Q4 2021 Qiagen NV Earnings Call

Speaker 1: the outlook for at least 15% CER growth.

One of at least 15% CER growth.

Speaker 1: Our non-COVID business again delivered outstanding results ahead of our goal for 20% CR growth and those products represented about 70% of our total sales.

Our non Covid business again delivered outstanding results ahead of our goal for 20% CER growth and those products represented about 70% of our total sales.

Speaker 1: The strong business expansion led to earnings growing at a faster pace.

The strong business expansion led to earnings growing at a faster pace.

Speaker 1: Adjusted earnings per share for the fourth quarter rose 10% to 75 cents CER and this was again above the outlook for at least 60 cents CER. For the full year 2021 adjusted EPS grew 22% over 2020 to $2.63 CER and this was well above the outlook for at least $2.48 cents per share at CER.

Adjusted earnings per share for the fourth quarter was 10% to 75% CER and this was again above the outlook for at least 60 CER for.

For the full year of 2021, adjusted EPS grew 22% over 2020 to $2 63.

And this was where the bulk of the outlook for at least $2 48 per share at CER.

Speaker 1: Another very key highlight was that the strong business performance led to a record year of cash flow.

And those are very key highlight was that the strong business performance led to a record year of cash flow.

Speaker 1: Operating cash flow for 2021 rose 40% to $639 million, while free cash flow increased 38% to $449 million over 2020.

Operating cash flow for 2021 rose, 40% to $639 million.

While free cash flow increased 38% to $449 million over 2020.

Speaker 1: Those results highlight once again our ability to generate strong cash flow from the business while investing to support our growth ambitions as part of a very disciplined capital allocation strategy.

Those results highlights once again, our ability to generate strong cash flow from the business.

While investing to support our growth ambitions as part of a very disciplined capital allocation strategy.

This leads to our third message.

Speaker 1: KIAJEM enters 2022 as a stronger, more focused and balanced company.

<unk> enters 2022 as a stronger <unk>.

<unk> focused and balanced compound.

Speaker 1: The last two years have been a period of implementing our strategy as a new management team. That strategy is focused on helping customers around the world gain access to valuable molecular insights from molecular research to clinical healthcare.

The last two years have been a period of implementing our strategy as a new management team that strategy is focused on helping customers around the world gain access to valuable molecular insights from molecular research to clinical healthcare.

Speaker 1: We are targeting segments in the market with promising growth opportunities while making sure we execute cluster after cluster.

We are targeting segments in the market with promising growth opportunities, while making sure we execute cluster after a cluster.

Speaker 1: At the core of this new strategy is a focus on our five pillars of growth.

At the core of this new strategy is a focus on our five pillars of growth.

Speaker 1: Those are opportunities to maintain and create top-three leadership positions in highly attractive markets.

Those are opportunities to maintain and create top three leadership positions in highly attractive markets.

Speaker 1: The five pillars built on our absolute leadership in sample technologies, the first step in any laboratory process.

The five pillars built on our absolute leadership in sample technologies. The first step in any laboratory process.

Speaker 1: Against this backdrop, our focus translates into two key words, returance and balance.

Against this backdrop, our focus translate into two key words.

Recurrence and balance.

What do I mean by recurrence.

Speaker 1: Recurrence means our razor blade business model, building up the revenues coming from our highly recurring business involving consumable and associated service.

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Our razor razor blade business model building of the revenues coming from our highly recurring business involving consumable and associated services.

Speaker 1: This reached 88% of sales in 2020.

This reached 88% of sales in 2021.

Speaker 1: This also means building revenue streams from the significant increase of our install base of instruments. We saw indeed a dramatic acceleration in the install base for COVID-19 over the last two years.

This also means building revenue streams from the significant increase of our installed base of instruments. We saw indeed, a dramatic acceleration in the installed base for COVID-19 over the last two years.

Speaker 1: As we move into 2022, we want to focus on transforming this install base into new sources of growth.

As we move into 2022, we want to focus on transforming this installed base into new sources of growth.

Speaker 1: And for this, we are obviously developing new tests and applications across our portfolio.

And for this we are obviously developing new tests and applications across our portfolio.

Speaker 1: We made significant progress in 2021 on this front, especially with CHI-ASPAD diagnostic for syndromic testing and CHI-ACQUITY digital PCR system.

We made significant progress in 2021 on this front, especially with <unk> diagnostic for Syndromic testing and the <unk> equity digital PCR system <unk>.

Speaker 1: This focus is reflected in the fact that more than 65% of our R&D investments are dedicated to our five pillars of growth.

This focus is reflected in the fact that more than 65% of our R&D investment.

Our dedicated to our five pillars of growth.

Speaker 1: We also continue to step up our manufacturing capacity for consumables that are essential for future growth of our system.

We also continued to step up our manufacturing capacity for consumer board that are essential for future growth of our systems.

Speaker 1: which also include CHIA symphony for automated sample prep and pneumotics for integrated PCR clinical healthcare testing.

Which also include carrier Symphony for automated sample prep and new Modi export integrity, PCR clinical healthcare testing.

The second key word is balance it means balance in serving customers in both the life Sciences and molecule diagnostic as a reminder, and a point that I believe is often overlooked or.

Speaker 1: It means balance in serving customers in both the life sciences and molecular diagnostics. As a reminder, and the point that I believe is often overlooked, about half of our sales involve life science customers.

About half of our sales in both life science customers.

Speaker 1: These are attractive hand markets given the very robust funding environment and our differentiated offering as well as long tail customers.

These are attractive end markets, given the very robust funding environment, and our differentiated offering as well as long tail customers.

Speaker 1: As a second reminder, balance also across our geographic regions. About half of our sales in the Americas, about a third in Europe and the remaining 20% in the Asia Pacific region.

As a second reminder.

<unk> also across our geographic regions about half of our sales in the Americas about a third in Europe , and the remaining 20% in the Asia Pacific region.

Speaker 1: Balance is also ensuring we operate sustainably and responsibly with commitments towards important ESG goals. For example, reducing our carbon footprint to reach net zero carbon emissions by 2050.

Balance is also ensuring we operate sustainably and responsibly with commitments towards important ESG goals for example, reducing our carbon footprint to reach net zero carbon emissions by 2050.

Speaker 1: We have strengthened our dedication by setting targets in areas such as improving access to healthcare, increasing diversity and inclusion, maintaining responsible governance just to name a few. Our focus in 2020 is riskidentallyariest single day caremeg CNM.

We have strengthened our dedication by setting targets in areas, such as improving access to healthcare, increasing diversity and inclusion maintaining responsible governance just to name a few.

Our focus.

In 2002 is clearly.

Hans.

Speaker 1: continuing those important ESG investments.

Continuing those important ESG investment.

Speaker 1: This is how we become a stronger kyogen in 2022.

This is how we become a stronger carriers and in 2022.

Speaker 1: and in the coming years continuing our clear focus on execution.

And in the coming years, continuing our clear focus on execution.

Speaker 1: As a last message, our outlook for 2022 calls for a strong growth instead of our non-COVID portfolio.

As a last message our outlook for 2022 courts for a strong growth in sales of our non covered portfolio.

Speaker 1: For the full year, we expect sales of at least 2.07 billion.

For the full year, we expect sales of at least two zero.

Zero 7 billion.

Speaker 1: dollars and led by double digit CER growth in our non-COVID portfolio.

Rollouts and led by double digit CER growth in our non covered portfolio.

Speaker 1: We also expect at least $2.05 CER for LogistdDP.

We also expect at least $2 five CER for adjusted EPS.

Speaker 1: As we have done in 2021, we take a conservative view on COVID-19 testing demand trends.

We have done in 2021, we take a conservative view on COVID-19 testing demand trends.

Speaker 1: Given the volatile trends expected for 2022, we anticipate a significant decline in those sales compared to 2021.

Given the volatile trends expected for 2022, we anticipate a significant decline in those sales compared to 2021.

Speaker 1: Our focus in 2022, as said before, is clearly on the non-COVID portfolio to deliver solid midterm growth trends, while again remaining ready as ever to support the global response to the pandemic, however, it may develop.

Our focus in 2002 as said before is clearly on the non covered portfolio to deliver solid mid term growth trends, while again remaining ready as ever to support the global response to the pandemic. However, if made developed.

Speaker 1: We will provide more details on the outlook later in this call, but now I would like to hand over to Roland for a financial update.

We will provide more details on the outlook later on this call, but now I would like to and over to Jorge for a financial update.

Speaker 1: Thank you Thierry. Hello and thank you as well from my side for joining the call. Let me begin by walking you through our...

Thank you Tony Hello, and thank you as well from my side for joining the call let.

Let me begin by walking you through our sales in more detail.

Speaker 2: For the fourth quarter, NetSeal throws 4% at constant exchange.

For the fourth quarter net sales rose, 4% at constant exchange rates.

Speaker 2: This was against a very tough comparison to the fourth quarter of 2020, which was a quarter with highest levels of sales for that year.

This was against a very tough comparison to the fourth quarter of 2020.

The quarter was highest levels of sales for that year.

Speaker 2: Also in the fourth quarter of 2021, non-COVID-19 has grown nicely over the third quarter 2021, reflecting the positive trends in our core business going into 2021.

Also the fourth quarter of 'twenty, one non corporate sales grew nicely over the third quarter 'twenty one.

<unk> is a positive trend in our core business core into 'twenty two.

Speaker 2: The residuals and related revenues for the fourth quarter rose 7% CER over the same period in 2020 and represented 89% of the total total revenue.

Consumables and related revenues for the fourth quarter or 7% over the same period in 2020 and represented 89% of sales.

Speaker 2: While instrument sales in the first quarter 21 decline 14% CR, this was against the highest level of quarterly instrument sales for 2020 and also a sequential increase over the third quarter 21.

While instrument sales for the fourth quarter up 21 declined 14% CER. This was against the highest level of quarterly instrument sales for 2020 and also a sequential increase over the third quarter 'twenty one.

Speaker 2: For the full year, consumer sales were up 21% CR based on solid growth trends throughout the year, while the instrument sales rose 2%.

For the full year consumable sales were up 21% based on solid core trends throughout the year.

Instrument sales force, 2% CER.

Speaker 2: terms of sales among the four product groups, let's start the sample technology.

In terms of sales amongst our four product groups, let's start with <unk> technologies.

Speaker 2: These hails were up for percent TR for the full year and reflected the volatility in COVID-19 demand.

These sales were up 4% CER for the full year and reflected some volatility and COVID-19 demand trend.

Speaker 2: Some technologies represented about 40% of the collagen cells and the vast majority of these cells are in the lifeline.

Talk to technologists represented about 40% of Qiagen sells and the vast vast majority of these sales on the life Sciences.

Speaker 2: We were very pleased with the double-digit T-Agrove in the non-COVID polar groups for 21, especially in DNA sample prep, which is benefiting from the strong research funding environment.

These are very pleased with the double digit CER growth in the non corporate product groups for 'twenty, one, especially in DNA sample prep, which is benefiting from the stronger search funding environment.

Speaker 2: It's in diagnostic solutions were up 37% TR for the full year over 2020. The key driver

Cancer diagnostic solutions were up 37% CER for the full year over 2020.

The key driver of us quantity.

Speaker 2: Sales rising 47% TR to 281 million US dollars for the year. And this is even without testing levels returning to pre-COVID demand.

With sales rising 47% to $281 million for the year and this is even without testing levels trying to pre COVID-19 demand trends.

Speaker 2: Pcr clinical testing systems. Cha not start the ICS and noymodics provided important in commment.

The two P C our clinical testing systems.

Starting at nine <unk>.

Important incremental growth contribution.

Speaker 2: While web news in our precision medicine business benefited from the resumption of many farmer

While revenues in our precision medicine business benefited from a assumption of many pharma R&D project.

Speaker 2: In this PCR nuclear acid amplification polar group, full year cells rose 18% CR in 21 and were supported by the KIAQT digital PCR system, as well as consumers used by other

In the TCR nucleic acid amplification product group full year sales force, 18% in 'twenty, one and were supported by the carrier acuity digital Pcr system.

Well as consumables.

Used by other companies.

Speaker 2: performance was even more encouraging given the fact that the growth was driven by double digit CR gained the non-covid portfolio that more than absorbed a significant decline in

This performance was even more encouraging given the fact that the growth was driven by double digit CER gains in the non covered portfolio that more than absorbed a significant decline in corporate product group sales.

Speaker 2: Genomics and GS sales were up 47% T-R in 21 over 2020 and represented about 10% of total mileage.

Genomics engine sales were up 47% CER in 'twenty, one over 'twenty 'twenty and represented about 10% of total Qiagen sales.

Speaker 2: This performance came against weaker sales trends in 2020 due to the adverse impact of the pandemic on customer activity.

This performance came against weaker sales trends in 2020 due to the adverse impact of the pandemic on customer activities. This.

Speaker 2: This transclearly reversed during 21, as many laboratories resumed a higher levels of operations after shutdowns were released.

These trends clearly reversed during 'twenty, one as many laboratories, because you have a higher levels of operations after shutdowns were lifted.

Speaker 2: tells the universal consumables used in next generation sequencing as well as bioinformatics revenues from CHI and digital insights both advanced double digit TRGRO.

Yeah, let's figure in the browser Universal consumables used in next generation sequencing as well as bioinformatics revenues from Qiagen digital insights.

<unk> advanced at double digits, she alcohol for it.

Speaker 2: It tells the performance across the region in 21, also highlighted the balance of our geographic presence and reach into key markets. It tells the performance across the region in 21, also highlighted the balance of our geographic presence and reach into key markets.

The sales performance across the region in 'twenty. One also highlighted the balance of our geographic presence and reach into key market.

Just to highlight some of the key for your figures here.

Speaker 2: The Americas delivered 22% CR growth in 21. This results benefited from 25% growth in the US, including growth in front of the FIERON-TB and life sciences.

The Americas delivered 22% CER growth in 'twenty one.

<unk> benefited from 25% growth in the U S, including golfing quantifier on TB and life Sciences.

Speaker 2: The Europe , Middle East and Africa region fell for the year grew 17% CER led by Austria, the United Kingdom, Italy, Turkey and

In the Europe Middle East Africa region.

For the year grew 17% led by Australia, the United Kingdom, Italy, Turkey in Switzerland.

Speaker 2: The Asia Pacific Japan region also enjoyed WGTR growth in 21. The sales are 17% T-R over 2020 and supported by more than 20% T-R growth in non-covid products.

The Asia Pacific Japan region also enjoyed double digit CER growth in 'twenty one.

That's up 17%.

Over 2020, and supported by more than 20% T I coffee nonwoven product groups.

Speaker 2: China rose above 20% by Japan, Australia and South Africa, also had solid results.

China was above 20%.

By Japan, Australia, and South Africa also had solid results.

Speaker 2: Moving down the income statement, the decline in the adjusted cost margin in 2021 involved several factors.

Moving down the income statement the decline in adjusted gross margin in 'twenty one involve several factors.

Speaker 2: These included a change in product mix as well as investments that are being made to build up consumers production capacity.

These included a change in product mix as well as the investments that are being made to build up consumables production capacity meaningfully.

Speaker 2: meaning we can improve economics of scale in the future as volume scores.

Meaning we can improve economics of scale in the future as volumes cool.

Speaker 2: As a result, the adjusted cross margin for the full year decline to 67.9% of fails from 1969.6% in 20...

As a result, the adjusted gross margin for the full year declined to six to seven 9% of sales from 1969.

6% in 2020.

Speaker 2: We continue to make significant R&D investments into manual expansion and new applications.

We continue to Mexican difficult R&D investments into menu expansion and new applications, especially for the five pillars of growth. These investments horse in 'twenty, one to eight 4% of sales from eight zero percent in 2020.

Speaker 2: especially for the five pillars of growth. These investments rose in 21 to 8.4% of sales from 8.0% in 2020.

Speaker 2: same time we were able to gain leverage in other operating expenses. Sales and marketing expenses declined to 20.3% of sales in 21 from 22.1% in 2020, especially as COVID-19 drove a significant shift to digital channels for customer engagement and marketing.

At the same time, we were able to get leverage in other operating expenses.

Marketing expenses declined to 23% of sales in 'twenty, one from 'twenty two 1% in 2020, especially as COVID-19 drove a significant shift to digital channels for customer engagement and marketing activities.

Speaker 2: And as a last point, general administrative expenses fell to 5.7% of sales in 21 from 6.0%.

And as a last point general administrative expenses fell to five 7% of sales in 'twenty, one from 6.0% in 2020.

Speaker 2: The outcome was a 20% increase in adjusted operating income for 21 to $755 million US dollars from 627 million.

The outcome was a 20% increase in adjusted operating income for 'twenty $1 million to $755 million of $627 million in 2020.

Speaker 2: operating income margin.

Adjusting operating income margin remained steady at 33, 5% upstairs in boss.

Speaker 2: KD at 33.5% of sales in both

Speaker 2: adjusted EPS for 2021 was again well above our outlook and came in at $2.63 CER.

Adjusted EPS for 'twenty, one was again well above our outlook and came in at $2.63 C. E. L F.

Speaker 2: The results on an actual basis were $2.65 and reflected 2 cents of currency benefit.

Is that on an extra business about $2 65, and they reflect the two sets of currency benefit.

Speaker 2: Text rate and also the adjusted text rate for both years was steady at 18%.

The tax rate and also the adjusted tax rate for both years was steady at 18% additional.

Speaker 2: Additionally, the share count was in line with our expectations for about 232

Additionally, the share count was in line with our expectations for about 232 million shares.

Speaker 2: I just said EPS results for both years, for both full year periods, and also for the fourth quarter of 2020 Excludes again from the sale of our minority investment in ARJA and shares received from invitations in connection with acquisition of this company

Adjusted EPS results for both years for both full year periods and also for the fourth quarter of 2020 executes against from the sale of our minority investment in <unk>.

And she has received from N V T in connection with this acquisition of this company.

Speaker 2: Turning to cash flow trends for 21. We saw dynamic results in both operating cash flow and free cash flow thanks to the strong business expense.

Turning to cash flow transit for 'twenty, one we saw dynamic results at both operating cash flow and free cash flow. Thanks to the strong business expansion for.

Speaker 2: For 21 operating cash flow rose 40% to $639 million. And this included the payment of $53 million to resolve a patent.

About 21 operating cash flow was 40% to 639 billion U S dollars and this included a payment of $53 million to resolve a patent infringement.

Speaker 2: We also had significant higher tax payments than in 2020, rising more than 50% to 102 million US dollars.

We also had significant tier tax payments than in 2020, rising more than 50% to 102 million U S dollars.

Speaker 2: The results for 2020 also included the payments for the discontinued tender off.

The results for 2020 also included the payments for the discontinued tender awful.

Speaker 2: Free cash will also rose at the Rabas, robust 38% rate to $449 million in 21, and absorbed a 43% increase in purchase.

Free cash flow also or is it all about so about 38% weight too far not 49 billion U S dollars in 'twenty, one and absorbed a 43% increase in purchase.

Speaker 2: of property plant and equipment in 21. This was primarily...

Property plant and equipment in 'twenty one.

We're primarily <unk>.

Speaker 2: investments to expand consumer production, capacity for key growth products at sites in Europe and the United.

Investments to expand consumer production capacity for key growth products at sites in Europe , and the United States.

In terms of our balance sheet, our net debt position decreased to $876 million at the end of 'twenty, one compared to a net debt of $1 2 billion U S dollars at the end of 2020.

Speaker 2: This was due to the strong cash accrual trends and higher levels of cash, cash equivalent and short-term investments held at the end of 21.

Due to the strong cash flow trends and higher levels of cash cash equivalents and short term investments held at the end of 'twenty one.

Speaker 2: The combination of reduced net depth and higher EBDA results. Results led to the leverage ratio failing to point nine times net depth to EBDA at the end of 21 compared to 1.5 times at the end of 2020.

The combination of reduced net debt and higher EBITDA was audited results led to a leverage ratio of failing to 0.9 times net debt to EBITDA at the end of 'twenty, one compared to one five times at the end of 2020.

Speaker 2: We are reaffirming our discipline, Captain allocation strategy that involves investing, organic, play in the business.

We are reaffirming our disciplined capital allocation strategy that involves investing organically and as a business.

Speaker 2: Completing value, creating M&A transactions, and increasing returns through share repurchase programs such as $100 million program completed in 21.

Fleeting value, creating M&A transactions and increasing returns through share repurchase programs, such as $100 million program completed in 'twenty one.

Speaker 2: As we have said before, we have reviewed various M&A targets that would strengthen and complement to our portfolio across the life sciences and molecular diagnostics, but continue to take a disciplined view on valuations.

Yes, we have said before we have a view of value of M&A targets that would strengthen and some element to our portfolio across the life Sciences, and molecular diagnostics, but continue to take a disciplined view on valuation.

Speaker 2: At the same time, we're also faced debt majorities in 22 and are considering various debt pre-financing opportunities. I would.

At the same time, you also face debt maturities in 'twenty, two and are considering various debt refinancing opportunities.

I would like to now hand back to tell you.

Speaker 1: Thank you, Ronan. Let me now give you an update on our keyboard folios and in particular the five pillars of growth.

Thank you all and let me now give you an update on our key portfolios and in particular, the five pillars of growth.

Speaker 1: As I said at the GPM conference in 21, we have ticked the boxes. For all the commitment we gave you on further menu development in our five pillars of growth and delivered solid progress on building sales in those portfolios. First.

As I said that the GPM conference in 'twenty, one we have to tick the boxes for all the commitment. We gave you on further menu development in our five pillars of growth and delivered solid progress on building says in those portfolios.

Central technology.

Speaker 1: sales for the full year 2021, which $851 million, beating our expectation for $750 million at the end. This was driven by strong demand for DNA extraction kits as labs returns to work. We also saw very good sales of our kayak-prep and amp, liquid sample pre-solution for COVID-19 tests.

Sales for the full year of 2021 reached $851 million, beating our expectation for $750 million that's here.

This was driven by strong demand for DNA extraction kits as labs returns to work. We also saw a very good set of of our carrier prep and liquid sample prep solution for COVID-19 testing.

Speaker 1: In terms of portfolio development in sample tech, we have just launched the easy to connect system as part of our program to upgrade our automated sample preparation instruments.

In terms of portfolio development in Central we have just launched the easy to connect system as part of our program to upgrade our automated sample preparation instrument bill.

Speaker 1: Both instruments build on the success of over 4,800 easy one system in the market and are specifically designed for molecular diagnostic and human identification.

Booties Fremont built on the success of over 4800 easy one system in the market and are specifically designed for molecular diagnostic and human identification.

For 2022.

Speaker 1: We are expecting the non-COVID products to deliver low single digit growth in the sample technology portfolio and for total sales of more than $750 million at CER compared to $851 million in 2020 as we again anticipate headwinds in COVID-19 product groups.

We are expecting the non COVID-19 products to deliver a low single digit growth in the central technology portfolio and for total sales of more than $750 million at CER compared to $851 million in 2020.

We again anticipate headwinds in COVID-19 product group says.

Second.

Speaker 1: Our quantity of franchise sales rose to 281

Our quantitative and franchise sales rose to 281.

Speaker 1: $1,221, exceeded the target for at least $250,5 million at CEO .

Million dollar out into 421 exceeded the targets for at least $255 million.

Oh.

Speaker 1: As back to school testing and healthcare screening programs are resuming, demand for TB testing returns strongly across all regions in the world. The quantity of support for you has seen multiple expansion in 2020.

As back to school testing and healthcare screening programs are resuming demand for TB testing return strongly across all regions in the world.

The quality people and portfolio has seen multi port expansion in 2021 <unk>.

Speaker 1: This includes the CE marking of our quanti-ferron SARS-CoV-2T cell test, a very useful tool in COVID immunity survey.

This includes the CE, marking of our quantity susko two T cell test very useful tool in COVID-19 immunity civilians.

Speaker 1: Additionally, Kaya reached QFTTB GENC E-marking as a new battery-operated device developed specifically for using high-burden low resources comp.

And you Shouldnt.

Yeah, Rich Q http gain CE, marking as a new battery operated device developed specifically for use in high burden low resource countries.

Speaker 1: It was very recently approved by the Global Fund's expert review panel, Diagnos.

It was very recently approved by the global firms expert review panel diagnostic this lowest procurement by public health programs and institution in more than 100 countries all over the world.

Speaker 1: This allows procurement by public health programs and institutions in more than 100 countries all over the world, qualifying for global fund or unit aid resource.

Fighting for global fund or unit aid resources.

Speaker 1: Moving into 2022, we are expecting over 310 million dollars of sales from our Quantity Fairone franchise, so once again, another year of double digit, CER Gro.

Moving into 2022, we are expecting over $310 million of sales from our quantitate one franchise. So once again another year of double digit CER growth.

Speaker 1: So, our Integrated PCR platform.

Fifth our integrity Pcr platform.

First.

Speaker 1: Our KIA Start Diagnostics Syndrome is testing platform performed very well last year, with a total of $75 million in sales, also exceeding the 21 target for at least $60 million at CER. Community Instrument Placement for KIA Start rose to about 2,900 placement at the end of January , 2020.

Our diagnostic Syndromic testing platform performed very well last year with a total of $75 million and says also exceeding the 'twenty one target for at least $60 million at CER.

<unk> instrument placement for chaos that rose to about 2900 placements at the end of January 2022.

Speaker 1: Important progress were made this year in bringing new panels into the platform.

Important progress as we made this year in bringing new partners into the platform.

Speaker 1: This included a four-plex respiratory panel to support the diagnosis of four diseases, flu aid, flu B, respiratory syncychial virus, ERSV, and COVID-19.

This included a four plex respiratory panel to ship both the diagnosis of four diseases fluid flu B right.

<unk> theory syncytial virus.

As Lee.

And COVID-19.

Speaker 1: This is key to this thing with the diagnosis among these common respiratory diseases.

This is key to distinguish a diagnosis among these come on the respiratory diseases.

Speaker 1: As promised, our team successfully completed the CE-IVD marking of the managed entities panel and submitted on time the gas flow intestinal panel for FDO approval in the US.

As promised our team successfully completed the CE <unk>, marking of the meningitis panel and submitted on time, the gastrointestinal panel for <unk> approval in the U S.

Speaker 1: Our teams are also preparing the 2022 launch of Kaya State Diagnostic RISE, the new high throughput model for large volume laboratories interested in Cindermi tests.

Our teams are also preparing the 2022 launch of chaos that diagnostic rise do new high throughput more data for large volume laboratory is interested in syndromic testing.

Speaker 1: We just passed an important development milestone this week with the CEIVD launch in mid-2000, 2022.

We just passed an important development milestone this week with the CE IBD launch in mid 2000 2022.

Speaker 1: This system will significantly enhance our scalable offering to labs. Kaya Start diagnostic rise as random access capacity to older, to 18 different tests for processing and leading up to 56 tests in an eight-hour shift. So 160 tests per day with eight analytical modules.

This system will significantly enhance our scalable offering two labs.

Yes that does.

Agnostic rise as random access capacity to all the to 18 different tests for processing and litigate 256 test in <unk>.

With our shift.

160 tests per day with eight analytical modules, we have no time today for the video, but you would see as well a key differentiation. It will be the first system of the generation and beating what we will call a smart drover, a fully automated loading and unloading of the countries.

Speaker 1: We have no time today for a video, but you would see as well a key differentiation. It will be the first system of this generation embedding what we will call a smart drawer, a fully automated loading and unloading of the cartridge.

Speaker 1: Our expectations for full year 2022 are for over $85 million in sales for Kaya Stadeis as those new Spanish and instrument support the transition into the non-COVID world.

Our expectation for full year 2022 are for over $85 million in sales for carrier studies as those new spending and instruments to support the transition into the non Covid world.

Speaker 1: NUMODIC sales rose to $105 million in 2021, ahead of our target of $100 million at CEO . Community placement for NUMODICs grew to about 220 platforms as of January , 2004.

Numerous sales rose to $105 million in 2021, well ahead of our target over $100 million.

E R cumulative placement for numerous <unk> grew to about 220 platform as of January 2022.

Speaker 1: With the addition of the human, I don't know, virus-passed, we now have 15 CE-IVD Markets running on pneumodics.

With the addition of the human Adenovirus asset we now have 15, CE IBD market is running on <unk>.

Speaker 1: making one of the largest menu of its kind.

Making one of the largest menu of its Karen.

Speaker 1: In the US, COVID is currently the driver for consumable pull-through with full FDA approved tests and this system are also leveraging the capability to batching laboratory developed tests.

In the U S. <unk> is currently the driver for consumable pull through we've four FDA approved test and G system are also leveraging the capability to batch in laboratory developed test.

Speaker 1: For 2022, we therefore anticipate over $70 million in sales as we focus on expanding the menu to the FDA approved test. In a-

For 2022.

We therefore anticipate over $70 million in sales as we focus on expanding the menu.

The FDA approved test.

In our fifth pillar of growth digital Pcr.

Speaker 1: We achieved a placement goal for kayak with the digital PCR system as we now stand over 730 places.

We achieved a placement goals for cash equity digital PCR system as we now stand at over 730 placement.

Speaker 1: We also co-author over quarter sales growth in 2021. At the same time, however, we did not reach our full year sales goal for more than 45 millions dollars at a year.

We also saw quarter over quarter sales growth in 2021 at the same time. However, we did not reach our full year sales goal for more than 45 million start out at CER.

Speaker 1: We have now set a new goal for 2022 for more than $55 million of CER for kayak equity based on plans for more placement and to ramp up consumable utilization on the install base.

We have now set a new goal for 2022 for more than $55 million or CE for cash equity based on plans for more placement and to ramp up consumables utilization on the installed base.

Speaker 1: to help drive utilization. We are expanding the application into new areas of research and testing. As an example, we recently announced that about 70% of all American states in public health are using kayakity for wastewater surveillance.

To help drive utilization, we are expanding the application in new areas of research and testing as an example, we recently announced that about 70% of all American states in.

Public health are using equity for waste water civilians.

Speaker 1: In addition, we recently entered into collaboration with ActoM and Atila BioSystem to offer new solutions for protein quantification and non-invasive pre-netortism.

Additionally, we recently entered into collaboration with axiom and Tela bio system to offer a new solution for protein quantification and non invasive prenatal testing.

Speaker 1: We are ready to determine to make a equity, the number one digital PCR system in terms of placement and drive the conversion of the quantitative PCR market to this new technology standard.

We are really determined to make equity the number one digital PCR system in terms of placements and drive the conversion of the quantitative PCR market to these new technologies standup.

Speaker 1: And now let me back, let me hand it back over to Roland again.

Now, let me back let me hand, it back over to ordering again.

Speaker 2: Thank you, TIE. Let me now provide some additional perspectives on the Outlook for 22.

Thank you Tony Let me now provide some additional perspective on the outlook for 'twenty two.

Speaker 2: and also for the first quarter. Our expectations is for sales of at least $2.07 billion US dollars at CER for the full year $2.20 billion US dollars at CER for the full year.

And also for the first quarter, our expectation is for sales of at least two point or 7 billion U S dollars at sea.

Full year 'twenty, two and this is driven by double digit CER growth in nonwoven product groups.

Speaker 2: and this is driven by double digits CR growth in non-covid products.

Speaker 2: As you come from once again, we do not want to make aggressive assumptions on the cause of COVID-19 fairs.

And she confirmed once again, we do not want to make aggressive assumptions on the cost of COVID-19 sales.

Speaker 2: or a view remained for a significant decline in this health in 22.21, while again remaining prepared to support the pandemic.

Our view remains for a significant decline in sales in 'twenty two from 'twenty, one while again remaining pet to support our pandemic response.

Speaker 2: We expect adjusted EPS of at least $2.5 at CR. This takes into consideration continued plans for investments into our portfolio and in particular the five pillars of growth for new tests and applications.

We expect adjusted EPS of at least $2.05 at CER. This takes into consideration continued plans for investments into our portfolio and in particular, the five pillars of growth for new test and application.

Speaker 2: Based on exchange rates as of January 31st, 22, currency movements against US dollar, I expect to create an adverse impact of about two percentage points on net sales growth in about four cents per share on adjusted EPS for full year.

Based on exchange rates as of January 31st 22.

Nancy movements against the U S dollar I expect that to create an adverse impact of about two percentage points on net sales growth and about four cents per share on adjusted EPS for full year 'twenty two.

Speaker 2: For the first quarter, net sales are expected to grow at least 7% TER and adjusted eluded EPS is expected to be at least 72 cents at TER. We also expect currency headwinds in the first quarter against US dollar. Our reporting currency and foreign adverse impact of about 3 percentage points on sales and about 1 cent on adjusted EPS. I would like to now hand.

For the first quarter net sales are expected to grow at least.

7% CER and adjusted diluted EPS is expected to be at least 72 cents at T O.

Also expect currency headwinds to the first quarter against U S dollar.

Parts and currency and foreign adverse impact of about three percentage points on sales and about 1% on adjusted EPS.

We'd like to now hand back to tell you.

Speaker 1: Thank you, Roland. And as we have said many times, Roland, John , Phoebe, myself, we are really committed to a lot more time to exchange and discussion. So let me provide you with a very quick summary before we move into the Q&A session.

Thank you Harlan.

We have said many times, our long John and myself, we are really committed to a little more time to exchange and discussion. So let me provide you with a very quick summary, before we move into the Q&A session.

Speaker 1: Our team delivered an outstanding year in 2021. We set the growth and adjusted the PSXCD out.

<unk>.

Our team has delivered an understanding a year in 2021 with sales growth and adjusted EPS exceeded our outlook.

Speaker 1: This was driven by sequential growth quarter of quarter in 2021 for our non-COVID-SETs and supported by a volatile demand for COVID-19.

It was driven by sequential growth quarter over quarter in 2021 and for our non Covid says and supported by a volatile demand for COVID-19 testing.

Speaker 1: Our team continue to execute and deliver on our committee.

Our team continued to execute and deliver on our commitments.

Speaker 1: Faker, we enter 2022 as a company with a solid business case that combines recurring stream of revenues with balanced market opportunities. We have made tremendous progress in growing our install base and have entered the next phase of our growth ambition that they're delivering on our 2021 course.

Second.

We enter 2022 is a company with a solid business case that combined recurring stream of revenues with balanced market opportunities. We have made tremendous progress in growing our install base and enter the next phase of our growth ambitions are still delivering on our 2021 course.

Speaker 1: Our 5 pillars of growth finished the year with strong performance.

Our five pillars of growth finished the year with a strong performance.

Third.

Speaker 1: We maintain a very strong level of profitability as a healthy cash flow enabled us to invest in our growth that I was while delivering value to shareholders.

We maintained a very strong level of profitability.

Healthy cash flow enabled us to invest in our growth rate was while delivering value to shareholders.

And as a last point we.

Speaker 1: We are increasingly confident in this stronger Kajaj, which is reflected in our outlook for 2020.

We are increasingly confident in the strong okay.

Which is reflected in our outlook for 2022.

Speaker 1: A year to be driven by double digit CRC growth for our non-covid performance.

The year to be driven by double digit CER sales growth for our non core portfolio.

Speaker 1: We have a motivated team of empowered Coyaginus with a focus on execution ready to deliver on our committee.

We have a motivated team of <unk> with a focus on execution ready to deliver on our commitments with that I'd like to hand back to John and the operator for the Q&A session. Thank you.

Speaker 1: With that, I'd like to hand back to John and the operator for the Q&A session. Thank you.

Okay.

Speaker 3: Thank you, ladies and gentlemen. At this time, we will begin the Q&A session. Anyone who wishes to ask a question may press star followed by one on their touch tone telephone. If you wish to withdraw your question, you may press star followed by two.

Thank you ladies and gentlemen at this time, we will begin the question and answer session anyone who wishes to ask a question you May press star followed by one on their Touchtone telephone if you wish to withdraw your question you May press star followed by Chill.

Speaker 3: To ensure we can accommodate as many people as possible, please let me yourself to only one question and if necessary, one follow up. Your microphone will also be needed after you finish asking the questions.

To ensure we can accommodate as many people as possible. Please limit yourself to only one question and if necessary one follow up your microphone will also be needed. After you finish asking the questions.

Speaker 3: Anyone who has a question may press star followed by one at this time. One moment for the first question.

Anyone who has a question you May press star followed by one at this time one moment for the first question. Please.

Speaker 3: The first question comes from Patrick Donnelly with City. Please go ahead.

The first question comes from Patrick Donnelly with Citi. Please go ahead.

Hey, good morning, guys. Thanks for taking the questions.

Speaker 4: Gary, maybe one for you just on that underlying COVID bucket, obviously really encouraging to see the base business. But on the co-

Gary maybe one for you just don't that underlying Covid bucket, obviously really encouraging to see the base business, while the Covid piece I think 350 million for this year, how do we think about the durability. There because you guys are pretty unique in the fact that you tied COVID-19 revenues, even kind of broke it back to 2019 when you've had.

Speaker 4: I think 350 million for this year, how do you think about the durability there? Because you guys are pretty unique in the fact that you tied COVID revenues, even it broke it back to 2019, when you had this bucket that essentially touched anything that then became COVID.

And essentially touched anything that then became COVID-19 . So how do we think about that going forward I mean, it feels like a more durable number than others that are really pure COVID-19 . So would love you just kind of parse through that maybe if you could kind of break out that.

Speaker 4: So how do you think about that going forward? I mean, it feels like a more durable number than others that are really pure COVID. So we'd love you to just kind of parse through that. Maybe if you could kind of break out.

Speaker 4: that previous COVID number of that revenue, I think it was 140 million or so, and what that could look like going forward beyond beyond the she...

Previous COVID-19 number of that rather than I think it was $140 million or so and what that could look like going forward beyond just beyond this year.

Speaker 1: Thank you Patrick. So the first thing I would like to say is that even if the market reacted at that time, I believe that we were absolutely right.

Thank you Patrick so the first thing I would like to say is that.

Even if the market.

Reacted at that time, I believe that we were absolutely right.

Speaker 1: and quite courageous back in July 2021 to fully decouple.

And quite courageous back in July 2021 to fully decoupled.

Speaker 1: The CHI agent says, result and I work P&L from the COVID Volatile.

<unk> sales results in our P&L from the Covid volatility.

Speaker 1: And we always said systematically, since then, that we would not take new assumptions for COVID development. We added and we continue to confirm.

And we always said systematically.

Since then that we would not take.

New assumptions for coffee development.

We added and we continued to confirm this.

That's our priority.

Is two.

Speaker 1: We remain relevant in any kind of search of the man. So we constantly adjust our

Sure.

We remain relevant in any kind of surge of demand. So we constantly adjust our.

Speaker 1: Manufacturing outputs and we told you by the way that we are obviously using a lot of contractors for that But the focus clearly is on the non-coded

Manufacturing output and we told you by the way that we are obviously using a lot of contractors for that but the focus clearly is on the non core.

Now directly to your question.

Speaker 1: Systematically, we have said that for 2022, we were expecting to half our COVID results that we obtained in 2021. We believe...

Systematically we have said that.

For 2022, we were expecting to part of our Covid.

Results that we obtained in 2000.

In 'twenty one.

We believe.

In this $350 million.

Speaker 1: that most of it is going to happen in Q1.

That.

Most of it is going to happen in Q1, we.

Speaker 1: We do not want to take longer term assumptions.

We do not want to take longer term assumption.

Speaker 1: for Q2 or Q3 or Q4. We believe that it's going to go down progressively. And you will write to

For Q2, or Q3 or Q4, we believe that is going to go down progressive.

You were right to remember.

Speaker 1: that we always give a comparison with 2009-19 the pre-Covid period where we said that a equivalent

That's we always give a comparison with 2019, the pre COVID-19 period, where we said that equivalent.

Speaker 1: testing solution not applied to COVID at that time obviously because COVID was not existing was a 150 million dollars. For this 150 million dollars of pre-COVID, I don't see any reason why it should go lower than the pre-COVID period. We are now and we will be back in normal non-COVID utilization for RNA testing. So the real basic ED friends.

Testing certain should not apply to COVID-19 at that time, obviously, because it was not existing was around $150 million.

For this $150 million of pre Covid I don't see any reason why it should go lower than the pre Covid period. We are now and we will be back in normal non COVID-19 utilization for Erin.

So the real basically defense.

Is the remaining.

Speaker 1: And we believe most of it is done in Q1. It is mainly in San Perthake, the rest of the platform we really want to dedicate them to the non-COVID growth.

And we believe most of it is done in Q1. It is mainly in center take the rest of the platform, where you really want to dedicate them to the non COVID-19 growth.

Speaker 4: I'm answering your questions. Yep, that was great. Thank you. And then a quick one for rolling on the guidance. Obviously one queue came in well above consensus.

Am I answering your question.

Yes, no that was that was great. Thank you and then a quick one for Roland on the guidance obviously.

Obviously <unk> came in well above consensus.

Speaker 4: How should we think about the level of conservatism based in for the rest of the year? Was it that you guys had visibility into a really strong one queue? And then to Terry's point there, certainly COVID gets stripped out, but the back half, you're a little more conservative with. Can you just talk through the levels there as you look for the full year guide relative to the really strong one queue?

How should we think about the level of conservatism baked in for the rest of the year or was it that you guys had visibility into a really strong <unk> and then to Terry's point, there certainly COVID-19 gets stripped out but the back half you were a little more conservative with can you just talk through the levels. There as you look for the full year guide relative to the really strong <unk>.

Speaker 2: Yeah, and I think it goes hand in hand with what what what you just described, but very much within clearly by by two things what clearly one is overall assumptions for for COVID and I think as we said in a call and just we ate the rate.

Yeah, I think it goes hand in hand, with what what what you just described.

Much driven clearly by twisting spot clearly one is that of all our assumptions for COVID-19 .

I think as we said on the call and just reiterate it.

We really are focusing on that what is more or less on hand, and very visible. That's clearly in Q1, and we don't want to take any larger aggressive assumption for the second out of the year and again, if you put all the numbers together with just you described.

Speaker 2: that what is more or less on hand and very visible, that's clearly in Q1. And we don't want to take any larger or even aggressive assumption for the second out of the year. And again, if you put all the numbers together, we're just, the year this quite.

Speaker 2: for the full year, assumption 31, and what is anyway this kind of bottom line RNA related products which we even had before 2020 so in 29

Something for the full year assumption for Q1, and what is any way to just kind of bought in line.

<unk> and related products, which we even had before our 2020. So in 2019, you can clearly see that's expectations on that Ah I would say quite motto. It. Nevertheless, we want to be ready if the market picks up where we are.

Speaker 2: I would say quite moderate. Nevertheless, you want to be ready. If the market takes up, we are on standby. We have clearly the production capacity.

While we have plenty of production capacity.

Speaker 2: In terms of expenses moving on to the second part of the answer.

You have shown in Q4, we can react quickly in terms of expenses moving onto the second part of the answer.

Speaker 2: Quite obvious that we use some of this, as we did in 21, some of the initial proceeds, which we're gaining to invest in a probably even stream focus on timing here, a bit more on the project to get things quicker done. And I guess you know I was quite well that we have typically a hand, a hand, a valour, and the operational expense.

It's quite obvious that we use some of this.

As we did in <unk> and.

21, some of the initial proceeds which were gaining.

To invest in it probably even a stream our focus on timing here a bit more on the R&D projects forget things quicker than and I guess, you know us quite well that we have typically Johann I'll hand, Vela once operational expenses.

Speaker 2: I clearly try to make also hear some use from more or less the incremental.

Clearly try to to make also here some use from modest incremental opportunities, we're seeing short term, but she still believing that a long term, albeit on a long term view on track also to improve our margins.

Speaker 2: short term, but I see still believing that a long term or mid and long term beyond track also to improve our margins.

Very helpful. Thank you guys.

Speaker 3: The next question comes from Tyco Peterson with JP Morgan. Please go ahead.

The next question comes from Tycho Peterson with J P. Morgan. Please go ahead.

Speaker 5: Hey, thanks. Question on chiostat and pneumotics. Chiostat, good revenues in the quarter, pneumotics decline. You know, they're both COVID beneficiaries. So can you maybe just talk to why pneumotics decline? Is that getting replaced by rapid and incident testing or other PCR in the quarter? And why is your pneumotics sales target for 22 below what you've laid out for 21?

Hey, thanks.

And on time.

<unk> okay.

Revenues in the quarter Pneumatics decline, they're both Colby beneficiaries shell can you maybe just talk to why you might ask decline is that getting replaced by rapid antigen testing or other PCR in the quarter and lighter pneumatics sales target for 'twenty, two or below what you had laid out for 'twenty one.

Speaker 1: There is a clearing pack for pneumodics and we have set that cycle over to 2021 already. A clearing pack from the year before which was the full integration of pneumodics in our portfolio.

Okay.

There is a clear impactful pneumonia and we have said that tyco over 2021 already.

A clear impact from the year before which was the full integration of Oh.

Numerous in our portfolio.

Speaker 1: Second, because previously the quarter of 2004 had been very strong also for New Bodelec because it is when it started to become really relevant in the US as there was a real need for COVID test.

Second because previously the quarter of quarter four of 2024 had been very strong so far and you will just because it is when he started to become really relevant in the U S that was a real need for Covid testing.

Speaker 1: And so we have always been very clear in the second half of 2021 to explain that a very strong path.

And so we have always been very clear in the second half of 2021 to explain that to a very strong path.

Speaker 1: of the new modics revenue is still COVID-19 driven. We have made no mystery of...

Of the new <unk> revenue is still COVID-19, Threep and we have made no mystery of that so as we are basically now moving post COVID-19 and given the importance of Covid testing in the U S, where we still do not have full pneumonia. The menu that we have in Europe is going to be more difficult for new <unk> two quick.

Speaker 1: So as we are basically now moving post-COVID and given the importance of COVID testing in the US, where we still do not have for new modics the menu that we have in Europe , it's going to be more difficult for new modics to quickly catch up with the performance that we achieved in 2021. So this is why we had this ambition of 80 million, at least dollars revenues for 2020 .

We catch up with the performance that we achieved.

In 2021. So this is why we had this ambition of $80 million.

At least the loss of revenues for 2022, it's just that differential and now we need to transfer all of you see the customers that we have acquired or pneumonia to the rest of the menu in Europe , and obviously move customers in the U S to the LPG capabilities and to the menu that we are going to continue to get it to you.

Speaker 1: It's just that differential and now we need to transfer obviously the customers that we have acquired on pneumodics to the rest of the menu in Europe and obviously move customers in the US to the SDG capabilities and to the menu that we are going to continue to get FDO proof. That's the only reason. Now I willSt take a better picture. Edit to type down the download here. Back off this remote foot. Now I willSt take a better picture.

That's the only reason.

A reason for that because you have already.

Speaker 1: because you have already a more menu available in Europe and now also because we submitted the GI.

More menu available in Europe , and now also because we submitted the Gi.

Speaker 1: We expect this to start selling in the second half of 2022. It's a bit easier, basically, and we guided on Kaya Stad at more than 85. Kaya Stad cells are still heavily driven by COVID at the moment, but both instruments, as we have explained many times, Tyco are menu driven. They were in our portfolio. Before the pandemic, they will be in our portfolio way beyond the pandemic. There is still a phase of catch-up because of the headwind of the COVID.

We expect these to start selling in the second half of 2022, it should be easier basically and we guided on carrier set at more than 85.

Sales are still heavily driven by COVID-19 at the moment, but bookings three months as we have explained many times Tycho a menu driven there were in our portfolio before depending if they will be in our portfolio way beyond the pending the receipt of a phase of catch up because of the headwind of the.

Okay.

The of the Cookie.

Speaker 5: Does it answer your question? Okay. It did. Yeah, that's helpful. And then one follow up on the COVID commentary earlier. Have your property, assumptions around the COVID business change for 22, you know, given pricing dynamics in the market? You know, maybe just talk about how you're thinking about drop through from the revenue contributions this year.

So your question Tycho.

Yes, Thats helpful. And then one follow up on the commentary earlier heavier and heavier profitability assumptions around the Colgate business change for 'twenty, two given pricing dynamics in the market.

Just talk about how you think about drop through from the revenue contribution this year.

So that's why first of all that.

Hello.

Speaker 1: Okay, I'm going to take this one and roll up this please please please please keep free to time it It's time in obviously so so

Okay, I'm going to take this one and hold on please.

Please feel free to chime in I mean, obviously so.

Speaker 1: We don't see a clear pressure on prices in our COVID portfolio cycle because first of all, I believe that PCR testing is much more immune to significant price pressing that we see, for example, on home testing or on NKGEN. So this is not as you know relevant for KIAGEN. We obviously...

We don't see a clear pressure on.

Prices in our coffee portfolio telco.

Because first of all I believe that the PCR testing is much more immune to significant price pressure that we see for example on home testing or on NT. James. So this is not that you know relevant for Cajun <unk>.

We obviously are.

Speaker 1: as repeated before, so never to advantage of the COVID situation to try to bump and price is, so it's pretty neutral for us.

Repeated before so never took advantage of the COVID-19 situation to try to burp in prices, So it's pretty neutral for us.

Okay. Thank you.

Speaker 3: The next question comes from Daniel Windor for an Odo BH. If your line is open, please go ahead.

The next question comes from Daniel Wendorff at O that'll be a check if your line is open. Please go ahead.

Speaker 6: Thanks for taking my questions. My main question is looking at the non-COVID-related revenue growth you got for 2022. Can you talk a bit more about what is...

Yeah. Thanks for taking my questions and my main question is.

Looking at the non Covid related revenue growth guide for 2022 can you talk a bit more about what is driving this is it at.

Speaker 6: Driving this is the general very healthy market environment.

The general very healthy market environment.

Speaker 6: Is it a certain product line? So any more color you can provide here would be would be helpful and then I would have a small follow up question on the operating and free casual development maybe one for Roland. How should we think about this going into 2022? Is there any major developments we should take care of?

Is it a certain product line. So any more color you can provide here would be would be helpful. And then I would have a small follow up question on the operating and free cash flow development, maybe one for Roland how how should we think about this going into 2022 is there any major.

Developments, we should take care of thank you.

Speaker 1: Thanks Daniel. If you remember at GPM, we had a GPM organ, we had a...

Thanks Daniel.

Yeah.

You remember at <unk>, we had at Jpmorgan, we had.

Speaker 1: Interesting slide that was describing what we consider to be our market and variance.

Interesting slide that was describing what we consider to be our makeup environment.

Speaker 1: First of all, this slide highlighted that four life signs.

First of all this slide highlighting that for life science.

Speaker 1: We believe on a rather healthy level of funding from public institutions. I'm referring to the NIH in the US. We gave also data on funding in the UK for it.

We believe on a rather healthy.

Level of funding from public institution, and referring to the NIH in the U S. We gave us some data on <unk> in the U K for example.

Speaker 1: And so this is obviously a reassuring and a low-ingence to the optimistic. We also gave you some data from expert and independent institution on diagnostic.

And so this is obviously a.

A reassuring and allowing us to be optimistic we also gave you.

Some data from expert and independent institution on diagnostic showing that in many.

Speaker 1: showing that in many testing, like oncology, for example, like non-COVID infectious diseases, we were progressively returning to a level that was pre-COVID-19, in any case, where above the level of February 2020, that was the mention in the slide, where we were very hit by the COVID impact. So there is a very good, let's say, positive market outbreak.

Testing like oncology for example, like.

Like non COVID-19 infectious diseases, we will progressively returning to a level that was pre COVID-19 in any case waiver both D.

Level of February 2020 that was mentioned in the slide where we were very hit by the Covid impact. So there is.

A good.

Good, let's say positive market environment.

Speaker 1: Second, even if I don't want to be complacent and I don't want to be over optimistic here, I believe that COVID-19 has sincerely demonstrated and proven the critical value of diagnostic, both light science and research or clinical diagnostic in the healthcare valuation. And for the company, for the company that KIAGN, more importantly, even it has proven the superiority and the value of molecular testing.

<unk>.

Even if I don't want to be complacent and they don't want to be over optimistic here I believe that COVID-19.

Sincerely.

Australia and proven the critical value of diagnostic both life science and research or clinical and diagnostic in the health care value shouldn't and for the company for a company like <unk> and more importantly, even it has proven distributor you retain the value of molecular testing.

Speaker 1: in the healthcare valuation. Sure, at the moment you have many governments talking about antigen, but I always said the same. First of all, it's not about antigen versus PCR because when you have so many such a surge of demand for testing, every technology is welcome. But...

In the health care evolution sure at the moment, you'll have many government talking about antigen, but I always said the same first of all it is not about anti gen investors PCR because when you have so many such a surge of demand for testing every technology is welcome, but I've said, many times last year and I'm sure that when Covid will come back.

Speaker 1: I said many times last year and I'm sure of that, that when COVID will come back to let's say more acceptable level, more kind of endemic phase if you want.

To let's say more acceptable level more of a kind of and they meet phase if you want.

Speaker 1: I am very convinced that PCR will remain again and the core standard because there will be less need for emerging for for a joint result. A laboratory will be able to test in batch as well. So this is really the kingdom for molecular value.

I'm very convinced that PCR, we remain again and the core standup because there will be less need for emerging yet for photo Gen reserved.

All right, we will be able to test in batch as well. So this is really the kingdom formally collaborators.

Speaker 1: Then, in our own portfolio.

Then.

In our.

One portfolio.

Speaker 1: As we have said, since last year, we said we would take a commitment for double the deep offer and we have a positive growth forward one week.

As we have said.

Since last year, we said, we would take a commitment for double digit growth for the non covered portfolio.

Speaker 1: We can say that because of what I said in the environment, but also because of the training and some of our key products.

We can say that because of what I said in the of enrollment, but also because of the training some of our key products.

Speaker 1: As we have said today for example, we believe that the quantifier will continue in a double-digit growth time.

We have said today for example, we believe that <unk> will continue in the double digit growth 10.

Speaker 1: outside of the non-COVID, outside of the five pillars of growth, sorry, you have key activities such as, for example, oncology.

Outside of the non Covid outside of the five pillars of growth story you have key.

Activity such as for example, oncology.

Speaker 1: or universal chemistry for mixed generation sequencing, I see no reason for those activities to grow less than double digit. They were growing double digit before COVID. There is no reason that they grow less than this after COVID. If you look at the non-

Our universal <unk> III for next generation sequencing I see no reason for those activities to grow.

Less than double digit they were growing double digit before COVID-19 . There is no reason that they grow less than these after fluffy.

If you look at the non.

Speaker 1: COVID passed over our sample tech. We confirm what we said already.

A part of our San protect we confirm what we said already in December of 2020, when we did the carrier agenda.

Speaker 1: In December of 2020 when we did the Cuyah agenda, which is we will go back to let's say meet a single digit growth rate and we confirm that.

We will go back to where let's say mid single digit growth rate and we confirm that.

Speaker 1: The non-COVID part of menu added for pneumodics, for KIA start, we always feel that we'll also feel that double-git growth. So it's a combination of...

None.

The non coffee pot of menu added four new <unk> four.

Okay, yes that we'd always a few that will also fuel that double digit growth. So it's a combination of.

If people recall environment.

Speaker 1: Second, of what we said for the last two years, we have with the five pillars of growth, plus the rest of the portfolio, waves of growth in our development that can help up sustaining double digit growth for the, let's say, five pillars of growth, as we said, but also for the non-COVID for 2022, and potentially as well to 2023. Thank you for your time.

Second.

What we said for the last two years, we have with the Pi for the five pillars of growth plus the rest of the portfolio waves of growth in our development that can help sustaining double digit growth for the let's say five pillars of growth as we said, but also for the non COVID-19 for 2022 and potentially as well 2023.

Okay.

Can you you had a question.

Speaker 2: Yeah, I have questions on that cash flow as well. Yeah, yeah, and to question cash flow, Daniel, again,

Yes.

Cash flow as well.

Yeah, Yeah yeah.

On cash flow Daniel again.

Speaker 2: Very much of course, depending on how we see the fully developing particular given the volatility around COVID. We look at our guidance right now. I would assume that we will probably run to our BAF our 2020 cash flow development. I think that is probably the...

Very much of course, depending on the harvest season.

Full year, developing particular, given the volatility on corvid.

Our guidance right now I would assume that's probably a hard or a bus or.

2020.

Cash flow development I think that's probably the ballpark.

I think we feel comfortable right now.

Thank you.

Speaker 3: The next question is Jack Meaghan at Neffron Research. Please go ahead.

The next question is Jack Meehan Nephron research. Please go ahead.

Thank you hi, guys.

Speaker 4: Wanted to start and ask about the highest that utilization, just reflecting on the numbers you put up in 2021. So you did 75 million of sales.

I wanted to start and ask about the highest that utilization just reflecting on the numbers you put up in 2021. So you did.

$75 million of sales if.

Speaker 4: If I assume that all consumables, which probably is inaccurate, but for all with it, I think that implies about $30,000 of average utilization per box, which is about one test per day. So my question one is, does that math check out? How do you think about it? And then question two, can you just talk about the range of utilization you're seeing in the field? What's like the max? What's the min? How are you seeing customers use these in the field?

If I assume that all.

All consumables, which probably isn't accurate, but its role with it I think that implies about $30000 of average utilization per box, which is about one test per day.

My question, one is does that math checkout, how do you think about it.

And then question two can you just talk about the range of utilization Youre seeing in the field, what's like the Max What's the man how are you seeing customers use he is in the field.

Speaker 1: That's a very good question, Jack. And we gave data on that in the past. Your math, saying 1 to 1.5 test today, is an accurate math, clearly. When you only refer to one assay, which is respiratory or in this case, COVID. The way I see it for a...

That's a very good question Jack and.

We gave data on that in the past your math.

And one to one five tests today is an accurate math clearly.

When you only referred to one assay, which is respiratory or in this case.

Gordon.

Way I see it.

For.

Speaker 1: a syndromic system. You need to take into account seasonability season in a year.

Syndromic system, you need to taking into account season ability ski seasons in the year.

Speaker 1: When you have, for example, a high flu season during the winter time, I think having or expecting a leverage of 2.5 test a day per module is something which is perfectly reasonable. In a normal situation, one to one and a half is a good number to factor in. For the coming utilization.

When you have very for example, a high flu season during the wintertime, I think having or expecting a leverage of two to two five.

Tests, a day per module is something which is perfectly reasonable.

Normal situation, one to one and that is a good.

And number two factor in.

For the coming utilization.

Speaker 1: It will all depend on our menu progression and we have always been clear.

Will all depend on our menu progression and we are we have always been clear on this is why we always said that carriers that like when would you expect the ways of menu play it's not a coffee.

Speaker 1: This is why we always said that caria start like new muddocks by the way the new place, not the COVID place. So we have two.

So we have two good teams this year.

First of all.

Speaker 1: For the first time, we are in the real position to answer any kind of tender in Europe , which was not completed the case before why, because the minimal expected menu to be competitive in a tender on a syndromic is at least respiratory GI and meningitis. We have it now in Europe . So we were already competitive without meningitis, we would become more competitive with meningitis.

For the first time, we are in the real position.

<unk> answer any kind of tender in Europe , which was not completed the case before why because the many more expecting menu to be competitive in the tender on our syndromic is acute respiratory Gi meningitis, we have it now in Europe . So we were already competitive without <unk>, we will become more common.

With meningitis.

Speaker 1: Second, in the US, basically, at the moment we have two assesses. We have the respiratory normal and the respiratory plus, i.e. risk of it. Adding DI, and now we are expecting the FDA or you say to approve the test, we will help. And we want also to submit meningitis to the FDA in the US before the end of 2,400.

Second.

In the U S basically at the moment, we have two assays, we have the respiratory normal in the respiratory closed I E. We score.

Adding Gi yes, now we are expecting the FDA would you say to approve the test will help and we want also to submit the <unk> in the U S. Before the end of 2022.

Speaker 1: So if we continue to increase that menu

So if we.

Continue to increase that venue.

Speaker 1: Moving to an average of two tests, on average is something that we can keep in mind, yes, per day. It depends also on the specialization on the hospital of the site you are, you are in your Kaya Stata, Jack. Some will never do anything else than a respiratory. Some will combine the menu. So that's why, by the way, adding also the rise to our portfolio on Kaya Stata is extremely important because it will help us.

Moving to an average of two test.

Our leverage is something that we can we can we can keep in mind, yes per day is it depends also on the specialization on that on the hospital decides to you are you already in Europe .

Jack some we'd never do anything gets done respiratory so we will combine the menu. So that's why by the way I think also the rise to our portfolio on carriers such as extremely important because it will help us go into greater laboratory hospitals, 400 beds, plus and those normally are using <unk>.

Speaker 1: going to greater laboratory, hospitals of 400 beds plus and those normally are using multi targets with a syndromic, not just one of us.

T targets with a syndromic not just one asset so youre correct. Your math is correct at the moment with more menu I would try to factor mentioned more 2% to two point practice today.

Speaker 1: So your map is correct at the moment. With moment you, I would try to factor more to 2.5 test today.

Great.

Speaker 4: And then as an unrelated question, when to talk about digital PCR.

Yeah.

Unrelated question wanted to talk about digital Pcr.

Speaker 4: I was curious if you could give some color, how much the US waste water contract just as a percentage of the sales you generate in 2021 for the business. And at 70% of US states sounds pretty broad. Can you just give us maybe a sense for what you think your market share is of the opportunity and what type of tail of revenues this could generate?

Was curious if you could give some color how much the U S. A wastewater contract just as a percentage of the sales you generated in 2021 for the business.

And 70% of U S States sounds pretty broad.

Can you just give us maybe a sense for what you think your market share is of the opportunity and what type of tail of revenues this could generate.

I mean.

Speaker 1: First of all, it was not a big part of the sales in 2021 for Caliacwiti for one single reason.

Most of what it was not a big part of.

The sales in 2021.

Okay equity for one single reason is.

Speaker 1: is that we close that contract at a very hand of Q3, the time to implement the system into the public health lab in the US. It's most of Q4, Q4, 2,000 and 21. So basically the impact revenue wise is not, is not

Is that we close that contract.

At the very end of Q3, the time to implement the system into the public health lab in the U S. A.

It's most of Q2 to Q4 2021, so basically the impact revenue wise is not is not huge.

Speaker 1: Why is it important to get that contract? First of all, because the public health labs in the US are very representative and significant institution, there is normally one public health lab for the state.

Why is it important to get that contract yet.

Well because the public health lab in the U S are very representative and significant institution. There is normally one public health lab for.

Speaker 1: If we don't have all the states with kayak Quiti Westwater, it's not because we have lost the rest of the labs to a competitor, it's because those remaining states are not doing Westwater. So basically the real market share is 100%. Clearly, this will develop in 2022, but clearly, I don't even expect.

First state.

If we don't have all the states we scaled equity wastewater is not because we have lost the rest of the labs to a competitor is because those remaining states are not doing wastewater. So basically do real market share is 100%.

This will develop.

In 2022, but clearly I don't even expect huge flow of revenues because it will depend on the utilization is going to be mainly Slovenia. So we'd go with Kobe, but why am I optimistic.

Speaker 1: a huge flow of revenues because it will depend on the utilization. This is going to be mainly so it will go with COVID. But why am I looking?

Speaker 1: First, because that shows a signal to many other governments and countries in the world to say Westwater is something to be taken seriously.

First because that shows a signal to menu is our governments and countries in the world to say wastewater is something to be taken seriously.

Speaker 1: And I think and I believe that we have the possibility to install more of those contracts in other countries. First.

And I think and I believe that we have the possibility to install more of those contracts and those are countries first.

Speaker 1: second, because Westwater testing is going to be proven, proven relevant, not only for COVID, but for a lot of infectious diseases. You can think about Westwater for malaria, even for tuberculosis and things like this.

Second <unk>.

Because wastewater testing is going to be proven proven relevant not only for COVID-19 , but for a lot of infectious diseases. You can think about wastewater for malaria for even for tuberculosis and things like this so.

Speaker 1: Our ambition will be to develop a menu beyond COVID around Westwood.

Sure.

I wouldn't be shouldn't we will be to develop a menu beyond COVID-19 .

Speaker 1: So, as of today what I can tell you is that I confirm what we said in 2021, Jack.

Iran wastewater so as of today, what I can tell you is that I confirm what we said in 2021 check.

Speaker 1: that barely 10% of our well-instrument placement are driven by wastewater testing, clearly. And we don't expect more for an increased presentation in 2020 years.

That barely 10% of our instrument placement.

Even by wastewater or testing clearly and we don't expect more for.

The increased percentage in 2020.

Speaker 1: two and therefore, Kayakuti is really, really not depending on COVID-19 at all.

Two and therefore carry equity is really really not depending on it.

On the COVID-19 at all.

So as you can hear your questions.

It did thanks.

Thank you.

Speaker 3: We'll go next to Dan Areas at Steephal. Your line is open. Please go ahead.

We'll go next to Dan areas with Stifel. Your line is open. Please go ahead.

Speaker 7: Hey good morning guys, thank you. You touched on it with men and judges, but for the other athletes for Chiastat and pneumotics, are you able to put some revised timelines around them within 2022 just with respect to submittals and launches?

Hey, good morning, guys. Thank you you touched on it with meningitis, but for the other assays for <unk> are you able to put some revised timelines around them within 2022, just with respect to submit <unk> in launches for.

Speaker 7: for those assays, blood, culture, and gas row for chiostat and then CTNG and I believe strep for pneumotics.

For those assays blood culture, and gastro for Cai is that and then <unk> and I believe strapped for NIM Alex.

So.

Speaker 1: For Kaya Start, we have already submitted the GI to the FDA, however...

For cash that we have already submitted to the FDA. However.

Speaker 1: As you are well aware, there is a significant backlog of approval requests at the FDA. So in all transparency, we are not expecting sales of GI in the US and Canada state before the second half of the year, and I would say even before Q4. If it comes before.

As you are well aware there is a significant backlog of approval request a D. A.

So in all transparency, we are not expecting sales of <unk> in the U S. B.

Be before the second half of the year and I would say even before Q4, if it comes before that.

Speaker 1: That's perfect. We have ticked the box of the commitment we took, which is submitted. Now we depend on the end.

That's perfect.

Tick the box of the commitment we took which is submitted now we depend on.

Speaker 1: For meningitis in the US, our ambition is to submit a Adolator in Q4 of 2020.

For mainland <unk> in the U S.

Our ambition is to submit.

At the latest in Q4 of 2022.

Speaker 1: For STREP and CT&Z, we want to submit to the FDA in the second half of the year 2022.

For a trip and <unk>, we want to send me to give you in the second half of the year 2022.

For Pcie.

Speaker 1: We want to submit to the sea marking authorities before the end of 2024. This is the current timeline. And we also continue to believe that we should be able to launch on Kaya's tat our...

We want to submit to the CE marking of authorities before the end of 2020. This is the current timeline and we also continue to believe that we should be able to launch on carriers that I were.

Speaker 1: Eurinary tracking infection assess in the second half of 2,423 in Europe .

During a REIT tracking fiction assays in the second half of 2023 in Europe .

This is the current timeline.

Speaker 7: That is very helpful. Thank you. And then rolling on gross margins, if you mentioned this in the prepared remarks, and I missed it, I apologize, but I think towards the end of the year, it sounded like gross margins were best thought of as being flatish in 2022. Is that still the right outlook? And if so, what would keep you from seeing a bit of a rebound there, especially given that COVID testing revenues don't seem like they carry out significantly?

Okay that is very helpful. Thank you and then roll it on gross margins if you're if you've mentioned this in the prepared remarks.

Missed it I apologize, but I think towards the end of the year. It sounded like gross margins were best thought of as being flattish in 2022 is that still the right outlook and if so what would keep you from seeing a bit of a rebound there, especially given that COVID-19 testing revenues don't seem like they carry us significantly.

Higher gross margin profile.

Speaker 2: I do think it's a pair assumption for a position here. I made it with my two factors. One is clearly...

I do think it's a fair assumption for this year and.

Mainly driven by two factors one is clearly that we.

As we discussed invested heavily in production expansion.

Speaker 2: that really something what also let know that we are not running on the best economy of scale to we need an increased utilization and that is clearly something

That's clearly something what also let us know that they're not wanting the best economy of scale. So we need.

This utilization and that is clearly something what do you expect to come in over time, and therefore again it being helpful. Second is clearly also a bit on the margin side in terms of product mix.

Speaker 2: tell you also a bit on the margin side in terms of product mix. I would also assume that that will be a bit more helpful over time as certain portion.

Also assumed debt.

More helpful over time.

Certain portions.

Martha.

And if you can share so again thats, probably the two reasons why was this the overseas margin.

More or less flattish and then going forward.

Okay.

Okay very good thank you guys.

Speaker 3: Our last question comes from Velco Fredericks at Deutsche Bank. Please go ahead.

Our last question comes from Falko Friedrichs Deutsche Bank. Please go ahead.

Speaker 2: Thank you, hello. So my question is a follow up on Daniel's question earlier for your theory. It's on the growth guidance for the non-COVID business. So if I look at a consensus expectations, it looks like the market is expecting a high single-digit growth for the non-COVID business post 2022. Now if I listen to your comments correctly, it did sound like this double-digit growth, but this here could be a bit more sustainable, I'm also over the next few years.

Thank you Hello, and so my question is a follow up on Daniel's question earlier for <unk>, it's on the growth guidance for the non Covid business. So if I look at <unk>.

Consensus expectations. It looks like the market is expecting a high single digit growth for the non Covid business post 2022, now if I listen to your comments correctly. It sounds like in this double digit growth this year could be a bit more sustainable and also over the next few years.

Speaker 2: So can you maybe clarify if I understood that correctly or if I'm getting carried away here because that would obviously be a very important message? Thank you.

And can you maybe.

Sorry, if I understood that correctly or is I'm getting carried away here because that would obviously be a very important message. Thank you.

Oh.

I don't think youre being carried away at her cool thanks for the question.

Speaker 1: into 1221, always forward.

Two things.

And in 2021 already.

Speaker 1: We do that commitment or double-check for the non-COVID. We confirm.

We took that commitment.

<unk> dropped for the non coffee.

We confirm this in that guidance and what I said today exactly as we said.

Speaker 1: And what I said today, exactly as we said in December 2020,

In December .

20, <unk> eight of December .

Speaker 1: is that post-COVID and excluding of, usually, COVID--based effects.

Is that post COVID-19 and excluding obviously COVID-19 basic fit.

Speaker 1: We think that four of our pile pillars of growth have definitely a double digit profile. So, can...

We think that four of our five pillars of growth are definitely a double digit profile.

So <unk> that.

Speaker 1: Digital PC Arcadia Quity Quantifero and we said sample tech would be to low to meet single digit growth.

<unk>.

Digital PCR K equity quantify them.

And we said central take would be too low to mid single digit growth profile.

Speaker 1: There was a slide on that December and we confirmed that today. Kiaru.

And there was a slide on that on that December and we confirmed that today clearly.

Okay.

Okay. Okay. Thank you with that.

Speaker 8: With that, Terry, I'd like to end the call here and thank you again for your interesting cajoon. If you have any questions or comments, please do not hesitate to contact me and me. Thank you. Bye-bye.

With that Terry I'd like to end the call here and thank you again for your interest in Qiagen. If you have any questions or comments. Please do not hesitate to contact me. Thank you bye bye.

Speaker 3: Ladies and gentlemen, this concludes the conference call. Thank you for joining and have a pleasant day. Goodbye.

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