QIAGEN N.V. Morgan Stanley 24th Annual Global Healthcare Conference

Can everyone hear me? Yeah? Excellent. All right. Welcome, everyone, to our fireside chat with Qiagen. I'm Ayesha Noor, Head of European MedTech Research at Morgan Stanley, and it's my pleasure to host Qiagen CEO, Jonathan Pratt, and CFO, Roland Sackers today, as well as IR, Domenica Martorana. Before we start, I'm obligated to inform you to check ms.com/researchdisclosures for important disclosures, and to check with your MS sales rep if you have any questions. With that, welcome, Jon and Roland. It's great to have you here in New York, and Jonathan, for the first time, as CEO of Qiagen, very pleased to have you. If we kick off with your recent joining of Qiagen, it's great that you've decided to join us here today. Could you briefly introduce yourself and why you decided to join this organization, and what do you see as the biggest opportunities in this business?

Okay. Well, thank you, Ayesha. Hello, everyone. Good to be here. Briefly introduce myself, as you can probably tell by the accent, I'm a Brit. I grew up in Europe. I moved to the States in '01. In the industry, I spent a lot of my career at Pall Corporation, where I ran their laboratory businesses, some of the instrumentation businesses, and their food and beverage businesses. From Pall, I ran as president of Beckman Coulter Life Sciences as part of Danaher, and did that for a few years. Moved to Florida in the process. After Beckman Coulter Life Sciences, I led what we called the Waters division at Waters Corporation, which was about 90% of the corporation at that time. From Waters, I actually took an opportunity to run Filtration Group, which was a life science process tech and industrial enterprise that we were going to take public.

But as it happened, we had strategic interests and sold that company. We closed it about two weeks ago, two and a half weeks ago. The Qiagen board had approached me to join earlier in the year, and we eventually were able to join as CEO two weeks ago. The next part of your question was what attracted me to Qiagen?

Yes. I guess the first thing to say is, I'm a scientist.

I'm an undergrad chemist. I first used Qiagen in the lab, and from there, in each of my career steps, the kind of ever-present Qiagen blue boxes were in the labs, be it in Waters, be it in Pall Corporation, Beckman, et cetera. I knew the brand. I knew the reputation of the brand, which was pretty much deep customer intimacy and high-quality product. When I joined, I was intrigued, so I went to speak to the board. The portfolio itself is very interesting. In sample prep, we touch every part of the healthcare space, and so we're exposed to everything in sample prep, and it's a deep-rooted part of the organization. Some recent interesting acquisitions and bolt-ons in NGS. We also have the digital PCR franchise, as well as the recent Parse acquisition.

Also, there's a diagnostic play, which each have their niche two stools. You've got the QIAstat and QuantiFERON. So, interesting portfolio. Then you look at that and say, "Well, what can I bring to it?" If there's been a theme in my career, it's been simplifying the complex. Capital allocation focused on one or two things, not six or seven things. It's kind of a theme. Then bringing that right down through an enterprise in terms of choice and simplicity sounds easy, but it's what I tend to try and bring to it from a strategic choice perspective. Make sure you're structured to execute on that strategic choice. But I'm a front-end guy, really, a commercial guy. I think if there's a theme again through Beckman and Waters and others, it's improving that commercial execution.

Really bringing commercial excellence, sales funnel management, demand generation, product launch excellence, everything through a business. In a business like ours, which I love because it's razors and razor blades, every single placement matters, every single instrument matters. So having a great front-end commercial enterprise can really serve you very well. So I thought I could bring a lot of that to it as well. So here I am at Qiagen.

Mm-hmm. If you think about your principles as a CEO, what do you consider the most important or the priorities for an organization?

Yeah Public listed? Is it top-line growth, profitability, EPS growth, free cash flow, returns?

Help us think about that.

Yeah. At the end of the day, in the situation we're in at Qiagen right now, I think growth is a priority. We have some sensible margin expansion opportunities as well, and I think some of those comes from wonderful things like price and growth and instrument choice, et cetera. Roland, perhaps you want to comment on where you see Qiagen from a capital allocation perspective right now.

No, I think, Ayesha, we have since 2012, I would say, a longstanding capital allocation policy. First and foremost, we are happy to invest in organic growth opportunities. I am quite sure that also our focus on bolt-on acquisitions is still there. I do not think they would be looking for anything larger in terms of transformative deals. But of course, we do have excess cash, and if there is an opportunity, once we more or less continue to have excess cash and current net debt to EBITDA, as you know, is below one, there is opportunity also to continue with share buybacks. Most important is we asked on the latest AGM for the approval, so if the board decides to move forward, we can do it anytime.

Yeah. I would add as well, in terms of bolt-on acquisition, we would do something tomorrow if it made sense. But I think strengthening the core, strengthening our execution, being the best owner of an asset comes from how strong you execute in many ways as well. So I think there is a lot of focus I am bringing to it on organic execution as well.

Mm-hmm. Okay. Excellent. I wanted to start the discussion around AI. You recently announced an AI partnership in testing with the QIAsymphony Connect. Just talk us through the AI-driven automation opportunity and any benefits you see or are hoping to see in your early tests.