAGEN about WHO's the medical This for others. medical many real around market. name dedicated and sales, we talking marketing against relation education the years organization TB, close on the of Dedicated with with on on years, to the fight so

market around So course are of the we latent awareness for belittling the the not competitors, the probably the it see TB potential necessary positively we because fight tuberculosis. against testing on help arrival it raising in from but rather will

Operator

We'll De Bank our with America. next of question Bruin take from Derik

Unidentified Analyst

on Derik. Peter for is This

Just product anything here be customer at have whether have third exiting kind things quarter? at be stable geography? point level, of remained it in high XQ, guess this Just by since a the I incremental class, generally things or evolved how discuss would you And could helpful.

Thierry Bernard

Thanks, Peter.

think colors. gave that we into to some there I moment, the nothing highlight when move is I believe geographically QX. already at Roland

need of of the You Europe, the a in either world, Germany a holidays, of rest QX or salt. strong know Europe. also that we grain for especially August for in July in Part with take to

any see the as sequential don't Third, we Chinese Roland market. highlighted, on improvement,

geography-wise. or don't no is So there that product-wise specific at think either with the I highlight moment

school, for the many that especially would so in quarter, important Because it's is Why? just QX with U.S. QuantiFERON. an an us, is students highlight going interesting time. testing What for back I especially to

know from X don't we same QX shouldn't we going achieve $XXX as performance to far quarter, the that. but be I So generated that with if in away are million

Operator

TD Cowen. We'll go Brennan next to with Dan

Daniel Brennan

just unpack the don't to Congrats a you mind. little guide I on the if quarter, wanted bit, guys.

COVID, what sounds OEM decline? can for the OEM of it X% CER business I'm business, trying just it the the remaining -- What said how So from to trying business from year, of big in just year? versus Roland $XX full business for understand get COVID you you the the I business ex what Because Or the are much like to year. million of now, chunk assuming a I'm sense and is? what a impacts that. do China? or the the OEM are the cut the QX? million business so, does size you how just your $XX that Thierry, OEM for is for how growth help know OEM the like And

Roland Sackers

Thanks for the Dan. north layer numbers, would of take numbers. another I if out But be growth for it, call year. we want Thanks, Again, Yes. actually, not question. would rate non-COVID do our, the of of the introduce to OEM XX%

So you volatility, XXXX. see for can is business actually clearly that our is which affecting it the OEM

pack even whether few I above strong oligo typically is And call OEM to than before, business, help volatile orders said for digits and it had clearly either Just very business it with to enzymes you significant the different a a bit year. consumable -- and very business that as box last our typical, X it, being business blue and it's whether very us. customers, a

around Last and revenues. it $XXX it a was we As COVID business. about combination million in said is of before, year, non-COVID-related

the particularly don't we given from For already now sell on USD a And given last that time like in be to anticipated when overall because overall more for reviewing it unfortunately, that, this that that pharma year worthwhile saw base also macro has this around million. XX the probably less right rather I to it seeing it's We initial performance and now expect year, a think overshadows new or to volatility we volatility. see the created year. and the existing companies, We the have environment, additional that drop larger guidance. that, inventories the is diagnostic it remains our consumable we things business. the clearly rest of have But

Operator

from Arias question next with our Dan take We'll Stifel.

Daniel Arias

the expand Thierry, healthier see non-COVID demand do the the there? year it? you or you believe? then on like business a there for in than Sciences China performance finishing slightly year-over-year, if the just And I can did environment research clinical have down setting. it's Roland out sounds like What look how versus you It Life Diagnostics

Dan's part stick I'm the And destocking. Roland, lower then a margin a to of if follow-up could if on is I portfolio. mistaken, OEM that not question question on

So is the profitability, what's material that enough? mix? margins just is impact not happening positive on bit actually there on having Or destocking the a on a boosting

Thierry Bernard

Roland, What follow immediately up propose on after. with I'll Dan. question on we'll on China then the Thanks, I is just take destocking and

Roland Sackers

it's that Yes. or to say above margin well. margin as customers. talk of it's about to we EBIT XX% in more only OEM, in in do On said, want expect don't again, as terms a year less much few performance too fair do general. I margin think I a finishing I But

So that's you do know an very this math that our the is business Nevertheless, by business consumable much overall has you very Again, deal driven. margins. strong yourself. actually can overall a

put So I things perspective. to in think hard it's

Thierry Bernard

Thank you, last and Roland. for we years. And doesn't market least X believe current the the fair at vision market for vision that to the the it's to situation change regarding this say our China, I been that explaining have

world diagnostics, the it all, market both market, it's second the First science clinical just significant after for is life of a and American in market. the

the Chinese local very specific very, pharma competitors. China. health only the nationalization favor foreign but trying words, is In market care, in significant diagnostic, towards trend are it of also a not other with Second, against to authority champions a

and do China we development. and from mainly that we manufacturing is our but company, that second independent product sales have and which specific able which a addition with to site in bit this at QIAGEN QIAGEN will consolidated coming revenues. China, cope Shenzhen. be is owned in localize can I help and that, the companies do and typical rather also a for operationally that activities to research China, by with and We to paramount is same. years. manufacturing key is is is Chinese-originated situation, fully selling Chinese QIAGEN brand our in and company in This have the a And development marketing fully other probably our to differentiation results it because in be a think research in To

from have would or double digit, to be a what digit, before would the the year just double from me I have should situation different QIAGEN coming a I However, year I that the per that after you factors growth post what XX% sales X% in be probably explained, year, probably would X% one to competition if more as than due expected company Last, many growth normalized expectation around repeated diagnostic Chinese you China told more less asked in pandemic, from XX% our And there to science. would low be pandemic. of moment in much times will life that reason, the would in luckily, China clinical is immunoassays year. for where in science positioned Chinese I competition say chemistry. or life per coming than is businesses, technologies molecular intense other clinical than such the from QIAGEN Probably probably at in clinical diagnostic key

Operator

We'll go next to Goldman Matt Sykes Sachs. with

Matthew Sykes

is you issues, what help Maybe many duration customers very ask just us have those visibility OEM I'll the two given it's customers, the sort of on and of if like volatile destocking these in not any? of quick business, both sounds out it just ones, terms generally of them Maybe with the type it's that. and on But upfront.

on there But of the U.S. the realize the And to try and do menu I you the of approval that's then sort accelerate that out of of a there's anything the you understand order different goals of in have, in is on in a platforms control terms secondly, number to menu just can terms U.S. the process. reprioritize of menu the or types your that of sort -- expansion? that menu lot in into to your diagnostic reporting tests

Thierry Bernard

to two are first, Roland, as feel in questions. you OEM chime those free Matt, want, well. and if good

in can as those imagine, in close process. obviously, Roland And customers. a very you few we their have, presentation compulsory with selling highlighted discussion rather is what to his them We that basically are

talking enzymes. are oligos We or

accuracy. So having or forecast on we work forecast improve

few the visibility good a highlighted to in on coming the have difficult in we this moment why strongly that minutes We that business However, this believe Roland I ago, on at they year. are have, we think faced the that good years. business is been million least this also base more with softness side, a that and continue it at $XX reason demand and has their

that it's second the slightly to a And priority to are is the It with menu to the question. was we we for had answering U.S. the good try our allocation. point. be is submission pandemic to What at make for this the NeuMoDx, the a happening some On panel, the U.S. is menu the intense we therefore, in push to of It's situation volume. postpone QIAstat On FDA our had different. discussion In NeuMoDx, in choice which problematic very giving moment, U.S., GI the significant at portfolio would in panel

We this year. again starting are

For submitted CT/NG. example, we have

year submission. or XXXX compared We was and to delays I plan X to continue But for in to situation. X.X-year because probably answer the early the we for will this had increase But we 'XX. have taken NeuMoDx, initial pandemic pandemic repeat,

Operator

our Morgan from with next Aisyah question We'll Noor Stanley. take

Aisyah Noor

guidance the broader X%. non-COVID now over lowered I had given a for expectations your question growth around you've to

will I How call state have As for balance are of visibility the that, growth you you with non-COVID or ability do up okay. lower next, then you launches be about your And look a lines product to panel the at in XX that? drive contributors double-digit after you OEM portfolio segments that And the now. your and to if the the which have in to follow-up then feeling think that's biggest you XXXX? it, business. months X here on lined today

Thierry Bernard

Aisyah, lot, Thanks question. a for your

XXXX a no sales, and that a base above is what we reason we QuantiFERON at in we to to stick digit, to to for very this lower took What our for the portfolio the for deliver. always see all, business, of a non-COVID. grow will to has clear. what growth, First as market We for on you said QIAGEN statement, double-digit be decrease than example, never commitment brutal we There is double growth refer XXXX. need and least

we to our that tech this. mid-single-digit portfolio in say confirm we In XXXX, sample today, X, when have that. said QIAcuity we profile. double-digit QIAstat back to December stick we you definitely the December we potential. 'XX, we in said gave what As and We believe growth in a day presentation confirm We low- that has growth clearly same a

against of COVID. obviously, weight, fighting is the NeuMoDx

base as growing you portfolio as as serious be all the U.S. do affected it that we So and this Europe But long because release exceed for the COVID. by think double-digit in years, launches, seen that this, that NGS we XXXX. example, business new those We we press our really, have positioned growth, in and stabilize to of not fact will market the year in our in well. for elements, will are not be coming in enriched plus QDI, companion is diagnostic recent have constantly growth the only

Aisyah Noor

and the then expect Great. program a this. for get just when share And That's buyback approval helpful. to on you follow-up quick

Roland Sackers

we is probably that add, important together said, we in I year. growth I mid or think why important a adds term. an think you do plus before, as But if to I I you see which EBIT that, just see not what nicely before long say single before, also have again mid- see can for to XX% We clearly that rate any also something above-market we think go is I to there, aggregate it's think we this reason we improvement also margin said what up it's in we shouldn't digit. also, again, high to margins that midterm, said

that good announcement it's as quite so. actually important with And and I of has think have that nothing well. as think a probably we to record doing trend stable, about realize also yesterday, the think changed remains of I both I

shareholder got In terms news good of share is we approval buyback, the the on meeting. the

technically for share a or approved buyback. we more are synthetic So less

that quite is I the ways XXXX, successful we did we of are it's share capital more buyback a have technical middle that different of going and in full we which are allocation, some to work also as obvious continue in we as the M&A are activities. what that, we of Right have into blood said on As X open business, topics we Once Verogen since both course, quite my investing remarks, flexibility. activities to clearly did now, and or in instruments as did less we repayment our where you done financing through. some to with know, unsettling we has

Operator

Hugo question BNP from take We'll Solvet with our next Paribas.

Hugo Solvet

TB. and Thierry, QX, to after on of think X X accounts? guide Tier you're can business will for and tracking well the in the given phasing year full have one QX? follow-up sales strength Just QuantiFERON U.S. Tier should or smaller And maybe the growth in accounts you Maybe, about And the that. we of talk of I

Thierry Bernard

is Hugo. market. for as America you, our Thank you're probably QuantiFERON, And North main aware,

X, referring at LabCorp, laboratories national typically We And but rate. and Tier to comparable extremely ARUP, are we both like between example, the call dividing market not are X and growth accounts, Quest, for Tier accounts. we are well a nonnational what developing

that, from but fourth the not also to automation it passed top In DiaSorin, any we addition, we premium DiaSorin, a words, have extract we able to been value the the year, price. at of on a last also, generation year. at of time customer with from we But only do QuantiFERON automate price in not other beginning only increase,

to opportunities. QuantiFERON What the driven price. that of that volume us before in rest U.S., than in like especially like and is optimistic confident the in the is for we would the I North to open insist mainly America, Nonetheless, by growth QuantiFERON, world continue for new makes

is opportunity For diabetes patient becoming significant a for us. example,

immigration there starting period. again Second, there higher is to administration at or especially testing previous pandemic pace compared for a is countries, the the from immigration, QuantiFERON. emerging is Anytime

is are the North America. is had And price precise where of one in we investment question, last Hugo. the it but U.S. but your of price after very to a knowledge a QuantiFERON. have, question, is comparable the second least much you I easier. tests skin the believe where a more of in a what not skin answered now Therefore, the is test that interesting think a And significant least, country conversion is of bit I a at marketing,

Hugo Solvet

Yes.

going theoretically baseline just of better assume Thank you that low over follow-up XXXX, pre-COVID a to should will million? the as have answering we think what growth But of Or XXXX COVID, sense the USD previous landing for the single-digit a to the you Just baseline non-COVID a point about should on we portfolio. back of about the -- period be? XXX question on on the assume XXXX. sales

Roland Sackers

No.

portfolio, plus, in Again, be assuming I the probably the more $XXX would at a the points. $XXX is might less or area percentage I say year for I baseline. underlying plus million next least a revenues think some of few in that million that think growth stay

Operator

Bank. We'll go Falko next Deutsche Friedrichs with to

Falko Friedrichs

you QIAcuity what in -- winner a remind and very makes continue is with question the well. QIAstat non-COVID -- that to mean the you line be I to doing us can market? seem My in will on confident Thierry, be the just this

what of lagging makes will one a NeuMoDx of might that the you drivers that bit confident be sort be So behind?

Thierry Bernard

number quarter question, X it's investment Thanks. but years, because system more X.X a It's of us look of an cannot that. of competitive obviously. explained the of year, market. the very are differentiated. U.S., what taken we judge not has an a or with first Obviously, a good instrument like the in first market share of a extremely at #X NeuMoDx, it's What is QIAGEN or we like are in the XX% on that makes the happy Falko, -- system, know, confident platform is But I in when you already market. placements, than all, and in we something years in And as current the that late we

there over NeuMoDx have easier this differentiated, none solution of or upgraded seriously business, are to better completely big competitors, slightly. In automation, use. the them their is years where XX last very

for the take result at assays this first hours and laboratory our sample, or the You of kind date, a on can do, same platform random kind competitors. the of with the in NeuMoDx minutes regulated XX against to any assays. any market and DNA X laboratory-developed to only main a where access, time, True test either XX

that the no differentiated. doubt platform is is So there

Europe continue have menu. already to XX more we for of infectious the develop menu need we countries, diseases. to obviously, But marking assays CE largest remember, Obviously, than available, one in and the

allocation fight. all per to same review geographies what's to the best we capital solution to have strategy, tools best the we constantly the At to need So the market. the time, what's push that

Operator

will come Our Woodring with last from question JPMorgan. Casey

Casey Woodring

but touched on have late. on And apologies if this so you guys jumped

on Just 'XX. maybe one Roland for

side. So X% next non-COVID expansion in in line XXX the your Street similarly, rate be will is It for exit at sounds on Street the that is high And margin like XQ the growth range basis at growth. points year. single-digit top

numbers So 'XX. of be demand? if takes can maybe maybe expectations of for in on just continues Kind 'XX you from through walk level instrument and That to puts those kind factors demand set would pharma maybe the and and helpful. for China soft swing OEM of kind be just

Roland Sackers

because Yes. for Thanks, well should as as Casey, job my do well. exactly that asking now I you right question what because see again,

Overall, So make well. I think uncomfortable at quite fits you doesn't that you I us all. that just think as said stated before, what

which is very reasonable. environment in Europe. still in market There that course, is ongoing But volatility particular of the a an change think clearly there in There market. is all either in war, might I direction. is

think now do is of a the right there's around. I to So hard get in market, uncertainty our lot which hands

believe reason us going to 'XX to our any XX% consumable is is that 'XX. business, we good very it's or resilient the in that for and Nevertheless, a change of haven't either seen news in business

more is shining But said time, clearly So underway. of I overall, as we There's into next even we At opportunities. before, are a say, areas overall, growing there's performance. of upside a there well our just couple with the overall good growth, where year, are comfort others. particularly good same pillars would all very some than

there you side that that even diagnostic and believe good high believe clients is it OEM to and another and As our a normal a pharma to double-digit back said, come very grower, single, reason midterm, do we helpful. just becomes

might We not stable a more in China be well. becomes in that but hope industry all only that our general, as business-wise environment, helpful

as we things. and the lot out? so that at now last there's we're for in that rate, with X% upside ongoing non-COVID we we many menu that, X time, shouldn't here, with what So something expansion shouldn't in helpful had is too very And QIAGEN, Is accelerated early opportunities. healthy the is was growth also I growth OEM, actually that And quarters I think, many of driving finishing a we our forget I consecutive there a call it Absolutely. a all us about healthy At forget of reasons rate. talked that lot seize also a expect very performance. ex XX-plus them again, an to double-digit same areas year again, years, where also in could think we R&D activities. still

John Gilardi

to for that, call Thank the I'd today. you participation like your here. end With Okay. and much Roland very Thierry,

you reach Bye-bye. questions, If please to you me. do Phoebe topics. much. and not Thank hesitate to out or suggestions, you have support any very available to We're comments on always

Operator

have and a day. Ladies call. gentlemen, Thank Goodbye. joining, concludes and this pleasant you conference the for

Qiagen (QGEN) 9 Aug 232023 Q2 Earnings call transcript