More money for shareholders
Qiagen aims to outperform market growth
17.06.2024, 15:16
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Qiagen is one of the beneficiaries of the Corona crisis. The diagnostics group is now adjusting its direction. Acquisitions could also play a role in this. This is intended to gain market share in the coming years. The DAX company is wooing shareholders with share buybacks.
The diagnostics group Qiagen wants to leave the Corona slump behind after the boom in the pandemic and is aiming for significant sales growth in the coming years. Qiagen expects an average annual growth rate of around seven percent at constant exchange rates by 2028, as the company announced at its capital markets day in New York. The adjusted operating profit margin is expected to reach at least 31 percent, after being 26.9 percent in 2023.
“Our market is growing between four and six percent in the life sciences and clinical applications sector. So when we talk about seven percent, that means we are outperforming the market and therefore gaining market share,” said CEO Thierry Bernard.
Qiagen wants to achieve this primarily by focusing more on its five most important growth drivers, including the tuberculosis test Quantiferon, the diagnostic system Qiastat-Dx and sample technologies. They are expected to generate total sales of two billion dollars by 2028. The NeuMoDx PCR test system, on the other hand, is no longer one of the growth pillars and Qiagen only recently announced that it would stop selling it. This was important for many laboratories during the corona pandemic, but is now putting a strain on profit margins.
With the discontinuation of NeuMoDx, the DAX group had increased its forecast for adjusted earnings per share at constant exchange rates for this year to at least $2.14 (previous year: $2.09) from at least $2.10. However, this also means restructuring costs of $400 million. Sales are expected to increase by around 1.5 percent to at least $2 billion.
Acquisitions planned – program for shareholders
The company, which specializes in tests for the detection of diseases and laboratory equipment, was one of the winners of the corona pandemic with its products. But with the end of the pandemic, demand for corona tests also dropped noticeably, which was reflected in a significant decline in sales and profits last year. Qiagen now wants to drive forward its business with PCR genetic tests for laboratories as well as diagnostic tests for cancer and infectious diseases such as meningitis, pneumonia and gastrointestinal infections. Analytical software and the tuberculosis test are also expected to play an important role.
Bernard said Qiagen is also looking at exiting other smaller, low-return products. An update on that could be provided later this year. At the same time, the company is also continuing to pursue complementary acquisitions.
The board is wooing shareholders with a synthetic share buyback that combines an immediate capital repayment with a share consolidation. The company plans to return at least one billion dollars to its shareholders between 2024 and 2028. Qiagen had already announced a buyback of 300 million dollars in January, and shareholders are expected to give the green light for a further 300 million at the annual general meeting on Friday.