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

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.

About QIAGEN

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 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/.