Q4 2020 Qiagen NV Earnings Call
[music].
Ladies and gentlemen, thank you for standing by I am So see there your P. G I called operation Welcome and thank you for joining <unk> Q4, 2020 earnings conference call.
This time all participants are in a listen only mode. Please be advised that this call is being recorded at Qiagen <unk> request and will be made available on their internet site. The presentation will be followed by a question and answer session.
If you would like to ask a question you May press the star followed by the one on your Touchtone telephone. Please press the star key followed by zero for operator assistance at this time I would like to introduce your host John Gilardi, Vice President head of corporate Communications and Investor Relations at Qiagen.
Please go ahead, sir thank.
Thank you very much and welcome to all of you to our conference call today. The speakers, we have for you or Terry Bernard the CEO of Qiagen enrollments hackers, our Chief Financial Officer also joining us this EBIT low director of Investor Relations. Please note that this call is being webcast live and will be archived on the investors section of our website at www Qiagen.
Dot com a copy of the press release is also available on the same section.
Before we begin let me cover our safe Harbor statement, the discussions and responses to your questions on this call reflect management's views as of today February 10th 2021, we won't be making statements and providing responses to your questions that state our intentions beliefs expectations or predictions of the future. These constitute forward looking statements for the purpose.
The safe Harbor provisions under the private Securities live as the gauge Reform Act of 1995.
<unk> involve risks and uncertainties that could cause actual results to differ materially from those projected qiagen.
Qiagen disclaims any intention or obligation to revise any forward looking statements for more information. Please refer to our filings with the U S Securities and Exchange Commission. These are also available on our website.
We will also be referring to certain financial measures not prepared in accordance with generally accepted accounting principles. You can find a reconciliation of these figures to GAAP in the press release and the presentation for this call I'd like to now turn the call over to Terry.
Thank you very much zone and a good evening. Good afternoon. Good morning to all of you let.
Let me please begin by welcoming all of you to our conference call today and as the first remark on behalf of our team and myself I would like to get into your wish you and your families very good health and all the best during dose unprecedented times.
Without question two program into 'twenty was a Europe significant changes and developments for all of us for Qiagen, obviously, it's significantly shifted the way we work the demand for our products and the dynamics in the market we serve.
Throughout the year, our teams continue to adapt and position qiagen to serve the rapidly changing phases of the pandemic.
They are also doing well Nixon and job of managing our non COVID-19 business, and therefore positioning our company for future growth.
I'd like to thank all of our employees for their tremendous performance. It is indeed, a humbling experience to be able to lead such a did you get your peer.
Let me go through our four key messages of today.
First our teams exceeded the outlook for sales growth and adjusted EPS in the fourth quarter.
As you have seen we continued to deliver on our commitments.
Sales grew 36% at constant exchange rates to 571.2 million Donuts and this was when we bought the outlooks that for at least 32% CER growth.
Adjusted earnings per share was 68 cents at constant exchange rates and this was well above our outlook range for 64 to 65 to 65 cents C E O.
Thank you.
The performance in the fourth quarter leads to a thicker.
Good performance for the full year sales results and adjusted EPS for 2020. This also.
Excuse me that word out.
Sales of one point to $87 billion in 'twenty represented 23% growth over 2000 imagine.
This was above our outlook for 22% increase.
Adjusted earnings per share were $2.17 at constant exchange rates. This was once again above the high end of our outlook by free.
The third key message today relates to the ongoing impact of the pandemic in the fourth quarter, we experienced dynamic growth four product groups used in COVID-19 testing.
While as well seeing further improvements in non COVID-19 areas.
The fourth quarter of represents you didn't in the trunk goes you're on your growth in sales during two program in 'twenty and also a very strong sequential improvement from the second and third quarters of the year.
Those resort underpinned once again.
But Jamie as COVID-19 relevant right.
Qiagen is not COVID-19 dependent we are actively managing our business both sales and expenses to navigate through the pandemic, but also to make sure. We are best positioned to continue our business expansion in the future and Korea. Therefore.
Long term value for our shareholders.
This is why we are putting a relentless and I insist on this relentless focus on the five pillars of growth, which we outlined to you at our recent via pure deep dive event on December eight per blast year.
If you remember those pillars include.
First our leading position in sample technologies.
Thinking.
The quality, if you have a franchise and caused by El Cubo kudos.
For the cash equity digital PCR series of platform that we recently launched for the new integrated PCR, She simple clinical diagnostic and the chaos that value agnostic syndromic testing platform.
As a final key message for today, we are reaffirming our full year two folds in in 'twenty, one outlook announced in December of 'twenty.
We are confident to deliver an ongoing high level of sales growth and further improvements in adjusted EPS for 2021.
For the full year.
We are expecting sales growth of boat 18 to 20 per cent see our growth will go the same peer youre into program in 'twenty.
This is based on the expectation for ongoing strong demand for COVID-19 products sales during at least the first half of two fold them into Q1, along with continued improvements in all other areas of our book for you.
For adjusted EPS, we continue to expect about $2.42 to $2.46 I'd see are a good day.
This reflects our plans to invest in our five pillars of growth to strengthen our competitive profile.
And I would like now to hand over to hurdle.
Thank you Teri Hello, and thank you as well for me for joining US on this conference call.
Oh I see its results for the force caught off 2020 was the strongest of CEO task force for solid, 6% CER and currency movements had a positive impact of two percentage points on the results.
That's driven by boss Covid related sales and sales of non COVID-19 product groups.
Oh, it's got presented a continuation from the short quarter for improving sales trends and non COVID-19 product.
I'll give you more detail on our sales performance.
Coming slides.
Moving down the income statement.
Adjusted gross margin declined about two percentage points to 69, 3% of sales in the fourth quarter. This was due to a continued tie out share of instrument sales and increase production expenses.
Addition of more than four net new assets are used in production at the end of 'twenty 'twenty compared to the end of 2019, as we ramp up our expansion plans.
For the full year adjusted gross margin was $69 six per cent compared to 71% in 2019, just commence at a strong level and reflects trends seen in the fourth quarter of drugs across off 2020.
The adjusted operating income for the fourth quarter was 34, 4% of sales and improved over the same period in 2019 due to lower expenses as a percentage of sales for R&D sales and.
In marketing and administration.
He asked of savings included a drop off in travel and marketing expenses during the year an additional factor is the savings from the decision we announced in October 2019, the chance to orientation of our strategy and implement targeted efficiency programs.
At the same time, we made investments into all five pillars of growth.
Second half of 2020.
<unk> also included the first time cost associated with the full acquisition of <unk> in September 2020.
Moving to EPS adjusted EPS was 42 per cent.
68 cents per share for the fourth quarter and was up 52% per dollar on 17th Seth S. T. A.
Yeah.
Cause lots for the fourth quarter and full year 'twenty 'twenty include an after tax benefit of about 34 cents per share for Ultra day X. This benefit relates to the pretax net kept again of whether or not certain pod 4 billion U S dollars related to the sale of Qiagen stake in <unk>, which was recently.
A quiet.
In addition to upfront cash consideration. We also received chefs in EBITDA a publicly traded company. This chest are reported at fair market value of Wisconsin loss of quality. Nowadays this change in value during the fourth quarter is in the pretax kept again, but just in time.
I kept again is excluded from adjusted results.
As for cash flow, we saw a 38% increase in operating cash flow to 457 $8 billion in 'twenty 'twenty from CMS, Saudi put $8 million in 2019.
The development and operating cash flow reflects the higher sales and collections during the year as evidenced by the relatively similar levels of accounts receivables at the end of 'twenty 'twenty compared to 2019, even considering the 23 per cent increase in sales during the.
Also keep in mind that you had about $126 million of payments in 2020 was a discontinued tender offer and also about $52 million of cash payout in 2020, plus the restructuring measures initiated in October 2019.
We also saw a significant saatchi cash flow during the fourth quarter to nearly 270 million U S. Dollars. This compares to operating cash flow for the first quarter of 2020 of only about 16 million U S dollars for.
For free cash flow, you saw 53% increase compared to the prior year.
Purchase of property plant and equipment during 2020.
Our investments in expanded production lines to meet force the current demand for our products as well as expanding capacity as we invest in new products focusing on all five pillars of your trigger wall.
Moving to the balance sheet, our leverage ratio stood at one five times net debt to adjusted EBITDA at the end.
'twenty 'twenty this was slightly lower than the 1.6 starts at the end of 2019.
It's the same time, our net debt increased to $1 $2 billion at the end of 'twenty 'twenty, one 953 million U S dollars at the end of 2019.
Late in the fourth quarter of 2020, you redeemed 2021 convertible notes for 177 million U S dollars and terminated related volume for about 175 million U S dollars.
This had moved about 3.5 million potential dilutive share. So all shackled to in essence has the same effect as a share repurchase.
In tandem we issued $5 billion of news your coupon convertible notes that mature in 'twenty and 'twenty seven.
<unk> 2027 notes have an initial conversion price of $80.72, all representing $6 2 million underlying shares.
During the fourth quarter of 2020, we also completed about $64 million of $100 million tranche before it expired at this programs.
Independently by banks, and so that Jewish approaches amount came as the Qiagen share price was rising.
Here yet.
I would now like to provide additional perspective on sales.
And you reported by product groups.
We have this perspective as a non set our virtual dipped off day in December.
These groups provide insights into our business portfolio and a copy of your company. The sales data, we typically provide by product type customer class and geographic region.
Other technologies one of all five pillars of growth. It's the first product category and includes product and <unk>.
<unk> is the first step in any molecular lab post that.
During the fourth quarter of 'twenty 'twenty.
Sales of sample technologies, or <unk> 55 per cent D. A.
So there's 6 million U S dollar.
This category was driven by ongoing strong demand for extraction kits used in COVID-19 testing and cause such increase in demand for DNA kits and so each launch of cutoff Perpend N S. A solution to help scale COVID-19 testing.
Diagnostics solutions include our molecular testing platforms.
Traveling three off a pillar of growth, which I quantified here on cash start to X and now I'm more day eggs as well as precision medicine and companion diagnostic co development revenues.
That's cool so it is 6% CER and were supported by Covid testing solutions and first time sales contributions from the non motor ex acquisition related to newly acquired U S sales.
But if you're on sales improved over the course of 2020, finishing strongest in the fourth quarter with solid off into the U S compared to declines for this region in the first three quarters of C. L.
Offset by an increase in decline in South Korea, who are 'twenty 'twenty.
This meant for Quanta fair on a decline of 3% CER for the fourth quarter of 2020 compared to 2019 and this was a sequential improvement from 46% CER decline in the second quarter and 20% CER decline in this third quarter of 2020.
TCR nucleic acid amplification involves oh, it's such an up slide P. C. Our solutions and components. This category includes another of our growth pillars. We saw recent launch of kayak surety digital Pcr platforms.
The first orders were received in the fourth quarter well ahead of our internal plan. This helped to drive dynamic Wolff in both instruments and consumables.
That's not the driver of this category was a demand for all am solutions and enzymes using third party diagnostic kit for COVID-19 testing.
Genomics N G. S includes all universal LNG, our solutions as well as a full qiagen digital inside portfolio. This product oops, that's faced slower customer demand. During this pandemic, but we saw improving trends against the second non soft quarters of 'twenty 'twenty, especially overall sequence.
Sing and clinical oncology applications.
I would like to now give you an update on sales results by product type and customer class and.
In terms of the two so two product groups during the fourth quarter sales of consumables and related revenues was sort of three per cent are the highest quarterly weighted on a comparative basis in 2020.
In cement sales continued his twenty-twenty growth momentum in the fourth quarter sales were up 52% CER and reached $77 million in the fourth quarter of 2020 S. We experienced record lateral placements, where it's across multiple product categories, including sample preparation.
Platforms as well as general integrated P C I commitment and platforms.
<unk> diagnostics sales were supported by an improvement in trends and non COVID-19 applications, we're testing such as oncology and non COVID-19 related infectious diseases began to began to resume. Additionally, this sales continued to be driven by COVID-19 tailwind in the fourth quarter of 2020.
Fourth quarter sales in life Sciences sales the highest growth of the year at 28% see out what was the same period of 2019. This growth was driven by value viral vaccine or as such with the mindful on extraction General P. C. R E jets and enzymes as well as Universal <unk> solutions.
Which offset lower sales and qiagen digital insights and for human identification forensic product.
Moving to our geographic results in Europe, Middle East Africa Regional let fourth quarter and full year 'twenty 'twenty Ingalls fourth quarter sales were driven by double digit C Act Wolf in France, the United Kingdom, and Italy across both customer classes and single digits see a growth in Germany.
Cause regions experienced its highest level of 'twenty 'twenty sales growth during the fourth quarter.
Key driver was a return to double digit C. I golfing quantify O N E B test sales.
Zelle in Mexico also continued to deliver growth at a high level, whereas the other molecular diagnostics more than doubled compared to the fourth quarter of 2019 in both countries.
In the fourth quarter, the Asia Pacific, Japan region was supported by China growth above 15%.
Oh, I'm strong chaos that day.
Instrument sales molecular diagnostics revenues in China saw high single digit gains in the fourth quarter against declines in the previous quarters of 2020 feels about also highlight in Japan, and Australia, and this more than offset weaker trends in India and South Korea.
On the next slide we have.
Included an overview on the COVID-19 impact to our performance. This provides clarity and understanding of our business performance as we look to manage our growth after the COVID-19 tailwind.
Our non COVID-19 product groups short and improving quarterly trend.
This total 371 billion in U S dollars or about 65% of total sales you still had a modest decline of 2% C. I the fourth quarter compared to the same quarter of 2019, but just contrast, the sharp drop of 23 per cent and the second quarter of 2020, improving from minus 8%.
In the third quarter of 2020.
COVID-19 related product groups continued to experience significant growth in the fourth quarter. This sales force about 388% from the same quarter in 2019, two to end up but in U S dollars for about 35% of total itself.
Like to now hand back to you.
Thank you all and we all know moving to the slide number 10 of your presentation. Just gives me a GOP can you teach you a review of some of our more recent development and sure you.
That indeed qiagen is emerging from 2020 is one independent.
Q2 longer and free more focus company for the coming years really to execute on group book spend Inc.
First of all.
We're aligning our strategy on five pillars of growth and shows we are focusing on our largest and most attractive growth opportunities.
In twofold, then in 'twenty, we made considerable rebooting crazies, you know where I would put a key consumable products such as simple technology kits, okay, yes that diagnostic Oregon numerous accounts injuries.
Throughout the year, we continued to innovate in anticipation of the changing testing demands and overcome challenges in the market as the pandemic evolved moving as rapidly as possible. Our team has developed over 10, new solution for you independently and then E C.
Two game.
All those are deeply those new solution have applications beyond the pandemic as win.
Also still being both Covid and non Covid application I would install base of instrument shown accelerated growth. In fact, we may do a free poser and free 800, new placement into programs.
To solidify.
Our position in the cool testing market PCL.
We completed the full acquisition of pneumonia in September we acquired the remaining 80.1% stake and he's also gave us the rights to commercialization in the U S market.
We know the key success was the launch of cash accretive digital PCR platform in September.
Our team delivered over 200 orders in 2020 and about 75 per cent of those orders were placed in labs before the end of the year.
On the next slide I would now like to give you an overview of the qiagen products being used in COVID-19 testing and the most recent development.
Looking at the split of our fourth quarter sales force Covid related product groups.
The propulsion of says from Central Texas.
Strength slightly.
Due to an increase in sales force testing solutions have we made as we made progress in increasing our project shouldn't capacity in PCR test in consumables.
The demand for Aero in the simple take continued to trend towards automated extraction as expected and.
And we have made further progress in increasing manufacturing output food those automated consumables.
Many of our customers haven't had great success in implementing our new carrier prep solution to help them increase efficiency over there 15, workflows and overcome plastique supply constraints.
PCR testing solutions, he ongoing high demand for single place, but also multiplex and Syndromic testing.
Okay, Yes that day agnostic and your Moody's both experienced a continuous boost in market penetration.
This is indeed sitting at a strong foundation for midterm growth as we are far ahead of the timelines. We are the only two years ago.
We entered the market with those two new system.
Furthermore, <unk> has expanded its kobe testing options with the live video pool approval for the use of saliva centers with our single play.
Yes.
And the construction project to further build the production capacity are progressing well for K yesterday agnostic in our sites in Germany and Spain.
As communicated a couple weeks ago.
We plan to resubmit UK, Yeah, rich antigen test this quarter to give you.
We have a resort Kimi three issue and I'm now working on new data sets for the Resubmission.
The decision to withdraw the submission was made on our side to proactively withdrew two productivity address the shoe that free phone and further improve the performance of the day.
Beyond the solution that you all know familiar with.
Okay, Yeah, Jen has been developing solutions to fit their needs will be.
Besides sort of dependent.
As an example.
Recently, we have all seen the onset of more frequent sequence you can.
We have cash seek susko two panels are being used to monitor the prevalence or viral mutation.
Another example, we have also seen the emergence of new applications, such as waste water testing, where our new cash equity digital PCR viral kit is being employed to quantify pathogen load in order to calculate population in fixture in the race.
Yeah.
And this has been recently a clear driver for placement.
Likely to day more than 10 per cent, although our cash equity holders off book Covid with water fishing.
And finally last but not least OEM components wear eye wear reagents.
And enzymes offshore to fill party suppliers and those experienced significant demand in two fold in in 'twenty and this continued in the fourth quarter.
No moving on to 2021.
We expect Covid will continue to place high demands on our portfolio, especially in the first half of the year.
Is vaccines are rolled out we anticipate continued strong demand for PCR and then T. J testing solution, which we expect as ways that this could we see that during the second half book to further in 'twenty one.
Depending of course on the impact of the new viral volumes.
In order to provide for those 50 trends.
We are continuing to invest in the schedule where production lines.
We are dedicated to helping customers get set up with our newly launched technologies.
Which has got you free up on them.
Or do you quantify when she says UK equity platforms and to further and breweries those solutions in the fight against Covid.
And we are focusing again on gaining M. D and then she IBD statues four hour infusion.
When he was at hand, we are also managing increasing demand for non COVID-19 categories and planning for a steady progressive increase of doses of clinical testing volume return for oncology and infectious disease.
We describe on December 8th during I would keep that day.
We have extensive plans for menu expansion.
In our five pillars of growth.
Okay, Yes that day agnostic for example, we are planning submission for Dominion J T spend it in Europe.
And the gastro panel in the U S.
So on your monies, we have plans to add four more C. E. IBD test in two other you should notice to the U S menu.
So indeed, we expect the system to continue seeing solid growth trends after the pending 15 subjects.
We are also planning for upcoming launches in the Cookie film franchise.
Okay, Yeah reached T b, we'd expand model that you'd be testing into high build in la.
No resource areas.
And this is based on the same ehealth platform as I work here, yeah, which antigen and antibody tests for COVID-19 testing.
The quote you save on Lantus is also planned for CE IBD launch with our partner data source on their own platform. Just as we did we just couldn't keep it won't you be day.
Our menu expansion plans also include research application, especially the specialty areas of sample preparation and fills a concern for supporting cash equity digital PCR market penetration.
Moving to slide 13, and looking specifically at our five pillars of growth here, you can see our sales expectations and the key drivers for 2021.
Central Technology Oswald I'll explain how this strong year in 2020, and we will again show solid performance in 'twenty, one with more than $750 million and cents.
As we explained already we expect accelerated placement leavers to continue through the first half of the year with our flexi system. Okay, Yes. It would.
Continuing with at least 200 placement into program when do you want.
Okay, Yeah, queasy platform are expected to deliver over $45 million and says with a rapidly growing installed base ending the year with around 600, new placement in Q4 going into 'twenty one.
Okay, yes that diagnostic should continue to deliver a rapidly growing sales.
$120 million in 'twenty, one and we will expand the installed base by more than 800 incremental placement during the year.
So new movies, we are expecting sales of over $140 million.
Driven.
Value growing installed base with regard to more than double the current number of placements.
And for cookies peer.
You have seen with what all we have seen a sequential improvement of performance. Since Q2 2020, we expect to see the sales in this franchise to return to 2019 level and deliver around $250 million a fish.
Here.
We feel confident in our ability to expand market share despite competitor activity in the T V.
Space.
As we have said before.
Key point of our differentiation is quantity of automation capabilities, which we have built along with our partner day a story.
But also for the full time automation, she can and humming.
And we are expanding our capability to reach completely new areas of this market in the emerging countries with upcoming cash which can be large.
Moving to slide 14, really important news I would like to introduce you to our new Supervisory Board member.
Book to El Dorado Hog has joined the board and will be nominated for election at our next annual General meeting.
As noted in the announcement in January two.
Total Ralph was chosen as a as part of an expansion process launched by the supervisory board to further complement and enhance the board's already extensive experience in life science and diagnostics.
Yeah, he shouldn't have thrown out a hug no brings the number of current supervisory board members to savour.
And I'd like to hand back over to a hold on that.
Thank you Terry.
Note that the audio we are reaffirming the full year outlook previously announced in December 2020 per net sales to about 18% to 20% CER growth.
Adjusted EPS, we expect $2.42 to $2.46.
And based on full year weighted average of about 234 million shares outstanding.
For the first quarter, we anticipate ongoing value elevated sales growth of at least 45 per cent are.
By continued improvements in non COVID-19 related products, coupled with dynamic gains from Covid testing solution.
Adjusted diluted EPS I expect it to be about 60 to 62 said C.
And this is based on 233 million shares outstanding.
Towards the significant planned investments in our five pillars of growth through 'twenty and 'twenty one.
As for currencies based on rates as our people I force 21 on a full year basis, we expect a currency tailwind of about two percentage points on sales results at extra words for adjusted EPS for the full year expect a currency tailwind of about four cents per share.
For the first quarter, we expect a tailwind of net sales of about four percentage points and the tailwind of about two cents per share is that I would like to hand back to tell you.
Thank you again.
Just as a summary.
First.
We have shown excellent results for the fourth quarter and the full year 2020.
We exceeded the outlook for sales growth and adjusted EPS in both periods.
These really.
Shows that Qiagen during an extremely demanding year has stepped up to the challenge.
Second.
We are encouraged for the future as we see continued improvement in all areas of our portfolio.
The non Covid area.
But also a continued dynamic growth in COVID-19 related product.
True.
We are focused on investments in our five pillars of growth to fuel our success beyond dependent and.
And create long term share holder value.
And as a last point, we are reaffirming our 2021 outlook for both sales growth and adjusted EPS.
We are confident for 2021, and our ability to achieve full year sales growth of about 18 to 20 per cent C. E R and adjusted EPS of $2.42 to $2.46 with that I'd like to thank you and hand back to June and you.
Operator for the Q&A session.
Ladies and gentlemen at this time, we will begin the question and answer session.
I Wonder if you wish to ask a question.
Yes.
Tom.
If you wish to withdraw your question.
The star followed by the team.
To ensure we accommodations.
Please limit yourself to one question.
One follow up your microphone, but also getting after finishing asking the question.
Anyone who has questions May press star followed by other one at this time one moment for our first question.
We will now take our first question from Jack Meehan from Nephron Research. Please go ahead.
Thank you good morning.
Jerry I was hoping you could elaborate a little bit more on the testing offering for COVID-19 with the new variance of some of your peers have talked about developing PCR test, which can differentiate amongst the variance is that a focus for you with <unk> entire stat and just maybe more broadly how do the variance influence your thinking about the testing offering.
Thanks, Jack for this a key question obviously as you noted there are new needs are we spending weak.
Because there are for example, new volume and therefore, theyre all needs for a deferred EBITDA bureaus.
The first answer of Qiagen is what we call our curiosity, 15th which is based on N G. As technologies and we are ramping manufacturing output because we see an increased demand.
The thick and.
Action that qiagen tube, but not just since 2021, we started Jack in 2020 exactly in May of last year.
Every two weeks, we continue to monitor our PCR test efficiency on testing.
And make sure that we pick up all those values.
And so far is proving extremely successful.
Indeed, we are looking at the moment on the potential to develop.
Geno typing PCR solution, we are currently talking with customers and Gorgon months to see if there is a real need for these so it's in the maybe in the making in our plans.
We will now take our next question from Daniel Wendorff from Commerzbank. Please go ahead.
Yes, good afternoon, and thanks for taking my question and my question is on your you'll keep pillars of growth basically and is there anything which has changed your view here since your deep dive deep dive state in December and I'm thinking in particular about the new platform launches and the performance of your new platforms, which has been.
Actually quite quite strong in my view and in the last quarter, So anything which has changed maybe since early December.
Any color that would be much appreciated. Thank you.
Thank you Danielle and I, we don't speak about change, but reinforced conviction festival.
Those are the.
Key five pillars of growth for Qiagen and the good ones you remember in December we explain that out of a total of 11 billion total market addressable by Qiagen solution those $50 only.
Go over at least 6 billion.
There's 11 billion.
Crystal thicker.
We saw a significant acceleration.
Oh market penetration.
For at least two of the solutions.
Chaos that and your Moody's and so this is where I can see that COVID-19 is basically triggering.
Our next day, we shouldn't of already existing business cases.
Okay got it.
But as you know book Pandemics, we have also menus on those two platforms.
To make sure that we can continue to grow you know had few weighted.
For cash equity.
We are extremely satish.
Satisfied with a very very good first.
Free months of launch.
We achieved as we said 200 parishes orders all of which 75 plus percent I've already been placed at customers.
And we have very strong ambition at least as we said before 600 for this year.
In other chip.
Covid tailwind.
Simple take okay, yes that.
That new Moody's or absolutely non COVID-19 dependent because initially digital PCR was launched for life Science. We are already we are now implementing these waste what's the what's your solution, but initially digital PCR was really a nice science non COVID-19 related we see strong performance.
And we see this continuing around 2021, we don't see that deceleration.
And we see increasing rate of placement.
We will now.
Our next question from.
Brian Weinstein.
From William Blair. Please go ahead.
Hey, guys. Thanks for taking the question.
I wanted to ask about robotics, a little bit here and trying to understand the placements I think you have over 130 and I'm I'm curious as to you a little bit more detail.
As to where those placements are going now are they sitting alongside competitor products and if so are in those labs, what kind of confidence do you have that you will be able to see utilization in a post COVID-19 world and it is part of that I'm also wondering just how you think about utilization per box of course.
19, four at Ford Mnemonics.
So indeed, Brian. Thanks for this question on your Moody's we are extremely pleased by the performance in 2000, and the <unk> 'twenty as you said a more than 250 placement.
We see that strength continuing as we are entering 2021.
The placement configuration, it really depends by geographies and by also customer configuration, we have sites, where we are placing the pneumonia alongside audio solutions.
Hello G. So Roche for example, we have configurations, where we have one tenders against those competitors are based not only on the solution we were offering for COVID-19, but also on the menu.
Remember, Brian already first United States non Covid available CE marked in Europe.
And we have also the tremendous benefit of being a ball on that platform to run alongside Booth is E cheese.
And regulated assets. So for example in the U S where we are at the moment less menu registered with the FDA. We have demand also and sites using a well and you would not only for COVID-19, but also for the LPT capability.
So these are the configuration.
Over all of our placement.
And second part of your question is on the G. A evolution post pandemic.
This is where we said that our.
For new Moody's like Baidu wafer carriers that it's a menu play.
This is why we are confident in the placement reason because we have those first United States already.
Proved in Europe that we are now, bringing as fast as weekend to the U S. In 'twenty, one 'twenty, two and 'twenty free.
We are not commenting on the actual pull through per our system post pandemic, because we are basically still.
Addressing at the moment, mainly depending week needs, but what I can tell you Brian is that anytime we place.
When you move well, we said it we do it in a site, where we are fully explain the menu and where we are convinced that this site.
He's not just thinking pandemic needs, but upcoming menu as well and this is why we are explaining 2020 that as often as we can we try to.
<unk> does system with Prairie annual contract two years three years, so that we make sure that we had some customer loyalty tier.
We will now take our next question from Scott.
Please go ahead.
Yeah. Thanks, so much for taking the questions actually just following on from Brian's question. Please clearly.
Testing solutions, new multi X and costar, forming part of the Covid revenues that you've described in this in this quarter I'm. Terry I think you mentioned that you expect to continue to grow these franchises.
I guess given that revenues are so COVID-19 dependent than other moment, you'll comments to be interpreted that you expect both class that Nemo Dx to growth in 2022, and despite you know 'twenty 'twenty, one projected levels or if you could comment that's the place and net.
A follow up please for Roland.
I think if I understand correctly the revenue line for Qiagen is now anticipated to be greater than what.
You previously outlined in December given that you've closed the she is strong stronger than expected in maintaining to your growth expectation yet your earnings guidance is the same is that because you're investing more than your thoughts. If you could perhaps just give it a little bit of color around that please. Thanks.
So.
So Scott to the first part of your question on the growth profiles over that in your margin. So first of all I'd like to remind.
Those business cases, where embedded in carrier Gen way before dependent.
So depending meek ass.
Has boosted.
The placement of those two solutions caveat that.
Or new Moody's and the way you should see that with the pandemic, we have gained and potentially one or two years of market growth.
As regard to instrument placement first book.
Second dip.
And then it doesn't change.
Our strategy we.
We never launched those instrument because of a pandemic, we always say, it's a menu play.
Okay, Yes, that's it means that we need to continue to bring at least between one and two new applications per year.
In 'twenty, one, but also in 'twenty, two and didn't do your doctor.
And four new boutiques. It means first as we have said that we need you.
Bring the menu available in Europe.
U S and then beyond U S. China in those other markets for example, and also to continue margin expansion.
Sure.
On the growth profile in 2022, it should be.
Difficult to.
So precisely to the question Scott because.
Nobody knows really what is the pace. The post pandemic is at 21 22, what we are doing at cogent.
And what you should try to model is that we are preparing.
The two solutions.
These to continue to grow regardless of the pandemic with the menu that we are developing and.
Making sure that they are recruiting the different countries that the way we should use that as the way you should see it.
Hello.
Yeah.
Scott for your question I think your wide. It's now since you took over what we reported first quarter us and I don't know if this quarters, you've beaten revenue is gonna be beaten on it. So I think it's a.
A nice track record, which you also want to continue and I think it's right that we are again two beliefs that are actually in terms of both in terms of revenue.
In terms of profitability.
Interest strong year, 'twenty or 'twenty, one but.
But I don't think we at the same time, our updating our guidance on a monthly basis a lot of it if it did it more or less in December and are looking forward. What happens there was a quite a few yeah.
We will now take our next question.
Doug Schenkel. Your line is open. Please go ahead.
Hey, good morning, and good afternoon, everybody and thank you for taking my questions.
<unk>.
So just just a couple on the instrument front, and then that kind of a related well maybe it's an unrelated just guidance question. So so first you're you're forecasting very strong instrument place.
Placements across kayak acuity digital PCR kind of stopped the accident no biotechs in 'twenty and 'twenty. One I'm just wondering if you could share you know essentially how many of these placements are already ordered or a backlog like my guess is given where you're sitting today that you know if you were to put error bars around it you know what your share there.
In terms of guidance assumptions on each of those platforms that you have pretty good visibility and that the arrow bars actually skew to the upside there, but I just want to make sure. That's the case. So that's the first question.
The second related to that is you know.
Regarding highest at Dx in new boat acts are what what are the key drivers for demand that essentially what I'm trying to get at is you know or are you seeing you know increased motivation that goes beyond COVID-19 testing or you know at this point is the primary motivator still COVID-19.
My last one is.
Yeah, just just kind of a another guidance question. It sounds like you're assuming that COVID-19 revenue becomes a little bit of a headwind as you move into the second half.
Just based on uncertainty as we look ahead right now, but that you know that that also leaves room for potential upside I just want to make sure. That's the case. Thank you very much.
Thank you, Doug and I hope that they capture the free components.
I won't give you a percentage on what he's already based on purchase order for easier Okay equity.
Gary I'll start on your Moody's.
What I can tell you is that.
Just from a simple math, we told you.
So that at the end of 2020, we had 200 purchase orders for cash equity all of which 75 per cent.
We're a place that customers. So he gives you already are basically the carryover I would say that we have tweens toward immediately in the first days of January but this continue.
What I can tell you is that the demand for.
For that in three months and four new Moody's and book.
Okay equity, especially now that we are also launching digital PCR wastewater solution for cash equity.
Continues to be very strong and the way you should see I see I think is that okay is that the new Moody's.
Because of the volume needed.
In <unk>.
COVID-19 testing.
We will be below market demand.
During the duration of the pandemic, which means that it means treatments every consumable.
He is going to the market is stored.
So that's that's one way to built Yamal day.
The second question on the key drivers.
First let's not forget and we insisted loved.
On these when we launched those two solution dog they are clearly differentiated.
There is no equivalent oh simplicity of sample preparation forecast that for example, none on the market at this stage. This is extremely convincing for many customers and the fact that we can oh.
They're.
Not only are syndromic and sure.
Through COVID-19, but also.
Also good news in Europe and soon in the U S is also with other.
And those are a convincing a.
Effective for our customers and you want to use the same significantly differentiated faster than any competition our ability to run at the same time M. D teams that are very prevalent in the U S or even in some markets in Europe and other regulators that says all these you say I usually convincing.
Walk us through book and the fact that not only do you bring a single plex.
Solution, but also a fault blake's solution for Covid and that they know that too gives always these at this moment in Europe again, you'll have 15 ozone assays available and our U S. Customers know that we are now bringing those assays in the U S D.
This is also obviously, helping them to make do this season.
Of course, there's a lot of those decision.
Birthdays I've been also accelerated by the Covid.
COVID-19 crises for both Guy you start a new Moody's, but again it proves what that those those those doing three months COVID-19 relevant but they are not COVID-19 dependent their success story will not stop when the pandemic subject.
No. The third part of your question regarding potential headwinds.
Hum.
It is very very.
Difficult to and so precisely you have seen a dog in less than two months everybody tended to say in December of 2020.
Sustained demand for Covid for the first your the first half of the year and potentially you receding a bit in the second half now we're moving in January more and more and then east colleagues of yours companies' customers, saying.
Given the speed of vaccination.
Oh, the lack of in some countries vaccination it might be the case that demand for testing will continue strong beyond so we continue to adjust we continue to listen to our customers. We continue to read and listen to also your analysis and so far we are just seeing that we are confirming and reaffirming.
The guidance, we gave in December but what all you might want to complete these one that's weighted.
Yeah I know.
I would agree to what I said before which is again, we just gave our guidance in early December. Since then we have seen a couple of news that you were laying out and they probably again displayed the volatility which isn't the market uncertainties in the market I would agree right now it's probably much more good news and charged off.
Testing requirements, but unfortunately, I haven't fallen to Crystal ball, Yeah. I would also again I think a little bit more time outperform the industry.
We will now take our next question from.
Johnson.
Please go ahead.
Oh, Hi, good afternoon, and thank you for the time here I thought I might mix things up a little bit and talk about a non COVID-19 topic.
Roland one of the things that people are going to struggle with a little bit given all the moving parts in the model is how to think about the progression of operating margins from 21 to.
<unk> to 'twenty, two and beyond.
We have a framework from you guys about how to think about margins long term one other variables that I think would be really helpful to hear about from you would be actually how much incremental spend there is in 'twenty and 'twenty, one that may be non repeating as the company works hard to scale things up and.
If you could expound upon that to talk about any other sort.
So a swing factors you you would suggest we think about between margins in 'twenty and 'twenty one.
And 2022 that'd be really helpful to you here sorry for the very long winded question. Thanks again.
Yeah.
Question and thanks for it.
Yeah of course very much as always it is a somewhat revenue depending on how we see again the overall development.
So revenue situation moving over the next 24 months despite that I do believe a couple of things are important to know what part of all our.
Other cross margin side I do believe over the course over the next 24 months, we will see incremental improvement because of better utilization of our equipment and also again force getting news of production sites and our production lines online getting all of those incremental costs.
Across all 20 of all 20.
'twenty one will be incrementally helpful for all the other cost margin side, I think we talked quite significantly about our incremental R&D costs particular in developing all of our U S menu for non Modi ex that is.
Something what probably again is our first approach over the next 12 18 months and that's why I believe also moving now into 'twenty 'twenty two into 2000 Twenty's free.
That should be again getting us similarly.
Perspective.
The seltzer marketing side Ah, it's quite obvious that there's significant changes in customer behavior ongoing right now again, if you're saying so we have now north of 60% of all revenue is coming via digital channels. So again overhauls.
The level that you get to your.
In terms of sales and marketing activities I think also the way for example, marketing book, we've done going forward it'll change. So I think that there'll be somebody not again compared to what we had a pre COVID-19. If you bought a bond that together I was also a healthy revenue situation.
I believe quite strongly that we are at least of all COVID-19.
Covid situation with a better EBIT margin zombie more or less moved into that.
Okay.
Our next question from Jackie.
Bank of America. Please go ahead.
Hi, good morning.
Two questions and Steve just took my margin question. So I'll have to ask somebody else real quick.
The first question is it's more about what one's about long term strategy I mean, there's been some.
Press reports recently about potentially.
Potentially.
Incremental.
M&A talk I'm, just wondering if you have any general comments on.
On that since it would be a lot of questions to investors and I guess can we talk a little bit about the.
Qantas ear on product Rollouts and sort of what's your expectations are and what's embedded into the.
Model for the wind speeds in particular, thank you.
Eric I'm, sorry, I didn't hear the last part of your sentence for quantity and when I do apologize for this sure.
Lyme disease, Lyme disease expectations other than that.
Okay.
I will start with your first question on the potential M&A I mean, as you know the work in that and we have these codes that are extensively.
And during our EBITDA, you're going to in December 8th Qiagen is really pursuing a strategy to execute on opportunities driven by our five pillars of growth and we believe that those organic growth opportunities have attractive growth potentials.
And also large market potential.
And so we also believe that we.
With those five P dolls, we pause you shouldnt get your agenda for growth beyond the pandemic.
And this will.
Already generate and deliver shareholder value.
No.
In terms of capital deployment.
We will continue abuse need to consider it any kind of potential bolt on acquisitions.
As we said in December she book and strengthen our portfolio.
And they specifically the five pillars of growth remember in December we said, it's a game to dilute our activities no if it's to reinforce notably the five pillars of growth yes.
And obviously, our capital deployment, Okay yesterday, and he's also constantly thinking about increasing returns to our shareholders and we have used in the past we could use that to gain share.
Share repurchase program.
As an example, so that's.
To address the first part of your question.
Lyme disease as we presented it.
When we disclosed the Jupiter seem weighted I assure you we.
We seed first as an extension of the interest you won't get my technology.
Which is behind.
The quantifiable success.
Okay. Good.
It creates a partnership with a company that used to win which is already extremely present.
In the Lyme disease market.
We there I G G. I G M solution, so it's going to complain about that leverage.
That market position.
2020.
One will be D C E marking.
We want to launch the product by the summer, which is the key season for line.
But we both know.
That's the key here is one year and half during 2022, we launched.
Launched in the U S.
Well, we believe that we will have the stronger impact in terms of numbers. So what is important for us is.
The medical case.
In 2021, two gigs or with our CE Mark we don't expect.
Significant meaningful contribution to the top line, we will have only a limited numbers of months of growth. The key moment will be 2022.
The last question comes from Dan Brennan from UBS. Please go ahead.
Great. Thank you. Thanks for taking the question I I kind of try and get away I had a two part question first I was just wondering could you provide any customer color on robotics, I know that I expect it to be a big driver of growth in 2021 amongst the other I E.
Platforms that you have but I'm just wondering what customer feedback is like.
I know you just had your Investor day, but you are competing with big players there with differentiated technology.
And and then and then the second question would be cash as we think about.
A significant capacity expansion being planned by some of the all in one.
Fox P C. Our players like Roche I think which is expected to quadruple capacity in the first six months of the year like does that is that is that factored into your guidance as you think about like your attraction revenue outlook to the extent that these.
All in one players that I don't think rely on your extraction kits potentially take share in 2021. Thank you.
Well, thank you Derek and.
Or do you still don't feel free to chime in also.
Also to point to for me.
And the profile of the customers for the first half of your question directly.
Hum.
I'm sorry is up.
The profile of our customers.
Mainly host be towards extremely high television infectious diseases as we said in the previous sensors, sometimes we win against competition, sometimes we are.
Police single sitting.
Alongside existing competition why because to your question down is not the competition, which is differentiated it.
Is the new <unk> system, which is differentiated and again, we explained when we acquired the company and started a collaboration with new Moody's.
First much faster than any competition.
These tremendous flexibility of running other same time.
I would like to read you wrapped it all regulatory that says this is what the customers are finding extremely interesting and if we are able to.
To execute on the menu development remember once again already 13 assays available CE marked in Europe now, we bring that to the U S and beyond Europe and the U S. If we are able to execute on the development on this menu.
On the success of these menu in the regulatory approval in the U S.
I feel no competition.
To your question, yes, like Qiagen competition is increasing manufacturing capacity, because we all have to because the demand is still significant.
But if you just want to focus on the market related to each other.
The big market that we are talking about two $3 billion market at least growing at a healthy weight or let's say high single digit to sometimes double digit in some geographies. So there is room, especially.
Where.
Well when you have differentiation.
And I don't think that anybody who won't get where competitors would have to expect that we would put.
150, new where the system.
Is this market is a bit more than a year.
So thank you Terry and thank you to all of you for your participation. If you have any questions or comments. Please don't hesitate to reach out to me with this I'd like to end the call. Thank you very much.
Ladies and gentlemen, this concludes the conference call. Thank you for joining other Pleasant day Goodbye.
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