QIAGEN launches project to improve efficiency and resource allocation
Reallocating resources to accelerate strategic initiatives focused on driving platform success, adding content, expanding geographic presence and growing efficiently
Streamlining organizational structures to enhance processes, speed and productivity
Implementation during 2011-2012 to result in approximately 8-10% workforce reduction; restructuring charge to be taken in fourth quarter of 2011; no change to 2011 outlook
Venlo, The Netherlands, November 28, 2011 - QIAGEN N.V. (NASDAQ: QGEN; Frankfurt Prime Standard: QIA) today launched a project to enhance productivity by streamlining the organization and freeing up resources for reallocation to strategic initiatives that will help drive growth and innovation, strengthen its industry leadership position and improve longer-term profitability.
This project aims to eliminate organizational layers and overlapping structures, actions that will enhance QIAGEN's processes, speed and productivity. The vast majority of savings will be reinvested into strategic initiatives that focus on driving the success of automation platforms, particularly the global rollout of QIAsymphony RGQ; adding content to QIAGEN's test menu; and expanding QIAGEN's geographic presence, especially in high-growth emerging markets.
These actions, which will be implemented in 2011 and 2012, are intended to further improve QIAGEN's strong competitive positions in the molecular diagnostics and life sciences markets amid fast-changing conditions.
"QIAGEN has undergone a significant transformation in recent years, successfully building up a strong presence in molecular diagnostics and the life sciences by leveraging our leadership in Sample & Assay Technologies," said Peer M. Schatz, CEO of QIAGEN N.V. "Strategic initiatives are in place to drive the next wave of growth at QIAGEN. Against a background of short-term challenges in both our business and the industry, we have initiated this project to work more efficiently and reallocate additional resources to these initiatives and prepare for future growth. The emerging opportunities and the speed at which the environment has changed led us to accelerate these plans and take action."
Targeted actions include the following:
- Organizational structures will be streamlined throughout QIAGEN, and duplications between global, regional and local activities will be eliminated.
- R&D activities will be focused on high-growth areas in all customer classes. Important to this strategy is greater focus on driving platform success and expanding the menu of regulatory-approved tests to run on QIAGEN's automation platforms. Some R&D programs will be discontinued in order to place greater priority on the most important projects.
- QIAGEN will optimize capacity utilization at selected locations in order to increase production efficiency and leverage investments that have already been made. Improving site utilization will also result in changes for other functions.
- Initiatives are under way to capture savings from the expansion of shared service functions, including administration functions, procurement and data processing, that will provide greater economies of scale. Certain non-core support activities are also planned to be outsourced.
As a result of this project, approximately 8-10% of QIAGEN's currently 3,800 employees worldwide are expected to be affected. All reductions will be handled in a socially responsible manner with fair and respectful treatment of employees. QIAGEN will consult with works councils and fully comply with local labor laws.
Implementation of this project is expected to generate annual pre-tax cost savings of approximately $50 million starting in 2012, with the vast majority of savings to be reinvested into areas of focus as defined by QIAGEN's strategic initiatives. A pre-tax restructuring charge of approximately $70 million will be taken in the fourth quarter of 2011, of which 30% is expected to involve cash-related charge components. This restructuring charge is not expected to have an impact on QIAGEN's outlook for adjusted earnings in the fourth quarter of 2011 or for the second half and full-year 2011. QIAGEN further anticipates taking a pre-tax restructuring charge of approximately $20 million during 2012 (which is expected to include mostly cash-related charge components) for additional restructuring measures related to this program, and which will generate additional annual cost savings.
QIAGEN N.V., a Netherlands holding company, is the leading global provider of sample and assay technologies. Sample technologies are used to isolate and process DNA, RNA and proteins from biological samples such as blood or tissue. Assay technologies are used to make these isolated biomolecules visible. QIAGEN has developed and markets more than 500 sample and assay products as well as automated solutions for such consumables. QIAGEN provides its products to molecular diagnostics laboratories, academic researchers, pharmaceutical and biotechnology companies, and applied testing customers for purposes such as forensics, animal or food testing and pharmaceutical process control. QIAGEN's assay technologies include one of the broadest panels of molecular diagnostic tests available worldwide. This panel includes the first FDA-approved test for human papillomavirus (HPV), the primary cause of cervical cancer, as well as a broad suite of solutions for infectious disease testing and companion diagnostics. As of September 30, 2011, QIAGEN employed approximately 3,800 people in over 35 locations worldwide. Further information about QIAGEN can be found at http://www.qiagen.com/.
Certain of the statements contained in this news release may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's products, markets, strategy or operating results, including without limitation its expected operating results and anticipated restructuring charges or cost savings, are forward-looking, such statements are based on current expectations and assumptions that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations, regulatory processes and dependence on logistics), variability of operating results and allocations between business segments, the commercial development of markets for our products in applied testing, personalized healthcare, clinical research, proteomics, women's health/HPV testing and nucleic acid-based molecular diagnostics; changing relationships with customers, suppliers and strategic partners; competition; rapid or unexpected changes in technologies; fluctuations in demand for QIAGEN's products (including fluctuations due to general economic conditions, the level and timing of customers' funding, budgets and other factors); our ability to obtain regulatory approval of our products; difficulties in successfully adapting QIAGEN's products to integrated solutions and producing such products; the ability of QIAGEN to identify and develop new products and to differentiate and protect our products from competitors' products; market acceptance of QIAGEN's new products and the integration of acquired technologies and businesses. For further information, please refer to the discussions in reports that QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC).