QIAGEN's CEO Discusses Q4 2011 Results - Earnings Call Transcript


Q4 2011 Earnings Conference Call

February 1, 2012 09:30 ET


Albert Fleury – Director IR North America

Peer Schatz – Chief Executive Officer

Roland Sackers – Chief Financial Officer

John Gilardi – Vice President and Corporate Communications and Investor Relations


Quintin Lai – Robert W. Baird

Doug Schenkel – Cowen and Company

Nandita Koshal – Barclays Capital

Tycho Peterson – JPMorgan

Jon Groberg – Macquarie

Martin Wales – UBS

Bill Quirk – Piper Jaffray

Romain Zana – Exane BNP Paribas

Peter Lawson – Mizuho Securities



Ladies and gentlemen, thank you for standing by. Welcome to the QIAGEN NV Investor and Analyst Conference Call on the Q4 Results 2011. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. (Operator Instruction)

I would now like to turn the conference over to Albert Fleury, Director IR North America.

Albert Fleury – Director IR

Thank you. Good afternoon and welcome to the QIAGEN conference call to discuss our results for the fourth quarter and full year 2011. Joining me on the call are Peer Schatz, Chief Executive Officer, Roland Sackers, Chief Financial Officer and John Gilardi, Vice President and Corporate Communications and Investor Relations. A copy of this announcement and the presentation for this conference call can be downloaded from the Investor Relations section of our homepage at www.qiagen.com.

Moving onto Slide 2, before I turn the call over to Peer, please keep in mind that the following discussion and the responses to our questions reflect management’s view as of today, February 1, 2011. As we share information to help you better understand our business, we will make statements and provide responses that state our intentions, beliefs, expectations, or predictions of the future. These constitute forward-looking statements for the purpose of the Safe Harbor provision. These involve certain risks and uncertainties that could cause QIAGEN’s actual results to differ materially from those projected. QIAGEN disclaims any intention or obligation to revise any forward-looking statements. For a compete description of the risks and uncertainties, please refer to our Form 20-F filed with the U.S. Securities and Exchange Commission.

I would now like to turn this call over to Peer.

Peer Schatz – Chief Executive Officer

Thank you, Al. I would like to welcome all of you to our conference call and the opportunity to discuss our results for the fourth quarter and full year 2011. As you saw in our release last night, we delivered dynamic growth in the fourth quarter. Net sales were up 17% at constant exchange rates to $334 million by adjusted net income rose 19% to $74 million and adjusted EPS came in at $0.31 per share.

The strong finish led to net sales growth of 4% in the constant exchange rate basis for the full year to $1.17 billion. An adjusted EPS for the full year rose to $0.98. We achieve these results, which were ahead of our goals against the backdrop of a challenging business environment when they did not improve during the course of the year.

The key driver has been our progress on four strategic initiatives. Number one, we are driving platform success, especially with the rollout of the breakthrough QIAsymphony automation platform. Number two, we are adding content across all of our customer classes. Number three, we are expanding our geographic presence especially in high growth markets. And number four; we are improving our efficiency and effectiveness. We are clearly not growing yet at a rate that we believe our company can deliver, but our strategic initiatives are on track to get there. And achieving these results in 2011 was an important step of course to accelerate full year sales growth to faster pace in 2012.

Moving to Slide 5, you can see that we achieved our goals deliver markedly improved year-on-year performance in the second half of 2011, compared to the first half. We had said previously that the second half of 2011, we provide a proxy as to how we believed growth could accelerate for the full year in 2011 and 2012.

Our sales growth in the second half of the year was above our target of around 7% on a constant exchange rate basis. With the second half, organic growth improved and contributed about 4 percentage points, while the Cellestis and Ipsogen acquisitions have been performing very well and they contributed about 5 percentage points. So, this total sales performance helps our confidence for accelerating growth in 2012, but again we are taking conservative perspective given the ongoing challenging environment.

I’m now on Slide 6, to review a few achievements in 2011 against our strategic initiatives I described before. In terms of driving platform success, we achieved our goal for more than 550 installed QIAsymphony systems worldwide at the end of 2011. We are very pleased with the rollout and our only in the early years of a decade long product cycle. Also in late 2011, we introduced the QIAensemble Decapper system that automates the tedious task of manually handling clinical liquid sample vials.

Based on recent industry announcements, it is worth noting that both QIAsymphony and QIAensemble Decapper receive very strong endorsements by customers. Even competitors for instance now recognized that, for instance the QIAensemble Decapper system addresses a significant gap in the liquid cytology vial processing and some are seeking to create their own systems a very significant undertaking.

In terms of adding content, we have been very active in Personalized Healthcare. In the U.S., we completed our two submissions of the therascreen KRAS assay as a companion diagnostic. Discussions with the FDA are progressing well and we anticipate receiving decisions in mid-2012. We also added new co-development projects during 2011 that will lead to regulatory submissions in the future.

In terms of geographic expansion, you saw in our release that the top seven emerging markets are delivering dynamic growth. We entered India and Taiwan with our own operations in 2011. And in terms of growing efficiently and effectively, we launched a major efficiency project at the end of 2011. We streamlined our organization and are now working to free up additional resources that can be reallocated to this growth initiatives. These actions will help improve our adjusted operating income margin in 2013.

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