UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 6-K
__________________________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of June 30, 2024
Commission File Number 001-38332
QIAGEN N.V.
Hulsterweg 82
5912 PL Venlo
The Netherlands
__________________________________
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form 20-F
x
Form 40-F
o
1
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QIAGEN N.V.
Form 6-K
Table of Contents
Item Page
Other Information 3
Signatures 4
Exhibit Index 5
-------------------------------------------------------------------------------
Other Information
On June 21, 2024, QIAGEN N.V (NYSE: QGEN; Frankfurt Prime Standard: QIA) held
the Annual General Meeting of Shareholders. The related materials are
furnished herewith as Exhibit 99.1 to 99.7 and are incorporated by reference
herein.
3
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
QIAGEN N.V.
By: /s/ Roland Sackers
Roland Sackers
Chief Financial Officer
Date: August 1, 2024
4
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Exhibit Index
Exhibit Exhibit
No.
99.1 Notice 2024 AGM QIAGEN N.V.
99.2 Proxy Statement 2024
99.3 Beneficial Shareholder Attendance Form 2024
99.4 Registered Shareholder Attendance Form 2024
99.5 Proxy Card for 2024 Annual General Meeting of Shareholders
99.6 2024 QIAGEN AGM Voting Results
99.7 2023 IFRS Annual Report
5
Exhibit 99.1
________________________________________________________________________________
___
NOTICE
OF
THE
ANNUAL
GENERAL
MEETING
OF
SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders (the "
Annual General Meeting
")
of
QIAGEN
N.V.,
a
public
limited
liability
company
organized
and
existing
under
the
laws of the Netherlands, with corporate seat in Venlo, the Netherlands (the "
Company
" or "
QIAGEN
") will be held on Friday, June 21, 2024 at 10:00, local time, at Maaspoort,
Oude Markt 30, 5911 HH Venlo, The Netherlands.
AGENDA
Undefined terms in this agenda shall have the meaning as set out in the
explanatory notes to the
agenda.
1.
Opening;
2.
Managing
Board
Report
for
the
year
ended
December
31,
2023
("
Calendar
Year
2023
");
3.
Compliance
with
Dutch
Corporate
Governance
Code;
4.
Supervisory Board Report on the Company's Annual Accounts (the "
Annual Accounts
") for Calendar Year 2023;
5.
Adoption
of
the
Annual
Accounts
for
Calendar
Year
2023
(
voting
item
);
6.
Advisory
Vote
on
the
Remuneration
Report
2023
(
advisory
voting
item
);
7.
Reservation
and
dividend
policy;
8.
Discharge from liability of the Managing Directors
for
the performance of
their duties during
Calendar Year 2023 (
voting item
);
9.
Discharge from liability of the Supervisory Directors for the performance of
their duties during Calendar Year 2023 (
voting item
);
1
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10.
Reappointment of the following ten Supervisory Directors of the Company for a
term running up
to
and
including
the
date
of the
Annual
General
Meeting
in
2025 (
voting
items
):
(a)
Dr.
Metin
Colpan;
(b)
Dr.
Toralf
Haag;
(c)
Prof.
Dr.
Ross
L.
Levine;
(d)
Prof.
Dr.
Elaine
Mardis;
(e)
Dr.
Eva
Pisa;
(f)
Mr.
Lawrence
A.
Rosen;
(g)
Mr.
Stephen
H.
Rusckowski;
(h)
Ms.
Elizabeth
E.
Tallett;
(i)
Mr.
Bert
van
Meurs;
and
(j)
Ms.
Eva
van
Pelt.
11.
Reappointment
of
the
following
two
Managing
Directors
of
the
Company
for
a
term
running up
to
and
including
the
date
of the
Annual
General
Meeting
in
2025 (
voting
items
):
(a)
Mr.
Thierry
Bernard;
and
(b)
Mr.
Roland
Sackers.
12.
Remuneration
of
the
Supervisory
Board
(voting
items)
:
(a)
Adoption
of
the
Remuneration
Policy
with
respect
to
the
Supervisory
Board;
and
(b)
Determination
of
the
remuneration
of
the
members
of
the
Supervisory
Board.
13.
Reappointment of KPMG Accountants N.V. as auditors of the Company for the
calendar year ending December 31, 2024 (
voting item
);
14.
Appointment of Ernst & Young Accountants LLP as auditor of the Company for the
calendar
year ending December 31, 2025
(voting item)
;
15.
Authorization
of
the
Supervisory
Board,
until
December
21,
2025
to
(
voting
items
):
(a)
issue
a
number
of
ordinary
shares
and
financing
preference
shares
and
grant
rights to subscribe for such shares, the aggregate par value of which shall be
equal to the aggregate
par
value
of
fifty
percent
(50%)
of
the
shares
issued
and
outstanding
in the capital of the Company as at December 31, 2023 as included in the
Annual Accounts for Calendar Year 2023; and
(b)
restrict or exclude the pre-emptive rights with respect to issuing ordinary
shares or granting subscription rights, the aggregate par value of such shares
or subscription rights
shall
be
up
to
a
maximum
of
ten
percent
(10%)
of
the
aggregate
par
value
of all shares issued and outstanding in the capital of the Company as at
December 31,
2023;
16.
Authorization
of
the
Managing
Board,
until
December
21,
2025,
to
acquire
shares
in
the Company's own share capital (
voting item
);
17.
Discretionary
rights
for
the
Managing
Board
to
implement
a
capital
repayment
by
means
of a synthetic share repurchase
(voting item)
:
(a)
Proposal
to
amend
the
Company's
Articles
of
Association
in
accordance
with
the draft deed
of amendment
to
the Company's
Articles of Association
(Part I)
to, amongst
other
things,
increase
the
par
value
per
ordinary
share
in
the
share
capital
2
-------------------------------------------------------------------------------
of the Company by an amount to be determined by the Managing Board of the
Company;
(b)
Proposal
to
amend
the
Company's
Articles
of
Association
in
accordance
with
the draft deed of amendment of the Company's Articles of Association (Part II)
to,
amongst other things, consolidate the ordinary shares at a consolidation ratio
to be determined by the Managing Board, subject to the approval of the
Supervisory Board (the reverse stock split);
(c)
Proposal
to
amend
the
Company's
Articles
of
Association
in
accordance
with
the draft deed of amendment of the Company's Articles of Association (Part
III) to decrease the par value per ordinary share to an amount of EUR 0.01 and
to repay to the shareholders an amount to be determined by the Managing Board,
subject to the approval
of
the
Supervisory
Board,
which
amount will at
maximum
be
USD
300 million in the aggregate; and
(d)
Proposal to authorize each member of the Managing Board of the Company and
each lawyer, (candidate) civil law notary and paralegal working at De Brauw
Blackstone Westbroek N.V. to execute the three deeds of amendment of the
Company's Articles
of Association (Part I, II and III);
18.
Cancellation
of
fractional
ordinary
shares
held
by
the
Company
(voting
item)
;
19.
Questions;
20.
Closing.
Meeting
documentation
Copies
of
the
Annual
Accounts
for
Calendar
Year
2023,
the
reports
of
the
Supervisory
Board
and the Managing Board, the Company's 2023 Remuneration Report, the
explanatory notes to the
agenda, including the list and biographies of binding nominees for
reappointment to the Supervisory Board and the Managing Board, a triptych
containing an explanation to each of the proposed amendments to the Company's
Articles of Association (Part I, II and III) as contemplated by Agenda Item
17
as
well
as
documents
reflecting
the
verbatim
text
of
the
amendments
proposed
under Agenda Item 17 and other documents relevant for
the Annual General Meeting can be obtained
free
of charge by shareholders and other persons entitled to attend the Annual
General Meeting at the offices of the Company at Hulsterweg 82, 5912 PL Venlo,
the Netherlands, and at the offices of
Equiniti Trust Company, LLC at 48 Wall Street, Floor 23, New York, NY 10005,
United States of America, until the close of the Annual General Meeting.
Copies are also available on our website:
https://corporate.qiagen.com/agm2024
. In order to
contribute to sustainability, we strongly encourage you to obtain your copies
of the meeting
documents electronically via our website.
Record
Date
The record date for persons considered as entitled to participate and vote at
the Annual General Meeting or by proxy, provided those persons are registered
for the Annual General Meeting in accordance with
the provisions
set
forth below,
is
close of business
(05:00 p.m. New
York
time / 23:00 Frankfurt am Main time) on Friday, May 24, 2024 (the "
Record Date
" and such persons 'record holders of shares').
3
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Attendance
On
or
about
May
28,
2024,
a
proxy
statement
together
with
an
attendance
form
and
form
of
proxy will
be
mailed
to
the
record
holders
of
shares
as
of
the
Record
Date
entitled
to
participate
and
vote at
the
Annual
General
Meeting.
Record
holders
of
shares
wishing
to
exercise
their
rights
in
person are obliged to complete, sign and send
the attendance form, such that
the attendance form is
received no later than 5 p.m. New York time (23:00 Frankfurt am Main time) on
June 14, 2024 at the offices of Equiniti Trust Company, LLC, 48 Wall Street,
Floor 23, New York, NY 10005, United States of America or by email at the
following e-mail address:
admin1@equiniti.com
.
The
Company
will
send
a
card
of
admission
to
record
holders
of
shares
that
have
properly
notified the Company of their intention to attend the Annual General Meeting.
Proxy
Record holders of shares wishing to exercise their shareholder rights by proxy
are obliged to
complete,
sign
and
send
the
proxy
card,
such
that
the
proxy
card
is
received
no
later
than
5
p.m. New York time (23:00 Frankfurt am Main time) on June 17, 2024 at the
offices of Equiniti Trust Company, LLC, 48 Wall Street, Floor 23, New York, NY
10005, United States of America or by email
at the following e-mail address: admin1@equiniti.com.
Other
matters
In case you have any queries with respect to the Annual General Meeting,
please contact
agm2024@qiagen.com
.
The Annual General Meeting will be streamed live via webcast on our website
https://corporate.qiagen.com/agm2024
. Shareholders will be able to follow the meeting in listen-only mode. It will
not be possible
to vote or
address
the meeting via the webcast.
The
official
language
of
the
Annual
General
Meeting
shall
be
the
English
language.
The Managing Board Venlo, the Netherlands, May 8, 2024
4
Exhibit 99.2
Dear Shareholder:
You are cordially invited to attend the Annual General Meeting of Shareholders
of QIAGEN N.V. (the "Company") to be held on Friday, June 21, 2024 at 10:00,
local time, at Maaspoort, Oude Markt 30, 5911 HH Venlo, The Netherlands.
We have attached a Notice of Annual General Meeting, including the Agenda and
Explanatory Notes thereto, and enclosed an attendance form and proxy card for
use in connection with the meeting.
We hope that you will be able to attend the Annual General Meeting. If you
plan to do so, please complete and sign the enclosed attendance form and
return it to Equiniti Trust Company, LLC , as specified thereon. We will then
add your name to the admission list for the meeting and forward to you an
entrance-ticket for the meeting.
The signed attendance form must be received no later than 5 p.m. (New York
time) on Friday, June 14, 2024 in order for you to attend the meeting.
The Annual General Meeting will also be streamed live via webcast on our
website: https://corporate.qiagen.com/agm2024. Shareholders will be able to
follow the meeting in listen-only mode. It will not be possible to vote or
address the meeting via the webcast.
Whether or not you plan to attend the Annual General Meeting, it is important
that your ordinary shares are represented. Therefore, please complete, sign,
date and return the enclosed proxy card promptly in the enclosed envelope,
which requires no postage if mailed in the United States.
The completed proxy card must be received no later than 5:00 p.m. (New York
time) on Monday, June 17, 2024 for your vote to count.
Votes cast pursuant to a timely received proxy card shall be deemed votes cast
in the meeting, and timely submitting your proxy will ensure your proper
representation at the Annual General Meeting. If you physically attend the
Annual General Meeting, you may vote in person if you wish, even if you have
previously returned your proxy.
Sincerely,
/s/ Thierry Bernard /s/ Roland Sackers
THIERRY BERNARD ROLAND SACKERS
Managing Director Managing Director
Venlo, The Netherlands
May 8, 2024
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
-------------------------------------------------------------------------------
QIAGEN N.V.
____________________________
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 21, 2024
____________________________
To The Shareholders:
Notice is hereby given that the Annual General Meeting of Shareholders (the
"Annual General Meeting") of QIAGEN N.V. (the "Company"), a public limited
liability company organized and existing under the laws of The Netherlands,
will be held on Friday, June 21, 2024 at 10:00, local time, at Maaspoort, Oude
Markt 30, 5911 HH Venlo, The Netherlands.
The Agenda of the Annual General Meeting of the Company, containing proposals
of the Managing Board and the Supervisory Board of the Company, is as follows
(undefined terms in this Agenda shall have the meaning as set out in the
Explanatory Notes thereto):
1.
Opening.
2.
Managing Board Report for the year ended December 31, 2023 ("Calendar Year
2023").
3.
Compliance with Dutch Corporate Governance Code.
4.
Supervisory Board Report on the Company's Annual Accounts (the "Annual
Accounts") for Calendar Year 2023.
5.
Adoption of the Annual Accounts for Calendar Year 2023 (
voting item
).
6.
Advisory Vote on the Remuneration Report 2023 (
advisory voting item
).
7.
Reservation and dividend policy.
8.
Discharge from liability of the Managing Directors for the performance of
their duties during Calendar Year 2023 (
voting item
).
9.
Discharge from liability of the Supervisory Directors for the performance of
their duties during Calendar Year 2023 (
voting item
).
10.
Reappointment of the following ten Supervisory Directors of the Company for a
term running up to and including the date of the Annual General Meeting in
2025 (
voting items
):
a.
Dr. Metin Colpan;
b.
Dr. Toralf Haag;
c.
Prof. Dr. Ross L. Levine;
d.
Prof. Dr. Elaine Mardis;
e.
Dr. Eva Pisa;
f.
Mr. Lawrence A. Rosen;
g.
Mr. Stephen H. Rusckowski;
h.
Ms. Elizabeth E. Tallett;
i.
Mr. Bert van Meurs; and
j.
Ms. Eva van Pelt.
-------------------------------------------------------------------------------
11.
Reappointment of the following two Managing Directors of the Company for a
term running up to and including the date of the Annual General Meeting in
2025 (
voting items
):
a.
Mr. Thierry Bernard; and
b.
Mr. Roland Sackers.
12.
Remuneration of the Supervisory Board
(voting items)
:
a.
Adoption of the Remuneration Policy with respect to the Supervisory Board; and
b.
Determination of the remuneration of the members of the Supervisory Board.
13.
Reappointment of KPMG Accountants N.V. as auditors of the Company for the
calendar year ending December 31, 2024
(voting item)
.
14.
Appointment of Ernst & Young Accountants LLP as auditor of the Company for the
calendar year ending December 31, 2025 (
voting item
).
15.
Authorization of the Supervisory Board, until December 21, 2025 to (
voting items
):
a.
issue a number of ordinary shares and financing preference shares and grant
rights to subscribe for such shares, the aggregate par value of which shall be
equal to the aggregate par value of fifty percent (50%) of the shares issued
and outstanding in the capital of the Company as at December 31, 2023 as
included in the Annual Accounts for Calendar Year 2023; and
b.
restrict or exclude the pre-emptive rights with respect to issuing ordinary
shares or granting subscription rights, the aggregate par value of such shares
or subscription rights shall be up to a maximum of ten percent (10%) of the
aggregate par value of all shares issued and outstanding in the capital of the
Company as at December 31, 2023.
16.
Authorization of the Managing Board, until December 21, 2025, to acquire
shares in the Company's own share capital (
voting item
).
17.
Discretionary rights for the Managing Board to implement a capital repayment
by means of synthetic share repurchase
(voting item)
:
a. Proposal to amend the Company's Articles of Association in accordance
with the draft deed of amendment to the Company's Articles of Association
(Part I) to, amongst other things, increase the par value per ordinary share
by an amount to be determined by the Managing Board of the Company;
b. Proposal to amend the Company's Articles of Association in accordance
with the draft deed of amendment of the Company's Articles of Association
(Part II) to, amongst other things, consolidate the ordinary shares at a
consolidation ratio to be determined by the Managing Board, subject to the
approval of the Supervisory Board (the reverse stock split);
c. Proposal to amend the Company's Articles of Association in accordance
with the draft deed of amendment of the Company's Articles of Association
(Part III) to decrease the par value per ordinary share to an amount of EUR
0.01 and to repay to the shareholders an amount to be determined by the
Managing Board, subject to the approval of the Supervisory Board, which amount
will at maximum be USD 300 million in the aggregate; and
d. Proposal to authorize each member of the Managing Board of the Company
and each lawyer, (candidate) civil law notary and paralegal working at De
Brauw Blackstone Westbroek N.V. to execute the three deeds of amendment of the
Company's Articles of Association (Part I, II and III).
18.
Cancellation of fractional ordinary shares held by the Company
(voting item)
.
19.
Questions.
20.
Closing.
-------------------------------------------------------------------------------
Meeting documentation
Under the Articles of Association of the Company and Dutch law, copies of the
Annual Accounts for Calendar Year 2023, the reports of the Supervisory Board
and the Managing Board, the Company's 2023 Remuneration Report, the list and
biographies of binding nominees for reappointment to the Supervisory Board and
the Managing Board, a triptych containing an explanation to each of the
proposed amendments to the Company's Articles of Association (Part I, II and
III) as contemplated by Agenda Item 17 as well as documents reflecting the
verbatim text of the amendments proposed under Agenda Item 17, the information
sent to the record holders of ordinary shares in connection with the Annual
General Meeting and other documents relevant for the Annual General Meeting
can be obtained free of charge by shareholders and other persons entitled to
attend the Annual General Meeting at the offices of the Company at Hulsterweg
82, 5912 PL Venlo, The Netherlands, and at the offices of Equiniti Trust
Company, LLC at 48 Wall Street, Floor 23, New York, NY 10005, United States of
America, until the close of the Annual General Meeting.
Copies are also available on our website:
https://corporate.qiagen.com/agm2024
.
In order to contribute to sustainability, we strongly encourage you to obtain
your copies of the meeting documents electronically via our website.
In an effort to reduce our cost of printing and mailing documents for the
Annual General Meeting and to exhibit environmentally responsible conduct, we
are not mailing paper copies of our 2023 Annual Report to our shareholders.
The 2023 Annual Report, which provides additional information regarding our
2023 financial results, and copies of the Notice of Annual General Meeting,
including the Agenda and Explanatory Notes thereto, and Annual Accounts for
Calendar Year 2023, can be accessed on our website:
https://corporate.qiagen.com/agm2024
. Printed copies of the 2023 Annual Report can also be obtained free of charge
by visiting our website:
https://corporate.qiagen.com/investor-relations/ir-contacts/information-request-
form/
or by contacting QIAGEN Sciences LLC, Attention: Executive Assistant to Chief
Financial Officer, 19300 Germantown Rd, Germantown, MD 20874, United States of
America, Phone number: +1 240 686 7774 until the close of the Annual General
Meeting.
Record date
Close of business (5:00 p.m. New York time / 23:00 Frankfurt am Main time) on
Friday, May 24, 2024 is the record date (the "Record Date") for the
determination of the record holders of ordinary shares entitled to attend and
vote at the Annual General Meeting (in person or by proxy).
Attendance
All shareholders are cordially invited to attend the Annual General Meeting.
If you plan to do so, please complete and sign the enclosed attendance form
and return it as specified thereon. We will then add your name to the
admission list for the meeting and forward to you an entrance-ticket for the
Annual General Meeting.
Voting
Whether you plan to attend the Annual General Meeting or not, you are
requested to complete, sign, date and return the enclosed proxy card as soon
as possible in accordance with the instructions on the card. A pre-addressed,
postage prepaid return envelope is enclosed for your convenience. Completed
proxy cards may also be submitted via email to
admin1@equiniti.com
.
Other matters
In case you have any queries with respect to the Annual General Meeting,
please contact
agm2024@qiagen.com
.
The Annual General Meeting will be streamed live via webcast on our website
https://corporate.qiagen.com/agm2024. Shareholders will be able to follow the
meeting in listen-only mode. It will not be possible to vote or address the
meeting via the webcast.
-------------------------------------------------------------------------------
By Order of the Managing Board
/s/ Thierry Bernard /s/ Roland Sackers
THIERRY BERNARD ROLAND SACKERS
Managing Director Managing Director
May 8, 2024
Venlo, The Netherlands
-------------------------------------------------------------------------------
QIAGEN N.V.
____________________________
ANNUAL GENERAL MEETING OF SHAREHOLDERS
____________________________
EXPLANATORY NOTES TO AGENDA
I. General
The enclosed proxy card and the accompanying Notice of Annual General Meeting
of Shareholders and Agenda are being mailed to shareholders of QIAGEN N.V.
(the "Company" or "QIAGEN") in connection with the solicitation by the Company
of proxies for use at the Annual General Meeting of Shareholders of the
Company to be held on Friday, June 21, 2024 at 10:00 local time, at Maaspoort,
Oude Markt 30, 5911 HH Venlo, The Netherlands. These proxy solicitation
materials will be mailed on or about Tuesday, May 28, 2024 to all shareholders
of record as of Friday, May 24, 2024, the record date for the Annual General
Meeting.
Under the Articles of Association of the Company and Dutch law, copies of the
Annual Accounts for Calendar Year 2023, the reports of the Company's
supervisory board (the "Supervisory Board") and the Company's managing board
(the "Managing Board"), the Company's 2023 Remuneration Report, the list and
biographies of binding nominees for reappointment to the Supervisory Board and
the Managing Board, a triptych containing an explanation to each of the
proposed amendments to the Company's Articles of Association (Part I, II and
III) as contemplated by Agenda Item 17 as well as documents reflecting the
verbatim text of the amendments proposed under Agenda Item 17, the information
sent to the record holders of ordinary shares in connection with the Annual
General Meeting and other documents relevant for the Annual General Meeting
can be obtained free of charge by shareholders and other persons entitled to
attend the Annual General Meeting at the offices of the Company at Hulsterweg
82, 5912 PL Venlo, The Netherlands, and at the offices of Equiniti Trust
Company, LLC at 48 Wall Street, Floor 23, New York, NY 10005, United States of
America, until the close of the Annual General Meeting.
Copies are also available electronically on our website:
https://corporate.qiagen.com/agm2024
.
In order to contribute to sustainability, we strongly encourage you to obtain
your copies of the meeting documents electronically via our website.
In an effort to support sustainable business practices and reduce printing and
mailing costs, we are not mailing paper copies of the Company's 2023 Annual
Report (the "2023 Annual Report") to our shareholders.
The 2023 Annual Report, which provides additional information regarding our
2023 financial results, and copies of the Notice of Annual General Meeting,
including the Agenda and Explanatory Notes, and Annual Accounts for Calendar
Year 2023, can be accessed on our website:
https://corporate.qiagen.com/agm2024
. Printed copies of the 2023 Annual Report can also be obtained free of charge
by visiting our website:
https://corporate.qiagen.com/investor-relations/ir-contacts/information-request-
form/
or by contacting QIAGEN Sciences LLC, Attention: Executive Assistant to Chief
Financial Officer, 19300 Germantown Rd, Germantown, MD 20874, United States of
America, Phone number: +1 240 686 7774 until the close of the Annual General
Meeting.
The reasonable cost of soliciting proxies, including expenses in connection
with preparing and mailing the proxy solicitation materials, will be borne by
the Company. In addition, the Company will reimburse brokerage firms and other
persons representing beneficial owners of ordinary shares for their expenses
in forwarding proxy materials to such beneficial owners. Solicitation of
proxies by mail may be supplemented by telephone, telegram, telex, electronic
mail and personal solicitation by directors, officers or employees of the
Company. No additional compensation will be paid for such solicitation.
The Company is not subject to the proxy solicitation rules contained in
Regulation 14A promulgated under the United States Securities Exchange Act of
1934, as amended.
-------------------------------------------------------------------------------
II. Voting and Solicitation
In order to attend, address and vote at the Annual General Meeting, or vote by
proxy, the record holders of ordinary shares are requested to advise the
Company in writing in accordance with the procedure set forth in the Notice of
Annual General Meeting of Shareholders.
Close of business (5:00 p.m. New York time / 23:00 Frankfurt am Main time) on
May 24, 2024 is the record date for the determination of the record holders of
ordinary shares entitled to participate in and vote at the Annual General
Meeting or by proxy.
At May 2, 2024, there were 223,904,370 whole ordinary shares and 59.41
fractional ordinary shares issued in the Company's share capital; no
preference shares or financing preference shares have been issued to date. The
Company holds 2,057,236 whole ordinary shares and 1.12 fractional ordinary
shares in its own capital, which cannot be voted.
Shareholders are entitled to one vote for each whole ordinary share held.
Each of the proposals to reappoint members to the Supervisory Board and the
Managing Board set forth under Agenda Items 10 and 11 will be adopted
irrespective of the number of votes cast in favor, unless such proposal is
overruled by at least two-thirds of the votes cast being votes against the
proposal, provided such votes also represent more than fifty percent (50%) of
the issued share capital of the Company as of the record date of the Annual
General Meeting.
The proposals (i) to authorize the Supervisory Board to restrict or exclude
the pre-emptive rights with respect to issuing shares or granting subscription
rights set forth under Agenda Item 15.b, (ii) to decrease the par value of the
ordinary shares through an amendment of the Articles of Association in
connection with the discretionary repayment of capital by means of a synthetic
share repurchase set forth under Agenda Item 17.c, and (iii) to cancel
fractional ordinary shares the Company holds in its own share capital set
forth under Agenda Item 18 shall be validly adopted if adopted by at least
two-thirds of the votes cast at the Annual General Meeting if less than fifty
percent (50%) of the Company's issued share capital is represented at the
Annual General Meeting. If fifty percent (50%) or more of the Company's issued
share capital is represented at the Annual General Meeting, the proposals set
forth under Agenda Items 15.b, 17 (being one combined voting item, comprising
Agenda Item 17.c referred to above) and 18 shall be validly adopted if adopted
by a simple majority of the votes cast at the Annual General Meeting. The
proposal to adopt the Remuneration Policy with respect to the Supervisory
Board as set forth under Agenda Item 12.a shall be validly adopted if adopted
by at least seventy-five percent (75%) of the votes cast at the Annual General
Meeting.
All other proposals presented to the shareholders at the Annual General
Meeting shall be validly adopted if adopted by a simple majority of the votes
cast at the Annual General Meeting. No majority requirement applies to the
non-binding advisory vote referred to under Agenda Item 6.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivery to the Company of a written
notice of revocation or a duly executed proxy bearing a later date. Any
shareholder who has executed a proxy but is present at the Annual General
meeting, and who wishes to vote in person, may do so by revoking his or her
proxy as described in the preceding sentence. Mere attendance at the Annual
General Meeting will not serve to revoke a proxy. Ordinary shares represented
by valid proxies received in time for use at the Annual General Meeting and
not revoked prior to the Annual General Meeting, will be voted at the Annual
General Meeting.
III. Explanatory Notes to Agenda Items
Explanatory Note to Item 2-Managing Board Report for Calendar Year 2023
At the Annual General Meeting, the Managing Board will conduct a presentation
on the performance of the Company during Calendar Year 2023.
Explanatory Note to Item 3-Compliance with Dutch Corporate Governance Code
The Company complies with the majority of the best practice provisions of the
Dutch Corporate Governance Code. For further details on the Company's
compliance with the Dutch Corporate Governance Code, reference is made to the
''Dutch Corporate Governance Code - Comply or Explain'' section in the 2023
Annual Report.
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Explanatory Note to Item 4-Supervisory Board Report on the Company's Annual
Accounts for Calendar Year 2023
At the Annual General Meeting, the Supervisory Board will conduct a
presentation of its report on the Company's Annual Accounts for Calendar Year
2023.
Explanatory Note to Item 5-Adoption of the Annual Accounts for Calendar Year
2023
The shareholders of the Company are being asked to adopt the Annual Accounts
for Calendar Year 2023. The Annual Report and the Annual Accounts have been
prepared by the Managing Board and approved by the Supervisory Board.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR
THIS ITEM. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF UNLESS
INSTRUCTIONS ARE OTHERWISE PROVIDED.
Explanatory Note to Item 6-
Advisory Vote on the Remuneration Report 2023.
At the Annual General Meeting, information on the implementation of the
Remuneration Policies for the Managing Board and Supervisory Board during 2023
will be provided to shareholders. Following the presentation, it will be
proposed to cast a favorable, non-binding, advisory vote in respect of the
Remuneration Report for 2023.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A
NON-BINDING ADVISORY VOTE FOR THIS ITEM. COMPLETED PROXY CARDS WILL BE VOTED
IN FAVOR THEREOF UNLESS INSTRUCTIONS ARE OTHERWISE PROVIDED.
Explanatory Note to Item 7-Reservation and Dividend Policy
The Company's reservation and dividend policy is to retain the profits by way
of reserve. Consequently, the Company will not pay a dividend to the
shareholders out of the Calendar Year 2023 profits. This policy benefits our
shareholders by increasing share value, and the Company believes that this
policy is aligned with shareholders' taxation preferences.
As further set out under Agenda Item 17, the Company is proposing to the
Annual General Meeting to grant the Managing Board the discretionary power to,
subject to the approval of the Supervisory Board, return capital to the
shareholders of the Company by means of a Synthetic Share Repurchase.
Explanatory Note to Item 8-Discharge from Liability of the Managing Directors
Under Dutch law, the adoption of the Annual Accounts does not automatically
discharge the members of the Managing Board and the Supervisory Board from
liability for the performance of their duties during Calendar Year 2023. The
grant of such discharge from liability is typical for Dutch companies, and its
approval is commonly included on the agenda for annual general meetings.
The shareholders of the Company are being asked to discharge the members of
the Managing Board from liability for the performance of their duties during
Calendar Year 2023, as described in the 2023 Annual Report and the 2023 Annual
Accounts or as otherwise disclosed to the General Meeting of Shareholders.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR
THIS ITEM. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF UNLESS
INSTRUCTIONS ARE OTHERWISE PROVIDED.
Explanatory Note to Item 9-Discharge from Liability of the Supervisory Directors
The shareholders of the Company are being asked to discharge the members of
the Supervisory Board from liability for the performance of their duties
during Calendar Year 2023, as described in the 2023 Annual Report and the 2023
Annual Accounts or as otherwise disclosed to the General Meeting of
Shareholders.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR
THIS ITEM. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF UNLESS
INSTRUCTIONS ARE OTHERWISE PROVIDED.
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Explanatory Note to Items 10 and 11-Reappointment of the Supervisory Directors
and Reappointment of the Managing Directors
The Supervisory Board and the Managing Board acting together at a joint
meeting (the "Joint Meeting") resolved to make a binding nomination for the
reappointment of the ten current members of the Supervisory Board (the
"Supervisory Directors"). Furthermore, the Joint Meeting resolved to make a
binding nomination for the reappointment of the two current members of the
Managing Board.
The Supervisory Board consists of such number of members, with a minimum of
three members, as the Joint Meeting may determine. The Supervisory Board
presently consists of ten members. The Joint Meeting has set the number of
members of the Supervisory Board at ten as of the day following the Annual
General Meeting. The Supervisory Directors are appointed by a vote of the
shareholders of the Company at the Annual General Meeting, subject to the
authority of the Supervisory Board to appoint up to one-third of its members
if vacancies occur during a calendar year. The Supervisory Board has made use
of this latter authority and appointed Ms. Eva van Pelt in March 2024 and Mr.
Bert van Meurs in April 2024 as Supervisory Directors for a term ending on the
date of the Annual General Meeting. As from the date of their appointment, Mr.
van Meurs and Ms. van Pelt have received and, subject to their reappointment
pursuant to Agenda Item 10.i and 10.j, respectively, will continue to receive
remuneration in accordance with the Remuneration Policy for the Supervisory
Board as adopted and determined by the general meeting of shareholders.
The Managing Board has one or more members, as determined by the Supervisory
Board. The Managing Board presently consists of two members. The members of
the Managing Board (the "Managing Directors") are appointed by a vote of the
shareholders of the Company at the Annual General Meeting.
The Supervisory Board and the Managing Board at the Joint Meeting may make a
binding nomination to fill each vacancy on the Supervisory Board and Managing
Board. At the Annual General Meeting, the shareholders may overrule the
binding nature of a nomination by resolution adopted with a majority of at
least two-thirds of the votes cast, provided such majority also represents
more than half the issued share capital of the Company as of the date of the
Annual General Meeting. Our shareholders vote for each nominee for
reappointment to our Supervisory Board and Managing Board as a separate voting
item.
It is proposed to reappoint the persons nominated for reappointment to the
Supervisory Board as per the below, for a period beginning on the date
following the date of the Annual General Meeting, until and including the date
of the Annual General Meeting held in the following calendar year. It is
furthermore proposed to reappoint the persons nominated for reappointment to
the Managing Board as per the below for a period beginning on the date
following the date of the Annual General Meeting, until and including the date
of the Annual General Meeting held in the following calendar year.
By unanimous written consent and taking into account each individual's
performance during their past term(s) of appointment, the Joint Meeting
resolved to make a binding nomination for ten members of the Supervisory Board
and two members of the Managing Board. The ten binding nominees for
reappointment to the Supervisory Board positions are as follows:
.
Nomination for position no. 1: Dr. Metin Colpan;
.
Nomination for position no. 2: Dr. Toralf Haag;
.
Nomination for position no. 3: Prof. Dr. Ross L. Levine;
.
Nomination for position no. 4: Prof. Dr. Elaine Mardis;
.
Nomination for position no. 5: Dr. Eva Pisa;
.
Nomination for position no. 6: Mr. Lawrence A. Rosen;
.
Nomination for position no. 7: Mr. Stephen H. Rusckowski;
.
Nomination for position no. 8: Ms. Elizabeth E. Tallett;
.
Nomination for position no. 9: Mr. Bert van Meurs; and
.
Nomination for position no. 10: Ms. Eva van Pelt.
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The Supervisory Board believes that these nominees meet the criteria for
Supervisory Board positions, as approved by the Supervisory Board and set
forth on the Company's website, and that they will continue to deliver
significant contributions in view of their broad international, financial and
management experience, integrity and ethics. This applies in particular for
Dr. Metin Colpan, Prof. Dr. Levine, Prof. Dr. Elaine Mardis, Mr. Lawrence A.
Rosen and Ms. Elizabeth E. Tallett, who have served on the Supervisory Board
for eight years or more. The Dutch Corporate Governance Code states that
reasons should be given for a reappointment after an eight-year period. The
Supervisory Board believes that the in-depth knowledge of the Company
represented by Dr. Colpan, Prof. Dr. Levine, Prof. Dr. Mardis, Mr. Rosen and
Ms. Tallett is very valuable for QIAGEN and beneficially supplements the
diverse and mixed profile of the Supervisory Board. The experience and
qualifications of each nominee to the Supervisory Board are described below.
The binding nominations for the two Managing Board positions are as follows:
.
Nomination for position no. 1: Mr. Thierry Bernard; and
.
Nomination for position no. 2: Mr. Roland Sackers.
The following is a brief summary of the backgrounds of each of the Supervisory
Director and Managing Director nominees. References to "QIAGEN" and the
"Company" in relation to periods prior to April 29, 1996 mean QIAGEN GmbH and
its consolidated subsidiaries.
Dr. Metin Colpan
(1955, German). Dr. Colpan co-founded QIAGEN and served as its first Chief
Executive Officer and as a Managing Director from 1985 to 2003. Dr. Colpan has
been a member of the Supervisory Board since 2004 and has served as Chair of
the Science & Technology Committee since 2014. He has been a member of the
Nomination & ESG Committee since 2015. Prior to co-founding QIAGEN, Dr. Colpan
was an Assistant Investigator at the Institute for Biophysics at the
University of Dusseldorf. He has extensive experience in Sample technologies,
in particular the separation and purification of nucleic acids, and has many
patents in the field. Dr. Colpan obtained his Ph.D. and master's degree from
the Darmstadt Institute of Technology.
Dr. Toralf Haag
(1966, German). Dr. Haag joined the Supervisory Board and the Audit Committee
in 2021 and is Chair of the Audit Committee. Dr. Haag is Chief Executive
Officer and Chairman of the Corporate Board of Management of Voith GmbH & Co.
KGaA, a privately held German technology company. Before joining Voith as
Chief Financial Officer in 2016, Dr. Haag served for more than 11 years as
Chief Financial Officer and Member of the Executive Committee of Lonza Group
AG. Dr. Haag earned a degree in business administration from the University of
Augsburg and a Ph.D. from the University of Kiel.
Prof. Dr. Ross L. Levine
(1972, U.S.). Dr. Levine joined the Supervisory Board and its Science &
Technology Committee in 2016. In 2021, he became Chair of QIAGEN's Scientific
Advisory Board. A physician-scientist focused on researching and treating
blood and bone-marrow cancers, Dr. Levine is the Laurence Joseph Dineen Chair
in Leukemia Research, the Chief of Molecular Cancer Medicine and an Attending
Physician at Memorial Sloan Kettering Cancer Center, and Professor of Medicine
at Weill Cornell Medicine. Board-certified in internal medicine and
hematology-oncology, Dr. Levine received a bachelor's degree from Harvard
College and his M.D. from The Johns Hopkins University School of Medicine.
Prof. Dr. Elaine Mardis
(1962, U.S.). Dr. Mardis joined the Supervisory Board in 2014. She has been a
member of the Science & Technology Committee since 2014 and a member of the
Compensation & Human Resources Committee since 2020. Dr. Mardis is
Co-Executive Director of the Steve and Cindy Rasmussen Institute for Genomic
Medicine at Nationwide Children's Hospital in Columbus, Ohio, and Professor of
Pediatrics at The Ohio State University College of Medicine. Previously, she
was the Robert E. and Louise F. Dunn Distinguished Professor of Medical
Sciences at Washington University School of Medicine and President of the
American Association for Cancer Research. Dr. Mardis is a scientific advisor
to Scorpion Therapeutics LLC, an elected member of the U.S. National Academy
of Medicine, and a member of the Board of Directors of Singular Genomics
Systems, Inc., a publicly listed company based in the U.S. Dr. Mardis received
her bachelor's degree and Ph.D. from the University of Oklahoma.
Dr. Eva Pisa
(1954, Swedish/Swiss). Dr. Pisa joined the Supervisory Board and the
Compensation & Human Resources Committee in 2022. Since March 2024, she has
been Chair of the Compensation & Human Resources Committee. She is an advisor
to several life science and diagnostic companies through her company piMed
5
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Consulting, and she previously held senior leadership positions in Roche
Diagnostics International from 2007 to 2020, most recently as Senior Vice
President at Roche Centralized and POC Solutions. Prior to joining Roche, she
was Chief Executive Officer of Sangtec Molecular Diagnostics AB, a Swedish
start-up, from 2001 to 2007. Dr. Pisa holds a Ph.D. from the Karolinska
Institutet and an MBA from Heriot-Watt University.
Mr. Lawrence A. Rosen
(1957, U.S.). Mr. Rosen joined the Supervisory Board in 2013 and has served as
Chair of the Supervisory Board since 2020. He has been a member of the Audit
Committee since 2013 and a member of the Nomination & ESG Committee since
2020. Mr. Rosen also serves on the Supervisory Boards of Lanxess AG and
Deutsche Post AG, where he previously was a member of the Board of Management
and Chief Financial Officer from 2009 to 2016. He served as Chief Financial
Officer of Fresenius Medical Care AG & Co. KGaA from 2003 to 2009, and earlier
as Senior Vice President and Treasurer of Aventis SA in Strasbourg. Mr. Rosen
holds a bachelor's degree from the State University of New York and an MBA
from the University of Michigan.
Mr. Stephen H. Rusckowski
(1957, U.S.). Mr. Rusckowski joined the Supervisory Board in April 2023. He is
a member of the Compensation & Human Resources Committee and since March 2024,
he has been Chair of the Nomination & ESG Committee. He most recently served
as Chairman, President and Chief Executive Officer of Quest Diagnostics. He
joined Quest Diagnostics as President and Chief Executive Officer in May 2012
and was named Chairman in 2016. He stepped down from his role as President and
CEO in 2022, and as Chairman in early 2023. Prior to joining Quest
Diagnostics, Mr. Rusckowski was CEO of Philips Healthcare, which he joined in
2001 when Philips acquired the Healthcare Solutions Group that he was leading
at Hewlett-Packard/Agilent Technologies. Mr. Rusckowski also serves on the
Board of Directors of Baxter International Inc., and previously served as a
member of the Board of Directors of Xerox Holdings Corporation and Covidien
plc. He earned a bachelor's degree in Mechanical Engineering from Worcester
Polytechnic Institute and a master's in Management from the Massachusetts
Institute of Technology's Sloan School of Management.
Ms. Elizabeth E. Tallett
(1949, U.S./British). Ms. Tallett joined the Supervisory Board and its Audit
Committee and Compensation & Human Resources Committee in 2011. In 2016, she
joined the Nomination & ESG Committee. Ms. Tallett is Chair of the Board of
Directors of Elevance Health, Inc. and a member of the Board of Directors of
Moderna, Inc., both publicly listed companies based in the U.S. From 2002 to
2015, she was a Principal of Hunter Partners, LLC, a management company for
pharmaceutical, biotechnology and medical device companies, and continues to
consult with early-stage healthcare companies. She previously served as
President and Chief Executive Officer of Transcell Technologies Inc.;
President of Centocor Pharmaceuticals; a member of the Parke-Davis Executive
Committee, and Director of Worldwide Strategic Planning for Warner-Lambert
Company. A founding Board member of the Biotechnology Council of New Jersey,
Ms. Tallett received bachelor's degrees in mathematics and economics from the
University of Nottingham.
Mr. Bert van Meurs
(1961, Dutch). Mr. van Meurs joined the Supervisory Board and the Nomination &
ESG Committee in April 2024. He is a member of the Executive Committee at
Royal Philips N.V. of the Netherlands, where he serves as Executive Vice
President and Chief Business Leader of Image Guided Therapy, and also as Chief
Business Leader of Precision Diagnosis (ad interim) responsible for Diagnosis
& Treatment. He has more than 30 years of experience since joining Philips in
1985 in various global business leadership positions in research and
development, clinical science, and marketing and sales in Europe and Asia. He
has a Master's degree in Physics from the University of Utrecht and a degree
in Business Marketing from the Technical University of Eindhoven, both in the
Netherlands.
Ms. Eva van Pelt
(1965, German). Ms. van Pelt joined the Supervisory Board and the Audit
Committee in March 2024. She most recently served as Co-CEO and member of the
Management Board of Eppendorf Group, a privately-held German Life Sciences
company with more than EUR 1.2 billion of annual sales and over 5,000
employees worldwide. Prior to her time at Eppendorf, she held various
international management positions of increasing responsibility with Siemens,
Accenture, Hitachi Data Systems and Leica Microsystems. She also currently
serves as a member of the Supervisory Board of Paul Hartmann AG, a
publicly-listed German healthcare company, and as President of the
German-Dutch Chamber of Commerce. She earned a Diplom-Kauffrau degree from the
Ludwig-Maximilians-Universitat in Munich.
Thierry Bernard
(1964, U.S./French). Mr. Bernard joined QIAGEN in February 2015 to lead the
company's growing presence in molecular diagnostics, the application of Sample
to Insight solutions for molecular testing in
6
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human healthcare. He was named Chief Executive Officer in March 2020 after
serving in this role on an interim basis and became a member of the Managing
Board in 2021. Previously, Mr. Bernard held roles of increasing responsibility
during 15 years with bioMerieux SA, most recently as Corporate Vice President,
Global Commercial Operations, Investor Relations and the Greater China Region.
He also held senior management roles in other leading international companies.
He was named in March 2023 as Chair of the AdvaMedDx Board of Directors, a
U.S. industry trade association. Mr. Bernard has earned degrees and
certifications from Sciences Po, LSE, the College of Europe, Harvard Business
School, Centro de Comercio Exterior de Barcelona, and has been appointed
Conseiller du Commerce Exterieur by the French government.
Roland Sackers
(1968, German). Mr. Sackers joined QIAGEN in 1999 as Vice President, Finance
and has been Chief Financial Officer since 2004. In 2006, Mr. Sackers became a
member of the Managing Board. From 1995 to 1999, he was an auditor with Arthur
Andersen Wirtschaftsprufungsgesellschaft Steuerberatungsgesellschaft. Since
2019, Mr. Sackers has served on the Supervisory Board of Evotec SE, a publicly
listed company based in Germany, including as Chair of the Audit Committee
since 2019 and as Vice Chair of the Supervisory Board since 2021. He is also a
member of the Board of the industry association BIO Deutschland. Mr. Sackers
earned his Diplom-Kaufmann from the University of Munster.
Share Ownership
The following table sets forth certain information as of January 31, 2024
concerning the ownership of ordinary shares by each current member of the
Supervisory Board being proposed for reappointment. In preparing the following
table, the Company has relied on information furnished by such persons.
Name and country of residence Number of shares beneficially owned
(1)(2)
Dr. Metin Colpan, Germany 410,886
Dr. Toralf Haag, Germany 679
Prof. Dr. Ross L. Levine, United States of America 12,793
Prof. Dr. Elaine Mardis, United States of America -
Dr. Eva Pisa, Switzerland -
Mr. Lawrence A. Rosen, United States of America 10,399
Mr. Stephen H. Rusckowski, United States of America 25
Ms. Elizabeth Tallett, United States of America 44,011
Mr. Bert van Meurs, The Netherlands -
Ms. Eva van Pelt, Germany -
(1)
The number of ordinary shares outstanding as of January 31, 2024 was
221,356,630. The persons named in the table have sole voting and investment
power with respect to all shares shown as beneficially owned by them and have
the same voting rights as other shareholders with respect to ordinary shares.
(2)
Does not include ordinary shares subject to options or awards held by such
persons as at January 31, 2024.
The Dutch Authority of Financial Markets ("AFM") maintains a public database
of notifications regarding shareholdings and voting rights of directors on its
website. This database includes all notifications made by the current members
of the Supervisory Board regarding their holdings of ordinary shares and
related voting rights. The database can be accessed through an Internet link
on our website: www.qiagen.com.
THE SUPERVISORY BOARD AND THE MANAGING BOARD ACTING TOGETHER AT THE JOINT
MEETING UNANIMOUSLY RECOMMEND THE REAPPOINTMENT OF EACH PROPOSED NOMINEE TO
THE SUPERVISORY BOARD AND THE REAPPOINTMENT OF EACH PROPOSED NOMINEE TO THE
MANAGING BOARD. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF UNLESS
INSTRUCTIONS ARE OTHERWISE PROVIDED.
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Explanatory Note to Item 12-Remuneration of the Supervisory Board
Adoption of the Remuneration Policy with respect to the Supervisory Board
(item 12a)
The shareholders of the Company are being asked to adopt the Remuneration
Policy with respect to the Supervisory Board (the "SB Remuneration Policy").
The proposed Supervisory Board Remuneration Policy sets out the rules
regarding the remuneration of the Supervisory Board members and is included
below. According to Dutch law, this proposal requires the affirmative vote of
a majority of 75% of the votes cast at the Annual General Meeting.
Supervisory Board Remuneration Policy
Introduction
This Remuneration Policy for the Supervisory Board was initially submitted to
the Annual General Meeting (AGM) of shareholders of QIAGEN in June 2020, and
received approval by 84% of the votes cast at the meeting. This amended
version will be submitted to the AGM in June 2024. It will apply for no more
than four years, and the Supervisory Board will submit a new policy no later
than the AGM in 2028.
This Remuneration Policy describes and codifies our remuneration practices.
This Policy complies with the European Directive on shareholder engagement as
implemented in the legislation in the Netherlands, where QIAGEN is
incorporated. It aims to provide transparency that enables and invites
shareholder dialogue. This Policy further complies with the best practices in
Corporate Governance in Germany and the United States, where QIAGEN is listed
on the Frankfurt Stock Exchange and NYSE, respectively. Explanation will be
provided when, by exception, tried and proven remuneration practices are given
precedence.
New in the 2024 Remuneration Policy
The fixed compensation in RSUs (Restricted Share Units) is simplified and
significantly reduced to align with market best practices, while introducing a
minimum shareholding guideline for Supervisory Board members. No other changes
are planned for the Supervisory Board compensation. The fixed annual fees for
board membership have remained unchanged since 2015.
Policy Principles
Remuneration as a strategic instrument
This Policy supports the long-term development and strategy of QIAGEN in a
highly dynamic environment, while aiming to address the requests of various
stakeholders and maintaining an acceptable risk profile.
It builds on remuneration principles and practices that have proven to be both
fitting and effective for QIAGEN. The Supervisory Board ensures that the
Policy and its implementation are linked to our objectives and commitment to
value creation for our stakeholders, including shareholders.
More than ever, the ambition for QIAGEN is to stay true to our mission of
advancing molecular testing through our Sample to Insight portfolio and
helping us achieve our vision of making improvements in life possible. QIAGEN
is a global leader in providing a differentiated portfolio of products and
services used across the continuum from research in Life Sciences to clinical
healthcare using novel solutions to unlock valuable molecular insights from
DNA and RNA - the building blocks of life.
Founded in Germany in 1984, QIAGEN has grown by developing new solutions based
on consumables kits, related instruments and bioinformatics to meet diverse
and rapidly changing customer needs.
QIAGEN's strategy is focused on "Balance" and "Focus" - balance in terms of
serving more than 500,000 customers around the world involved in life sciences
and molecular diagnostics combined with a broad geographic presence, and focus
in terms of ensuring that investments are targeted on those areas of the
portfolio with the highest and most promising growth potential. Our strategy
is anchored by innovation and sustainable value creation with an emphasis on
increasing growth, efficiency, engagement and improving customer experience.
To realize our strategy successfully, we need to attract and retain highly
qualified members of the Supervisory Board. Relevant experience
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at the executive level is required to supervise the execution of the strategy
and to be a sounding board and advisor to our Managing Board, as well as
employer of its members.
Remuneration principles
QIAGEN strongly believes in competitive remuneration as a precondition to
attracting intrinsically motivated top talent throughout all levels of the
organization, including the Supervisory Board. We focus on achieving a total
remuneration level, both short-term and long term, that is comparable with
levels provided by our peer companies in Europe and the United States,
especially given that nearly half of QIAGEN's business is conducted in the
U.S. The remuneration level should reflect the responsibilities of being a
Supervisory Board member, and the intensive time commitment and international
travel that is required for Board meetings and Committee assignments.
Independence in judgment and position is required in the supervisory function
and may not be compromised. Accordingly, no variable or performance-driven
remuneration that is dependent upon the results of QIAGEN is provided to
Supervisory Board members. We do believe, however, in remuneration that is
partly paid in RSUs, in addition to fixed annual fees. The grant of a fixed
compensation level of RSUs under this amended proposal underlines the
long-standing commitment to QIAGEN that is expected of Supervisory Board
members and that QIAGEN has experienced over the last few decades as a
publicly-listed company.
Support for Remuneration Policy
As a global company incorporated in the Netherlands, as well as having stock
market listings in the U.S. and Germany, QIAGEN intends to fully comply with
relevant legal requirements and governance best practices. We engage on a
regular basis with shareholders on our policies and seek their feedback.
Within QIAGEN, the policies for our employees are transparent and meet broad
support from stakeholders, including shareholders, around the world. Key
attributes include linking compensation for all employees to our performance
and ensuring strong internal consistency.
It is noted that The Dutch Corporate Governance Code states a Supervisory
Board member should not be granted equity-based compensation. This is,
however, a very common practice for internationally oriented companies and it
has proven successful in attracting and retaining high profile candidates to
our Supervisory Board.
Based on feedback received from shareholders and employees, as well as
opinions expressed in public debate among stakeholders, the Supervisory Board
believe that this amended Policy should continue to receive broad support.
Reference Group Benchmarking
The Remuneration Policy and overall remuneration levels offered to members of
the Supervisory Board are benchmarked regularly against a selected group of
reference companies to ensure overall competitiveness. These companies have
been selected based on their market capitalization, direct competition for
talent, similar complexity, scope of international activities, presence in
similar industries and data transparency. It is identical to the labor market
peer group used in setting remuneration levels for the Managing Board.
The geographic composition of this reference group reflects QIAGEN's extensive
and growing presence in the U.S. as well as the fact that the vast majority of
our direct competitors are located there. The U.S. also is an increasingly
important source for leadership, senior management and employees, and this
practice has proven successful in the past.
As part of its periodic review of remuneration practices, the Supervisory
Board may adjust the composition of this reference group in view of
developments among various companies, such as for mergers or acquisitions.
Supervisory Board Remuneration Structure
Overview
Remuneration for Supervisory Board members consists of a combination of fixed
annual fees, fees for committee membership and a grant of a fixed value of
RSUs. The fixed annual fees for board membership have remained unchanged since
2015.
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Fixed annual fees
Fee payable to the Chair $150,000
of the Supervisory Board
Fee payable to each member $57,500
of the Supervisory Board
Additional compensation payable to
members holding the following positions:
Chair of the Audit Committee $25,000
Member of the Audit Committee $15,000
Chair of the (i) Compensation & Human Resources Committee, (ii) the $18,000
Nomination & ESG Committee, or (iii) the Science & Technology Committee
Member of the (i) Compensation & Human Resources Committee, (ii) the $11,000
Nomination & ESG Committee, or (iii) the Science & Technology Committee
Chair of other Committees $12,000
Member of other Committees $6,000
Further, Supervisory Board members are reimbursed for reasonable administration
costs and tax consulting costs incurred in connection with the preparation of
their tax returns up to EUR 5,000 per person per year.
Fixed compensation in RSUs
Supervisory Board members receive annually share-based remuneration in the
form of RSUs, which represent rights to receive QIAGEN Shares at future dates
if the individual continues to provide service to the Company.
Supervisory Board members shall each be eligible to receive an RSU award on an
annual basis valued at $230,000 on the grant date. The RSUs will be structured
so that each award will vest one year from the grant date.
Equity holding guideline
Supervisory Board members will be required to hold QIAGEN shares with a value
of at least 200% of their gross annual RSU award. The minimum shareholding may
be built up over a multi-year period based on the after-tax value of shares
after vesting, and does not require any personal share purchases. All vested
shares are locked up until this guideline is fulfilled.
Service Agreements
QIAGEN generally does not enter into written agreements with its Supervisory
Board members, nor does it make any arrangements in respect of severance
payment. If agreements are to be entered into in the future, such agreements
will not be entered into for a term longer than the term of appointment of the
Supervisory Board member concerned, which is for one year.
These agreements will not provide for any arrangements that provide severance
payment, and can be terminated upon resignation or dismissal of the
Supervisory Board member, or with mutual consent of the parties to the
agreement, taking into account the relevant provisions of the agreement.
The Supervisory Board members do not participate in corporate benefit plans.
Decision-making Process
Overview
Under the European Directive (EU) 2017/828, a Remuneration Policy for the
Supervisory Board is to be submitted to the AGM at least once every four
years, where it requires at least 75% approval of the votes present. Under
approval by the full Supervisory Board, the Policy is prepared by the
Compensation Committee and takes into consideration:
.
Feedback received at the AGM and through shareholder engagement.
.
The Company's identity, mission, business strategy, as well as long-term
interests and sustainability.
.
The employment conditions of employees.
10
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When approved by the AGM, the Remuneration Policy will be published without
delay in the Investor Relations section of the QIAGEN's website at
www.qiagen.com. If a proposal is not approved, the existing Remuneration
Policy will continue to apply, and the Supervisory Board shall submit a
revised proposal to the next AGM.
Derogation
In exceptional circumstances only, the General Meeting of QIAGEN may decide to
temporarily derogate from the Remuneration Policy. This derogation may concern
all aspects of the policy. "Exceptional circumstances" only cover situations
in which the derogation from the Remuneration Policy is necessary to serve the
long-term interest and sustainability of the Company as a whole or to assure
its viability.
Determination of the remuneration of members of the Supervisory Board (item
12.b)
The General Meeting of Shareholders is being asked to determine that the
remuneration of the members of the Supervisory Board, effective as of this
Annual General Meeting of Shareholders, will be equal to the remuneration as
set out in the SB Remuneration Policy and as reflected under Agenda Item 12.a.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR
EACH OF THESE ITEMS. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF
UNLESS INSTRUCTIONS ARE OTHERWISE PROVIDED.
Explanatory Note to Item 13-Reappointment of Auditor
The Supervisory Board approved a resolution to propose to the shareholders of
the Company at the Annual General Meeting, and hereby does so propose, the
reappointment of KPMG Accountants N.V. to audit the financial statements of
the Company for the calendar year ending December 31, 2024. KPMG Accountants
N.V. audited the Company's financial statements for Calendar Year 2023.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR
THIS ITEM. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF UNLESS
INSTRUCTIONS ARE OTHERWISE PROVIDED.
Explanatory Note to Item 14-Appointment of Auditor
Under applicable laws and regulations, on December 31, 2024, KPMG Accountants
N.V. will have reached the maximum aggregate term as the Company's external
auditor. Therefore, the Company conducted a process for the selection of the
external auditor for calendar year 2025.
The Company started a competitive selection process in October 2023. Two 'big
four' audit firms (other than KPMG Accountants N.V.), as well as one other
audit firm, were invited to participate in the selection process. One of the
'big four' audit firms, being Ernst & Young Accountants LLP, as well as the
other firm, being BDO Accountants, decided to participate in the selection
process. A series of interviews were conducted, as well as three presentation
rounds to the management and the Audit Committee, in which the participating
firms were offered the opportunity to present themselves and their audit
proposals. The Audit Committee led the process and the assessment and
evaluated the participating audit firms based on certain pre-defined selection
criteria, such as audit approach and scoping, composition of the audit team
members, industry experience, transition strategy, quality assurance aspects
and competitiveness of the audit fee.
Following such competitive selection process, the Audit Committee assessed the
participating audit firms in terms of composition of the team, industry
experience, transition strategy and quality assurance aspects. The Audit
Committee has recommended the appointment of Ernst & Young Accountants LLP as
the Company's external auditor for the calendar year ending December 31, 2025.
The Supervisory Board concurs with the Audit Committee's recommendation and
proposes to the General Meeting of Shareholders the appointment of Ernst &
Young Accountants LLP to audit the financial statements of the Company for the
calendar year ending December 31, 2025.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR
THIS ITEM. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF UNLESS
INSTRUCTIONS ARE OTHERWISE PROVIDED.
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Explanatory Note to Item 15-Extension of Certain Powers of the Supervisory Board
At our Annual General Meeting on June 22, 2023, the Supervisory Board was
designated, for a period of eighteen (18) months, to:
a)
issue a number of ordinary shares and financing preference shares and grant
rights to subscribe for such shares, the aggregate par value of which shall be
equal to the aggregate par value of fifty percent (50%) of shares issued and
outstanding in the capital of the Company as at December 31, 2022 as included
in the Annual Accounts for Calendar Year 2022; and
b)
restrict or exclude the pre-emptive rights with respect to issuing ordinary
shares or granting subscription rights for such shares, the aggregate par
value of such shares or subscription rights shall be up to a maximum of ten
percent (10%) of the aggregate par value of all shares issued and outstanding
in the capital of the Company as at December 31, 2022.
The Managing Board and the Supervisory Board consider it in the best interest
of the Company and its shareholders for the Supervisory Board to be able to
react in a timely manner when certain opportunities arise that require
issuance of our shares. For example, in the past, this designation has been
used in relation to the issuance of convertible bonds because of the short
window of opportunity for completing such transactions to maximize shareholder
value.
Therefore, the Managing Board and the Supervisory Board believe it would be in
the best interests of the Company and its shareholders to grant to the
Supervisory Board the authority to issue ordinary shares or financing
preference shares, or to grant rights to subscribe for such shares, when such
occasions occur, and to exclude the pre-emptive rights in situations where it
is imperative to be able to act quickly, without having to obtain shareholder
approval at an extraordinary general meeting of shareholders, which could take
valuable time and may create disrupting market speculations. In addition, the
authority to issue ordinary shares may also be applied to meet the Company's
obligations under options, RSUs and PSUs awarded in accordance with applicable
employee participation plans or the Company's remuneration policies.
Notwithstanding the authorization of the Supervisory Board to issue shares as
described herein, as a matter of Dutch law (Section 2:107a of the Dutch Civil
Code), we must seek the approval of the general meeting of shareholder for
resolutions of the Managing Board in respect of any transaction concerning a
material change to the identity or the character of the Company or its
business.
It is proposed to renew the current authorizations of the Supervisory Board to
issue ordinary shares and financing preference shares and to grant rights to
subscribe for such shares as well as to restrict or exclude pre-emptive rights
in connection therewith, with the same limits as the current authorizations,
for a period of 18 months from the date of the Annual General Meeting (i.e.,
until December 21, 2025).
Designation of the Supervisory Board, for a period of 18 months from the date
of the Annual General Meeting, as the body authorized to issue a number of
ordinary shares and financing preference shares and grant rights to subscribe
for such shares, up to a maximum of fifty percent (50%) of the Company's
issued and outstanding share capital as at December 31, 2023
(Agenda Item 15.a)
It is proposed to designate the Supervisory Board, for a period of 18 months
from the date of the Annual General Meeting (i.e., until December 21, 2025),
as the body authorized to issue a number of ordinary shares and financing
preference shares in the capital of the Company and grant rights to subscribe
for such shares, the aggregate par value of which shall be equal to the
aggregate par value of fifty percent (50%) of shares issued and outstanding in
the capital of the Company as at December 31, 2023 as included in the Annual
Accounts for Calendar Year 2023. The designation granted by the general
meeting of shareholders held on June 22, 2023, will expire on adoption of this
proposed resolution.
Designation of the Supervisory Board, for a period of 18 months from the date
of the Annual General Meeting, as the body authorized to restrict or exclude
the pre-emptive rights with respect to issuing ordinary shares or granting
subscription rights for such shares, up to a maximum of ten percent (10%) of
the Company's issued and outstanding share capital as at December 31, 2023
(Agenda Item 15.b)
12
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In connection with the authorization of the Supervisory Board to issue shares
and grant rights to subscribe for shares, it is proposed to also designate the
Supervisory Board, for a period of 18 months from the date of the Annual
General Meeting (i.e., until December 21, 2025), as the body authorized to
restrict or exclude the pre-emptive rights with respect to issuing ordinary
shares or granting subscription rights for such shares, the aggregate par
value of such shares or subscription rights shall be up to a maximum of ten
percent (10%) of the aggregate par value of all shares issued and outstanding
in the capital of the Company as at December 31, 2023 as included in the
Annual Accounts for Calendar Year 2023. The designation granted by the general
meeting of shareholders held on June 22, 2023, will expire on adoption of this
proposed resolution.
According to Dutch law and the Company's Articles of Association, the proposal
set forth under Agenda Item 15.a may be adopted by an affirmative vote of a
simple majority of the votes cast at the Annual General Meeting. The proposal
set forth under Agenda Item 15.b requires the affirmative vote of two-thirds
of the votes cast at the Annual General Meeting if less than fifty percent
(50%) of the Company's issued share capital is represented at the Annual
General Meeting. If fifty percent (50%) or more of the Company's issued share
capital is represented at the Annual General Meeting, the proposal set forth
under Agenda Item 15.b shall be validly adopted if adopted by a simple
majority of the votes cast at the Annual General Meeting.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR
EACH OF THESE ITEMS. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF
UNLESS INSTRUCTIONS ARE OTHERWISE PROVIDED.
Explanatory Note to Item 16-Extension of Certain Powers of the Managing Board
Pursuant to Article 6 of the Company's Articles of Association, the Managing
Board shall have the power to cause the Company to acquire for consideration
shares in the Company's own share capital, if and in so far as the Managing
Board has been authorized by the General Meeting of Shareholders for this
purpose. The grant of such power to the Managing Board is typical for Dutch
companies, and its approval is commonly included by such companies on the
agenda for annual general meetings.
At our Annual General Meeting on June 22, 2023, the Managing Board was
authorized, for a period of eighteen (18) months (i.e. until December 22,
2024) to, subject to the approval of the Supervisory Board and to the
provisions of the Company's Articles of Association and Section 2:98 of the
Dutch Civil Code, cause the Company to acquire for consideration shares in the
Company's own share capital, up to a maximum of ten percent (10%) of the
Company's issued share capital on the date of acquisition and provided that
the Company or any subsidiary of the Company shall not hold more than ten
percent (10%) of the Company's issued share capital at any time. Such
acquisition may occur (i) with respect to ordinary shares, at a price between
EUR 0.01 and one hundred ten percent (110%) of the higher of the average
closing price of the ordinary shares on the New York Stock Exchange or, as
applicable, the Frankfurt Stock Exchange, for the five trading days prior to
the day of purchase or (ii) with respect to preference and financing
preference shares, at a price between EUR 0.01 and three times the issuance
price.
The power to repurchase shares provides the Managing Board, subject to the
approval of the Supervisory Board, with flexibility to repurchase shares for
general corporate purposes and allows the Managing Board to return capital to
the Company's shareholders by repurchasing shares. In addition to being a
means to return value to shareholders, repurchases of shares in the Company's
own share capital could be used by the Managing Board to streamline the
Company's investor base, demonstrate a commitment to the Company's business
and confidence in the long-term growth of the Company, provide increased
liquidity for investors and cover obligations under the Company's share-based
compensation plans.
It is therefore proposed to renew this authorization and authorize the
Managing Board, for a period of 18 months from the date of the Annual General
Meeting (i.e., until December 21, 2025) and subject to the approval of the
Supervisory Board and to the provisions of the Company's Articles of
Association and Section 2:98 of the Dutch Civil Code, to cause the Company to
acquire, on a stock exchange or otherwise, for consideration shares in the
Company's own share capital, up to a maximum of ten percent (10%) of the
Company's issued share capital on the date of acquisition and provided that
the Company or any subsidiary of the Company shall not hold more than ten
percent (10%) of the Company's issued share capital at any time. Such
acquisition may occur (i) with respect to ordinary shares, between EUR 0.01
and one hundred ten percent (110%) of the higher of the average closing price
of the ordinary shares on the New York Stock Exchange or, as applicable, the
Frankfurt Stock Exchange, for the five
13
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trading days prior to the day of purchase or, (ii) with respect to preference
and financing preference shares, between EUR 0.01 and three times the issuance
price. The authorization granted by the general meeting of shareholders held
on June 22, 2023, will expire on adoption of this proposed resolution.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR
THIS ITEM. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF UNLESS
INSTRUCTIONS ARE OTHERWISE PROVIDED.
Explanatory Note to Item 17 - Discretionary rights for the Managing Board to
implement a Capital Repayment by means of a Synthetic Share Repurchase
General introduction and key principles
Synthetic Share Repurchase
It is proposed to, for a period of 18 months from the date of the Annual
General Meeting of Shareholders, grant discretionary powers to the Managing
Board to, within certain boundaries and subject to the approval of the
Supervisory Board, adjust the Company's capital structure and to repay capital
to the Company's shareholders via a synthetic share repurchase, with the key
consequences of this synthetic share repurchase being as follows:
(i) an amount to be determined by the Managing Board, subject to the
approval of the Supervisory Board, which amount will at maximum be USD 300
million, will be paid to the holders of ordinary shares as a capital
repayment; and
(ii) the number of outstanding ordinary shares will at least be decreased
by a number of ordinary shares approximately equal to the number of ordinary
shares that could, theoretically, have been repurchased by the Company for the
aggregate amount repaid to the holders of ordinary shares (the amount repaid
on each outstanding ordinary share, in the currency as determined by the
Managing Board with the approval of the Supervisory Board, the "Repayment
Amount", the aggregate amount to be repaid to a certain shareholder, the
"Shareholder Repayment Amount", and the aggregate of all Shareholder Repayment
Amounts, the "Aggregate Repayment Amount").
The adoption by the Company's shareholders of the resolutions proposed under
this Agenda Item 17 would, if implemented, reduce the implementation time for
a synthetic share repurchase from about five (5) months to approximately three
(3) months (including a mandatory two-month creditor opposition period), and
in particular eliminate the need for an Extraordinary General Meeting of
Shareholders.
Implementation Steps
If implemented, the synthetic share repurchase will take place in three steps
that involve three subsequent amendments to the Company's Articles of
Association, which are all proposed by the Supervisory Board in accordance
with article 43.2 of the Company's Articles of Association:
(i)
Step I
: firstly, the par value of each ordinary share will be increased by an amount
to be determined by the Managing Board, subject to the approval of the
Supervisory Board in accordance with the procedure described below (amendment
Part I);
(ii)
Step II
: secondly, the ordinary shares will be consolidated on the basis of a ratio
to be determined by the Managing Board, subject to the approval of the
Supervisory Board, which share consolidation will decrease the number of
issued and outstanding ordinary shares, such that the number of outstanding
ordinary shares will be reduced by a number approximately equal to the number
of ordinary shares that could, theoretically, have been repurchased by the
Aggregate Repayment Amount (amendment Part II); and
(iii)
Step III
: thirdly, the par value of the ordinary shares will be decreased to EUR 0.01
(the current par value of the ordinary shares) (amendment Part III) and on
each outstanding ordinary share the Repayment Amount will be paid, which
Repayment Amount will not exceed the amount by which the par value of the
ordinary shares will be reduced pursuant to this Step III.
A further explanation to these proposed subsequent amendments to the Company's
Articles of Association (Part I, II and III) and the overall mechanics of the
proposed synthetic share repurchase are reflected below. The
14
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proposed steps including the related amendments to the Company's Articles of
Association under this Agenda Item 17 are put to a vote as one combined voting
item.
Discretionary Powers
After a favorable vote by the Annual General Meeting in respect of this Agenda
Item 17, the Managing Board shall have the full discretionary power not to,
or, subject to the approval of the Supervisory Board, to implement the
synthetic share repurchase. Furthermore, if the synthetic share repurchase
were to be implemented, the Managing Board, with the approval of the
Supervisory Board, will have the full discretionary power to determine when
the synthetic share repurchase will be implemented and what the record date(s)
and the payment date(s) of the Shareholder Repayment Amount to shareholders
will be, provided that the proposed amendments to the Company's Articles of
Association cannot be effected after 18 months from the date of the Annual
General Meeting (i.e., until December 21, 2025).
Furthermore, the Managing Board shall have full discretionary power, subject
to the approval of the Supervisory Board, to only implement Step I and III,
but not Step II. For example, if the Repayment Amount will be relatively
limited and the reduction of the number of ordinary shares pursuant to the
consolidation will be limited accordingly. Where the context so requires,
references to the synthetic share repurchase should be read to include a
reference to the implementation of only Step I and Step III.
The powers of the Managing Board set out in the two preceding paragraphs are
jointly referred to as the "Discretionary Powers". As a result of these
Discretionary Powers, a favorable vote by the Annual General Meeting in
respect of Agenda Item 17 will not by any means guarantee the actual
implementation of a synthetic share repurchase, and therefore, a favorable
outcome should expressly not be understood by shareholders as a final and
unconditional decision to execute the program. A favorable vote only enables
the Managing Board to implement the synthetic share repurchase in a more
efficient and economical manner, if and when the Managing Board, using the
Discretionary Powers, and with the approval of the Supervisory Board, decides
to execute the program. It is emphasized that the Discretionary Powers also
leave room to the Managing Board to decide not to implement the synthetic
share repurchase at all, for reasons that the Managing Board deems in the best
interests of the Company and its affiliated enterprise, taking into account
the interests of the Company's stakeholders, including its shareholders.
Procedure of the synthetic share repurchase
First amendment of the Company's Articles of Association (Part I) - increase
of par value
To make it possible to pay the Repayment Amount to the holders of ordinary
shares as a repayment of share capital, the par value of the ordinary shares
must be increased. The increase of the par value will take place prior to the
share consolidation, if Step II is implemented, and will be such that prior to
the decrease of the par value and repayment of share capital as provided for
in Step III, the nominal value of the ordinary shares at least equals the
Repayment Amount plus EUR 0.01.
This increase of the par value of the ordinary shares will be achieved through
an amendment to the Company's Articles of Association (Part I), as referred to
under Agenda Item 17.a.
The increase in par value will be charged to the Company's share premium
reserve.
Second amendment of the Company's Articles of Association (Part II) - share
consolidation (reverse stock split)
Secondly it is proposed to consolidate the ordinary shares (including all
fractional ordinary shares in issue, if any) in accordance with a
consolidation ratio, which will be determined on the basis of the formula
below. This consolidation of ordinary shares, or reverse stock split, will be
implemented by means of a second amendment of the Company's Articles of
Association (Part II), which amendment is proposed under Agenda Item 17.b.
Under Dutch law the par value per ordinary share must be a multiple of EUR
0.01, therefore if the par value of the ordinary shares after implementation
of amendment Part I, divided by the consolidation ratio, would not result in a
EUR amount that is a multiple of EUR 0.01, the par value of the consolidated
ordinary shares will be rounded upwards. This potential subsequent increase of
the par value of the ordinary shares will again be charged to the Company's
share premium reserve.
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Third amendment of the Company's Articles of Association (Part III) - decrease
par value and repayment of share capital
Finally, it is proposed to decrease the par value of each (consolidated)
ordinary share back to EUR 0.01. This requires a third amendment to the
Company's Articles of Association (Part III), which is proposed under Agenda
Item 17.c. In connection with this capital decrease, the Shareholder Repayment
Amount will be paid to the holders of ordinary shares and fractional ordinary
shares, whereby (i) the Repayment Amount will always be an amount having no
more than two decimal places and be determined by the Managing Board, subject
to the approval of the Supervisory Board, and (ii) to the extent that a
Shareholder Repayment Amount would, as a result of entitlement to payment on
fractional ordinary shares, have more than two decimal places, the relevant
Shareholder Repayment Amount will be rounded upwards to the nearest amount
with two decimal places.
Calculation of the consolidation ratio
The consolidation ratio ("Y") will be determined by the Managing Board as
follows:
A = the total market value of the outstanding ordinary shares in EUR
calculated on the basis of a market price per ordinary share on a date to be
determined by the Managing Board and based on the market price of an ordinary
share, which can be a volume weighted average market price on a stock-exchange
as determined by the Managing Board and converted into EUR if applicable in
accordance with an exchange ratio determined by the Managing Board.
B = the intended Aggregate Repayment Amount (subject to rounding), as
determined by the Managing Board.
Y = a fraction equal to or as close as possible to Q, as determined by the
Managing Board.
The consolidation ratio will in any event not result in a registered
shareholder holding at least two ordinary shares prior to the implementation
of Step II, holding less than one ordinary share (i.e. only fractional shares)
following the implementation of Step II.
Calculation example
Example
1
The calculations below provide an example of the procedure. No rights can be
derived from this example. The actual values, if and when the synthetic share
repurchase would be implemented, will be determined by the Managing Board in
accordance with the formulas reflected above.
Total number of outstanding ordinary shares:
200 million
Market price per ordinary share:
EUR 40.00
Total market value of ordinary shares:
EUR 8 billion
Par value per ordinary share
EUR 0.01
Intended Aggregate Repayment Amount
EUR 100 million (subject to rounding)
The intended Aggregate Repayment Amount to the holders of ordinary shares in
this example amounts to EUR 100 million. This equals one point twenty-five
percent (1.25%) of the total market value of the outstanding
1
Note that these numbers have been included for illustrative purposes only.
They should not be considered to give any guidance of the intended amount of
the Repayment Amount or the past, current or future value of the ordinary
shares.
16
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ordinary shares in this example. Therefore, the total number of issued
ordinary shares should be decreased by approximately one point twenty-five
percent (1.25%) by means of the reverse stock split to ensure that the market
value of an outstanding ordinary share will stay approximately the same. Or,
in other words, approximately one point twenty-five percent (1.25%) of the
outstanding ordinary shares could theoretically have been repurchased by the
Company, if the amount of EUR 100 million was used for a share repurchase
against a price per ordinary share of EUR 40.00, the market value of an
ordinary share in this example.
As can be seen in the formula below, this reduction can be achieved by using a
consolidation ratio of 80 pre-split ordinary shares to 79 post-split ordinary
shares:
As set out above under `calculation of the consolidation ratio', the
consolidation ratio Y, shall be a fraction equal to or as close as possible to
Q, as determined by the Managing Board. In this example, it is assumed that Y
equals 79/80. Accordingly, the 200 million outstanding ordinary shares shall
be consolidated into 197.5 million shares, representing a one and a quarter
percent (1.25 %) reduction .
Since the Repayment Amount will be paid on the consolidated ordinary shares,
the intended Aggregate Repayment Amount must be divided by 197.5 million
shares. This results in a payment per ordinary share of approximately EUR
0.506329, which will be rounded upwards to EUR 0.51. This rounded amount is
the actual Repayment Amount.
As set out above, the par value of the ordinary shares will be increased to
such level that prior to the capital reduction as contemplated by Part III,
the par value of each ordinary share at least equals the Repayment Amount plus
EUR 0.01, in this case EUR 0.52. To arrive at a par value of EUR 0.52 per
consolidated ordinary share, taking into account a 79/80 consolidation ratio,
the par value pre-consolidation should be EUR 0.5135 (EUR 0.5135 times 80
divided by 79 equals EUR 0.52). However, in Part I, the amount will be rounded
such that it allows for the par value to increase to such value after Part II
that at least equals the Repayment Amount plus EUR 0.01. In this calculation
example each ordinary share shall therefore have a par value of EUR 0.51 after
implementation of amendment Part I (EUR 0.51 times by 80 divided by 79 and
rounded upwards to the nearest number with two decimal places, equals EUR
0.52).
Pursuant to the share consolidation each 80 ordinary shares (aggregate par
value 0.51 times 80, equals EUR 40.80) will be consolidated into 79 ordinary
shares. This would result in a par value of approximately EUR 0.516456 (EUR
40.80 dividend by 79), which will be rounded upwards as set out above to EUR
0.52. Subsequently, amendment Part III will be implemented pursuant to which
the par value will again be reduced to EUR 0.01, and EUR 0.51 will be repaid
on each outstanding ordinary share and in pro rata entitlements on each
outstanding fractional ordinary share. For ordinary shares or fractional
ordinary shares held in treasury, the relevant amount will again be added to
the Company's reserves.
Timeline and implementation process
If the Managing Board resolves to implement the synthetic share repurchase, it
will timely announce the intention to implement this program, the relevant Ex
Distribution Date(s), Record Date(s) and Payment Date(s) to the holders of
ordinary shares. Note that, in addition to the exercise of the Discretionary
Powers by the Managing Board and the required approvals of the Supervisory
Board, the implementation of the synthetic share repurchase will be subject to
the observance of a statutory creditor opposition procedure, which involves a
two-months creditor opposition period and the Company having sufficient
reserves to charge the increase of the par value to at the time of the
implementation of the synthetic share repurchase.
Shareholders' interests
Beneficial Shareholders
For persons holding their ordinary shares through the Depository Trust
Company, subject to contractual arrangements, the shareholding of beneficial
shareholders will be rounded down. As a result, shareholders entitled
17
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to fractional ordinary shares in accordance with the consolidation ratio will
receive cash from their relevant bank or intermediary.
Registered Shareholders
Shareholdings registered in the Company's shareholders register will be
consolidated in accordance with the consolidation ratio based on the formula
described above. Any registered holding of fractional ordinary shares in the
Company will entitle the holder of those fractional ordinary shares to a
fractional dividend but will not entitle the holder to voting rights with
respect to such fractional ordinary shares (unless exercised together with
other holders of fractional ordinary shares, to the extent their aggregate
number of fractional ordinary shares equals the number of fractional ordinary
shares one ordinary share comprises or a multiple thereof). Please see article
11 of the Company's Articles of Association for the provisions applicable to
fractional ordinary shares.
Holders of existing fractional shares
Fractional ordinary shares and whole ordinary shares will be consolidated in
the same manner. If the consolidation would entitle a shareholder to
fractional entitlements, such entitlements will be added to the number of
existing fractional ordinary shares. This addition of fractional ordinary
shares to existing fractional ordinary shares, may result in an automatic
consolidation of fractional shares into an ordinary share in accordance with
the Company's Articles of Association.
Fractional shares make-whole action
Prior to, upon or following the execution of the synthetic share repurchase,
if and to the extent implemented, or without the synthetic share repurchase
being implemented, the Company may undertake certain steps making-whole the
then issued and outstanding fractional ordinary shares. These steps may
include the unilateral transfer, for no consideration, by the Company of such
number of additional fractional ordinary shares to each holder of fractional
ordinary shares, that these holders will hold such number of fractional
ordinary shares one ordinary share comprises, as a result of which, the
fractional ordinary shares will automatically consolidate into an ordinary
share in accordance with article 11.7 of the Company's Articles of
Association. If the transfer described above were to be undertaken by the
Company, no further action or act of acceptance will be required from the
holders of fractional ordinary shares in that respect.
Tax consequences
The amount to be repaid to a holder of ordinary shares in connection with the
synthetic share repurchase will not be subject to Dutch dividend withholding
tax. Shareholders are encouraged to consult their own tax advisor as to the
particular tax consequences in light of their specific circumstances.
Potential EUR / USD conversion implications
The Repayment Amount may, at the discretion of the Managing Board with the
approval of the Supervisory Board, be denominated in EUR or USD (or a
combination of both, depending on for example where the relevant shares are
traded). The relevant EUR / USD conversions will be made on the basis of
exchange rate or rates discretionarily set by the Managing Board on the basis
of such source or sources as discretionarily selected by the Managing Board.
To limit the risk that fluctuating currency exchange prices limit the maximum
aggregate amount of the capital repayment (which maximum amount is denominated
in USD), by adopting the proposal under this Agenda Item 17, the General
Meeting will be considered to have approved a capital reduction in a EUR
amount equal to 120% of the maximum aggregate amount of USD 300 million
calculated on the day of the filing of the resolution to reduce the Company's
share capital with the Dutch Trade Register as further described below. For
the avoidance of doubt, the maximum aggregate amount of the capital reduction
will not exceed USD 300 million on the basis of the source or sources selected
by the Managing Board, irrespective of exchange rate fluctuations after the
day of the filing of the resolution.
Further explanation to the proposed resolutions under Agenda Items 17.a.
through 17.d.
The three steps by which the synthetic share repurchase will be effected - if
and to the extent the Managing Board, using the Discretionary Powers, decides
to implement the synthetic share repurchase - are summarized below and each
step will be implemented by a separate deed of amendment to the Company's
Articles of
18
-------------------------------------------------------------------------------
Association. Further explanations to the proposed changes are also included in
a triptych (a comparison with the present Company's Articles of Association)
made available to the Company's shareholders upon convocation of the Annual
General Meeting.
17.a. Amendment of the Articles of Association of the Company (Part I) to
increase the par value per ordinary share
It is proposed to the Annual General Meeting to resolve to amend the Company's
Articles of Association in accordance with the draft deed of amendment Part I
that is made available to the Company's shareholders upon convocation of the
Annual General Meeting.
17.b. Amendment of the Articles of Association of the Company (Part II) (to
execute the reverse stock split)
To consolidate the ordinary shares as explained above, it is proposed to the
Annual General Meeting to resolve to amend the Company's Articles of
Association in accordance with the draft deed of amendment Part II that is
made available to the Company's shareholders upon convocation of the Annual
General Meeting, following the amendment as referred to under Agenda Item
18.a. In addition, in connection with this share consolidation, certain
changes will be made to the provisions in the Company's Articles of
Association relating to fractional ordinary shares as the existing fractional
ordinary shares will also be consolidated in accordance with the consolidation
ratio.
17.c. Amendment of the Articles of Association (Part III) to decrease the par
value of the ordinary shares including a reduction of capital
It is proposed to the Annual General Meeting to resolve to amend the Company's
Articles of Association, following the amendments as referred to under Agenda
Items 17.a. and 17.b. (to the extent applicable), in accordance with the draft
deed of amendment Part III which is made available to the Company's
shareholders upon convocation of the Annual General Meeting, to decrease the
par value of each ordinary share back to EUR 0.01, which will be combined with
a capital repayment to the Company's shareholders.
17.d. Authorization
It is proposed to the Annual General Meeting to authorize each member of the
Managing Board and each lawyer, (candidate) civil law notary and paralegal
working at De Brauw Blackstone Westbroek N.V. to have the three deeds of
amendment of the Company's Articles of Association as referred to under Agenda
Items 17.a., 17.b. and 17.c executed, if and to the extent the Managing Board,
using the Discretionary Powers, decides to proceed with the synthetic share
repurchase.
The verbatim text of each of the amendments to the Company's Articles of
Association and a triptych containing explanatory notes thereto are available
at the Company's website (https://corporate.qiagen.com/ agm2024) and at the
offices of the Company at Hulsterweg 82, 5912 PL Venlo, The Netherlands, and
at the offices of Equiniti Trust Company, LLC at 48 Wall Street, Floor 23, New
York, NY 10005, United States of America, until the close of the Annual
General Meeting.
One voting item
The proposals under Agenda Items 17.a. through 17.d. will be put to a vote as
one combined voting item and, for the avoidance of doubt, include the grant of
the Discretionary Powers to the Managing Board for a period of 18 months from
the date of the Annual General Meeting (i.e. until December 21, 2025).
Pursuant to Dutch law, the resolution to decrease the (aggregate) par value of
the issued ordinary shares (both the issued and outstanding (fractional)
ordinary shares and the (fractional) ordinary shares held in treasury at the
time of implementation of the synthetic share repurchase) through the proposed
amendment of the Company's Articles of Association (Part III) reflected in
Step III above require a favorable vote by a majority of at least two-thirds
of the votes cast at the Annual General Meeting if less than fifty percent
(50%) of the Company's issued share capital is represented at the Annual
General Meeting. If fifty percent (50%) or more of the Company's issued share
capital is represented at the Annual General meeting, a simple majority of the
votes cast at the Annual General Meeting is sufficient for the resolution to
be adopted. As the relevant steps contemplated for the synthetic share
repurchase (Steps I through III reflected above) are put to a vote as one
combined voting item, the aforementioned majority requirements apply in full
to this voting item.
19
-------------------------------------------------------------------------------
It is once again noted that, if this Agenda Item 17 is adopted by the Annual
General Meeting, the implementation of this Agenda Item 17 and the relevant
subsections thereof is subject to, among other things, the Managing Board's
use of its Discretionary Powers.
Furthermore, the resolution to reduce the issued share capital as contemplated
by Step III only becomes effective after a two-month creditor opposition
period as described in section 2:100 of the Dutch Civil Code has been observed.
Under the provisions of section 2:100 of the Dutch Civil Code, creditors may
lodge objections to the capital reduction within a period of two months
following the announcement of the filings of the resolution to reduce the
Company's share capital with the Dutch Trade Register. The third amendment of
the Articles of Association (Part III) effecting the capital reduction may
only be implemented after such two-month creditor opposition period has
lapsed, provided that no creditor objections have been received by the
competent court or, in the event objections have been received, after such
opposition has been withdrawn, resolved of lifted by an enforceable court
order by the competent court in the Netherlands.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR
THIS ITEM. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF UNLESS
INSTRUCTIONS ARE OTHERWISE PROVIDED.
Explanatory Note to Item 18-Cancellation of fractional ordinary shares held by
the Company
In an effort to, as much as possible, clean up the composition of the
Company's share capital, it is contemplated by the Company to cancel all
fractional ordinary shares it holds or will hold in own capital as these
fractional ordinary shares do not serve any particular purpose and cannot be
used for any purpose for which full ordinary shares held in treasury are
typically used. The costs for such cancellation(s) will be limited.
It is therefore proposed by the Supervisory Board, in accordance with article
7 read in conjunction with article 11.4 of the Company's Articles of
Association, and with due observance of Section 2:99 of the Dutch Civil Code,
to reduce the issued share capital of the Company by cancelling all fractional
ordinary shares (i) the Company holds in its own capital at the date of the
Annual General Meeting, or will hold in its own share capital following the
execution of certain steps, as further described in the explanatory notes to
Agenda Item 17, making-whole the fractional ordinary shares issued and
outstanding at the date of the Annual General Meeting, and (ii) the Company
will hold in its own capital as a result of the synthetic share repurchase
proposed under Agenda Item 17, if implemented, and the execution of certain
steps making-whole the then issued and outstanding fractional ordinary shares
as described in the explanatory notes to Agenda Item 17. The cancellation may
be executed in one or more tranches, at the discretion of the Managing Board.
The number of fractional ordinary shares to be cancelled (whether or not in a
tranche) shall be determined by the Managing Board, but shall not exceed the
number of fractional ordinary shares the Company (i) holds in its own capital
at the date of the Annual General Meeting, or will hold in its own share
capital following the execution of certain steps making-whole the fractional
ordinary shares issued and outstanding at the date of the Annual General
Meeting, and (ii) may hold in its own share capital following execution of the
synthetic share repurchase proposed under Agenda Item 17, if implemented, and
any related steps making-whole the then issued and outstanding fractional
ordinary shares as described in the explanatory notes to Agenda Item 17, as
the case may be.
Under the provisions of Section 2:100 of the Dutch Civil Code, creditors may
lodge objections to a capital reduction within a period of two months
following the announcement of the filing of the resolution to reduce the
Company's share capital with the Dutch Trade Register. Any resolution of the
Managing Board to implement the cancellation of fractional ordinary shares
(whether or not in a tranche) will only become effective after such two-month
creditor opposition period has lapsed, provided that no creditor objections
have been received by the competent court or, in the event objections have
been received, after such opposition has been withdrawn, resolved of lifted by
an enforceable court order by the competent court in the Netherlands.
According to Dutch law, the proposal set forth under this Agenda Item 18
requires the affirmative vote of two-thirds of the votes cast at the Annual
General Meeting if less than fifty percent (50%) of the Company's issued share
capital is represented at the Annual General Meeting. If fifty percent (50%)
or more of the Company's issued share capital is represented at the Annual
General Meeting, the proposal set forth under this
20
-------------------------------------------------------------------------------
Agenda Item 18 shall be validly adopted if adopted by a simple majority of the
votes cast at the Annual General Meeting.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR
THIS ITEM. COMPLETED PROXY CARDS WILL BE VOTED IN FAVOR THEREOF UNLESS
INSTRUCTIONS ARE OTHERWISE PROVIDED.
21
-------------------------------------------------------------------------------
COMMITTEES OF THE SUPERVISORY BOARD, MEETINGS AND
SHAREHOLDER COMMUNICATIONS TO THE BOARD
Meeting Attendance
. During 2023, there were six (6) meetings of the Supervisory Board, and the
various committees of the Supervisory Board met a total of twenty one (21)
times. Attendance was 100% at all Supervisory Board meetings and all Committee
meetings.
Committees of the Supervisory Board
. The Supervisory Board has established an Audit Committee, a Compensation &
Human Resources Committee, a Nomination & ESG Committee and a Science &
Technology Committee from among its members and can establish other committees
as deemed beneficial. The Supervisory Board has approved charters under which
each of the committees operates. These charters are published on our website
www.qiagen.com. The committees were comprised of the following members as of
May 1, 2024:
Supervisory Directors Audit Compensation & Nomination & Science &
(1) (2) (3) Committee Human Resources ESG Committee Technology
Committee Committee
Mr. Lawrence A. Rosen . .
Dr. Metin Colpan . . (Chair)
Dr. Toralf Haag . (Chair)
Dr. Ross L. Levine .
Dr. Elaine Mardis . .
Dr. Eva Pisa . (Chair)
Mr. Stephen H. Rusckowski . . (Chair)
Ms. Elizabeth E. Tallett . . .
Mr. Bert van Meurs .
Ms. Eva van Pelt .
(1)
Mr. Rusckowski joined the Compensation & Human Resources Committee in June
2023 and the Nomination & ESG Committee in March 2024.
(2)
Mr. van Meurs joined the Nomination & ESG Committee in April 2024.
(3)
Ms. van Pelt joined the Audit Committee in March 2024.
The composition of each Committee, including the Chair, is reviewed and
updated accordingly by the Supervisory Board following each Annual General
Meeting.
We believe that all of our Supervisory Directors meet the independence
requirements set forth in the Dutch Corporate Governance Code (the "Dutch
Code") and that the majority of our Supervisory Directors meet the
independence requirements set forth in the New York Stock Exchange (the
"NYSE") Listed Company Manual (the "NYSE Rules"). Pursuant to the NYSE Rules,
a majority of the Supervisory Directors must qualify as independent, as
defined in the NYSE Rules.
Audit Committee
.
The Audit Committee currently consists of four members appointed annually by
the Supervisory Board for one-year terms and met at least quarterly during
2023. We believe that the majority of the members of this Committee meet the
independence requirements as set forth in Rule 10A-3 of the Securities
Exchange Act of 1934, as amended, and the NYSE Rules.
The Board has designated Dr. Haag as an "Audit Committee Financial Expert" as
that term, or the Dutch equivalent thereof, is defined or referred to (as
applicable) in the U.S. Securities and Exchange Commission rules adopted
pursuant to the Sarbanes-Oxley Act of 2002 and as referred to in the Dutch
Decree on Audit Committees (
Besluit instelling auditcommissie
).
22
-------------------------------------------------------------------------------
The Committee performs a self-evaluation of its activities on an annual basis.
The Committee's primary duties and responsibilities include, among other
things, to serve as an independent and objective party to monitor QIAGEN's
accounting and financial reporting process, control and compliance systems and
internal risk management, including cyber security. This Committee also is
directly responsible for proposing the external auditor to the Supervisory
Board, which then proposes the appointment of the external auditor to the
Annual General Meeting.
Further, this Committee is responsible for the compensation and oversight of
QIAGEN's external auditor and for providing an open avenue of communication
among the external auditor as well as the Managing Board and the Supervisory
Board. Our Internal Audit and Compliance functions operate under the direct
responsibility of the Audit Committee. Additionally, this Committee is
responsible for establishing procedures to allow for the confidential and or
anonymous submission by employees of concerns, including the receipt,
retention and treatment of submissions received regarding accounting, internal
accounting controls, or auditing matters.
The Audit Committee met seven times in 2023, and also met with the external
auditor excluding members of the Managing Board in August 2023. The Committee
discussed, among other matters, the following topics, and provided updates to
the Supervisory Board:
.
the adequacy of our financial accounting (including reporting principles and
policies), financial and operating controls and procedures with the external
auditor and management;
.
consideration and approval of any recommendations regarding changes to our
accounting principles, policies and processes;
.
reviewed with management and the external auditor our quarterly earnings
reports prior to their public release;
.
reviewed the quarterly and annual reports (reported on Forms 6-K and 20-F) to
be furnished to or filed with the U.S. Securities and Exchange Commission and
the Deutsche Boerse in Germany;
.
reviewed the annual report to be filed with the Dutch Authority for Financial
Markets; and
.
reviewed major risk exposures (including cyber security) and reviewed any
legal matter including compliance topics that could have a significant impact
on the financial statements.
Compensation & Human Resources Committee
.
The Compensation & Human Resources Committee currently consists of four
members appointed annually by the Supervisory Board for one-year terms.
Its primary duties and responsibilities include, among other things, oversight
of the Company's programs, policies and practices related to management of
human capital resources including talent management, culture, diversity and
inclusion; the preparation of a proposal to the Supervisory Board regarding
the Remuneration Policy for the Managing Board and Supervisory Board and
proposal for adoption by shareholders at the General Meeting; preparation of a
proposal concerning the individual compensation for Managing Board members to
be adopted by the Supervisory Board, and preparation of the Remuneration
Report that outlines compensation for the Managing Board and Supervisory Board
members to be adopted by the Supervisory Board, and submitted to the Annual
General Meeting for an advisory vote in accordance with Dutch law.
The Remuneration Report outlines the implementation of the Remuneration
Policies for the most recent year. This Committee engaged during 2023 with
external consultants to ensure that the overall remuneration levels are
benchmarked regularly against a selected group of companies and key markets in
which QIAGEN operates.
The Compensation & Human Resources Committee met six times in 2023. The
Committee discussed, among other matters, the following topics, and provided
updates to the Supervisory Board:
.
policies and practices related to management of human capital resources
including talent management and diversity;
.
review and approve all share-based compensation;
.
review and approve the annual salaries, bonuses and other benefits of the
Executive Committee; and
23
-------------------------------------------------------------------------------
.
review of general policies relating to employee compensation and benefits.
Nomination & ESG Committee
.
The Nomination & ESG Committee currently consists of five members appointed by
the Supervisory Board annually for one-year terms.
Its primary responsibilities include, among other things, preparing the
selection criteria and appointment procedures for members of the Supervisory
Board and Managing Board; periodically evaluating the scope and composition of
the Managing Board and Supervisory Board; periodically evaluating the
functioning of individual members of the Managing Board and Supervisory Board,
and reporting these results to the Supervisory Board; proposing (re-)appointment
s of members of the Supervisory Board and Managing Board; conducting periodic
evaluations of QIAGEN's ESG (Environmental, Social and Governance) policies
and related public disclosures; and periodically reviewing the Company's
Corporate Governance structure in line with applicable legal requirements and
recommend changes to the Supervisory Board.
The Nomination & ESG Committee met four times in 2023. The Committee
discussed, among other matters, the following topics, and provided updates to
the Supervisory Board:
.
the nomination of Mr. Steven H. Rusckowski as a new member of the Supervisory
Board;
.
an annual evaluation on the scope and composition of the Managing Board and
the Supervisory Board, including the profile of the Supervisory Board as well
as the functioning of individual members of Boards;
.
proposals for the (re-)appointment of members of the Managing Board and
Supervisory Board, and supervised the Managing Board in relation to the
selection and appointment criteria for senior management;
.
the search and selection process for new members and succession planning
considerations for the Supervisory Board, Managing Board, Executive Committee
and other senior management positions, taking into account short-, medium- and
longer-term perspectives;
.
the preparation of the Supervisory Board self-evaluation process, which
involved an external expert; and
.
regular updates on the progress of the company's ESG programs, including a
review and discussion of the Gender Diversity Policy.
Science & Technology Committee
.
The Science & Technology Committee consists of three members appointed
annually by the Supervisory Board for one-year terms. The Committee works with
the Scientific Advisory Board, which was established in 2021 to provide early
evaluation of market and technology developments that could have an influence
on QIAGEN's development and positioning in the Life Sciences and Molecular
Diagnostics.
The Committee's primary responsibilities include, among other things,
reviewing and monitoring research and development projects, programs, budgets,
infrastructure management; and overseeing the management risks related to our
portfolio and information technology platforms.
This Committee met four times in 2023. The Committee discussed, among other
matters, the following topics, and provided updates to the Supervisory Board:
.
discussions to gain understanding, clarification and validation of the
fundamental technical basis of our businesses in order to enable the
Supervisory Board to make informed, strategic business decisions and vote on
related matters; and
.
guided the Managing Board to ensure that QIAGEN can develop and leverage
powerful, world-class science to create value for our stakeholders, including
shareholders.
Shareholder Communications to the Board
.
Shareholders who have questions or concerns should generally contact our
Investor Relations department at +49-2103-29-11709 or
ir@qiagen.com.
However, any shareholders who wish to address questions regarding our business
directly with the Supervisory Board, or any individual Supervisory Director,
should direct questions in writing to the Chair of the Supervisory Board,
QIAGEN N.V., Hulsterweg 82, 5912 PL Venlo, The Netherlands.
24
-------------------------------------------------------------------------------
ADDITIONAL INFORMATION REGARDING REMUNERATION OF MANAGING DIRECTORS
The following section summarizes the remuneration of the Managing Directors.
More detailed information on the way our Remuneration Policy was executed in
2023 can be found in the Remuneration Report of the Company which is published
on our website (www.qiagen.com
)
.
At the Annual General Meeting in June 2021, the Remuneration Policy of the
Managing Board was adopted. The Remuneration Policy for the Managing Board
supports the sustainable long-term development and strategy of QIAGEN in a
highly dynamic environment while aiming to address the views of various
stakeholders and maintaining an acceptable risk profile. It builds on
remuneration principles and practices that have proven to be both fitting and
effective for QIAGEN. The Supervisory Board ensures that the Remuneration
Policy for the Managing Board and its implementation are linked to our
objectives.
Remuneration of Managing Board members consists of a combination of base
salary, short-term variable cash incentive (STI) tied to the achievement of
annual Corporate Goals and Team Goals, and a long-term incentive (LTI) granted
in share units that only vest after multiple years upon the achievement of
predefined targets. In addition, Managing Board members can receive deferred
compensation contributions and other benefits in line with market practices.
The remuneration package for Managing Board members is designed to have a
significant portion of total compensation in variable awards. The value of
these awards can differ substantially from year to year depending on actual
performance. Within the variable component, the incentives for short-term
performance targets have a lower weight than those for long-term incentives,
which are aimed at delivering sustainable value creation for our stakeholders,
including shareholders.
The remuneration of the Managing Board in 2023 is based on the implementation
of the Remuneration Policy for the Managing Board, as approved by shareholders
in 2021. It includes any remuneration granted by any consolidated subsidiary.
The 2023 remuneration of the Managing Board is reflected in the table below.
An overview of all share grants outstanding and their status in vesting and
release is presented in the tables under the header "Share-based rights" in
the 2023 Remuneration Report.
Annual Long-term
compensation compensation
Managing Fixed Variable Other Total Benefit Performance
Board member salary cash (2) plans stock units
(1) bonus granted
Thierry $978,500 $780,354 $33,320 $1,792,174 $199,700 119,695
Bernard
Roland $588,000 $319,730 $40,270 $948,000 $117,270 67,723
Sackers
(1)
The salary of Mr. Bernard is set in U.S. dollars. The salary of Mr. Sackers is
set in euros and subject to fluctuation of exchange rates when reported in
U.S. dollars. The exchange rate used for translation was EUR 1 = USD 1.081.
(2)
Amounts include, among others, car lease and reimbursed personal expenses such
as tax consulting. We also occasionally reimburse our Managing Directors'
personal expenses related to attending out-of-town meetings but not directly
related to their attendance. Amounts do not include the reimbursement of
certain expenses relating to travel incurred at the request of QIAGEN, other
reimbursements or payments that in total did not exceed $10,000, or tax
amounts paid by the Company to taxing authorities in order to avoid
double-taxation under multi-tax jurisdiction agreements.
25
Exhibit 99.3
BENEFICIAL
SHAREHOLDER
ATTENDANCE
FORM
TO: QIAGEN N.V.
c/o
Equiniti
Trust
Company,
LLC
Attention: Proxy Department
48
Wall
Street,
Floor
23
New York, NY 10005
QIAGEN
N.V.
Annual
General
Meeting
of
Shareholders June 21, 2024
The
undersigned,
beneficial
holder
of __________________
registered shares of QIAGEN N.V.
(the
"Company"),
hereby
notifies
the
Company
that
he/she/it
wishes
to
attend
and
to
exercise his/her/its
shareholder
rights
at
the
Annual
General
Meeting
of
Shareholders
of
the
Company
to
be held on Friday, June 21, 2024 at 10:00 a.m., local time, at Maaspoort, Oude
Markt 30, 5911 HH Venlo,
The Netherlands, and requests
that the
Company
add his/her/its
name
to
the admission
list for the Annual General Meeting.
The undersigned beneficial shareholder realizes that he/she/it can only
exercise his/her/its shareholder rights for the shares beneficially held in
his/her/its name as of the close of business (New York time) on Friday, May
24, 2024, the record date for the Annual General Meeting.
In witness whereof the undersigned has duly executed this form/caused this
form to be duly executed by its authorized officers at
_____________________________
this
______ day
of
______________,
2024.
_________________________________________________________________________
(Signature of beneficial shareholder)
__________________________________________________________________________
(Signature of beneficial shareholder)
__________________________________________________________________________
(Print full name of beneficial shareholder(s))
If
the
shares
are
held
jointly,
each
beneficial
holder
must
sign.
Notification
must
be
received no later than 5 p.m. (New York time) on Friday, June 14, 2024 at the
offices of Equiniti Trust Company, LLC, Attention: Proxy Department, 48 Wall
Street, Floor 23, New York, NY 10005, United States of America.
Exhibit 99.4
REGISTERED
SHAREHOLDER
ATTENDANCE
FORM
TO:
QIAGEN
N.V.
c/o
Equiniti
Trust
Company,
LLC
Attention: Proxy Department
48
Wall
Street,
Floor
23
New York, NY 10005
QIAGEN
N.V.
Annual
General
Meeting
of
Shareholders June 21, 2024
The undersigned, holder of___________________
registered
shares
of
QIAGEN
N.V.
(the "Company"),
hereby
notifies
the
Company
that
he/she/it
wishes
to
attend
and
to
exercise
his/her/its shareholder rights at the Annual General Meeting of Shareholders
of the Company to be held on Friday, June 21, 2024 at 10:00 a.m., local time,
at Maaspoort, Oude Markt 30, 5911 HH Venlo, The Netherlands, and requests that
the Company add his/her/its name to the
admission list for the Annual General Meeting.
The undersigned registered shareholder realizes that he/she/it can only
exercise his/her/its shareholder rights for the shares registered in
his/her/its name as of the close of business (New York time) on Friday, May
24, 2024, the record date for the Annual General Meeting.
In witness whereof the undersigned has duly executed this form/caused this
form to be duly executed by its authorized officers at
_____________________________
this
______ day
of
______________,
2024.
_________________________________________________________________________
(Signature of registered shareholder)
__________________________________________________________________________
(Signature of registered shareholder)
__________________________________________________________________________
(Print full name of registered shareholder(s))
If
the
shares
are
held
jointly,
each
registered
holder
must
sign.
Notification
must
be
received no later than 5 p.m. (New York time) on Friday, June 14, 2024 at the
offices of Equiniti Trust Company, LLC, Attention: Proxy Department, 48 Wall
Street, Floor 23, New York, NY 10005, United States of America.
Exhibit 99.5
-------------------------------------------------------------------------------
Exhibit 99.6
2024
Voting
Results
________________________________________________________________________________
___________________________________________________________
Voting
Results
of
the
Annual
General
Meeting
of
Shareholders
of
QIAGEN
N.V.
QIAGEN's Annual General Meeting of Shareholders (the "Annual Meeting") was
held on June 21,
2024. The following actions
were taken at the Annual Meeting:
1.
Opening
(no
voting
item)
2.
Managing
Board
Report
for
the
year
ended
December
31,
2023
("Calendar
Year
2023")
(no
voting
item)
3.
Compliance
with
Dutch
Corporate
Governance
Code
(no
voting
item)
4.
Supervisory
Board
Report
on
the
Company's
Annual
Accounts
(the
"Annual
Accounts")
for
Calendar
Year
2023
(no
voting
item)
5.
Proposal
to
adopt
the
Annual
Accounts
of
QIAGEN
N.V.
(the
"Company")
for
the
Calendar
Year
2023
was
approved
Votes Votes Votes
for against abstain
Number 169,563,398 437,647 708,610
of
shares
Percentage 99.74% 0.26% -
6.
Proposal
to
cast
a
favorable
non-binding
advisory
vote
in
respect
of
the
Remuneration
Report
2023
was
approved
Votes Votes Votes
for against abstain
Number 153,298,897 16,607,441 803,317
of
shares
Percentage 90.23% 9.77% -
7.
Reservation
and
dividend
policy
(no
voting
item)
8.
Proposal
to
discharge
from
liability
of
the
Managing
Directors
for
the
performance
of
their
duties
during
Calendar
Year
2023
was
approved
Votes Votes Votes
for against abstain
Number 164,535,634 5,344,962 829,059
of
shares
Percentage 96.85% 3.15% -
9.
Proposal
to
discharge
from
liability
of
the
Supervisory
Directors
for
the
performance
of
their
duties
during
Calendar
Year 2023 was approved
Votes Votes Votes
for against abstain
Number 164,520,214 5,359,799 829,642
of
shares
Percentage 96.84% 3.16% -
1
-------------------------------------------------------------------------------
10a.
Proposal
to
reappoint
Dr.
Metin
Colpan
as
a
Supervisory
Director
of
the
Company
for
a
term
running
up
to
and
including
the
date of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 160,292,518 10,354,571 62,566
of
shares
Percentage 93.93% 6.07% -
10b.
Proposal
to
reappoint
Dr.
Toralf
Haag
as
a
Supervisory
Director
of
the
Company
for
a
term
running
up
to
and
including
the
date
of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 170,603,666 42,757 63,232
of
shares
Percentage 99.97% 0.03% -
10c.
Proposal
to
reappoint
Prof.
Dr.
Ross
L.
Levine
as
a
Supervisory
Director
of
the
Company
for
a
term
running
up
to
and
including the date of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 169,082,097 1,564,541 63,017
of
shares
Percentage 99.08% 0.92% -
10d.
Proposal
to
reappoint
Prof.
Dr.
Elaine
Mardis
as
a
Supervisory
Director
of
the
Company
for
a
term
running
up
to
and
including
the date of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 168,053,354 2,593,321 62,980
of
shares
Percentage 98.48% 1.52% -
10e.
Proposal
to
reappoint
Dr.
Eva
Pisa
as
a
Supervisory
Director
of
the
Company
for
a
term
running
up
to
and
including
the
date
of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 169,837,957 804,241 67,457
of
shares
Percentage 99.53% 0.47% -
10f.
Proposal
to
reappoint
Mr.
Lawrence
A.
Rosen
as
a
Supervisory
Director
of
the
Company
for
a
term
running
up
to
and
including
the date of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 152,957,724 17,688,755 63,176
of
shares
Percentage 89.63% 10.37% -
2
-------------------------------------------------------------------------------
10g.
Proposal
to
reappoint
Mr.
Stephen
H.
Rusckowski
as
a
Supervisory
Director
of
the
Company
for
a
term
running
up
to
and including the date of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 165,413,049 5,233,478 63,128
of
shares
Percentage 96.93% 3.07% -
10h
.
Proposal
to
reappoint
Ms.
Elizabeth
E.
Tallett
as
a
Supervisory
Director
of
the
Company
for
a
term
running
up
to
and
including the date of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 138,308,560 32,337,463 63,632
of
shares
Percentage 81.05% 18.95% -
10i.
Proposal
to
reappoint
Mr.
Bert
van
Meurs
as
a
Supervisory
Director
of
the
Company
for
a
term
running
up
to
and
including
the date of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 170,042,089 604,227 63,339
of
shares
Percentage 99.65% 0.35% -
10j
.
Proposal
to
reappoint
Ms.
Eva
van
Pelt
as
a
Supervisory
Director
of
the
Company
for
a
term
running
up
to
and
including
the
date of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 169,257,599 1,389,076 62,980
of
shares
Percentage 99.19% 0.81% -
11a.
Proposal
to
reappoint
Mr.
Thierry
Bernard
as
a
Managing
Director
of
the
Company
for
a
term
running
up
to
and
including
the date of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 168,599,213 1,615,996 494,446
of
shares
Percentage 99.05% 0.95% -
11b.
Proposal
to
reappoint
Mr.
Roland
Sackers
as
a
Managing
Director
of
the
Company
for
a
term
running
up
to
and
including
the date of the Annual General Meeting in 2025 was approved
Votes Votes Votes
for against abstain
Number 168,926,696 1,288,623 494,336
of
shares
Percentage 99.24% 0.76% -
3
-------------------------------------------------------------------------------
12a.
Proposal
to
adopt
the
Remuneration
Policy
with
respect
to
the
Supervisory
Board
was
approved
Votes Votes Votes
for against abstain
Number 146,317,062 24,319,182 73,411
of
shares
Percentage 85.75% 14.25% -
12b.
Proposal
to
determine
the
Remuneration
of
the
members
of
the
Supervisory
Board
was
approved
Votes Votes Votes
for against abstain
Number 146,629,189 24,011,699 68,767
of
shares
Percentage 85.93% 14.07% -
13.
Proposal
to
reappoint
KPMG
Accountants
N.V.
as
auditors
of
the
Company
for
the
calendar
year
ending
December
31,
2024 was approved
Votes Votes Votes
for against abstain
Number 170,429,724 192,166 87,765
of
shares
Percentage 99.89% 0.11% -
14.
Proposal
to
appoint
Ernst
& Young
Accountants
LLP
as
auditors
of
the
Company
for
the
calendar
year
ending
December
31, 2025 was approved
Votes Votes Votes
for against abstain
Number 170,526,084 116,662 66,909
of
shares
Percentage 99.93% 0.07% -
15a.
Proposal to authorize the Supervisory Board, until December 21, 2025 to issue
a number of ordinary shares and financing preference
shares
and
grant
rights
to
subscribe
for
such
shares,
the
aggregate
par
value
of
which
shall
be
equal
to
the
aggregate par value of fifty percent (50%) of shares issued and outstanding in
the capital of the Company as at December 31, 2023 as included in the Annual
Accounts for Calendar Year 2023 was approved
Votes Votes Votes
for against abstain
Number 139,237,436 31,391,984 80,235
of
shares
Percentage 81.60% 18.40% -
15b
.
Proposal
to
authorize
the
Supervisory
Board,
until
December
21,
2025
to
restrict
or
exclude
the
pre-emptive
rights
with
respect
to issuing ordinary shares or granting subscription rights, the aggregate par
value of such shares or subscription rights shall be up to a maximum of ten
percent (10%) of the aggregate par value of all shares issued and outstanding
in the capital of the Company as at December 31, 2023 was approved
Votes Votes Votes
for against abstain
Number 167,392,438 3,213,774 103,443
of
shares
Percentage 98.12% 1.88% -
4
-------------------------------------------------------------------------------
16.
Proposal
to
authorize
the
Managing
Board,
until
December
21,
2025,
to
acquire
shares
in
the
Company's
own
share
capital
was
approved
Votes Votes Votes
for against abstain
Number 170,288,388 166,977 254,290
of
shares
Percentage 99.90% 0.10% -
17.
Proposal
to
approve
discretionary
rights
for
the
Managing
Board
to
implement
a
capital
repayment
by
means
of
a
synthetic share repurchase was approved
a.
Proposal to amend the Company's Articles of Association in accordance with the
draft deed of amendment to the Company's Articles
of
Association
(Part
I)
to,
amongst
other
things,
increase
the
par
value
per
ordinary
share
by
an
amount
to
be
determined by the Managing Board of the Company;
b.
Proposal to amend the Company's Articles of Association in accordance with the
draft deed of amendment of the Company's Articles
of
Association
(Part
II)
to,
amongst
other
things,
consolidate
the
ordinary
shares
at
a
consolidation
ratio
to
be
determined by the Managing Board, subject to the approval of the Supervisory
Board (the reverse stock split);
c.
Proposal
to
amend
the
Company's
Articles
of
Association
in
accordance
with
the
draft
deed
of
amendment
of
the
Company's Articles of Association (Part III) to decrease the par value per
ordinary share to an amount of EUR 0.01 and to repay to the shareholders an
amount to be determined by the Managing Board, subject to the approval of the
Supervisory Board, which amount will at maximum be USD 300 million in the
aggregate; and
d.
Proposal to authorize each member of the Managing Board of the Company and
each lawyer, (candidate) civil law notary and paralegal
working
at
De
Brauw
Blackstone
Westbroek
N.V.
to
execute
the
three
deeds
of
amendment
of
the
Company's
Articles
of Association (Part I, II and III)
Votes Votes Votes
for against abstain
Number 169,595,262 51,431 1,062,962
of
shares
Percentage 99.97% 0.03% -
18.
Proposal
to
approve
the
cancellation
of
fractional
ordinary
shares
held
by
the
Company
was
approved
Votes Votes Votes
for against abstain
Number 170,588,847 50,866 69,942
of
shares
Percentage 99.97% 0.03% -
19.
Questions
(no
voting
item)
20.
Closing
(no
voting
item)
5
Exhibit 99.7
-------------------------------------------------------------------------------
Table of Contents Overview 3 Common Shares Management Report 9 Business and
Operating Environment 22 Operating and Financial Review 31 Risks and Risk
Management 50 Quantitative and Qualitative Disclosures about Market Risk 54
Sustainability Statement 115 Outlook Corporate Governance 116 Message from the
Chair of the Supervisory Board 118 Governance Structure 120 Managing Board 121
Supervisory Board 125 Board-Related Matters 126 Shareholder Meetings and Share
Capital 131 Additional Information 136 Corporate Governance Statement 137
Supervisory Board Report 144 Remuneration Report 169 Responsibility Statement
of the Managing Board Consolidated Financial Statements 172 Consolidated
Balance Sheets 174 Consolidated Income Statements 175 Consolidated Statements
of Comprehensive Income 176 Consolidated Statements of Cash Flows 179
Consolidated Statements of Changes in Equity 180 Notes to the Consolidated
Financial Statements Company Financial Statements 284 Company Balance Sheets
286 Company Income Statements 287 Company Statements of Changes in Equity 289
Notes to the Company Financial Statements Other Information 306 Independent
Auditor's Report 320 Appropriation of Net Income Appendices 321 Memorandum and
Articles of Association 333 Taxation 338 Government Regulations 350 Controls
and Procedures 351 Sustainability Statement - Annex 351 Detailed Tax
Disclosure 360 GRI Content Index 369 SASB Index 372 TCFD Index QIAGEN N.V. |
IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 2 Overview
-------------------------------------------------------------------------------
Common Shares Market Environment Despite concerns over inflation, rising
interest rates, and increasing geopolitical tensions around the world, various
stock markets defied expectations in 2023 and posted gains during very
volatile conditions for the year. This rally, however, was dominated by a
select group of stocks as many others were held back by fears of recession and
higher interest rates. All three major U.S. indices ended 2023 with gains,
making up for losses in 2022. The Dow Jones Industrial Average was up 14% and
the S&P 500 returned 24%. Mega-cap tech companies made the biggest comeback,
reflected in the 54% rise in the NASDAQ 100 Index. In Germany, the blue-chip
DAX-40 Index (QIAGEN is a member) rose 20%, while the TecDAX Index of top
technology companies (QIAGEN is also a member) closed up 14% for the year.
This overall performance reflects the impact on valuations due to inflation in
tandem with the continued economic recovery following the COVID-19 pandemic.
Global Shares listed in the U.S. and Europe QIAGEN Global Shares have been
registered and traded in the United States since 1996 and are traded on the
New York Stock Exchange (NYSE). These Shares have also traded in Germany on
the Frankfurt Stock Exchange since 1997, and the Prime Standard segment since
its launch in 2003, where shares are traded on the XETRA electronic trading
platform as well as on the Frankfurt Borse involving floor trading. The dual
listing on the NYSE and the Frankfurt exchange offers advantages for QIAGEN,
our shareholders and employees. The presence in both markets enhances
liquidity, and increases the opportunity to attract investors, particularly
those in the U.S. restricted to only holding in U.S. dollar- denominated
investments. Unlike American Depositary Receipts (ADRs), QIAGEN's global
shares provide equal rights for all shareholders and can be traded on either
exchange, in U.S. dollars or euros. Share Price and Liquidity QIAGEN's share
price performance in 2023 has to be considered in the context of trends among
stocks in the life sciences and molecular diagnostics industry, which were
under pressure during the year following significant gains during the COVID-19
pandemic. QIAGEN's share price fared comparatively well in 2023, ending the
year with a 13% decline to $43.43 on the NYSE, and a 16% decline to EUR 39.40
on the Frankfurt Stock Exchange (XETRA). Our shares continued to offer high
liquidity, with average daily trading volume of approximately 1.5 million in
2023 - around 1.0 million in the U.S., and 0.5 million in Germany. As of
December 31, 2023, the free float, which affects weighting of QIAGEN shares in
various indices, was approximately 99%. Shareholder Structure QIAGEN has a
global investor base comprised of more than 600 identified institutional
investors, with approximately 46% in North America, 50% in Europe, and the
remaining shares held in the rest of the world. Members of the Managing Board
and the Supervisory Board, in total, owned less than 1% of QIAGEN's
outstanding common shares at the end of 2023. Market Capitalization 2023
Year-end market capitalization (in $ million) 9,911 Year-end market
capitalization (in million) 8,991 QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 3 Overview
-------------------------------------------------------------------------------
2023 Shareholder Structure by Geography 44% 9% 11% 17% 17% 2% US Germany
France United Kingdom Other Non-Institutional 2023 Shareholder Structure by
Investor Type 2% 5% 17% 67% 7% 2% GARP Value Index Growth Other Non-Institutiona
l Annual Shareholder Meeting At the Annual General Meeting on June 22, 2023,
in Venlo, the Netherlands, shareholders gave overwhelming approval to all
agenda items. Shareholders present or represented at the meeting held
approximately 158.7 million shares, or 69% of QIAGEN's approximately 230.8
million issued shares as of the record date for the meeting. Details of
attendance and voting results are available at corporate.QIAGEN.com. Investor
Relations and Shareholder Engagement QIAGEN is committed to offering
shareholders, analysts and communities around the world transparent,
comprehensive and readily accessible information on our performance, strategy
and future prospects, as well as our vision and mission. Interactions included
individual calls, roadshows and attendance at broker-sponsored investor
conferences. These efforts were acknowledged in the annual "Institutional
Investor" magazine survey of investors, with the QIAGEN Investor Relations
team being recognized as the top team in the EMEA region within the Medtech
industry, and among the top five in the Healthcare sector. QIAGEN Share Price
Development and Average Trading Volume - NYSE 2023 2023 Year-end price $43.43
High $51.18 Low $34.74 Average daily trading volume (in million shares) 1.02
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
Governance Financial Statements Appendices Page 4 Overview
-------------------------------------------------------------------------------
QIA NYSE NASDAQ Biotech 1.03.2023 3.31.2023 6.30.2023 9.30.2023 12.31.2023 60%
70% 80% 90% 100% 110% QIAGEN Share Indices and Historic Prices - NYSE On
January 10, 2018, our Shares began trading on the New York Stock Exchange
(NYSE) under the symbol QGEN. Prior to the transition to the NYSE, our Common
Shares were traded on NASDAQ since the IPO (Initial Public Offering) in 1996
under the same QGEN ticker. The following tables set forth the annual high and
low sale prices for the last five years, the quarterly high and low sale
prices for the last two years, and the monthly high and low sale prices for
the last six months on the NYSE. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 5 Overview
-------------------------------------------------------------------------------
QIAGEN Historical Share Price History - NYSE High ($) Low ($) Annual: 2019
43.16 25.04 2020 55.27 32.97 2021 59.00 45.58 2022 55.12 40.38 2023 51.18
34.74 High ($) Low ($) Quarterly 2022: First Quarter 55.12 41.32 Second
Quarter 50.38 42.44 Third Quarter 50.51 40.49 Fourth Quarter 51.05 40.38
Quarterly 2023: First Quarter 51.18 45.08 Second Quarter 46.99 43.80 Third
Quarter 47.70 38.98 Fourth Quarter 43.73 34.74 Quarterly 2024: First Quarter
(through March 7) 45.87 42.17 High ($) Low ($) Monthly: October 2023 40.65
34.74 November 2023 41.48 37.14 December 2023 43.73 40.78 January 2024 45.87
42.73 February 2024 45.38 42.17 March 2024 (through March 7) 44.65 42.60
QIAGEN Share Price Development and Average Trading Volume - Germany Frankfurt
Stock Exchange (XETRA) 2023 2023 Year-end price 39.40 High 48.36 Low 32.74
Average daily trading volume (in million shares) 0.51 QIAGEN N.V. | IFRS
Annual Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 6 Overview
-------------------------------------------------------------------------------
QIA XETRA TecDax 1.02.2023 3.31.2023 6.30.2023 9.30.2023 12.31.2023 60% 70%
80% 90% 100% 110% 120% QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page 7
Overview
-------------------------------------------------------------------------------
QIAGEN Share Indices and Historic Prices - Germany Our Shares have been traded
on the Frankfurt Stock Exchange since a secondary IPO in September 1997 under
the symbol QIA. QIAGEN joined the blue-chip DAX-40 Index in September 2021, a
recognition of our ranking among the top publicly-traded companies in Germany
based on market capitalization. The following table sets forth the annual high
and low sale prices for the last five years, the quarterly high and low sale
prices for the last two years, and the monthly high and low sale prices for
the last six months on the Prime Standard. QIAGEN Historical Share Price
History - Germany High () Low () Annual: 2019 39.19 22.54 2020 46.95 29.55
2021 51.56 37.38 2022 49.37 37.95 2023 48.36 32.74 High () Low () Quarterly
2022: First Quarter 49.34 37.95 Second Quarter 46.03 39.94 Third Quarter 49.37
41.32 Fourth Quarter 48.26 41.62 Quarterly 2023: First Quarter 48.36 41.57
Second Quarter 43.47 39.62 Third Quarter 43.39 36.73 Fourth Quarter 40.07
32.74 Quarterly 2024: First Quarter (through March 7) 42.19 38.83 High () Low
() Monthly: October 2023 38.64 32.74 November 2023 37.83 35.09 December 2023
40.07 37.46 January 2024 42.10 38.83 February 2024 42.19 39.07 March 2024
(through March 7) 41.05 39.32 QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page 8
Overview
-------------------------------------------------------------------------------
Business and Operating Environment Company Overview QIAGEN is a leading global
provider of Sample to Insight solutions that enable customers to gain valuable
molecular insights from any biological sample. Our sample technologies isolate
and process deoxyribonucleic acid (DNA), ribonucleic acid (RNA) and proteins -
the building blocks of life - from blood, tissue and other materials. Assay
technologies make these biomolecules visible and ready for analysis using a
range of technologies. Bioinformatics software and knowledge bases are used to
interpret complex genomic data sets to provide relevant, actionable insights.
Instruments and automation solutions are used to tie together these products
into seamless and cost-effective workflows. We provide solutions to more than
500,000 customers around the world in Molecular Diagnostics (human healthcare)
and Life Sciences (academic research, pharma and biotech companies, and
applied applications such as human identification / forensics and food
safety). As of December 31, 2023, we employed approximately 6,000 people in
more than 35 locations worldwide. QIAGEN was founded in 1984 and began
operations in 1986 as a pioneer in the emerging biotechnology sector with a
revolutionary method that standardized and accelerated the extraction and
purification of nucleic acids from biological samples, which means any
material containing DNA, RNA or proteins. As molecular biology and genomic
knowledge has grown to influence many areas of daily life, we have expanded to
serve the full spectrum of market needs, developing new instruments,
consumables and digital solutions; partnering with researchers and
pharmaceutical companies, and acquiring companies and technologies that best
complement our portfolio. We believe the addressable global market for our
portfolio totals more than $11 billion. We continue to accelerate our
portfolio growth and increase our efficiency and effectiveness while also
enhancing our customer experience, our corporate citizenship, and our position
as an employer of choice. Our growth strategy is anchored in our Five Pillars
of Growth: sample technologies, the digital PCR (Polymerase Chain Reaction)
platform QIAcuity, the clinical PCR automation solutions QIAstat-Dx and
NeuMoDx and the QuantiFERON technology platform used to detect medical
conditions such as latent tuberculosis. Our growth has been funded through
internally generated funds, as well as debt offerings and the public sales of
equity securities. Our global shares are listed on the New York Stock Exchange
under the ticker symbol QGEN and on the Frankfurt Stock Exchange as QIA.
QIAGEN N.V. is the holding company for more than 50 consolidated subsidiaries,
many of which have the primary function of distributing our products and
services on a regional basis. Certain subsidiaries also have research and
development or production activities. The Company is registered under its
commercial and legal name QIAGEN N.V. with the trade register (kamer van
koophandel) of the Dutch region Limburg Noord under file number 12036979.
QIAGEN N.V. is incorporated under Dutch law as a public limited liability
company (naamloze vennootschap) and is organized as a holding company. Our
principal executive office is located at Hulsterweg 82, 5912 PL Venlo, The
Netherlands, and our telephone number is +31-77-355-6600. Further information
on QIAGEN can be found at www.qiagen.com. The U.S. Securities Exchange
Commission (SEC) website at www.sec.gov contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC. Information contained in, or that can be accessed
through, our website is not a part of, and shall not be incorporated by
reference into, this Annual Report. We have included our website address in
this document solely as an inactive textual reference. Operating Environment
Economic Environment The global economy grew by approximately 2.9% in 2023,
slightly below the 3.1% growth rate recorded for 2022, making it one of the
more modest annual growth performances of the last 20 years. This soft growth
trajectory can be attributed to ongoing inflationary pressures and the complex
unwinding of post- pandemic economic disruptions. Central banks around the
world continued to walk a fine line of monetary tightening, adjusting interest
rates to curb inflation while trying to mitigate impacts on national
economies. The U.S. Dollar Index, QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 9 Management Report
-------------------------------------------------------------------------------
after seeing volatility in 2022, maintained a relatively stable performance
throughout 2023, with minor fluctuations reflecting ongoing economic
uncertainties. Industry Environment Life Sciences and Molecular Diagnostics
faced diverging trends in 2023 - there was growth in areas that had been
adversely affected by the pandemic lockdowns, but another significant drop in
demand for COVID-19 testing and surveillance products compared with the peak
level in 2021. The pandemic had led to significant growth in the installed
base of instruments, and competitors were now seeking to expand this base to
other applications in Life Sciences and Molecular Diagnostics. Although
numerous smaller companies have emerged in recent years, larger companies such
as QIAGEN boast the crucial advantage of better global distribution and
production capacity, as well as brand recognition and credibility. The
addressable Life Sciences and Molecular Diagnostics industry segments generate
an estimated $11 billion of annual sales, and are expected to maintain a
healthy rate of single-digit sales growth in the coming years. Key growth
drivers include continued research funding to advance our understanding of
biology, as well as consistently strong medical demand for molecular clinical
testing. QIAGEN Products Our leadership in molecular research and testing
solutions leverages our product portfolio across a wide range of applications.
These are grouped into two main categories: . Consumables and related revenues
involve our consumables kits, bioinformatics solutions, royalties,
co-development milestone payments and services (88% of total net sales in
2023); and . Instruments and related services and contracts (12% of total net
sales in 2023). QIAGEN Product Groups Sample Technologies Sample Technologies
is the first of our Five Pillars of Growth and includes products involved in
the first step of any molecular lab process. QIAGEN N.V. | IFRS Annual Report
2023 Overview Management Report Corporate Governance Financial Statements
Appendices Page 10 Management Report
-------------------------------------------------------------------------------
Our broad portfolio of Sample technologies includes consumables and
instruments used in sample collection, stabilization, storage, purification
and quality control. Some of our consumables are designed to run on our
instruments, while others are universal kits designed for use with any
molecular- testing platform. These products are used in research and applied
testing (forensics / human identification and food safety) laboratories as
well as clinical testing. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page 11
Management Report Applications Cloning qPCR / dPCR DNA amplification
Sequencing / NGS Arrays Liquid biopsy Gene editing Microbiome Epigenetics Gene
silencing Cellular analytics Proteomics Input demands Processing Target
analytes Low / high-volume Manual Genomic DNA Low-quantity Plasmid DNA
Tubes / plates cfDNA Input demands Low-quantity Automated mRNA, rRNA
High-quantity Low-to miRNA Tubes / plates High-throughput Proteins Circ. Tumor
cells Selected biological samples Tissue Stool Cells Saliva Blood Other body
fluids Serum Bone Plasma Plants Urine Soil
-------------------------------------------------------------------------------
Sample technologies Selected QIAGEN brands Primary Sample technology
consumables . Nucleic acid stabilization and purification kits designed for
primary sample materials (DNA, RNA), manual and automated processing for
genotyping, gene expression, viral and bacterial analysis . Mainly based on
silica membrane and magnetic bead technologies . QIAamp . PAXgene . AllPrep .
DNeasy . AdnaTest . QIAprep& . RNeasy . MagAttract Secondary Sample
technology consumables . Kits and components for purification of nucleic acids
from secondary sample materials (e.g., gel, plasmid DNA) . QIAprep . QIAGEN
Plasmid . HiSpeed . QIAquick . QIAfilter . EndoFree . DyeEx Sample technology
instruments . Instruments for nucleic acid purification, quality control and
accessories . QIAsymphony . EZ1 Advanced XL . TissueLyser III . QIAcube
Connect . EZ2 Connect MDx . QIAxpert . QIAcube HT . QIAxcel Connect . QIAcube
Connect MDx Diagnostic Solutions Diagnostic solutions include our molecular
testing platforms and consumables covering three of our Pillars of Growth,
which are QuantiFERON, QIAstat-Dx and NeuMoDx, as well as Precision
Diagnostics which involves companion diagnostic co-development revenues from
projects with pharmaceutical companies, regulated assays and solutions for
laboratory developed tests. Additional areas include Oncology and Sexual &
Reproductive Health for detection of various diseases and for other laboratory
processes. Diagnostic solutions Selected QIAGEN brands Immune response
consumables . Interferon-Gamma Release Assay (IGRA) for latent TB testing .
Assays for post-transplant testing, viral load monitoring, assessment of
T-Cell response to COVID-19 . QuantiFERON Oncology and Sexual & Reproductive
health consumables . Assays for analysis of genomic variants such as
mutations, insertions, deletions and fusions . Assays for prenatal testing and
detection of sexually transmitted diseases and HPV . therascreen . AmniSure /
PartoSure . ipsogen . digene HC2 Sample to Insight instruments and dedicated
assays . One-step molecular analysis of hard-to-diagnose syndromes . Fully
integrated PCR testing . QIAstat-Dx . QIAstat-Dx Rise . NeuMoDx QIAGEN N.V. |
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PCR / Nucleic Acid Amplification PCR / Nucleic Acid Amplification involves our
research and applied PCR solutions and components. The product group includes
another of our Five Pillars of Growth: QIAcuity. We offer optimized solutions
for end-point PCR, quantitative PCR and digital PCR. Our kits, assays,
instruments and accessories amplify and detect targets and streamline workflow
for virtually any application. PCR/Nucleic acid amplification Selected QIAGEN
brands Research PCR consumables . Different generations of PCR, quantitative
PCR, reverse transcription and combinations (RT-PCR) kits for analysis of gene
expression, genotyping and gene regulation, running on QIAGEN or third-party
instruments and technologies . QuantiTect . OneStep RT-PCR . Type-it .
OmniScript . QuantiFast . QIAGEN Multiplex . miRCURY LNA . miScript .
QuantiNova . HotStarTaq . TopTaq Human ID / Forensics assay consumables . STR
assays for Human ID, additional assays for food contamination . Investigator
(human ID / forensics) . mericon (food safety) PCR instruments . Digital PCR
solutions . qPCR solutions . QIAcuity . Rotor-Gene Q . QIAquant . QIAgility
OEM consumables . Custom-developed and configured enzymes and PCR solutions
that are sold to OEM customers . Provided on an individualized contract basis
Genomics / NGS This product group includes our universal NGS (next-generation
sequencing) solutions for use with any NGS sequencer as well as the full
bioinformatics portfolio offered by QIAGEN Digital Insights. QIAGEN N.V. |
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Genomics / NGS Selected QIAGEN brands Universal NGS consumables . Predefined
and custom NGS gene panels (DNA, RNA), library prep kits and components, whole
genome amplification, etc. . Sequence-based assays for forensic genetic
genealogy . QIAseq . REPLI-g Epitect . ForenSeq Kintelligence QIAGEN Digital
Insights solutions . Bioinformatics solutions analyze and interpret data to
deliver actionable insights from NGS. This includes freestanding software or
cloud-based solutions and is also integrated into many QIAGEN consumables and
instruments . QIAGEN Clinical Insight . QCI Interpret One . Ingenuity Variant
Analysis . CLC Genomics Workbench . OmicSoft . Ingenuity Pathway Analysis .
QIAGEN Knowledge Base . HGMD Custom laboratory and genomic services . Custom
services such as DNA sequencing, whole genome amplification, and non-cGMP DNA
production . Provided on an individualized contract basis Other Revenues from
various sources including protein biology products, royalties, intellectual
property and freight charges. Principal Markets We sell our products to more
than 500,000 customers in two broad customer groups: Molecular Diagnostics
(clinical testing) and Life Sciences (academia, pharmaceutical R&D and applied
testing). Sales to these groups were as follows: Net sales (in millions) 2023
2022 2021 Molecular Diagnostics $1,035.5 $1,126.2 $1,143.7 Life Sciences 929.8
1,015.3 1,108.0 Total $1,965.3 $2,141.5 $2,251.7 We estimate the total
addressable market at over $11 billion annually. Molecular Diagnostics The
molecular diagnostics market includes healthcare providers engaged in many
aspects of patient care that require accurate diagnoses and insights to guide
treatment decisions in oncology, infectious diseases and immune monitoring. We
offer one of the broadest portfolios of molecular technologies for healthcare.
The success of molecular testing in healthcare depends on the ability to
accurately analyze purified nucleic acid samples from sources such as blood,
tissue, body fluids and stool. Automated systems process tests reliably and
efficiently, often handling hundreds of samples simultaneously. Our range of
assays for diseases and biomarkers speeds up and simplifies laboratory
workflow and standardizes lab procedures. Molecular testing is the most
dynamic segment of the global in vitro diagnostics market. The pandemic has
demonstrated the value of molecular testing in healthcare and we expect the
market to provide significant growth opportunities. We have built a position
as a preferred partner to co-develop companion diagnostics paired with
targeted drugs and have created a rich pipeline of molecular tests that are
transforming the treatment of cancer and other diseases. We have more than 30
master collaboration agreements with pharmaceutical industry customers, some
with multiple co-development projects. In 2023, we continued to expand on
these partnerships with new agreements, for example a new partnership with
Servier for the development of a companion diagnostic in Acute Myeloid
Leukemia therapy. Also, our portfolio of assays was expanded following the FDA
approval of a companion diagnostic for Blueprint Medicines' QIAGEN N.V. | IFRS
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therapy for gastrointestinal stromal tumors. Companion diagnostics move
through clinical trials and regulatory approvals, along with the paired drugs,
to commercialization and marketing to healthcare providers. Selected Molecular
Diagnostics products Sample technologies Assay technologies Instruments
Bioinformatics For extraction from: . Tissue . Blood . Swabs, other Indication
areas . Oncology . Immune modulation . Infectious diseases technologies:
QuantiFERON, Polymerase Chain Reaction (PCR), Next-generation sequencing (NGS)
. QIAstat-Dx . NeuMoDx . QIAsymphony RGQ . QIAcube Connect MDx . EZ2 Connect
MDx . QIAstat Rise QIAGEN Clinical Insight (QCI) . Hereditary diseases .
Somatic and germline cancers . All diseases Life Sciences The Life Sciences
market includes governments and biotechnology companies - and researchers
using molecular testing technologies who are generally served by public
funding in areas such as medicine and clinical development, forensics, and
exploring the building blocks of life. We partner with customers across
diverse disciplines in academia and industry, providing sample technologies,
assay technologies, bioinformatics and services to universities and
institutes, pharmaceutical and biotech companies, government and law
enforcement agencies. We provide Sample to Insight solutions to academic and
research institutions around the world. We focus on enabling researchers to
use high-quality technologies to generate reliable, fast, highly reproducible
results, sometimes replacing time-consuming traditional or in-house methods.
We often partner with leading institutions on research projects and develop
customized solutions such as NGS panels for the sequencing of multiple gene
targets. We are a global leader in solutions for governments and industry,
particularly in forensic testing and human identification. The value of
genetic "fingerprinting" has been proven in criminal investigations and
examinations of paternity or ancestry, as well as in food safety. We provide
sample collection and analytical solutions for law enforcement and human
identification labs, as well as advanced technologies for studies of
microbiomes and their effect on health and the environment. We have deep
relationships with pharmaceutical and biotechnology companies. Drug discovery
and development as well as translational research efforts increasingly employ
genomic information, both to guide research in diseases and to differentiate
patient populations that are most likely to respond to particular therapies.
We estimate that about half of our sales to these companies supports research,
while the other half supports clinical development, including stratification
of patient populations based on genetic information. Also, QIAGEN Digital
Insights solutions are widely used to guide pharmaceutical research and
treatment options. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Selected Life Sciences products Sample technologies Assay technologies
Instruments Bioinformatics ~300 different kit types for extraction and
purification of DNA, RNA and proteins from tissue, blood, cells, stool,
plants, soil, and other sample types . Real-time PCR . Digital PCR .
Next-generation sequencing . QIAsymphony . QIAcube Connect . QIAcuity digital
PCR . Ingenuity Pathway Analysis (IPA) . Genomics Workbench/Server . Microbial
Pro Suite/RNA-seq . Microbial Epigenetics Competition The markets for most of
our products are very competitive. Competitors may have developed, or could
develop in the future, new technologies that compete with our products or even
render our products obsolete. In sample technology products, we experience
competition in various markets from other companies providing sample
preparation products in kit form and assay solutions. These competitors
include, but are not limited to, companies with a focus on nucleic acid
separation and purification kits, assay solutions, reagents and instrumentation.
We compete with other suppliers through innovative technologies and products,
offering a comprehensive solution for nucleic acid collection, pre-treatment,
separation and purification needs as well as downstream applications,
providing significant advantages in speed, reliability, accuracy, convenience,
reproducibility and ease of use. Some of our other products within our
molecular diagnostics customer class, such as tests for chlamydia, gonorrhea,
hepatitis B virus, herpes simplex virus and CMV (cytomegalovirus), compete
against existing screening, monitoring and diagnostic technologies, including
tissue culture and antigen-based diagnostic methodologies. We believe the
primary competitive factors in the market for gene-based probe diagnostics and
other screening devices are clinical validation, performance and reliability,
ease of use, reproducibility, standardization, cost, proprietary position,
competitors' market shares, access to distribution channels, regulatory
approvals and reimbursement. We believe our competitors typically do not have
the same comprehensive approach to sample to insight solutions as we do, nor
do they have the ability to provide the broad range of technologies and depth
of products and services that we offer. Current and potential competitors may
be in the process of seeking FDA or foreign regulatory approvals for their
respective products. Our continued future success will depend in large part on
our ability to maintain our technological advantage over competing products,
expand our market presence and preserve customer loyalty. There can be no
assurance that we will be able to compete effectively in the future or that
development by others will not render our technologies or products
non-competitive. Global Presence by Product Category and Geographic Market
Product Category Information Net sales for the product categories are
attributed based on those revenues related to sample and assay products and
related revenues including bioinformatics solutions, and revenues derived from
instrumentation sales. Net sales (in millions) 2023 2022 2021 Consumables and
related revenues $1,726.2 $1,888.9 $1,986.3 Instrumentation 239.1 252.6 265.3
Total $1,965.3 $2,141.5 $2,251.7 Geographical Information We sell our products
in more than 170 countries. The following table shows total revenue by
geographic market for the past three years (net sales are attributed to
countries based on the location of the customer, as certain subsidiaries have
international distribution): QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Net sales (in millions) 2023 2022 2021 United States $935.3 $909.6 $909.7
Other Americas 84.8 88.1 97.7 Total Americas 1,020.1 997.8 1,007.4 Europe,
Middle East and Africa 624.6 733.5 814.4 Asia Pacific, Japan and Rest of World
320.7 410.3 429.9 Total $1,965.3 $2,141.5 $2,251.7 We have built an increasing
presence in key markets as a growth strategy. In 2023, the top six growth
markets-China, Brazil, India, South Korea, Mexico and Turkiye-contributed 12%
of net sales. Russia was excluded as a market in early 2022 following the
invasion of Ukraine, and the subsequent decision to stop business activities
in Russia and Belarus. Seasonality Our business is not significantly impacted
by seasonal factors. Historically, a significant portion of our sales has been
to researchers, universities, government laboratories and private foundations
whose funding is dependent upon grants from government agencies, such as the
National Institutes of Health and similar bodies. To the extent that our
customers experience increases, decreases or delays in funding arrangements
and budget approvals, and to the extent that customers' activities are slowed,
such as during times of higher unemployment, vacation periods or delays in
approval of government budgets, we may experience fluctuations in sales
volumes during the year or delays from one period to the next in the
recognition of sales. Additionally, we have customers who are active in the
diagnostics testing market, and sales to these customers fluctuate to the
extent that their activities are impacted by public health concerns - for
example, the timing and severity of viral infections such as the influenza or
SARS-CoV-2 viruses. Suppliers We strive to ensure that our quality standards,
compliance with laws and regulations as well as environmental and social
standards are maintained along the entire value chain of suppliers and
partners. We demand the same from our business partners. Suppliers are
subjected to a risk analysis with regard to environmental and social criteria
based on their geographic location. Our supplier policy, which all new
suppliers sign, is available on our website and contains requirements with
regard to legal compliance, bribery and corruption, labor rights,
non-discrimination and fair treatment, health and safety, as well as
environmental protection and conservation. In addition, first- tier suppliers
must confirm REACH, RoHS and conflict minerals compliance as appropriate. As
part of our supplier assessment procedures, we evaluate on a monthly basis the
supply performance of our raw material and component suppliers, and we assess
on a continuous basis potential alternative sources of such materials and
components, and on a yearly basis the risks and benefits of reliance on our
existing suppliers. We buy materials for our products from many suppliers, and
are not dependent on any one supplier or group of suppliers for our business
as a whole. Raw materials generally include chemicals, raw separation media,
biologics, plastics, electronics and packaging. Certain raw materials are
produced under our specifications. We have inventory agreements with the
majority of our suppliers and we closely monitor stock levels to maintain
adequate supplies. In the second half of 2023, while the availability of raw
materials improved over 2022, raw material prices continued to increase
primarily driven by energy costs and inflation. We use long-term supply
contracts when needed to secure raw materials and mitigate availability
challenges when identified. The overall increase in energy costs and materials
has had a significant adverse impact on our costs for raw materials,
specifically plastics and packaging as well as for logistics. Long-term supply
contracts have helped to limit the risks for shortages in electronic
components, but have still resulted in price increases. We expect improved
availability in 2024 under continued pricing pressure. We strive to maintain
inventories at a sufficient level to ensure reasonable customer service levels
and to guard against normal volatility in availability. These initiatives help
us minimize shortages and pricing pressures. QIAGEN N.V. | IFRS Annual Report
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Research and Development We are committed to expanding our global leadership
in Sample to Insight solutions in Molecular Diagnostics and the Life Sciences.
We target our research and development resources at the most promising
technologies to address the unmet needs of our customers in healthcare and
research labs in key geographic markets. Innovation at QIAGEN follows parallel
paths: . Creating new systems for automation of workflows - platforms for
laboratories, hospitals and other users of novel molecular technologies. .
Expanding our broad portfolio of novel content - including assays to detect
and measure biomarkers for disease or genetic identification. . Integrating
QIAGEN Digital Insights with the testing process - software and cloud-based
resources to interpret and transform raw molecular data into useful insights.
Innovation in automation systems positions us in fast-growing fields of
molecular testing, and generates ongoing demand for our consumable products.
We are developing and commercializing a deep pipeline of assays for preventive
screening and diagnostic profiling of diseases, detection of biomarkers to
guide Precision Diagnostics in cancer and other diseases, and other molecular
targets. Our assay development program aims to commercialize tests that will
add value to our QIAsymphony, QIAstat-Dx and NeuMoDx automation systems in the
coming years, as well as next-generation sequencing (NGS) kits to support our
universal NGS franchise and our in vitro diagnostics partnership with
Illumina. We continue to develop applications for the QIAcuity digital PCR
system which is designed to make digital PCR technology available to Life
Sciences laboratories worldwide. Sales and Marketing We market our products
primarily through subsidiaries in markets with the greatest sales potential in
the Americas, Europe, Australia and Asia. Experienced marketing and sales
staff, many of them scientists with academic degrees in molecular biology or
related areas, sell our products and support our customers. Business managers
oversee key accounts to ensure that we serve customers' commercial needs, such
as procurement processes, financing, data on costs and the value of our
systems, and collaborative relationships. In many markets, we have specialized
independent distributors and importers. Our marketing strategy focuses on
providing differentiated, high-quality products across the value chain from
Sample to Insight, integrating components into end-to-end solutions when
possible, and enhancing relationships with commitment to technical excellence
and customer service. Our approach seeks to engage customers through their
preferred channels - online, by phone, in person, etc. - and to optimize
investment in different customer types. We continue to drive the growth of our
digital marketing channels - including our website at www.qiagen.com,
product-specific sites and social media. Since the onset of the pandemic there
has been an increase in virtual events and use of digital sales channels. We
have likewise increased the activities in digital marketing to adapt to these
market changes, such as installing an in- house studio to facilitate creation
of video content and live virtual events. Our eCommerce team works with
clients to provide automated processes supporting a variety of electronic
transactions and all major eProcurement systems. Information contained on our
website, or accessed through it, is not part of this Annual Report. My QIAGEN
is an easy-to-use self-service portal that is personalized to our customers'
needs and enables customers to manage different activities in one central
place. Customers can now easily reorder, place bulk orders, apply quotes to
their cart, and then track their order status. Functionality in the dashboard
allows customers to monitor their instrument use and view the status of
licenses and service agreements. Additionally, customers can access our
exclusive content and services, such as webinars, handbooks and other
documents. Our GeneGlobe Design & Analysis Hub (www.geneglobe.com) is a
valuable outreach to scientists in pharma and academia, enabling researchers
to search and order from approximately 25 million pre-designed and custom PCR
assay kits, NGS assay panels and other products. The new hub brings QIAGEN
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next-level experiment planning, execution and follow-up to life science
researchers, linking our QIAGEN Digital Insights solutions with ordering of
assays to accelerate research. We use a range of tools to provide customers
with direct access to technical support, inform them of new product offerings,
and enhance our reputation for technical excellence, high-quality products and
commitment to service. For example, our technical service hotline allows
existing or potential customers to discuss a wide range of questions about our
products and molecular biology procedures, online or via phone, with Ph.D. and
M.Sc. scientists at QIAGEN. Frequent communication with customers enables us
to identify market needs, learn of new developments and opportunities, and
respond with new products. We also distribute publications, including our
catalog, to existing and potential customers worldwide, providing new product
information, updates, and articles about existing and new applications. In
addition, we hold numerous scientific seminars at clinical, academic and
industrial research institutes worldwide and at major scientific and clinical
meetings. We conduct direct marketing campaigns to announce new products and
special promotions, and we offer personalized electronic newsletters and
webinars highlighting molecular biology applications. For laboratories that
frequently rely on our consumables, the QIAstock program maintains inventory
on-site to keep up with their requirements. QIAGEN representatives make
regular visits to replenish the stock and help with other needs, and we are
automating this process with digital technologies. Easy-to- use digital
ordering, inventory monitoring and customer-driven changes make QIAstock an
efficient system for providing ready access to our products for the hundreds
of customers worldwide who use this program. Intellectual Property,
Proprietary Rights and Licenses We have made and expect to continue to make
investments in intellectual property. In 2023, additions to our intangible
assets outside of business combinations totaled $11.1 million and as of
December 31, 2023, patent and license rights, net totaled $75.6 million. While
we do not depend solely on any individual patent or technology, we are
significantly dependent in the aggregate on technology that we own or license.
Therefore, we consider protection of proprietary technologies and products one
of the major keys to our business success. We rely on a combination of
patents, licenses and trademarks to establish and protect proprietary rights.
As of December 31, 2023, we owned 303 issued patents in the United States, 251
issued patents in Germany and 1,716 issued patents in other major
industrialized countries. We had 360 pending patent applications. Our policy
is to file patent applications in Western Europe, the United States and Japan.
Patents in most countries have a term of 20 years from the date of filing the
patent application. We intend to aggressively prosecute and enforce patents
and to otherwise protect our proprietary technologies. We also rely on trade
secrets, know-how, continuing technological innovation and licensing
opportunities to develop and maintain our competitive position. Our practice
is to require employees, consultants, outside scientific collaborators,
sponsored researchers and other advisers to execute confidentiality agreements
upon commencement of their relationships with us. These agreements provide
that all confidential information developed by or made known to the individual
during the course of the relationship is to be kept confidential and not
disclosed to third parties, subject to a right to publish certain information
in scientific literature in certain circumstances and to other specific
exceptions. In the case of our employees, the agreements provide that all
inventions conceived by individuals in the course of their employment will be
our exclusive property, subject to local laws. See Risk Factors included in
Risks and Risk Management for details regarding risks related to our reliance
on patents and proprietary rights. QIAGEN N.V. | IFRS Annual Report 2023
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Description of Property Our primary production and manufacturing facilities
for consumable products are located in Germany, the United States, Spain and
China. Our facilities for software development are located in the United
States, Germany, Poland, Denmark and Romania. In recent years, we have made
investments in automated and interchangeable production equipment to increase
our production capacity and improve efficiency. Our production and
manufacturing operations are highly integrated and benefit from sophisticated
inventory control. Production management personnel are highly qualified, and
many have advanced degrees in engineering, business and science. We also have
installed and continue to expand production-planning systems that are included
in our integrated information and control system based on the SAP R/3 business
software package from SAP SE. Worldwide, we use SAP R/3 software to integrate
most of our operating subsidiaries and are currently undergoing a multi-year
implementation of S/4HANA. Capital expenditures for property, plant and
equipment totaled $149.7 million, $129.2 million and $189.9 million for 2023,
2022 and 2021, respectively. We have an established quality system, including
standard manufacturing and documentation procedures, intended to ensure that
products are produced and tested in accordance with the FDA's Quality System
Regulations, which impose current Good Manufacturing Practice (cGMP)
requirements. For facilities that accommodate cGMP production, special areas
were built and these facilities operate in accordance with cGMP requirements.
The consumable products manufactured at QIAGEN GmbH in Germany, and QIAGEN
Sciences LLC in Maryland, are produced under ISO 9001: 2015, ISO 13485:2016,
MDSAP. Our certifications form part of our ongoing commitment to provide our
customers with high-quality, state-of-the- art sample and assay technologies
under our Total Quality Management system. Our corporate headquarters are
located in Venlo, The Netherlands. The table below summarizes our largest
facilities. Other subsidiaries throughout the world lease smaller amounts of
space. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Facility location Country Purpose Owned or leased Square feet Hilden Germany
Manufacturing, warehousing, distribution, research and development and
administration Owned 986,000 Germantown, Maryland U.S. Manufacturing,
warehousing, distribution and administration Owned 285,000 Ann Arbor, Michigan
U.S. Service Solutions, manufacturing, warehousing, distribution and
administration Leased 109,000 Shenzhen China Development, manufacturing,
warehousing, distribution and administration Leased 107,200 Manchester U.K.
Development and Service Solutions Leased 96,300 Frederick, Maryland U.S.
Development, Service Solutions, manufacturing, warehousing and distribution
Leased 76,500 Wroclaw Poland Business service center Leased 65,100 Beverly,
Massachusetts U.S. Enzyme manufacturing Leased 44,000 Barcelona Spain
Development, manufacturing, warehousing, distribution, and administration
Leased 31,900 Manila Philippines Business service center Leased 29,300
Shanghai China Service Solutions and administration Leased 28,400 GdaDsk
Poland Enzyme manufacturing, development, warehousing and administration
Leased 27,100 Germantown, Maryland U.S. Service Solutions and training center
Leased 13,500 Redwood City, California U.S. Bioinformatics Leased 12,700
Gdynia Poland Enzyme manufacturing, development and warehousing Leased 11,200
Each of our owned facilities in Hilden, Germany and Germantown, Maryland, has
capacity for future expansion of up to 300,000 square feet of facility space.
In 2023, we invested in our Hilden, Germany site to add an emergency power
supply and renewable heating systems in order to reduce our dependency on
carbon energy sources and to reduce our carbon emissions. We believe our
existing production and distribution facilities can support anticipated
production needs for the next 36 months. Our production and manufacturing
operations are subject to various federal, state, and local laws and
regulations including environmental regulations. We do not believe we have any
material issues relating to these laws and regulations. QIAGEN N.V. | IFRS
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Operating and Financial Review This section contains a number of forward-looking
statements. These statements are based on current management expectations,
and actual results may differ materially. Among the factors that could cause
actual results to differ from management's expectations are those described in
Risk Factors and Note Regarding Forward-looking Statements and Risk Factors in
this Annual Report. The discussion that follows focuses on 2023 with
comparisons to 2022. For discussion of the year ended December 31, 2022,
compared to 2021, refer to our December 31, 2022 Annual Report. Operating
Results Overview Net sales growth continued in 2023 in the non-COVID product
portfolio amid a challenging macro-environment, and total 2023 net sales of
$2.0 billion reflect the advancement of our strategy of "Focus and Balance" on
areas offering the highest growth potential. Focus involves our Five Pillars
of Growth strategy to make significant investments in the commercialization
and development of (1) Sample technologies, (2) QuantiFERON, (3) QIAcuity, (4)
NeuMoDx and (5) QIAstat-DX. Balance involves developing our portfolio to
address more than 500,000 customers across the Life Sciences and Molecular
Diagnostics, as well as to build out our global presence in markets offering
growth potential. We made solid progress in driving growth of our consumables
business, which accounts for over 85% of our sales, while expanding our
installed instrument base. Financial highlights of 2023 include: . While net
sales from our non-COVID product portfolio grew 8% in 2023, total net sales
declined 8% over the year-ago period, reflecting a 66% decline in net sales
from COVID-19 products. . The operating income margin in 2023 was 21.0% of
sales compared to 24.9% in 2022, reflecting lower sales contributions as well
as higher expenses from recent production capacity expansion projects,
investments in research and development include BLIRT S.A. and Verogen, Inc.
which we acquired in May 2022 and January 2023, respectively. . Net cash
provided by operating activities declined 34% to $493 million in 2023 from
$751 million in 2022. Results in 2023 reflected the reduced net income
compared with 2022 results, as well as higher working capital requirements, in
particular an increase in inventories to ensure product availability. We
continue to invest to support internal growth with a high level of investment
into research and development for menu expansion of our key platforms as well
as our IT infrastructure. Additionally, in January 2024, we completed a
synthetic share repurchase that combined a direct capital repayment to
shareholders with a reverse stock split. This approach is designed to return
cash to shareholders in a more efficient way than through a traditional
open-market repurchase program. In January 2023, we acquired Verogen, Inc., a
leader in the use of next- generation sequencing (NGS) technologies to drive
the future of human identification (HID) and forensic investigation. Verogen,
a privately held company founded in 2017 based in San Diego, California,
supports the global human identification community with NGS tools and
professional services to help resolve criminal and missing-persons cases. In
May 2022, we acquired BLIRT S.A., a supplier of standardized and customized
solutions for proteins and enzymes as well as molecular biology reagents
located in GdaDsk, Poland. These acquisitions were not significant to the
overall consolidated financial statements. As of April 1, 2022, the results of
our subsidiary in Turkiye are reported under highly inflationary accounting,
as the prior three-years cumulative inflation rate exceeded 100%. Foreign
Currencies The reporting currency of QIAGEN N.V. is the U.S. dollar. The
functional currency of most of our subsidiaries are the local currencies of
the countries in which they are headquartered. All amounts in the financial
statements of entities whose functional currency is not the U.S. dollar are
translated into U.S. dollar QIAGEN N.V. | IFRS Annual Report 2023 Overview
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equivalents at exchange rates as follows: (1) assets and liabilities at
period-end rates, (2) income statement accounts at average exchange rates for
the period, and (3) components of equity at historical rates. Translation
gains or losses are recorded in equity, and transaction gains and losses are
reflected in net income. Year Ended December 31, 2023, Compared to 2022 Net
Sales (in millions) 2023 2022 Product type Net sales % of net sales Net sales
% of net sales % change Consumables and related revenues $1,726.2 88 %
$1,890.4 88 % -9 % Instruments 239.1 12 % 252.6 12 % -5 % Net sales $1,965.3
$2,143.0 -8 % Customer class Molecular Diagnostics $1,035.5 53 % $1,127.7 53 %
-8 % Life Sciences 929.8 47 % 1,015.3 47 % -8 % Net sales $1,965.3 $2,143.0 -8
% (in millions) 2023 2022 Product group Net sales % of net sales Net sales %
of net sales % change Sample technologies $663.0 34 % $798.4 37 % -17 %
Diagnostic solutions 697.6 35 % 660.9 31 % +6 % PCR / Nucleic acid
amplification 300.2 15 % 390.8 18 % -23 % Genomics / NGS 238.9 12 % 224.8 10 %
+6 % Other 65.6 3 % 68.1 3 % -4 % Net sales $1,965.3 $2,143.0 -8 % Sample
technologies involve the sale of consumables kits and instruments for use in
obtaining DNA, RNA and proteins from biological samples. Overall sales in this
product group declined 17% in 2023 to $663.0 million, due to significant
drop-off in the pandemic testing demand. Growth in Non-COVID product sales
were supported by higher sales of consumables that more than offset the
decline in instruments. Sales results for 2023 were adversely impacted by
approximately one percentage point of currency movements over the prior year.
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Diagnostic Solutions involve the sale of regulated consumables kits and
instruments for use in clinical healthcare, as well as revenues from our
Precision Diagnostics portfolio and companion diagnostic co-development
projects with pharmaceutical companies. Sales in this product group grew 6% to
$697.6 million in 2023. The QuantiFERON-TB test for tuberculosis detection
maintained a solid pace with 24% growth in 2023 and QIAstat-DX sales rose,
supported by an ongoing high level of placements. NeuMoDx sales were down
compared to the significant COVID-19 sales in 2022, but exceeded the annual
sales goal in 2023. Sales in the rest of this product group declined, mainly
due to lower sales of COVID-19 products. PCR / Nucleic Acid Amplification
involves consumables kits and instruments used in non-regulated applications.
Sales in this product group fell 23% to $300.2 million due to a sharp decline
in COVID product group demand, as well as the drop-off in sales of OEM
products. The QIAcuity digital PCR system delivered solid growth in 2023 over
2022 results, driven by increasing consumables pull through and new placements
especially to biopharma customers. Genomics / NGS involves our portfolio of
universal solutions for use on any next-generation sequencer (NGS) as well as
the QIAGEN Digital Insights bioinformatics business and other products used in
genomics analysis workflows. Sales in this product group rose 6% to $238.9
million in 2023 driven by business expansion in the bioinformatics business
and the portfolios of universal NGS solutions for use with various third-party
NGS systems. Geographic region (in millions) 2023 2022 % change Americas
$1,020.1 $997.8 +2 % Europe, Middle East and Africa 624.6 734.9 -15 % Asia
Pacific, Japan and Rest of World 320.7 410.3 -22 % Net sales $1,965.3 $2,143.0
-8 % The Americas region led the performance among our three regions, with
overall results reflecting the COVID-19 product contributions in 2022. Higher
sales were seen in the U.S. and Mexico, against lower results in Canada over
the prior year. Sales in this region were not materially affected by currency
movements. The Europe, Middle East and Africa (EMEA) region's results were
also affected by the decline in COVID-19 sales, partially offset by one
percentage point of favorable currency movements against the U.S. dollar.
Among the top- performing countries in 2023 were Spain, France and the United
Kingdom. The Asia Pacific, Japan and Rest of World region saw an overall sales
decline in 2023 over the prior year. Sales in this region were adversely
impacted by three percentage points from unfavorable currency movements
against the U.S. dollar. Gross Profit (in millions) 2023 2022 % change Gross
profit $1,228.3 $1,376.2 -11 % Gross margin 62.5% 64.2% The gross margin in
2023 primarily reflects changes in individual product sales and mix.
Generally, our consumables and related products have a higher gross margin
than our instrumentation products and service arrangements. Fluctuations in
the sales levels between periods can cause changes in gross profit between
periods. In 2023, gross margin decreased in line with the significant decline
in the overall sales level, which was mainly due to the sharp reduction in
COVID-19 product group revenues. The gross margin in 2023 also includes costs
for higher material and logistics costs over the year-ago periods. The
amortization expense on acquisition-related intangibles within cost of sales
increased to $64.2 million in 2023 compared to $60.5 million in 2022 and
includes amortization related to Verogen acquired in January 2023. Our
acquisition-related intangible amortization will increase in the event of
future acquisitions. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Operating Expenses (in millions) 2023 2022 Expenses % of net sales Expenses %
of net sales % change Sales and marketing ($470.5) 23.9 % ($488.7) 22.8 % -4 %
Research and development (192.2) 9.8 % (181.0) 8.4 % +6 % General and
administrative (117.4) 6.0 % (128.3) 6.0 % -8 % Restructuring, acquisition,
integration and other, net (34.5) 1.8 % (44.8) 2.1 % -23 % Other operating
income 0.6 - % 0.3 - % Other operating expense (1.4) 0.1 % (0.4) 0.0 % Total
operating expenses ($815.2) 41.5 % ($842.9) 39.3 % Income from operations
$413.1 21.0 % $533.3 24.9 % Sales and Marketing Sales and marketing expenses
declined 4% to $470.5 million over 2022, and rose to 23.9% of sales from 22.8%
in 2022. The overall decrease in sales and marketing expenses primarily
reflects lower freight and other supply chain costs. Sales and marketing
expenses are primarily associated with personnel, commissions, advertising,
trade shows, publications, freight and logistics expenses, and other
promotional expenses. The increased use of digital customer engagement
continues to build on the new habits of customers and enhance customer
engagement with a focus on greater efficiency and effectiveness. Research and
Development Research and development expenses increased 6% to $192.2 million
in 2023 compared to 2022 and rose to 9.8% of sales from 8.4% in 2022. Results
for 2023 included $2.6 million of unfavorable currency exchange movements.
Research and development expense reflects our continued focus on our Five
Pillars of Growth, including investments in NeuMoDx, QIAstat-Dx and QIAcuity.
These investments are targeting new applications within our Five Pillars of
Growth to drive sustainable post-pandemic expansion. As we continue to
discover, develop and acquire new products and technologies, we expect to
incur additional expenses related to facilities, licenses and employees
engaged in research and development. Overall, research and development costs
are expected to increase as a result of seeking regulatory approvals,
including U.S. FDA Pre-Market Approval (PMA), U.S. FDA 510(k) clearance and EU
CE approval of certain assays or instruments. Further, business combinations,
along with the acquisition of new technologies, may increase our research and
development costs in the future. We have a strong commitment to innovation and
expect to continue to make investments in our research and development
efforts. General and Administrative General and administrative expenses
declined 8% to $117.4 million in 2023 and remained unchanged to 6% of sales
compared to 2022. These results reflect lower share-based compensation expense
together with efficiency gains across many administrative functions partially
offset by investments into our information technology systems (including an
upgrade of the SAP enterprise resource planning system) and into cyber
security measures. Results for 2023 included $1.0 million of unfavorable
currency exchange movements. We expect future costs to increase due to higher
licensing and information technology costs as well as increased cyber security
costs. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Restructuring, Acquisition, Integration and Other, net Restructuring,
acquisition, integration and other, net expenses decreased to $34.5 million in
2023, or 1.8% of sales, from $44.8 million, or 2.1% of sales, in 2022.
Expenses incurred in 2023 included charges related to the 2022 restructuring
program, as discussed further in Note 6 "Restructuring," as well as costs
related to our acquisition of Verogen, Inc. in January 2023. Expenses incurred
in 2022 included costs related to our BLIRT S.A. acquisition in May 2022 and
impairments and charges related to our decision to suspend business in Russia,
Ukraine and Belarus in the first quarter of 2022 as well as impairments to
intangible assets of $12.8 million and impairments related to Ellume, as
further discussed in Note 12 "Goodwill and Intangible Assets." Additionally in
2022, we incurred $4.6 million of charges related to the 2022 restructuring
program. Financial Income (Expense) (in millions) 2023 2022 % change Financial
income $79.0 $33.2 +138 % Financial expense (55.9) (60.1) -7 % Gain from
equity accounted investments 4.2 3.8 +11 % Non-monetary loss, net - (5.4) -100
% Other financial results 134.1 161.8 -17 % Total financial income, net $161.4
$133.3 +21 % Financial income includes interest earned on cash, cash
equivalents and short- term investments, income related to certain interest
rate derivatives as discussed in Note 26 "Financial Risk Factors and Use of
Derivative Financial Instruments" and other components including the interest
portion of operating lease transactions. The increase in 2023 compared to the
prior year was due to increasing interest rates and the duration and level of
short-term investments held during the period. Financial expense primarily
relates to debt, as discussed in Note 16 "Financial Debts" in the accompanying
notes to consolidated financial statements. The decrease in 2023 compared to
2022 is driven by the repayment of the 2023 Notes that matured in September
2023 totaling $400.0 million partially offset by the issuance of German
private placement bonds in July and August 2022 totaling 370.0 million. Our
share of income from equity accounted investments resulted in gains of $4.2
million and $3.8 million for the years ended December 31, 2023 and 2022,
respectively, as discussed in Note 11 "Equity Accounted Investments." Other
financial results was $134.1 million of income for the year ended December 31,
2023. Other financial results included a gain of $182.8 million related to the
embedded cash conversion option on the cash convertible notes and $141.6
million related to the fair value change in warrants and embedded conversion
option as discussed in Note 26 "Financial Risk Factors and Use of Derivative
Financial Instruments." These were partially offset by a loss of $182.0
million related to the change in the fair value of equity options also
discussed in Note 26, $4.2 million of impairments in non-marketable
investments not accounted for under the equity method, and loss of $4.1
million on foreign currency transactions. Other financial results was $161.8
million of income for the year ended December 31, 2022. Other financial
results included $161.1 million related to the fair value change in warrants
and embedded conversion option and a gain of $2.7 million on foreign currency
transactions. These were partially offset by $2.0 million related to the
change in fair value of interest rate derivatives. QIAGEN N.V. | IFRS Annual
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Income Tax Expense (in millions) 2023 2022 % change Income before income taxes
$574.5 $666.6 -14 % Income tax expense (89.6) (91.0) -1 % Net income $484.8
$575.7 Effective tax rate 15.6 % 13.6 % In 2023, our effective tax rate was
15.6% compared to 13.6% in 2022. Our effective tax rate differs from the
Netherlands statutory tax rate of 25.8% due in part to our operating
subsidiaries being exposed to statutory tax rates ranging from zero to 35%.
Fluctuations in the distribution of pre-tax income or loss among our operating
subsidiaries can lead to fluctuations of the effective tax rate in the
consolidated financial statements. We record partial tax exemptions on foreign
income primarily derived from operations in Germany. These foreign tax
benefits are due to a combination of favorable tax laws and exemptions in
these jurisdictions, including intercompany foreign royalty income in Germany
which is statutorily exempt from trade tax. Further, we have intercompany
financing arrangements in which the intercompany income is nontaxable in
Dubai. The effective tax rate in 2022 reflects the release of uncertain tax
positions following the conclusion of tax audits covering the 2014 to 2016
years in the second quarter of 2022. See Note 17 "Income Tax" to the
consolidated financial statements for a full reconciliation of the
Netherlands' statutory income tax rate to the effective tax rate. Global
Minimum Tax (Pillar Two) In December 2021, the Organization for Economic
Co-operation and Development (OECD) Inclusive Framework released model rules
focused on "Addressing the Challenges of the Digitalization of the Economy."
The breadth of the OECD project extends beyond pure digital businesses and is
likely to impact most large multinational businesses by both redefining
jurisdictional taxation rights and establishing a 15% global minimum tax
(referred to as Pillar Two). The Netherlands formally enacted the Pillar Two
legislation into domestic law and certain aspects of Pillar Two are effective
January 1, 2024, and other aspects effective January 1, 2025. Under the
legislation, we may, briefly stated, be required to pay top-up tax on profits
that are taxed at an effective tax rate of less than 15%. We expect to be
subject to the top-up tax in relation to our operations in the United Arab
Emirates (UAE), where the Pillar Two effective tax rate is below 15%. Had the
Pillar Two legislation been effective for the year ended December 31, 2023,
the effective tax rate under IFRS, including the top- up tax on our operations
in the UAE, is estimated to have been approximately 17% which would have been
approximately 1% higher than the reported tax rate of 15.6%. The proportion of
profit before tax subject to top-up tax under Pillar Two and the effective tax
rates in 2024 will depend on the development of results in the various
jurisdictions in which we operate and other factors such as development in
interest rates, foreign currency rates and relative weight of the results in
each of the jurisdictions. In future periods, our effective tax rate may
fluctuate due to similar or other factors as discussed in "Changes in tax laws
or their application or the termination or reduction of certain government tax
incentives, could adversely impact our overall effective tax rate, results of
operations or financial flexibility" in Risk Factors. Liquidity and Capital
Resources To date, we have funded our business through internally generated
funds, debt, as well as private and public sales of equity. Our primary use of
cash has been to strengthen our business operations, while our investing
activities have focused on capital expenditure requirements and acquisitions.
(in millions) 2023 2022 Cash and cash equivalents $667.3 $730.3 Short-term
investments 389.7 687.6 Total cash and cash equivalents and short-term
investments $1,057.0 $1,417.9 Working capital $1,018.2 $1,339.8 QIAGEN N.V. |
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Cash and cash equivalents are primarily held in U.S. dollars and euros, other
than those cash balances maintained in the local currency of subsidiaries to
meet local working capital needs. At December 31, 2023, cash and cash
equivalents had decreased by $63.0 million from December 31, 2022, primarily
as a result of cash used in financing activities of $460.6 million and cash
used in investing activities of $94.5 million, partially offset by cash
provided by operating activities of $492.8 million as discussed in the Cash
Flow Summary below. The decrease in short-term investments at December 31,
2023, is the result of our active cash management. The overall lower cash and
cash equivalent balance together with a higher current portion of long-term
debt led to the decrease of working capital at December 31, 2023. Cash Flow
Summary (in millions) 2023 2022 Net cash provided by operating activities
$492.8 $751.1 Net cash used in investing activities (94.5) (735.6) Net cash
used in financing activities (460.6) (152.6) Effect of exchange rate changes
on cash and cash equivalents (0.6) (12.5) Net decrease in cash and cash
equivalents ($63.0) ($149.6) Operating Activities For the year ended December
31, 2023, we generated net cash from operating activities of $492.8 million
compared to $751.1 million in 2022. While net income was $484.8 million in
2023, non-cash components in income included $211.3 million of depreciation
and amortization, $47.1 million of share-based compensation and $30.2 million
of amortization of debt discount and issuance costs. Cash flow impacts from
changes in operating assets and liabilities primarily reflect increased
inventories to support customer demand trends in light of global supply chain
tensions. Given that we rely heavily on cash generated from our operating
activities to fund our business, a decrease in demand for our products, longer
collection cycles or significant technology advances by competitors could have
a negative impact on our liquidity. Investing Activities Approximately $94.5
million of cash was used in investing activities in 2023 compared to $735.6
million in 2022. Investing activities during 2023 consisted principally of
$839.4 million for purchases of unquoted debt securities, $149.5 million of
net cash paid for the acquisition of Verogen, Inc., $137.0 million for
purchases of quoted debt securities, $121.4 million paid for intangible
assets, $66.6 million paid to our derivative counterparties to collateralize
our derivative liabilities with them as discussed in Note 26 "Financial Risk
Factors and Use of Derivative Financial Instruments" and $41.4 million in cash
paid for purchases of property and equipment. This was partially offset by
cash inflows of $1.1 billion from the redemption of unquoted debt securities
and $215.6 million from the redemption of quoted debt securities. Cash used in
investing activities during 2022 consisted principally of $1.1 billion for
purchases of unquoted debt securities, $267.6 million for purchases of quoted
debt securities, $93.0 million paid for intangible assets, $63.7 million of
net cash paid for the acquisition of BLIRT S.A., $56.3 million for purchases
of property, plant and equipment and $9.9 million returned to us from our
derivative counterparties with cash provided to them to collateralize our
derivative liabilities with them. This was partially offset by cash inflows of
$694.0 million from the redemption of unquoted debt securities and $189.1
million from the redemption of quoted debt securities. Financing Activities
For the year ended December 31, 2023, cash used in financing activities was
$460.6 million compared to $152.6 million in 2022. Financing activities during
2023 included $400.0 million for the repayment of long-term debt, $26.8
million payment of leases, $17.7 million paid in connection with net share
settlement for tax withholding related to the vesting of stock awards, and
$16.3 million paid to our derivative counterparties to collateralize
derivative assets that we hold with them. QIAGEN N.V. | IFRS Annual Report
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In 2022, cash used in financing activities totaled $152.6 million and
consisted of $480.0 million for the repayment of long-term debt, $26.8 million
payment of lease, $25.4 million paid in connection with net share settlement
for tax withholding related to the vesting of stock awards, and $4.6 million
in cash paid for contingent consideration. This was partially offset by
proceeds of $371.5 million from the issuance of long-term debt and $12.6
million received from our derivative counterparties to collateralize
derivative assets that we hold with them. Other Factors Affecting Liquidity
and Capital Resources As of December 31, 2023, we carry $1.5 billion of
long-term debt, of which $0.6 billion is current and $0.9 billion is
long-term. In July and August 2022, we completed a German private placement
bond (2022 Schuldschein), which was issued in various tranches totaling 370.0
million ($371.5 million) due in various periods through 2035 as described more
fully in Note 16 "Financial Debts." The interest rate is linked to our ESG
performance. As of December 31, 2023, a total of $408.0 million is
outstanding. In December 2020, we issued $500.0 million aggregate principal
amount of zero coupon Convertible Notes due in 2027 (2027 Notes). The 2027
Notes will mature on December 17, 2027, unless converted in accordance with
their terms prior to such date as described more fully in Note 16 "Financial
Debts." In November 2018, we issued $500.0 million aggregate principal amount
of Cash Convertible Senior Notes due in 2024 (2024 Notes). Interest on the
2024 Notes is payable semiannually in arrears at a rate of 1.000% per annum.
The 2024 Notes will mature on November 13, 2024, unless repurchased or
converted in accordance with their terms prior to such date. In September
2017, we issued $400.0 million aggregate principal amount of Cash Convertible
Senior Notes due in 2023 (2023 Notes) which were due and repaid in September
2023. In 2017, we completed a German private placement (2017 Schuldschein)
consisting of various tranches denominated in U.S. dollars or euros at either
floating or fixed rates, and due at various dates through June 2027. As of
December 31, 2023, a total of $121.0 million is outstanding. In December 2020,
we obtained a 400 million syndicated revolving credit facility with a
contractual life of three years, and with the ability to be extended twice by
a one-year period. No amounts were utilized during 2023. The facility can be
utilized in euros and bears interest of 0.550% to 1.500% above EURIBOR, and is
offered with interest periods of one, three or six months. The interest rate
is linked to our ESG performance. We have additional credit lines totaling
13.0 million with no expiration date. None of these credit lines were utilized
in 2023. We have lease obligations, including interest, in the aggregate
amount of $109.9 million, of which $25.1 million was current as of December
31, 2023. We also have purchase obligations of $98.8 million and license
commitments of $7.2 million. In connection with certain acquisitions that we
have completed, QIAGEN could be required to make additional contingent cash
payments of up to $20.7 million based on the achievement of certain revenue
and operating results milestones. These obligations are further discussed in
Note 13 "Leases" and Note 20 "Commitments and Contingencies" in the
consolidated financial statements. Liabilities associated with uncertain tax
positions, including interest and penalties, were estimated at $98.9 million
as of December 31, 2023. Ultimate settlement of these liabilities is dependent
on factors outside of our control, such as examinations by the respective
taxing authorities and expiration of statutes of limitation for assessment of
additional taxes. Therefore, we cannot reasonably estimate when, if ever, this
amount will be paid. In January 2024, we completed a synthetic share
repurchase that combined a direct capital repayment with a reverse stock
split. The transaction was announced on January 7, 2024, and involved an
approach used by various large, multinational Dutch companies to provide
returns to all shareholders in a faster and more efficient manner than
traditional open-market repurchases. $295.2 million was returned to
shareholders through the transaction, which reduced the total number of issued
Common Shares by approximately 3% to QIAGEN N.V. | IFRS Annual Report 2023
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223.9 million (of which 2.5 million are held in Treasury Shares) as of January
31, 2024. We did not use special purpose entities and did not have any
off-balance sheet financing arrangements during the years ended December 31,
2023 and 2022. We expect that cash from financing activities will continue to
be impacted by issuances of our common shares in connection with our equity
compensation plans, and that the market performance of our shares will impact
the timing and volume of the issuances. Additionally, we may make future
acquisitions or investments requiring cash payments, the issuance of
additional debt or equity financing. We believe that funds from operations,
existing cash and cash equivalents, together with the proceeds from any public
and private sales of equity, and availability of financing facilities, would
be sufficient to fund our planned operations and expansion in the coming year.
However, any global economic downturn may have a greater impact on our
business than currently expected, and we may experience a decrease in the
sales of our products, which could impact our ability to generate cash. If our
future cash flows from operations and other capital resources are not adequate
to fund our liquidity needs, we may be required to obtain additional debt or
equity financing or to reduce or delay our capital expenditures, acquisitions
or research and development projects. If we could not obtain financing on a
timely basis or at satisfactory terms, or implement timely reductions in our
expenditures, our business could be adversely affected. Policy on Dividend
Distribution We have not paid any dividends on our Shares since our inception.
In January 2017 and January 2024 we completed synthetic share repurchases that
combined direct capital repayments with reverse stock splits. Credit Rating We
currently do not have a rating issued by any credit rating agency. QIAGEN N.V.
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Risks and Risk Management Risk Management Our risk management approach
embodies the key elements of a sound risk management system including (1)
active Supervisory Board and senior management involvement; (2) adequate
policies and procedures; (3) adequate risk management, monitoring and
information systems; and (4) comprehensive internal controls. QIAGEN is
managed by a Managing Board and an independent Supervisory Board appointed by
the General Meeting of Shareholders. One of the Managing Board's responsibilitie
s is the oversight of the risk management system. The Managing Board has
developed and implemented strategies, controls and mitigation measures to
identify current and developing risks as part of this system. These policies
and procedures are embodied in our corporate governance, code of ethics and
financial reporting controls and procedures. A variety of functional experts
evaluate these business risks, attempting to mitigate and manage them on an
ongoing basis. Identified risks are sub-divided into three types: . a base
business risk that is specific to us or our industry and threatens our
existing business; . a business growth risk that is specific to us or our
industry and threatens our future business growth; and . an underlying
business risk that is not specific to us or our industry, but applies to a
larger number of public companies. All identified risks are evaluated based on
their likelihood of occurring and their potential impact (estimated in
monetary terms) on disrupting our progress in achieving our business
objectives. The overall risk management goal is to identify risks that could
significantly threaten our success and to provide management the opportunity
to successfully implement mitigation actions on a timely basis. The results of
the risk assessment, and any updates, are reported to the Audit Committee of
the Supervisory Board on a regular basis. A detailed risk reporting update is
provided each quarter to the Audit Committee for specific risks that have been
newly identified or have changed since the previous assessment. At least once
on an annual basis, the Supervisory Board discusses the corporate strategy and
business risks, as well as the results of an assessment by the Managing Board
and the Audit Committee of the structure and operations of the internal risk
management and control systems, including any significant changes. Our
corporate governance structure outlines the responsibilities of our Managing
Board and Supervisory Board (discussed in more detail in their respective
sections in the Corporate Governance chapter) and the function of the Audit
Committee of the Supervisory Board (discussed in more detail in the
Supervisory Board Report ). We maintain internal controls to ensure the
integrity of financial reporting, which is described further in Controls and
Procedures. Additionally, we have a Compliance Committee that consists of
senior executives from various functional areas who are responsible for
ensuring compliance with legal and regulatory requirements, as well as
overseeing the communication of corporate policies, including our Code of
Ethics as described further in the Governance section of our Sustainability
Statement of this Annual Report. QIAGEN N.V. | IFRS Annual Report 2023
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Risk Management Base Business Risk . Identification and monitoring of
competitive business threats . Monitoring complexity of product portfolio .
Monitoring dependence on key customers for single product groups . Reviewing
dependence on individual production sites or suppliers . Evaluating purchasing
initiatives, price controls and changes to reimbursements . Monitoring
production risks, including contamination prevention and high-quality product
assurance . Ensuring our ability to defend against intellectual property
infringements and maintain competitive advantage after expiration Business
Growth Risk . Managing the development and successful completion of key R&D
projects, including regulatory approvals . Managing successful integration of
acquisitions to achieve anticipated benefits Underlying Business Risk .
Evaluating financial risks, including global economic risks and currency rate
fluctuations against the U.S. dollar (our reporting currency) . Evaluating and
monitoring international hostilities . Monitoring financial reporting risks,
including multi-jurisdiction tax compliance . Reviewing possible asset
impairment events . Assessing cyber security, compliance and legal risks,
including safety in operations and environmental hazard risks, compliance with
various regulatory bodies and pending product approvals . Monitoring risks of
FCPA (Foreign Corrupt Practices Act) or antitrust concerns arising from a
network of subsidiaries and distributors in foreign countries Risk Factors The
risks described below are listed in the order of our current view of their
expected significance. Describing the risk factors in order of significance
does not imply that a lower-listed risk factor may not have a material adverse
impact on our results of operations, liquidity or capital resources. Our
continued growth is dependent on the development and success of new products.
Rapid technological change and frequent new product introductions are typical
in the markets we serve. Our success will depend in part on continuous, timely
development and introduction of new products that address sometimes rapidly
evolving market requirements, such as the pandemic caused by the SARS-CoV-2
virus. We believe successful new product introductions provide a significant
competitive advantage because many customers make an investment of time into
selecting and learning how to use a new product and are reluctant to switch
after these efforts. To the extent that we fail to introduce new and
innovative products, or such products suffer significant delays in development
or are not accepted by customers, we may lose market share to our competitors
that would be difficult or impossible to regain. An inability to successfully
develop and introduce new products, for technological or other reasons, could
reduce our growth prospects or otherwise have an adverse effect on our
business. In the past, we have experienced delays in the development and
introduction of new products, caused by delays in regulatory approvals, for
example, or decisions to stop development of projects, and we may experience
delays or make decisions to stop certain product development in the future. As
a result, we cannot assure you that we will keep pace with the rapid rate of
developments in our markets or that our new products will adequately meet the
requirements of the marketplace, achieve market acceptance or regulatory
approval, or compete successfully with companies offering similar or new
technologies. Some of the factors affecting market acceptance of a new product
include: QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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. availability, quality and price relative to existing competitor products; .
the timing of introduction of the new product relative to competitive
products; . perceptions of the new product's utility; . citation of the new
product in published research; . regulatory trends and approvals; and .
general trends in life sciences research, applied markets and molecular
diagnostics. In the development of new products, we may make significant
investments in intellectual property, software solutions and manufacturing
capacity. These investments increase our fixed costs, resulting in higher
operational costs in the short term that will negatively impact our gross
profit and operating income until products potentially reach a minimum level
of market acceptance and sales. The expenses or losses associated with
unsuccessful product development activities or lack of market acceptance of
our new products could materially have an adverse effect on our business,
financial condition and results of operations. Our continued growth depends
significantly on the success of new products in the molecular research and
testing markets that we serve, and our ability to scale manufacturing
capacities to meet customer demands. Important product programs in early
commercialization stage include the QIAstat-Dx system for one-step, fully
integrated molecular analysis of hard-to-diagnose syndromes, the NeuMoDx 96
and 288 systems offering fully integrated PCR clinical testing, and the
QIAcuity digital PCR system. The speed and level of adoption of our new
automation platforms will affect sales not only of instrumentation but also of
consumables kits - identified as sample and assay kits - that are designed to
run on the systems in a "razor- razorblade" model. The rollout of new
automation platforms are intended to drive the dissemination and increasing
sales of consumables for these systems. We are developing or co-developing new
kits for these platforms and seeking regulatory approvals for a number of new
products. In turn, the availability and regulatory approval of more tests for
processing on the QIAstat-Dx, NeuMoDx and QIAcuity systems will influence the
value of the instruments to prospective customers. Slower adoption of these
systems could significantly affect sales of instruments as well as consumables
products designed to run on these platforms. An inability to manage our
growth, manage the expansion of our operations, or successfully integrate
acquired businesses could adversely affect our business. Our business has
grown in recent years, with total net sales increasing to $1.97 billion in
2023 from $1.53 billion in 2019. In addition to incremental sales from our
global response to the COVID-19 pandemic, we have made a series of
acquisitions in recent years, including the acquisitions of Verogen, Inc. in
January 2023 and BLIRT S.A. in 2022. We intend to identify and acquire other
businesses in the future that support our strategy to build on our global
leadership position in providing Sample to Insight solutions focused on
molecular research and clinical testing. The successful integration of
acquired businesses requires a significant effort and expense across all
operational areas. We continue to make investments to expand our existing
business operations. These projects increase our fixed costs, resulting in
higher operational costs in the short term that will negatively impact our
gross profit and operating income until we more fully utilize the additional
capacity of these facilities. The expansion of our business and the addition
of new personnel may place a strain on our management and operational systems.
As we continue to upgrade our operating and financial systems, as well as
expand the geographic presence of our operations, we intend to continue to
assess the need to reallocate existing resources or hire new employees, as
well as increase responsibilities for both existing and new management
personnel. Our future operating results will depend on our ability to continue
to implement and improve our research, product development, manufacturing,
sales and marketing and customer support programs, enhance our operational and
financial control systems, expand, train and manage our employee base,
integrate acquired businesses, and effectively address new issues related to
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growth as they arise. There can be no assurance that we will be able to manage
our recent or any future expansion or acquisitions successfully, and any
inability to do so could have a material adverse effect on our results of
operations. Our acquisitions expose us to new risks, and we may not achieve
the anticipated benefits of acquisitions of technologies and businesses.
During the past several years, we have acquired and integrated a number of
companies, as mentioned earlier, through which we have gained access to new
technologies, products and businesses that complement our internally developed
product lines. In the future, we expect to acquire additional technologies,
products or businesses to expand our operations. Acquisitions potentially
expose us to new operating and financial risks, including risks associated
with the: . assimilation of new products, technologies, operations, sites and
personnel; . integration and retention of fundamental personnel and technical
expertise; . application for and achievement of regulatory approvals or other
clearances; . diversion of resources from our existing products, business and
technologies; . generation of sales; . implementation and maintenance of
uniform standards and effective controls and procedures; . exposure to cyber
security risks or compromise of acquired entities; . maintenance of
relationships with employees, customers and suppliers, and integration of new
management personnel; . issuance of initially dilutive equity securities; .
incurrence or assumption of debt and contingent liabilities; . increased
exposure to geopolitical risks; . amortization or impairment of acquired
intangible assets or potential businesses; and . exposure to liabilities of
and claims against acquired entities or personnel, including patent
litigation. Our failure to address the above risks successfully in the future
may prevent us from achieving the anticipated benefits from any acquisition in
a reasonable time frame, or at all. Global economic conditions could adversely
affect our business, results of operations and financial condition. Our
results of operations could be materially affected by adverse general
conditions in the global economy and financial markets, including inflation
and rising interest rates. Direct conflicts, such as the ongoing wars in
Ukraine and the Middle East, and an increasingly challenging economic
environment lead to uncertainty about the future. Trade restrictions or export
controls, as were seen with the Russia-Ukraine war, could disrupt our supply
chain and flow of products if they disturb the international flow of goods and
increase costs. Our results of operations could also be negatively impacted if
the U.S. federal government were to enact automatic spending cuts
(sequestration), which have occurred in the past. Such a decision could add
uncertainty to the timing and the availability of budget funds for investment
decisions by our customers- particularly researchers, universities, government
laboratories and private foundations whose funding is dependent upon grants
from government agencies, such as the U.S. National Institutes of Health (NIH)
and similar bodies. While there has been global economic recovery from the
COVID-19 pandemic, higher inflation continues, including on raw material
prices which also reflect higher energy costs. The overall increase in energy
costs and materials has had a significant adverse impact on our business.
Access to financing in the global financial markets has been adversely
affected for many businesses in light of the high-inflation environment. The
central banks in the U.S., the United Kingdom and the Euro Zone tightened
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policies materially beginning in 2022 by raising interest rates, and continued
headwinds and volatility are expected in 2024. This may impact our ability to
obtain new or refinance existing debt facilities at competitive rates.
Additionally, our customers may face internal financing pressures that
adversely impact spending decisions or the ability to purchase our products,
or that lead to a delay in collection of receivables and thus negatively
impact our cash flow. A severe or prolonged economic downturn could result in
a variety of risks to our business that would adversely impact our results of
operations, including the reduction or delay in planned improvements to
healthcare systems in various countries, the reduction of funding for life
sciences research, and intensified efforts by governments and healthcare
payors regarding cost-containment efforts. As is the case for many businesses,
we face the following risks in regard to financial markets: . severely limited
access to financing over an extended period of time, which may affect our
ability to fund our growth strategy and could result in delays to capital
expenditures, acquisitions or research and development projects; . failures of
currently solvent financial institutions, which may cause losses from our
short-term cash investments or our hedging transactions due to a counterparty's
inability to fulfil its payment obligations; . inability to refinance existing
debt at competitive rates, reasonable terms or sufficient amounts; and .
increased volatility or adverse movements in foreign currency exchange rates.
Our global operations may be affected by actions of governments, global or
regional economic or public health developments, weather or transportation
delays, epidemics or pandemics, natural disasters or other force majeure
events (collectively, unforeseen events) which may negatively impact our
suppliers, our customers or us. Our business involves operations around the
world. Our primary manufacturing facilities are located in Germany, the U.S.,
Spain and China. We have established sales subsidiaries in numerous countries,
and our products are sold through independent distributors serving more than
60 countries. Our global footprint exposes us to unforeseen events, such as
the COVID-19 pandemic, or other natural events. We have analyzed climate
change risk and its potential impact on our largest production and logistics
sites, as well as important sites of our key suppliers. No material risks were
identified that could potentially impact our business, operations, sales or
expenditures. However, our facilities may be harmed by unforeseen events. In
the event that we or our customers are affected by a disaster, we may
experience delays or reductions in sales or production. We may also face
significantly increased costs or be required to identify alternate suppliers
and/or rely on third-party manufacturers. To the extent that our suppliers are
impacted by a natural disaster or other disruption, we may experience periods
of reduced production. Any unexpected interruptions in our production
capabilities may lead to delayed or lost sales and adversely affect our
results of operations for a specific period. In addition, to the extent we
temporarily shut down any facility following such an unforeseen event, we may
experience disruptions in our ability to manufacture or ship products to
customers or otherwise operate our business. Many of our products are
manufactured in a single location, and we may experience significantly adverse
effects to the extent that these manufacturing operations are disrupted and
cannot be replaced elsewhere. While our global operations give us the ability
to ship some products from alternative sites, we may not be able to do so
because the facilities of our customers are shut or the local logistics
infrastructure is not functioning. As a result, our sales, profitability and
cash flows would suffer. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Damage to our property due to unforeseen events, and the resulting disruption
of our business, may be covered by insurance. However, this insurance may not
be sufficient to cover all of our potential losses, and the insurance coverage
may not continue to be available to us on acceptable terms, or at all. In
addition, we may incur incremental costs following an unforeseen event, which
will reduce profits and adversely affect our results of operations. Terrorist
attacks and international hostilities and instability in any region could
adversely affect our business. Terrorist attacks, the outbreak of war, or the
existence of international hostilities could damage the world economy,
adversely affect the global supply chain and materially impact the
availability of and prices for energy and other raw materials. In February
2022, the government of Russia invaded Ukraine. The ongoing war is so far
confined to Ukraine, but any expansion into other countries could materially
disrupt our operations in Europe and/or increase our operating costs. In
addition, Russia's prior annexation of Crimea, the annexation of various
regions of Ukraine and subsequent military interventions have led to sanctions
being levied by the European Union, the U.S. and other countries against
Russia. Additionally, in October 2023, Hamas launched a series of coordinated
attacks on Israeli targets, and Israel responded by formally declaring war on
Hamas. The armed conflict is ongoing and rapidly evolving as of the date of
this filing, and its length and outcome are highly unpredictable. These
conflicts and similar current and future conflicts could lead to significant
market and other disruptions, instability in financial markets, supply chain
interruptions, political and social instability and other material and adverse
effects on macroeconomic conditions, any of which could magnify the impact of
other risks described in this Annual Report. We depend on suppliers for
materials used to manufacture our products, and if shipments from these
suppliers are delayed or interrupted, we may be unable to manufacture our
products. We buy materials to create our products from a number of suppliers
and are not dependent on any one supplier or group of suppliers for our
business as a whole. However, key components of certain products, including
certain instrumentation and chemicals, are available only from a single
source. If supplies from these vendors are delayed or interrupted for any
reason, we may not be able to obtain these materials in a timely manner or in
sufficient quantity or quality to produce certain products, and this could
have an adverse impact on our results of operations. In 2022, the volatility
in product availability and pricing drastically increased compared to previous
years. In 2023, while availability continued to improve, raw material prices
increased, reflecting higher energy costs and inflation. Supply chain
constraints have required, and may continue to require, in certain instances,
alternative delivery arrangements and increased costs and could have a
material adverse effect on our business and operations. We rely heavily on air
cargo carriers and other overnight logistics services, and shipping delays or
interruptions could harm our business. Our customers typically keep only a
modest inventory of our consumables kits on hand, and consequently often
require rapid delivery of purchases. Additionally, some of our products
require complex supply chains, such as constant cold storage or shipment using
dry ice. As a result, we rely heavily on air cargo carriers and logistic
suppliers. If these services are suspended or delayed, and other delivery and
logistic suppliers cannot provide satisfactory services, customers may be
forced to suspend a significant amount of their work. The lack of adequate
delivery alternatives would have a serious adverse impact on our customer
relations and results of operations. Changes in tax laws or their application
or the termination or reduction of certain government tax incentives, could
adversely impact our overall effective tax rate, results of operations or
financial flexibility. Our effective tax rate reflects the benefit of some
income being partially exempt from income taxes due to various inter-company
operating and financing activities. The benefit also derives from our global
operations, where income or loss in some jurisdictions is taxed at rates
higher or lower than the statutory rate of 25.8% in the Netherlands. Changes
in tax laws, including changes resulting from the current work being led by
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and Development (OECD) Inclusive Framework focused on "Addressing the
Challenges of the Digitalization of the Economy", or their application with
respect to matters such as changes in tax rates, transfer pricing and income
allocation, utilization of tax loss carry-forwards, inter-company dividends,
controlled corporations, and limitations on the deductibility of interest and
foreign related-party expenses, and changes to tax credit mechanisms, could
increase our effective tax rate and adversely affect our results of operations
and limit our ability to repurchase our Common Shares without experiencing
adverse tax consequences. The breadth of the OECD project extends beyond pure
digital businesses and is likely to impact most large multinational businesses
by both redefining jurisdictional taxation rights and establishing a 15%
global minimum tax (referred to as Pillar Two). The Netherlands formally
enacted the Pillar Two legislation into domestic law and certain aspects of
Pillar Two are effective January 1, 2024, and other aspects effective January
1, 2025. Although global enactment has begun, the OECD and participating
countries continue to work on defining the underlying rules and administrative
procedures. Pillar Two is effective for us in 2024. The increased tax burden
as a result of changes in law could be material and may adversely affect our
results of operations, cash taxes and effective tax rate. Additionally,
depending on the timing of effective dates, changes in tax law may limit our
ability to accurately forecast the related tax impacts. If our tax positions
are challenged by taxing authorities or other governmental bodies, such as the
European Commission, we could incur additional tax liabilities, which could
also have an adverse effect on our results of operations, financial
flexibility or cash flow. We rely on secure communication and information
systems and are subject to privacy and data security laws which, in the event
of a disruption, breach, violation or failure, could adversely affect our
business. We rely heavily on communications and information systems to conduct
our business. In the ordinary course of business, we collect and store
sensitive data, including our own intellectual property and other proprietary
business information and that of our customers, suppliers and business
partners, as well as personally identifiable information (PII) of our
customers and employees, in our data centers and on our networks or in the
cloud. Our operations rely on the secure processing, storage and transmission
of confidential and other information on both our own and cloud-based computer
systems and networks. We have made significant investments to ensure our
employees are aware of cyber security risks facing our company and how to
prevent data breaches. We have modernized our cyber security tools, and are
continually updating our cyber security processes, in an attempt to keep pace
with evolving cyber security risks. In spite of our efforts, we are unable to
completely eliminate these risks, and occasionally experience minor cyber
security incidents. External phishing emails (occurring outside of our
computer services) are a growing threat for our customers. These emails could
lead to the disclosing of intellectual property or personally identifiable
information, which could lead to financial harm or reputational damage. While
our cyber security team works diligently with our employees around the world,
as well as with our customers, to mitigate these threats by helping to
identify and analyze phishing emails, we cannot guarantee that sensitive data
will not be lost or stolen. A breach in cyber security due to unauthorized
access to our computer systems or misuse could include the misappropriation of
assets or sensitive information, the corruption of data, or other operational
disruption. Failures in our computer systems and networks could be caused by
internal or external events, such as incursions by intruders or hackers,
computer viruses, failures in hardware or software, or cyber-terrorists.
Furthermore, there is an increased risk of cyber security attacks by state
actors due to the Russian war with Ukraine. Russian ransomware gangs have
threatened to increase hacking activity against critical infrastructure of any
nation or organization that retaliates against Russia. Any such increase in
such attacks on our third-party providers or other systems could adversely
affect our network systems or other operations. If we experience a breach or
failure of our systems, we could experience potentially significant
operational delays due to the disruption of systems, loss due to theft or
misappropriation of assets or data, or negative impacts from the loss of
confidential data or intellectual property. We may face significant liability
in the event personal information that we maintain is lost or otherwise
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misuse or other wrongful use, access or disclosure. Furthermore, we could
experience significant negative publicity that could result in reputation or
brand damage with customers or partners. Additionally, we are subject to
privacy and data security laws across multiple jurisdictions. These include
laws relating to the storage of health information that are complex,
overlapping, sometimes contradictory and rapidly evolving. In the U.S.,
individual states regulate requirements and have authority over privacy and
personal data protection. For example, the California Consumer Privacy Act of
2018 (CCPA), which took effect on January 1, 2020, imposes expansive new
requirements and protections upon the processing of personal data, aimed at
giving California consumers more visibility into and control over their
personal information. The U.S. states of Virginia and Colorado also enacted
comprehensive data privacy laws similar to the CCPA, both of which became
effective in 2023. In addition, laws in all 50 U.S. states require businesses
to provide notice to consumers whose personal information has been disclosed
as a result of a data breach. State laws are changing rapidly and there is
discussion in the U.S. Congress of a new comprehensive federal data privacy
law to which we would become subject if it is enacted. There are also European
privacy laws, such as the General Data Protection Regulation (GDPR) of the
European Union, that impose restrictions on the transfer, access, use and
disclosure of health and other personal information. As our activities
continue to evolve and expand, we may be subject to additional laws that
impose further restrictions on the transfer, access, use and disclosure of
health and other personal information, which may impact our business either
directly or indirectly. A failure to comply with applicable privacy or
security laws or significant changes in these laws could subject us to costly
regulatory action or lawsuits, and could adversely impact our reputation,
business and future business plans. We may encounter delays in receipt, or
limits in the amount, of reimbursement approvals and public health funding,
which may negatively impact our ability to grow revenues in the healthcare
market or our profitability. Changes in the market availability or
reimbursement of our diagnostic testing products by insurance providers and
health maintenance organizations could have a significant adverse impact on
our results of operations. Third-party payors are often reluctant to reimburse
healthcare providers for the use of medical tests that involve new
technologies or provide novel diagnostic information. In addition, third-party
payors are increasingly limiting reimbursement coverage for medical diagnostic
products and, in many instances, are even exerting pressure on suppliers to
reduce their prices. Since each third-party payor often makes reimbursement
decisions on an individual patient basis, obtaining such approvals is a
time-consuming and costly process that requires us to provide scientific and
clinical data supporting the clinical benefits of each of our products. As a
result, there can be no assurance that reimbursement approvals will be
obtained, and the process can delay the broad market introduction of new
products. If third-party reimbursement is not consistent or financially
adequate to cover the cost of our products, this could limit our ability to
sell our products or cause us to reduce prices, which would adversely affect
our results of operations. Further, the ability of many of our customers to
successfully market their products depends in part on the extent to which
reimbursement for the costs of these products is available from governmental
health administrations, private health insurers and other organizations.
Governmental and other third-party payors are increasingly seeking to contain
healthcare costs and to reduce the price of medical products and services.
With evolving political realities in the United States, certain sections of
the Patient Protection and Affordable Care Act of 2010 (ACA) have not been
fully implemented and the direction of healthcare policy is unpredictable.
Uncertainty around the future of the ACA, and in particular the impact on
reimbursement levels, may lead to uncertainty or delay in the purchasing
decisions of our customers, which may in turn negatively impact our product
sales. In accordance with the Protecting Access to Medicare Act of 2014
(PAMA), the Centers for Medicare & Medicaid Services calculate QIAGEN N.V. |
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Medicare reimbursement rates for certain clinical diagnostic tests using
weighted median private payor rates, which are based on rate information
reported by applicable laboratories. This new rate methodology means the lower
reimbursement rates previously experienced in the field of molecular pathology
testing now extend to additional diagnostic testing codes on the Clinical
Laboratory Fee Schedule (CLFS). If there are not adequate reimbursement
levels, our business and results of operations could be adversely affected.
Reduction in R&D budgets and government funding may result in reduced sales.
Our customers include researchers at pharmaceutical and biotechnology
companies, academic institutions, and government and private laboratories.
Fluctuations in the research and development budgets of these organizations
could have a significant adverse effect on demand for our products. Research
and development budgets are affected by changes in available resources, the
mergers of pharmaceutical and biotechnology companies, changes in spending
priorities and institutional budgetary policies. Our results of operations
could be adversely affected by any significant decrease in expenditures for
life sciences research and development by pharmaceutical and biotechnology
companies, academic institutions, and government and private laboratories. In
addition, short-term changes in administrative, regulatory or purchasing-related
procedures can create uncertainties or other impediments that can have an
adverse impact on our results of operations. In recent years, the
pharmaceutical and biotechnology industries have undergone substantial
restructuring and consolidation. Additional mergers or consolidation within
the pharmaceutical and biotechnology industries could cause us to lose
existing customers and potential future customers, which could have a material
adverse impact on our results of operations. We sell our products to
universities, government laboratories and private foundations, whose funding
is dependent on grants from government agencies, such as the NIH (National
Institutes of Health) in the U.S. which accounts for the majority of Life
Science funding in the country. Although the level of research funding has
been increasing in recent years, we cannot ensure that this trend will
continue given federal and state budget constraints. Government funding of
research and development is subject to the political process, which is
inherently unpredictable. Future sales may be adversely affected if our
customers delay purchases as a result of uncertainties regarding the approval
of government budget proposals. Also, government proposals to reduce or
eliminate budgetary deficits have sometimes included reduced allocations to
the NIH and government agencies in other countries that fund life sciences
research and development activities. A reduction in government funding for the
NIH or government research agencies in other countries could have a serious
adverse impact on our results of operations. Competition could reduce our
sales. The markets for most of our products are very competitive. Competitors
may have significant advantages in financial, operational, sales and marketing
resources as well as experience in research and development. These competitors
may have developed, or could develop in the future, new technologies that
compete with our products or even render our products obsolete. Some
competitors may obtain regulatory approval from the U.S. Food and Drug
Administration (FDA) or similar non-U.S. authorities. Our competitors'
development of alternative products offering superior technology, greater
cost- effectiveness and/or receiving regulatory approval could have a material
adverse effect on our sales and results of operations. The growth of our
business depends in part on the continued conversion of users from competitive
products to our sample and assay technologies and other solutions. Lack of
conversion could have a material adverse effect on our sales and results of
operations. It can be difficult for users of our products to switch from their
current supplier of a particular product, primarily due to the time and
expense required to properly integrate new products into their operations. As
a result, if we are unable to be the first to develop and supply new products,
our competitive position may suffer, resulting in a material adverse effect on
our sales and results of operations. QIAGEN N.V. | IFRS Annual Report 2023
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For our commercial clinical assays, we often compete with solutions developed
by our laboratory customers, and driving conversion from such laboratory-
developed tests (LDTs) to commercial diagnostics assays can be challenging.
The time and expense needed to obtain regulatory approval and respond to
changes in regulatory requirements could adversely affect our ability to
commercially distribute our products and generate sales. We and our customers
operate in a highly regulated environment characterized by frequent changes in
the governing regulatory framework. Genetic research activities and products
commonly referred to as "genetically engineered" (such as certain food and
therapeutic products) are subject to extensive governmental regulation in most
developed countries, especially in the major markets for pharmaceutical and
diagnostic products such as the European Union, the U.S., China and Japan. In
recent years, several highly publicized scientific events (notably in genomic
research, gene editing and cloning) have prompted intense public debate on the
ethical, philosophical and religious implications of an unlimited expansion in
genetic research and the use of products emerging from this research. As a
result of this debate, some key countries may increase or establish regulatory
barriers, which could adversely affect demand for our products and prevent us
from fulfilling our growth expectations. Furthermore, there can be no
assurance that any future changes in applicable regulations will not require
further expenditures or an alteration, suspension or liquidation of our
operations in certain areas, or even in their entirety. Changes in the
existing regulations or adoption of new requirements or policies could
adversely affect our ability to sell our approved or cleared products, or to
seek approvals for new products in other countries around the world. Sales of
certain products now in development may be dependent upon us successfully
conducting preclinical studies, clinical trials and other tasks required to
gain regulatory approvals and meet other requirements from the In Vitro
Diagnostic Device Regulation in the European Union, the FDA in the U.S. and
regulatory agencies in other countries. If we are not able to meet the
applicable requirements, we will not be able to commercialize our products and
tests, which will have a material adverse effect on our business. Several of
our key products and programs are medical devices that are subject to
extensive regulation by the FDA under the U.S. Food, Drug and Cosmetic Act. We
plan to apply for FDA clearance or approval of additional products in the
future. Regulatory agencies in other countries also have medical device and in
vitro diagnostic medical devices (IVD) approval requirements that are becoming
more extensive. These regulations govern most commercial activities associated
with medical devices, including indications for the use of these products as
well as other aspects that include product development, testing, manufacturing,
labeling, storage, record-keeping, advertising and promotion. Compliance with
these regulations is expensive and time-consuming. Our cleared or approved
devices, including diagnostic tests and related equipment, are subject to
numerous post-approval requirements. We are subject to inspection and
marketing surveillance by the FDA to determine our compliance with regulatory
requirements. If the FDA determines that we have failed to comply, it can
institute a wide variety of enforcement actions, ranging from warning letters
to more severe sanctions such as fines, injunctions and civil penalties,
recalls or seizures of our products, operating restrictions, partial
suspension or total shutdown of production, denial of our requests for 510(k)
clearance or pre-market approval of product candidates, withdrawal of 510(k)
clearance or pre-market approval already granted and civil or criminal
prosecution. Any enforcement action by the FDA may affect our ability to
commercially distribute these products in the U.S. Some of our products are
sold for research purposes in the U.S. We do not promote these products for
clinical diagnostic use, and they are labeled "For Research Use Only" (RUO) or
"For Molecular Biology Applications." If the FDA were to disagree with our
designation of a product as having RUO status, we could be forced to stop
selling it until appropriate regulatory clearance or approval has been
obtained. We are subject to risks associated with patent litigation. The
biotechnology industry has been characterized by extensive litigation
regarding patents and other intellectual property rights, particularly since
industry competitors gravitate around common technology platforms. We are
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claiming technologies for sample and assay technologies that are closely
related to those we use. From time to time, we receive inquiries requesting
confirmation that we do not infringe patents of third parties. We endeavor to
follow developments in this field, and we do not believe that our technologies
or products infringe any proprietary rights of third parties. However, there
can be no assurance that third parties will not challenge our activities or,
if so challenged, that we will prevail. In addition, the patent and
proprietary rights of others could require that we alter our products or
processes, pay licensing fees or cease certain activities, and there can be no
assurance that we will be able to license any technologies that we may require
on acceptable terms. In addition, litigation, including proceedings that may
be declared by the U.S. Patent and Trademark Office or the International Trade
Commission, may be necessary to respond to any assertions of infringement,
enforce our patent rights and/or determine the scope and validity of our
proprietary rights or those of third parties. Litigation, or threatened
litigation, could involve substantial cost, and there can be no assurance that
we would prevail in any proceedings. We rely on collaborative commercial
relationships to develop and/or market some of our products. Our long-term
business strategy involves entering into strategic alliances as well as
marketing and distribution arrangements with academic, corporate and other
partners relating to the development, commercialization, marketing and
distribution of certain of our existing and potential products. We may be
unable to continue to negotiate these collaborative arrangements on acceptable
terms, and these relationships also may not be scientifically or commercially
successful. In addition, we may be unable to maintain these relationships, and
our collaborative partners may pursue or develop competing products or
technologies, either on their own or in collaboration with others. Our
Precision Diagnostics business includes projects with pharmaceutical and
biotechnology companies to co-develop companion diagnostics paired with drugs
that those companies either market currently or are developing for future use.
The success of these co-development programs, including regulatory approvals
for the companion diagnostics, depends upon the continued commitment of our
partners to the development of their drugs, the outcome of clinical trials for
the drugs and diagnostics, and regulatory approvals of the tests and drugs. In
addition, the future level of sales for companion diagnostics depends to a
high degree on the commercial success of the related medicines for which the
tests have been designed. More companion diagnostics would be sold in
combination with a widely prescribed drug than one with limited use. The
successful marketing of QIAGEN products, in some cases, depends on commercial
relationships such as joint ventures or distributorships, particularly in
emerging markets where we partner with local companies to augment our
less-established commercial relationships and infrastructure. The continued
commitment of our partners to these ventures, as well as the management of the
commercial efforts, could influence QIAGEN's sales and profitability in these
markets. We have made investments in and are expanding our business into
growth markets, which exposes us to risks. Our top six emerging growth markets
are Brazil, China, India, South Korea, Mexico, and Turkiye, which together
accounted in 2023 for 12% of total sales. Russia was removed as a top growth
market in 2022 following the invasion of Ukraine and the subsequent decision
to suspend business operations in Russia and Belarus, which made up less than
1% of total sales. We expect to continue to focus on expanding our business in
these or other fast-growing markets, including those in the Middle East and
Asia. In addition to the currency and operating risks described above, our
international operations are subject to a variety of risks arising from the
economy, political outlook, language and cultural barriers in countries where
we have operations or do business. In many of these emerging markets, we may
face several risks that are more significant than in other countries where we
have a history of doing business. These risks include economies that may be
dependent on only a few products and are therefore subject to significant
fluctuations, weak legal systems that may affect our ability to enforce
contractual rights, exchange controls, unstable governments, and privatization
or other government actions affecting the flow of goods and currency. In
conducting our business, we move products from one country to another and may
provide services in one country from a subsidiary located in another country.
Accordingly, we are vulnerable to abrupt changes QIAGEN N.V. | IFRS Annual
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in customs and tax regimes that could have significant negative impacts on our
results of operations. Some of our customers are requiring us to change our
sales arrangements to lower their costs, and this may limit our pricing
flexibility and harm our business. Some of our customers have developed
purchasing initiatives to reduce the number of vendors from which they
purchase products in order to lower their supply costs. In some cases, these
customers have established agreements with large distributors, which include
discounts and direct involvement in the distributor's purchasing process.
These activities may force us to supply large distributors with our products
at discounts in order to continue providing products to some customers. For
similar reasons, many larger customers, including the U.S. federal government,
have requested, and may request in the future, special pricing arrangements,
which can include blanket purchase agreements. These agreements may limit our
pricing flexibility, which could harm our business and affect our results of
operations. For a limited number of customers, and at the request of
customers, we have conducted sales transactions through distribution and other
value-added partners. If sales grow through these intermediaries, this could
adversely impact our results of operations, in particular our gross profit.
Exchange rate fluctuations may adversely affect our business and operating
results. Given that we currently market our products throughout the world, a
significant portion of our business is conducted in currencies other than the
U.S. dollar, our reporting currency. As a result, fluctuations in value
relative to the U.S. dollar of the currencies in which we conduct our business
have caused and will continue to cause foreign currency transaction gains and
losses. Foreign currency transaction gains and losses arising from normal
business operations are charged against earnings in the period when incurred.
Due to the number of currencies involved, the variability of currency
exposures and the potential volatility of currency exchange rates, we cannot
predict the effects of future exchange rate fluctuations. As of April 1, 2022,
the results of operations from our subsidiary in Turkiye have been reported
under highly inflationary accounting as the prior three-years cumulative
inflation rate exceeded 100%. While we may engage in foreign exchange hedging
transactions to manage our foreign currency exposure, there can be no
assurance that our hedging strategy will adequately protect our operating
results from the effects of future exchange rate fluctuations. Our success
depends on the continued employment of qualified personnel, any of whom we may
lose at any time. Although we have not experienced any difficulties attracting
or retaining management and scientific staff, our ability to recruit and
retain qualified, skilled employees will continue to be critical to our
success. Given the intense competition for experienced scientists and managers
among pharmaceutical and biotechnology companies, as well as academic and
other research institutions, there can be no assurance that we will be able to
attract and retain employees critical to our success on acceptable terms.
Initiatives to expand QIAGEN will also require additional employees, including
management with expertise in areas such as research and development,
manufacturing, digitization, sales and marketing, and the development of
existing managers to lead a growing organization. The failure to recruit and
retain qualified employees, or develop existing employees, could have a
material adverse impact on our results of operations. Our ability to
accurately forecast our results during each quarter may be negatively impacted
by the fact that at times a high percentage of our sales may be recorded in
the final weeks or days of the quarter. In the markets we serve, a high
percentage of purchase orders can be received in the final few weeks or days
of each quarter. Although this varies from quarter to quarter, many customers
make a large portion of their purchase decisions late in each quarter, in
particular because they receive new information during this period on their
budgets and requirements. Additionally, volatility in the timing of revenue
from companion diagnostic partnerships can be difficult to predict. As a
result, even late in each quarter, we cannot predict with certainty whether
our sales forecasts for the quarter will be achieved. QIAGEN N.V. | IFRS
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Historically, we have been able to rely on the overall pattern of customer
purchase orders during prior periods to project with reasonable accuracy our
anticipated sales for the current or coming quarters. However, if customer
purchasing trends during a quarter vary from historical patterns, as may occur
with changes in market and economic conditions, our quarterly financial
results could deviate significantly from our projections. As a result, our
sales forecasts for any given quarter may prove not to be accurate. We also
may not have sufficient, timely information to confirm or revise our sales
projections for a specific quarter. If we fail to achieve our forecasted sales
for a particular quarter, the value of our Common Shares could be
significantly affected. We have a significant amount of debt that may
adversely affect our financial condition and flexibility. We have a
significant amount of debt, debt service obligations and restrictive covenants
imposed by our lenders. A high level of indebtedness increases the risk that
we may default on our debt obligations, and restrictive covenants may prevent
us from borrowing additional funds. There is no assurance that we will be able
to generate sufficient cash flow to pay the interest on our debt and comply
with our debt covenants, or that future working capital, borrowings or equity
financing will be available to repay or refinance our debt. If we are unable
to generate sufficient cash flow to pay the interest on our debt and comply
with our debt covenants, we may have to delay or curtail our research and
development programs. The level of our indebtedness could, among other things:
. make it difficult for us to make required payments on our debt; . make it
difficult in the future for us to obtain financing necessary for working
capital, capital expenditures, debt service requirements or other purposes; .
limit our flexibility in planning for, or reacting to, changes in our business
and the industry in which we compete; and . make us more vulnerable in the
event of a downturn in our business. Our business may require substantial
additional capital, which we may not be able to obtain on terms acceptable to
us, if at all. Our future capital requirements and level of expenses will
depend on numerous factors, including the costs associated with: . marketing,
sales and customer support; . research and development; . expansion of our
facilities; . possible future acquisitions of technologies, products or
businesses; . demand for our products and services; . repayment or refinancing
of debt; and . payments in connection with our hedging activities and/or
taxes. We currently anticipate that our short-term capital requirements will
be satisfied by cash flow from our operations and/or cash on hand. As of
December 31, 2023, we had outstanding long-term debt of $1.5 billion, of which
$588.0 million was current. We may choose to refinance these liabilities. If
at some point in time our existing resources should be insufficient to fund
our activities, we may need to raise funds through public or private debt or
equity financings. The funds for the refinancing of existing liabilities or
for the ongoing funding of our business may not be available or, if available,
not on terms acceptable to us. If adequate funds are not available, we may be
required to reduce or delay expenditures for research and development,
production, marketing, capital expenditures and/or acquisitions, which could
have a material adverse effect on our business and results of operations. To
the extent that additional capital is raised through the sale of equity or
convertible securities, the issuance of any securities could result in
dilution to our shareholders. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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The accounting for the cash convertible notes we have issued will result in
recognition of interest expense significantly greater than the stated interest
rate of the notes and may result in volatility to our Consolidated Statements
of Income. We will settle any conversions of the Cash Convertible Notes
described under the heading "Other Factors Affecting Liquidity and Capital
Resources" elsewhere in this Annual Report, entirely in cash. Accordingly, the
conversion option that is part of the Cash Convertible Notes is accounted for
as a derivative pursuant to accounting standards relating to derivative
instruments and hedging activities. Refer to Note 14 "Derivatives and Hedging"
and Note 16 "Debt" of the Notes to Consolidated Financial Statements. In
general, this resulted in an initial valuation of the conversion option
separate from the debt component of the Cash Convertible Notes, resulting in
an original issue discount. The original issue discount will be accreted to
interest expense over the term of the Cash Convertible Notes, which will
result in an effective interest rate reported in our financial statements
significantly in excess of the stated coupon rates of the Cash Convertible
Notes. This accounting treatment will reduce our earnings. For each financial
statement period after the issuance of the Cash Convertible Notes, a gain (or
loss) will be reported in our financial statements to the extent the valuation
of the conversion option changes from the previous period. The Call Options
issued in connection with the Cash Convertible Notes will also be accounted
for as derivative instruments, substantially offsetting the gain (or loss)
associated with changes to the valuation of the conversion option. This may
result in increased volatility to our results of operations. The cash
convertible note hedge and warrant transactions we entered into in connection
with the issuance of our Cash Convertible Notes may not provide the benefits
we anticipate, and may have a dilutive effect on our common stock.
Concurrently with the issuance of the Cash Convertible Notes, we entered into
Call Options and issued Warrants. We entered into the Call Options with the
expectation that they would offset potential cash payments by us in excess of
the principal amount of the Cash Convertible Notes upon conversion of the Cash
Convertible Notes. In the event that the hedge counter-parties fail to deliver
potential cash payments to us, as required under the Call Options, we would
not receive the benefit of such transaction. Separately, we also issued
Warrants. The Warrants could separately have a dilutive effect to the extent
that the market price per share of our common stock, as measured under the
terms of the Warrants, exceeds the strike price of the Warrants. An impairment
of goodwill and intangible assets could reduce our earnings. At December 31,
2023, our consolidated balance sheet reflected $2.5 billion of goodwill and
$526.8 million of intangible assets. Goodwill is recorded when the purchase
price of a business exceeds the fair value of the tangible and separately
measurable intangible net assets. U.S. generally accepted accounting
principles (GAAP) require us to test goodwill for impairment on an annual
basis or when events or circumstances occur indicating that goodwill might be
impaired. Long-lived assets, such as intangible assets with finite useful
lives, are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. The impairment
review often cannot be done at the level of the individual asset and it must
instead be applied to a group of assets. For the purpose of our annual
goodwill impairment testing based on the current circumstances of how we
manage our business, this group of assets is the Company as a whole. If we
determine that any of our goodwill or intangible assets were impaired, we will
be required to take an immediate charge to earnings and our results of
operations could be adversely affected. Our strategic equity investments may
result in losses. We have made, and may continue to make, strategic
investments in businesses as opportunities arise. We periodically review the
carrying value of these investments for impairment, considering factors that
include the most recent stock transactions, book values from the most recent
financial statements, and forecasts and expectations of the investee. The
results of these valuations may fluctuate due to market conditions and other
conditions over which we have no control. QIAGEN N.V. | IFRS Annual Report
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Estimating the fair value of non-marketable equity investments in life science
companies is inherently subjective. If actual events differ from our
assumptions and unfavorable fluctuations in the valuations of the investments
are indicated, we could be required to write down the investment. This could
result in future charges on our earnings that could materially have an adverse
effect on our results of operations. It is uncertain whether or not we will
realize any long-term benefits from these strategic investments. Doing
business internationally creates certain risks. Our business involves
operations in several countries around the world. Our consumables
manufacturing facilities are located in Germany, China, Spain and the U.S. We
source raw materials and subcomponents to manufacture our products from
different countries. We have established sales subsidiaries in numerous
countries. In addition, our products are sold through independent distributors
serving more than 60 countries. Conducting and launching operations on an
international scale requires close coordination of activities across multiple
jurisdictions and time zones and consumes significant management resources. We
have invested heavily in computerized information systems in order to manage
more efficiently the widely dispersed components of our operations. Worldwide,
we currently use SAP R/3 software to integrate most of our operating
subsidiaries and are currently undergoing a multi-year implementation of
S/4HANA. If we fail to coordinate and manage these activities effectively, or
if we face a loss of information or the non-availability of any system, our
business and results of operations will be adversely affected. Our operations
are subject to other risks inherent in international business activities, such
as the general economic and public health conditions in the countries in which
we operate, trade restrictions and changes in tariffs, longer accounts
receivable payment cycles in certain countries, overlap of different tax
structures, unexpected changes in regulatory requirements, and compliance with
a variety of foreign laws and regulations. Other risks associated with
international operations include import and export licensing requirements,
climate change legislation, exchange controls and changes in freight rates, as
may occur as a result of rising energy costs. Further, any misuse or other
wrongful use of our products could expose us to negative publicity resulting
in reputation or brand damage with customers or partners. As a result of these
conditions, an inability to successfully manage our international operations
could have a material adverse impact on our business and results of
operations. In any of the markets in which we do business, increasing
attention to environmental, social and governance (ESG) matters may result in
new or expanded legal or regulatory requirements or expectations specific to
ESG matters. A failure to meet investor or other stakeholder expectations may
result in adverse reputation impacts, loss of business or a negative impact to
attract and retain talent. Further, working to adhere to any new or expanded
legal or regulatory requirements may require additional investments which
could negatively impact our profitability. Unethical behavior and
non-compliance with laws by our sales representatives, other employees,
consultants, commercial partners or distributors or employees could seriously
harm our business. Our operations include doing business in countries with a
history of corruption and involve transactions with foreign governments. These
factors may increase the risks associated with our international activities.
We are subject to the U.S. Foreign Corrupt Practices Act (FCPA), the U.K.
Bribery Act and other laws that prohibit improper payments or offers of
payments to foreign governments and their officials and political parties by
business entities for the purpose of obtaining or retaining business. We have
operations, agreements with third parties and sales in countries known to
experience corruption. Further international expansion may involve increased
exposure to these types of practices. Our activities in these countries and
others create risks of unauthorized payments or offers of payments,
non-compliance with laws, or other unethical behavior by any of our employees,
consultants, sales agents or distributors, that could be in violation of
various laws, including the FCPA, even though these parties are not always
subject to our control. Our policy is to implement safeguards to discourage
these or other unethical practices by our employees and distributors,
including online and in-person employee trainings, periodic internal audits,
and standard reviews of our distributors. However, our existing safeguards and
any future improvements QIAGEN N.V. | IFRS Annual Report 2023 Overview
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may not prove to be effective, and our employees, consultants, sales agents or
distributors may engage in conduct for which we might be held responsible.
Violations of the FCPA and other laws may result in criminal or civil
sanctions, which could be severe, and we may be subject to other liabilities,
which could negatively affect our business, results of operations and
financial condition. Real or perceived defects in or misuse of our products
could adversely affect our results of operations, growth prospects and
reputation. We currently market our products in over 130 countries either
directly or indirectly through commercial partners and distributors. Due to
the size and breadth of our operations, we may not always be able to track the
use of our products by the end users. If our products are misused or are
perceived to be misused, this could adversely affect our reputation and our
customers' willingness to buy from us, and adversely affect market acceptance
or perception of our products. Many of our customers - especially those in law
enforcement and government who use our products for forensic testing, human
identification, food testing or other purposes - use our products in
applications that are of public interest or critical to their businesses or
missions. As a result, they may have a lower risk tolerance to defects in our
products than to defects in other less critical products. A defect in or
misuse of any of our products by our law enforcement customers could lead to
interference with the administration of justice, such as damage to forensic
evidence. Any defects or misuse, real or perceived, could cause us to lose
sales opportunities, increase our service costs, incur replacement costs,
cause reputational damage, lose customers or subject us to liability for
damages and divert our resources from other tasks. Any one of these factors
could materially and adversely affect our business and results of operations.
In addition, our products could be perceived as ineffective for reasons
outside of our control. Additionally, if any of our customers, government or
otherwise, use or are perceived to use our products in a manner that is
unethical, unlawful or inconsistent with our values, this may damage our
reputation and results of operations. We strive to ensure that our products
are used only in ethical and lawful ways, but we cannot provide any assurance
that we will not be subject to claims from third parties alleging that our
products were misused. Any allegations of misuse by our customers or third
parties may damage our reputation, even if we took no part in the misuse or
take immediate action to sever ties with such customers. We believe that our
brand and reputation are critical to driving our business. Building our brand
will depend largely on our ability to continue to provide top- tier service,
including high quality products at appropriate price points, which we may not
do successfully. Negative reviews or publicity about our products or business,
especially on media outlets, could harm our reputation and diminish our
ability to make additional sales, which would adversely affect our business,
financial condition, and results of operations. We depend on patents and
proprietary rights that may fail to protect our business. Our success depends
to a large extent on our ability to develop proprietary products and
technologies and to establish and protect our patent and trademark rights in
these products and technologies. As of December 31, 2023, we owned 303 issued
patents in the United States, 251 issued patents in Germany and 1,716 issued
patents in other major industrialized countries. In addition, as of December
31, 2023, we had 360 pending patent applications, and we intend to file
applications for additional patents as our products and technologies are
developed. The patent positions of technology-based companies involve complex
legal and factual questions and may be uncertain, and the laws governing the
scope of patent coverage and the periods of enforceability of patent
protection are subject to change. In addition, patent applications in the
United States are maintained in secrecy until patents issue, and publication
of discoveries in the scientific or patent literature tends to lag behind
actual discoveries by several months. Therefore, no assurance can be given
that patents will issue from any patent applications that we own or license,
or if patents do issue, that the claims allowed will be sufficiently broad to
protect our technology. In addition, no assurance can be given that any issued
patents that we own or license will not be challenged, invalidated or
circumvented, or that the rights granted thereunder will provide us
competitive QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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advantages. Further, as issued patents expire, we may lose some competitive
advantage as others develop competing products and as a result, we may lose
revenue. Some of our products incorporate patents and technologies that are
licensed from third parties and for certain products, these in-licensed
patents together with other patents provide us with a competitive advantage.
These licenses impose various commercialization, sub-licensing and other
obligations on us. Our failure to comply with these requirements could result
in the conversion of the applicable license from being exclusive to
non-exclusive or, in some cases, termination of the license, and as a result,
we may lose some competitive advantage and experience a loss of revenue. We
also rely on trade secrets and proprietary know-how, which we seek to protect
through confidentiality agreements with our employees and consultants. There
can be no assurance that any confidentiality agreements that we have with our
employees, consultants, outside scientific collaborators and sponsored
researchers and other advisors will provide meaningful protection for our
trade secrets or adequate remedies in the event of unauthorized use or
disclosure of such information. There can also be no assurance that our trade
secrets will not otherwise become known or be independently developed by
competitors. We currently engage in, and may continue to engage in,
collaborations with academic researchers and institutions. There can be no
assurance that under the terms of such collaborations, third parties will not
acquire rights in certain inventions developed during the course of these
collaborations. Our business exposes us to potential product liability. The
marketing and sale of our products and services for certain applications
entail a potential risk of product liability. Although we are not currently
subject to any material product liability claims, product liability claims may
be brought against us in the future. Further, there can be no assurance that
our products will not be included in unethical, illegal or inappropriate
research or applications, which may in turn put us at risk of litigation. We
carry product liability insurance coverage, which is limited in scope and
amount. There can be no assurance that we will be able to maintain this
insurance at a reasonable cost and on reasonable terms, or that this insurance
will be adequate to protect us against any or all potential claims or losses.
We are subject to various laws and regulations generally applicable to
businesses in the different jurisdictions in which we operate, including laws
and regulations applicable to the handling and disposal of hazardous
substances. The risk of accidental contamination or injury from these
materials cannot be completely eliminated. In the event of such an accident,
we could be held liable for any damages that result, and any such liability
could have a material adverse impact on us. Our operating results may vary
significantly from period to period and this may affect the market price of
our Common Shares. Our operating results may vary significantly from quarter
to quarter, and also year to year, since they are dependent upon a broad range
of factors that include demand for our products, the level and timing of
customer research budgets and commercialization efforts, the timing of
government funding budgets of our customers, the timing of our research and
development activities and related regulatory approvals, the impact of sales
and marketing expenses, restructuring activities, introduction of new products
by us or our competitors, competitive market conditions, exchange rate
fluctuations and general economic conditions. Our expense levels are based in
part on our expectations as to future sales trends. As a result, sales and
earnings may vary significantly from quarter to quarter or from year to year,
and actual sales and earnings results in any one period will not necessarily
be indicative of results to be anticipated in subsequent periods. Our results
may also fail to meet or exceed the expectations of securities analysts or
investors, which could cause a decline in the market price of our Common
Shares. Our holding company structure makes us dependent on the operations of
our subsidiaries. QIAGEN N.V. is incorporated under Dutch law as a public
limited liability company (naamloze vennootschap), and is organized as a
holding company. Currently, the material assets are the outstanding shares of
the QIAGEN subsidiaries, intercompany receivables and other financial assets
such as cash, QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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short-term investments and derivative instruments. As a result, QIAGEN N.V. is
dependent upon payments, dividends and distributions from the subsidiaries for
funds to pay operating and other expenses as well as to pay future cash
dividends or distributions, if any, to holders of our Common Shares. Dividends
or distributions by subsidiaries in a currency other than the U.S. dollar may
result in a loss upon a subsequent conversion into U.S. dollars. Our Common
Shares may have a volatile public trading price. The market price of our
Common Shares since our initial public offering in September 1996 has
increased significantly and been highly volatile. Since January 10, 2018, our
shares have been listed on the New York Stock Exchange (NYSE). Before that,
our shares were listed on the NASDAQ through January 9, 2018. In the last two
years, the price of our Common Shares has ranged from a high of $55.12 to a
low of $34.74. On the Frankfurt Stock Exchange our Common Shares have ranged
from a high of 49.37 to a low of 32.74 during the last two years. In addition
to overall stock market fluctuations, factors that may have a significant
impact on the price of our Common Shares include: . announcements of
technological innovations or the introduction of new products by us or our
competitors; . developments in our relationships with collaborative partners;
. quarterly variations in our operating results or those of our peer
companies; . changes in government regulations, tax laws or patent laws; .
developments in patent or other intellectual property rights; . developments
in government spending budgets for life sciences-related research; . general
market conditions relating to the diagnostics, applied testing, pharmaceutical
and biotechnology industries; and . impact from foreign exchange rates. The
stock market has from time to time experienced extreme price and trading
volume fluctuations that have particularly affected the market for technology-
based companies. These fluctuations have not necessarily been related to the
operating performance of these companies. These broad market fluctuations may
adversely affect the market price of our Common Shares. Holders of our Common
Shares should not expect to receive dividend income. QIAGEN has not paid an
annual dividend since its inception, and does not intend to implement one at
this time. However, in January 2017 and January 2024 we completed synthetic
share repurchases that combined direct capital repayments with reverse stock
splits. Although we do not anticipate paying any cash dividends on a regular
basis, the distribution of cash through another synthetic share repurchase in
a currency other than the U.S. dollar will be subject to the risk of foreign
currency transaction losses. Investors should not invest in our Common Shares
if they are seeking dividend income; the only return that may be realized
through investing in our Common Shares would be through an appreciation in the
share price. Future sales and issuances of our Common Shares could adversely
affect our stock price. Any future sale or issuance of a substantial number of
our Common Shares in the public market, or any perception that a sale may
occur, could adversely affect the market price of our Common Shares. Under
Dutch law, a company can issue shares up to its authorized share capital
provided for in its Articles of Association. Pursuant to our Articles of
Association, our authorized share capital amounts to EUR 9.0 million, which is
divided into 410.0 million common shares, 40.0 million financing preference
shares and 450.0 million preference shares, with all shares having a EUR 0.01
par value. As of December 31, 2023, a total of approximately 228.2 million
Common Shares were outstanding along with approximately 20.9 million Common
Shares reserved under our stock plans as of December 31, 2023, including the
shares subject to outstanding awards. Additionally, an aggregate of 17.1
million shares of Common Shares or up to a maximum of 27.0 million shares,
subject to customary adjustments under certain circumstance, may be issued
upon QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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conversion of debt or warrants. The majority of our outstanding Common Shares
may be sold without restriction, except shares held by our affiliates, which
are subject to certain limitations on resale. Shareholders who are United
States residents could be subject to unfavorable tax treatment. We may be
classified as a "passive foreign investment company", or a PFIC, for U.S.
federal income tax purposes if certain tests are met. Our treatment as a PFIC
could result in a reduction in the after-tax return to holders of Common
Shares and would likely cause a reduction in the value of these shares. If we
were determined to be a PFIC for U.S. federal income tax purposes, highly
complex rules would apply to our U.S. shareholders. We would be considered a
PFIC with respect to a U.S. shareholder if for any taxable year in which the
U.S. shareholder held the Common Shares, either (i) 75% or more of our gross
income for the taxable year is passive income; or (ii) the average value of
our assets (during the taxable year) which produce or are held for the
production of passive income is at least 50% of the average value of all
assets for such year. Based on our income, assets and activities, we do not
believe that we were a PFIC for U.S. federal income tax purposes for our
taxable year ended December 31, 2023, and do not expect to be a PFIC for the
current taxable year or any future taxable year. No assurances can be made,
however, that the Internal Revenue Service will not challenge this position or
that we will not subsequently become a PFIC. Provisions of our Articles of
Association and Dutch law and an option we have granted may make it difficult
to replace or remove management and may inhibit or delay a takeover. Our
Articles of Association (Articles) provide that our shareholders may only
suspend or dismiss our Managing Directors and Supervisory Directors against
their wishes with a vote of two-thirds of the votes cast if such votes
represent more than 50% of our issued share capital. If the proposal was made
by the joint meeting of the Supervisory Board and the Managing Board, a simple
majority is sufficient. The Articles also provide that if the members of our
Supervisory Board and our Managing Board have been nominated by the joint
meeting of the Supervisory Board and Managing Board, shareholders may only
overrule this nomination with a vote of two-thirds of the votes cast if such
votes represent more than 50% of our issued share capital. Certain other
provisions of our Articles allow us, under certain circumstances, to prevent a
third party from obtaining a majority of the voting control of our Common
Shares through the issuance of Preference Shares. Pursuant to our Articles and
the resolution adopted by our General Meeting of Shareholders, our Supervisory
Board is entitled to issue Preference Shares in case of an intended takeover
of our company by (i) any person who alone or with one or more other persons,
directly or indirectly, have acquired or given notice of an intent to acquire
(beneficial) ownership of an equity stake which in aggregate equals 20% or
more of our share capital then outstanding or (ii) an "adverse person" as
determined by the Supervisory Board. If the Supervisory Board opposes an
intended takeover and authorizes the issuance of Preference Shares, the bidder
may withdraw its bid or enter into negotiations with the Managing Board and/or
Supervisory Board and agree on a higher bid price for our Shares. In 2004, we
granted an option to the Stichting Preferente Aandelen QIAGEN, or the
Foundation (Stichting), subject to the conditions described in the paragraph
above, which allows the Foundation to acquire Preference Shares from us. The
option enables the Foundation to acquire such number of Preference Shares as
equals the number of our outstanding Common Shares at the time of the relevant
exercise of the option, less one Preference Share. When exercising the option
and exercising its voting rights on these Preference Shares, the Foundation
must act in our interest and the interests of our stakeholders. The purpose of
the Foundation option is to prevent or delay a change of control that would
not be in the best interests of our stakeholders. An important restriction on
the Foundation's ability to prevent or delay a change of control is that a
public offer must be announced by a third party before it can issue
(preference or other) protective shares that would enable the Foundation to
exercise rights to 30% or more of the voting rights without an obligation to
make a mandatory offer for all shares held by the remaining shareholders. In
addition, the holding period for these shares by the Foundation is restricted
to QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
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two years, and this protective stake must fall below the 30% voting rights
threshold before the two-year period ends. Note Regarding Forward-Looking
Statements and Risk Factors Our future operating results may be affected by
various risk factors, many of which are beyond our control. Certain statements
included in this Annual Report and the documents incorporated herein by
reference may be 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, including statements regarding
potential future net sales, gross profit, net income and liquidity. These
statements can be identified by the use of forward-looking terminology such as
"believe", "hope", "plan", "intend", "seek", "may", "will", "could", "should",
"would", "expect", "anticipate", "estimate", "continue" or other similar
words. Reference is made in particular to the description of our plans and
objectives for future operations, assumptions underlying such plans and
objectives, and other forward-looking statements. Such statements are based on
management's current expectations and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. We caution investors that there
can be no assurance that actual results or business conditions will not differ
materially from those projected or suggested in such forward-looking
statements as a result of various factors. Factors which could cause such
results to differ materially from those described in the forward- looking
statements include those set forth in the risk factors above. As a result, our
future success involves a high degree of risk. When considering forward-
looking statements, you should keep in mind that the risk factors could cause
our actual results to differ significantly from those contained in any
forward- looking statement. Quantitative and Qualitative Disclosures About
Market Risk Derivatives and Hedging In the ordinary course of business, we use
derivative instruments, including swaps, forwards and / or options, to manage
potential losses from foreign currency exposures and variable rate debt. The
principal objective of such derivative instruments is to minimize the risks
and / or costs associated with global financial and operating activities. We
do not utilize derivative or other financial instruments for trading or
speculative purposes. We recognize all derivatives as either assets or
liabilities on the balance sheet, measure those instruments at fair value and
recognize the change in fair value in earnings in the period of change, unless
the derivative qualifies as an effective hedge that offsets certain exposures.
In determining fair value, we consider both the counterparty credit risk and
our own creditworthiness, to the extent that the derivatives are not covered
by collateral agreements with the respective counterparties. To determine our
own credit risk, we estimated our own credit rating by benchmarking the price
of our outstanding debt to publicly available comparable data from rated
companies. Using the estimated rating, we quantify our credit risk by
reference to publicly traded debt with a corresponding rating. Foreign
Currency Derivatives As a globally active enterprise, we are subject to risks
associated with fluctuations in foreign currencies in our ordinary operations.
This includes foreign currency-denominated receivables, payables, debt and
other balance sheet positions including inter-company items. We manage our
balance sheet exposure on a group-wide basis using foreign exchange forwards,
options and cross-currency swaps. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
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Interest Rate Derivatives We use interest rate derivative contracts on certain
borrowing transactions to hedge interest rate exposures. We have previously
entered into interest rate swaps in which we agree to exchange, at specified
intervals, the difference between fixed and floating interest amounts
calculated by reference to an agreed-upon notional principal amount. We also
make use of economic hedges. Further details of our derivative and hedging
activities can be found in Note 14 "Derivatives and Hedging" in the
accompanying consolidated financial statements. Our market risk relates
primarily to interest rate exposures on cash, short-term investments and
borrowings, and foreign currency exposures. Financial risk is centrally
managed and is regulated by internal guidelines which require a continuous
internal risk analysis. The overall objective of our risk management is to
reduce the potential negative earnings effects from changes in interest and
foreign exchange rates. Exposures are managed through operational methods and
financial instruments relating to interest rate and foreign exchange risks. In
the ordinary course of business, we use derivative instruments, including
swaps, forwards and/or options, to manage potential losses from foreign
currency exposures and interest rates. The principal objective of such
derivative instruments is to minimize the risks and/or costs associated with
global financial and operating activities. We do not utilize derivative or
other financial instruments for trading or other speculative purposes. All
derivatives are recognized as either assets or liabilities in the balance
sheet and are measured at fair value with any change in fair value recognized
in earnings in the period of change, unless the derivative qualifies as an
effective hedge that offsets certain exposures. In determining fair value, we
consider both the counterparty credit risk and our own creditworthiness, to
the extent that the derivatives are not covered by collateral agreements with
the respective counterparties. Further details of our derivative and hedging
activities can be found in Note 14 "Derivatives and Hedging" in the
accompanying consolidated financial statements. Interest Rate Risk We use
interest rate derivatives to align our portfolio of interest-bearing assets
and liabilities with our risk management objectives. At December 31, 2023, we
are party to cross-currency interest rate swaps through 2025 for a total
notional amount of 180.0 million under which we exchange, at specified
intervals, the difference between the euro and USD interest amounts calculated
on their respective fixed rates by reference to an agreed-upon euro and USD
notional principal amounts. Also at December 31, 2023, we are party to
cross-currency interest rate swaps through 2025 for a total notional amount of
CHF 542.0 million under which we exchange, at specified intervals, the
difference between the CHF and USD interest amounts calculated on their
respective fixed rates by reference to an agreed-upon CHF and USD notional
principal amounts. At December 31, 2023, we had $668.1 million in cash and
cash equivalents as well as $389.7 million in short-term investments. Interest
income earned on our cash investments is affected by changes in the relative
levels of market interest rates. We only invest in high-grade investment
instruments. A hypothetical adverse 10% movement in market interest rates
would have impacted our financial statements by approximately $5.7 million.
Borrowings against lines of credit are at variable interest rates. We had no
amounts outstanding against our lines of credit at December 31, 2023. A
hypothetical adverse 10% movement in market interest rates would not have
materially impacted our financial statements. At December 31, 2023, we had
$1.5 billion in long-term debt of which $245.5 million is floating interest
rate debt. A hypothetical adverse 10% movement in market interest rates would
not have materially impacted our financial statements, as the increased
interest expense would have been completely offset by increased interest
income from our variable rate financial assets. QIAGEN N.V. | IFRS Annual
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Foreign Currency Exchange Rate Risk As a global enterprise, we are subject to
risks associated with fluctuations in foreign currencies with regard to our
ordinary operations. This includes foreign currency-denominated receivables,
payables, debt and other balance sheet positions as well as future cash flows
resulting from anticipated transactions including intra-group transactions. We
manage our balance sheet exposure on a group-wide basis primarily using
foreign exchange forward contracts, options and cross-currency swaps. Russia's
February 2022 invasion of Ukraine and the sanctions imposed in response have
led to a decline in the value of the ruble which is expected to remain highly
volatile. In 2022, we suspended our activities in Russia. As of April 1, 2022,
the results of our subsidiary in Turkiye are reported under highly
inflationary accounting as the prior three-years cumulative inflation rate
exceeded 100 per cent. A significant portion of our revenues and expenses are
earned and incurred in currencies other than the U.S. dollar. The euro is the
most significant such currency, with others including the British pound,
Chinese renminbi, Japanese yen, and Swiss franc. Fluctuations in the value of
the currencies in which we conduct our business relative to the U.S. dollar
have caused and will continue to cause U.S. dollar translations of such
currencies to vary from one period to another. Due to the number of currencies
involved, the constantly changing currency exposures, and the potential
substantial volatility of currency exchange rates, we cannot predict the
effect of exchange rate fluctuations upon future operating results. In general
terms, depreciation of the U.S. dollar against our other foreign currencies
will increase reported net sales. However, this effect is, at least partially,
offset by the fact that we also incur substantial expenses in foreign
currencies. We have significant production and manufacturing facilities
located in Germany and inter-company sales of inventory also expose us to
foreign currency exchange rate risk. Inter-company sales of inventory are
generally denominated in the local currency of the subsidiary purchasing the
inventory in order to centralize foreign currency risk with the manufacturing
subsidiary. We use an in-house bank approach to net and settle inter-company
payables and receivables, as well as inter-company foreign exchanged swaps and
forward contracts in order to centralize the foreign exchange rate risk to the
extent possible. We have entered in the past and may enter in the future into
foreign exchange derivatives including forwards, swaps and options to manage
the remaining foreign exchange exposure. Credit Risk Financial instruments
that potentially subject us to concentrations of credit risk are cash and cash
equivalents, financial assets, and accounts receivable. We attempt to minimize
the risks related to cash and cash equivalents and financial assets by dealing
with highly rated financial institutions, and investing in a broad and diverse
range of financial instruments. We have established guidelines related to
credit quality and maturities of investments intended to maintain safety and
liquidity. Concentration of credit risk with respect to accounts receivable is
limited due to a large and diverse customer base, which is dispersed over
different geographic areas. Allowances are maintained for potential credit
losses and such losses have historically been within expected ranges. There
were no significant concentrations of credit risk during the reporting period.
The maximum exposure to credit risk is represented by the carrying amount of
each financial asset in the statement of financial position. Credit risk is
managed on a Company basis, except for credit risk relating to accounts
receivable balances. Each local entity is responsible for managing and
analyzing the credit risk for each of their new clients before standard
payment and delivery terms and conditions are offered. QIAGEN N.V. | IFRS
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Counterparty Risk The financial instruments used in managing our foreign
currency, equity and interest rate exposures have an element of risk in that
the counterparties may be unable to meet the terms of the agreements. To the
extent that derivatives are not subject to mutual collateralization
agreements, we attempt to minimize this risk by limiting the counterparties to
a diverse group of highly rated international financial institutions. The
carrying values of our financial instruments incorporate the non- performance
risk by using market pricing for credit risk. However, we have no reason to
believe that any counterparties will default on their obligations and
therefore do not expect to record any losses as a result of counterparty
default. In order to minimize our exposure with any single counterparty, we
have entered into all derivative agreements, with the exception of the Call
Spread Overlay, under master agreements which allow us to manage the exposure
with the respective counterparty on a net basis. Most of these master
agreements include bilateral collateral agreements. Commodities We have
exposure to price risk related to anticipated purchases of certain commodities
used as raw materials in our business. A change in commodity prices may alter
the gross margin, but due to the limited exposure to any single raw material,
a price change is unlikely to have a material unforeseen impact on earnings.
However, the volatility in product availability and pricing continued in 2023,
and we expect some level of market constraints to continue in 2024. QIAGEN
N.V. | IFRS Annual Report 2023 Overview Management Report Corporate Governance
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Sustainability Statement Our Business - Profile and business model As a
leading provider of Sample to Insight solutions, we realize our vision of
making improvements in life possible by supporting our global customers across
the molecular diagnostic and life science markets. Our products are used to
advance science and improve outcomes for patients around the world. We are
committed to being a sustainable business and consider the views of our
stakeholders - customers, employees, authorities, regulators, suppliers, and
shareholders - in how we operate. Through initiatives such as reducing
plastics and developing products with a lower environmental impact, we uphold
our commitment to sustainability throughout our business activities and
product lifecycle. Details about our business, operating environment and
products are included in the section Business and Operating Environment.
Building a sustainable business Since 2017, we have focused on integrating
sustainability throughout the entire value chain and aligning our vision with
a sustainable business which includes reducing our impact on the environment
and minimizing the carbon footprint of our products. Our key strategic
sustainability activities target increasing the number of women in leadership
positions, reducing our emissions, avoiding cyber security incidents, and
ensuring a consistent 100% completion rate for new employee compliance
trainings and the commitment of our strategic suppliers to sustainable
improvement goals. Global presence with a focus on the most attractive
developed and emerging markets Shipping product to Direct sales in >170
>30 Countries Countries Our global and regional headquarters Global
presence Venlo, Global HQ Hilden, EMEA HQ Germantown, Americas HQ Shanghai,
Asia-Pacific HQ QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Integrating sustainability throughout the value chain General Approach to
Sustainability Sustainability governance Aligning the QIAGEN vision with
sustainable business QIAGEN plays a vital role in helping to advance our
understanding about the building blocks of life - DNA, RNA, and proteins. Our
products are used to advance science and improve outcomes for patients around
the world. This is underscored by our vision of "making improvements in life
possible", which extends to our commitment of being a sustainable business
ensuring that we do not negatively impact our environment, community or
society as a whole. We take into consideration the views of our stakeholders
in making decisions on the way to operate our business. Our approach to
sustainability is to consider our actual or potential positive and negative
impacts throughout each area of our business. In line with our vision of
making improvements in life possible, we have a commitment to deliver the best
possible portfolio of product and services while leaving the smallest possible
footprint on our planet. From whom we source to how we produce, we approach
each step with the intention to do so in a sustainable way. We know our people
are our most critical asset and we care about them - from their working
environment to career development and opportunity. We aim to attract and
retain talents that contribute to our vibrant workforce and our culture of
empowerment. Sustainability anchored in two-tier corporate governance
structure The Nomination & Environmental, Social, and Governance (ESG)
Committee, a dedicated Supervisory Board Committee, oversees the strategy,
development and performance measurements of our sustainability initiatives.
The strength of the committee lies in the extensive leadership experience of
its current members, as each one of them has served as either the CEO or CFO
of publicly listed companies. (Refer to Corporate Governance and our website
for more details, including the Nomination & ESG Committee charter.) Their
background equips them with a profound understanding of the intricate business
implications associated with sustainability targets, the imperative need for
effective risk management, and the comprehensive reporting requirements
spanning both QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Preferably sustainable sourcing New Supplier Code of Conduct Jointly maturing
towards SBTi target achievement Reduce, reuse, recycle Transfer from air
freight to ocean Customer survey on waste management Pilot to identify
recycling options Recyclability Suppliers QIAGENCustomers
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financial and non-financial domains. The Nomination & ESG Committee reviews
the operational activities of the Corporate ESG Committee, a cross- functional
team with representatives from across the Company. The Corporate ESG Committee
is led by our Head of ESG Strategy & Impacts Programs under the supervision of
the Executive Committee. This Committee formulates and secures approval for
our sustainability strategy and actively drives its implementation throughout
the year. Additionally, a key responsibility of the Corporate ESG Committee is
to inform the Audit Committee and Nomination & ESG Committee about new or
updated regulatory requirements, such as the Corporate Sustainability
Reporting Directive (CSRD), the EU Taxonomy and the German Supply Chain Act.
In October 2023, the Corporate ESG Committee conducted a regulatory update
with the Audit and Nomination & ESG Committees and instructed attendees on the
relevant requirements from these three upcoming regulations. This update
served to equip the Supervisory Board with the necessary information to guide
their role in overseeing the effectiveness of internal controls and the risk
management system pertaining to sustainability reporting. The Executive
Committee receives updates on the progress of the implementation of the
sustainability strategy and on regulatory changes on a quarterly basis while
the Supervisory Board is informed of these updates at least twice a year. In
2023, the Corporate ESG Committee met with the Nomination & ESG Committee
twice to review and approve the sustainability strategy and the implementation
plan, including reporting. The significance of sustainability within QIAGEN is
firmly embedded in our culture and linked through the compensation system,
wherein ESG objectives are incorporated into the annual Team Goals. These
goals serve as the foundation for a substantial portion of variable short-term
incentive compensation for our global workforce and the Managing Board. In
acknowledgment of the paramount importance of sustainability, we have elevated
the weight and influence of these objectives in line with our sustainability
aspirations, a commitment that aligns with our broader promises on ESG
matters. Risk management and internal controls over sustainability reporting
Our risk management approach is discussed under section Risks and Risk
Management. To ensure that newly established sustainability topics are
integrated into the risk management approach, specialized teams were
collaboratively formed in 2023 comprised of representatives from the owners of
material topics and the ESG Reporting team. These teams included experts from
global functions such as Accounting, ESG, U.S. Securities Exchange Commission
(SEC) Reporting, and Corporate Communications. During the 2023 reporting
process, provided guidance by these teams on process requirements was applied
by all owners of material topics and documented accordingly, including
applicable reviews. Reporting boundaries The basis of our Sustainability
reporting is defined in the EU Non-financial Reporting Directive (2014) and
the EU Corporate Sustainability Reporting Directive (in effect since 2024),
including the EU Taxonomy (partially in effect since 2022), and the proposed
EU Sustainability Reporting Standards (in effect since 2024). The
Sustainability reporting has also been aligned with the guidelines of the
Global Reporting Initiative (GRI) and has been prepared in accordance with the
GRI Standards. We also take into account the relevant requirements of the
Sustainability Accounting Standards Board (SASB) for the Medical Equipment &
Supplies industry. Where possible, we follow the recommendations of the Task
Force on Climate-Related Financial Disclosures (TCFD). The Sustainability
Statement - Annex contains the relevant indexes. Our Sustainability Report is
available on our website. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Committed to the Sustainable Development Goals As a global company, QIAGEN
supports the Sustainable Development Goals (SDGs) of the United Nations (UN).
The SDGs identify starting points for policy- makers, businesses and private
individuals worldwide to tackle the major challenges of our time - from
resource consumption and global inequality to climate change. The 17 SDGs and
the 169 targets were adopted by all UN member states in 2015 in what is termed
the "Agenda 2030." Companies can make a major contribution to the
implementation of the SDGs due to their influence on the environment and
society in many ways - from production to distribution of products, the
actions and behaviors of employees, and cooperations with partners, suppliers
and customers along the supply chain. We are aware of this responsibility and
want to make an impactful contribution to the SDGs that can be influenced by
our business activities. Looking at the impact of our business activities on
sustainable development, we have identified five SDGs where QIAGEN can
contribute the most: . SDG 3 Good Health and Well Being . SDG 5 Gender
Equality . SDG 8 Decent Work and Economic Growth . SDG 12 Responsible
Consumption and Production . SDG 13 Climate Action We value this alignment and
the way our use of technology, resources and knowledge contributes to the
United Nation's global mission of achieving the SDGs. Validation of Carbon
Emissions Targets Our carbon emissions targets have now been validated by the
Science Based Targets initiative (SBTi), endorsing our ambition to honor the
Paris Agreement's climate goals. The SBTi is a global body that enables
companies to set ambitious emissions reductions targets in line with the
latest climate science. The initiative is a collaboration between the Carbon
Disclosure Project (CDP), the United Nations Global Compact, the World
Resources Institute (WRI) and the World Wide Fund for Nature (WWF), and one of
the We Mean Business Coalition commitments. The SBTi defines and promotes best
practice in science-based target setting, offers resources and guidance to
reduce barriers to adoption, and independently assesses and approves
companies' targets. We are seeking to achieve net-zero status by 2050 by
cutting direct and indirect emissions throughout our operations. We disclose
our strategy to meet our targets in the Environment chapter under the section
Minimize Carbon Footprint. Our Material Topics In 2023, we focused on
reviewing the material topics of our last materiality analysis conducted in
2022 and on aligning them with upcoming European regulatory requirements
induced by the Corporate Sustainability Reporting Directive (CSRD). We
assessed actual and potential impacts as well as financial risks and
opportunities in relation to the management of QIAGEN´s material topics.
Based on our assessment, we identified the following material topics:
Environment Minimize Carbon Footprint Reduce, replace and recycle Plastic
Social Employee Attraction and Development Diversity & Inclusion Occupational
Health and Safety Quality and Product Safety Customer Satisfaction Access to
Healthcare Governance Anti-corruption and Anti-trust Data and Cyber Security
More detailed information in connection with the respective material topics is
reported in this sustainability statement in subsequent chapters. QIAGEN N.V.
| IFRS Annual Report 2023 Overview Management Report Corporate Governance
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Regular updates and information exchange Nomination & ESG Committee Executive
Committee Corporate ESG Committee Environmental Responsibility Serving Society
Investing in People Ensuring Business with Integrity ESG Goals Reduction of
our plastic footprint Implementation of short-term climate strategy Improving
Access to Healthcare and our customers' experiences Maintain compliant QIAGEN
Quality Systems to assure safe and effective QIAGEN Products Fostering a
positive work environment, attract, develop and retain talent and increase
percentage of women in leadership positions Implementation of compliance
program and supplier risk assessment Material Topic Reduce, Reuse and Recycle
Plastic Minimize Carbon Footprint Access to Healthcare Product Quality
Customer Satisfaction Diversity and Inclusion Occupational Health and Safety
Employee Attraction and Development Data and Cyber Security Governance and
Compliance Following the outcomes of the 2022 materiality analysis, we
undertook a strategic reconfiguration of our Corporate ESG Committee, which
was further refined in 2023. This restructuring served to enhance the
coordination of individual topics under the oversight of global leaders
appointed for each material aspect. These leaders assume responsibility for
both crafting the strategy and translating it into tangible metrics,
collaborating closely with their designated teams. In a series of subsequent
workshops, and in conjunction with specialist departments, these global
leaders conducted a thorough analysis of the maturity levels associated with
each material topic. This analysis laid the foundation for the meticulous
development of concrete roadmaps and action plans geared towards attaining our
sustainability objectives and ensuring compliance with regulatory mandates.
This strategic approach reflects our commitment to a comprehensive and
systematic advancement in meeting our sustainability goals. In 2023, under the
newly organized focus, the Corporate ESG Committee maintained this commitment
by reviewing action plans and prioritizing the nature and extent of the work
depending on the maturity level of a material topic. Examples of this work
included efforts to establish or enhance their management approach for
handling identified risks. Additionally, they undertook actions such as
finalizing the documentation of related processes and policies including
formalizing standard operating procedures. The maturity of the material topics
will be reviewed on an annual basis and revalidated against current
sustainability regulations and their implications for our sustainability
strategy and governance. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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At a Glance: Goals and achievements 2023 Goal (short-term)** 2023 Achievement
Outlook (mid- to long-term)** Chapter Environmental Responsibility SBTi target
validation Targets validated Net-zero by 2050 Minimize Carbon Footprint 4.2%
or 866 tCO2e Scope 1 and 2 emission reduction (2020 baseline year) 15% or
3,156 tCO2e emission reduction over 2022 42% emission reduction in Scope 1 and
2 GHG emissions by 2030 Scope 3 data improvement . Top seller data analyzed .
Top seller circularity screening . Customer survey on waste 25% emission
reduction scope 3.6, 3.11, 3.12 until 2030 80% of suppliers by spend with 1
environmental and 1 social goal 80% 67% of suppliers by emission with
sustainable engagement goals 2027 Science Based Target Initiative (SBTi)
Validation; Partnership with suppliers 7% plastic transport packaging (2022
baseline)* 7% Increase of product recyclability Reduce, replace and recycle
plastic Investing in People 1 Top Employer Recognition Award per region in
minimum >1 per region Be the industry employer of choice by attracting,
developing and retaining diverse top talent. Employee satisfaction and
retention e36% Women in leadership* 36% e40% Women in leadership positions by
2027 Diversity & Inclusion Achieve Top Employer LGBTQ+ with 100% score on 2023
Corporate Equality Index (CEI) 100% Build upon the current environment to
further empower and value every employee. <0.9 DART (per 100 employees)*
Reduced number of Incidents that result in Days Away, Restricted and
Transferred work 0.43 Working towards ISO certification at key manufacturing
sites to progressively elevate our safety culture and performance Occupational
Health and Safety Serving Society 100% of certified manufacturing sites 100%
Continuous monitoring and improvement of our processes to ensure effectiveness
and efficiency of our Quality Management System (QMS). Quality and product
safety <0.5 external audit non-conformance rate <0.5 >63 NPS-T
Service score 68.8 Exceeding the expectations of our customers in continually
assessing their satisfaction with the help of the Net Promoter Score (NPS)
methodology Customer satisfaction Ensuring Business with Integrity >85%
cyber security awareness training ~85% Increase QIAGEN's cyber resilience.
Certify QIAGEN's main production location under ISO 27001 Data and Cyber
Security Regulatory sustainability trainings for the management and
supervisory board Regulatory update conducted. In-depth trainings concept
developed. Implementation of educational trainings program and continuous
update from 2024 onwards Sustainability governance *Team Goals **QIAGEN
differentiates as follows: short-term = 1 year, mid-term = 2-5 years,
long-term = more than 5 years. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Stakeholder engagement We regard dialogue with our stakeholders as a central
element in our development and the achievement of our long-term vision. We are
aware that the shift toward a more sustainable economy and society requires
intensive dialogue and cooperation with various stakeholder groups. We welcome
this engagement and see these discussions as a way to identify important
trends and developments in society and in our business fields. We take the
outcomes of these discussions into account when shaping our business strategy
as well as our sustainability agenda and objectives. Engaging with the
financial community is an essential aspect of our growth strategy. Creating a
solid relationship with investors and analysts enables us to build trust and
transparency, fostering understanding and dialogue while enhancing
credibility. We regularly communicate and provide financial updates, host
investor calls, and attend a series of conferences and industry events each
year. These discussions include operational topics as well as opportunities to
discuss our ESG strategy, access to healthcare and corporate governance
topics. These activities can help attract and retain investors, maintain an
active market for our stock, and ultimately support our long-term success. In
2023, we took strides in fostering collaboration with our suppliers to develop
a joint strategy aimed at realizing our climate commitments. As part of this
process, we performed a maturity assessment of our suppliers to identify their
environmental ambitions. The maturity assessment included a letter of our
sustainability commitment from our Head of Global Procurement and a detailed
questionnaire around the suppliers' ability to measure their emissions and
meet environmental standards. We also included an information package on our
SBTi commitment and our connected goals, together with the result of our
analysis on the suppliers' current maturity level. Furthermore, we conducted
Q&A sessions during strategic review meetings with suppliers. The results of
the maturity assessments were used to derive an action plan for 2024 with the
goal to jointly define a plan to further develop ambitious climate-connected
commitments and achievements. Additionally, a risk assessment was initiated
internally that extends beyond our environmental goals, encompassing human
rights considerations. We formally integrated our ESG strategy with the
publication of a new Supplier Code of Conduct in February 2023. The new Code
of Conduct expresses our expectations towards our suppliers and its rollout
was followed by a partner letter sent in April 2023 by our Head of
Procurement, encouraging our suppliers to jointly work on our goals for
climate action. Read more in the Governance chapter under section Sustainable
Procurement. In June 2023, we engaged with our customers to identify best
practices for more sustainability in research, opting to cover this topic in
one of our live Q- rious shows. This digital format involves information
sharing through live video presentation and moderation and discussions in live
chats. In this episode, we discussed practical eco-friendlier lab practices;
options to reduce waste - from packing to products; understanding the
`Environmental Impact Factor Label', and what sustainability means to us as
scientists striving to be experts in sustainability. In the same month, we
invited diagnostic customers from Germany, Austria and Switzerland to a summer
camp at our Hilden site to discuss, among other topics, clinical applications
of next-generation sequencing, changes in the regulatory In vitro Diagnostic
(IVDR) requirements, and sustainability aspects in the laboratory. Internally,
our volunteer-led employee communities actively engaged to promote diversity
and inclusion through a series of events and activities during the year. In
October 2023, a panel discussion was held on "Thriving in the workplace with
disabilities" to provide insight and guidance how to navigate work and life
with mental health challenges and invisible disabilities. In December 2023, an
event was held allowing discussions around indigenous Americans, and how
QIAGEN is supporting initiatives to end violence against tribal women. This
was accompanied by Orange Day awareness events in December at some of our
sites, as well as in-person and virtual events on International Women´s
Day. Additionally, several events were hosted by QIAwomen throughout the year
to encourage and support women in the workplace by offering networking
opportunities, highlighting resources available to sustain a work-life
balance, and hosting panel discussions on navigating challenges and
opportunities for women. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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In 2023, we incorporated an internal evaluation of our ESG performance into
our anonymous employee "pulse check", an annual survey sent to all employees
seeking to assess corporate and management-related decisions. The response to
the assessment of our ESG performance yielded a score of nearly 4 on a scale
ranging from 1 to 5, where 5 represents the highest evaluation. This metric
serves to provide a robust benchmark, allowing us to systematically collect
and incorporate valuable insights into our ESG activities shared by our
employees. By standardizing and documenting this feedback, we aim to further
enhance the effectiveness and transparency of our ESG initiatives. Stakeholder
group Formats of engagement Topics we engage on Employees Annual strategic
kick-off meetings, Quarterly Pulse Check for feedback, ESG awareness,
management and regulatory trainings, monthly internal posts on sustainability,
regular one-on-one review sessions, 180° feedback process, surveys, events
and webinars. (e.g., sustainability, diversity & inclusion) Health & safety,
culture, inclusion & diversity, innovation, employee development, company
strategy and organizational topics Customers Surveys (e.g., on sustainability,
customer satisfaction), QIAquest After Support Survey, web chat, service
portal with 24/7 follow-up, conferences, trade fairs, roadshows, bilateral
engagement, production tours, VIP days in our facilities, questionnaires
(e.g., EcoVadis), hosted infotainment shows ESG strategy and targets,
decarbonization, minimizing plastics, quality, and product safety Shareholders
and the financial community Quarterly reports and quarterly earnings calls,
Annual Report, live broadcast of all parts of the Annual General Meeting with
access to appointed proxies in advance of the meeting, regular roadshows and
calls, investor relations website ESG strategy and targets, access to
healthcare, and corporate governance topics Suppliers Agreeing on supplier
engagement goals, risk assessment, strategic reviews, supplier days,
workshops, bilateral engagement, initiatives, video conferences including
employees, trainings Sustainability performance, quality and product safety,
responsible sourcing standards, climate commitment, scope 3 accounting General
society and local communities Digital QIAtalk format on Integrating TB
Elimination and Pandemic Preparedness. Industry-specific forums and
conferences, proactive communication with local and national press, local
community engagement, engagement in more than 50 joint healthcare projects in
more than 30 countries. Access to healthcare, business support Banks and
financial institutions Mandatory reporting and information (e.g., Annual
Report, non-financial reporting), bilateral meetings Sustainability
performance, ESG-linked financing QIAGEN N.V. | IFRS Annual Report 2023
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Environment Environmental Responsibility Approach to environmental protection
We make considerable investments into improving our environmental performance,
striving to prevent or mitigate negative impacts from our business activities,
products, or services. Our priority is implementing effective measures to
comply with regulations, protecting the environment, and avoiding reputational
damage or financial loss. The Global Environmental, Health, and Safety (EHS)
Management System systematically applies processes and controls to safeguard
our sustainability program globally and locally. This system ensures
compliance with legislation, reduces environmental pollution, prevents
inefficient use of natural resources, and aims to avoid environmental
incidents. The Global EHS Department oversees our EHS strategy, policies, and
risk controls. Our updated Environment, Health and Safety policy, effective
since early 2023, commits to integrating sustainable principles in business
decisions, operations, and products. This includes prioritizing conservation,
pollution prevention, and reducing our carbon and plastic footprint. We
promote end-to- end sustainable development, working with partners to foster
responsible practices throughout the supply chain. In 2023, we developed new
policies on climate, energy, and waste management. Global managers and on-site
professionals implement the EHS framework, tailored to their business areas
(manufacturing, research, sales and administration). The Head of Global EHS
reports to the Senior Vice President, Head of Global Operations, a member of
the Executive Committee, and contributes as a member to the Corporate ESG
Committee and Climate Working Group, which ensures our long- and short-term
environmental goals are aligned within the EHS management system. ISO
certification is integral to our EHS strategy, with global alignment to ISO
norms. We achieved ISO 14001 certification in China for QIAGEN Shenzhen Co.
Ltd in July 2023 and have obtained the Environmental Management System (EMS)
ISO 14001 certification for our Hilden, Germany site in March 2024. Our
corporate architecture guideline promotes green building standards. Wherever
it is possible we are aiming for green building certifications assessing the
environmental sustainability and resilience of our commercial real estate. We
also consider achieving LEED, BREEM or DGNB certified green buildings to
underpin our ambitions to operate highly efficient and cost-saving buildings.
We achieved green building certifications at buildings in our major sites in
Germany (Hilden), North America (Germantown), and the U.K. (Manchester) under
LEED or BREEAM. In 2023, we initiated a pilot project at our Stockach site in
Germany to obtain a green building certification from the German Sustainable
Building Council (DGNB). Upon success, we'll explore replicating this project
at other sites. The new construction at our Frederick site in North America is
set to be LEED certified in 2024. Minimize Carbon Footprint Climate strategy
and value chain We recognize climate change as one of the most pressing global
challenges, bringing with it risks such as extreme weather events, changes in
regulations, and changes in customer needs and behavior. Operations could, for
example, be negatively impacted by fluctuations in the cost of raw materials,
components, freight and energy. New laws and regulations adopted in response
to climate change could cause a further rise in energy prices, as well as the
price of certain raw materials, components, packaging and transportation.
Based on our 2022 materiality analysis, dialogue with our stakeholders and ESG
ratings evaluations, we concluded that the majority of our internal and
external stakeholders, including our employees and customers, are very
conscious of environmental issues, including plastic consumption and the
recyclability and durability of products. Among others, these factors QIAGEN
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influence our customers' choice of supplier. We recognize that urgent action
is required and are committed to reducing our greenhouse gas emissions in line
with the EU Paris-Agreement. Reducing Greenhouse Gas emissions in line with a
1.5 degree Celsius climate target . Net-zero across our value chain by 2050 .
GHG Emissions reduction targets validated by the Science Based Targets .
Switch to renewable energy . Implementation of site-specific eco-friendly
technologies and improvement of Building Management System programs to reduce
energy demand 3.3, 3b Science Based Target Initiative (SBTi) Validation In
2019 we began setting emission reduction goals, and in 2021 we committed to
reducing greenhouse gas emissions in line with the most recent criteria set
out by the SBTi. These targets have been validated and approved by the SBTi in
2023. The SBTi has assessed our near-term and net-zero targets against the
SBTi's Net-Zero Standard Criteria and the SBTi Near-Term Target Criteria and
Recommendations (Version 5). The SBTi target validation team has classified
QIAGEN's Scope 1 and 2 target ambition and has determined that it is in line
with a 1.5°C trajectory. Our approved targets are: . Overall Net-Zero
Target: We commit to reach net-zero greenhouse gas emissions (GHG) across the
value chain by 2050 from a 2020 base year. . Near-Term Targets: We commit to
reduce absolute Scope 1 and 2 GHG emissions 42% by 2030 from a 2020 base year.
We also commit to reducing our absolute Scope 3 GHG emissions from business
travel, use of sold products, and end-of-life treatment of sold products by
25% within the same timeframe. We further commit that 67% of our suppliers by
emissions covering purchased goods and services, capital goods and upstream
transportation and distribution will have science-based targets by 2027. .
Long-Term Targets: We commit to reduce absolute Scope 1, 2 and 3 GHG emissions
90% by 2050 from a 2020 base year. After analyzing GHG emissions from key
assets and products (locked-in GHG emissions), we found that our product
disposal minimally contributes to Scope 3 emissions, and emissions from
product use represent an insignificant amount of the total. With potential
natural gas consumption reduction through heat pumps and green electricity
use, we determined that locked-in GHG emissions are not significant, posing no
hindrance to our carbon roadmap or SBTi target achievement. QIAGEN N.V. | IFRS
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QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
Governance Financial Statements Appendices Page 64 Management Report Start
fleet transition to electric cars U.S./Europe Switch to green electricity at
key sites Launch first eco-friendlier product line QIAwave New global car
policy Move to renewable heating in Hilden Develop circular and sustainable
design guidelines Cooperate with customers to identify recycling options
Ongoing fleet transitions U.S./Europe Switch further sites to green
electricity Increase bio-based or recycled content in products Complete fleet
transitions in U.S./Europe Use renewable energy for all sites in scope Launch
sustainable design- based products QIAGEN Carbon Reduction Roadmap
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Impact, risk and opportunity management As part of the Corporate ESG
Committee, we formed a Climate Working Group with two teams: one team manages
Scope 1 and 2 emissions, exploring site-specific eco-friendly technologies,
considering carbon dioxide (CO2) pricing regulations, and assessing
energy-related cost increases. The other team adopts a cross-functional
approach to reduce Scope 3 emissions. We report our emissions throughout the
entire value chain according to the requirements of the Greenhouse Gas
Protocol (GHG Protocol). The Scope 1 and 2 team comprises representatives from
global and local EHS, Engineering, Technical Operations, and site management.
The Scope 3 team is cross-functional, involving R&D, Life Cycle Management,
Marketing, ESG, Procurement, Global Supply Chain, Controlling, and EHS, along
with subject matter experts. Our Climate Policy outlines how climate-related
targets and risks are handled, and the integration of the Climate Working
Groups within the organization. Chaired by the Head of ESG Strategy & Impact
Programs, the Climate Working Group reports progress quarterly to the
Executive Committee and semi-annually to the Nomination & ESG Committee of the
Supervisory Board. To proactively manage climate-related risks and their
financial implications, we've incorporated climate impacts into our existing
risk management structure, engaging QIAGEN internal key stakeholders
throughout the organization. In 2022, a thorough physical climate risk
assessment was conducted for 13 key locations, prioritized by revenue or
spending share. Results, reviewed in early 2023 and approved by senior
management, revealed no materialized physical climate risks. Our voluntary
annual reporting to the Carbon Disclosure Project (CDP) was rated with an
improved score from B- in 2022 to B in 2023. Transition risk assessment,
involving Emerging Regulation, Reputation, Market, Legal, and Technology,
engaged the same stakeholders. The top two potential transition risks -
reduced investment in green technology and slow adoption of modern technology
- were identified. In 2023, we analyzed strategic implications and calculated
abatement costs for Scope 1, 2, and 3, aligning this information with
financial planning for energy-reduction projects. While we currently do not
integrate internal CO2 pricing into financial planning, our analysis suggests
no imminent transition risks. In the coming months, we plan to refine our
approach, transitioning from initial estimates to more precise expense
calculations, enabling a reassessment of our stance on transition risks in
2024. Management of Scope 1 and 2 emissions Our Carbon Reduction Roadmap (CRM)
targets a 42% cut in carbon emissions by 2030, focusing on Scope 1 and 2
emissions as published at www.qiagen.com/sustainability. Key measures include
transitioning from gas to green electricity and using Energy Attributed
Certificates (EAC). The CRM prioritizes our major manufacturing sites in
Germany and the U.S., which contributed approximately 60% of related Scope 1
and 2 emissions in 2023. To help achieve this, we've developed a tool to model
changes in EAC availability. The installation of a wood pellet burner and heat
pumps at our largest manufacturing site in Hilden, Germany, will significantly
contribute to our carbon reduction projects. At our Germantown, Maryland site
in the U.S., several Building Management System programs have been improved in
order to reduce the energy demand for heating and cooling. These have also
contributed to our carbon reduction projects. Management of Scope 3 emissions
In 2023, we enhanced our Scope 3 emissions data model by incorporating a
subset of mass- and volume-based data for our leading products. Our intention
is to progressively augment this model with additional data to use it to focus
our efforts on effective targets and measures. As part of this initiative, we
performed a circularity assessment for one of our top-selling products, with a
specific focus on assessing and improving recyclability. To further refine our
data model we want to gain insights into customer waste streams. A survey will
launch in early 2024, guiding joint recycling options in selected regions,
with results expected by mid-2024. In 2023, strategic partnerships drove
eco-design innovations in our product portfolio. Rethinking nucleic acid
extraction kits led to a 62% reduction in plastic and up to 58% less cardboard
in our QIAwave product portfolio. QIAGEN N.V. | IFRS Annual Report 2023
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Collaborating with suppliers was crucial in meeting greenhouse gas reduction
targets. Ongoing partnerships in 2024 aim to identify low-carbon materials and
effective recycling solutions, reinforcing our commitment to sustainability.
Status 2023 In 2023, our Scope 1 and 2 emissions have decreased by 15% or
3,156 tCO2e compared to 2022 as a result of expanded usage of green energy and
relating Renewable Energy Certificates (REC) in the United States and China.
Our total Scope 3 emissions increased by around 4% (13,053 tCO2e) in 2023 over
the year-ago period. As part of our continuous improvement process, comparison
period results for scope 1 & 2 and certain scope 3 emissions have been
adjusted to align with improved measurements and calculation methods applied
in 2023. The amount of our global spend of purchased goods and services (Scope
3.1) in 2023 was almost equal to 2022. However, we elected to refine our
matching of suppliers to the spend-based emission factors as released by the
Department for Business, Energy and Industrial Strategy (DBEIS). This
refinement of classification led to updated emission distributions and, upon
application, to an overall increase of Scope 3.1 emissions by almost 9%. This
increase was partially offset by emission declines derived from Scope 3.4
(Transportation and distribution) and Scope 3.5 (Waste in operations). The
carbon emissions within Scope 3.4 decreased in 2023 by 15% compared to 2022
and was driven by a decline of the total chargeable weight in 2023, in
combination with changes in transportation routes. Our carbon emissions
related to Scope 3.5 (Waste in operations) declined by 59% in 2023. The
decrease is due to improved reporting processes for waste volumes at several
production sites. Our total corporate carbon footprint for 2023 amounts to
351,424 tCO2e, which is +2.9% or 9,897 tCO2e above the same period a year ago
of 341,527 tCO2e. Scope 3.11 and Scope 3.12 emissions categories have been
modified to apply improved measurements and calculation methods for current
year reporting and the prior year comparative period. Use phase of sold
products emissions reported in Scope 3.11 are now better reflected through a
metric that captures the volume of global instrumentation equipment sold.
Emissions from end of life treatment of sold products, reported in Scope 3.12,
are now more robustly aligned to underlying sales information included in our
internal reporting data queries. The following table provides the detail of
emissions for the years ended December 31, 2023 and 2022: QIAGEN N.V. | IFRS
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Corporate Carbon Footprint by Emissions Category (in tCO2e) 2023 2022 Change
in tCO2e 2022 to 2023 Change in % 2022 to 2023 Scope 1: Direct emissions
13,375 13,908 (533) -3.8 % Scope 2: Indirect emissions 3,930 6,553 (2,623)
-40.0 % Total Scope 1 and 2 (market based) 17,305 20,461 (3,156) -15.4 % Scope
3.1: Purchased goods and services 254,498 234,189 20,309 +8.7 % Scope 3.3:
Energy related activities 4,654 4,104 550 +13.4 % Scope 3.4: Transportation
and distribution 31,086 36,420 (5,334) -14.6 % Scope 3.5: Waste in operations
2,630 6,493 (3,863) -59.5 % Scope 3.6: Business travel 11,633 10,621 1,012
+9.5 % Scope 3.7: Employee commuting 8,970 8,092 878 +10.9 % Scope 3.11: Use
phase of sold products 979 1,050 (71) -6.8 % Scope 3.12: End of life treatment
of sold products 19,669 20,097 (428) -2.1 % Total Scope 3 334,119 321,066
13,053 +4.1 % Total emissions 351,424 341,527 9,897 +2.9 % QIAGEN N.V. | IFRS
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Methodology Overall, we apply the Corporate Accounting and Reporting Standards
as outlined in the Greenhouse Gas Protocol (GHG Protocol) for the GHG
emissions reporting. Hence, the consolidated GHG emissions include all
emissions from subsidiaries where QIAGEN has financial control. Scope 1 covers
direct Greenhouse Gas (GHG) emissions from the combustion of fossil fuels on
the QIAGEN premises and by company vehicles. Scope 2 covers indirect GHG
emissions originating from the external generation of electricity for our
operational and business activities. They are reported using both a
location-based and market-based approach. A market- based calculation method
for Scope 2 emissions reflects emissions calculated with the energy source mix
used by each of our sites and is our first priority. A location-based method
reflects the average emissions intensity of grids on which energy consumption
occurs and is only made when market-based is not available. As sustainability
reporting, including emissions, will be subject to mandatory limited assurance
beginning in 2024, we engaged an independent audit firm to conduct a limited
assurance review for Scope 1 and 2 emissions for the 2023 reporting year in
advance of the formal regulatory requirement. The assurance engagement was
performed in accordance with the International Standard on Assurance
Engagements (ISAE) 3410 "Assurance on Greenhouse Gas Statements" as issued by
the International Auditing and Assurance Standards Board (IAASB). Scope 3
covers upstream and downstream emissions that occur along our value chain. The
sub-categories are reported separately in the table Corporate Carbon Footprint
by Emissions Category shown above. To assist and inform our preparedness for
the upcoming regulatory requirement of a limited assurance, in 2023, an
independent audit firm confirmed our audit readiness of our processes for
Scope 3 emissions. We have considered emissions in the following categories as
material to our operations: Scopes 3.1. (purchased goods and services), 3.3.
(energy-related activities), 3.4. (upstream and downstream transportation and
distribution), 3.5. (waste in operations), 3.6. (business travel), 3.7.
(employee commuting), 3.11. (use phase of sold products) and 3.12. (end of
life treatment of sold products). The energy data used to calculate Scope 1
and 2 emissions is shown in the Energy Consumption by Source table below.
Energy Scope 1: Direct energy Stationary combustion Natural gas 41,160 38,233
Diesel 207 11 Heating oil - 13 Mobile combustion Diesel 3,696 4,159 Gasoline
15,126 13,682 Total Scope 1 consumption 60,189 56,098 Scope 2: Indirect energy
Electricity from conventional tariffs 6,971 12,990 Electricity procurement
from green tariffs 35,653 25,707 Electricity from e-mobility 25 - Consumption
from district heating and cooling 4,329 2,778 Total Scope 2 consumption 46,978
41,475 Total energy consumption (including green energy) 107,167 97,573 Energy
Consumption by Source (in MWh) 2023 2022 QIAGEN N.V. | IFRS Annual Report 2023
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Energy efficiency Improving energy efficiency is a key part of our climate
strategy and essential to meeting our SBTi target. We selected energy
efficiency measures based on the Carbon Roadmap. During 2023, we continued our
energy efficiency campaign to create awareness for and understanding of our
energy efficiency priorities. This campaign provided guidance on how all
employees could contribute to our climate goals and identify creative
solutions for energy efficiencies across the company, beyond facility
improvements. Use of renewable energy In 2023, our energy attribute
certificates (EACs) purchased in 2022 remained valid for Hilden, Germany and
Germantown, Maryland. They are sourced from unspecified renewable electricity.
Our sites in Sweden and in the Netherlands source their EACs from
hydroelectric and wind turbines. Further we have expanded the usage of green
energy in the United States and China by purchasing Renewable Energy
Certificates (RECs) to offset relating emissions in these regions. We will
also transition other offices to renewable energy according to our CRM. In
total, we use 84% of our purchased electricity from renewable sources. In
addition to renewable energy certificates, the solar panels on the roof at our
manufacturing site in Hilden produced 58 MWh in 2023 for our own operations
and reduced our reliance on the electricity grid. Scope 1 & 2 GHG emissions
intensity 2023 2022 Change in % 2022 to 2023 Scope 1 & 2 GHG emissions (in
tCO2e) 17,305 20,461 -15.4 % Net sales (in USD millions) $1,965 $2,143 -8.3 %
Net GHG emissions intensity (tCO2e/ USD millions) 8.8 9.5 -7.8 % Also this
year, we continued to reduce the greenhouse gas (GHG) intensity compared to
our sales and compared to 2022. We use the GHG intensity ratio, which looks at
the amount of emissions (in tons carbon dioxide equivalent) in relation to our
total net sales (in USD millions). In 2023, we have reduced the GHG intensity
by 7.8% compared to the prior year. Electric company cars and employee
commuting In line with our emissions reduction strategy, we started to
transition our fleet of company cars in the U.S., Germany, Switzerland, and
Austria to use hybrid or wherever possible electric vehicles in 2022. During
2023, car fleet used for field services have been equipped with hybrid cars.
For other areas electrical cars have been considered as a company car only.
The Benelux region and U.K. will transition to hybrid or electric vehicles in
2024. At our U.S. facilities, employees are offered incentives to select
hybrids and electric vehicles through an increased car allowance and a
subsidized at- home electric charger. We continue to expanding the necessary
infrastructure for electric vehicles for employee use at our manufacturing
site in Hilden, Germany. Many facilities provide discounted train and bus
tickets to encourage employees to use public transportation. At our sites in
Shenzhen, China, and Manila, Philippines, we offer bus shuttles to public
transport stations. In Hilden, Germany and Manchester, U.K., we support
commuting by subsidizing public transportation costs. In Hilden, an electric
bike program was initiated to offer employees an alternative option of
transportation. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Reducing our environmental footprint . 7% transportation packaging reduction
in 2023 compared with 2022 . Circularity analysis of the QIAamp DNA Mini Kit
with an accredited partner based on the Cradle to Cradle(R) Design Framework .
Expansion of our plastic reduction strategy "reduce - replace - recycle"
beyond our QIAwave product line and into other products 12.2, 12.5 Reduce,
replace and recycle plastic Plastic footprint reduction While technical,
regulatory, safety and hygiene standards requires us to use plastics in the
production of many of our products as well as for transport and packaging, we
are working to eliminate plastics wherever possible without compromising
product quality. To curtail the adverse environmental impact caused by plastic
in transport, packaging and products, we adopted a "reduce - replace -
recycle" strategy. In addition to enhancing environmental protection, our
decision to minimize our use of plastic can provide greater autonomy,
alleviating the risk exposure of higher costs due to plastic tax or regulatory
changes. Our customers and shareholders expect us to invest in alternative
material and act in harmony with long-term future-oriented and environmentally
conscious solutions. We rely on our global cross-functional plastic footprint
reduction team to identify opportunities to diminish plastic and explore more
environmentally friendly alternative materials. In 2023, we continued to
follow up on our ambitious corporate goal to reduce plastic in transportation
packaging materials and achieved our reduction goal of 7% compared to 2022.
This was realized by eliminating, reducing and replacing plastic with paper,
cardboard or sustainable materials. Key initiatives in 2023 included further
replacing packaging materials with sustainable alternatives and reducing the
amount of plastic material. We invested in new winding equipment for pallet
wrapping within our distribution hubs in Europe and the U.S. and drastically
reduced the amount of stretch foil. In 2023, aligned with our strategy, we
continued the roll-out of eco-friendly transport boxes in the U.S. and EMEA,
replacing expanded polystyrene (EPS) transport boxes with cold chain
shipments. In addition, we continue to consider the role of coordinating
logistic processes and increasing the number of bulk shipments to further
reduce our use of plastics. In 2024, we aim to further reduce plastic by 20t
by expanding our plastic reduction strategy "reduce - replace - recycle"
beyond our QIAwave product line into other products. Our project teams are
working on the reduction of the thickness of primary plastic product packaging
materials within the kits while other project teams have implemented
paper-based product packaging alternatives. We are also preparing a pilot
project where we will step into the use of bio-based plastic from renewal
feedstock for some dedicated product parts. We are optimistic that the
benefits of this alternative plastic will be a good option for our products
and anticipate using the outcomes of this project to decide on the extent of
future use. In addition, we encourage our employees to act as drivers of
increased sustainable awareness and to serve as a source for the creation of
new ideas to reduce our reliance on plastic. The "Sustainable Teams"
voluntarily established across multiple sites have contributed toward our
goals by successfully completing projects with the target of reducing
operational waste at our sites. With the aim to reduce plastics in our
products, we launched the eco-friendlier product line QIAwave in January 2022.
In September 2023, we subsequently expanded its product range with additional
kit variants for the simultaneous purification of DNA and RNA from cells and
tissues, as well as RNA isolation with effective gDNA removal and kit sizes.
The five QIAwave kits deliver the same high-quality genomic and plasmid DNA
and RNA but produce less plastic and cardboard waste compared to our RNeasy
Mini, RNeasy Plus Mini, DNeasy Blood & Tissue, AllPrep DNA/RNA Mini and
QIAprep Spin Miniprep Kits. The QIAwave kits feature fewer components, waste
tubes made from 100% recycled plastic and buffer concentrates in smaller
bottles. More compact QIAGEN N.V. | IFRS Annual Report 2023 Overview
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kits and new packaging methods reduce the amount of cardboard needed, and
instructions for use are available online in lieu of printed materials.
QIAwave marks the beginning of our journey to translate sustainability
directly to our products, and we will continue to pursue other opportunities
to transfer identified best practices to other product portfolios as well. The
QIAwave Kits are the first sample preparation kits in our industry to receive
the prestigious ACT (Accountability, Consistency, and Transparency)
Environmental Impact Factor Label from My Green Lab. Compared to the
respective standard kits, the QIAwave DNA Blood & Tissue Kit (250), the
QIAwave RNA Mini Kit (250) and the QIAwave Plasmid Miniprep Kit (250) launched
in 2022 have a 36% lower environmental impact factor, taking criteria such as
manufacturing, impact reduction, responsible chemical management, product and
packaging content as well as disposal of packaging into account. Our next
development steps aim to reduce plastic further by re- designing the spin
columns and waste tubes. Circularity assessment for the QIAamp DNA mini Kit A
life cycle assessment (LCA) considers the environmental impact of the full
life cycle of a product. This assessment considers the extraction and
processing of raw materials, transport to the customer, the energy and
material input required when using the product, transport to the disposal
facility, and incineration of remaining materials. After an initial assessment
in 2019, in 2021 we conducted an LCA with an increased scope in accordance
with ISO 14040/14044 and certified by an independent third party (GUTcert).
The LCA reconfirmed the environmental impacts within the entire life cycle of
a QIAamp DNA Mini Kit, one of our best- selling products, and one which is
similar in composition and manufacturing process to other QIAGEN kits. The
detailed report on the LCA can be found on our sustainability website. Based
on the results, we received confirmation that plastic within our kits is the
main contributor to our CO2 footprint. In 2023, we performed a further
analysis of the amount and type of plastics contained in our top-selling
products and additionally analyzed the circularity aspects of the QIAamp DNA
Mini Kit in collaboration with an accredited external partner. This analysis
was based on the Cradle to Cradle(R) Design Framework and revealed the
potential to apply recycled or bio-based polyolefins (plastic components) as
feedstock. After the use phase, the polyolefins are suitable for thermoplastic
recycling and the paper and cardboard are suitable for municipal paper
recycling. The results of the circularity assessment guide our journey to
optimize Scope 3 emissions. With improved data, we are now able to measure the
impact of reducing plastic and to prioritize our activities based on
optimization potentials. Waste Our operational waste is generated primarily
from manufacturing, packaging and research activities conducted at our
production sites. Proper management of waste is an essential part of our
regulatory obligations and environmental permits. To ensure minimal
environmental impact, our waste is handled and disposed of by approved waste
disposal service providers. Our waste can be defined into two categories:
non-hazardous and hazardous. Our production facilities have controls in place
to manage hazardous waste to ensure that it is treated before disposal. Of the
total waste in 2023, 31% was segregated for material recycling with the aim of
reducing the volume of waste ending up in a landfill. As waste is managed
locally at each site, some of our sites work with third-party Integrated
Facility Management (IFM) partners to manage site waste. All waste produced in
the course of our operations at our largest manufacturing facility in Hilden,
Germany, is diverted from landfill and sent for alternative methods of
disposal. Regarding product waste, we offer transport packaging, hazardous
packaging and electrical/electronic equipment take-back options with approved
collection agencies. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Waste production by type (in tons) 2023 2022 Total Percentage Total Percentage
Non-hazardous waste 984 48 % 1,932 47 % Hazardous waste 440 21 % 1,550 37 %
Recycled: Non-hazardous waste recycled 624 648 Hazardous waste recycled 17 12
Total recycled waste 641 31 % 660 16 % Total 2,065 100 % 4,142 100 % Water
consumption Good quality, potable freshwater is essential for manufacturing
our products. All water is withdrawn from third-party water utilities. The
remaining water is used for cleaning, decontamination of production lines,
sanitation and drinking water. In 2023, we used 136,701 megaliters of water
(2022: 118,551 megaliters), an increase of 15.3% compared to the previous
year. Our two key manufacturing facilities (Hilden and Germantown) are located
in low-risk water stress areas and comprise approximately 65% of our water
use. We did not identify water as a material ESG topic. However, we recognize
water risks in some areas of our operations and aim to conduct a detailed
water risk assessment in 2024. We currently identify water risk using the
World Resource Institute (WRI) Aqueduct Tool. In 2023, 14% of water was
withdrawn from areas classified as having medium-high, high, or extremely high
water stress. In addition, approximately 50% of our sites are located in areas
of medium-high, high, or extremely high water stress. We recognize the value
in conservation of water and have taken steps to apply best practices.
Existing measures to reduce water usage include using processed water - a
by-product of manufacturing - to cool buildings. We have also installed
hand-motion activated faucets, introduced low-flow plumbing, dual-flush
toilets, and the use of rainwater to flush toilets. To achieve EHS business
objectives to reduce environmental impacts, we ensure that the wastewater
discharges comply with local and national standards. In 2023, for the first
time, we submitted our water-related qualitative and quantitative usage
information to the Carbon Disclosure Project (CDP). As we look to integrate
water conservation in our sustainability goals, we anticipate publicly
reporting our water use and targets by the end of 2024. Water consumption by
water stress level (in megaliters) 2023 2022 Low 102,913 101,749 Low-medium
14,391 3,497 Medium-high 9,252 8,867 High 617 2,826 Extremely high 9,528 1,612
Total 136,701 118,551 QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Water use and risk by region (in megaliters) Low Low-medium Medium-high High
Extremely high Total Percentage North America 62,807 559 4,517 - 911 68,794
50.3 % Europe, Middle East and Africa 40,011 2,684 1,179 496 5,871 50,241 36.8
% Asia Pacific 95 11,148 3,359 121 2,732 17,455 12.8 % Latin America - - 197 -
14 211 0.1 % Total 102,913 14,391 9,252 617 9,528 136,701 100.0 % Further
environmental data Overall, we apply the Corporate Accounting and Reporting
Standards as outlined in the Greenhouse Gas Protocol (GHG Protocol) for the
GHG emissions reporting. Hence, the consolidated GHG emissions include all
emissions from subsidiaries where QIAGEN has financial control. In 2023, to
manage our environmental performance effectively, we implemented a new tool to
enable our individual facilities to collect and report their indicators,
allowing for transparency and accurate reporting. Our consolidated
environmental indicators for three consecutive years are shown in the table
below. The data are also displayed as a ratio of consolidated net sales, for
short- and long-term monitoring. Environmental indicators 2023 Indicators 2023
2022 Indicators 2022 Energy (in MWh) 107,167 0.0545 MWh/NS 97,573 0.0455
MWh/NS GHG emissions Scope 1 and 2 (in tCO2; location-based) 32,881 0.0167
t/NS 31,622 0.0148 t/NS GHG emissions Scope 1 and 2 (in tCO2; market-based)
17,305 0.0088 t/NS 20,461 0.0095 t/NS Freshwater use (in megaliters) 136,701
69.56 l/NS 118,551 55.32 l/NS Non-hazardous waste (in t) 984 0.501 kg/NS 1,932
0.902 kg/NS Hazardous waste (in t) 440 0.224 kg/NS 1,550 0.723 kg/NS
Non-hazardous waste recycled (in t) 624 0.318 kg/NS 648 0.302 kg/NS Hazardous
waste recycled (in t) 17 0.009 kg/NS 12 0.006 kg/NS QIAGEN N.V. | IFRS Annual
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Social Investing in People Attracting talent and acting as a responsible
partner along the value chain . Culture and values embedded in our Corporate
Code of Conduct and Ethics and Ethical Standards Policy . High-quality
training and career development for our employees . Multi-stage vendor
selection process to minimize risks in our supply chain 8.3, 8.4, 8.7
Employees QIAGEN's success starts with our people. Our long-term success and
growth depend on the knowledge, skill and passion of our employees. Investing
in our people, therefore, drives our economic performance and considerably
influences the sustainability of our operations. The attraction, development
and retention of our employees is an integral factor in creating value for
customers, colleagues, partners and shareholders. During 2023, we continued
our strategic focus on being recognized as an employer of choice, which
enables us to attract, develop and retain top talents that are critical to our
long-term success. Our Corporate Code of Conduct and Ethics provides our
employees with a clear understanding of the principles of business conduct and
ethics that are expected of them. Additionally, respect for human rights is a
fundamental value of QIAGEN. Our Human Rights Policy defines how we strive to
respect and promote human rights in our relationships with our employees,
suppliers and other stakeholders. The policies are reviewed and updated
annually and are both available on our website. As a company headquartered in
the European Union, freedom of association and collective bargaining are
cornerstones of the good relationship between management and representatives
of employees. The majority of our workforce is employed in member states of
the OSCE (Organization for Security and Cooperation in Europe), which includes
states from Europe, Central Asia and North America. In all regions where we
operate, we comply with all applicable laws regarding freedom of association
and collective bargaining, and respect local laws and regulations concerning
labor relations as outlined in our Human Rights Policy, available on our
sustainability website. Management believes that its relations with regional
labor unions and employees are good. The following tables provide information
on the number of employees by geographical region and main category of
activity. We acknowledge and respect all gender identities, understanding that
individuals may identify as female, male, non-binary, or in various other
ways. The gender data in the tables in this report are presented in the female
or male format. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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2023 2022 Employees by region Female Male Total Percentage Female Male Total
Percentage EMEA(1) 1,800 1,652 3,453 57.9 % 1,863 1,695 3,558 57.6 % Americas
609 720 1,329 22.3 % 610 760 1,370 22.2 % APAC 595 590 1,185 19.9 % 632 618
1,250 20.2 % Total employees 3,004 2,962 5,967 100.0 % 3,105 3,073 6,178 100.0
% Percent of total employees 50.3 % 49.6 % 50.3 % 49.7 % (1) As of December
31, 2023, one employee identified their gender as non-binary or chose not to
disclose. Employees by contract 2023 2022 Total Percentage Total Percentage
Full-time employees 5,625 94.3 % 5,903 95.5 % Part-time employees 342 5.7 %
275 4.5 % Total employees 5,967 100.0 % 6,178 100.0 % Employees by function
2023 2022 2021 Production 28 % 29 % 30 % Research & Development 18 % 17 % 16 %
Sales 37 % 37 % 37 % Marketing 6 % 6 % 6 % Administration 11 % 11 % 11 % Total
100 % 100 % 100 % In 2023, the number of employees working in production
decreased as business conditions continued to reset following the significant
ramp-up of production during the COVID-19 pandemic when we employed workers
for this specific need under limited time contracts. Depending on local laws
and customs, there are different types of employment ranging from long-term
fixed contracts to temporary positions. In addition, part- time, full-time and
temporary employees may have access to benefits that offer flexible time and
programs for parents following childbirth and during schooling, for example.
Refer to section Employee satisfaction and retention for additional
information. In 2023, part-time employees represented 5.7% of our workforce
and temporary employees with a fixed-term work contract represented 7.3%. We
strive to foster an open-door workplace culture where employees can approach
anyone. Employees may communicate openly with management or the Supervisory
Board at any time regarding their working conditions without threat of
reprisal, intimidation or harassment. We actively encourage continuous
feedback through regular one-on-one discussions between our managers and
employees, meetings with our Human Resources colleagues, our QIAGEN N.V. |
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Pulse Check employee surveys (discussed below), our manager specific 180°
feedback process `QIAlead' and through questions to the Executive Committee
(EC) at our Town Halls, and by direct email. Employee Attraction and
Development Our Approach QIAGEN´s goal is to be the industry employer of
choice by attracting, developing and retaining diverse top talent. Enabling a
fair, respectful and inclusive work environment is embedded in our culture. To
drive our economic performance and create value, we focus on building
excellent teams with remarkable talents. To adapt in the competitive field of
talent attraction, the global Talent Acquisition Policy has been revised in
line with an improved Talent Acquisition Strategy to enhance the global
overall recruiting process, the commitment to diversity and inclusion, our
internal application processes, work with hiring agencies, and adherence to
official regulations. We strive to create a work environment that empowers and
involves employees at all levels. In 2023, we continued our global QIAGEN
EMPOWER cultural change initiative, originally launched in 2021 with voluntary
ambassadors who actively facilitated discussions and practices around
empowerment. The EMPOWER initiative aims at fostering inclusive networks and
inspiring a culture of empowerment. The initiative also serves as a foundation
for the professional and personal development of each employee. Our goal is to
provide our employees with opportunities to develop, be venturesome, think and
act long- term and, at the same time, motivate them to perform to the best of
their ability with discipline, empathy and trust. We seek to inspire our
people to grow so they have the right mindset and skills to thrive and achieve
both professional and personal objectives. With our focus on performance
management, employee, career and leadership development, we seek to foster
effectiveness and performance. As anchored in our formal coaching guidelines,
we empower every employee and encourage them to take on the responsibility for
their learning and personal growth. The talent, skills and passion of our
employees are key to our success and value creation. The opportunity to
develop personally and professionally is a core aspiration, both for employees
who have recently joined QIAGEN and for those who have been with QIAGEN for
quite some time. Our objective is to foster a learning culture that gives our
employees the opportunity to develop their own unique career paths while
collectively enhancing our ability to achieve our business objectives and
secure a robust pipeline of talent to deliver on our long-term strategies.
Impact, risks and opportunities We believe fostering a positive work
environment with good working conditions and opportunities to develop a career
will attract and retain more skilled and motivated employees. Enhancing
training and career development increases employee satisfaction, employee
performance and retention. In turn, increased retention helps to mitigate our
exposure to risks associated with vacant positions, high turnover, and reduced
productivity. We expect a positive effect in the mid-term given our unique and
solid employer brand and the implementation of a targeted talent attraction
strategy. Throughout the year, actions were initiated and promoted that
comprised two key approaches: to refresh the QIAGEN employer brand and to
refine talent acquisition operations. Additionally, training, skill and
competency development are essential drivers for candidates in their decision
to join a new employer. With our extensive career and leadership development
programs, we provide the opportunity to be part of a motivated and efficient
workforce. In developing and sharing best practices, we learn from each other
across sites and continuously improve the way we act to foster a high-performing
culture at QIAGEN. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Employee attraction Winning Talents The currently under development Employer
Value Proposition with its three pillars (impacting our world, impacting our
teams, impacting careers) and its statements will also serve as the foundation
for our improved Talent Attraction Strategy in the long-term. We will focus on
the development of additional actions and measures which we plan to implement
from 2024 onwards, including specific recruiting trainings, such as advanced
interview techniques and matters related to diverse communication panels.
Given the importance of recruitment decisions to achieve our improved
strategy, unconscious bias training will be a mandatory part of manager
training in the coming year. The training has proven valuable in creating
better communication, trust and cooperation across departments within an
open-minded, inclusive and respectful culture. In 2023, QIAGEN participated in
various job fairs globally, for example, at the University of Manchester,
U.K.; the Economic University in Wroclaw, Poland; the University of Michigan,
U.S.; the Boston University, U.S.; the University of Maastricht, the
Netherlands; the WHU - Otto Beisheim School of Management, Germany and at the
Deutsches Krebsforschungszentrum, DKFZ (the German Cancer Research Center).
Employee Development Training and feedback Employee development is vital for
building capabilities and addressing current and future gaps. We provide
diverse internal and external learning solutions, fostering competency and
preparing employees for future roles. Our focus is on inspiring growth with
quality tools and activities, nurturing the right mindset, behaviors, and
skills. Training opportunities are offered through in-person and hybrid
formats as well through QIAlearn, our global e-learning platform on which we
deployed 1,300 training courses in 2023. Regular evaluations via surveys
ensure program effectiveness. Leadership behavior is assessed through the
annual QIAlead 180° feedback process. The 2023 assessment indicated that
an improved focus of managers to deliver continuous feedback to employees is
required, reflecting that the benefits of a timely exchange will improve
opportunities to share outcomes, recognize successes, learn from mistakes and
leave comfort zones. A formal process addresses identified improvement areas.
In 2023, we piloted a 360° feedback process for newly promoted leaders,
planning its implementation before promotion in 2024. This comprehensive view
enhances workplace behaviors, aligning with our commitment to continuous
improvement. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Development cycle: promoting strengths Our global Performance Enhancement
System (PES) guides regular one-on-one review sessions between employees and
managers to discuss performance and career growth. It facilitates goal
setting, competency assessment, and training needs identification. The
lifecycle includes goal setting at the beginning of each year and mid-year
development conversations where competencies are assessed and development
plans established. PES discussions are mandatory and follow the principle of
promoting strengths. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Report Attract Identify Retain Develop Rewarding Rating Developing Monitoring
Recognize high performance and overall contribution Summarize and quantify
overall performance Support development by assessing key competences and
providing suitable learning solutions or opportunities Manage performance with
regular, timely feedback Set clear goals and expectations Development Cycle
QIAGEN'S Performance Management Process Planning
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Competency model for long-term success In the QIAGEN competency model, we
define key competences and skills for the long-term success of our
fast-growing technology and knowledge-based company. In addition to individual
professional expertise and background, we differentiate between: . core
competences . entrepreneurial competences . leadership skills In 2023, we
offered over 20 training courses linked to the competency model. Our top five
competency-based trainings last year were: . Enhancing Communication for
Success . Basic Project Management . Lateral Leadership . Effective Leadership
Communication . Emotional Intelligence QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 79 Management Report Innovative Ability Accountability
Strategic Thinking and Acting Change Management Working in Teams Continuous
Learning Planning and Problem Solving Decision Making Performance Management
Customer Orientation Effective Communication Focus Risk Taking Employee
Development Core Competences Entrepreneurial Competences Leadership
Competences Professional Expertise QIAGEN Mission, Strategy and Values
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70:20:10 model for highest impact QIAGEN's competency development approach
follows the 70:20:10 model for learning and development, a highly successful
industry practice that defines the optimal sources of learning with the
highest impact on people. Based on the model, individuals obtain 70% of their
knowledge from job-related experiences, 20% from interactions with others, and
only 10% from formal training courses or programs. Global Leadership
Development QIAGEN continues to adapt to ongoing changes in the economy and
the industry. While valuing our ability to be responsive and adaptive, we
remain steadfast in preserving what QIAGEN stands for, protecting our core
company values. Our leaders play an important part in helping this
transformation across the workforce. The Global HR Learning & Development Team
has focused on further elaborating the new Global QIAGEN Leadership Program,
which will be fully deployed in 2024. The Leadership Program builds on the
EMPOWER Leadership behaviors: Focus, Walk the Talk, Create Context for
Success, Build Collaborative Networks. The target-group-specific leadership
learning portfolio provides leaders at all levels with the capabilities to
coach and develop their own skills. Where employees are encouraged to be more
autonomous, they are guided how to strengthen their responsibility for the
respective individual learning process and assess their contributions to the
success of our global company goals. Mentoring We foster employee development
through initiatives like our Mentorship Exchange program. This internal
mentorship program pairs employees to advance each other's career goals
through guided sessions. In 2023, we launched two programs, proving its
effectiveness in unlocking career potential and fostering mentorship skills.
Building on this success, we introduced the Mentorship Ambassador Program,
offering selected participants further professional growth opportunities
through a structured curriculum. Employee satisfaction and retention We strive
to be an Employer of Choice - a great place to work. Employees join QIAGEN,
stay, and also return to QIAGEN because they know their work makes
improvements in life possible. Employees feel they are treated fairly, they
are listened to, they have opportunities to grow and develop, and they are
empowered to make a difference. We are committed to fair pay and have clear
pay guidelines and job grading which are regularly updated based on market
data. Pay decisions consider peer comparisons, and we adhere to transparency
regulations, allowing employees to request salary information for gender
comparison. We are currently developing a global equity measurement
methodology to address pay equity issues comprehensively. QIAGEN N.V. | IFRS
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We also have frameworks in place for performance-based and share-based
compensation, along with offering incentive programs for new ideas and
innovation. While varying based on role and jurisdiction, the majority of the
members of management participate in our stock plan and are eligible to
receive stock unit grants subject to performance and/or service requirements.
These programs aim to ensure fair and attractive compensation and serve to
encourage each employee to contribute to our long-term success. Our
Remuneration Report provides detailed information on the compensation
practices regarding our Supervisory and Managing Boards. Work-life balance is
an important driver of creating and maintaining employee satisfaction. We
provide services to help employees balance their personal lives with our
dynamic work environment, including in-house childcare at certain sites and
flexible working hours. Our global remote working policy, QIAflex, sets a
foundation for on-site and remote success and collaboration. It guides local
site leadership in creating flexible work models for roles suitable for remote
work, allowing eligible employees to work remotely up to 40% of the time.
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
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Great Place To WorkOur commitment to excellence also extends to our QIAGENers
UK Germany Poland USA Mexico Brazil Hong Kong Philippines Taiwan China
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An essential component of our efforts to maintain a high level of employee
satisfaction at work is our focus on employee well-being. We offer a wide
range of measures and tools, from annual "health days" with free counseling,
screening and medical check-ups to fitness opportunities. Since January 2023,
Employee Assistance Programs (EAP) are available globally. For further
details, refer to Promotion of employees' health under Occupational Health and
Safety in this chapter. To provide a snapshot of employee engagement levels
within the organization, we deploy short, anonymous global engagement surveys
called Pulse Checks. The findings from the Pulse Checks are used to help
leaders focus on specific engagement topics. The September 2023 survey was
completed with an employee participation rate of 79%, the highest ever since
initiation of the annual surveys started in 2019. The results yielded an
average score of 3.9 - on a scale of 1 (lowest) to 5 (highest) - across all
areas of engagement. The questions take into account topics such as corporate
values, engagement, recognition, learning and development, and ESG. This year,
an open comment field was added to solicit specific insight from employees and
allow for more detailed analysis, feedback and action plans by regions and
Business Areas. Our latest results from feedback received suggest that we
continue to reduce silo thinking across our business and ensure employees at
all levels across our organization are empowered to make decisions. We are
encouraged that our efforts to be an employer of choice are successful given
the recognition and designations collected throughout the year and around the
globe. In 2023, our subsidiaries in Germany, United Kingdom and Poland were
once again recognized as a "Top Employer" by the Top Employer Institute, a
global authority on recognizing excellence in people practices. The "Top
Employer" title is awarded after a formal process in which companies share
detailed information on their HR practices, undergo an onsite review, and
provide several employee interviews. Furthermore, our subsidiaries in the
U.S., Brazil, Mexico, Hong Kong, Taiwan, China and the Philippines were once
again recognized as a "Great Place to Work" in 2023. To earn this
certification, at least 7 out of 10 employees must classify the company as a
"Great Place to Work" in an anonymous survey. In addition, our subsidiary in
the Philippines won multiple employer certifications in 2023, including "Asia
Best Employer Brand Awards", while Greater China was named as "Best Workplaces
Asia." In 2023, total turnover declined for both total employees and employees
in management roles, as identified in the table below. Turnover 2023 2022
Headcount Turnover Headcount Turnover Total employees 5,967 13.4 % 6,178 14.1
% Thereof employees in management roles 678 8.3 % 651 9.6 % QIAGEN N.V. | IFRS
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Fostering diverse teams and equal opportunities . e36% of leadership roles
filled by women . QIAGEN Diversity and Inclusion ambassador program .
Mentorship exchange with focus on culture and inclusiveness . 5 QIAGEN
communities established to foster inclusion 5.1, 5.5 Diversity & Inclusion At
QIAGEN, we firmly believe that diverse teams are the cornerstone of our
success. We recognize that a variety of perspectives, ideas and approaches
foster innovation and drive our business forward. Our commitment to diversity
and inclusion is steadfast, as we strive to cultivate an environment where
every employee feels valued and empowered to contribute their unique talents
and experiences. Regardless of age, educational background, gender, sexual
orientation, gender identity, nationality, ethnicity, veteran status,
abilities, religion, or any other distinguishing characteristic protected by
law, we are dedicated to providing equal opportunities for all. We firmly
believe that diversity is not only a moral imperative but also a competitive
advantage that propels us forward. Our Talent Acquisition Strategy focuses on
identifying, recruiting and retaining the most suitable individuals for the
job. Central to our diversity and inclusion efforts is our Executive Council
of Equal Opportunity (ECEO), a diverse body of volunteers from across the
company, including executives, managers and individual contributors. This
cross-functional council oversees our initiatives aimed at fostering diversity
and inclusion within our organization. The ECEO ensures that our policies,
practices and procedures support the recruitment, retention, education and
development of a diverse workforce that reflects the rich tapestry of society.
With a minimum of six advisory board members and a minimum of four council
members, the ECEO adopts a co-chair leadership structure accountable to an
Executive Committee Sponsor. Together, they establish a comprehensive
diversity strategy and implement action plans with clear timelines to achieve
our diversity goals. Aligned with our corporate objectives, the ECEO drives
initiatives within each organizational area and sponsors programs such as the
D&I Ambassador program and QIAGEN Communities. The D&I Ambassadors, comprised
of employee volunteers, champion diversity and inclusion through various
activities including hosting speakers, organizing trainings, and facilitating
events. Collectively composing the QIAGEN Communities, each of the five
Employee Resource Groups (ERGs) focuses on a unique priority: . Disability,
mental health, and well-being through Thrive@QIAGEN, . Parents and caregivers
through QIAGEN Parents and Caregivers Community (QPACC), . LGBTQIA+ through
Pride@QIAGEN, . Women through QIAwomen, . Racial and Ethnic diversity through
Mosaic. Mosaic is the newest of the Communities, created and launched in
November 2023. The creation of the community was the outcome of employee
empowerment and supportive, collective interest across sites and encouraged by
the success of the four other groups. The QIAGEN Gender Diversity Policy was
last updated in 2023. Read more about the policy under Diversity within the
Managing Board and Supervisory Board in Corporate Governance. Impact, risks
and opportunities We are committed to diversity in our teams as we recognize
this fuels innovation and engagement with our customers and business partners,
and is vital to an environment and culture that provides equal opportunity for
success to all employees. We are sensitive to the fact that a lack of focus on
diversity and inclusion in a workplace can lead to various repercussions and
risks QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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affecting the growth and profitability of an organization because of
dissatisfaction or difficulties in attracting a diverse workforce. As such, we
decided to create a new position in 2023 fully dedicated to our D&I ambitions.
This position ensures that the activities around employee engagement,
including D&I, have a clear focus and strategic accountability. In 2018, we
started our strategic initiative on gender diversity with a focus on improving
the number of women in management. The participation of women in management
roles increased from approximately 28% in 2018 to 36% in 2023 (2022: 35%).
This was achieved because of strategic initiatives to drive awareness,
engagement and development of better gender representation among our
management team. We continue to work towards gender parity, and it is our goal
to achieve at least 40% of women in management in the mid- term in accordance
with our Gender Diversity Policy. Employees by age, gender and management
roles 2023(1) 2022 Female Male Female Male Under 30 years old 461 302 584 395
30 to 50 years old 2,061 1,960 2,063 1,984 Over 50 years old 482 700 458 694
3,004 2,962 3,105 3,073 Employees in management roles 243 435 226 425 (1) As
of December 31, 2023, one employee identified their gender as non-binary or
chose not to disclose. In October 2023, we were selected for the Belonging
Builder Award from Mindr as one of a group of five companies out of 53. We
earned this award for fostering welcoming, diverse, equitable and inclusive
environments through our employee driven initiatives, reflected as well in our
2023 ISS ESG Prime rating. We expressed our culture as an inclusive employer
by participating in the Sticks and Stones, Europe's largest LGBTQIA+ Job Fair,
in July 2023. In line with our initiatives, we are currently revising our
global recruitment policy to prioritize and highlight diverse candidate pools
and interview panels, ensuring a fair and inclusive hiring process. At the
beginning of 2023, we updated our applicant system to offer more gender-inclusiv
e options. In addition, we added a line to our interview invitation (virtual
and in-person) encouraging participants to inform us about any suggestions for
improvements in our interview participation process. In striving towards
greater gender inclusion at QIAGEN, in 2023, QIAwomen hosted more than nine
events featuring both internal and external speakers to share experiences and
promote discussion. These included on-site events in support of the UN's
campaign to end violence against women, culminating on Orange Day. These gave
participants the opportunity to exchange resources and, in the U.S., support a
local charity for survivors of domestic violence. Launched in July 2022,
QIAwomen has grown to approximately 380 members. For the second consecutive
year, in 2023, QIAGEN has been listed on the Bloomberg Gender Equality Index
(GEI), which provides an opportunity for companies to assess progress towards
parity, benchmark against peers, and highlight a commitment to gender
equality. QIAGEN also endorses the Women's Empowerment Principles. These
principles are a result of QIAGEN N.V. | IFRS Annual Report 2023 Overview
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collaboration between the UN Global Compact and UN Women, emphasizing the
business case for corporate action to promote gender equality and women's
empowerment. Our commitment to diversity extends beyond cultural and gender
diversity. For example, the Pride@QIAGEN community was launched in 2022 and
was comprised of approximately 180 members at the end of 2023. The community
hosted virtual and in-person events in support of pride month activities in
the U.S., Poland, Germany, Mexico, and the U.K. and held several virtual
discussions to engage outside of pride month and share ways to support the
LGBTQIA+ community throughout the year. QIAGEN also endorses the Standards of
Conduct for Business: Tackling Discrimination against Lesbian, Gay, Bi, Trans,
& Intersex People which builds on the UN Guiding Principles of Business and
Human Rights. As a result of these initiatives, our U.S. subsidiary achieved
all the criteria to earn a score of 100 and was recognized as a recipient of
the 2023 Human Rights Campaign (HRC) Foundation's "Equality 100 Award: Leader
in LGBTQ+ Workplace Inclusion." In 2022, we further focused on disability and
assessed targeted areas for improvement through a project team assembled as
part of a leadership training program. The project team identified key areas
for review such as hiring and retention strategies for onboarding candidates,
improving information accessibility and visibility within QIAGEN, and
extending our outreach in our local communities. In addition, in 2022 we
piloted the Disability Index. During 2023, we have analyzed the results,
created a Reasonable Adjustment Framework as a direct outcome, and plan to
implement these findings during 2024. Internally, our Thrive@QIAGEN employee
resource grew to approximately 210 members in 2023 and has hosted events and
calls to action championing disability, well-being and inclusion in the
workplace. Occupational Health and Safety Management Approach/Strategy Safe
workplaces and healthy employees are a top priority at QIAGEN. All employees
are required to adhere to local and global health and safety procedures and
practices. We place the health and safety of our employees above all other
considerations and have introduced multiple measures to foster a serious
culture of safety awareness. Our Global Environment, Health and Safety team
(EHS team) oversees the conscientious implementation of global EHS policies
and procedures. Our local EHS teams constantly manage and monitor
site-specific occupational health and safety risks and activities. Global
processes include the implementation of a Global EHS Management system based
on the ISO 45001 standard. The EHS management system aims to reduce health and
safety risks, related injuries, illness and unplanned events within our
business operations to minimize safety risks for employees. All employees,
service providers and company-managed contractors are required to follow the
standards and requirements in our EHS management system. The processes of the
Global EHS management system are also implemented at a local level for the
QIAGEN facilities, taking into consideration local and international
requirements. Local EHS teams at our facilities coordinate, manage and monitor
site-specific occupational health and safety risks and hazards, including the
management of permits and licenses, risk assessment analysis, accident
reporting, and health and safety inspections. ISO certification forms part of
our strategy to drive and improve our safety performance. We achieved ISO
45001 certification in China for QIAGEN Shenzhen Co. Ltd in July 2023 and the
Occupational Health and Safety Management System ISO 45001 certification for
our Hilden, Germany site in March 2024. As a next step, our second largest
manufacturing site in Germantown, Maryland, U.S. will start to prepare for
certification in 2025. Impact, risk and opportunities The EHS processes
provide measures to address potential Health and Safety risks. Preventing
employee absenteeism due to work-related injury or illness is essential to
maintain productivity. Production stops or delays would increase costs and the
likelihood of reputational damage. A healthy workforce is more motivated and
committed, thus increasing productivity and providing for a more stable market
position. We monitor our health and safety performance using safety indicators
including the number of safety accidents under categories: Medical Treatment
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Work cases (LWC); Restricted Work cases (RWC); Transferred Work cases (TWC);
Death (DT); Near misses; and Safety observations. Based on this information,
we calculate the rate of lost work due to Days Away, Restricted and
Transferred (DART), the Total Recordable Incident Rate (TRIR), and Lost Time
Incident rate (LTIR). We use the U.S. based Occupational Safety and Health
Administration (OSHA) criteria for recording and tracking safety accidents.
This allows for standardization across many of our facilities located around
the world and enables us to compare our performance against other
international companies. Safety indicators are calculated from safety
incidents that are reported, documented and investigated within our EHS
Reporting portal. The Health and Safety representatives can use this approach
to run local initiatives. Our main manufacturing site ran a QIAttention
campaign to raise awareness about incidents that occur due to slips, trips and
falls. In 2023, Global Operations took action to increase awareness at our key
manufacturing sites with the aim to ensure that any safety concerns, including
near misses, were reported. The heightened awareness and attention resulted in
an increase in the reported number of near misses and safety observations for
2023 and reduced the number of lost work day cases for the year by 63%
compared to the prior year. Health and Safety training needs are assessed at a
local level and Health and Safety Training is provided during onboarding on
the job and continuously throughout employment. Professional safety officers
at key manufacturing sites conduct safety walks. Our facilities have workplace
arrangements to provide safe, healthy working conditions, processes for
workplace risk assessments, scheduled fire evacuation routes, and emergency
response plans to be able to respond to an immediate crisis and mitigate the
risk of injury and damage. All employees are required to report injuries and
illness in the Global EHS Reporting Portal, and these submissions are
investigated by EHS professionals at the facilities to determine the root
cause and any corrective and preventative actions to prevent recurrence. All
employees are required to adhere to the measures identified in occupational
risk assessments and related workplace procedures, including emergency
response plans. In addition, we encourage our employees to take an active role
in establishing and maintaining health and safety standards by collaborating
with leadership on health and safety committees. Promotion of employees'
health We established a Global Benefit Council with the mission to achieve a
global minimum level of benefits and to maintain a benefit program that
improves employees' well-being and meets market standards while being
financially sustainable. The global minimum benefits aims to address immediate
needs that employees and their families might have, improve employee
well-being and recognize commitment. One key benefit expanded in 2023 is the
Global Employee Assistance Program, now available to all QIAGEN employees and
their immediate families worldwide at no cost. Our employees can make use of a
confidential, anonymous consultant service for any topic related to mental
health and find support related to child and family care, health and
lifestyle, legal and financial advice. This global service creates the
opportunity for enhanced overall health and well-being of our employees. In
addition to utilizing the services offered, employees have accessed webinars
and written reference materials offered through the program at no cost.
Through the reporting, we can monitor the areas where our employees need
support and further develop and optimize our benefit offerings to mitigate
non-work-related health risks. We regularly evaluate if there is an increasing
demand for support in the field of mental health. This led, for example, to
the appointment of mental health first aiders at our facility in the United
Kingdom who serve as specific contacts for our employees who want to take
advantage of their support. Furthermore, on-site Human Resources (HR) and EHS
personnel support our employees by providing access to non-occupational
medical and preventative health services. These services differ among sites
and are regularly reviewed to ensure they are in line with country practice
and local specifics and may include: . Medical health insurance, dental
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. Medical clearances for job assessments to assess the individual's capability
to perform an assigned task; . Access to treatment for work-related injury or
illness; . Flu and other applicable vaccinations, i.e. Hep B; . Health and
nutrition workshops or other events promoting health and self- care; and .
On-site sports facilities or reimbursement for such activities. Additionally,
as addressed under Employee satisfaction and retention in this chapter, our
employees have access to flexible work arrangements and paid time off for
volunteering, benefits that serve not only to enhance the health and
well-being of the employee but also contribute to the well-being of their
families and communities. Actions and Data For 2023, our corporate goal was to
keep the number of recordable work- related lost workday cases (measured by
Days Away, Restricted and Transferred, DART) below 0.9 /per 100 employees. The
data for this metric during 2023 was collected monthly from 15 sites across
all regions. The DART rate for 2023 was 0.43 and achieved the corporate goal.
The DART rates are shown in the table below. DART rate for key facilities
(employees and contractors) 2023(1) 2022 Total number of calculated work
hours(2) 7,942,278 7,987,934 Total number of recordable work-related cases 31
47 Total number of recordable work-related cases that caused days away,
restricted or transferred encountered 17 33 DART (per 100 employees)(3) 0.43
0.83 (1) Safety data for 2023 includes one additional key site, QIAGEN GdaDsk.
(2) Total number of calculated work hours including employees, temporary
workers and contractors. (3) DART is calculated per OSHA methodology. The
table below shows the number of recordable work-related incidents and number
of days lost due to injuries for all workers, which include employees,
temporary workers and contractors, during 2023 and 2022, by region at key
sites. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Reportable incidents and lost workdays for all Total recordable incidents(1)
Days lost due to injuries 2023(2) 2022 2023(2) 2022 Total average headcount
per month at key sites 4,260 4,338 4,260 4,338 EMEA 26 39 106 275 Americas 5 6
11 38 APAC 0 2 0 0 (1) Recordable incidents include all work-related accidents
excluding first aid cases. (2) Safety data for 2023 includes one additional
key site, QIAGEN GdaDsk. The table below compares the safety indicators for
work-related injuries and recordable work-related cases at key manufacturing
sites for employees and temporary workers against contractors. Safety
indicators for full-time employees and temporary workers vs. contractors
Full-time employees and temporary workers Contractors 2023(1) 2022 2023(1)
2022 Number of hours worked 7,444,255 7,286,205 498,023 701,729 Number of
work-related fatalities 0 0 0 0 Number of work-related injuries including
first aid cases 158 163 20 22 Rate of work-related injuries including first
aid cases(2) 4.24 4.47 8.03 6.27 Number of recordable work-related cases(2)(3)
26 39 5 8 Recordable incident rate(2)(3) 0.7 1.07 2.01 2.28 Main types of
work-related injuries and illnesses Unsafe acts by people: inattention,
exposed or in contact while handling lifting or carrying, slipping, tripping,
falling Slipping, tripping, falling, misbehavior, unsafe working procedures
Unsafe acts by people: contact with something fixed or stationary,
inattention, hit by falling product/ machinery/equipment Misbehavior, unsafe
acts of people (1) Safety data for 2023 includes one additional key site,
QIAGEN GdaDsk as of 2023. (2) Rate of work-related injuries and recordable
incident rate are calculated per OSHA methodology based on 200,000 working
hours. (3) Recordable incidents include all work-related accidents, excluding
first aid cases. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Serving Society Making improvements in life possible is our vision. As a
global provider of resources and tools in molecular testing, we continue to
contribute to improving human health by ensuring communities around the world
have access to our products and solutions. Our global reach extends to
encompass public health organizations and commercial partners in more than 170
countries. We strive to provide innovative solutions to our customers and
their patients by delivering high-quality products and modern technologies
that enable new insights for scientific research, forensics, food safety and
better informed treatment decisions. Quality and product safety Our approach
to quality QIAGEN stands for quality. Since the beginning of our operations in
1986, our products are manufactured and distributed in compliance with global
regulatory requirements. Our processes are designed to set state-of-the-art
usability standards and are verified and validated according to their intended
purpose. To achieve and maintain our high-quality standards, we established
global quality management systems (QMS) in all our manufacturing facilities
worldwide. These ensure consistent high quality as well as safe and effective
medical devices. The QMS are certified according to ISO 9001, ISO 13485,
Medical Device Single Audit Program (MDSAP), ISO 18385, and comply with
European In Vitro Diagnostic Devices Regulation EU/2017/746 (IVDR) and U.S.
FDA 21 CFR 820 and other applicable medical device standards around the world.
Refer to the appendix Government Regulations for further discussion of our
regulatory environment. All processes at QIAGEN are customer- and
patient-oriented. Our activities are systematically and consistently
integrated into cross-functional end-to-end processes. Based on collected
insights and facts, reliable and sound information, and relevant measured
data, we continuously monitor and improve our processes. This ensures the
effectiveness and efficiency of our Quality Management System (QMS). Important
key performance indicators (KPIs) to measure the effectiveness of our QMS and
our product quality are: . First time right of our products manufactured .
Customer complaint rate, including trending and turnaround cycle times .
Supplier and internal corrective and preventive actions (CAPA), including the
efficiency and the cycle times . Recalls and medical device reports, including
trending and timely completion . Internal and external audits and inspections,
including tracking of timely completion of observations The processes around
product quality are described in more detail in our global Quality Manual. All
our employees receive regular training on quality-related topics. Consistent
product quality and customer satisfaction are strong reputational drivers. For
more details regarding our customer perception, refer to Customer Satisfaction
in this chapter. Risk management is fully implemented in the quality
management system. To ensure the quality of our products and solutions, we
validate our manufacturing processes, and each manufactured lot is verified
according to predefined specification prior to market release. We monitor
product performance according to established procedures internally through
trending and data analysis and in the market by assessing complaints and
engaging in post-market surveillance. Like other manufacturers, we are exposed
to the financial implications of potential recalls and other adverse events
due to equipment failure, manufacturing defects, design flaws or inadequate
disclosure of product-related risks. In the event of a recall, all of our
sites are subject to global procedures to avoid the further use of the product
and to guarantee cost-neutral procedures for our customers. We guarantee full
traceability of each product to the final customer and can, therefore, notify
customers directly in the event of a recall. QIAGEN N.V. | IFRS Annual Report
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Required actions for recalls depend on the individual case. Actions can range
from providing additional information to physically recalling a product. We
have defined processes, responsibilities and improvement programs as required
by regulating authorities to avoid the recurrence of recalls. Due to our
stringent quality management, recalls rarely occur. In past recalls, we were
able to reach 90% to 100% of customers to confirm the recall. QMS
Certification 2023 2022 2021 Percent of certified manufacturing sites 100 %
100 % 100 % Audits and inspection 2023 2022 2021 External audit non-conformance
rate (NC/audit man days) <0.5 <0.5 <0.5 Number of FDA warning letters
0 0 0 Recalls 2023 2022 2021 Number of recalls (U.S./EU FSCA) 7 6 6 Number of
FDA Class I recalls 0 0 0 Chemical product safety Management of Chemical
Product Safety Chemical product safety is our utmost priority. Our customers
rely on us to develop products that are safe for people - product users and
employees - and for the environment. The goal is to prevent any harm
associated with hazardous chemicals from the use of our products and to reduce
or avoid any current or potential environmental pollution. We work with our
business partners to foster responsible practices among suppliers, to
implement continuous improvement, and to support impact reduction starting at
product design and development and throughout the life cycle of the products.
To reduce the potential negative impacts of hazardous chemicals, the risks and
opportunities are addressed in our global EHS (Environment, Health, and
Safety) management system. It is accompanied by processes and procedures that
define roles and responsibilities required to comply with national and
international regulations. Furthermore, in late 2023, we established a
Substance of Concern Program with the objective to identify, manage and
understand the use of substances of concern within our product portfolio.
Regulatory context Global legal requirements on chemical product safety are
abundant and continually changing. In particular, we monitor conformity with
directives under REACH (Registration, Evaluation, Authorisation and
Restriction of Chemicals) and their counterpart in other regions, the Globally
Harmonized System of Classification and Labelling (GHS) and the Dangerous
Goods Regulations (DGR). All of these regulations compose the standards or
specifications for marketability, product labelling, and for providing
information to ensure safe product handling and transport. Changes in
regulations could lead to adjustments of safety evaluations. The team of EHS
Managers is responsible for tracking changes to the current legislation and
monitoring emerging regulations. To ensure and monitor the compliance of our
products, including automated system products, we use software configured to
support supply chain communication and data evaluation. In addition, we rely
on the use of Professional Regulatory insight services and typically acquire
specific input from associations. Access to information and responsible
marketing practices We provide the necessary information to users of our
products to handle and maintain the products safely. Our design and
development processes include the generation of user instructions and
marketing material for our products. Although we strive to develop products
free of hazardous properties, the nature of our product lines generate an
inevitable risk exposure to chemicals that are classified as hazardous or
potentially hazardous to human health or to the environment. To ensure safe
handling of products, we communicate the hazards via the product labels, in
safety data sheets or in the accompanying Instructions for Use (IFUs). A
safety data sheet is available for each product that contains chemicals by
kit. The safety data sheet includes valuable information related to
occupational health and safety, safe handling of chemical substances, and
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information and classifications for transport. It is provided in country- and
language-specific formats on our webpage. As with all companies in the medical
device/In Vitro Diagnostic (IVD) industry, our product claims and properties
are verified and validated during development and approved by regulatory
bodies around the world as part of the product submission process. All IVD
products are specially tested for safety and usability during development. We
market products only in accordance with their approved intended purpose and
declare potential residual (or remaining) risks in the instructions for each
product. For responsible marketing, we follow specific guidelines such as the
Federal Trade Commission's Green Guides or the guide to biodegradable,
compostable and related claims on plastic products issued by the Department of
Justice, State of California. All communications are subject to an internal
legal review via document controls before publishing. Safety along the value
chain and evaluation of raw materials We require our direct suppliers to
comply with the conditions of the Supplier Code of Conduct. By working closely
with our suppliers, we aim to ensure a high standard of chemical product
safety along the entire value chain. Suppliers confirm their compliance with
product-related statutory requirements by providing necessary certificates.
During the early phases of product development and product implementation,
every raw material and formulation is evaluated with regards to their safety
and impact on human health or the environment. This assessment is done in
accordance with the international standard under UN Model Regulation on GHS as
well as local chemical legal requirements. If necessary, testing is done on
our products to understand and identify any potential safety, health and
environmental hazard. Raw materials are subject to ongoing regulatory reviews
to ensure continual compliance with product safety. QIAGEN strives to reduce
the use of substances of concern in products and has a procedure in place to
support the efforts of reducing the use of substances of concern over a
product's life cycle. Specifically, we maintain and reference a watch-list for
"unwanted" chemical substances and prevent their use in product development.
Customer Satisfaction Management Approach We are committed to continually
improving our customers' experiences, taking into account their evolving needs
and expectations. Since our products extend across different market segments,
our customers have some common overlapping needs but also hold market-specific
expectations for the use of our products and services. We strive to exceed
customer expectations and establish trustful relationships that translate into
customer loyalty, allowing us to best market our current and developing
product portfolio across an established, diverse set of customers. Identifying
opportunities To continually assess the satisfaction of our customers, we
employ the Net Promoter Score (NPS) methodology to survey customers, analyze
their feedback, resolve identified individual situations of dissatisfaction,
and deduce and implement corrective actions to improve customer experience in
future. The NPS is a market research metric that measures customer
satisfaction by asking customers to rate the likelihood that they would
recommend a company or a specific product. Respective NPS values can range
from -100, indicating all customers were detractors and dissatisfied, to +100,
indicating all customers were promoters and satisfied. In 2023, we introduced
a transactional Net Promoter Score (NPS-T) for customer care (ordering
support) and tech service (technical product requests). Upon completion of an
interaction with a customer, we sent out requests to the respective NPS-T
survey via email and solicited customer feedback on their experience. All
collected customer feedback was directly accessible by local country managers.
They analyzed the collected responses and followed up immediately with
customers who indicated they were not fully satisfied with the resolution of
their requests. Based on the feedback we received, in the future, we will
offer enhanced customer service features. In 2024, we will launch our QIAGEN
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web-chat option in additional countries outside of North America to offer even
more timely solutions to the evolving requirements of our customers. In 2023,
the goal for NPS-T Service was set to be above 63. We achieved our goal as we
reached 68.8 by the end of December 2023. Throughout 2023, we built a baseline
for NPS-T Customer Care and we will set a minimum value target to be achieved
for 2024 of 64. In 2023, we additionally initiated our first Net Promoter
Score - Relationship (NPS-R) survey to collect information about the overall
state of the relationship between our company and our customers. It was
conducted in five languages and captured a diverse set of customers from all
business areas. The feedback from this initial 2023 NPS-R global survey was
predominantly positive, emphasizing our participants' confidence in our
product and service quality. For example, customers acknowledged our efforts
towards sustainability, saying they were pleased with changes in packaging and
product configurations. There was a general desire for increased in-person
interactions post-COVID-19, reflecting the willingness to return to the
visible level of attention and care that prevailed before the pandemic.
Customers also highlighted factors such as ease of doing business, effective
remote customer support and product-specific features as contributing to a
positive experience with QIAGEN and supporting their recurring business. We
anticipate finalizing and analyzing the results of this assessment during
2024. To address our customers' expectations in the best possible way, we
emphasize trainings for our sales force, with the goal of enhancing our
abilities to understand customer needs, educate them about our solutions, and
build lasting relationships. Through QIAlearn, we offer e-learning and
instructor-led training courses to our sales professionals on various topics
ranging from foundational knowledge to detailed product offerings. Our vision:
Making improvements in life possible . Development of research and diagnostic
solutions to understand, treat and prevent diseases . Collaboration with
governments, public health authorities and customers to ensure availability of
testing solutions3.3, 3b Access to Healthcare Management Approach Improving
access to diagnostics remains one of the world's greatest healthcare
challenges. Our vision of Access to Healthcare is to ensure that every person
who may benefit from a QIAGEN testing solution has access to one, regardless
of where they live in the world and regardless of their economic status or
background. Our commitment to Access to Healthcare is focused on three
pillars: Accessibility, Affordability and Collaboration, with special focus on
therapeutic areas that disproportionately affect vulnerable populations,
including elimination of Tuberculosis (TB), HIV, COVID-19, Human Papilloma
Virus (HPV), and Monkeypox (MPOX), among other infectious and neglected
diseases. As described in our Access to Healthcare policy, our Global Public
Health Task Force (GPHTF) is the highest governing body, responsible for
oversight of QIAGEN's Access to Healthcare strategy and objectives, including
allocation of resources and overseeing project expansion in crucial regions.
The GPHTF is composed of a diverse population of employees, with representation
from each sales region encompassing APAC, EMEA, and the Americas. It also
integrates members from every functional domain in Molecular Diagnostics, Life
Sciences, and QIAGEN Digital Insights. While public health touches every
region, particular consideration is given to Low and Middle-Income Countries
(LMICs) where global health access pricing of our products is offered. QIAGEN
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Collaborations We collaborate with public health laboratories, research and
academic institutions around the world as part of our mission to enhance
access to healthcare. Our role and contribution varies based on the project
and may involve laboratory infrastructure and capacity building to support
pandemic preparedness and response initiatives, local surveillance, and
development of new tools for pathogen detection. One such collaboration
launched in 2023 involved working with the Pasteur Network and Institut
Pasteur at two of their sites in Dakar, Senegal, and Bangui, Central African
Republic. As part of the collaboration, we donated over 500 QIAstat-Dx panels
for Meningitis/ Encephalitis and MPOX surveillance at Institut Pasteur Dakar,
and continued supporting Institut Pasteur Bangui with ongoing MPOX research
from kits previously donated in 2022. The project in Bangui focused on
detection of MPOX Clade I, inaugurated during a visit of the Minister of
Health and a World Health Organization (WHO) delegation. Launching the
collaboration was no small feat, with meticulous planning for equipment
deployment and training. In 2023, we expanded our support for a pilot project
with the Malawi-Liverpool Wellcome Trust Clinical Research Programme for TB
infection surveillance of pediatric populations. Additional QuantiFERON-TB
Gold Plus tests and automation equipment were provided to increase the
capacity for collecting and processing samples. An HPV screening project in El
Salvador with Basic Health International was also expanded in 2023 with the
delivery of additional careHPV testing assays and consumables. In addition, as
part of a research initiative, we shipped QIAprep& Viral RNA UM Kit
materials to Institut Pasteur Dakar to validate an innovative molecular method
for rapid and simple detection of Plasmodium spp. parasites using whole blood.
This malaria detection method has several advantages over conventional
methods, including reduced dependence on skilled personnel, better performance
at low parasitemia, and better handling of mixed infections and parasite
mutations. Our collaborations with Institut Pasteur remain ongoing with the
intention to further expand the collaboration to other sites within the
Pasteur Network in 2024 and beyond. Humanitarian Assistance and Disaster
Relief QIAGEN is committed to corporate social responsibility and believes in
actively contributing to the communities we serve. In light of the ongoing war
in Ukraine, QIAGEN has supported the Public Health Centre of Ukraine, a
division of the Ministry of Health, with multiple product donations to address
healthcare challenges and disruption to healthcare services caused by the war.
Our donation included QuantiFERON-TB Gold Plus testing kits and instrumentation
to diagnose Tuberculosis infections and control the spread of this deadly
disease. The donation was coordinated through the United Nations Office for
Project Services and the Global Drug Facility. To assist with the
identification of missing persons and war crimes investigations, we provided a
donation of human identification and forensic equipment to two public health
laboratories in the country. In addition, working in collaboration with a non-
governmental organization in Ukraine called "We Stand," we donated care HPV
testing equipment and consumables to aid in the screening of HPV and the
prevention of cervical cancer among women who have been displaced or affected
by the ongoing war. On September 10, 2023, a massive storm caused widespread
flooding and destruction in Libya. According to UNICEF, the flooding killed
more than 4,300 people with thousands more missing and displaced. To respond
to the crisis, QIAGEN contacted representatives of the Libyan government and
provided a donation of reagents and consumables to assist in the identification
of missing persons and catalyze search and recovery efforts. In addition to
product donations that support healthcare services and laboratory
infrastructure, QIAGEN also provided financial contributions to local Red
Cross and Red Crescent Societies in response to international disasters.
During the course of 2023, QIAGEN organized two global employee donation
drives to raise funds for relief efforts in response to the earthquakes in
Turkiye, Syria and Morocco, and the tragedy in Libya. These campaigns raised
over $124,000 from employee donations and a QIAGEN contribution, which matched
the employee donations dollar for dollar. QIAGEN N.V. | IFRS Annual Report
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Tuberculosis Tuberculosis (TB) is one of the world's leading infectious
disease killers. In 2021, more than 1.6 million people died and another 10.6
million people fell ill from the disease, according to the WHO. Recognizing
this, for nearly two decades, QIAGEN has undertaken a global effort to advance
diagnostics for TB in low-resource, high-disease burdened countries. Our
QuantiFERON-TB Gold Plus (QFT-Plus) remains one of the most widely used tests
for the detection of Tuberculosis with over 100 million tests distributed to
over 130 countries around the world. We work closely with the World Health
Organization, Stop TB Partnership Private Sector Constituency, and many other
organizations involved in the fight to eliminate this deadly disease and raise
awareness on the importance of TB infection testing in order to reach global
elimination targets. In 2023, we participated in the 2nd United Nations
General Assembly High Level Meeting on Tuberculosis, delivering testimony on
the importance of early detection and prevention of infection by cutting off
the source of TB disease before transmission can occur. The meeting culminated
in the adoption of a Political Declaration whereby Member States committed to
find and treat 45 million people between 2023 and 2027 and mobilize an
additional $5 billion annually by 2027 for TB research. QIAGEN's support for
TB infection testing will be instrumental in reaching these targets. In
addition to supporting a global health movement, at the regional level, QIAGEN
supported education and awareness for TB infection testing in rural First
Nation indigenous communities in Canada and Alaska in 2023 through the
QIAcommunities initiative. Since January 2023, QIAGEN has supported the Alaska
Department of Health with numerous awareness-raising activities ranging from
sponsoring free lunches and TB testing to podcasts and art contests for kids.
In Canada, trainings were conducted for First Nation healthcare workers.
Initial activities focused on Yukon and Northwest Territories, with plans to
expand into Nunavut by the end of 2023 and into 2024. QIAGEN's commitment to
aid in eradicating TB did not go unnoticed. In 2023, QIAGEN was recognized by
the Treatment Action Group as one of the leading private sector funders of TB
diagnostics research during 2022. Importantly, we are proud to renew our
commitment to pediatric TB R&D and be recognized as one of three corporations
in the private sector investing more than $500,000 in pediatric TB research in
2021. Children are often a neglected segment of this already neglected
disease. The unique needs of children and adolescents require new tools and
innovations, and QIAGEN is a leader in developing testing solutions suitable
for this vulnerable population. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Governance Ensuring Business with Integrity Compliance, Anti-corruption and
Anti-trust Compliance Program As a publicly listed company with international
operations, we are subject to regulations in various jurisdictions. Unethical
behavior and non-compliance with laws and regulations has the potential to
seriously harm our business, our reputation, our shareholders, and expose our
employees to personal liability. We have established a comprehensive
Compliance Program which is overseen by the Global Compliance Manager and the
Compliance Committee, under the leadership of the Head of Global Legal Affairs
and Compliance, who reports in this function directly to the Audit Committee
of the Supervisory Board. The Compliance Committee consists of managers from
Legal, Internal Audit, Human Resources, SEC Reporting, Clinical and Medical
Affairs, and Trade Compliance. The Compliance Committee is responsible for our
Corporate Code of Conduct and Ethics, which is updated annually, supplements
specific policies for our employees, and meets the requirements of the SEC and
the NYSE Listed Company Manual. The Corporate Code of Conduct and Ethics
applies to all employees including the chief executive officer, chief
financial officer, the principal accounting officer or controller, and other
persons performing similar functions. The full text of our Corporate Code of
Conduct and Ethics can be found on our website, www.qiagen.com, on the
Compliance page under Investor Relations. Our Compliance Program includes a
broad range of policies including, but not limited to, aspects such as
conflicts of interest, insider trading, revenue recognition, confidentiality,
and social media. Policies regarding interactions with healthcare
professionals are fully compliant with the AdvaMed Code of Ethics, and are
described in detail in our Global Legal Framework for Sales and Marketing
Activities Policy, which includes guidelines on various marketing activities
such as samples, gifts, etc. All our compliance policies are available to
employees via the intranet. Each policy includes a contact address and the
invitation to comment or to ask questions. Moreover, we do not make or receive
any payments to or from political parties or political action committees. Such
actions have been prohibited without exception by our Code of Conduct since
its establishment in 1996. QIAGEN is a member of several industry trade
associations, such as AdvaMed (U.S.) and MedTech (Europe), which work to
advance important healthcare related initiatives with governmental and
non-governmental organizations. We also collaborate with global health policy
institutions such as the World Health Organization and regional consortia,
such as the African Society for Laboratory Medicine, to improve affordable
access to testing solutions for neglected diseases in low-resource settings.
Besides our engagement in industry associations, we are not active in any
direct lobbying activities. Risk Management We pay special attention to
anti-trust and anti-corruption laws. Non-compliance with the related rules can
expose QIAGEN and its involved employees to monetary and reputational damage
and criminal charges. Conversely, compliant behavior will improve the trust in
us held by our customers, employees and shareholders and enhance our
reputation in the market. Our Compliance Committee annually analyzes related
risks, including anti- competitive practices. The risk assessments are applied
to the entire group. When evaluating the individual jurisdictions across each
subsidiary, while we basically see a higher corruption risk in developing
countries as per the Transparency International Corruption Perceptions Index,
we have not identified any significant risks related to corruption in any of
our operations. Furthermore, the Legal Department closely monitors the
evolution of the law to adapt our policies and training courses, if needed.
QIAGEN targets 100% compliance, i.e. no occurrence of any incidents in these
areas. During 2023, there were no significant issues of non-compliance with
any laws or regulations and no fines were paid during the reporting period.
Our specific anti-trust policy and anti-corruption policy support our
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abide by the anti-trust and anti-corruption laws of the countries in which we
operate. Our policies on anti-trust and anti-corruption can be found on our
Compliance webpage under Investor Relations. We extend our Compliance Program
not only to our management and employees, but also to third-party
intermediaries, such as distributors or agents. Our third-party due diligence
program, which is administered by our Global Compliance Manager, focuses on
our local distributors and agents, and contains the following six elements:
(1) pre-screening, anti-corruption questionnaire and certification for new
distributors, resellers and agents; (2) annual risk assessment of selected
third parties based on a calculated risk score, which factors in location of
business and Corruption Perceptions Index; (3) annual audits of the
anti-corruption program and third-party risk management conducted by internal
and external auditors; (4) training for third-party distributors; (5)
contractual obligation to comply with applicable laws (including anti-
corruption laws) and QIAGEN's Code of Conduct and Anti-Corruption Policy, as
well as compliance certification; and (6) due diligence in the form of annual
background checks of a random selection of third parties, and ongoing
monitoring. Compliance training courses Our employees' awareness of compliance
is shaped by regular in-person training courses held by external hosts as well
as in-house legal and regulatory experts. We also offer online courses to
instruct and verify knowledge of policies for anti-trust and competition,
bribery and corruption, conflicts of interest, data protection, gifts and
entertainment, harassment, insider trading, reporting, and respectful
communication. Online training is provided to all employees in nine languages
and supported by multiple communication resources. All new employees are
required to complete online training regarding the QIAGEN Corporate Code of
Conduct and Ethics, and to confirm that they have read and understood the
Code. Additional mandatory courses, including courses related to risks linked
with job function, are customized to the specific area of responsibility. All
employees in sales and marketing as well as upper management are required to
complete trainings in anti-corruption and anti-trust laws on a regular basis.
These basic training courses are followed by regular refresher courses with
reassessment varying in frequency from quarterly to every three years
depending on the course. In 2023, our employees completed courses covering
anti-harassment and discrimination, prevention of corruption and bribery, and
business ethics. In addition, we keep employees informed on compliance topics
through our intranet and regular updates via our internal communication
platform Viva Engage and our quarterly Compliance Newsletter. During 2023,
each employee was obliged to take cyber security trainings. Additionally, the
majority of our management was obliged to take master data governance
trainings, with this course offering extended to all new employees as well.
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2023 Compliance training courses Number completed Total time (hrs) Average
time (hrs) Harassment and D&I by category:(1) Harassment - U.S. 879 879 1.00
Harassment - Non U.S. 2,561 2,561 1.00 Diversity & Inclusion 388 279 0.72
Anti-corruption and bribery(2) 1,930 1,081 0.56 Business ethics(3) 2,158 1,273
0.59 (1) Includes Harassment, Sexual Harassment & D&I. Note D&I is mandatory
in curriculum starting in 2022. (2) Includes third-party training on
anti-corruption and bribery (3) Includes Code of Conduct course & handbook
QIAGEN Integrity Line Our hotline for the good faith reporting of violations
of the law or our compliance policies is in accordance with the applicable
German Whistleblower Act (Hinweisgeberschutzgesetz), the U.S. Sarbanes-Oxley
Act, and the listing standards of the NYSE. We follow a strict non-retaliation
policy. Upon identification of a report, we diligently investigate all such
complaints and protect the anonymity of the complainant to ensure protection
from retaliation as well as to secure the employment status of the
complainant. We also offer a direct email and telephone hotline for employees
to communicate questions or make suggestions for our Compliance Program. In
2023, we updated our Whistleblower Policy to allow compliance- or audit-
related complaints to be collected from outside the organization and not
limited to only reports by employees. The new QIAGEN Integrity line is
accessible via the QIAGEN Website. It is open for all persons or groups of
persons who are directly or indirectly affected by human rights or
environmental risks or violations within QIAGEN's own business area or within
QIAGEN's supply chains. Reported potential or actual violations and breaches
will be forwarded to the Audit Committee of the Supervisory Board. A written
or oral report can be submitted via the digital reporting system, with text
available in 19 languages. Sustainable Procurement Supplier structure Our
direct distribution network extends across more than 30 countries worldwide,
and our sites are supported by a global supplier network that includes over
6,100 suppliers in more than 70 countries supplying resources such as
chemicals and bioreagents, plastics, packaging materials, and other materials
and services essential to our business. Currently, 95% of our overall
purchasing volume comes from OECD countries. QIAGEN N.V. | IFRS Annual Report
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Region of origin of suppliers 2023 2022 Europe 62 % 58 % Asia 5 % 8 % North
America 31 % 27 % South America - % 4 % Australia 2 % 2 % Africa - % 1 % Total
100 % 100 % New Supplier Code of Conduct We strive to ensure that our quality
standards, compliance with laws and regulations, as well as environmental and
social standards, are observed along the entire value chain. QIAGEN expects
the same high standards that it has set for itself as an organization from its
suppliers. In 2023, we introduced our revised Supplier Code of Conduct.
Acceptance of this code is an integral part of our terms and conditions. All
suppliers are requested to commit to QIAGEN's Supplier Code of Conduct and to
accept the human rights, environment and sustainability principles defined
therein as a precondition for a contractual relationship with QIAGEN.
Accepting our Purchase Orders is a confirmation of acknowledging our Code of
Conduct. The revised QIAGEN Supplier Code of Conduct refers to numerous
obligations, and it safeguards fundamental human rights. In addition to the
obligation to fully comply with applicable laws and other behavioral
requirements, it includes: . Standards to prevent corruption, . Ethical
standards in research and development, . Fair trade and competition, .
Environmental, health and safety standards, . Fair standards for wages,
benefits and working hours, . Freedom of association, . Non-discrimination and
fair treatment, and . Standards for the sourcing of conflict materials. We
expect our suppliers to commit to respect human rights and environmental
protection, to establish appropriate due diligence processes, and to pass
these principles on to their own suppliers. The Supplier Code of Conduct is
available online on our website, along with the QIAGEN Procurement Policy. In
alignment with the revision of the Supplier Code of Conduct, our internal
procurement policy was updated in 2023. The policy applies to QIAGEN
procurement activities globally and serves as the foundation to enable and
ensure sustainable sourcing at QIAGEN. With respect to the revised Supplier
Code of Conduct, 100% of employees working in procurement completed training.
Our compliance training program ensures that employees in the procurement
organization understand our existing guidelines and policies and comply with
them. The training is mandatory. Supply chain management The Global
Procurement Team, situated across several countries, assumes a pivotal role in
overseeing acquisitions and expenditures in our production cycle and across
various other business functions. It provides the required strategic overall
direction and informational foundation and enables efficient and effective
operational execution. This includes defining, developing and realizing all
relevant category and supply base strategies to execute and support global
procurement and sourcing activities. The team is tasked with driving cost
savings, investigating innovation, supporting ESG initiatives, securing
availability of products and services, and ensuring compliance within the
category. Additionally it engages in spend, trend, and forecast analyses, and
conducts quantitative reviews of price and market benchmarks. It also
participates in the oversight and verification of the quality of procured
goods and services by ensuring specifications adhere with business
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Furthermore, our Head of Procurement serves as an ambassador to the
Sustainable Procurement Pledge, an international non-profit organization for
procurement professionals, driving awareness and knowledge on responsible
sourcing practices. In 2023, we continued to navigate through supply chain
interruptions in a disruptive supply landscape. We took action to hedge
against our exposure by employing a combination of long-term agreements and
alternative sourcing activities in the short and mid-term. Our ability to
engage this adaptive strategy allowed us to navigate the challenges during the
year posed by the dynamic and unpredictable nature of the supply environment.
Due Diligence in the supply chain Risk analysis When working with suppliers,
we apply a multi-stage selection process to minimize compliance, environmental
and social risks in our supply chain. Suppliers are subject to a risk analysis
covering environmental and social criteria based on their geographic location.
To ensure the reliability of these criteria, we leverage information from
reputable sources, including the MVO Netherlands platform, funded by the Dutch
Foreign Ministry, and the Sustainable Development Goals Index in 2022 from the
Bertelsmann Stiftung. Effective risk management enables us to perform an
assessment of human rights and environmental risks in our operating business
with greater comprehension and prioritization, resulting in more efficient
identification and integration of main risk areas. To date, this includes: .
regular risk assessment of existing suppliers and new suppliers during their
onboarding process, . review and analysis of results from the annual
environment, health and safety risk workshops, . understanding and integration
of our experience in dealing with critical/ controversial business activities,
incorporating the expertise of external human rights experts, and . insights
from dialogues with investors, NGOs, key opinion leaders and other
stakeholders. Our subsidiary in Hilden, Germany is subject to the German
Supply Chain Act (Lieferkettensorgfaltspflichtengesetz or LkSG) as of January
1, 2024. The new law imposes extended due diligence requirements in the supply
chain on QIAGEN. To effectively address the challenges of a sustainable supply
chain and meet the regulatory requirements as well as our own ambitions, we
refined our existing risk analysis and implemented various measures in 2023,
including the establishment of a Human Rights Committee. Read more about its
composition in the section Human Rights in this chapter. The risk analysis for
2023 reflected that no suppliers falling under the German Supply Chain Act
pose potential risks based on their geographic location and their transactions
with QIAGEN. Direct suppliers As a general principle, our suppliers have to
commit to our Supplier Code of Conduct and the embedded human rights and
environmental principles, and to adhere to these principles in their supply
chain. As part of this commitment, our direct suppliers are obliged to allow
us to conduct audits. Each new supplier is required to complete a
questionnaire that collects information on specific human rights and
environmental risk, as well as aspects of safety, quality and cyber security.
We plan to extend the questionnaire to existing suppliers during 2024 through
an electronic survey administered by the cloud-based tool we use to onboard
our suppliers. For registered suppliers, we regularly track potential
incidents with media checks via the same system. The effectiveness of our
prevention measures is reviewed by our Human Rights Committee annually, or on
an ad hoc basis as needed. Supplier assessment and audits We conduct
comprehensive assessments as part of our supplier selection process. All
direct strategic suppliers with a critical impact on the value of our supply
undergo this assessment. Among other things, the assessment is based on the
following criteria: quality management, future supply strategies, financial
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stability, embargoes, and risks of natural disaster. In 2023, this process was
adapted to leverage criteria in line with the evolving compliance regarding
environmental and social risks. We collect the relevant data for the
assessment via a submitted questionnaire or when assessing the suppliers
directly on site during a visit. In 2024, we anticipate more than 20 site
visits. If suppliers fail to fulfil all criteria, we reserve the right to
refrain from future cooperation. For all direct suppliers that we define as
critical, quality audits are conducted on site at least every three years on a
case-by-case basis. We document all audit findings and share the results with
the audited suppliers. In case of non- conformity with quality processes, we
deliver corrective actions to the supplier and continually follow-up until
effective implementation adheres to expected quality standards. Beginning in
2024, ESG-related topics will be incorporated into procedures evaluating
quality processes. For the onboarding of new suppliers, we use a cloud-based
tool with automated and optimized due diligence processes. Moreover, we
utilize this system to continuously monitor documentation data and
performance-related criteria of registered suppliers, as well as to track the
progress of the risk assessments. We anticipate that this tool will also help
us achieve our supply chain-related climate target we have committed to under
the SBTi, as discussed in the Environment chapter under Minimize Carbon
Footprint. Preventive measures Competency and awareness In 2023, as will also
be the case in 2024, ESG-related objectives were integrated into the personal
goals of all procurement employees. Beginning in 2024, new and mandatory
employee training courses regarding sustainability and human rights in the
supply chain were introduced. Furthermore, internal quality processes will be
extended as Global Procurement will report on local environmental and human
rights protection laws in connection with audits commencing in 2024.
Partnerships with suppliers In addition to assessments and audits, we engage
in strategic partnerships with suppliers. In these partnerships, we work
collaboratively on joint projects, events, training courses, and other shared
commitments. In general, it is our goal to strengthen ongoing partnerships
with our suppliers, for example by aligning our ecological and social goals.
During our Strategic Supplier Meetings in 2023, we further intensified the
cooperation with our suppliers by sharing our SBTi commitments and guidance on
the emission reduction goals. In order to enable our suppliers to reduce their
emissions as well, we analyzed their maturity levels and provided information
packages or further direct communication. Our commitment to sourcing from
suppliers having at least one environmental and one social goal reached 80% of
our total spend in 2023. In 2024, we aim to expand our reach and include more
suppliers. Remedies If we become aware of potential or actual violations and
breaches of the LkSG or our Supplier Code of Conduct, communicated for example
through the QIAintegrity Line, we will take immediate corrective action. In a
first step, any report is anonymously forwarded to the Compliance Team, which
then reviews the report with the appropriate teams. With regard to violations
due to our own business operations, we will take remedial measures to correct
identified violations and prevent future violations. In the case of (imminent)
violations involving direct suppliers, we will develop a corrective action
plan with the affected suppliers and monitor its implementation, provided that
the business relationship is to be continued. In the case of indirect
suppliers, in the event of substantiated knowledge of a (threatened)
violation, we will develop a process for the prevention and termination of
human rights or environmental violations, and ensure its implementation. We
reserve the right to terminate a business relationship in accordance with the
requirements of the LkSG, including in exceptional cases: . serious violations
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. no remedy through implemented measures after the specified time has expired,
. no alternative options identified and our ability to exert influence does
not appear promising. Conflict minerals U.S. legislation has been enacted to
improve transparency and accountability concerning the sourcing of conflict
minerals from mines located in the conflict zones of the Democratic Republic
of Congo (DRC) and its adjoining countries. Conflict minerals comprise
tantalum, tin, tungsten (or their ores) and gold. Certain of our instrumentation
product components that we purchase from third party suppliers contain gold.
This U.S. legislation requires manufacturers, such as us, to investigate our
supply chain and disclose if there is any use of conflict minerals originating
in the DRC or adjoining countries. We conduct due diligence measures annually
to determine the presence of conflict minerals in our products and the source
of any such conflict minerals. Because we do not purchase conflict minerals
directly from smelters or refineries, we rely on our suppliers to specify to
us their conflict minerals sources and declare their conflict minerals status.
We disclosed our most recent conflict minerals findings to the Securities
Exchange Commission for the calendar year ending December 31, 2022, on Form SD
on May 30, 2023, and will provide updated disclosure to the Securities
Exchange Commission as required. Human Rights Respect for human rights is an
essential component of promoting sustainability in our global business. As a
publicly listed company with international operations, we regard ourselves as
a responsible corporate citizen in all the countries and regions where we do
business. This role includes rights and obligations governed by international
and national law, with human rights as one of the foundational elements. Our
Human Rights Policy is designed to provide guidance on all human rights issues
in our sphere of influence, including our relationships with customers,
employees and in our supply chain. Our Human Rights Policy can be found on our
sustainability webpage. Further, beginning in 2024, we published a General
Declaration on our Human Rights Strategy in accordance with the German Due
Diligence Supply Chain Act (QIAGEN compliance webpage). We acknowledge and
endorse the UN Universal Declaration of Human Rights, the European Convention
on Human Rights, the business-related Organization for Economic Cooperation
and Development (OECD) Guidelines for Multinational Enterprises, the ILO
Declaration on Fundamental Principles and Rights at Work, and the UN Guiding
Principles on Business and Human Rights and its application in National
Actions Plans of our relevant jurisdictions. Our subsidiaries in the U.K.
comply with the U.K. Modern Slavery Act 2015. Management of our human rights
issues lie within different departments depending on the subject area, but may
involve Legal Affairs and Compliance, Human Resources, Procurement, Sales
and/or ESG. Our review of potential compliance matters with respect to human
rights violations applies a risk-based approach. Our review takes into account
that our global operations can be classified as based in either administrative,
research and development, manufacturing or sales. None of these areas,
including our manufacturing sites, allow for employment practices that violate
human rights principles (such as child or slave labor). Furthermore, local
management is responsible for overseeing that all employees adhere to the
observance of the principles set forth in our Code of Conduct and Ethics and
our Human Rights Policy at all sites. In 2023, we established a Human Rights
Committee. The Committee is comprised of the Vice President Procurement, the
Head of ESG Strategy & Impacts Programs, and the Head of Legal Affairs and
Compliance. It is responsible for ensuring the implementation of human rights
due diligence measures. Please refer to section Sustainable Procurement in the
Governance chapter to learn about the risk management of supply chain.
Business Ethics Management of ethical matters As a global leader in in vitro
diagnostics, we acknowledge the critical importance of bioethics in guiding
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practices. Our recently developed bioethics policy outlines our commitment to
ethical integrity across all facets of our operations. Our established
Bioethics Committee, led by the Chief Medical Officer, operates within the
broader structure of the Compliance Committee. This arrangement ensures
comprehensive ethical oversight, with regular meetings to review and update
our policies in response to new ethical challenges and scientific
advancements. The integration of our Bioethics Committee within the Compliance
Committee ensures a comprehensive approach to ethical decision-making. This
collaborative model fosters cross-functional dialogue and enhances our ability
to effectively address complex ethical dilemmas. Our stakeholder engagement
strategy involves regular dialogue with patients, healthcare providers,
regulatory authorities, and other key stakeholders. This engagement helps us
to refine our policies and practices, ensuring they are responsive to diverse
perspectives and the evolving landscape of healthcare and diagnostics. Ethics
in clinical studies Clinical studies are essential to evaluate the performance
and clinical value of our regulated clinical diagnostic tests. This
information is required by regulatory authorities to gain marketing approval.
More importantly, we are committed to bringing high performance products to
the market, and this can only be achieved by establishing the performance
characteristics of a potential product according to its intended use.
Therefore, we and our partners conduct clinical studies for our diagnostics
tests that are to be approved for use as in vitro diagnostics in a patient
care pathway. In the conduct of these studies, we commit to ensuring the
well-being, safety, ethical concerns, and legal rights of the study
volunteers. We have built global procedures for the conduct of clinical
studies which abide by the following principles: . The Declaration of
Helsinki: This is a statement of ethical principles that was developed by the
World Medical Association (WMA) to guide medical research, formally entitled
WMA Declaration of Helsinki - Ethical Principles for Medical Research
Involving Human Subjects, . The International Conference on Harmonization and
national Good Clinical Practice (GCP) guidelines, . Standards under ISO 20916:
In vitro diagnostic medical devices - Clinical performance studies using
specimens from human subjects - Good study practice. All investigators and
staff involved in studies must be suitably qualified for their role. They are
required to have a current GCP certification (renewed biannually) which
demonstrates training in the ethical conduct of clinical trials with human
participants. Eligible studies must be approved by ethics committees or the
Institutional Review Board prior to initiation, and if required, have the
appropriate regulatory approvals from authorities in the country in which the
study is being conducted. Study sites require proof of qualifications before
participating in a study to ensure compliance with all relevant regulations,
including financial disclosures and suitability of the principal investigator
and site staff. Study master files are compiled to ensure full recording and
monitoring of the study, which may be subject to audit by relevant
authorities. We use residual (left-over) patient samples whenever possible in
our studies, minimizing the need to actively collect new samples from
patients. Where active participation by volunteers in studies is needed, we
obtain informed consent by providing them with a comprehensive overview of the
study including its risks and benefits and alternative options for the
patient, in accordance with best practices. Appropriate guidelines, such as
ISO 20916, Clinical and Laboratory Standards Institute guidelines and direct
feedback and guidance documents from regulatory authorities, are followed when
designing QIAGEN clinical studies. This is to ensure the integrity of study
design, adherence to sound scientific principles, and that high quality data
are generated, while minimizing the risk to volunteers. Through our clinical
and medical monitoring, we oversee study and patient risks and assess any
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appropriately reviewed and reported to authorities (e.g., FDA, European
Competent Authorities, dependent on study location) when required. Personally
identifiable data that we collect while conducting studies are kept
confidential in accordance with all applicable laws and regulations. All
volunteers are issued unique subject identification numbers to de-identify
patient data, ensuring we meet the requirement for data privacy. For
transparency and accessibility of clinical performance data of clinical
diagnostic tests, we undertake to: . register relevant studies on
www.clinicaltrials.gov, a resource provided by the U.S. National Library of
Medicine and, . publish studies in peer-reviewed publications in an anonymized
fashion. Ethical product use We endorse the application of our products, our
services, and our operations in compliance with human rights principles and
codes such as the UN Guiding Principles on Business and Human Rights. Many of
our products, such as DNA or RNA extraction kits, have an intended use for a
broad range of research and diagnostic applications, including COVID-19,
oncology testing and forensics. None of them are designed for population
screening, but we acknowledge that it is technically possible to operate our
products for this purpose. As per our Human Rights Policy, we do not tolerate
the misuse of our products for purposes such as mass screening and
surveillance of ethnic minorities, and we will block customers involved in
such practices from further sales should this become known to us. However, as
we operate via distributors in many countries, we have no means of monitoring
the identity of all our end- users of our products, nor can we control the use
of our products by end customers. Following media reports about the use of DNA
profiling technologies for the genetic surveillance of minorities in certain
countries, we reviewed our commercialization channels in the identified
countries and could not confirm that any such practices were performed with
our products. To further mitigate this risk, we now require our distributors
to sign distribution agreements requiring them to block end customers from
further sales in the event they become aware of any misuse of our products as
defined by our Human Rights Policy. Those amendments give us the legal
leverage to terminate the respective distribution agreement if necessary.
Animal testing QIAGEN does not conduct any animal testing or related research
activities. However, we procure raw materials for some of our products from
suppliers that potentially may conduct animal testing and / or research as
stated in CIoMS (Council for International Organizations of Medical Sciences).
Rules are in place within our Supplier Code of Conduct (available on our
QIAGEN website) to ensure responsible actions. These rules request that
suppliers conduct testing and research activities in line with the guidelines
of international organizations such as the Association for the Assessment and
Accreditation of Laboratory Animal Care (AAALAC). Ethical use of genetic
editing Genome editing tools such as CRISPR-Cas9 are revolutionizing life
science research and have the potential to prevent and treat many diseases.
Our solutions are used in almost every laboratory conducting CRISPR and other
gene modification techniques. While such technologies can enable major
advances in life science research, we truly appreciate the complex ethical
considerations of using such technology, as well as the need for clear
guidelines and policies. At QIAGEN, we fully support the careful development
of guidelines by scientific and societal leaders, with involvement and
transparency for diverse elements of society with a stake in the issue. Tight
regulations and ethical rules about the use of genome editing are necessary to
prevent misconduct and avoid harm to people and the ecosystem in which we
live. We endorse the principles and proposals of scientific organizations and
advisory groups that have issued cautionary guidelines, namely the American
Society of Human Genetics and the European Society of Human Genetics. QIAGEN
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In 2019, leading scientists and ethicists from seven countries called for an
international moratorium on all clinical uses of human germline editing to
produce genetically modified children. These leaders are asking for a fixed-
period ban on changing heritable human DNA (in sperm, eggs or embryos) to make
genetically modified offspring. We strongly agree with the moratorium and
require compliance according to our Human Rights Policy. All employees who
become aware or have suspicions of customers using our products in a
non-compliant manner in this field are required to notify our Head of Legal
Affairs and Compliance in accordance with our policy on Ethical Issues in Gene
Typing. Data and Cyber Security Considering the increasingly challenging cyber
threat landscape, the realities of a remote workforce and our steadily
progressing digitalization efforts, cyber security remains an important topic
for our organization. We have made investments to improve the cyber-resilience
of our organization, products and services. Preserving the trust of our
customers, partners and employees is our goal. Despite our security measures,
the risk of data breaches remains. Potential incidents can have severe
ramifications including financial loss, reputational damage, and legal
penalties. Cyber-attacks, such as ransomware, can cause significant
operational disruptions, impeding the timely delivery of services and products
and potentially impacting our commitments to our stakeholders. We are aware
that some of the data we are processing, if leaked, may harm the trust of the
general public, our partners and customers. Our cyber security program,
therefore, aims to implement robust measures ensuring the confidentiality,
availability and integrity of critical data and services. Our cyber security
efforts are based on the ISO 27001 standard and incorporate the Information
Security Forum "Standard of Good Practice for Information Security." Global
cyber security and privacy requirements are actively monitored for and
discussed as part of our Cyber Security Council as well as during Data
Protection Committee meetings, both held multiple times a year. To facilitate
information and knowledge exchange, QIAGEN has joined well- known industry and
governmental cyber security communities like the Information Security Forum
(ISF), Allianz fur Cyber-Sicherheit and Health-ISAC. Our Cyber Security Team
consists of members with varying professional, educational, cultural and
industry backgrounds, as well as a balanced mix of technical and managerial
skills. We encourage and support our cyber security employees to further
develop their skill set and participate in relevant security industry and
community activities. Our cyber security program considers evolving business
requirements, regulatory guidance, and emerging threats. We have supporting
privacy and cyber security policies and guidelines in place, which are
reviewed and approved as part of our Cyber Security Council and Compliance
Committee procedures. These policies and guidelines are applicable to all
employees and are available on our intranet. Furthermore, we offer employees
mandatory training during which we carry out knowledge checks to ensure that
the content was understood by the trainees. QIAGEN has a high cyber security
awareness culture. For our mandatory cyber security awareness training, we
have, on average, approximately 85% of our staff worldwide successfully
complete the training and we are actively working on increasing this
completion rate further. We also conduct regular 'phishing' simulations,
providing all staff members with an opportunity to interact in a safe manner
with up-to-date phishing threats as observed from real threat actors. We offer
frequent awareness webinars and workshops on important security topics,
including new phishing trends, as well as role-specific trainings. In
addition, the cyber security team regularly conducts incident response
exercises to evaluate the organization's established procedures, including an
analysis of each applicable incident response stage. We are monitoring our
organization's externally exposed assets and services (Attack Surface
Monitoring), as well as information exposure (Dark Web Monitoring) to identify
blind spots and potential weaknesses. Our vulnerability QIAGEN N.V. | IFRS
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management program covers our global networks, digital workplaces and
corporate cloud environments. We are working with Council for Registered
Ethical Security Testers (CREST) certified partners to conduct regular, at
least annual, security assessments of our global infrastructure. We further
engage with external partners as needed to utilize their expertise for
advanced security assessments. Cyber security risks are considered in the
context of our Enterprise Risk Management. Tax Tax accountability, governance
and compliance We are committed to conducting business lawfully, ethically,
and with the highest degree of integrity. These fundamental values and
principles are key to our long-term success and the basis of our tax strategy.
Our tax strategy is firmly anchored within the company, being considered
within our risk management, subject to management decisions, and reviewed with
our Supervisory Board. Our tax strategy is embedded in the following guiding
principles, reflecting our status as a listed company and the regulated nature
of our business. Tax is part of our corporate governance and is supervised by
the Managing Board. Our tax function is centrally managed and controlled by
our Global Tax Department, which is part of the Global Finance organization.
It is led by the Global Head of Tax, who reports to the Chief Financial
Officer. Under the ultimate responsibility of our Audit Committee and Managing
Board, the Chief Financial Officer regularly reviews, evaluates, approves and,
where necessary, adjusts our approach to tax. Tax management One of the basic
principles for sustainable tax management is that taxes should be paid where
economic value is generated. We allocate assets to the jurisdictions in which
the underlying activities are performed, and risks are assumed. This ensures
that the return on our business activities is allocated and taxed where they
are actually performed. The volume of product and service that flows among
entities within the company is significant, and the price of transactions
among our entities is an important factor in our overall tax organization.
Within Global Tax, our Transfer Pricing Team determines the policy for the
pricing of such transactions based on a full analysis of the value drivers of
our business, ensuring that international and local rules are followed. Our
objective is that all entities are remunerated at "arm's length", in
accordance with OECD guidelines and country-specific rules and regulations.
The intellectual property related to our products, and also to marketing
specific intangibles, are key profit drivers within QIAGEN, and profits
generated with the employment of such assets are appropriately remunerated
with the respective owner. The owner is the company controlling and taking the
entrepreneurial risk of investing in the intellectual property. Our main
entrepreneurs and intellectual property owners are companies in Germany and
the U.S. We seek an open dialogue with our stakeholders, including relevant
tax authorities, our shareholders, customers, business partners, employees,
governments, regulators, NGOs, and the communities in which we operate. In
some cases, QIAGEN and the respective tax authority may disagree on the
correct application of local tax law. In the event of disputes, we collaborate
with the respective tax authority in a fair and positive spirit to find
balanced solutions in accordance with the applicable laws. We only use
business structures that are driven by commercial considerations, are aligned
with business activities, and have genuine substance. We do not operate in
countries that are on the EU list of non-cooperative jurisdictions for tax
purposes. Tax benefits Like many companies, we seek to optimize our global tax
position by accepting tax incentives. In doing so, we strive to achieve an
appropriate balance between corporate, employee and shareholder interests, as
well as public interest. We are committed to conducting business lawfully,
ethically, and with the highest degree of integrity. We seek to comply with
both the letter and the spirit of the relevant local and international tax
laws and principles wherever we operate, and we anticipate paying tax on
profits where our business QIAGEN N.V. | IFRS Annual Report 2023 Overview
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activities take place and added value is created. If possible and ethically
appropriate, we apply for tax incentives and exemptions. Such tax incentive
schemes relate to eligible research and development activities performed by
QIAGEN. Compliance and relationships with tax authorities We are committed to
complying with the tax legislation of the countries in which we operate and
create added value, and to paying the right amount of tax at the right time.
We strive for full and timely tax compliance. To minimize any tax compliance
risk, a frequent review process is in place to secure timely and correct tax
filings and tax payments. In the execution of tax compliance, third-party tax
service providers are often involved under the supervision of the Global Tax
Department. Transparency Country-by-Country Reporting (CbCR) requires
multinationals to report with aggregate data on the global allocation of
income, profit, taxes paid, and economic activity among tax jurisdictions in
which they operate. This requires QIAGEN N.V., the ultimate parent of the
QIAGEN Group, to file an annual CbCR report to the Dutch taxing authorities.
We provide in the following selected, aggregated information for the regions
Europe, Middle East and Africa (EMEA), North and South America (Americas), and
Asia Pacific, Japan and Rest of World (APAC). We also provide more detailed
information and reconciliation in accordance with the respective GRI standard
in the Annex of this report. The following information is based on U.S.
generally accepted accounting principles (GAAP), which is underlying to the
CbCR filing in the Netherlands. (in thousands, except headcount) 2023 2022
EMEA Americas APAC Total EMEA Americas APAC Total Headcount 3,453 1,329 1,185
5,967 3,556 1,372 1,250 6,178 Income tax paid(1) $40,303 $38,320 $3,786
$82,409 $85,996 $28,326 $6,154 $120,476 Related party revenues $1,762,690
$919,287 $36,132 $2,718,109 $2,239,637 $827,477 $28,534 $3,095,648 Profit
before income tax for CbCR $169,685 $235,364 $2,272 $407,321 $234,848 $240,534
$21,930 $497,312 Tangible assets $916,116 $360,630 $79,186 $1,355,932 $798,317
$344,754 $86,125 $1,229,196 (1) Cash paid for income taxes for EMEA in 2022
has been updated to reflect adjusted values as disclosed in the Consolidated
Financial Statement. Financial assistance from governments We recognize
government grants when there is reasonable assurance that all conditions will
be complied with and the grant will be received. Our government grants
generally represent subsidies for specified research and development
activities and are therefore recognized when earned as a reduction of the
expenses recorded for the activity for which the grants are intended to
compensate. Thus, when the grant relates to research and development expenses,
the grant is recognized over the same period that the related costs are
incurred. Otherwise, amounts received under government grants are recorded as
liabilities in the statement of financial position. When the grant relates to
an asset, the value of the grant is deducted from the carrying amount of the
asset and recognized over the same period that the related asset is
depreciated or amortized. In 2023, we received government grants in the amount
of $4.4 million (2022: $2.4 million). At December 31, 2023, we did not carry
any liabilities related to government grants. QIAGEN N.V. | IFRS Annual Report
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EU Taxonomy Under the Green Deal, the European Union is striving for a green
transition of its economy. The deal calls for sustainable growth by mitigating
climate change, protecting the environment and preserving biodiversity. To
help reach its goal of climate neutrality by 2050, the European Union aims to
redirect capital flows towards sustainable investments and projects. The
Taxonomy-Regulation is part of the EU Action Plan on Sustainable Finance and
contains a classification system for environmentally sustainable business
activities. Under the Regulation's disclosure obligations, companies will be
required to disclose their share of Taxonomy-eligible and -aligned activities.
This will increase transparency and allow investors to make decisions
according to sustainability aspects. The EU Taxonomy-Regulation defines six
environmental objectives to which the economic activities listed in the
Regulation and its delegated acts can contribute: . climate change mitigation
. climate change adaptation . sustainable use and protection of water and
marine resources . transition to a circular economy . pollution prevention and
control . protection and restoration of biodiversity and ecosystems The EU
Taxonomy distinguishes between two levels: Taxonomy-eligibility and
Taxonomy-alignment. Beginning in 2023, all six environmental objectives need
to be considered. For the first two environmental objectives (climate change
mitigation and climate change adaptation) Taxonomy-eligibility and -alignment
reporting is required. For the remaining four environmental objectives, only a
reporting about Taxonomy-eligibility is required. According to Article 8 of
the Taxonomy-Regulation, in conjunction with the Delegated Acts for the
reporting year 2023, key figures on turnover, operational and capital
expenditures are to be reported for Taxonomy-eligible and Taxonomy-aligned
economic activities. The tables provided within the Delegated Act on Article 8
are to be used for the presentation of the key figures. Taxonomy-eligibility
and Taxonomy-alignment An economic activity is Taxonomy-eligible if it
fulfills the description given in the Delegated Act of the corresponding
environmental objective. For Taxonomy- alignment, an economic activity must
additionally comply with the technical screening criteria and minimum
safeguards. The technical screening criteria are composed of the substantial
contribution criteria and the do no significant harm criteria: . Substantial
Contribution: Companies must meet defined technical requirements, for example
regarding the level of CO2 emissions of an economic activity. . Do-No-Significan
t-Harm (DNSH): Companies must ensure that the contribution to one of the six
environmental goals does not do significant harm to the environmental
objectives. This must be verified through, for example, a climate risk
analysis. The underlying requirements for Substantial Contribution and DNSH
are documented for each individual economic activity in the Delegated Act of
the corresponding environmental objective. For the minimal social safeguards,
an approach is set at the corporate level for every activity through which the
reporting company must prove its compliance with the following frameworks: .
International Bill of Human Rights . International Labor Organization
Declaration on Fundamental Rights and Principles at Work . UN Guiding
Principles on Business and Human Rights . OECD Guidelines for Multinational
Enterprises (OECD MNE Guidelines) QIAGEN N.V. | IFRS Annual Report 2023
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We did not collect evidence for the fulfillment of the Minimum Social
Safeguards for 2023 and will use a fit-gap-analysis for the Minimum Social
Safeguards to prove the fulfillment of the Minimum Social Safeguards for 2024
in line with the updated OECD guidelines with the aspect of Science,
Technology and Innovation. Determination of Taxonomy-eligible business
activities In an initial screening, we examined our whole portfolio to
determine relevant business activities. Our core business is not covered by
the Climate Delegated Act on the environmental objectives of Climate Change
Mitigation and Adaptation that has been submitted to date. The Environmental
Delegated Act was adopted in June 2023 during a comprehensive workshop where
the business activities of the four new environmental objectives were
assessed. Still, none of the listed economic activities, neither from the
Climate Delegated Act nor from the Environmental Delegated Act, match our
business model. Nevertheless, the economic activities listed in the table
below are principally relevant to us through the acquisition of products in
these categories: 6.5 Transport by motorbikes, passenger cars and light
commercial vehicles 7.3 Installation, maintenance and repair of energy
efficiency equipment 7.5 Installation, maintenance and repair of instruments
and devices for measuring, regulation and controlling energy performance of
buildings All activities which QIAGEN defined as Taxonomy-eligible are
allocated to both climate-related environmental objectives. As for QIAGEN's
actions in context with the respective activities, since no adaptation to
climate change can be derived, this environmental objective is excluded. Next
to climate change mitigation, the economic activity of Installation,
maintenance and repair of energy efficiency equipment could contribute as well
to the environmental objective circular economy. We consider this activity
rather contributing to Climate Change Mitigation than to Circular Economy. The
emphasis of building and renovating buildings is energy efficiency. We have
not identified any building projects specifically dedicated to Circular
Economy. With that, none of our taxonomy-eligible activities contributes to
more than one environmental objective. We use our internal reporting systems
to assess defined KPIs and document them under standardized data queries to
the extent possible, structuring the format to ensure we are not double-counting
our economic activities when calculating turnover, CapEx, and OpEx. We
disclose the three KPIs below in adherence with Annex II of the Disclosure
Delegated Act and also address the role of nuclear and gas activities as
required under the Complementary Delegated Act of the EU Taxonomy. Disclosure
of the financial KPIs Turnover To determine the turnover KPI, the
Taxonomy-Regulation requires that the net turnover, generated with business
activities contributing to the respective environmental objective, is related
to the net turnover of the QIAGEN Group as shown in the Consolidated Income
Statements and information provided in Note 4 "Revenue." As QIAGEN's material,
revenue-generating economic activities are not covered by the EU Taxonomy
Regulation, the share of Taxonomy-eligible and Taxonomy-aligned revenues is
0%. QIAGEN reports the following for 2023: QIAGEN N.V. | IFRS Annual Report
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Fiscal Year N 2023 Substantial Contribution Criteria DNSH (Does Not
Significantly Harm) criteria Economic activities (1) C od e (a ) ( 2) Tu rn ov
er (3 ) Pr op or tio n of Tu rn ov er , y ea r N (4 ) C lim at e C ha ng e M
iti ga tio n (5 ) C lim at e C ha ng e A da pt at io n (6 ) W at er (7 ) Po
llu tio n (8 ) C irc ul ar E co no m y (9 ) Bi od iv er si ty (1 0) C lim at e
C ha ng e M iti ga tio n (1 1) C lim at e C ha ng e A da pt io n (1 2) W at er
(1 3) Po llu tio n (1 4) C irc ul ar E co no m y (1 5) Bi od iv er si ty (1 6)
M in im um Sa fe gu ar ds (1 7) Pr op or tio n of Ta xo no m y al ig ne d (A
.1 .) or e lig ib le (A .2 .) tu rn ov er , ye ar N -1 (1 8) C at eg or y en
ab lin g ac tiv ity (1 9) C at eg or y tra ns iti on al a ct iv ity (2 0) kUSD
% Y/N N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N
Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1.
Environmentally sustainable activities (Taxonomy-aligned) n/a n/a Turnover of
environmentally sustainable activities (Taxonomy-aligned) (A.1) A.2
Taxonomy-Eligible but not environmentally sustainable activities (not
Taxonomy-aligned activities) EL; N/EL(b) EL; N/EL(b) EL; N/EL(b) EL; N/EL(b)
EL; N/EL(b) EL; N/EL(b) n/a n/a Turnover of Taxonomy-eligible but not
environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)
A. Turnover of Taxonomy eligible activities (A.1+A.2) B. TAXONOMY-NON-ELIGIBLE
ACTIVITIES Turnover of Taxonomy- non-eligible activities 1,965.3 100 % Total
1,965.3 100 % (a) Y - Yes, Taxonomy-eligible and Taxonomy-aligned activity
with the relevant environmental objective; N - No, Taxonomy-eligible but not
Taxonomy-aligned activity with the relevant environmental objective; EL -
Taxonomy eligible activity for the relevant environmental objective; N/EL -
not eligible, Taxonomy non-eligible activity for the relevant environmental
objective (b) EL - Taxonomy-eligible activity for the relevant objective; N/EL
- Taxonomy-non-eligible activity for the relevant objective. The Taxonomy
Regulation and its Delegated Acts do not cover our core business or any other
business activity from which QIAGEN generates turnover. QIAGEN N.V. | IFRS
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CapEx To determine the CapEx KPI, the Taxonomy-Regulation requires that the
capital expenditures for business activities contributing to the respective
environmental objective are related to the absolute CapEx of the QIAGEN Group
as shown in the Consolidated Statements of Cash Flows and included in Note 10
"Property, Plant and Equipment." The Taxonomy-definition of CapEx considers
additions in accordance with the following IFRS standards: . Additions to
tangible assets (IAS 16) . Additions to intangible assets (IAS 38) . Additions
to right of use assets (IFRS 16) . Additions to real estate which is kept as
financial investment (IAS 40) As QIAGEN's business activities are not covered
by the Taxonomy-Regulation, we do not report Taxonomy-eligible or
Taxonomy-aligned turnover but only report purchased CapEx. This form of CapEx
is classified as "CapEx c)" in the Annex I of the Delegated Act to Article 8.
For purchased CapEx (CapEx c)) the relevant information about compliance with
the Taxonomy-alignment criteria (substantial contribution, DNSH, minimum
social safeguards) needs to be provided by the suppliers. The results of the
respective queries were that the suppliers were not able to ensure their
compliance with the alignment criteria. For individual measures as listed in
categories 6.5, 7.3 and 7.5, QIAGEN must also prove compliance with selected
technical screening criteria and the minimum social safeguards despite the
purchased character of the products. Compliance with the technical screening
criteria and the minimal social safeguards cannot be ensured by QIAGEN at this
time. Additionally, QIAGEN is currently in the process of collecting evidence
for the fulfillment of the minimum safeguards. QIAGEN reports the following
for 2023: QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Fiscal Year N 2023 Substantial Contribution Criteria DNSH (Does Not
Significantly Harm) criteria Economic activities (1) C od e (a ) ( 2) C ap Ex
(3 ) Pr op or tio n of C ap Ex , y ea r N (4 ) C lim at e C ha ng e M iti ga
tio n (5 ) C lim at e C ha ng e A da pt at io n (6 ) W at er (7 ) Po llu tio n
(8 ) C irc ul ar E co no m y (9 ) Bi od iv er si ty (1 0) C lim at e C ha ng e
M iti ga tio n (1 1) C lim at e C ha ng e A da pt io n (1 2) W at er (1 3) Po
llu tio n (1 4) C irc ul ar E co no m y (1 5) Bi od iv er si ty (1 6) M in im
um Sa fe gu ar ds (1 7) Pr op or tio n of Ta xo no m y al ig ne d (A .1 .) or
e lig ib le (A .2 .) tu rn ov er , ye ar N -1 (1 8) C at eg or y en ab lin g
ac tiv ity (1 9) C at eg or y tra ns iti on al a ct iv ity (2 0) kUSD % Y/N
N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N Y/N
Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally
sustainable activities (Taxonomy-aligned) n/a CapEx of environmentally
sustainable activities (Taxonomy-aligned) (A.1) A.2 Taxonomy-Eligible but not
environmentally sustainable activities (not Taxonomy-aligned activities) EL;
N/EL(b) EL; N/EL(b) EL; N/EL(b) EL; N/EL(b) EL; N/EL(b) EL; N/EL(b)
Installation, maintenance and repair of energy efficiency equipment 7.3 40.0
0.02% EL N/EL N/EL N/EL N/EL N/EL 0.7% Installation, maintenance and repair of
instruments and devices for measuring, regulation and controlling energy
performance of buildings 7.5 78.9 0.04% EL N/EL N/EL N/EL N/EL N/EL -%
Transport by motorbikes, passenger cars and commercial vehicles 6.5 670.1
0.35% EL N/EL N/EL N/EL N/EL N/EL 3.2% CapEx of Taxonomy-eligible but not
environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)
789.0 0.41% 100% 3.9% A. CapEx of Taxonomy eligible activities (A.1+A.2) 789.0
0.41% 100% 3.9% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy-
non-eligible activities 192,923.9 99.59% Total 193,712.9 100.00% (a) Y - Yes,
Taxonomy-eligible and Taxonomy-aligned activity with the relevant
environmental objective; N - No, Taxonomy-eligible but not Taxonomy-aligned
activity with the relevant environmental objective; EL - Taxonomy eligible
activity for the relevant environmental objective; N/EL - not eligible,
Taxonomy non-eligible activity for the relevant environmental objective (b) EL
- Taxonomy-eligible activity for the relevant objective; N/EL - Taxonomy-non-eli
gible activity for the relevant objective. QIAGEN N.V. | IFRS Annual Report
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OpEx To determine the OpEx KPI, the Taxonomy-Regulation requires that the
operational expenditures for business activities contributing to the
respective environmental objective are related to the absolute OpEx of the
QIAGEN group. The Taxonomy-definition of OpEx differentiates significantly
from the common financial definition. It considers non-capitalized
expenditures that relate to research and development, building renovation
measures, short-term leases, maintenance and repairs, and any other direct
expenditures relating to the day-to-day servicing of assets of property, plant
and equipment by the undertaking or third party to whom activities are
outsourced that are necessary to ensure the continued and effective
functioning of such assets. As QIAGEN's core business is not covered by the EU
Taxonomy Regulation and therefore no operating costs are incurred in
connection with revenue- generating economic activities, the materiality of
operating costs was assessed. According to the Delegated Act on Article 8
(Section 1.1.3.2) as well as the FAQ document published in December 2022 by
the European Commission (Commission Notice 19 December, 2022, question 13),
the operating expenditures as defined according to the Taxonomy Regulation are
not material for QIAGEN's business model. The total value in the OpEx
denominator is 1.8% of the total operating costs and is therefore classified
as immaterial. The Taxonomy-eligible or Taxonomy-aligned costs for the OpEx
numerator can be reported as zero due to the immateriality of the denominator.
Thus, QIAGEN's Taxonomy-eligible and Taxonomy-compliant share of operating
costs is 0%. QIAGEN reports the following for 2023: QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 112 Management Report
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Fiscal Year N 2023 Substantial Contribution Criteria DNSH (Does Not
Significantly Harm) criteria Economic activities (1) C od e (a ) ( 2) O pE x
(3 ) Pr op or tio n of O pE x, ye ar N (4 ) C lim at e C ha ng e M iti ga tio
n (5 ) C lim at e C ha ng e A da pt at io n (6 ) W at er (7 ) Po llu tio n (8
) C irc ul ar E co no m y (9 ) Bi od iv er si ty (1 0) C lim at e C ha ng e M
iti ga tio n (1 1) C lim at e C ha ng e A da pt io n (1 2) W at er (1 3) Po
llu tio n (1 4) C irc ul ar E co no m y (1 5) Bi od iv er si ty (1 6) M in im
um Sa fe gu ar ds (1 7) Pr op or tio n of Ta xo no m y al ig ne d (A .1 .) or
e lig ib le (A .2 .) tu rn ov er , ye ar N -1 (1 8) C at eg or y en ab lin g
ac tiv ity (1 9) C at eg or y tra ns iti on al a ct iv ity (2 0) kUSD % Y/N
N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N N/EL(a) Y/N Y/N
Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally
sustainable activities (Taxonomy-aligned) n/a n/a OpEx of environmentally
sustainable activities (Taxonomy-aligned) (A.1) A.2 Taxonomy-Eligible but not
environmentally sustainable activities (not Taxonomy-aligned activities) EL;
N/EL(b) EL; N/EL(b) EL; N/EL(b) EL; N/EL(b) EL; N/EL(b) EL; N/EL(b) n/a n/a
OpEx of Taxonomy-eligible but not environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2) A. OpEx of Taxonomy eligible activities
(A.1+A.2) B. TAXONOMY-NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy- non-eligible
activities 13,848.1 100 % Total 13,848.1 100 % (a) Y - Yes, Taxonomy-eligible
and Taxonomy-aligned activity with the relevant environmental objective; N -
No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant
environmental objective; EL - Taxonomy eligible activity for the relevant
environmental objective; N/EL - not eligible, Taxonomy non-eligible activity
for the relevant environmental objective (b) EL - Taxonomy-eligible activity
for the relevant objective; N/EL - Taxonomy-non-eligible activity for the
relevant objective. QIAGEN's absolute OpEx (in accordance with the Taxonomy
Regulation definition) is immaterial when compared with QIAGEN's absolute OpEx
(in accordance with the financial accounting definition). In this case, the
numerator can be disclosed as zero and all figures are 0%. Nuclear and fossil
gas related activities Under the requirements of the Disclosure Delegated Act
and latest European Securities and Markets Authority's (ESMA) enforcement
priorities, QIAGEN reports the following table on nuclear and gas activities:
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
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Row Nuclear energy related activities Yes / No 1. The undertaking carries out,
funds or has exposures to research, development, demonstration and deployment
of innovative electricity generation facilities that produce energy from
nuclear processes with minimal waste from the fuel cycle. No 2. The
undertaking carries out, funds or has exposures to construction and safe
operation of new nuclear installations to produce electricity or process heat,
including for the purposes of district heating or industrial processes such as
hydrogen production, as well as their safety upgrades, using best available
technologies. No 3. The undertaking carries out, funds or has exposures to
safe operation of existing nuclear installations that produce electricity or
process heat, including for the purposes of district heating or industrial
processes such as hydrogen production from nuclear energy, as well as their
safety upgrades. No Fossil gas related activities 4. The undertaking carries
out, funds or has exposures to construction or operation of electricity
generation facilities that produce electricity using fossil gaseous fuels. No
5. The undertaking carries out, funds or has exposures to construction,
refurbishment, and operation of combined heat/cool and power generation
facilities using fossil gaseous fuels. No 6. The undertaking carries out,
funds or has exposures to construction, refurbishment and operation of heat
generation facilities that produce heat/cool using fossil gaseous fuels. No
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Outlook Global Economic Perspectives for 2024 Another year of global growth,
steady but muted compared to growth in 2023, is expected by both the World
Bank and the International Monetary Fund (IMF). Both institutions forecast
growth in 2024 at around the same rate of 3.0% as the previous year, thanks to
a combination of ongoing high interest rates and inflation, plus geopolitical
uncertainty and instability in various parts of the world. Even as the
negative effects of the COVID-19 pandemic waned in 2023, the sudden
Israel-Palestine conflict in the Gaza Strip fueled fears of a wider war in the
Middle East on top of the already intractable war in the Ukraine. China's
claim on Taiwan also remains a constant worry. On the plus side, the U.S.
economy showed signs of a revival in 2023, and analysts expect the Federal
Reserve to ease interest rates over the course of the year. This should not
only boost the U.S. economy, but trigger central banks in Europe and Asia to
follow suit. However, any such moves could depend on inflation continuing to
fall, and no further geopolitical shocks that might disrupt supply chains or
prompt a rise in energy prices. An escalation of the U.S.-China trade war can
also not be ruled out, while the European Union has entered the year in a
technical recession. The post-Brexit economic outlier that the United Kingdom
has become, meanwhile, is forecast to post zero growth in 2024. Key elections
there, in the U.S., and in India will also command the financial market's
attention. On top of all this, China's economy continues to weaken, the burden
of debt for developing countries may cause many to default on loans to China,
the World Bank and the IMF, and climate-related disasters have become an
inevitability, not just random 'natural' events. Nonetheless, if these factors
can be navigated and inflation continues to decline in 2024, many economists
expect improved growth across the world in 2025 if the stronger economies
loosen monetary policy. Industry Perspectives for 2024 The life science and
molecular diagnostics sectors will continue to be driven by innovation and
technological advances, with industry forecasts expecting annual growth rates
in the higher single digits up until the end of the decade. The burgeoning
fields of precision medicine and gene editing, for example, have the potential
to revolutionize diagnoses and the treatment of genetic diseases. The use of
Artificial Intelligence (AI) is also expected to play an increasing role in
the development and discovery of new drugs and therapies, while mobile apps
and portable devices will break new ground collecting data and preventing
disease. We aim to be at the forefront of this anticipated growth through our
focused growth strategy, our differentiated product portfolio, and our strong
global reach in emerging markets. QIAGEN Perspectives for 2024 QIAGEN
announced an outlook for 2024 (as of February 2024) with expectations for
solid sales growth in the second half 2024 in the non-COVID portfolio over the
2023 period. The outlook for sales is overall unchanged from 2023, takes a
prudent view on current macro trends and ongoing volatility in certain regions
(e.g., China), while still expecting positive trends in a number of our
end-markets. Consumables and related revenues are expected to drive growth,
while larger-scale instrument sales remain challenging. Currency movements
against the U.S. dollar are expected to have an overall neutral impact on
full-year net sales, but a negative impact on EPS. Significant pressure is
expected on non-operating income in 2024 due to anticipated lower interest
income and a higher tax rate compared to 2023. QIAGEN continues to implement
its strategy based on "focus" and "balance." Focus involves our Five Pillars
of Growth strategy to make significant investments in the commercialization
and development of (1) Sample technologies, (2) QuantiFERON, (3) QIAcuity, (4)
NeuMoDx and (5) QIAstat-Dx. Balance involves developing our portfolio to
address more than 500,000 customers across the Life Sciences and Molecular
Diagnostics, as well as to build our presence in markets around the world
offering growth potential. In terms of profitability, QIAGEN anticipates
earnings per share (EPS) to be slightly above the 2023 level. The outlook
provided by QIAGEN in February 2024 does not include any potential
acquisitions that could be completed during the year. QIAGEN N.V. | IFRS
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Message from the Chair of the Supervisory Board Dear Stakeholders, 2023 was a
challenging as well as an encouraging year for QIAGEN. Geopolitical
uncertainty, inflation and higher interest rates provided a volatile backdrop
to our efforts to generate growth and move beyond the COVID-19 pandemic. We
are proud of the initiative and determination among our 6,000 employees - whom
we call QIAGENers - to deliver solid sales growth in non-COVID product groups
that was in the top tier among companies in our industry, even if the targets
we had set ourselves were not fully achieved. QIAGEN's strategy is driven by a
commitment to "balance" and "focus" - building on the balance of our customer
base in serving more than 500,000 customers in the Life Sciences and Molecular
Diagnostics, and a broad geographic presence in areas offering the highest
growth potential. Focus is reflected in our decision to prioritize resources
and investments into Growth Pillars that involve products with significant
market positions as well as some with the potential to achieve this goal in
the coming years. The strategy is supported by a high level of R&D investment
that helps us stay ahead with distinctive products. Innovation and the
development of dynamic applications are key to the value that QIAGEN creates
over the long-term. Providing guidance Our role in the Supervisory Board is to
provide oversight, evaluate performance and give advice where required or
requested in our very constructive engagement with senior management. The
Supervisory Board members bring together enormous experience in international
leadership. management and finance along with deep knowledge in the Life
Sciences and diagnostics. Through our formal meetings and additional ad hoc
meetings and events, we are closely involved in the development of the QIAGEN
business. The following pages of this report provide detail on the areas of
focus that we have concentrated on during the year. A focus area that I want
to highlight here is our ESG strategy aimed at the long- term sustainability
and value creation in our business through the Environment, Social and
Governance framework. Our Supervisory Board is pleased to see how
sustainability and diversity are becoming truly embedded across QIAGEN, and a
topic we review within the Nomination and ESG Committee that I chair, as well
as through full Board sessions. Stakeholder engagement We actively engage with
our many stakeholders. Continued collaboration with customers and partners is
fundamental to the development of our portfolio of "Sample to Insight"
solutions to help customers unlock valuable molecular insights from any
biological sample. Frequent interaction with our employees supports an
empowered culture. This is reflected in a high level of employee satisfaction
and our ability to attract and retain top talent. Furthermore, we have engaged
with shareholders in discussions about QIAGEN and on our long-term ambitions.
The $300 million synthetic share repurchase completed in January 2024
underlines our confidence in the value creation opportunities for our
shareholders and other stakeholders in the years to come. To improve insight
and transparency in the governance of our company, we have restructured the
order of presentation of the annual report. In the first section, the
Management Board reports on the company performance. In a second section we
have concentrated our report on all aspects of governance. We feel this
provides a fair reflection of the position and responsibilities of management
and of our role in oversight, performance evaluation and advice. Strengthening
our leadership Succession is essential in strengthening of QIAGEN's
leadership, in particular the process undertaken in recent years to further
complement and enhance the Board's extensive experience profile. Two new
members - Dr. Eva van Pelt and Bert van Meurs - were appointed to the
Supervisory Board in early 2024, and will stand for election to one-year terms
at the next Annual General Meeting in June 2024 along with the other QIAGEN
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Board members. Both Dr. van Pelt and Mr. van Meurs bring impressive track
records in international healthcare industry management to QIAGEN along with
other areas of expertise involving digitization. We believe these new
appointments - including five new members since 2021 - contribute to our
discussions, decision-making and our interactions with the Managing Board and
senior management. Additionally, the Scientific Advisory Board comprised of
renowned scientists under the leadership of Prof. Dr. Ross Levine from our
Supervisory Board met during the year to support the early evaluation of
market opportunities and technology developments for QIAGEN. The Board was
regularly updated on the outcome of these discussions, which have been
critical to evaluating and prioritizing internal R&D activities, as well as
evaluating external opportunities. 2024 perspectives As we move into 2024, the
macro environment remains challenging amid a period of ongoing geopolitical
instability in various regions. Across the world, central banks are seeking to
tame inflation, and their progress has been varied. It will also be a year
marked by elections in more than 60 countries and over 40% of the world's
population. At the same time, as we have seen time and time again, challenges
bring out the best in our QIAGENers. We are confident that our strategy will
allow us to capture growth opportunities in attractive markets from a position
of strength and anchored by our trusted QIAGEN brand. We thank you for your
confidence and loyalty in QIAGEN, as we work together to realize our vision of
"making improvements in life possible." On behalf of the Supervisory Board,
Lawrence A. Rosen Chair of the Supervisory Board QIAGEN N.V. | IFRS Annual
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Governance Structure We recognize the importance of clear and straightforward
rules on corporate governance and, where appropriate, have adapted our
internal organization and processes to these rules. This section provides an
overview of our corporate governance structure and includes details of the
information required under the Dutch Corporate Governance Code 2022 (published
at www.mccg.nl) (the Dutch Code). The Dutch Code is applicable to QIAGEN N.V.
(in the following also referred to as QIAGEN or the Company), as it is a
publicly listed company incorporated under the laws of the Netherlands with
registered seat in Venlo, The Netherlands. The Dutch Code contains the
principles and concrete provisions which the persons involved in a listed
company (including Managing Board members and Supervisory Board members) and
stakeholders should observe in relation to one another. QIAGEN is a `Naamloze
Vennootschap,' or N.V., a Dutch limited liability company similar to a
corporation in the United States. We have a two-tier board structure under
which QIAGEN is managed by a Managing Board consisting of executive management
and acting under the supervision of an independent Supervisory Board
(non-executives). It is in the interest of QIAGEN and all our stakeholders,
including shareholders, that each Board performs its functions appropriately
with a clear division of responsibilities, as well as in terms of interaction
with the General Meeting of Shareholders (General Meeting) and the external
auditor, in a well-functioning system of checks and balances. The Supervisory
Board follows the principle of increasing stakeholder value and has always
pursued the highest standards in Corporate Governance. QIAGEN is committed to
ensuring a corporate governance structure that best suits its business and
stakeholders, and that complies with relevant rules and regulations. Our
corporate governance practices generally derive from the provisions of the
Dutch Civil Code and the Dutch Corporate Governance Code, although there are
some minor deviations due to factors such as legal requirements imposed by
other jurisdictions in which QIAGEN's Shares are listed, as well as due to
industry standards. A brief summary of the principal differences is presented
in the section Dutch Corporate Governance Code - Comply or Explain.
Requirements - U.S. Our Shares are also registered and traded in the United
States on the New York Stock Exchange (NYSE), which means we must comply with
requirements of U.S. legislation, such as the Sarbanes-Oxley Act of 2002, as
well as other regulations enacted under U.S. securities law and the NYSE
listing standards that are applicable to "foreign private issuers" such as
QIAGEN. A brief summary of the principal differences is presented under the
section NYSE Exemptions. Requirements - Germany Our Global Shares are listed
in Germany on the Frankfurt Stock Exchange in the Prime Standard segment,
where QIAGEN is a member of the blue-chip DAX-40 Index of the top
publicly-listed companies. QIAGEN is also a member of the TecDAX Index
composed of the country's leading technology companies. Accordingly, we are
required to follow the applicable German capital market laws, in particular
the Securities Trading Act (Wertpapierhandelsgesetz). We believe all of our
operations are carried out in accordance with legal frameworks, including
Dutch Corporate Law, U.S. laws and regulations, EU regulations, and applicable
German and U.S. capital market laws. QIAGEN N.V. | IFRS Annual Report 2023
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QIAGEN operates under a two-tier corporate structure General Meeting . Each
share carries one vote . Decisions on key topics (e.g. the appropriation of
net income, the ratification of the acts of the Managing and Supervisory
Boards and the appointment of independent auditors) Reports to Elects and
ratifies Reports to Elects and ratifies Close cooperation for the benefit of
the company Executive Committee Managing Board Supervisory Board . Comprised
of eight members . Senior leaders representing Business Areas and key
functions across QIAGEN . The Managing Board is accountable for the actions
and decisions by the Executive Committee . Comprised of two members (CEO and
CFO) . Top management body of QIAGEN N.V. . Comprised of eight members (As of
December 31, 2023) . Four committees - Audit - Compensation & Human Resources
- Nomination & ESG - Science & Technology Informs and reports to Advises,
oversees, approves QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Managing Board General The Managing Board is responsible for the continuity of
QIAGEN and its affiliated enterprise and for defining and achieving our aims
and strategy for, among other things, sustainable long-term value creation,
policies and results through the management of QIAGEN worldwide. The Managing
Board is also responsible for financing, managing the risks associated with
our business activities and complying with all relevant legislation and
regulations. In accordance with Dutch Law, our Managing Board, which has two
members, has chosen to work with an Executive Committee and is accountable for
the actions and decisions of the Executive Committee, which is comprised of
the CEO, the CFO and certain experienced leaders who have responsibilities for
the operational management of the Company and the achievement of its
objectives and results. The Managing Board (specifically the Chief Financial
Officer) is informed of the findings of the Internal Audit function, which
operates under the direct responsibility of the Supervisory Board through the
Audit Committee. The Managing Board provides timely information to the
Supervisory Board for discussions on the development of QIAGEN, and in
particular reviews internal risk management and control systems with the Audit
Committee. The Managing Board is accountable for the performance of its duties
to the Supervisory Board and the General Meeting. In discharging its duties,
the Managing Board takes into account the interests of all stakeholders,
including shareholders, in a commitment to sustainable long-term value
creation. Composition and Appointment The Managing Board consists of one or
more members as determined by the Supervisory Board. The Managing Board
members are appointed by the General Meeting upon the Joint Meeting of the
Supervisory Board and the Managing Board (the Joint Meeting), which makes
binding nominations. The General Meeting may overrule the binding nature of
any nomination by a resolution adopted by at least a two-thirds majority of
the votes cast, if such majority represents more than half of the issued share
capital. Managing Board members are appointed annually for one-year terms in
the period beginning on the day following the Annual General Meeting, up to
and including the day of the Annual General Meeting held in the following
year. Managing Board members may be suspended and dismissed by the General
Meeting by a resolution adopted by a two-thirds majority of the votes cast, if
such majority represents more than half of the issued share capital, unless
the proposal was made by the Joint Meeting, in which case a simple majority of
votes cast is sufficient. Furthermore, the Supervisory Board may at any time
suspend (but not dismiss) a member of the Managing Board. Managing Board
Members The following were our Managing Board members for the year ended
December 31, 2023: Thierry Bernard Chief Executive Officer (1964, U.S./French)
Thierry Bernard joined QIAGEN in February 2015 to lead our growing presence in
molecular diagnostics, the application of Sample to Insight solutions for
molecular testing in human healthcare. He was named Chief Executive Officer in
March 2020 after serving in this role on an interim basis, and became a member
of the Managing Board in 2021. Previously, Mr. Bernard held roles of
increasing responsibility during 15 years with bioMerieux SA, most recently as
Corporate Vice President, Global Commercial Operations, Investor Relations and
the Greater China Region. He also held senior management roles in other
leading international companies. He was named in March 2023 as Chair of the
AdvaMedDx Board of Directors, a U.S. industry trade association. Mr. Bernard
has earned degrees and certifications from QIAGEN N.V. | IFRS Annual Report
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Sciences Po, LSE, the College of Europe, Harvard Business School, Centro de
Comercio Exterior de Barcelona, and has been appointed Conseiller du Commerce
Exterieur by the French government. Roland Sackers Chief Financial Officer
(1968, German) Roland Sackers joined QIAGEN in 1999 as Vice President,
Finance. He became Chief Financial Officer in 2004, and joined the Managing
Board in 2006. From 1995 to 1999, he was an auditor with Arthur Andersen
Wirtschaftsprufungsgesellschaft Steuerberatungsgesellschaft. Since 2019, Mr.
Sackers has served on the Supervisory Board of Evotec SE, a publicly listed
company based in Germany, including as Chair of the Audit Committee since 2019
and as Vice Chair of the Supervisory Board since 2021. He is also a member of
the Board of the industry association BIO Deutschland. Mr. Sackers earned his
Diplom-Kaufmann from the University of Munster. Supervisory Board General The
Supervisory Board supervises the policies of the Managing Board, the general
course of our business and strategy for, among other things, sustainable
long-term value creation. The Supervisory Board assists the Managing Board by
providing advice relating to the business activities of QIAGEN. Meetings are
held in the absence of the Managing Board for select topics at each regular
meeting. In discharging its duties, the Supervisory Board takes into account
the interests of QIAGEN and all stakeholders, including shareholders, in its
aim to create long-term value. The Supervisory Board is responsible for the
quality of its own performance. In this respect, the Supervisory Board
conducts an annual self-evaluation which periodically takes place under the
supervision of an external expert. Our Supervisory Board has specified matters
requiring its approval, including decisions and actions that would
fundamentally change our assets, financial position or results of operations.
The Supervisory Board has established four Committees - Audit, Compensation &
Human Resources, Nomination & ESG, and Science & Technology - from among its
members. Additional Committees can be established or existing Committees
modified in terms of charter as deemed beneficial. The Supervisory Board has
approved charters for each of these Committees. An overview of these
Committees, their operations and meeting attendance is provided in the
Supervisory Board Report. Composition and Appointment The Supervisory Board
consists of at least three members, or a larger number as determined by the
Joint Meeting. Members of the Supervisory Board are appointed by the General
Meeting upon the Joint Meeting having made a binding nomination for each
vacancy. However, the General Meeting may overrule the binding nature of any
nomination by a resolution adopted by at least a two-thirds majority of the
votes cast, if such majority represents more than half of the issued share
capital. The Supervisory Board shall be composed in a way that enables it to
carry out its duties properly and enables its members to act critically and
independently of one another and of the Managing Board and any particular
interests. As a result, the Supervisory Board has adopted a profile in terms
of its size and composition that takes into account the nature of our
business, activities and the desired diversity, expertise and background of
the Supervisory Board members. The current profile of the Supervisory Board
can be found on our website (www.qiagen.com). The Supervisory Board has
appointed a Chair from its members who has the duties assigned by the Articles
of Association and the Dutch Code. Members of the Supervisory Board are
appointed annually for the period beginning on the day following the Annual
General Meeting of our shareholders up to and including the day of the Annual
General Meeting held in the following year. Members of the Supervisory Board
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and dismissed by the General Meeting by a resolution adopted by a two-thirds
majority of the votes cast, if such majority represents more than half of the
issued share capital, unless the proposal was made by the Joint Meeting, in
which case a simple majority of votes cast is sufficient. The composition of
our Supervisory Board is diverse in gender, nationality, background, knowledge
and experience. The targeted profile of the Supervisory Board is reflected in
its regulations, which are published on our website under "Supervisory Board."
Independence The NYSE listing standards require a majority of the Supervisory
Board Members to be independent, which is the case for QIAGEN. Additionally,
the Dutch Code distinguishes between certain independence criteria that may be
fulfilled by not more than one Supervisory Board Member (e.g., prior
employment with the Company, receiving personal financial compensation from
the Company, or having an important business relationship with the Company)
and other criteria that may not be fulfilled by more than the majority of the
Supervisory Board members. In some cases, Dutch independence requirements are
more stringent, such as by requiring a longer "look back" period (five years)
for former executives to become Supervisory Board members. In other cases, the
NYSE rules are more stringent, such as having a broader definition of
disqualifying affiliations. The majority of members of our Supervisory Board
are currently considered "independent" under both the NYSE and Dutch
requirements. Supervisory Board Members The following is a brief summary of
Supervisory Board members for the year ended December 31, 2023: Lawrence A.
Rosen Chair Committees: Audit, Nomination & ESG (Chair), Compensation & Human
Resources (1957, U.S.) Lawrence A. Rosen joined the Supervisory Board in 2013
and was appointed Chair in 2020. He is currently Chair of the Nomination & ESG
Committee and a member of the Audit Committee. Mr. Rosen also serves on the
Supervisory Boards of Lanxess AG and Deutsche Post AG, where he previously was
a member of the Board of Management and Chief Financial Officer from 2009 to
2016. He served as Chief Financial Officer of Fresenius Medical Care AG & Co.
KGaA from 2003 to 2009, and earlier as Senior Vice President and Treasurer of
Aventis SA in Strasbourg. A U.S. citizen, Mr. Rosen holds a bachelor's degree
from the State University of New York and an MBA from the University of
Michigan. Dr. Metin Colpan Committees: Science & Technology (Chair),
Nomination & ESG (1955, German) Metin Colpan Ph.D. co-founded QIAGEN and
served as its first Chief Executive Officer and a Managing Director from 1985
to 2003. A member of the Supervisory Board since 2004, Dr. Colpan is currently
Chair of the Science & Technology Committee and a member of the Nomination &
ESG Committee. Prior to co-founding QIAGEN, Dr. Colpan was an Assistant
Investigator at the Institute for Biophysics at the University of Dusseldorf.
He has extensive experience in Sample technologies, in particular the
separation and purification of nucleic acids, and has many patents in the
field. Dr. Colpan obtained his Ph.D. and master's degree from the Darmstadt
Institute of Technology. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Dr. Toralf Haag Committee: Audit (Chair and Financial Expert) (1966, German)
Toralf Haag Ph.D. joined the Supervisory Board in 2021 and currently serves as
Chair of the Audit Committee. Dr. Haag is Chief Executive Officer and Chairman
of the Corporate Board of Management of Voith GmbH & Co. KGaA, a privately
held German technology company. Before joining Voith as Chief Financial
Officer in 2016, Dr. Haag served for more than 11 years as Chief Financial
Officer and Member of the Executive Committee of Lonza Group AG. Dr. Haag
earned a degree in business administration from the University of Augsburg and
a Ph.D. from the University of Kiel. Prof. Dr. Ross L. Levine Committee:
Science & Technology (1972, U.S.) Ross L. Levine M.D. joined the Supervisory
Board in 2016 and serves on the Science & Technology Committee. In 2021, he
became Chair of QIAGEN's Scientific Advisory Board. A physician-scientist
focused on researching and treating blood and bone-marrow cancers, Dr. Levine
is the Laurence Joseph Dineen Chair in Leukemia Research, the Chief of
Molecular Cancer Medicine and an Attending Physician at Memorial Sloan
Kettering Cancer Center, and Professor of Medicine at Weill Cornell Medicine.
Board-certified in internal medicine and hematology-oncology, Dr. Levine
received a bachelor's degree from Harvard College and his M.D. from The Johns
Hopkins University School of Medicine. Prof. Dr. Elaine Mardis Committees:
Compensation & Human Resources, Science & Technology (1962, U.S.) Elaine
Mardis Ph.D. joined the Supervisory Board in 2014 and serves on the Science &
Technology Committee and the Compensation & Human Resources Committee. Dr.
Mardis is Co-Executive Director of the Steve and Cindy Rasmussen Institute for
Genomic Medicine at Nationwide Children's Hospital in Columbus, Ohio, and
Professor of Pediatrics at The Ohio State University College of Medicine.
Previously, she was the Robert E. and Louise F. Dunn Distinguished Professor
of Medical Sciences at Washington University School of Medicine and President
of the American Association for Cancer Research. Dr. Mardis is a scientific
advisor to Scorpion Therapeutics LLC, an elected member of the U.S. National
Academy of Medicine, and a member of the Board of Directors of Singular
Genomics Systems, Inc., a publicly listed company based in the U.S. Dr. Mardis
received her bachelor's degree and Ph.D. from the University of Oklahoma. Dr.
Eva Pisa Committees: Compensation & Human Resources (1954, Swedish/Swiss) Eva
Pisa Ph.D. joined the Supervisory Board in 2022 and serves on the Compensation
& Human Resources Committee. She is an advisor to several life science and
diagnostic companies through her company piMed Consulting, and she previously
held senior leadership positions in Roche Diagnostics International from 2007
to 2020, most recently as Senior Vice President at Roche Centralized and POC
Solutions. Prior to joining Roche, she was Chief Executive Officer of Sangtec
Molecular Diagnostics AB, a Swedish start-up, QIAGEN N.V. | IFRS Annual Report
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from 2001 to 2007. Dr. Pisa holds a Ph.D. from the Karolinska Institutet and
an MBA from Heriot-Watt University. Stephen H. Rusckowski Committees:
Compensation & Human Resources, Nomination & ESG (1957, U.S.) Stephen H.
Rusckowski joined the Supervisory Board in April 2023 and serves on the
Compensation & Human Resources Committee. He most recently served as Chairman,
President and Chief Executive Officer of Quest Diagnostics. He joined Quest
Diagnostics as President and Chief Executive Officer in May 2012 and was named
Chairman in 2016. He stepped down from his role as President and CEO in 2022,
and as Chairman in early 2023. Prior to joining Quest Diagnostics, Mr.
Rusckowski was CEO of Philips Healthcare, which he joined in 2001 when Philips
acquired the Healthcare Solutions Group that he was leading at Hewlett-Packard/A
gilent Technologies. Mr. Rusckowski also serves on the Board of Directors of
Baxter International Inc., and previously served as a member of the Board of
Directors of Xerox Holdings Corporation and Covidien plc. He earned a
bachelor's degree in Mechanical Engineering from Worcester Polytechnic
Institute and a master's in Management from the Massachusetts Institute of
Technology's Sloan School of Management. Elizabeth E. Tallett Committees:
Audit, Compensation & Human Resources (Chair), Nomination & ESG (1949,
U.S./British) Elizabeth E. Tallett joined the Supervisory Board in 2011. She
is Chair of the Compensation & Human Resources Committee and a member of the
Audit Committee and the Nomination & ESG Committee. Ms. Tallett is Chair of
the Board of Directors of Elevance Health, Inc., and a member of the Board of
Directors of Moderna, Inc., both publicly listed companies based in the U.S.
From 2002 to 2015, she was a Principal of Hunter Partners, LLC, a management
company for pharmaceutical, biotechnology and medical device companies, and
continues to consult with early-stage healthcare companies. She previously
served as President and Chief Executive Officer of Transcell Technologies
Inc.; President of Centocor Pharmaceuticals; a member of the Parke-Davis
Executive Committee, and Director of Worldwide Strategic Planning for
Warner-Lambert Company. A founding Board member of the Biotechnology Council
of New Jersey, Ms. Tallett received bachelor's degrees in mathematics and
economics from the University of Nottingham. QIAGEN N.V. | IFRS Annual Report
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Board-Related Matters Diversity within the Managing Board and Supervisory
Board On January 1, 2022, a new Dutch gender diversity bill became effective.
Although it does not apply to Dutch companies listed outside of the
Netherlands, the gender diversity bill imposes new requirements on so-called
"large" companies such as QIAGEN to formulate appropriate and ambitious gender
balance targets for the Supervisory Board, Managing Board and senior
management. Accordingly, we have established gender balance targets that we
consider appropriate and ambitious as follows: . Our objective is for at least
40% of the Supervisory Board members to be women and at least 40% men in the
mid-term. To achieve this goal, gender diversity is one of the key selection
criteria for new members. As of December 31, 2023, the Supervisory Board was
comprised of 37.5% women, and in early 2024, the Supervisory Board was
expanded with 40% of the members being women. . Our current Managing Board
consists of two members, the CEO and the CFO, who are ultimately accountable
for the actions and decisions of QIAGEN. If there is a change of a current
Managing Board member, an expansion in the number or a change in the
governance structure, we will seek to have at least 30% women as members and
at least 30% men. We will consider internal candidates from QIAGEN's senior
management who fulfill the desired profile for any open position or by
defining selection criteria for new hires that include, among other factors,
gender diversity. . In senior management, our goal is to have at least 40%
women and 40% men in these roles in the mid-term. To achieve this goal, gender
diversity is a goal that is part of our annual Team Goals, as well as a
priority in our recruiting practices and talent development programs. As of
December 31, 2023, 36% of senior management roles were held by women, having
increased from 28% in 2018. Although we are not subject to quota requirements
for gender diversity within the Managing Board and Supervisory Board, we
support the trend toward higher participation of women. At the same time,
QIAGEN believes that gender is only one aspect of diversity and strives to
ensure a diverse composition in terms of factors such as age, nationality,
public reputation, industry or academic experience, etc. We are committed to
increasing diversity while pursuing individuals for these Boards and senior
management roles who offer a unique blend of scientific and commercial
expertise combined with leadership capabilities that will contribute to the
future success of QIAGEN. Management development programs support the career
advancement of leaders regardless of gender and other factors. As a result,
the number of women in key leadership roles, particularly in commercial and
operational positions, has increased within QIAGEN in recent years. In line
with this commitment, our Nomination & ESG Committee will continue to select
future members for the Managing Board and Supervisory Board with due
observance of its aim to ensure a diverse leadership team on the basis of
gender, but also on the basis of other factors - all without compromising our
commitment to hiring the best individuals for those positions. More
information about diversity at QIAGEN can be found below under the section
Dutch Corporate Governance Code - Comply or explain. Culture QIAGEN's culture
is deeply embedded with a commitment to quality, ingenuity and accessibility -
all aligned with our QIAGEN brand values - to help our customers advance
science and improve outcomes for patients around the world. This commitment is
reflected in our EMPOWER culture that seeks to empower employees to take
ownership - with accountability - in making decisions in the best interests of
QIAGEN, our customers and other stakeholders. This culture is additionally
reflected in our approach to compensation in rewarding performance in terms of
"what" goals are achieved as well as "how" they are achieved in terms of our
cultural aspirations. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Checks and balances are in place to guide the ethical standards and healthy
business practices we adhere to: (i) Our Corporate Code of Conduct and Ethics
that reflects the highest standards; (ii) Our QIAintegrity Line, a web based,
independent, impartial and confidential reporting tool that provides employees
and third parties the opportunity to report misconduct within our Company or
in our supply chain; and (iii) Our Compliance Committee that consists of
senior executives from various functions responsible for ensuring compliance
with our Corporate Code of Conduct and Ethics. Conflicts of Interest, Loans or
Similar Benefits Resolutions to enter into transactions under which members of
the Managing Board or Supervisory Board could have a conflict of interest with
QIAGEN, and which may have a material significance to either QIAGEN or a
member, must be reported for review and approval by the Supervisory Board. In
2023, neither QIAGEN nor any of its Supervisory Board members entered into any
such transactions. No credit, loans or similar benefits were granted to
members of the Managing Board or Supervisory Board. Additionally, the Managing
Board and Supervisory Board members did not receive any benefits from third
parties that were either promised or granted in view of their position with
QIAGEN. Shareholder Meetings and Share Capital Shareholder Meetings Our
Shareholders exercise their voting rights through the Annual General Meeting,
and also through any Extraordinary General Meeting that may be called.
Resolutions at a General Meeting are adopted by an absolute majority of votes
cast, unless a different majority of votes or quorum is required by Dutch law
or the Articles of Association. Each Share confers the right to cast one vote.
Furthermore, the Managing Board, or where appropriate the Supervisory Board,
shall provide all shareholders and other stakeholders with equal and
simultaneous public information about any matters deemed to be materially
relevant and could significantly influence QIAGEN's Share price. QIAGEN is
required to convene an Annual General Meeting in the Netherlands no later than
six months following the end of each year. The agenda must contain certain
matters as specified in our Articles of Association and under Dutch law,
including, among other things, the adoption of the Annual Financial
Statements. Additional Extraordinary General Meetings may be convened at any
time by the Managing Board, the Supervisory Board, or by one or more
shareholders jointly representing at least 40% of the issued share capital.
Furthermore, one or more shareholders who jointly represent at least 10% of
QIAGEN's issued share capital may, on their application, be authorized by a
District Court Judge in the Netherlands to convene a General Meeting.
Shareholders are entitled to propose items for the agenda provided that they
hold at least 3% of the issued share capital. Proposals for agenda items must
be submitted at least 60 days prior to the General Meeting date. The notice
convening a General Meeting, accompanied by the agenda, shall be sent no later
than 42 days prior to the meeting date. QIAGEN informs the General Meeting by
means of explanatory notes to the agenda, providing all information relevant
to the proposed resolutions. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Pursuant to the Dutch Code, all transactions between QIAGEN and legal or
natural persons who hold at least 10% of the shares in the Company shall be
agreed on terms that are customary to our industry. Decisions to enter into
transactions in which there are considered to be conflicts of interest of
material significance to the Company and/or to the people involved require the
approval of the Supervisory Board. QIAGEN did not enter into any such
transaction in 2023. Furthermore, pursuant to the Dutch implementation of the
Shareholders Rights Directive II (SRD II), certain material transactions with
related parties (in the meaning of the standards adopted by the International
Accounting Standards Board and approved by the European Commission) require
the approval of the Supervisory Board, or, if all Supervisory Board members
are involved in such transactions, the General Meeting of Shareholders. Major
Shareholders The following table sets forth certain information concerning the
ownership of our Shares by holders with at least 5% ownership. These holders
have the same voting rights as other shareholders. Name and country of
residence Shares beneficially owned Number Percent ownership(1) BlackRock,
Inc., United States and United Kingdom 27,411,334 (2) 12.01 % Massachusetts
Financial Services Company, United States and Canada 24,066,569 (3) 10.55 %
(1) The percentage ownership was calculated based on 228,202,755 Common Shares
outstanding as of December 31, 2023. (2) Of the 27,411,334 shares attributed
to BlackRock, Inc., it has sole voting power over 25,864,730 and sole
dispositive power over all 27,411,334 shares. This information is based solely
on the Schedule 13G filed by BlackRock, Inc. with the Securities and Exchange
Commission on January 23, 2024, which reported ownership as of December 31,
2023. (3) Of the 24,066,569 shares attributed to Massachusetts Financial
Services Company, it has sole voting power over 20,451,464 and sole
dispositive power over all 24,066,569 shares. This information is based solely
on the Schedule 13G filed by Massachusetts Financial Services Company with the
Securities and Exchange Commission on February 9, 2024, which reported
ownership as of December 31, 2023. Control of Registrant To our knowledge,
QIAGEN is not directly or indirectly owned or controlled by another
corporation, by any foreign government, or by any other natural or legal
person. As of January 31, 2024, the officers and directors of QIAGEN as a
group beneficially owned 0.9 million Shares, or 0.4% of outstanding Shares.
Holders of any securities with special control rights Not applicable. System
of control of any employee share scheme where the control rights are not
exercised directly by the employees Not applicable. Restrictions on voting
rights At the General Meeting, each Share shall confer the right to cast one
vote, unless otherwise provided by law or our Articles. No votes may be cast
in respect of Shares that we or our subsidiaries hold, or by usufructuaries
and pledgees. All shareholders and other persons entitled to vote at General
Meetings are entitled to attend General Meetings, to address the meeting and
to vote. They must notify the Managing Board in writing of their intention to
be present or represented no later than on the third day prior to the day of
the General Meeting, unless the Managing Board permits notification within a
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period of time prior to the Meeting. Subject to certain exceptions,
resolutions may be passed by a simple majority of the votes cast. Agreements
between shareholders known to the Company and may result in restrictions on
the transfer of securities and/or voting rights Not applicable. Rules
governing the appointment and replacement of Board members and amendments of
the Articles of Association Supervisory Board and Managing Board members are
appointed annually for the period beginning on the day following the Annual
General Meeting up to and including the day of the Annual General Meeting held
the following year. Managing Board members shall be appointed by the General
Meeting upon the Joint Meeting having made a binding nomination. However, the
General Meeting may overrule the binding nature of a nomination by a
resolution adopted by at least a two-thirds majority of the votes cast, if
such majority represents more than half the issued share capital. This is
different from the provisions of many U.S. corporate statutes, including the
Delaware General Corporation Law, which give the directors of a corporation
greater authority in choosing the executive officers. Under our Articles, the
General Meeting may suspend or dismiss a Managing Board member at any time.
The Supervisory Board shall also be entitled at all times to suspend (but not
to dismiss) a Managing Director. The Articles also provide that the
Supervisory Board may adopt management rules governing the internal
organization of the Managing Board. The Supervisory Board members shall be
appointed by the General Meeting upon the Joint Meeting having made binding
nominations. If a vacancy occurs in the Supervisory Board during the year, the
Supervisory Board may appoint a new member who will cease to hold office at
the next Annual General Meeting, where this member may stand for appointment
to a one-year term along with other Supervisory Board and Managing Board
members. This right is limited to a number up to one-third of its current
members. Under Dutch law, in the event that there is a conflict of interest
between a Supervisory Board member and QIAGEN involving our business, the
involved Supervisory Board member shall not participate in the discussions and
voting on that matter. Additionally, the Dutch law stipulates that a
Supervisory or Managing Board member should report any conflict of interest or
potential conflict of interest in a transaction that is of material
significance to the Company and/or to the member to the Chair of the
Supervisory Board without delay. The Supervisory Board should decide, outside
the presence of the involved Supervisory Board member, whether there is a
conflict of interest. If all Supervisory Board members have a conflict of
interest, the relevant resolution shall be voted on by the General Meeting.
Decisions to enter into transactions under which a Supervisory Board member
has a conflict of interest require the approval of the Supervisory Board. The
Nomination & ESG Committee is primarily responsible for the preparation of
selection criteria and appointment procedures for members of the Supervisory
Board and Managing Board as well as the periodic evaluation of the scope and
composition of the two Boards, including the profile of the Supervisory Board.
It also proposes the (re-)appointments of the members for both Boards and
supervises the policy of our Managing Board in relation to selection and
appointment criteria for senior management. A resolution of the General
Meeting to amend our Articles, dissolve QIAGEN, issue shares or grant rights
to subscribe for shares or limit or exclude any pre- emptive rights to which
shareholders shall be entitled is valid only if proposed to the General
Meeting by the Supervisory Board. A resolution of the General Meeting to amend
our Articles is further only valid if the complete proposal has been made
available for inspection by the shareholders and the other persons entitled to
attend General Meetings at our offices as from the day of notice convening
such meeting until the end of the meeting. A resolution to amend our Articles
to change the rights attached to the shares of a specific class requires the
approval of the relevant class meeting. QIAGEN N.V. | IFRS Annual Report 2023
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Powers of Board members, including to issue or buy back shares The Managing
Board manages QIAGEN and is responsible for defining and achieving QIAGEN's
aims, strategy, policies and results. It is also responsible for complying
with all relevant legislation and regulations, as well as for managing the
risks associated with our business activities and financing requirements. The
Managing Board provides the Supervisory Board with timely information
necessary for the exercise of the duties of the Supervisory Board, and takes
into account the interests of QIAGEN, its enterprises and all parties involved
in QIAGEN, including shareholders and other stakeholders. Supervisory Board
members have the powers assigned to them by Dutch law, the Articles of
Association and in certain cases powers assigned by the General Meeting. The
Supervisory Board assists the Managing Board by providing advice relating to
the business activities and strategy. In discharging its duties, the
Supervisory Board also takes into account the interests of QIAGEN, its
enterprise and all parties involved in QIAGEN, including shareholders and
other stakeholders. On June 22, 2023, the General Meeting authorized the
Supervisory Board until December 22, 2024 (i), to issue a number of ordinary
shares and financing preference shares and grant rights to subscribe for such
shares, the aggregate par value of which shall be equal to the aggregate par
value of fifty percent (50%) of the shares issued and outstanding in the
capital of the Company as at December 31, 2022, as included in the Annual
Accounts for Calendar Year 2022 and (ii) to restrict or exclude the
pre-emptive rights with respect to issuing ordinary shares or granting
subscription rights, the aggregate par value of such shares or subscription
rights shall be up to a maximum of ten percent (10%) of the aggregate par
value of all shares issued and outstanding in the capital of the Company as at
December 31, 2022. We may acquire our own shares, subject to certain
provisions of Dutch law and our Articles, if (i) shareholders' equity less the
payment required to make the acquisition does not fall below the sum of
paid-up and called-up capital and any reserves required by Dutch law or the
Articles, and (ii) we and our subsidiaries would not thereafter hold shares
with an aggregate nominal value exceeding half of our issued share capital.
Shares that we hold in our own capital or shares held by one of our
subsidiaries may not be voted. The Managing Board, subject to the approval of
the Supervisory Board, may effect the acquisition of shares in our own
capital. Our acquisitions of shares in our own capital may only take place if
the General Meeting has granted to the Managing Board the authority to effect
such acquisitions. Such authority may apply for a maximum period of eighteen
months and must specify the number of shares that may be acquired, the manner
in which shares may be acquired and the price limits within which shares may
be acquired. Dutch corporate law allows for the authorization of the Managing
Board to purchase a number of shares equal to up to 50% of the Company's
issued share capital on the date of the acquisition. On June 22, 2023, the
General Meeting resolved to extend the authorization of the Managing Board in
such manner that the Managing Board may cause us to acquire shares in our own
share capital, for an 18-month period beginning June 22, 2023, until December
23, 2024, without limitation at a price between one euro cent (EUR 0.01) and
one hundred ten percent (110%) of the higher of the average closing price of
our shares on the New York Stock Exchange or, as applicable, the Frankfurt
Stock Exchange, for the five trading days prior to the day of purchase, or,
with respect to Preference and Finance Preference shares, against a price
between one euro cent (EUR 0.01) and three times the issuance price and in
accordance with applicable provisions of Dutch law and our Articles.
Significant agreements to which the Company is a party and which take effect
after or terminate upon a change of control of the Company following a
takeover bid Certain other provisions of our Articles allow us, under certain
circumstances, to prevent a third party from obtaining a majority of the
voting control of our Common Shares through the issuance of Preference Shares.
Pursuant to our Articles and the resolution adopted by our General Meeting,
our Supervisory Board is entitled to issue Preference Shares in case of an
intended takeover of our company by (i) any person who alone or with one or
more other persons, directly or indirectly, have acquired or given notice of
an intent to acquire QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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(beneficial) ownership of an equity stake which in aggregate equals 20% or
more of our share capital then outstanding or (ii) an "adverse person" as
determined by the Supervisory Board. If the Supervisory Board opposes an
intended takeover and authorizes the issuance of Preference Shares, the bidder
may withdraw its bid or enter into negotiations with the Managing Board and/
or Supervisory Board and agree on a higher bid price for our Shares. In 2004
(as amended in 2012), we granted an option to the Stichting Preferente
Aandelen QIAGEN (the "Foundation" (Stichting)), whereby the exercise of the
option by the Foundation is subject to the conditions described in the
paragraph above and which option allows the Foundation to acquire preference
shares from us. The option enables the Foundation to acquire such number of
preference shares as equals the number of our outstanding common shares at the
time of the relevant exercise of the right less one share. When exercising the
option and exercising its voting rights on such shares, the Foundation must
act in our interest and the interests of our stakeholders. The purpose of the
Foundation option is to prevent or delay a change of control that would not be
in the best interests of us and our stakeholders. An important restriction on
the Foundation's ability to prevent or delay a change of control is that
issuing (preference or other) protective shares enabling the Foundation to
exercise 30% or more of the voting rights without the obligation to make a
mandatory offer for all shares held by the remaining shareholders, is only
allowed after a public offer has been announced by a third party. In addition,
the holding of such a block of shares by the Foundation is restricted to two
years and, as a consequence, the size of the protective stake will need to be
decreased below the 30% voting rights threshold before the two-year period
lapses. Pursuant to our stock plans, the vesting and exercisability of certain
stock rights will be accelerated in the event of a change of control, as
defined in the agreements under the 2014 and 2023 Stock Plans. Further,
certain of our employment contracts contain provisions which guarantee the
payments of certain amounts in the event of a change in control, or if the
executive is terminated for reasons other than cause, as defined in the
agreements. Agreements between the Company and its Board members or employees
providing for compensation in case of resignation or termination without valid
reason or if employment ceases due to a change of control The Managing Board
members are appointed annually to one-year terms by the General Meeting based
on the nomination of the Joint Meeting. Further, the Managing Board members
have entered into employment agreements with QIAGEN N.V. and other QIAGEN
affiliates. The terms of these agreements vary for each Managing Board member
due to individual arrangements, and these go beyond the one-year term of
appointment as Managing Directors. These agreements cannot be terminated
without cause and, absent such cause, have to be fulfilled under the terms.
These agreements contain provisions that guarantee certain payments in the
event of a change in control, as defined in the agreements. There are no
arrangements for any extra compensation in case of resignation or termination.
The Supervisory Board members are also appointed annually by the General
Meeting based on the nomination of the Joint Meeting. There are no additional
employments in place and there are no arrangements for any extra compensation
in case of resignation or termination. The General Meeting determines the
remuneration of the members of the Supervisory Board. Reporting in accordance
with Directive 2004/25/EC of the European Parliament and of the Council of
April 21, 2004, on takeover bids Not applicable Structure of our capital,
including securities which are not admitted to trading on a regulated market
in a Member State of the European Union The authorized classes of our shares
consist of common shares, Financing Preference Shares and Preference Shares.
No Financing Preference Shares or Preference Shares have been issued. QIAGEN
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As of December 31, 2023, a total of approximately 228.2 million Common Shares
were outstanding along with approximately 4.0 million additional shares
reserved for issuance upon the vesting of outstanding stock awards.
Additionally, convertible debt issued in 2020 and Warrants issued as part of
the Call Spread Overlay discussed further in Note 16 "Financial Debts" cover
an aggregate of 17.1 million underlying shares of common stock or up to a
maximum of 27.0 million shares, subject to customary adjustments under certain
circumstances. Shares - restrictions on the transfer of securities Our Shares
are issued in registered form only. No Share certificates are issued for our
Shares, which are registered in either our Shareholders Register with Equiniti
Trust Company, LLC, our transfer agent and registrar in New York, or our
shareholder register with TMF Fund Services B.V., Westblaak 89, 3012 KG
Rotterdam, the Netherlands. The transfer of registered Shares requires a
written instrument of transfer and the written acknowledgment of such transfer
by QIAGEN or the New York Transfer Agent (in our name). Anti-Takeover Measures
In 2004, the Supervisory Board granted an option to the Dutch Foundation
Stichting Preferente Aandelen QIAGEN that allows the Foundation to acquire
preference shares from QIAGEN if (i) a person has (directly or indirectly)
acquired or has expressed a desire to acquire more than 20% of our issued
share capital, or (ii) a person holding at least a 10% interest in the share
capital has been designated as a hostile person by our Supervisory Board. The
option enables the Foundation to acquire preference shares equal to the number
of our outstanding common shares at the time of the relevant exercise of the
right, less one share. When exercising the option and exercising its voting
rights on these shares, the Foundation must act in the interest of QIAGEN and
the interests of our stakeholders. No preference shares are currently
outstanding. Additional Information Cyber Security Cyber security risks are
managed at multiple levels throughout the Company and are considered in the
context of our overall Enterprise Risk Management as discussed under Risks and
Risk Management. Cyber security risks facing our business that are reasonably
likely to materially affect us, including our business strategy, results of
operations or financial condition, are described in Risks and Risk Management
under "We rely on secure communication and information systems and are subject
to privacy and data security laws which, in the event of a disruption, breach,
violation or failure, could adversely affect our business." In the last three
years through the date of this annual report, there have been no breaches of
cyber security or other related risk threats that have or are reasonably
likely to have, a material impact to our business. We have not incurred any
material expenses and have not incurred any penalties or settlements. Cyber
Security Risk Management and Strategy Embedded in our risk management
strategy, we maintain a comprehensive cyber security program to identify and
assess material risks, including external threats, to ensure the confidentiality
and integrity of our information assets, and to ensure our IT systems operate
effectively. Reporting to our Chief Financial Officer, our Chief Information
Security Officer (CISO) is responsible for our enterprise and cyber risk
management and leads our cyber security program. A subject-matter expert with
more than a decade of experience leading information security programs, our
CISO is supported by a global team of security professionals. These security
professionals focus on information security and evaluate our global processes
and relevant cyber security threats. The severity and materiality of
incidences are addressed through an incident reporting process and, if
necessary, are escalated internally to senior management, which assesses the
need for public disclosure. Our cyber security program includes robust testing
and training and we engage third parties in connection with such processes to
ensure the effectiveness of our cyber security controls. Additionally,
relevant third-party service providers are QIAGEN N.V. | IFRS Annual Report
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subject to cyber security review. Further details are discussed under Data and
Cyber Security. Cyber Security Governance The Managing Board is ultimately
responsible for cyber security management, which is overseen by our Audit
Committee, a committee of our Supervisory Board. The CISO reports to the Audit
Committee on cyber security risks and incidents. This reporting includes an
update on cyber risk management, internal security awareness testing results,
cyber incident response, and planned improvements. In the event of a material
incidence, the Audit Committee would be informed in a timely manner and kept
updated regarding the mitigation and remediation of such incidence, and would
be involved in the assessment of any public disclosure. Stock Plans The stock
plan is administered by the Compensation & Human Resources Committee of the
Supervisory Board, which selects participants from among eligible employees,
consultants and directors, and determines the number of shares subject to the
stock-based award, the length of time the award will remain outstanding, the
manner and time of the award's vesting, the price per share subject to the
award, and other terms and conditions of the award consistent with the Plan.
The Compensation & Human Resources Committee's decisions are subject to the
approval of the Supervisory Board. The Compensation & Human Resources
Committee has the power, subject to Supervisory Board approval, to interpret
the plans and to adopt such rules and regulations (including the adoption of
"sub plans" applicable to participants in specified jurisdictions) as it may
deem necessary or appropriate. The Compensation & Human Resources Committee or
the Supervisory Board may at any time amend the plans in any respect, subject
to Supervisory Board approval, and except that (i) no amendment that would
adversely affect the rights of any participant under any option previously
granted may be made without such participant's consent, and (ii) no amendment
shall be effective prior to shareholder approval to the extent such approval
is required to ensure favorable tax treatment for incentive stock options or
to ensure compliance with Rule 16b-3 under the United States Securities
Exchange Act of 1934, as amended (the Exchange Act) at such times as any
participants are subject to Section 16 of the Exchange Act. On June 22, 2023,
our shareholders approved the QIAGEN N.V. 2023 Stock Plan, which will replace
the 2014 Stock Plan in May 2024. Further detailed information regarding stock
options and awards granted under the plan can be found in Note 22 "Share-Based
Compensation" included in the Consolidated Financial Statements. Whistleblower
Policy and Corporate Code of Conduct and Ethics We have a formal Whistleblower
Policy concerning the reporting of alleged irregularities within QIAGEN of a
general, operational or financial nature. Furthermore, we have a published
Corporate Code of Conduct and Ethics that outlines business principles for our
employees and rules of conduct. The Corporate Code of Conduct and Ethics can
be found on our website at www.qiagen.com. Insider Trading Policy Dealings in
our Shares based on material non-public information about QIAGEN is strictly
prohibited under U.S. and German securities laws. These laws are complex and
penalties can be severe. In order to protect QIAGEN and its employees from
such sanctions, we have adopted an Insider Trading Policy that outlines basic
rules, including procedures governing any dealings in our Shares, that apply
to potential Insiders (individuals with knowledge of non-public material
information) and holders of QIAGEN Shares (including stock options and
Restricted Stock Units). The Insider Trading Policy applies to the Supervisory
Board, Managing Board, and all employees of QIAGEN N.V. and its subsidiaries.
Clawback Policy To create and maintain a culture that emphasizes integrity and
accountability and that reinforces our pay-for-performance compensation
philosophy, the Managing Board and Supervisory Board adopted a policy which
provides for the recoupment of certain executive compensation in the event of
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restatement resulting from material non-compliance with financial reporting
requirements under the federal securities laws (Clawback Policy). The Clawback
Policy applies to our current and former executive officers, as determined by
the Supervisory Board, in accordance with the requirements of Section 10D of
the Exchange Act and any applicable rules or standards adopted by the SEC and
any national securities exchange on which our securities are listed, and such
other employees who may from time to time be deemed subject to the Clawback
Policy by the Supervisory Board. Independent Auditors In accordance with the
requirements of Dutch law, our independent auditor for our statutory
consolidated financial statements prepared in accordance with International
Financial Reporting Standards as adopted by the European Union and filed with
the Netherlands Authority for the Financial Markets (AFM), is appointed, and
may be removed by, the General Meeting. The Supervisory Board nominates a
candidate for the appointment as external auditor, for which the Audit
Committee advises the Supervisory Board. At the Annual General Meeting in
2023, KPMG Accountants N.V. was appointed as external auditor for the Company
for the 2023 year. The external auditor is invited to attend the meeting of
the Supervisory Board at which the statutory financial statements prepared in
accordance with International Financial Reporting Standards and filed with the
AFM shall be approved and is furthermore invited to attend the General Meeting
at which the statutory financial statements are adopted, and may be questioned
by the General Meeting on its statement on the fairness of our annual accounts
prepared in accordance with International Financial Reporting Standards.
Following the appointment of KPMG Accountants N.V. for the audit of our
statutory consolidated financial statements, the external auditor for our
consolidated financial statements prepared under U.S. generally accepted
accounting principles is KPMG AG Wirtschaftsprufungsgesellschaft, which
audited the U.S. GAAP consolidated financial statements as of and for the year
ended December 31, 2023. The remuneration of the external auditor, and
instructions to the external auditor to provide non-audit services, shall be
approved by the Supervisory Board on the recommendation of the Audit
Committee, and after consultation with the Managing Board. At least once every
four years, the Supervisory Board and the Audit Committee shall conduct a
thorough assessment of the functioning of the external auditor. The main
conclusions of this assessment shall be communicated to the General Meeting
for the purposes of assessing the nomination for the appointment of the
external auditor. KPMG Accountants N.V. have been our auditor since 2015.
According to Dutch regulations, an audit firm can be elected only for a period
of 10 subsequent years. Therefore, we must appoint a new auditor beginning
2025. Accordingly, the Supervisory Board has decided to nominate Ernst & Young
Accountants LLP as its external auditor for the reporting year 2025. The
formal appointment of Ernst & Young Accountants LLP will be submitted for
voting at QIAGEN's 2024 AGM. Dutch Corporate Governance Code - Comply or
Explain The corporate governance structure and compliance with the Dutch Code
is the joint responsibility of the Managing Board and the Supervisory Board.
They are accountable for this responsibility to the General Meeting. We
continue to seek ways to improve our corporate governance by measuring itself
against international best practice. The Dutch Code was last amended on
December 20, 2022, and can be found at www.mccg.nl. Non-application of a
specific best practice provision is not in itself considered objectionable by
the Dutch Code, and may well be justified because of particular circumstances
relevant to a company. In accordance with Dutch law, we disclose in our Annual
Report the application of the Dutch Code's principles and best practice
provisions. To the extent that we do not apply certain principles and best
practice provisions, or do not intend to apply these in the current or the
subsequent year, we state the reasons. We take a positive view of the Dutch
Code and apply nearly all of the best practice provisions. However, we prefer
not to apply some provisions due to the international character of our
business as well as the fact - acknowledged by the Commission that drafted the
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agreements between QIAGEN and individual members of the Managing Board cannot
be set aside at will. The following provides an overview of exceptions that we
have identified: 1. Best practice provision 2.2.2 recommends that a
Supervisory Board member is appointed for a period of four years and may then
be reappointed once for another four-year period. The Supervisory Board member
may then subsequently be reappointed again for a period of two years, which
appointment may be extended by at most two years. In the event of a
reappointment after an eight-year period, reasons should be given in the
report of the supervisory board. In any appointment or reappointment, the
profile referred to in best practice provisions 2.1.1 should be observed.
Members of the Supervisory Board are appointed annually for a one-year period
beginning on the day following the General Meeting up to and including the day
of the General Meeting held in the following year. Dr. Metin Colpan joined the
Supervisory Board in 2004, while Ms. Elizabeth Tallett has been a Supervisory
Board member since 2011, Mr. Lawrence A. Rosen since 2013 and Prof. Dr. Elaine
Mardis since 2014. Dr. Colpan brings extensive contributions to the
Supervisory Board based on his in-depth scientific and commercial experience,
and above all his role as a co-founder of QIAGEN. He has also served as a
board member for various other healthcare industry companies, which provides
unique perspectives and valuable contributions to the discussions of our
Board. Ms. Tallett has executive- and board-level experience at a number of
international companies, in particular in the pharmaceutical, biotechnology
and healthcare and payor industries. Areas of expertise include international
operations, mergers and acquisitions, strategic planning, marketing, product
development, talent management and executive compensation. Mr. Rosen is a
highly experienced executive who has served at the highest levels of various
publicly-listed multinational companies, including Deutsche Post AG, Fresenius
Medical Care AG & Co. KGaA and Aventis SA. He contributes to the profile of
the Supervisory Board with his knowledge and cross-border expertise developed
during a career working primarily in Europe and outside his home country of
the United States. Key areas in which Mr. Rosen contributes his expertise
include finance, strategy, mergers and acquisitions, investor relations,
corporate governance and engagement with the capital markets. Prof. Dr. Mardis
provides significant scientific acumen to QIAGEN, especially given her
international reputation and many contributions to advancing our knowledge
about biology. QIAGEN highly values and appreciates the full engagement of Dr.
Colpan, Ms. Tallett, Mr. Rosen and Prof. Dr. Mardis to the success of our
Company, and believes that they beneficially supplement the diverse and mixed
profile of the Supervisory Board. 2. Best practice provision 2.2.4 recommends
that the Supervisory Board should draw up a retirement schedule in order to
avoid, as far as possible, a situation in which many Supervisory Board members
retire simultaneously. The retirement schedule should be made generally
available and should be posted on the company's website. The Supervisory Board
follows the practice to discuss retirement plans of individual members early
to proactively manage continuity within the Supervisory Board. QIAGEN believes
that this practice provides a more flexible and better succession planning
than a fixed retirement schedule. 3. Best practice provision 3.1.2 vi
recommends that when formulating the remuneration policy, it should be
considered that shares awarded to members of the Management Board should be
held for a period of at least five years Pursuant to the Company's
Remuneration Policy, long-term equity-based grants to members of the Managing
Board primarily consist of an award of performance stock units, i.e.,
long-term incentive awards which are dependent upon the achievement of
pre-defined performance goals. Grants of restricted stock units, which are
based on time vesting only, are no longer to be granted. Performance stock
units and restricted stock units granted until February 2018 are basically
structured so that 40% of a grant vests after three years, 50% after five
years, and the remaining 10% after ten years. Grants of performance stock
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February 2018 vest 40% after three years, 60% after five years. Beginning in
February 2021, grants of performance stock units vest after three years. 4.
Best practice provision 3.2.3 recommends that the maximum remuneration in the
event of dismissal of a Management Board member may not exceed one year's
salary (the "fixed" remuneration component). Our Managing Board members have
entered into agreements with QIAGEN N.V. and some QIAGEN affiliates for which
they hold managing positions. In case of termination of an agreement without
serious cause as defined by the applicable law, the respective affiliate would
remain obliged to compensate the Managing Board member for the remaining term
of the employment agreement. 5. Best practice provision 3.3.2 recommends that
a Supervisory Board member may not be granted any shares and/or rights to
shares by way of remuneration. QIAGEN granted stock options to the members of
the Supervisory Board as a remuneration component from its establishment until
2013, when we stopped granting stock options. Since 2007, Supervisory Board
members have been granted restricted stock units. We believe that the
reasonable level of equity-based compensation which we practice allows a
positive alignment of shareholder interests with the other duties of the
Supervisory Board and that this practice is necessary to attract and retain
Supervisory Board members as the granting of share-based compensation to
Supervisory Board members is a common practice in our industry. NYSE
Exemptions Exemptions from the NYSE corporate governance standards are
available to foreign private issuers, such as QIAGEN when those standards are
contrary to a law, rule or regulation of any public authority exercising
jurisdiction over such issuer or contrary to generally accepted business
practices in the issuer's country of domicile. In connection with QIAGEN's
listing on the NYSE, the NYSE accepted QIAGEN's exemptions from certain
corporate governance standards that are contrary to the laws, rules,
regulations or generally accepted business practices of the Netherlands. These
exemptions and the practices followed by QIAGEN are described below: . QIAGEN
is exempt from NYSE's quorum requirements applicable to meetings of ordinary
shareholders. In keeping with the law of the Netherlands and generally
accepted business practices in the Netherlands, QIAGEN's Articles of
Association provide that there are no quorum requirements generally applicable
to meetings of the General Meeting. . QIAGEN is exempt from NYSE's
requirements that shareholder approval be obtained prior to the establishment
of, or material amendments to, stock option or purchase plans and other equity
compensation arrangements pursuant to which options or stock may be acquired
by directors, officers, employees or consultants. QIAGEN is also exempt from
NYSE's requirements that shareholder approval be obtained prior to certain
issuances of stock resulting in a change of control, occurring in connection
with acquisitions of stock or assets of another company or issued at a price
less than the greater of book or market value other than in a public offering.
QIAGEN's Articles of Association do not require approval of the General
Meeting prior to the establishment of a stock plan. The Articles of
Association also permit the General Meeting to grant the Supervisory Board
general authority to issue shares without further approval of the General
Meeting. QIAGEN's General Meeting has granted the Supervisory Board general
authority to issue up to a maximum of our authorized capital without further
approval of the General Meeting. QIAGEN plans to seek approval of the General
Meetings for stock plans and stock issuances only where required under the law
of the Netherlands or under QIAGEN's Articles of Association. QIAGEN N.V. |
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Corporate Governance Statement The Dutch Corporate Governance Code requires
businesses to publish a statement on their approach to corporate governance
and their compliance with the Code. This is referred to in Article 2a of the
Decree on additional requirements for directors' reports (Decree on the
Content of Directors' Reports - Besluit inhoud bestuursverslag), last amended
on January 1, 2024 (the Decree). The information that must be included in this
Corporate Governance statement as described in Sections 3, 3a, 3b and 3d of
the Decree, which is incorporated herein and repeated here by way of
cross-reference, can be found in the following sections of this annual report:
. The information concerning compliance with the Dutch Code, as required by
Section 3 of the Decree, is provided in the section Dutch Corporate Governance
Code - Comply or Explain; . The information concerning QIAGEN's risk
management systems and internal control frameworks relating to the financial
reporting process, as required by Section 3a(a) of the Decree, can be found
under Risk Management; . The information regarding the functioning of QIAGEN's
General Meeting, and the authority and rights of QIAGEN's shareholders, as
required by article 3a(b) of the Decree, can be found under Shareholder
Meetings; . The information regarding the composition and functioning of
QIAGEN's Managing Board, the Supervisory Board and its committees, as required
by article 3a(c) of the Decree, can be found in the relevant sections under
Managing Board, Supervisory Board and the Supervisory Board Report; . The
information on the policy and targets on diversity in the composition of the
Managing and Supervisory Boards, as required under Section 3a(d) and 3d of the
Decree, is provided in Diversity within the Managing Board and Supervisory
Board; and . The information concerning the powers to issue and repurchase
shares can be found under Shareholder Meetings and Share Capital in this
Annual Report. Decree implementing Article 10 of the Takeover Directive
Insofar as applicable, references are given below to information included
pursuant to the Decree implementing Article 10 of the Takeover Directive
(Besluit artikel 10 overnamerichtlijn): . The information on the capital
structure, the existence of different types of shares and the associated
rights and obligations and the percentage of issued share capital represented
by each type is provided in Classes of Shares and Note 18 of the Consolidated
Financial Statements; . The information on limitations imposed on the transfer
of shares issued with the Group's cooperation is provided in the paragraph
Anti-takeover Measures; . information on the mechanism for assigning rights to
employees to take or acquire shares in the capital of the company is provided
in Stock Plans; . information on limitations on voting rights and deadlines
for exercising voting rights is provided under Shareholder Meetings, Voting
Rights and Other Shareholder Rights; . information on the regulations
regarding appointment and dismissal of Managing and Supervisory Board members
and changes to the articles of association is provided under Memorandum and
Articles of Association; and . information on the powers of the Managing
Board, in particular to issue shares in the Company and to repurchase Company
shares, is provided under Acquisition of Our Own Shares. QIAGEN N.V. | IFRS
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Supervisory Board Report Supervisory Board composition The composition of our
Supervisory Board is diverse in gender, nationality, background, knowledge and
experience. As of March 2024, the Board was comprised of five men and four
women. Four members are American, two are German, one is U.K.-American, and
one is Swedish-Swiss. Many have spent considerable time during their careers
living and working outside their home countries in developing global
management and leadership capabilities. Following best practice 2.1.10 of the
Dutch Corporate Governance Code, the Supervisory Board establishes that its
members are able to act critically and independently of one another and of the
Managing Board. To safeguard this, the Supervisory Board is composed in such a
way that all its members are independent in the meaning of best practice 2.1.8
of the Dutch Corporate Governance Code. As a result, the Supervisory Board
confirms being of the opinion that the independence requirements referred to
in best practice 2.1.7 to 2.1.9 inclusive of the Dutch Corporate Governance
Code have been fulfilled. We further believe that all Supervisory Board
members qualify as independent under the independence standards set forth in
the New York Stock Exchange (NYSE) Listed Company Manual. Pursuant to the NYSE
rules, a majority of the Supervisory Board members must qualify as
independent, as defined in the Rules. The targeted profile of the Supervisory
Board is reflected in its regulations, which are published on our website
under "Supervisory Board." Please refer to the discussion under Supervisory
Board Members for information on the principal positions and relevant other
positions held by members of the Supervisory Board. Further detailed
information is also available on the company website at www.qiagen.com.
Supervisory Board meetings in 2023 The Supervisory Board held six meetings in
2023, with each member attending all meetings. Of these meetings, five were
held in person and one was held virtually. All Managing Board members were
also present for certain agenda items of these Supervisory Board meetings in
2023. The Supervisory Board meetings and the Supervisory Board committee
meetings are held over a number of days, ensuring there is time for review and
discussion. At each meeting, the members discuss among themselves the goals
and outcome of the meeting, as well as topics such as the functioning and
composition of the Supervisory Board and the Managing Board. Members of senior
management are also regularly invited to provide updates on topics within
their area of expertise. This gives the Supervisory Board the opportunity to
get acquainted with a variety of managers across QIAGEN, which the Supervisory
Board considers very useful in connection with its talent management and
succession planning activities. The Supervisory Board also reviewed and
discussed agenda items in the absence of the Managing Board members in each
meeting, such as performance and strategy, as well as to discuss compensation
matters. Supervisory Board committees The Board has four Committees to cover
key areas in greater detail: . Audit Committee . Compensation & Human
Resources Committee . Nomination & ESG (Environment, Social and Governance)
Committee . Science & Technology Committee The Supervisory Board can establish
other committees as deemed beneficial. Charters have been approved by the
Supervisory Board under which each of the committees operates. These charters
are published on our website at www.qiagen.com under "Supervisory Board."
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The following table outlines the current Supervisory Board members and a
selection of their skills and experience: Key competencies Lawrence A. Rosen
(Chair) Dr. Metin Colpan Dr. Toralf Haag Prof. Dr. Ross L. Levine Prof. Dr.
Elaine Mardis Dr. Eva Pisa Stephen H. Rusckowski Elizabeth E. Tallett Year of
Birth 1957 1955 1966 1972 1962 1954 1957 1949 Gender Male Male Male Male
Female Female Male Female Nationality U.S. German German U.S. U.S. Swedish /
Swiss U.S. U.S. / British Date of initial appointment* 2013 2004 2021 2016
2014 2022 2023 2011 Required competencies Integrity . . . . . . . . Ethics . .
. . . . . . Health . . . . . . . . English language skills . . . . . . . .
Experience . . . . . . . . Recommended competencies Entrepreneur . . . .
Corporate management multinational . . . . . . Currently full-time employed /
active . . . Public reputation . . . . . . . . Academic research . . .
Industrial research . Diagnostics markets . . . . . Capital markets . . . . .
Financial management . . . . M&A, business development . . . . . . Commercial
operations . . . . . Public management (e.g., universities) . . . Regulatory /
operations . . . . . *Supervisory Board members are reappointed annually, for
one-year terms. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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The following table outlines the committee membership and meetings attended
during 2023: Meeting Attendance Supervisory Board Audit Committee
Compensation & Human Resources Committee Nomination & ESG Committee Science &
Technology Committee Lawrence A. Rosen 6/6 7/7 4/4 4/4 (Chair) Dr. Metin
Colpan 6/6 4/4 4/4 (Chair) Thomas Ebeling(1) 3/3 3/3 Dr. Toralf Haag 6/6 7/7
(Chair) Prof. Dr. Ross L. Levine 6/6 4/4 Prof. Dr. Elaine Mardis 6/6 6/6 4/4
Dr. Eva Pisa 6/6 6/6 Stephen H. Rusckowski(2) 5/5 3/3 Elizabeth E. Tallett 6/6
7/7 6/6 (Chair) 4/4 (1) Mr. Ebeling did not stand for re-appointment at the
AGM in June 2023. (2) Mr. Rusckowski joined the Supervisory Board in April
2023. Audit Committee The Audit Committee members are appointed annually by
the Supervisory Board for one-year terms. In 2023, the Audit Committee
consisted of three members and met at least quarterly during the year. We
believe that all members of this Committee meet the independence requirements
as set forth in Rule 10A-3 of the Securities Exchange Act of 1934, as amended,
and the New York Stock Exchange Listed Company Manual. The Supervisory Board
has designated Dr. Toralf Haag as an "audit committee financial expert" as
that term is defined in the U.S. Securities and Exchange Commission rules
adopted pursuant to the Sarbanes-Oxley Act of 2002, and as referred to in the
Dutch Decree on Audit Committees (Besluit instelling auditcommissie). The
Committee performs a self-evaluation of its activities on an annual basis. The
Committee's primary duties and responsibilities include, among other things,
to serve as an independent and objective party to monitor QIAGEN's accounting
and financial reporting process, control and compliance systems and internal
risk management, including risks related to cyber security. This Committee
also is directly responsible for proposing the external auditor to the
Supervisory Board, which then proposes the appointment of the external auditor
to the Annual General Meeting. Furthermore, this Committee is responsible for
the compensation and oversight of QIAGEN's external auditor and for providing
an open avenue of communication among the external auditor as well as the
Managing Board and the Supervisory Board. Our Internal Audit and Compliance
functions operate under the direct responsibility of the Audit Committee.
Additionally, this Committee is responsible for establishing procedures to
allow for the confidential and or anonymous submission by employees of
concerns, including QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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the receipt, retention and treatment of submissions received regarding
accounting, internal accounting controls, or auditing matters. The Audit
Committee met seven times in 2023, and also met with the external auditor
excluding members of the Managing Board in August 2023. The Committee
discussed, among other matters, the following topics, and provided updates to
the Supervisory Board: . the adequacy of our financial accounting (including
reporting principles and policies), financial and operating controls and
procedures with the external auditor and management; . consideration and
approval of any recommendations regarding changes to our accounting
principles, policies and processes; . reviewed with management and the
external auditor our quarterly earnings reports prior to their public release;
. reviewed the quarterly and annual reports (reported on Forms 6-K and 20-F)
to be furnished to or filed with the U.S. Securities and Exchange Commission
and the Deutsche Boerse in Germany; . reviewed the annual report to be filed
with the Dutch Authority for the Financial Markets; and . reviewed major risk
exposures (including cyber security) and reviewed any legal matter including
compliance topics that could have a significant impact on the financial
statements. Compensation & Human Resources Committee The Compensation & Human
Resources Committee currently consists of four members that are appointed
annually by the Supervisory Board for one-year terms. Its primary duties and
responsibilities include, among other things, oversight of our programs,
policies and practices related to the management of human capital resources,
including talent management, culture, diversity and inclusion; the preparation
of a proposal to the Supervisory Board regarding the Remuneration Policy for
the Managing Board and Supervisory Board and proposal for adoption by the
General Meeting; preparation of a proposal concerning the individual
compensation for Managing Board members to be adopted by the Supervisory
Board; and preparation of the Remuneration Report that outlines compensation
for the Managing Board and Supervisory Board members to be adopted by the
Supervisory Board, and submitted to the Annual General Meeting for an advisory
vote in accordance with Dutch law. The Remuneration Report outlines the
implementation of the Remuneration Policies for the most recent year. This
Committee engaged during 2023 with external consultants to ensure that the
overall remuneration levels are benchmarked regularly against a selected group
of companies and key markets in which QIAGEN operates. The Compensation &
Human Resources Committee met six times in 2023. The Committee discussed,
among other matters, the following topics, and provided updates to the
Supervisory Board: . policies and practices related to management of human
capital resources including talent management and diversity; . review and
approve all share-based compensation; . review and approve the annual
salaries, bonuses and other benefits of the Executive Committee, and . review
of general policies relating to employee compensation and benefits. Nomination
& ESG Committee The Nomination & ESG Committee currently consists of three
members that are appointed by the Supervisory Board annually for one-year
terms. Its primary responsibilities include, among other things, preparing the
selection criteria and appointment procedures for members of the Supervisory
Board and Managing Board; periodically evaluating the scope and composition of
the Managing Board and Supervisory Board; periodically evaluating the
functioning of individual members of the Managing Board and Supervisory Board,
and reporting these results to the Supervisory Board; proposing (re-)appointment
s of members of the Supervisory Board and Managing Board; QIAGEN N.V. | IFRS
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conducting periodic evaluations of QIAGEN's ESG (Environmental, Social and
Governance) policies and related public disclosures; and periodically
reviewing the Corporate Governance structure in line with applicable legal
requirements and recommend changes to the Supervisory Board. The Nomination &
ESG Committee met four times in 2023. The Committee discussed, among other
matters, the following topics, and provided updates to the Supervisory Board:
. the nomination of Stephen H. Rusckowski as a new member of the Supervisory
Board; . an annual evaluation on the scope and composition of the Managing
Board and the Supervisory Board, including the profile of the Supervisory
Board as well as the functioning of individual members of Boards; . proposals
for the (re-)appointment of members of the Managing Board and Supervisory
Board, and supervised the Managing Board in relation to the selection and
appointment criteria for senior management; . the search and selection process
for new members and succession planning considerations for the Supervisory
Board, Managing Board, Executive Committee and other senior management
positions, taking into account short-, medium- and longer-term perspectives; .
the preparation of the Supervisory Board self-evaluation process, which
involved an external expert; and . regular updates on the progress of our ESG
programs, including a review and discussion of the Gender Diversity Policy.
Science & Technology Committee The Science & Technology Committee currently
consists of three members that are appointed annually by the Supervisory Board
for one-year terms. The Committee works with the Scientific Advisory Board,
which was established in 2021 to provide early evaluation of market and
technology developments that could have an influence on QIAGEN's development
and positioning in the Life Sciences and Molecular Diagnostics. The
Committee's primary responsibilities include, among other things, reviewing
and monitoring research and development projects, programs, budgets, and
infrastructure management; and overseeing the management risks related to our
portfolio and information technology platforms. This Committee met four times
in 2023. The Committee discussed, among other matters, the following topics,
and provided updates to the Supervisory Board: . discussions to gain
understanding, clarification and validation of the fundamental technical basis
of our businesses in order to enable the Supervisory Board to make informed,
strategic business decisions and vote on related matters; and . guided the
Managing Board to ensure that QIAGEN can develop and leverage powerful,
world-class science to create value for our stakeholders, including
shareholders. Annual self-evaluation In 2023, the Supervisory Board conducted
the annual self-evaluation of its own performance and effectiveness. The
process included aspects as appropriate skills and experiences of the members,
the adequacy of the size and composition of the Supervisory Board, the
structure, content and frequency of meetings, access to relevant information,
roles and responsibilities, chair performance and others. The same criteria
were evaluated for the Committees. The Supervisory Board also evaluated the
performance of the Managing Board members in terms of aspects such as
expertise, skills, leadership, and strategic thinking. The self-evaluation
process resulted in concrete proposals and action. Stakeholder management as a
central responsibility The Supervisory Board acts in accordance with the
interests of the company and the business connected with it, taking into
consideration the interests of our stakeholders. The members of the
Supervisory Board are in regular close contact with the Managing Board
members, and the same applies to the members of the Audit Committee. In 2023,
five of the six Supervisory Board meetings were in-person, at various
locations including several QIAGEN sites that provided the opportunity to
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interact with QIAGEN employees. These meetings also enabled the Supervisory
Board to receive information on relevant topics from senior leaders and
experts, both internally and externally, during committee meetings, full
Supervisory Board meetings, and also as part of their ongoing professional
education. Direct, one-to-one contact between Supervisory Board members and
Managing Board and Executive Committee members generally builds on the topics
discussed in the meetings of the Supervisory Board. These discussions draw on
the expertise of individual Supervisory Board members, whose advice is sought
on a wide range of topics. The Supervisory Board takes an active interest in
maintaining a good understanding of our stakeholders and their positions on
various topics related to QIAGEN's areas of business. This includes the
perceptions of our shareholders, which is received through direct interaction
and calls with major institutional shareholders. The Supervisory Board is also
informed of the position of the range of QIAGEN stakeholders by the Managing
Board and other senior managers. In addition, the Supervisory Board members
collect information through their own individual networks, and this is shared
with other Board members and the Managing Board. Role of the Supervisory Board
The Supervisory Board has the task of supervising the activities of the
Managing Board and the general affairs of QIAGEN, including: . the achievement
of corporate objectives; . the strategy and the risks inherent in the business
activities; . the structure and operation of the internal risk management and
control systems; . the financial and sustainability reporting process; and .
the observance of good corporate governance. Throughout 2023, the Supervisory
Board agenda was centered around the strategy and its execution, financial and
operational performance, business developments, risk management, and people
and organization. Based on the strategic priorities for QIAGEN as agreed in
the annual strategy review, several topics were extensively discussed by means
of deep dives, allowing a focused and in-depth review. With the strong demand
for QIAGEN's products in combination with the Company's focus on the execution
of its strategic priorities, the Supervisory Board has confidence in QIAGEN's
long-term growth opportunities and the continued delivery of value to its
stakeholders. As part of the annual strategy review, we held dedicated
discussions focused on QIAGEN's strategy, in particular the Five Pillars of
Growth. An in-depth review was performed of the short-, medium- and long-term
market developments in the markets served by QIAGEN and the related plans to
meet customer demands. Additional sessions were focused on longer-term growth
opportunities. In line with our overall strategy, the Supervisory Board also
regularly discusses M&A strategy and relevant developments within our sectors.
The Supervisory Board was regularly informed and kept up to date on the
process of reviewing potential M&A targets during the year. These sessions
enable an engaged and focused discussion between the Supervisory Board and
Managing Board on key strategic matters, and we highly value this way of
contributing to the decision- making process. Financial statements and audits
In this Annual Report, the financial statements for 2023 are presented as
prepared by the Managing Board and audited by KPMG Accountants N.V.
(Independent Auditor). The Audit Committee examined the financial statements,
the proposal for the use of the distributable profit, the consolidated
financial statements and the Management report. The Supervisory Board also
established that the external auditor was independent of QIAGEN. The results
have been approved by the Supervisory Board and an unqualified opinion was
given from the external auditors. The Supervisory Board will submit the 2023
financial statements to the next Annual General Meeting of Shareholders, which
is planned for June 2024. The proposal will outline that shareholders adopt
them and release the Managing Board from all liability in respect of its
managerial activities and to release the QIAGEN N.V. | IFRS Annual Report 2023
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Supervisory Board from all liability in respect of its supervision of the
Managing Board. Venlo, the Netherlands April 2024 The Supervisory Board QIAGEN
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Message from the Chair of the Compensation & Human Resources Committee Dear
Stakeholders, I am pleased to present to you the QIAGEN Remuneration Report
2023, which summarizes the Remuneration Policies for our Managing Board and
Supervisory Board, and how these Policies have been put into practice during
the year. We look back on a year in which QIAGEN made progress on many fronts
to counterbalance the anticipated decline in sales of product groups used in
the global response to the COVID-19 pandemic. Although sales in 2023 declined
8% at constant exchange rates (CER) to $1.97 billion, sales of the non-COVID
product groups rose 8% CER and represented more than 90% of total sales.
Adjusted earnings per share (EPS) were $2.07 ($2.09 CER), as we maintained a
high level of profitability with an adjusted operating income margin at 27% of
sales. At the same time, our overall results fell short of the ambitious goals
set for 2023. This resulted in an achievement level of 65% of our Corporate
Goals that make up 75% of the Short Term Incentive (STI) compensation for our
Managing Board and our employees. Effective compensation practice The
remuneration granted for 2023 reflects our clear "pay for performance" culture
and application of the Managing Board Remuneration Policy approved by
shareholders at the Annual General Meeting in 2021. In addition, the 2022
remuneration was approved by shareholders with 96% vote at the Annual General
Meeting in 2023. This results in remuneration levels for our Managing Board
that we believe are competitive and fair. In the past year we have engaged
with our shareholders, welcoming their input on governance issues. We have
followed current trends on corporate governance, and have considered the
requirements of the 2022 Dutch Corporate Governance Code as QIAGEN N.V. is
incorporated and headquartered in the Netherlands. The new requirements
include, among other things, explanation of how sustainability objectives have
been taken into account in the implementation of the remuneration policies and
how these objectives contribute to the creation of long-term value to
stakeholders. We have monitored the impact of the ambitious Environment,
Social and Governance (ESG) goals introduced by QIAGEN in recent years, and
which represent about 25% of the annual Team Goals, and believe that they
contribute to the creation of long-term value for all QIAGEN's stakeholders,
including shareholders. Updating our Supervisory Board Remuneration Policy The
insights gained in this engagement were included in our review and update of
the Remuneration Policy for the Supervisory Board, which will be put forward
for approval at the AGM in June 2024 as required by Dutch law every four
years. The revisions we have made are designed to be fully aligned with best
practices and build on the merits of the current Policy, which received 84%
approval at the AGM in 2020. Among the key points of this updated Supervisory
Board Remuneration Policy: . No changes in the cash remuneration for
membership and Committee attendance . Significant reduction in the amount of
annual Restricted Stock Units (RSUs) granted to Supervisory Board members .
Change in the vesting to one year (previously three and five years) to align
with the term of service of the board member (all members stand for election
each year) . Introduction of a minimum shareholding requirement for
Supervisory Board members at 200% of the gross annual value of RSU grant.
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To attract highly qualified board members with experience working on a global
basis, QIAGEN offers a competitive compensation package that meets the demands
of candidates in these different areas of the world, while also adhering to
the different - and sometimes conflicting - corporate governance standards. In
particular, the granting of compensation through RSUs is not always fully
appreciated in continental Europe, but is a standard in other areas of the
world, particularly in the U.S., and aligns the Supervisory Board with the
interests of shareholders. No changes are planned for the Managing Board
Remuneration Policy in 2024. In line with our board succession plans, I will
be stepping down from my role as Chair of the Compensation Committee. If you
have any questions or comments on our remuneration policies and practices, or
the contents of this Report, please do not hesitate to contact our Board via
our Investor Relations team at ir@qiagen.com. Thank you for your continued
support and helping QIAGEN achieve our vision of "making improvements in life
possible." Yours sincerely, Elizabeth E. Tallett Chair of the Compensation &
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Managing Board Remuneration This section of the Remuneration Report provides a
summary of the Remuneration Policy of the Managing Board that was adopted by
the AGM in 2021 and an account of how it was implemented in 2023. It also
presents the details of the actual remuneration outcomes for our two Managing
Board members for their performance during the year. This Remuneration Report
complies with the European Directive (EU) 2017/828 on Shareholder Engagement,
SRD II, as implemented into Dutch law. It also complies with the Dutch
Corporate Governance Code. No deviations were made from the Policy in
implementing remuneration for 2023. The 2021 Remuneration Policy is available
on the QIAGEN website at www.qiagen.com. Remuneration Policy summary
Remuneration as a strategic instrument The Remuneration Policy for the
Managing Board supports the sustainable long- term development and strategy of
QIAGEN in a highly dynamic environment while aiming to address the views of
various stakeholders and maintaining an acceptable risk profile. It builds on
remuneration principles and practices that have proven to be both fitting and
effective for QIAGEN. The Supervisory Board ensures that the Remuneration
Policy for the Managing Board and its implementation are linked to our
objectives. More than ever, the ambition for QIAGEN is to stay true to its
mission of advancing the use of its products and solutions for molecular
research and clinical testing. These help us achieve our vision of making
improvements in life possible. QIAGEN is a global leader in providing a
differentiated portfolio of products and services used across the continuum
from research in Life Sciences to clinical healthcare using novel products and
solutions that are used to unlock valuable insights from any biological
sample. Founded in Germany in 1984, QIAGEN has grown by developing new
solutions based on consumables kits, related instruments and bioinformatics,
to meet the diverse and rapidly changing needs of more than 500,000 customers
worldwide. QIAGEN's strategy is focused on innovation and sustainable value
creation with an emphasis on increasing growth, efficiency, engagement and
improving customer experience. To successfully develop and implement this
strategy, we need to attract and retain highly trained employees at all
levels, including the executive management level. U.S. practices have been
taken into consideration to set competitive remuneration levels given that
many of our leaders, customers, competitors and employees are based here.
Remuneration principles QIAGEN strongly believes in competitive remuneration
as a precondition to attracting intrinsically motivated top talent throughout
all levels of the organization. Furthermore, we believe in a "pay-for-performanc
e" culture that is based on creating a shared focus on setting ambitious
operational and strategic targets that are not rewarded when they are not
achieved, rewarded at target when fully achieved, and additionally rewarded
when the targets are exceeded. A system of corporate, team and individual
performance goals applies to all members of our global workforce. The
percentage weighted toward Corporate Goals, and less for Personal Goals,
shifts as job levels rise. Likewise, the variable portion of pay linked to
achievement of ambitious annual Corporate Goals as a share of total direct
remuneration increases with each job level, in line with greater responsibility
and more significant impact on the Company's results. At the executive level,
QIAGEN believes that pay for performance should primarily focus on long-term
value creation for shareholders and other stakeholders. Short-Term Incentives
(STIs) are essential to highlight the operational targets that are a
precondition to realizing our strategy. Long-Term Incentives (LTIs) have the
benefit of both being achieved only if QIAGEN is successful in delivering on
ambitious goals while they also contribute to long- term retention. In view of
these aspects, variable components represent the most significant element of
total remuneration. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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The remuneration principles are simple, transparent and provide internal
consistency. It helps the Supervisory Board to maintain equitable internal pay
ratios that support efficient talent recruitment and development and
succession planning. The principles are ingrained in our culture, and have
proven successful in attracting the global talent that QIAGEN needs to
successfully develop and implement a sustainable growth strategy. Remuneration
Policy principles Simple and transparent Remuneration schemes are clear and
practical Compliant Remuneration conforms to high governance standards Aligned
Remuneration is true to our mission, vision and strategy, ensures internal pay
consistency Competitive Remuneration is competitive and benchmarked to
relevant peers Performance-driven Major portion of remuneration value is at
risk Long-term focus Share-based incentives focused on sustainable long-term
value creation Benchmarking to set competitive remuneration levels The
Remuneration Policy and overall remuneration levels offered to members of the
Managing Board are benchmarked regularly against a selected group of reference
companies to ensure overall competitiveness. The benchmarking group consists
of both European and U.S.-based companies. This is due to QIAGEN's
international scope as a Dutch corporation with stock market listings on the
New York Stock Exchange and the Frankfurt Stock Exchange, our strong
commercial presence in the U.S. with over 45% of total sales in this country
and the large share of employees and senior leaders based in the U.S.
Additionally, this benchmarking group also reflects QIAGEN's significant U.S.
shareholder base and the location of key competitors. It is designed to
provide a balanced mix of companies, particularly in the life sciences and
diagnostics industries. The median remuneration in the benchmarking group
serves as a reference level for total remuneration. The following 18 companies
comprise the reference group for 2023, which remains unchanged from 2022. They
have been selected based on their market capitalization, direct competition
for talent, similar complexity, revenue, scope of international activities,
presence in similar industries, and data transparency. The benchmarking group
includes seven European and 11 U.S. companies, as listed in the table below,
to provide the best comparison and reflect our global competitive position.
Benchmark companies Europe bioMerieux SA Merck KGaA Carl Zeiss Meditec AG
Sartorius AG DiaSorin S.p.A. Tecan Group AG Eurofins Scientific SE United
States Agilent Technologies, Inc. IDEXX Laboratories, Inc. Avantor, Inc.
Hologic, Inc. Bio-Rad Laboratories, Inc. Illumina, Inc. Bruker Corporation
Revvity, Inc. Charles River Laboratories International, Inc. Waters
Corporation EXACT Sciences Corporation Supervisory Board evaluation The
Supervisory Board annually reviews the remuneration practices to ensure they
remain aligned with QIAGEN's business demands, stakeholder and shareholder
interests, and developments among benchmark companies. On an annual basis, the
Supervisory Board sets the performance targets for the members of the Managing
Board, reviews their performance against predetermined targets, and determines
the remuneration and benefits in line with contractual terms. In making this
determination, the Supervisory Board QIAGEN N.V. | IFRS Annual Report 2023
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considers the market conditions in which QIAGEN operates, financial
performance and strategy implementation. The Supervisory Board ensures that
the remuneration of Managing Board members incentivizes the right behaviors
desired for the sustainable success of QIAGEN while also providing the members
with fair and attractive remuneration. Furthermore, the Supervisory Board
performs an analysis of the possible outcomes for the variable components and
how they may affect total remuneration. Through its statutory power, the
Supervisory Board has the discretionary right to adjust the variable
compensation of the members of the Managing Board if compensation would
conflict with principles of reasonableness and fairness in both an upward and
downward direction. The Compensation Committee advises the Supervisory Board
and prepares resolutions with respect to the review and execution of the
Remuneration Policy. In case of policy changes, the Supervisory Board submits
the proposals to an AGM for adoption. Support for Remuneration Policy As a
global company incorporated in the Netherlands, as well as with stock market
listings in the U.S. and Germany, QIAGEN intends to fully comply with relevant
legal requirements and governance best practices. We engage on a regular basis
with stakeholders, including shareholders, on our policies and regularly seek
their feedback. Within QIAGEN, the policies for our employees are transparent
and meet broad support from teams around the world. Key attributes include
creating a strong "pay-for-performance" culture for all employees while
ensuring strong internal consistency. The Compensation Committee monitors the
developing views on compensation among shareholders and other stakeholders in
Europe, the U.S. and other markets worldwide. The level of support in society
for the Remuneration Policy that QIAGEN applies is important for the
Supervisory Board, and has been taken into account in formulating the various
elements. Managing Board remuneration structure Remuneration for Managing
Board members consists of a combination of base salary and STIs in the form of
cash compensation based on the achievement of annual performance goals. They
also receive performance-based LTIs that vest after a three-year performance
period. The level of vesting for each LTI grant is based on the achievement of
predefined targets. Achievement levels will be disclosed in this Report after
the end of each three-year period. In addition, Managing Board members can
receive deferred compensation arrangements and other benefits in line with
local market practice. The remuneration package for Managing Board members is
designed to have the vast majority paid in variable awards as part of the
"pay-for-performance" culture and to align their interests with stakeholders
to generate long-term value. The amount of these variable awards can differ
substantially from year to year and depend on actual performance. Within the
variable component, the incentives for short-term operational performance have
a lower weight than the long-term incentives, which are again aimed at
creating sustainable value for QIAGEN's shareholders and other stakeholders.
This is achieved by strongly linking long-term compensation through equity
with the outcomes for shareholders in terms of share price appreciation.
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
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2023 Managing Board remuneration structure Fixed remuneration Base salary .
Below market practice to allow for a higher share of long-term variable
share-based compensation Deferred compensation and other benefits . Below
market practice Variable remuneration Short-term incentive (STI) - Cash
payment provides incentives for strong annual financial and non- financial
performance as the basis for long-term strategy and sustainable value creation
. Opportunity at 100% target achievement: - CEO: 110% of base salary - CFO:
75% of base salary . Performance goals over one-year measurement period: - 75%
Corporate Goals comprised of 50% Financial Goals (capped at 200%) and 25% Team
Goals (capped at 120%) - 25% Personal Goals (capped at 100%) - Maximum payout
therefore capped at 1.55 times target . Metrics measured over one year against
budgeted targets Long-term incentive (LTI) - Performance Stock Units provides
incentives for value creation over a multi-year period and the achievement of
goals that are aligned with long-term strategy . Opportunity for all Managing
Board members - At target to 300% value of fixed remuneration . Performance
goals set for a three-year performance period - 50% cumulative net sales - 50%
Adjusted average operating income margin (% of sales) - Three-year performance
period with cliff vesting . Driven by performance - No PSUs are earned if
minimum threshold performance levels are not achieved, while maximum vesting
capped at two times total opportunity in the event of significant
overperformance . Net share settlement QIAGEN N.V. | IFRS Annual Report 2023
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2023: Managing Board remuneration The remuneration of the Managing Board in
2023 is based on the implementation of the Remuneration Policy for the
Managing Board, as approved by shareholders in 2021. It includes any
remuneration granted by any consolidated subsidiary. The remuneration granted
for 2023 takes into consideration the overall results, which showed QIAGEN
achieved the full-year sales outlook for $1.97 billion CER which was supported
by 8% CER growth for non-COVID product groups. Adjusted diluted EPS were $2.09
CER and exceeded the outlook for at least $2.07 CER. At the same time, these
results were below the targets set for the Corporate Goals, resulting in an
achievement level at 73% for 2023. The 2023 remuneration of the Managing Board
is reflected in the table below. An overview of all share grants outstanding
and their status in vesting and release is presented in the tables under the
header "Share-based rights." Annual compensation Long-term compensation
Proportion of variable remunerationManaging Board member(1) Fixed salary
Variable cash bonus Other(2) Total Benefit plans Performance Stock Units
granted Thierry Bernard $978,500 780,354 33,320 $1,792,174 $199,700 119,695
84% Roland Sackers $588,000 319,730 40,270 $948,000 $117,270 67,723 82% (1)
The salary of Mr. Bernard is set in U.S. dollars. The salary of Mr. Sackers is
set in euros and subject to fluctuation of exchange rates when reported in
U.S. dollars. The exchange rate used for translation was EUR 1- USD 1.081. (2)
Amounts include, among others, car lease and reimbursed personal expenses such
as tax consulting. We also occasionally reimburse our Managing Directors'
personal expenses related to attending out-of- town meetings but not directly
related to their attendance. Amounts do not include the reimbursement of
certain expenses relating to travel incurred at the request of QIAGEN, other
reimbursements or payments that in total did not exceed $10,000, or tax
amounts paid by the Company to taxing authorities to avoid double-taxation
under multi-tax jurisdiction employment agreements. QIAGEN N.V. | IFRS Annual
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Fixed remuneration Base salary Consistent with the policies and procedures
applied for all internal pay levels, the base salaries of the Managing Board
members are set below the median to allow for a larger proportion of long-term
incentives to underscore the performance-driven approach of this Remuneration
Policy. Base salary levels are reviewed annually, and any increase is expected
to be in line with the general workforce. Deferred compensation For 2023, a
total of $0.3 million was incurred by QIAGEN as part of the Managing Board
members participating in deferred compensation, defined contribution benefit
or similar plans. The contribution for Mr. Bernard is made into deferred
compensation and 401(k) plans. Mr. Sackers has a target retirement under the
plan at age 65 and is entitled to a one-time pension payment upon retirement.
Other benefits Other benefits may be provided to members of the Managing Board
in line with market practice. These include customary benefits such as
insurance coverage and company vehicles. Variable remuneration Variable
remuneration is contingent upon the performance of the individual Managing
Board member and QIAGEN. Ambitious goals are set annually to motivate and
drive performance with a focus on achieving both long-term strategic
initiatives as well as short-term targets tied to annual operational plans.
The Supervisory Board conducts an annual scenario analysis on the possible
outcomes of the variable remuneration components and their effect on the
remuneration of the Managing Board members. The scenario analysis results have
been taken into consideration in making decisions on remuneration for 2023.
Short-Term Incentives (STI) STIs consist of an annual variable cash bonus
award that is based upon the achievement levels of predetermined annual
Corporate Goals - which represent 75% of the Goals for the STIs and are
comprised of 50% for Financial Goals and 25% for Team Goals. In line with the
compensation policy at QIAGEN, the Remuneration Policy additionally provides
for incentives on Personal Goals for Managing Board members, and these
represent 25% of the target for STIs. The different Goals each have their own
opportunity Financial Goals The weighted performance spread for the Financial
Goals is 0% for less than achieving the minimum threshold, 100% for full
achievement and up to 200% for significant over performance. Financial Goals
are set in accordance with the budget for the year, which is reviewed and
approved by the Supervisory Board. Financial Goals (In $ millions at budget
rates) Weight Minimum threshold Target Maximum Achieved Award in % of target
Net sales 40% 1,887 2,132 2,234 1,949 62% Adjusted operating income 40% 478
612 665 529 75% Adjusted free cash flow 20% 469 550 667 335 -% Total Financial
Goals 100% 55% QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Team goals Team Goals are a set of annual cross-functional targets aimed at
achieving QIAGEN's strategy focused on innovation and sustainable value
creation. The metrics for the Team Goals are often based on targets from
multi-year plans. In the event of Team Goals with multiple components, the
possible outcomes are: no achievement, partial achievement or full
achievement. In the event of single goals, they are either fully met or not
met. When all goals are, or the single goal is, fully met, a performance
maximum of 120% of the overall target level may be paid out. Team Goals Weight
Metric Achieved Award granted Accelerate growth, in particular through focus
on Five Pillars of Growth 50% Deliver growth targets for defined products and
geographic markets, including: . Sample technologies portfolio: e$685 million
CER sales . QuantiFERON: e$350 million CER sales . QIAstat-Dx: e$95 million
CER sales . QIAcuity: e$75 million CER sales . NeuMoDx; e$85 million CER sales
Partially 20% Increase efficiency and effectiveness through targeted strategic
actions 32% . Achieve 5% revenue growth for direct business in Service . Sales
force efficiency: Achieve >$1.6 million CER of 2023 net sales per FTE Fully
32% Deliver compelling new products and services to customers and other
stakeholders 18% . Achieve >15% QDI revenue growth . Innovation: QVI 2023
at e4% Partially 13% Enhance QIAGEN's standing as a leader in ESG and Employer
of Choice 20% . 7% reduction in plastic material to 2022 baseline . Diversity
goal to increase women in leadership by 1 percentage point compared to 2022 .
100% score on 2023 Human Rights Campaign Corporate Equality Index (CEI) and
achieve Top Employer LGBTQ+ Fully 20% Total Team Goals 120% 85% Personal goals
Based on the overall company performance and strong leadership in 2023, the
Compensation & Human Resources Committee awarded both Managing Board members
95% achievement for their personal goals. The weighted performance on
Financial Goals and Team Goals set out above results in the following total
STI payout percentage: QIAGEN N.V. | IFRS Annual Report 2023 Overview
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STI award Weight Threshold Target Maximum Achieved Financial Goals 50% 20%
100% 200% 55% Team Goals 25% -% 100% 120% 85% Personal Goals Mr. Bernard / Mr.
Sackers 25% -% 100% 100% 95% Weighted total 100% 10% 100% 155% 73%
Corresponding payout (in $ thousands) Mr. Bernard 108 1,076 1,668 780 Mr.
Sackers 44 441 684 320 Long-Term Incentives (LTI) Managing Board members are
granted LTIs on an annual basis in the form of Performance Stock Units (PSU).
These are subject to rigorous and ambitious performance criteria and
multi-year vesting periods. As per the updated 2021 Remuneration Policy, the
value of the regular annual long-term incentive awards at the grant date
(depreciated due to factors such as risk of forfeiture, the Company's risk of
failure to achieve its long-term initiatives, and the length of the vesting
terms) is 300% of fixed remuneration. The annual PSU grants are subject to a
three-year period, which will be disclosed at the end of the performance
period. The target levels are directly linked to the achievement of financial
milestones as defined in QIAGEN's multi- year business plan. The performance
goals for cumulative net sales target and average adjusted operating income
margin (both at budget rates) were equally weighted. Overachievement may
result in an increase in the number of PSUs earned, and is capped at 200% of
the target grant. Underachievement below a threshold level will result in a
full loss of the grant. The details of the PSUs granted and vested are
presented in the tables for share- based rights below. Refer to Footnote 24
Related Party Transactions of the Consolidated Financial Statements for the
total recognized accounting expense in accordance with IFRS 2 Share-based
Payment. Share-based rights The following tables sets forth the grant details
of the long-term incentives of the Managing Board members as of December 31,
2023. PSUs and RSUs have no exercise or purchase price. QIAGEN N.V. | IFRS
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Thierry Bernard Performance Stock Units Year of grant Outstanding at December
31, 2022 Granted Performance adjustment Vested Outstanding at December 31,
2023 Share price on grant date Share price on release date 2023 - 119,695 - -
119,695 $45.95 - 2022 110,000 - - - 110,000 $49.69 - 2021 169,387 - - -
169,387 $48.38 - 2020 176,000 - - (70,400) 105,600 $35.90 $45.95 2019 32,329 -
- - 32,329 $38.43 - 2018 56,400 - - - 56,400 $36.30 - 2018 28,260 - - (23,550)
4,710 $33.70 $47.23 2017 3,940 - - - 3,940 $28.46 - 2016 7,650 - - - 7,650
$24.38 - 2016 900 - - - 900 $21.11 - 2015 1,250 - - - 1,250 $25.26 - 586,116
119,695 - (93,950) 611,861 Thierry Bernard Restricted Stock Units Year of
grant Outstanding at December 31, 2022 Granted Vested Outstanding at December
31, 2023 Share price on grant date Share price on release date 2020 12,000 - -
12,000 $35.90 - 12,000 - - 12,000 QIAGEN N.V. | IFRS Annual Report 2023
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Roland Sackers Performance Stock Units Year of grant Outstanding at December
31, 2022 Granted Performance adjustment Vested Outstanding at December 31,
2023 Share price on grant date Share price on release date 2023 - 67,723 - -
67,723 $45.95 - 2022 71,000 - - - 71,000 $49.69 - 2021 130,109 - - - 130,109
$48.38 - 2020 144,000 - - (57,600) 86,400 $35.90 $45.95 2019 76,211 - - -
76,211 $38.43 - 2018 109,416 - - - 109,416 $36.30 - 2018 61,800 - - (51,500)
10,300 $33.70 $47.23 2017 8,349 - - - 8,349 $30.38 - 2016 15,349 - - - 15,349
$24.38 - 2016 2,107 - - - 2,107 $27.71 - 2016 4,705 - - - 4,705 $21.11 - 2015
8,980 - - - 8,980 $25.26 - 2013 2,896 - - - 2,896 $23.16 - 634,922 67,723 -
(109,100) 593,545 Roland Sackers Restricted Stock Units Year of grant
Outstanding at December 31, 2022 Granted Vested Outstanding at December 31,
2023 Share price on grant date Share price on release date 2014 11,635 - -
11,635 $22.25 - 2013 13,207 - (13,207) - $21.44 $45.95 24,842 - (13,207)
11,635 QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Clawback provisions During 2023, no circumstances were identified by the
Supervisory Board that resulted in the application of clawback provisions. The
Supervisory Board has the right to recover variable remuneration from Managing
Board members based on its statutory powers in case of a payment was made
based on incorrect information in respect to target performance, material
financial restatement or individual gross misconduct. Any value adjustment or
clawback is at the discretion of the Supervisory Board. It will be accounted
for in the Remuneration Report submitted to subsequent AGM. Comparative
information Information on Change in Remuneration and Company Performance The
following table shows the annual change of remuneration based on accounting
expense, performance of entity, and average remuneration for other employees
over the last five years. Annual change 2019 vs. 2018 2020 vs. 2019 2021 vs.
2020 2022 vs. 2021 2023 vs. 2022 Managing Board remuneration Thierry Bernard
(as of June 2021) -% -% 3% 55% (14%) Roland Sackers 30% 34% (4%) 17% (15%)
Peer Schatz (until October 2020) 234% -% -% -% -% Company performance Net
sales (CER) 4% 23% 21% -% (13%) Adj. operating income 5% 49% 20% (13%) (19%)
Adj. free cash flow (15%) 113% (7%) 30% (43%) Average remuneration (in $
thousands) Average remuneration of employees(1) 86 97 102 98 100 (1) Our
employees are based in more than 25 countries so the average remuneration is
significantly influenced by currency movements. The average remuneration of
employees is obtained by dividing the total personnel costs as stated in Note
23 - Employee Benefits and Personnel Costs (after subtracting the Managing
Board remuneration) by the reported average number of full-time employees
(minus two). Please refer to the additional discussion under remuneration of
employees later in this report. Pay ratio Under the Dutch Corporate Governance
Code, QIAGEN is required to report the ratio between the remuneration of the
Managing Board members and a representative reference group within the Company
and its affiliated enterprise. QIAGEN's internal pay ratio is determined as
the ratio between the average pay of the Managing Board as disclosed in the
Corporate Governance Report in our 2022 Annual Report and the average pay of
QIAGEN employees on a global level. The pay ratio in 2023 for the CEO was
88:1. The average remuneration for all employees was calculated using the
average number of payroll employees. This ratio is prepared in accordance with
the Dutch Corporate Governance Code and has not been prepared to comply with
the Pay Ratio Disclosure requirements under U.S. Securities and Exchange
Commission regulations. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Management contracts The contracts for Managing Board members are determined
by the Supervisory Board and are built to comply with the framework of the
2021 Remuneration Policy, which was approved by Shareholders and is in
accordance with Dutch law. An outline of these contracts is submitted to the
AGM upon nomination for appointment. Due to the holding company nature of the
legal entity QIAGEN N.V., Managing Board members may have additional contracts
with other QIAGEN subsidiaries. Any compensation for these roles is
consolidated in the remuneration reported above. The contract for Mr. Bernard
with QIAGEN N.V. has a term for one year, which is aligned with the annual
appointment as a Managing Board member by the AGM. If Mr. Bernard is
reappointed, this contract is automatically extended for the statutory
reappointment of one year. The contract for Mr. Sackers with QIAGEN N.V.,
which was entered into in 2004, has an indefinite term, but includes
provisions for notice periods (six months from QIAGEN and three months from
Mr. Sackers) for termination, among other topics. His appointment as a
Managing Board member under this contract with QIAGEN N.V. is based on a
one-year term and subject to annual appointment by the AGM. Change of Control
In the event of the sale or the transfer of all or substantially all of the
Company's assets or business to an acquirer in one transaction or a series of
transactions, including through a merger, consolidation or a transfer of
shares to a third party (a "Transaction"), the Managing Board members are
entitled under legacy contracts to a Change of Control payment commensurate to
a multiple of two times their annual cash compensation (fixed payment plus
annual bonus, includes salaries and bonuses set forth in employment agreements
with other QIAGEN affiliates). Furthermore, unvested share-based compensation
granted to the Managing Board members will be subject to an accelerated
vesting in case of a Transaction. Loans Members of the Managing Board and
Supervisory Board are not eligible for any loans. Outlook: Managing Board
remuneration in 2024 For both CEO and CFO, the base salary remains unchanged
in 2024. No change has been made to the target bonus level as a percentage of
base salary, nor to the PSU target grant level. For 2024, Managing Board
members were granted PSUs subject to rigorous performance criteria over a
three-year performance period. The final number of earned PSUs is determined
upon completion of the three-year period from 2024-2026, and subject to the
achievement of challenging performance goals: 50% for 2024-2026 cumulative net
sales (at budget rates); and 50% for 2024-2026 average adjusted operating
income margin (at budget rates). The results against these targets will be
published in the Remuneration Report after the performance period ends in
2026. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Supervisory Board Remuneration At the Annual General Meeting in June 2021,
QIAGEN's shareholders approved the Remuneration Policy for the Supervisory
Board to harmonize compensation levels for the Chairs and Members of the
Compensation & Human Resources Committee, the Science & Technology Committee
and the Nomination & ESG (Environmental, Social, Governance) Committee. The
2021 Remuneration Policy came into force at the AGM in June 2021, and has been
the basis for the remuneration of the members of the Supervisory Board for
2023. In accordance with the requirement that the policy is approved every
four years, an updated Remuneration Policy is planned to be submitted to the
AGM in June 2024. Remuneration Policy summary The Remuneration Policy of the
Supervisory Board is aimed to attract and retain highly qualified members.
Remuneration is aligned to the applicable market standards, considering peer
companies of similar size and complexity in similar industries. These
companies represent the biotechnology, life sciences and diagnostics
industries, and also reflect our nexus to the European Markets as a Dutch
company, as well as our U.S. focus as a NYSE-listed company subject to U.S.
regulations. The Remuneration Policy for the Supervisory Board also reflects
the fact that many Supervisory Board members are residents of the United
States, a market that also represented more than 45% of QIAGEN's total sales
in 2023. The level of remuneration rewards an intense involvement with the
Company, and the high level of responsibility and time spent that goes with
it. Fixed remuneration in cash The Remuneration Policy for the Supervisory
Board provides for fixed annual retainers for the Chair and other members, and
additional fees for Committee Chairs and members as follows: Fee payable to
the Chair of the Supervisory Board $150,000 Fee payable to each member of the
Supervisory Board $57,500 Additional compensation payable to members holding
the following positions: Chair of the Audit Committee $25,000 Member of the
Audit Committee $15,000 Chair of the (i) Compensation & Human Resources
Committee, (ii) the Nomination & ESG Committee, or (iii) the Science &
Technology Committee $18,000 Member of the (i) Compensation & Human Resources
Committee, (ii) the Nomination & ESG Committee, or (iii) the Science &
Technology Committee $11,000 Chair of other Committees $12,000 Member of other
Committees $6,000 Further, Supervisory Board members are reimbursed for tax
consulting costs incurred in connection with the preparation of their tax
returns up to an amount of 5,000 per person per year. Fixed remuneration in
shares The Supervisory Board members receive grants of Restricted Stock Units
(RSUs) pursuant to the terms of the 2014 Stock Plan. These awards have no
performance condition and are in line with the principle of the Dutch
Corporate Governance Code that remuneration of Supervisory Board members
should not be dependent on a company's results. This compensation component
has been a long and tested practice at QIAGEN since the Initial Public
Offering (IPO) in 1996, and in line with the practices of many other
companies. It has proven effective in attracting and retaining QIAGEN N.V. |
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talented Supervisory Board members, as well as creating a strong commitment
and creating alignment with our stakeholders, who have given this approach
their broad support. The RSUs represent rights to receive common shares at
future dates if the individual continues to provide service to the Company. A
total of 40% of each award vests three years after the grant date, and the
remaining 60% vests after five years from the grant date. The number of RSUs
subject to each annual grant shall be reduced by 0.25% per each 1% increase in
the Company's share price, and increased by 0.25% per each 1% decrease in the
Company's share price, whereby the share price shall be determined as the
average trading price of the Company's common shares from July 1 through
December 31 of each year preceding the grant. 2023: Supervisory Board
remuneration For the year ended December 31, 2023, members of the Supervisory
Board received the following compensation: Supervisory Board member Fixed
remuneration Committee chair Committee membership Total(1) Restricted Stock
Units Lawrence A. Rosen (Chair) $150,000 18,000 20,500 $188,500 7,917 Dr.
Metin Colpan $57,500 18,000 11,000 $86,500 7,917 Thomas Ebeling(2) $28,750 -
5,500 $34,250 7,917 Dr. Toralf Haag $57,500 25,000 - $82,500 7,917 Dr. Ross L.
Levine $57,500 - 11,000 $68,500 7,917 Dr. Elaine Mardis $57,500 - 22,000
$79,500 7,917 Dr. Eva Pisa $57,500 - 11,000 $68,500 7,917 Stephen H.
Rusckowski(3) $40,570 - 5,500 $46,070 - Elizabeth E. Tallett $57,500 18,000
26,000 $101,500 7,917 (1) Supervisory Board members are reimbursed for travel
costs and for any value added tax to be paid on their remuneration. These
reimbursements are excluded from the amounts presented herein. (2) Thomas
Ebeling did not stand for re-appointment at AGM in June 2023. (3) Stephen H.
Rusckowski joined the Supervisory Board in April 2023, and was not eligible
for the equity grant for 2023. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
159 Corporate Governance
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The Supervisory Board members receive a grant of RSUs pursuant to the terms of
the 2014 Stock Plan. Under the terms of the grants, 40% of each award vests
three years after the grant date and the remaining 60% vests five years after
the grant date. Any granted awards will fully vest in case of a change of
control of QIAGEN. Refer to Footnote 24 Related Party Transactions of the
Consolidated Financial Statements for the total recognized accounting expense
in accordance with IFRS 2 Share-based Payment. The following tables set forth
the RSUs of the Supervisory Board: Lawrence A. Rosen Restricted Stock Units
Year of grant Outstanding at December 31, 2022 Granted Vested Outstanding at
December 31, 2023 Share price on grant date Share price on release date 2023 -
7,917 - 7,917 $45.95 - 2022 6,980 - - 6,980 $49.69 - 2021 7,482 - - 7,482
$50.00 - 2020 9,426 - (3,770) 5,656 $35.90 $45.95 2019 5,599 - - 5,599 $38.43
- 2018 5,920 - (5,920) - $33.70 $45.95 35,407 7,917 (9,690) 33,634 QIAGEN N.V.
| IFRS Annual Report 2023 Overview Management Report Corporate Governance
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Dr. Metin Colpan Restricted Stock Units Year of grant Outstanding at December
31, 2022 Granted Vested Outstanding at December 31, 2023 Share price on grant
date Share price on release date 2023 - 7,917 - 7,917 $45.95 - 2022 6,980 - -
6,980 $49.69 - 2021 7,482 - - 7,482 $50.00 - 2020 9,426 - (3,770) 5,656 $35.90
$45.95 2019 5,599 - - 5,599 $38.43 - 2018 5,920 - (5,920) - $33.70 $45.95
35,407 7,917 (9,690) 33,634 Thomas Ebeling Restricted Stock Units Year of
grant Outstanding at December 31, 2022 Granted Vested Outstanding at December
31, 2023 Share price on grant date Share price on release date 2023 - 7,917 -
7,917 $45.95 - 2022 6,980 - - 6,980 $49.69 - 2021 7,482 - - 7,482 $50.00 -
14,462 7,917 - 22,379 QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
161 Corporate Governance
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Dr. Toralf Haag Restricted Stock Units Year of grant Outstanding at December
31, 2022 Granted Vested Outstanding at December 31, 2023 Share price on grant
date Share price on release date 2023 - 7,917 - 7,917 $45.95 - 2022 6,980 - -
6,980 $49.69 - 2021 7,482 - - 7,482 $50.00 - 14,462 7,917 - 22,379 Prof. Dr.
Ross L. Levine Restricted Stock Units Year of grant Outstanding at December
31, 2022 Granted Vested Outstanding at December 31, 2023 Share price on grant
date Share price on release date 2023 - 7,917 - 7,917 $45.95 - 2022 6,980 - -
6,980 $49.69 - 2021 7,482 - - 7,482 $50.00 - 2020 9,426 - (3,770) 5,656 $35.90
$45.95 2019 5,599 - - 5,599 $38.43 - 2018 5,920 - (5,920) - $33.70 $45.95
35,407 7,917 (9,690) 33,634 QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
162 Corporate Governance
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Prof. Dr. Elaine Mardis Restricted Stock Units Year of grant Outstanding at
December 31, 2022 Granted Vested Outstanding at December 31, 2023 Share price
on grant date Share price on release date 2023 - 7,917 - 7,917 $45.95 - 2022
6,980 - - 6,980 $49.69 - 2021 7,482 - - 7,482 $50.00 - 2020 9,426 - (3,770)
5,656 $35.90 $45.95 2019 5,599 - - 5,599 $38.43 - 2018 5,920 - (5,920) -
$33.70 $45.95 35,407 7,917 (9,690) 33,634 Dr. Eva Pisa Restricted Stock Units
Year of grant Outstanding at December 31, 2022 Granted Vested Outstanding at
December 31, 2023 Share price on grant date Share price on release date 2023 -
7,917 - 7,917 $45.95 - - 7,917 - 7,917 QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 163 Corporate Governance
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Elizabeth E. Tallett Restricted Stock Units Year of grant Outstanding at
December 31, 2022 Granted Vested Outstanding at December 31, 2023 Share price
on grant date Share price on release date 2023 - 7,917 - 7,917 $45.95 - 2022
6,980 - - 6,980 $49.69 - 2021 7,482 - - 7,482 $50.00 - 2020 9,426 - (3,770)
5,656 $35.90 $45.95 2019 5,599 - - 5,599 $38.43 - 2018 5,920 - (5,920) -
$33.70 $45.95 35,407 7,917 (9,690) 33,634 Outlook: Supervisory Board
remuneration in 2024 In accordance with the requirement that the policy is
approved every four years, an updated Remuneration Policy is planned to be
submitted to the AGM in June 2024. The proposal has been designed to be
aligned with the latest best practices and build on the merits of the current
Policy, which received approval from 84% of the votes cast at the AGM in 2020.
Among the key points of this updated Supervisory Board Remuneration Policy: .
No changes in the cash remuneration for membership and Committee attendance .
Significant reduction in the amount of annual RSUs granted to Supervisory
Board members . Change in the vesting for these RSU awards to one year
(previously three and five years) to bring this more in line with market
practices . Introduction of a minimum shareholding requirement for Supervisory
Board members at 200% of the gross annual value of RSU grant. Share ownership
QIAGEN requires the Managing Board members and other senior executives to
build up a significant share ownership to underscore their alignment to the
interests of the Company and its shareholders. Under the remuneration policy,
Managing Board members must build up a shareholding equal in value to five
times their net base salary (after taxes) within four years of their first
appointment. At the end of 2023, Mr. Bernard and Mr. Sackers both complied
with the requirement. The following table sets forth certain information as of
January 31, 2024, concerning the ownership of Common Shares by our Managing
Board and Supervisory Board members. In preparing the following table, we have
relied on information furnished by such persons. QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 164 Corporate Governance
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Name Shares beneficially owned(1) Number(2) Note Thierry Bernard 182,662 (3)
Roland Sackers 246,377 (4) Dr. Metin Colpan 410,886 (5) Dr. Toralf Haag 679
(6) Dr. Ross L. Levine 12,793 (7) Dr. Elaine Mardis - (8) Dr. Eva Pisa -
Lawrence A. Rosen 10,399 (9) Stephen H. Rusckowski 25 Elizabeth Tallett 44,011
(10) (1) The number of Common Shares outstanding as of January 31, 2024, was
221,356,630. The persons named in the table have sole voting and investment
power with respect to all shares shown as beneficially owned by them and have
the same voting rights as shareholders with respect to Common Shares. (2) Does
not include Common Shares subject to options or awards held by such persons as
of January 31, 2024. See footnotes below for information regarding stock
awards that could become releasable within 60 days of the date of this table.
(3) Does not include 101,129 shares issuable upon the release of unvested
stock awards that could become releasable within 60 days from the date of this
table. (4) Does not include 200,158 shares issuable upon the release of
unvested stock awards that could become releasable within 60 days from the
date of this table. (5) Includes 347,156 shares held by CC Verwaltungs GmbH,
an entity which is controlled by Dr. Colpan. Does not include 8,591 shares
issuable upon the release of unvested stock awards that could become
releasable within 60 days from the date of this table. (6) Does not include
2,992 shares issuable upon the release of unvested stock awards that could
become releasable within 60 days from the date of this table. (7) Does not
include 8,591 shares issuable upon the release of unvested stock awards that
could become releasable within 60 days from the date of this table. (8) Does
not include 8,591 shares issuable upon the release of unvested stock awards
that could become releasable within 60 days from the date of this table. (9)
Does not include 8,591 shares issuable upon the release of unvested stock
awards that could become releasable within 60 days from the date of this
table. (10) Does not include 8,591 shares issuable upon the release of
unvested stock awards that could become releasable within 60 days from the
date of this table. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 165 Corporate
Governance
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Remuneration to employees We have approximately 6,000 employees in over 25
countries, and the same remuneration principles discussed above are applied
for all of our employees. Competitive remuneration is key to attracting top
talent throughout all levels of the organization and our "pay for performance"
culture applies at every level. We strive to achieve fair pay with cash
compensation commensurate with the market range and in accordance with an
employee's role, qualifications, experience and performance. All employees
have a combination of base salary and STIs. All members of our global
workforce share the same system of corporate, team and individual performance
goals and the percentage weighting toward Corporate Goals, and less for
Personal Goals, shifts as job levels rise. Likewise, the variable portion of
pay linked to achievement of ambitious annual Corporate Goals as a share of
total direct remuneration increases with each job level, in line with greater
responsibility and more significant impact on the Company's results. All
employees share the same targets for Corporate Goals. In 2023, total
employees' salaries increased by approximately 5.5%. We also have frameworks
in place for share-based compensation, as well as incentive programs for new
ideas and innovation. All members of QIAGEN management participate in our
stock plan and are eligible to receive stock unit grants (LTIs) subject to
performance and / or service requirements. All employees share the same
performance targets for performance based LTIs. Employee share-based
remuneration Pursuant to the 2014 Stock Plan (Plan), stock rights - which
include options to purchase our Common Shares, stock grants and stock-based
awards - may be granted to employees of QIAGEN and its subsidiaries.
Generally, the stock- based awards have terms of up to three years, subject to
earlier termination in the event of death, disability or other termination of
employment. Some grants were made previously that also included a 5-year
vesting tranche. The vesting and exercisability of certain stock rights would
be accelerated in the event of a change of control, as defined in the
agreements under the 2014 Plan. Treasury Shares are issued to satisfy option
exercises and award releases. Beginning in 2024, grants will be awarded under
the 2023 Stock Plan, which was approved at the 2023 Annual General Meeting.
The Plan is administered by the Compensation & Human Resources Committee of
the Supervisory Board, which selects participants from among eligible
employees, and determines the number of shares to be received subject to the
stock-based award, the length of time the award will remain outstanding, the
manner and time of the award's vesting, the price per share subject to the
award, and other terms and conditions of the award consistent with the Plan.
Details with respect to PSUs outstanding are set out below: QIAGEN N.V. | IFRS
Annual Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 166 Corporate Governance
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Performance Stock Units Shares Weighted average purchase price Weighted
average remaining contractual term (in years) Weighted average grant date
(Fair value) Outstanding December 31, 2022 2,021,893 $0.00 $40.00 Awarded
621,412 $0.00 $44.39 Released (492,178) $0.00 $35.97 Forfeited (104,986) $0.00
$41.64 Outstanding December 31, 2023 2,046,141 $0.00 1.28 $42.22 Vested and
expected to vest 1,917,278 $0.00 1.24 $42.19 Details with respect to RSUs
outstanding are set out below: Restricted Stock Units Shares Weighted average
purchase price Weighted average remaining contractual term (in years) Weighted
average grant date (Fair value) Outstanding December 31, 2022 474,998 $0.00
$46.01 Awarded 376,647 $0.00 $44.08 Released (107,070) $0.00 $46.46 Forfeited
(31,713) $0.00 $45.76 Outstanding December 31, 2023 712,862 $0.00 1.76 $44.93
Vested and expected to vest 653,122 $0.00 1.71 $44.98 QIAGEN N.V. | IFRS
Annual Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 167 Corporate Governance
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Stock options have not been granted to employees since 2013. Details with
respect to the outstanding stock options are set out below: Stock Options
Shares Weighted average exercise price Weighted average remaining contractual
term (in years) Outstanding and Exercisable December 31, 2022 8,730 $18.68
Exercised (8,730) $18.68 Outstanding and Exercisable December 31, 2023 - $-
0.00 QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 168 Corporate
Governance
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Management's statement pursuant to section 5:25c paragraph 2 sub s of the
Dutch Financial Supervision Act (Wet op het financieel toezicht) In accordance
with provision 1.4.3 of the Code and Article 5:25c of the Financial
Supervision Act, the Managing Board declares that, to the best of its
knowledge: 1. the report of the Management Board as included in this annual
report provides sufficient insights into any deficiencies in the effectiveness
of QIAGEN's internal risk management and control systems with regard to the
risks associated with the strategy and activities of QIAGEN and its affiliated
enterprise, including the strategic, operational, compliance and reporting
risks; 2. the aforementioned systems provide reasonable assurance that
QIAGEN's financial reporting does not contain any material errors; 3. based on
QIAGEN's current status of affairs, it is justified that the financial
reporting is prepared on a going concern basis; 4. the report of the
Management Board lists those material risks associated with the strategy and
activities of QIAGEN and its affiliated enterprise, including the strategic,
operational, compliance and reporting risks, or uncertainties that are
relevant to the expectation regarding QIAGEN's continuity for the period of
twelve months after the issuance of the report; 5. the financial statements as
included in this annual report provide a true and fair view of the assets,
liabilities, financial position, and profit for the financial year of QIAGEN
and the group companies included in the consolidation; and 6. the report of
the Management Board as included in this annual report provides a true and
fair view of the situation on the balance sheet date, the business development
during the year of QIAGEN, and of its affiliated group companies included in
the financial statements. The report of the Management Board describes the
material risks to which QIAGEN is exposed. Thierry Bernard Roland Sackers
Chief Executive Officer Chief Financial Officer QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 169 Responsibility Statement of the Managing Board
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Consolidated Financial Statements 172 Consolidated Balance Sheets 174
Consolidated Income Statements 175 Consolidated Statements of Comprehensive
Income 176 Consolidated Statements of Cash Flows 179 Consolidated Statements
of Changes in Equity 180 Notes to the Consolidated Financial Statements
Company Financial Statements 284 Company Balance Sheets 286 Company Income
Statements 287 Company Statements of Changes in Equity 289 Notes to the
Company Financial Statements Other Information 306 Independent Auditor's
Report 320 Appropriation of Net Income Appendices 321 Memorandum and Articles
of Association 333 Taxation 338 Government Regulations 350 Controls and
Procedures 351 Sustainability Statement - Annex 351 Detailed Tax Disclosure
360 GRI Content Index 369 SASB Index 372 TCFD Index QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 170 Table of Contents
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QIAGEN N.V. Consolidated Financial Statements QIAGEN N.V. | IFRS Annual Report
2023 Overview Management Report Corporate Governance Financial Statements
Appendices Page 171
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QIAGEN N.V. Consolidated Balance Sheets (in thousands) As of December 31,
Notes 2023 2022 Assets Current assets: Cash and cash equivalents (3.17)
$667,320 $730,271 Current financial assets (7) 389,698 687,597 Trade accounts
receivable (8) 381,877 323,750 Inventories (3.18) 397,912 358,487 Derivative
financial instruments (25, 26) 43,230 111,617 Other current assets (9) 240,253
152,385 Total current assets 2,120,290 2,364,107 Non-current assets: Property,
plant and equipment (10) 520,684 492,582 Goodwill (12) 2,503,038 2,380,162
Other intangible assets (12) 806,626 748,648 Right-of-use assets (13) 102,919
93,982 Equity accounted investments (11) 16,195 18,217 Non-current financial
assets (7) 4,435 5,329 Deferred tax assets (17) 63,574 89,440 Derivative
financial instruments (25, 26) 3,083 131,354 Other non-current assets (9)
33,309 27,927 Total non-current assets 4,053,863 3,987,641 Total assets
$6,174,153 $6,351,748 The accompanying notes are an integral part of these
consolidated financial statements. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 172
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QIAGEN N.V. Consolidated Balance Sheets (in thousands, except par value) As of
December 31, Notes 2023 2022 Liabilities and equity Current liabilities:
Current financial debts (16) $587,970 $389,552 Trade and other accounts
payable 84,155 98,734 Provisions (14) 5,246 5,967 Derivative financial
instruments (25, 26) 73,461 161,021 Other current liabilities (15) 351,295
369,018 Total current liabilities 1,102,127 1,024,292 Non-current liabilities:
Non-current financial debts (16) 867,773 1,417,847 Deferred tax liabilities
(17) 22,126 26,116 Derivative financial instruments (25, 26) 120,378 293,725
Other non-current liabilities (15) 194,598 200,475 Total non-current
liabilities 1,204,875 1,938,163 Equity: Common Shares, 0.01 EUR par value,
authorized-410,000 shares, issued-230,829 shares in 2023 and 2022 (18) 2,702
2,702 Share premium 1,965,581 1,921,972 Retained earnings (18) 2,421,630
1,981,498 Reserves (389,739) (356,691) Less treasury shares at cost-2,627 and
3,113 shares, respectively (18) (133,023) (160,188) Total equity 3,867,151
3,389,293 Total liabilities and equity $6,174,153 $6,351,748 The accompanying
notes are an integral part of these consolidated financial statements. QIAGEN
N.V. | IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 173
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QIAGEN N.V. Consolidated Income Statements (in thousands, except per share
data) Years ended December 31, Notes 2023 2022 Net sales (4, 21) $1,965,311
$2,143,020 Cost of sales: Cost of sales (672,835) (706,307) Acquisition-related
intangible amortization (12) (64,198) (60,483) Total cost of sales (737,033)
(766,790) Gross profit 1,228,278 1,376,230 Other operating income 639 282
Research and development expense (192,161) (181,038) Sales and marketing
expense (470,464) (488,678) General and administrative expense (117,399)
(128,285) Restructuring, acquisition, integration and other, net (6) (34,456)
(44,768) Other operating expense (1,366) (420) Total operating expenses, net
(10, 12, 23) (815,207) (842,907) Income from operations 413,071 533,323
Financial income 78,992 33,241 Financial expense (16) (55,912) (60,090) Gain
from equity accounted investments (11) 4,163 3,758 Non-monetary loss, net (3)
- (5,393) Other financial results (5, 7, 26) 134,138 161,807 Total financial
income, net 161,381 133,323 Income before income tax expense 574,452 666,646
Income tax expense (17) (89,644) (90,985) Net income $484,808 $575,661 Basic
earnings per common share (19) $2.12 $2.53 Diluted earnings per common share
(19) $2.10 $2.50 Weighted average shares outstanding Basic (19) 228,146
227,577 Diluted (19) 230,619 230,136 The accompanying notes are an integral
part of these consolidated financial statements. QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 174
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QIAGEN N.V. Consolidated Statements of Comprehensive Income (in thousands)
Years ended December 31, Notes 2023 2022 Net income $484,808 $575,661 Other
comprehensive income not reclassified to profit or loss in subsequent periods:
Gain in pensions (net of $72 and $528 tax expense in 2023 and 2022,
respectively) 167 1,233 Other comprehensive (loss) income to be reclassified
to profit or loss in subsequent periods: Foreign currency translation
adjustments (net of $0 tax and $854 tax benefit in 2023 and 2022,
respectively) (11,481) (62,235) Losses on cash flow hedges (net of $18,344 tax
benefit and $0 tax in 2023 and 2022, respectively) (26) (52,755) (24,098)
Reclassification adjustments on cash flow hedges (net of $17,183 tax expense
and $0 tax in 2023 and 2022, respectively) (26) 49,417 21,940 Net investment
hedge (26) (18,396) (14,724) Other comprehensive loss, after tax (33,048)
(77,884) Comprehensive income $451,760 $497,777 The accompanying notes are an
integral part of these consolidated financial statements. QIAGEN N.V. | IFRS
Annual Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 175
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QIAGEN N.V. Consolidated Statements of Cash Flows (in thousands) Years ended
December 31, Notes 2023 2022 Cash flows from operating activities: Net income
$484,808 $575,661 Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization (10, 12) 211,336 211,931
Non-cash impairments (6, 7) 4,158 12,970 Amortization of debt discount and
issuance costs (27) 30,162 33,701 Deferred income taxes (17) 15,811 (2,210)
Share based compensation expense (22) 47,100 49,507 Loss on financial assets
(7) - 6,230 Other items, including fair value changes in derivatives (11, 16,
26) (133,141) (128,995) Net changes in operating assets and liabilities: Trade
accounts receivable (8) (55,119) 13,949 Inventories (3) (44,746) (55,464)
Other current assets (9) 4,390 58,931 Other non-current assets (9) 691 (2,025)
Accounts payable (22,417) (1,756) Accrued and other current liabilities (15)
(78,919) 12,085 Other non-current liabilities (15) (6,675) (869) Income taxes
(17) 71,009 92,784 Interest paid (22,869) (24,961) Interest received 69,610
20,128 Income taxes paid, net of refunds (82,409) (120,476) Net cash provided
by operating activities 492,780 751,121 The accompanying notes are an integral
part of these consolidated financial statements. QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 176
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QIAGEN N.V. Consolidated Statements of Cash Flows Cash flows from investing
activities: Purchases of property, plant and equipment (10) (41,398) (56,338)
Purchases of intangible assets (12) (121,404) (92,998) Development expenses
(12) (6,350) (8,821) Purchases of unquoted debt securities (7) (839,399)
(1,118,318) Proceeds from redemption of unquoted debt securities (7) 1,054,946
694,027 Purchases of quoted debt securities (7) (137,049) (267,611) Proceeds
from redemption of quoted debt securities (7) 215,605 189,056 Purchases of
unquoted equity securities (7) (3,020) (1,484) Proceeds from unquoted equity
securities (7) 150 328 Cash paid for acquisitions, net of cash acquired (5)
(149,532) (63,651) Cash paid for collateral asset (66,583) (9,881) Other
investing activities (499) 107 Net cash used in investing activities (94,533)
(735,584) Cash flows from financing activities: Proceeds from non-current
debt, net of issuance costs (16, 17) - 371,452 Repayment of non-current debt
(16, 17) (400,000) (480,003) Proceeds from exercise of call option related to
cash convertible notes (16) 36,762 - Payment of intrinsic value of cash
convertible notes (16) (36,762) - Principal payments on leases (13) (26,779)
(26,842) Proceeds from issuance of common shares 163 121 Tax withholding
related to vesting of stock awards (17,675) (25,357) Cash received for
collateral liability (16,315) 12,556 Cash paid for contingent consideration -
(4,572) Net cash used in financing activities (460,606) (152,645) Effect of
exchange rate changes on cash and cash equivalents (592) (12,505) Net decrease
in cash and cash equivalents (62,951) (149,613) Cash and cash equivalents,
beginning of period 730,271 879,884 Cash and cash equivalents, end of period
$667,320 $730,271 (in thousands) Years ended December 31, Notes 2023 2022 The
accompanying notes are an integral part of these consolidated financial
statements. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 177
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QIAGEN N.V. Consolidated Statements of Cash Flows (in thousands) Years ended
December 31, Notes 2023 2022 Supplemental disclosure of non-cash investing
activities: Equity securities acquired in non-monetary exchange (7) $2,604
$1,475 Intangible assets received in exchange for note receivable (24) $- $-
The accompanying notes are an integral part of these consolidated financial
statements. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 178
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QIAGEN N.V. Consolidated Statements of Changes in Equity (in thousands) Common
Shares Share premium Retained earnings Derivative hedge reserve Pension
reserve Foreign currency translation Treasury Shares Total equityNotes Shares
Amount Shares Amount Balance at December 31, 2021 230,829 $2,702 $1,877,704
$1,490,974 $1,245 ($588) ($323,415) (3,755) ($189,730) $2,858,892 IAS 29
Hyperinflationary accounting (3) - - - (30,359) - - 43,951 - - 13,592 Balance
at January 1, 2022 230,829 2,702 1,877,704 1,460,615 1,245 (588) (279,464)
(3,755) (189,730) 2,872,484 Net income - - - 575,661 - - - - - 575,661 Other
comprehensive income (loss) - - - - (16,882) 1,233 (62,235) - - (77,884)
Comprehensive income - - - 575,661 (16,882) 1,233 (62,235) - - 497,777 Tax
benefit of employee stock plans (22) - - (5,239) - - - - - - (5,239)
Share-based payments (22) - - 49,507 - - - - - - 49,507 Employee stock plans
(22) - - - (54,778) - - - 1,171 54,899 121 Tax withholding related to vesting
of stock awards (22) - - - - - - - (529) (25,357) (25,357) Balance at December
31, 2022 230,829 $2,702 $1,921,972 $1,981,498 ($15,637) $645 ($341,699)
(3,113) ($160,188) $3,389,293 Balance at December 31, 2022 230,829 2,702
1,921,972 1,981,498 (15,637) 645 (341,699) (3,113) (160,188) 3,389,293 Net
income - - - 484,808 - - - - - 484,808 Other comprehensive income (loss) - - -
- (21,734) 167 (11,481) - - (33,048) Comprehensive income - - - 484,808
(21,734) 167 (11,481) - - 451,760 Tax benefit of employee stock plans (22) - -
(3,491) - - - - - - (3,491) Share-based payments (22) - - 47,100 - - - - - -
47,100 Employee stock plans (22) - - - (44,676) - - - 873 44,840 164 Tax
withholding related to vesting of stock awards (22) - - - - - - - (387)
(17,675) (17,675) Balance at December 31, 2023 230,829 $2,702 $1,965,581
$2,421,630 ($37,371) $812 ($353,180) (2,627) ($133,023) $3,867,151 The
accompanying notes are an integral part of these consolidated financial
statements. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 179
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1. Corporate Information, Basis of Presentation and Statement of Compliance
Corporate Information QIAGEN N.V. is a public limited liability company
('naamloze vennootschap') under Dutch law with a registered office at
Hulsterweg 82, 5912 PL Venlo, The Netherlands. The Company is registered under
its commercial and legal name QIAGEN N.V. with the trade register ('kamer van
koophandel') of the Dutch region Limburg Noord under file number 12036979.
QIAGEN N.V., a Netherlands holding company, and subsidiaries (we, our or the
Company) is a leading global provider of Sample to Insight solutions that
enable customers to gain valuable molecular insights from samples containing
the building blocks of life. Our sample technologies isolate and process DNA,
RNA and proteins from blood, tissue and other materials. Assay technologies
make these biomolecules visible and ready for analysis. Bioinformatics
software and knowledge bases interpret genomic data to report relevant,
actionable insights. Automation solutions tie these together in seamless and
cost-effective workflows. We provide solutions to more than 500,000 customers
around the world in Molecular Diagnostics (human healthcare) and Life Sciences
(academia, pharma R&D and industrial applications, primarily forensics). As of
December 31, 2023, we employed approximately 6,000 people in over 35
locations worldwide. Our Common Shares are listed for trading on the Frankfurt
Stock Exchange, Prime Standard Segment, under the symbol QIA and on the New
York Stock Exchange (NYSE) under the symbol QGEN. Basis of Presentation and
Statement of Compliance The accompanying consolidated financial statements
were prepared in accordance with International Financial Reporting Standards
as endorsed by the European Union (EU-IFRS) and all amounts are presented in
U.S. dollars rounded to the nearest thousand, unless otherwise indicated. The
consolidated financial statements have been prepared on a historical cost
basis, except for derivative financial instruments, contingent consideration
and financial assets that have been measured at fair value. The financial
statements of the Company have been prepared on the basis of the going concern
assumption. The consolidated financial statements also comply with the
financial reporting requirements included in Part 9 of Book 2 of the Dutch
Civil Code, as far as applicable. QIAGEN has a subsidiary in Moscow, Russia.
Due to uncertainties related to the war in Ukraine, and although not material
to our consolidated results of operations, during the year ended December 31,
2022, we recorded a combination of credit losses, write-offs and impairments
related to our business in Russia totaling $4.0 million. These charges are
included in the line item restructuring, acquisition, integration, and other,
net in the accompanying consolidated income statement. We have suspended
activities in Russia and also with our former commercial partner in Belarus.
We undertake acquisitions to complement our own internal product development
activities. In January 2023, we acquired Verogen, Inc., a leader in the use of
next-generation sequencing (NGS) technologies to drive the future of human
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
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Financial Statements December 31, 2023
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identification (HID) and forensic investigation located in San Diego,
California. The cash consideration, net of cash acquired was $149.5 million.
In May 2022, we acquired BLIRT S.A., a supplier of standardized and customized
solutions for proteins and enzymes as well as molecular biology reagents
located in GdaDsk, Poland. Its offering includes proteins and enzymes that are
critical to the life sciences industry and diagnostic kit manufacturers. The
cash consideration, net of cash acquired, was $63.7 million. At the
acquisition dates, all the assets acquired and liabilities assumed were
recorded at their respective fair values and our consolidated results of
operations include the operating results from the acquired companies from the
acquisition dates. These acquisitions were not significant to the overall
consolidated financial statements. The consolidated financial statements of
QIAGEN for the year ended December 31, 2023 were authorized for issue in
accordance with a resolution of the Supervisory Board on April 26, 2024. 2.
Effects of New Accounting Policies and Disclosures New Accounting Standards
and Interpretations Adopted For 2023, there were no new standards or
interpretations that were adopted which have a material impact to the
consolidated financial statements. Consistent with the International
Accounting Standards Board (IASB) amendments to International Accounting
Standards (IAS) 12 Income Taxes, we are subject to the temporary mandatory
relief from accounting for deferred tax that arises from legislation
implementing the Pillar Two model rules. Under this relief, we neither
recognize nor disclose information about deferred tax assets and liabilities
related to Pillar Two income taxes. We will recognize and disclose the impact
from Pillar Two income taxes effective January 1, 2024. See Note 17 for
further disclosures. New Accounting Standards and Interpretations Issued but
Not Yet Adopted For 2023, there are no new standards or interpretations issued
which have not been adopted that are expected to have a material impact to the
consolidated financial statements. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 181 Notes to the Consolidated Financial Statements
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3. Summary of Significant Accounting Policies, Estimates and Judgments
Significant Accounting Policies 3.1 Consolidation Principles The consolidated
financial statements comprise the financial statements of the Company and its
subsidiaries as at December 31, 2023 and for the year then ended. Subsidiaries
are fully consolidated from the date of acquisition, being the date on which
the Company obtains control, and continue to be consolidated until the date
that such control ceases. An entity is controlled when the Company has power
over the entity, exposure or rights to variable returns from its involvement
with the entity, and the ability to affect those returns through its power
over the entity. In determining whether control exists, potential voting
rights must be taken into account if those rights are substantive, in other
words they can be exercised on a timely basis when decisions about the
relevant activities of the entity are to be taken. Entities consolidated by
the Company are referred to as "subsidiaries." The financial statements of the
subsidiaries are prepared for the same reporting period as the parent company,
using consistent accounting policies. All intra-Company balances, income and
expenses, unrealized gains and losses and dividends resulting from
intra-Company transactions are eliminated in full. Profit or loss and each
component of other comprehensive income are attributed to the owners of the
parent and to the noncontrolling interest. Total comprehensive income is
attributed to the owners of the parent and to the noncontrolling interest even
if this results in a deficit balance. A change in the ownership interest of a
subsidiary, without a change of control, is accounted for as an equity
transaction. If the Company loses control over a subsidiary, it derecognizes
the assets (including goodwill) and liabilities of the subsidiary, the
carrying amount of any noncontrolling interest, the cumulative translation
differences, recorded in equity, recognizes the fair value of the
consideration received, recognizes the fair value of any investment retained,
any surplus or deficit in profit or loss and reclassifies the parent's share
of components previously recognized in other comprehensive income to profit or
loss. 3.2 Business Combinations and Goodwill Business combinations are
accounted for using the acquisition method. The cost of an acquisition is
measured as the aggregate of the consideration transferred, measured at
acquisition date fair value and the amount of any noncontrolling interest in
the acquiree. The Company measures the noncontrolling interest in the acquiree
at fair value. Acquisition related costs incurred are expensed. QIAGEN N.V. |
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When the Company acquires a business, it assesses the financial assets
acquired and liabilities assumed for appropriate classification and
designation in accordance with the contractual terms, economic circumstances
and pertinent conditions as at the acquisition date. Any contingent
consideration to be transferred by the acquirer will be recognized at fair
value at the acquisition date. Subsequent changes to the fair value of the
contingent consideration which is deemed to be an asset or liability will be
recognized either in profit or loss or as a change to other comprehensive
income. If the contingent consideration is classified as equity, it shall not
be remeasured until it is finally settled within equity. Goodwill is initially
measured at cost being the excess of the consideration transferred and the
amount recognized for noncontrolling interest over the Company's net
identifiable assets acquired and liabilities assumed. If this consideration is
lower than the fair value of the net assets of the subsidiary acquired, the
difference is recognized as profit. After initial recognition, goodwill is
measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Company's cash-generating units
that are expected to benefit from the combination, irrespective of whether
other assets or liabilities of the acquiree are assigned to those units. Where
goodwill forms part of a cash-generating unit and part of the operation within
that unit is disposed of, the goodwill associated with the operation disposed
of is included in the carrying amount of the operation when determining the
gain or loss on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative values of the operation
disposed of and the portion of the cash-generating unit retained. Management
monitors and makes decisions regarding the Company's operations on a
functional specific and global level. Goodwill is monitored and assessed for
the entire consolidated group as a whole because the Company and its
subsidiaries together compose a single cash-generating unit. 3.3 Equity
Accounted Investments Investments in entities in which the Company has
significant influence, generally participations of 20% or more of the voting
power, but over which it does not exercise management control are accounted
for using the equity method. The Company's interests in equity accounted
investees comprise interests in associates and joint ventures. Associates are
those entities in which the company has significant influence but no control
or joint control. A joint venture is an arrangement in which the company has
joint control, whereby the company has rights to the net assets of the
arrangement, rather than rights to its assets and obligations for its
liabilities. Under the equity method, the investment is carried in the balance
sheet at cost plus post acquisition changes in the Company's share of net
assets of the associate. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
183 Notes to the Consolidated Financial Statements
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After application of the equity method, the Company determines whether it is
necessary to recognize an additional impairment loss on the Company's
investment. The Company determines at each reporting date whether there is any
objective evidence that the investment is impaired. If this is the case the
Company calculates the amount of impairment as the difference between the
recoverable amount of the investment and its carrying value and recognizes the
amount in the income statement. Upon loss of significant influence over the
associate, the Company measures and recognizes any retaining investment at its
fair value. 3.4 Foreign Currency Translation The Company's presentation
currency is the U.S. dollar (US$) which is also the parent company's
functional currency. The majority of our subsidiaries' functional currencies
are the local currency of the respective country. Balance sheets prepared in
the functional currencies are translated to the presentation currency at
exchange rates in effect at the end of the accounting period except for
shareholders' equity accounts, which are translated at rates in effect when
these balances were originally recorded. Revenue and expense accounts are
translated at a weighted average of exchange rates during the period. The
cumulative effect of translation is included in shareholders' equity. On
disposal of a subsidiary, such translation differences are recognized in the
income statement as part of the gain or loss on sale. Foreign currency
transactions involving monetary assets and liabilities denominated in a
currency other than the functional currency of the entity are translated using
the exchange rate prevailing at the dates of the transactions and are
subsequently valued at the closing rates at each period end. The foreign
currency gains or losses on hedging instruments used to offset currency risk
associated with the translation of the foreign operations are deferred in
other comprehensive income, to the extent that the hedge is effective. Foreign
currency transaction gains and losses realized until settlement are included
in the income statement, except for those related to intercompany transactions
of a long-term investment nature which represent in substance part of the
reporting entity's net investment in a foreign entity; such gains and losses
are included in the cumulative foreign currency translation adjustments
component of shareholders' equity. Included in other financial results in the
accompanying consolidated income statements is a net loss on foreign currency
transactions of $4.1 million and a net gain on foreign currency transaction of
$2.7 million for the years ended December 31, 2023 and 2022, respectively.
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The exchange rates of key currencies affecting the Company were as follows:
(USD equivalent for one) Closing rate as at December 31, Annual average rate
2023 2022 2023 2022 Euro (EUR) 1.1050 1.0666 1.0814 1.0542 Pound Sterling
(GBP) 1.2715 1.2026 1.2435 1.2376 Swiss Franc (CHF) 1.1933 1.0832 1.1133
1.0486 Japanese Yen (JPY) 0.0071 0.0076 0.0071 0.0077 Chinese Yuan (CNY)
0.1408 0.1450 0.1413 0.1489 Beginning January 1, 2022, the results of our
subsidiary in Turkiye are reported under hyperinflationary accounting in
accordance with International Accounting Standard 29, Financial Reporting in
Hyperinflationary Economies (IAS 29). Under IAS 29, to reflect changes in
purchasing power using a general price index, the carrying amounts of
non-monetary assets and liabilities, shareholders' equity, and comprehensive
income of our subsidiary in Turkiye were restated in terms of a measuring unit
current at the balance sheet date. No restatement is required for monetary
assets and liabilities because they represent money held, to be received, or
to be paid. At initial application, we recognized a net monetary loss of $5.4
million to adjust transactions recorded during the period into a measuring
unit current as of December 31, 2022. No monetary gain or loss was recorded
for the year ended December 31, 2023 as there were no material effects from
the application of IAS 29. 3.5 Revenue Recognition We recognize revenue when
control of promised goods or services transfers to our customers in an amount
that reflects the consideration that is expected to be received in exchange
for those goods or services. We enter into contracts that can include various
combinations of products and services, which are generally distinct and
accounted for as separate performance obligations. The transaction price is
allocated to performance obligations based on their relative stand-alone
selling prices. The majority of our sales revenue is recognized when products
are shipped to the customers at which point control transfers. Refer to Note 4
"Revenue" for additional details. Shipping and handling costs charged to
customers are recorded as revenue in the period that the related product sale
revenue is recorded. Associated costs of shipping and handling are included in
sales and marketing expenses. For the years ended December 31, 2023 and 2022,
shipping and handling costs totaled $32.4 million and $34.4 million,
respectively. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 185 Notes to the
Consolidated Financial Statements
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3.6 Operating Expenses Advertising Costs The costs of advertising are expensed
as incurred when the services are performed and are included as a component of
sales and marketing expense. Advertising costs for the years ended December
31, 2023 and 2022 were $11.5 million and $15.8 million, respectively. General
and Administrative General and administrative expenses primarily represent
personnel costs and expenses associated with administrative infrastructure,
including continued investments across the organization in information
technology improvements and cyber security. Restructuring, Acquisition,
Integration and Other We incur indirect acquisition and business integration
costs in connection with business combinations. These costs represent
incremental costs that we believe would not have been incurred absent the
business combinations. Major components of these costs include consulting and
related fees incurred to integrate or restructure the acquired operations,
payroll and related costs for employees remaining with the Company on a
transitional basis and public relations, advertising and media costs for
re-branding of the combined organization. Restructuring costs include
personnel costs (principally termination benefits), facility closure and
contract termination costs. Termination benefits are recorded when it is
probable that employees will be entitled to benefits and the amounts can be
reasonably estimated. Estimates of termination benefits are based on the
frequency of past termination benefits, the similarity of benefits under the
current plan and prior plans, and the existence of statutory required minimum
benefits. Facility closure and other costs are recorded when the liability is
incurred. The specific restructuring measures and associated estimated costs
are based on management's best business judgment under the existing
circumstances at the time the estimates are made. If future events require
changes to these estimates, such adjustments will be reflected in the period
of the revised estimate. See Note 6 "Restructuring" for the details. Research
and Development Research costs are expensed as incurred. Development
expenditures on an individual project are recognized as an intangible asset
when the Company can demonstrate: . The technical feasibility of completing
the intangible asset so that it will be available for use or sale. . Its
intention to complete and its ability to use or sell the asset. . How the
asset will generate probable future economic benefits. QIAGEN N.V. | IFRS
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. The availability of resources to complete the asset and to use or sell the
intangible asset. . The ability to measure reliably the expenditure during
development. Following initial recognition of the development expenditure as
an asset, the cost model is applied requiring the asset to be carried at cost
less any accumulated amortization and accumulated impairment losses.
Amortization of the asset begins when development is complete and the asset is
available for use. It is amortized on a straight-line basis over the period of
expected future benefit (between three and five years). Amortization is
recorded in cost of sales. During the period of development, the asset is
tested for impairment annually. 3.7 Government Grants We recognize government
grants when there is reasonable assurance that all conditions will be complied
with and the grant will be received. Our government grants generally represent
subsidies for specified activities and are therefore recognized when earned as
a reduction of the expenses recorded for the activity that the grants are
intended to compensate. Thus, when the grant relates to research and
development expense, the grant is recognized over the same period that the
related costs are incurred. Otherwise, amounts received under government
grants are recorded as liabilities in the balance sheet. When the grant
relates to an asset, the value of the grant is deducted from the carrying
amount of the asset and recognized over the same period that the related asset
is depreciated or amortized. In 2023, we received government grants in the
amount of $4.4 million (2022: $2.4 million), of which $4.0 million was offset
against the carrying amount of assets and $0.4 million of income was included
to offset research and development expense in the accompanying consolidated
income statement. We do not carry any liabilities related to government
grants. 3.8 Borrowing Costs Borrowing costs directly attributable to the
acquisition, construction or production of an asset that takes a substantial
period of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective assets (qualifying asset) when such
borrowing costs are significant and are recognized using the effective
interest rate method. All other borrowing costs are expensed in the period
they occur. 3.9 Post-Employment Benefits The Company operates a number of
defined benefit and defined contribution plans. For defined benefit plans, the
Company provides for benefits payable to their employees on retirement by
charging current service costs to income. The defined benefit liability
comprises the present value of the defined benefit obligation less past
service cost and actuarial gains and losses not yet recognized and less the
fair value of plan assets out of which the obligations are to be settled
directly. The Company's contributions to the defined contribution pension
plans are charged to the income statement in the year to which they relate.
Refer to Note 23 "Employee Benefits and Personnel Costs" for more details.
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3.10 Share-Based Payments The Company has a stock option plan, which is
described in detail under Note 22 "Share-Based Payments." A compensation
charge is calculated at the date the options are granted. This charge is
recognized over the stock option's vesting period. When the option is
exercised, the proceeds received net of any transaction costs are credited to
share capital and share premium. 3.11 Taxation Taxes reported in the
consolidated income statements include current and deferred income taxes.
Current income tax Current income tax assets and liabilities are measured at
the amount expected to be recovered from or paid to the taxation authorities
and are presented net within tax jurisdictions where permitted. The tax rates
and tax laws used to compute the amount are those that are enacted or
substantively enacted, by the reporting date, in the countries where the
Company operates and generates taxable income. Current income tax relating to
items recognized directly in equity is recognized in equity and not in the
income statement. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate.
Deferred tax Deferred tax is provided using the liability method on temporary
differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the year when the asset is realized or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date. A deferred tax asset is
recognized for deductible temporary differences and unused tax losses (tax
credits) carried forward, to the extent that it is probable that future
taxable profits will be available. Deferred tax relating to items recognized
outside profit or loss is recognized outside profit or loss. Deferred tax
items are recognized in correlation to the underlying transaction either in
other comprehensive income or directly in equity. Deferred tax assets and
deferred tax liabilities are offset, if a legally enforceable right exists to
set off current tax assets against current income tax liabilities and the
deferred taxes relate to the same taxable entity and the same taxation
authority. Income tax exposure Uncertainties exist with respect to the
interpretation of complex tax regulations, changes in tax laws, and the amount
and timing of future taxable income. Given the wide range of international
business relationships and the long-term nature and QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
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complexity of existing contractual agreements, differences arising between the
actual results and the assumptions made, or future changes to such
assumptions, could necessitate future adjustments to tax income and expense
already recorded. The Company establishes provisions, based on reasonable
estimates, for possible consequences of audits by the tax authorities of the
respective counties in which it operates. The amount of such provisions is
based on various factors, such as experience of previous tax audits and
differing interpretations of tax regulations by the taxable entity and the
responsible tax authority. Such differences of Interpretation may arise on a
wide variety of issues depending on the conditions prevailing in the
respective Company's domicile. 3.12 Financial Instruments - Recognition and
Initial Measurement The Company's financial assets include cash and short-term
deposits, trade accounts receivable, loan and other receivables, quoted and
unquoted financial instruments, and derivative financial instruments. The
Company's financial liabilities include trade and other payables, loans and
borrowings, and derivative financial instruments. Trade receivables and debt
securities issued are initially recognized when they are originated. All other
financial assets and financial liabilities are initially recognized when the
Company becomes a party to the contractual provisions of the instrument. A
financial asset (unless it is a trade receivable without a significant
financing component) or financial liability is initially measured at fair
value plus, for an item not at fair value through profit or loss (FVTPL),
transaction costs that are directly attributable to its acquisition or issue.
A trade receivable without a significant financing component is initially
measured at the transaction price. 3.13 Financial Instruments - Classification
and Subsequent Measurement Financial assets On initial recognition, a
financial asset is classified as measured at: amortized costs; fair value
through other comprehensive income (FVOCI) - debt investment; FVOCI - equity
investment; or fair value through profit or loss (FVTPL). Financial assets are
not reclassified subsequent to their initial recognition unless the Company
changes its business model for managing financial assets, in which case all
affected financial assets are reclassified on the first day of the first
reporting period following the change in the business model. A financial asset
is measured at amortized cost if it meets both of the following conditions and
is not designated as an FVTPL: . it is held within a business model whose
objective is to hold assets to collect contractual cash flows; and QIAGEN N.V.
| IFRS Annual Report 2023 Overview Management Report Corporate Governance
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. its contractual terms give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following
conditions and is not designated as at FVTPL: . it is held within a business
model whose objective is achieved by both collecting contractual cash flows
and selling financial assets; and . its contractual terms give rise on
specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. On initial recognition of an
equity investment that is not held for trading, the Company may irrevocably
elect to present subsequent changes in the investment's fair value in OCI.
This election is made on an investment-by-investment basis. All financial
assets not classified as measured at amortized cost or FVOCI as described
above are measured at FVTPL. This includes all derivative financial assets
(see Note 26). On initial recognition, the Company may irrevocably designate a
financial asset that otherwise meets the requirements to be measured at
amortized cost or at FVOCI as measured at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise (IFRS
9, para 4.1.5). As of December 31, 2022, we have not made this election.
Financial assets - Business model assessment The Company makes an assessment
of the objective of the business model in which a financial asset is held at a
portfolio level because this best reflects the way the business is managed and
information is provided to management. The information considered includes: .
the stated policies and objectives for the portfolio and the operation of
those policies in practice. These include whether management's strategy
focuses on earning contractual interest income, maintaining a particular
interest rate profile, matching the duration of the financial assets to the
duration of any related liabilities or expected cash outflows or realizing
cash flows through the sale of the assets; . how the performance of the
portfolio is evaluated and reported to the Company's management; . the risks
that affect the performance of the business model (and the financial assets
held within that business model) and how those risks are managed; . how
managers of the business are compensated - e.g. whether compensation is based
on the fair value of the assets managed or the contractual cash flows
collected; and . the frequency, volume and timing of sales of financial assets
in prior periods, the reasons for such sales and expectations about future
sales activity. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 190 Notes to
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Transfers of financial assets to third parties in transactions that do not
qualify for derecognition are not considered sales for this purpose,
consistent with the Company's continuing recognition of the assets. Financial
assets that are held for trading or are managed and whose performance is
evaluated on a fair value basis are measured at FVTPL. Financial assets -
Assessment whether contractual cash flows are solely payments of principal and
interest For the purposes of this assessment, `principal' is defined as the
fair value of the financial asset on initial recognition. `Interest' is
defined as consideration for the time value of money and for the credit risk
associated with the principal amount outstanding during a particular period of
time and for other basic lending risks and costs (e.g. liquidity risk and
administrative costs), as well as a profit margin. In assessing whether the
contractual cash flows are solely payments of principal and interest, the
Company considers the contractual terms of the instrument. This includes
assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not
meet this condition. In making this assessment, the Company considers: .
contingent events that would change the amount or timing of cash flows; .
terms that may adjust the contractual coupon rate, including variable-rate
features; . prepayment and extension features; and . terms that limit the
Company's claim to cash flows from specified assets (e.g. non-recourse
features). A prepayment feature is consistent with the solely payments of
principal and interest criterion if the prepayment amount substantially
represents unpaid amounts of principal and interest on the principal amount
outstanding, which may include reasonable additional compensation for early
termination of the contract. Additionally, for a financial asset acquired at a
discount or premium to its contractual par amount, a feature that permits or
requires prepayment at an amount that substantially represents the contractual
par amount plus accrued (but unpaid) contractual interest (which may also
include reasonable additional compensation for early termination) is treated
as consistent with this criterion if the fair value of the prepayment feature
is insignificant at initial recognition. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
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Financial assets - Classification, subsequent measurement and gains and losses
Financial assets at FVTPL These assets are subsequently measured at fair
value. Net gains and losses, including any interest or dividend income, are
recognized in profit or loss. However, see Note 26 for derivatives designated
as hedging instruments. Financial assets at amortized cost These assets are
subsequently measured at amortized cost using the effective interest method.
The amortized cost is reduced by impairment losses. Interest income, foreign
exchange gains and losses and impairment are recognized in profit or loss. Any
gain or loss on derecognition is recognized in profit or loss. Debt
investments at FVOCI These assets are subsequently measured at fair value.
Interest income calculated using the effective interest method, foreign
exchange gains and losses and impairment are recognized in profit or loss.
Other net gains and losses are recognized in OCI. On derecognition, gains and
losses accumulated in OCI are reclassified to profit or loss. Equity
investments at FVOCI These assets are subsequently measured at fair value.
Dividends are recognized as income in profit or loss unless the dividend
clearly represents a recovery of part of the cost of the investment. Other net
gains and losses are recognized in OCI and are never reclassified to profit or
loss. At December 31, 2023, $81.0 million of commercial paper held as current
financial assets, all unquoted equity securities held as non-current financial
assets, and current and non-current derivative financial instruments are
measured at FVTPL. All other financial assets are measured at amortized cost.
The Company does not hold any debt or equity investments at FVOCI as of
December 31, 2023. Financial liabilities - Classification, subsequent
measurement and gains and losses Financial liabilities are classified as
measured at amortized cost or FVTPL. A financial liability is classified as at
FVTPL if it is classified as held-for-trading, it is a derivative or it is
designated as such on initial recognition. Financial liabilities at FVTPL are
measured at fair value and net gains and losses, including any interest
expense, are recognized in profit or loss. Other financial liabilities are
subsequently measured at amortized cost using the effective interest method.
Interest expense and foreign exchange gains and losses are recognized in
profit or loss. Any gain or loss on derecognition is also recognized in profit
or loss. At December 31, 2023, current and non-current derivative financial
instruments are measured at FVTPL, with additional disclosures in Note 25
"Fair Value Measurements." All other financial liabilities are measured at
amortized cost. See Note 26 for financial liabilities designated as hedging
instruments. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 192 Notes to the
Consolidated Financial Statements
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3.14 Derecognition Financial assets The Company derecognizes a financial asset
when the contractual rights to the cash flows from the financial asset expire,
or it transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of ownership
of the financial asset are transferred or in which the Company neither
transfers nor retains substantially all of the risks and rewards of ownership
and it does not retain control of the financial asset. The Company enters into
transactions whereby it transfers assets recognized in its balance sheet, but
retains either all or substantially all of the risks and rewards of the
transferred assets. In these cases, the transferred assets are not
derecognized. Financial liabilities The Company derecognizes a financial
liability when its contractual obligations are discharged or canceled, or
expire. The Company also derecognizes a financial liability when its terms are
modified and the cash flows of the modified liability are substantially
different, in which case a new financial liability based on the modified terms
is recognized at fair value. On derecognition of a financial liability, the
difference between the carrying amount extinguished and the consideration paid
(including any non-cash assets transferred or liabilities assumed) is
recognized in profit or loss. 3.15 Offsetting Financial assets and financial
liabilities are offset and the net amount presented in the balance sheet when,
and only when, the Company currently has a legally enforceable right to set
off the amounts and it intends either to settle them on a net basis or to
realize the asset and settle the liability simultaneously. 3.16 Derivative
Financial Instruments and Hedge Accounting The Company holds derivative
financial instruments to hedge its foreign currency and interest rate risk
exposures. Embedded derivatives are separated from the host contract and
accounted for separately if the host contract is not a financial asset and
certain criteria are met. Derivatives are initially measured at fair value.
Subsequent to initial recognition, derivatives are measured at fair value, and
changes therein are generally recognized in profit or loss. At inception of
designated hedging relationships, the Company documents the risk management
objective and strategy for undertaking the hedge. The Company also documents
the economic relationship between the hedged item and the hedging instrument,
including whether the changes in cash flows of the hedged item and hedging
instrument are expected to offset each other. QIAGEN N.V. | IFRS Annual Report
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Cash flow hedges When a derivative is designated as a cash flow hedging
instrument, the effective portion of changes in the fair value of the
derivative is recognized in OCI and accumulated in the hedging reserve. The
effective portion of changes in the fair value of the derivative that is
recognized in OCI is limited to the cumulative change in fair value of the
hedged item, determined on a present value basis, from inception of the hedge.
Any ineffective portion of changes in the fair value of the derivative is
recognized immediately in profit or loss. The Company designates only the
change in fair value of the spot element of forward exchange contracts as the
hedging instrument in cash flow hedging relationships. The change in fair
value of the forward element of forward exchange contracts (`forward points')
is separately accounted for as a cost of hedging and recognized in a costs of
hedging reserve within equity. When the hedged forecast transaction
subsequently results in the recognition of a non-financial item such as
inventory, the amount accumulated in the hedging reserve and the cost of
hedging reserve is included directly in the initial cost of the non-financial
item when it is recognized. For all other hedged forecast transactions, the
amount accumulated in the hedging reserve and the cost of hedging reserve is
reclassified to profit or loss in the same period or periods during which the
hedged expected future cash flows affect profit or loss. If the hedge no
longer meets the criteria for hedge accounting or the hedging instrument is
sold, expires, is terminated or is exercised, then hedge accounting is
discontinued prospectively. When hedge accounting for cash flow hedges is
discontinued, the amount that has been accumulated in the hedging reserve
remains in equity until, for a hedge of a transaction resulting in the
recognition of a non-financial item, it is included in the non-financial
item's cost on its initial recognition or, for other cash flow hedges, it is
reclassified to profit or loss in the same period or periods as the hedged
expected future cash flows affect profit or loss. If the hedged future cash
flows are no longer expected to occur, then the amounts that have been
accumulated in the hedging reserve and the cost of hedging reserve are
immediately reclassified to profit or loss. Net investment hedges When a
derivative instrument or a non-derivative financial liability is designated as
the hedging instrument in a hedge of a net investment in a foreign operation,
the effective portion of, for a derivative, changes in the fair value of the
hedging instrument or, for a non-derivative, foreign exchange gains and losses
is recognized in OCI and presented in the translation reserve within equity.
Any ineffective portion of the changes in the fair value of the derivative or
foreign exchange gains and losses on the non-derivative is recognized
immediately in profit or loss. The amount recognized in OCI is reclassified to
profit or loss as a reclassification adjustment on disposal of the foreign
operation. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 194 Notes to the
Consolidated Financial Statements
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3.17 Cash and Cash Equivalents Cash and cash equivalents consist of cash on
deposit in banks and other cash invested temporarily in various instruments
that are short-term and highly liquid with an original maturity of less than
three months at the date of purchase. (in thousands) 2023 2022 Cash at bank
and on hand $86,616 $121,916 Money market funds 481,360 289,394 Commercial
paper 9,982 94,828 Short-term bank deposits 89,362 224,133 Cash and cash
equivalents $667,320 $730,271 3.18 Inventories Inventories are stated at the
lower of cost and net realizable value. The moving average method of valuation
is used. The cost of work in process and finished goods includes raw
materials, direct labor and production overhead expenditure based upon normal
operating capacity. Net realizable value is the estimated selling price in the
ordinary course of business less the cost of completion and distribution
expenses. At December 31, 2023 and 2022, no inventory was recorded at net
realizable value. Provisions are established for slow-moving and obsolete
inventory. No inventory is pledged as collateral as of December 31, 2023 and
2022. (in thousands) 2023 2022 Raw materials $91,204 $97,613 Work in
process 94,736 85,488 Finished goods 211,972 175,386 Total inventories,
net $397,912 $358,487 Included in inventories as of December 31, 2023 are
$38.2 million (2022: $34.4 million) of inventory provisions. The movement in
inventory provisions was recorded under cost of sales. For the years ended
December 31, 2023 and 2022, cost of sales included cost of inventory sold of
$292.5 million and $300.4 million, respectively. QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
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3.19 Property, Plant and Equipment Property, plant and equipment are stated at
cost of acquisition or construction cost less accumulated depreciation and
accumulated impairment in value. Depreciation is computed using the
straight-line and declining balance methods over the following estimated
useful lives of the assets: Buildings and leasehold improvements up to 60
years Machinery and equipment 3-10 years Furniture and office equipment 3-10
years The residual values, useful lives and methods of depreciation are
reviewed annually and adjusted if appropriate. Land is not depreciated.
Construction costs include borrowing costs and operating expenses that are
directly attributable to items of property, plant and equipment capitalized
during construction. Subsequent expenditure on an item of property, plant and
equipment is capitalized at cost only when it is probable that future economic
benefits associated with the item will flow to the Company and the cost of the
item can be measured reliably. Repair and maintenance costs are expensed as
incurred. Gains and losses on disposal or retirement of items of property,
plant and equipment are determined by comparing the proceeds received with the
carrying amounts and are included in the consolidated income statements. The
asset's residual values, useful lives and methods of depreciation are
reviewed, and adjusted if appropriate, at each financial year end. 3.20 Leases
At inception of a contract, the Company assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration. Company as a lessee Leases are recognized as a
right-of-use asset and a corresponding liability at the date at which the
leased asset is available for use by the company. The right-of-use asset is
depreciated over the shorter of the asset's useful life and the lease term on
a straight-line basis. Assets and liabilities arising from a lease are
initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments: . fixed payments, including
in-substance fixed payments, less any lease incentives received; . variable
lease payments that are based on an index or a rate; . amounts expected to be
payable to the lessee under residual value guarantees; QIAGEN N.V. | IFRS
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. the exercise price of a purchase option if the lessee is reasonably certain
to exercise that option; and . payments of penalties for terminating the
lease, if the lease term reflects the lessee exercising that option. The lease
payments are discounted using the interest rate implicit in the lease. If that
rate cannot be determined, the lessee's incremental borrowing rate at the
lease commencement date is used, which is based on an assessment of interest
rates the company would have to pay to borrow funds, including the
consideration of factors such as the nature of the asset and location,
collateral, market terms and conditions, as applicable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. Each lease payment is
allocated between the liability and finance charges. The interest element of
the finance cost is recognized in the income statement over the lease period
so as to produce a constant periodic rate of interest on the remaining balance
of the liability for each period. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease
term, a change in the in-substance fixed lease payments or a change in the
assessment to purchase the underlying asset. Right-of-use assets are measured
at cost comprising the following: . the amount of the initial measurement of
the lease liability; . any lease payments made at or before the commencement
date less any lease incentives received; . any initial direct costs; and .
restoration costs. The company determines the lease term as the non-cancellable
term of the lease, together with any periods covered by an option to extend
the lease if it is reasonably certain to be exercised, or any periods covered
by an option to terminate the lease, if it is reasonably certain not to be
exercised. The company applies judgement in evaluating whether it is
reasonably certain to exercise the option to renew. That is, it considers all
relevant factors that create an economic incentive for it to exercise the
renewal. The company leases various items of real estate, vehicles and other
equipment. Rental contracts are typically made for fixed periods but may have
extension or termination options. Company as a lessor When the company acts as
a lessor, it determines at lease inception whether a lease is a finance lease
or an operating lease. Leases in which the company does not transfer
substantially all the risks and rewards incidental to ownership of an asset
are classified as operating leases. The company recognizes lease payments
received under operating leases as income on a straight-line basis over the
lease terms in the Income Statement. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 197 Notes to the Consolidated Financial Statements
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3.21 Intangible Assets Intangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets acquired in a
business combination is its fair value as at the date of acquisition.
Expenditure on acquired technology rights, patents, trademarks and licenses
are capitalized as intangible assets when it is probable that future economic
benefits will flow to the Company and the cost can be measured reliably.
Following initial recognition, intangible assets are carried at cost less any
accumulated amortization and any accumulated impairment losses. Through
business combinations, the Company may acquire a variety of intangible assets
which either will be or are amortized based on the nature and use of the
assets. Amortization expense related to developed technology and patent and
license rights acquired in a business combination is included in cost of
sales. Amortization of trademarks and customer base acquired in a business
combination is recorded in sales and marketing expense. For intangible assets
not acquired in business combinations, amortization expense is recorded within
cost of sales, research and development, or sales and marketing line items
based on the nature and use of the asset. The useful lives of intangible
assets are assessed as either finite or indefinite. Intangible assets with
finite lives are amortized over the useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be
impaired. The amortization period and the amortization method for an
intangible asset with a finite useful life are reviewed at least annually.
Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset is accounted for by changing
the amortization period or method, as appropriate, and are treated as changes
in accounting estimates. The amortization expense on intangible assets with
finite lives is recognized in the income statement in the expense category
consistent with the function of the intangible asset. Developed technology,
patents and license rights, computer software, development costs and other
intellectual properties are amortized on a straight-line basis over their
estimated useful lives as follows: Developed technology, patents and license
rights 5-15 years Computer software 3-20 years Development costs 3-5 years
Other intellectual properties 5-15 years 3.22 Impairment Impairment of
financial assets The Company recognizes an allowance for expected credit
losses (ECLs) for trade receivables, contract assets, and debt investments
carried at amortized cost. ECLs are based on the difference between the
contractual cash flows due in QIAGEN N.V. | IFRS Annual Report 2023 Overview
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accordance with the contract and all the cash flows that the company expects
to receive, discounted at an approximation of the original effective interest
rate. ECLs are recognized in two stages. For credit risk exposures for which
there has not been a significant increase in credit risk since initial
recognition, ECLs are provided for credit losses that result from default
events that are possible within the next 12 months (12-month ECLs). The
company considers a financial asset to be in default when the counterparty is
unlikely to pay its credit obligations to the company in full or when the
financial asset is past due. For those credit exposures for which there has
been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of
the exposure, irrespective of the timing of the default (lifetime ECLs). When
determining whether the credit risk of a financial asset has increased
significantly since initial recognition, the Company considers reasonable and
supportable information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information and
analysis, based on the company's historical experience and informed credit
assessment and including forward-looking information, such as forecast
economic conditions. The Company assesses the allowance for doubtful accounts
by applying the IFRS 9 simplified approach to measuring expected credit losses
(ECLs), which uses the lifetime ECL allowance. To measure the ECLs on trade
receivables, the Company considers any credit-risk concentration, collective
debt risk based on historical losses, specific circumstances considering the
market information on a country specific basis, and other forward looking
information. Trade receivables are written off when there is no reasonable
expectation of recovery of the asset (for example, because of bankruptcy).
Impairment of non-financial assets The Company assesses at each reporting date
whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required,
the Company estimates the asset's recoverable amount. An asset's recoverable
amount is the higher of an asset's or cash-generating unit's (CGU) fair value
less costs to sell and its value in use and is determined for an individual
asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or the Company's assets. Where the
carrying amount of an asset or CGU exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount. In
assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In
determining fair value less costs to sell, an appropriate valuation model is
used. These calculations are corroborated by valuation multiples, quoted share
prices for publicly traded subsidiaries or other available fair value
indicators. Impairment losses are recognized in the income statement in those
expense categories consistent with the function of the impaired asset, except
for property previously revalued where the revaluation was taken to other
comprehensive income. In this case, the impairment is also recognized in other
comprehensive income up to the amount of any previous revaluation. QIAGEN N.V.
| IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 199 Notes to the Consolidated Financial
Statements
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For assets excluding goodwill, an assessment is made at each reporting date as
to whether there is any indication that previously recognized impairment
losses may no longer exist or may have decreased. If such indication exists,
the Company estimates the asset's or cash-generating unit's recoverable
amount. A previously recognized impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset's recoverable
amount since the last impairment loss was recognized. The reversal is limited
so that the carrying amount of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognized for the asset in prior
years. Such reversal is recognized in the income statement unless the asset is
carried at a revalued amount, in which case the reversal is treated as a
revaluation increase. Goodwill Goodwill is subject to impairment tests
annually, as of October 1, or earlier if indicators of potential impairment
exist. We assess goodwill for impairment at least annually in the absence of
an indicator of possible impairment and immediately upon an indicator of
possible impairment. Impairment is determined for goodwill by assessing the
recoverable amount of each cash-generating unit (or group of cash- generating
units) to which the goodwill relates. Where the recoverable amount of the
cash-generating unit is less than their carrying amount an impairment loss is
recognized. Impairment losses relating to goodwill cannot be reversed in
future periods. Intangible assets Intangible assets with indefinite useful
lives are tested for impairment annually as of October 1 either individually
or at the cash-generating unit level, as appropriate and when circumstances
indicate that the carrying value may be impaired. 3.23 Provisions Provisions
are recognized by the Company when a present legal or constructive obligation
exists as a result of past events, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and a
reliable estimate of the amount of the obligation can be made. Where the
effect of the time value of money is material, the amount of a provision is
the present value of the expenditures expected to be required to settle the
obligation. Where discounting is used, the increase in the provision due to
the passage of time is recognized as a financing cost. The Company provides
warranties on products against defects in materials and workmanship for a
period of one year. A provision for estimated future warranty costs is
recorded in cost of sales at the time product revenue is recognized. Product
warranty obligations are included in other current liabilities in the balance
sheet. Additionally, we typically provide limited warranties with respect to
our services. Refer to Note 14 "Provisions" for changes in the carrying amount
of the warranty provision for 2023. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 200 Notes to the Consolidated Financial Statements
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Acquisition related provisions are costs recognized separately from the
purchase price of a business combination. These costs primarily relate to
personnel and consulting costs to effect the business combination and
subsequent integration. Refer to Note 14 "Provisions" for changes in the
carrying amount of the acquisition related provision for 2023. 3.24 Reportable
Segment We determined that we operate as one reportable segment. Our chief
operating decision maker (CODM) makes decisions based on the Company as a
whole. In addition, we have a common basis of organization and types of
products and services which derive revenues and consistent product margins.
Accordingly, we operate and make decisions as one cash- generating unit. 3.25
Statement of Cash Flows The statement of cash flows provides an explanation of
the changes in cash and cash equivalents. It is prepared on the basis of a
comparison of the balance sheet as of January 1 and December 31 using the
indirect method. Investing and financing transactions that do not require the
use of cash or cash equivalents have been excluded from the cash flow
statement. Significant Accounting Estimates and Judgments The preparation of
the consolidated financial statements in conformity with IFRS requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next year are described below. Purchase
Price Allocation The purchase price allocation for acquisitions requires
extensive use of accounting estimates and judgments to allocate the purchase
price to the identifiable tangible and intangible assets acquired, including
in-process research and development, and liabilities assumed based on their
respective fair values. An acquisition may include contingent consideration as
part of the purchase price. Contingent consideration is accounted for at fair
value at the acquisition date with subsequent changes to the fair value being
recognized in earnings. Additionally, we must determine whether an acquired
entity is considered to be a business or a set of net assets, because a
portion of the purchase price can only be allocated to goodwill in a business
combination. We have made several acquisitions in recent years. The purchase
prices for the acquisitions were allocated to tangible and intangible assets
acquired and liabilities assumed based on their estimated fair values at the
acquisition dates. We engaged an independent third-party valuation firm to
assist us in determining the estimated fair values of in-process research and
development and identifiable intangible assets. Such a valuation requires
significant estimates and QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
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assumptions, including but not limited to determining the timing and estimated
costs to complete the in-process projects, projecting regulatory approvals,
estimating future cash flows, and developing appropriate discount rates. We
believe the estimated fair values of contingent consideration and assets
acquired and liabilities assumed are based on reasonable assumptions. However,
the fair value estimates for the purchase price allocations may change during
the allowable allocation period, which is up to one year from the acquisition
dates, if additional information becomes available. Fair Value Measurements We
have categorized our assets and liabilities that are measured at fair value,
based on the priority of the inputs to the valuation techniques, in a
three-level fair value hierarchy: Level 1 - using quoted prices in active
markets for identical assets or liabilities; Level 2 - using observable inputs
other than quoted prices; and Level 3 - using unobservable inputs. We
primarily apply the market approach for recurring fair value measurements,
maximize our use of observable inputs and minimize our use of unobservable
inputs. We utilize the mid-point price between bid and ask prices for valuing
the majority of our assets and liabilities measured and reported at fair
value. In addition to using market data, we make assumptions in valuing
assets and liabilities, including assumptions about risk and the risks
inherent in the inputs to the valuation technique. Certain of our derivative
instruments, which are classified in Level 2 of the fair value hierarchy, are
valued using industry- standard models that consider various inputs, including
time value, volatility factors, and current market and contractual prices for
the underlying instruments, as well as other relevant economic measures.
Substantially all of these inputs are observable in the marketplace throughout
the full term of the instrument, can be derived from observable data or are
supported by observable prices at which transactions are executed in the
marketplace. Certain of our acquisitions involve contingent consideration, the
payment of which is contingent on the occurrence of future events. Contingent
consideration is classified in Level 3 of the fair value hierarchy and is
initially recognized at fair value as a cost of the acquisition. After the
acquisition, the contingent consideration liability is remeasured each
reporting period. The fair value of contingent consideration is measured
predominantly on unobservable inputs such as assumptions about the likelihood
of achieving specified milestone criteria, projections of future financial
performance, assumed discount rates and assumed weightings applied to
potential scenarios in deriving a probability weighted fair value. Significant
judgment is used in developing these estimates and assumptions both at the
acquisition date and in subsequent periods. If actual events differ from
management's estimates, or to the extent these estimates are adjusted in the
future, our financial condition or results of operations could be affected in
the period of any change. For other fair value measurements, we generally use
an income approach to measure fair value when there is not a market observable
price for an identical or similar asset or liability. This approach utilizes
management's best assumptions regarding expectations of projected cash flows,
and discounts the expected cash flows using a commensurate risk-adjusted
discount rate. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 202 Notes to
the Consolidated Financial Statements
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Impairment of Goodwill and Intangible Assets Assets are tested or reviewed for
impairment in accordance with the accounting policy stated under Note 3.22
"Impairment." In the fourth quarter of 2023, we performed our annual
impairment assessment of goodwill (using data as of October 1, 2023). We
performed our goodwill impairment testing on a single cash-generating unit
basis which is consistent with our reporting structure. In testing for
potential impairment, we measured the estimated fair value of the
cash-generating unit based upon discounted future operating cash flows using a
discount rate reflecting our estimated average cost of funds. Differences in
assumptions used in projecting future operating cash flows and cost of funds
could have a significant impact on the determination of impairment amounts. In
estimating future cash flows, we used our internal five-year projections. Our
projections were based on recent sales data for existing products, planned
timing of new product launches, and customer commitments related to new and
existing products. We performed a series of sensitivity analyses on our
calculation by varying key inputs individually including a decrease in
projected future cash flows and growth rates and an increase in the weighted
average cost of capital to a +/-10% threshold and found no material impact on
the value of goodwill. We concluded that no impairment existed at October 1,
2023 or through December 31, 2023. Due to the numerous variables associated
with our judgments and assumptions relating to the valuation of the cash-
generating unit and the effects of changes in circumstances affecting these
valuations, both the precision and reliability of the resulting estimates are
subject to uncertainty, and as additional information becomes known, we may
change our estimates. Development Costs Development costs are capitalized in
accordance with the accounting policy stated under research and development in
Note 3.6 "Operating Expenses" above. Assessing whether the development costs
qualify for capitalization requires management to make assumptions regarding
the expected future cash generation of the assets, discount rates to be
applied and the expected period of benefits. Periodically, and at least
annually, management assesses whether there are indications that projects may
be impaired and if impairment indicators exist, management reviews the
carrying amount of the projects and performs a test for impairment. Income
Taxes The Company is subject to income taxes in numerous jurisdictions that
require estimates to be made based on interpretations of laws or regulations.
Various internal and external factors, such as changes in tax laws,
regulations and rates, changing interpretations of existing tax laws or
regulations, future level of research and development spending and changes in
overall levels of pre-tax income may have favorable or unfavorable effects on
the income tax and deferred tax provisions in the period in which such
determination is made. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Deferred tax assets are recognized in accordance with the accounting policy
stated in Note 3.11 "Taxation." Deferred tax assets are recognized for net
operating loss carry-forwards to the extent that it is probable that taxable
profit will be available against which the losses can be utilized. Significant
management judgment is required to determine the amount of deferred tax assets
that can be recognized based upon the likely timing and level of future
taxable profits. Share-Based Payments - Stock Options The Company utilizes the
Black-Scholes-Merton valuation model for estimating the fair value of its
stock options as stated under Note 22 "Share-Based Payments." Option valuation
models, including Black-Scholes-Merton, require the input of highly subjective
assumptions, and changes in the assumptions used can materially affect the
grant date fair value of an award. Share-Based Payments - Restricted Stock
Units and Performance Stock Units Restricted stock units and performance stock
units represent rights to receive Common Shares at a future date. The fair
market value is determined based on the number of stock units granted and the
fair market value of our shares on the grant date. The fair market value at
the time of the grant, less an estimate for pre-vesting forfeitures, is
recognized in expense over the vesting period. We grant performance-based
stock units subject to performance periods of one-year up to three years. Thus
the estimates of performance achieved during the performance period may be
subject to significant changes from period to period as the performance is
completed. 4. Revenue Nature of Goods and Services Our revenues are reported
net of sales and value-added taxes and accruals for estimated rebates and
returns and are derived primarily from the sale of consumable and
instrumentation products, and to a much lesser extent, from the sale of
services, intellectual property and technology. Revenue is recognized upon
transfer of control of promised products or services to customers in an amount
that reflects the consideration we expect to receive in exchange for those
products or services. From time to time, we enter into contracts that can
include various combinations of products and services, which are generally
distinct and accounted for as separate performance obligations. The
transaction price is allocated to performance obligations based on their
relative stand-alone selling prices. We offer warranties on our products.
Certain of our warranties are assurance-type in nature and do not cover
anything beyond ensuring that the product is functioning as intended. Based on
the guidance in IFRS 15, assurance-type warranties do not represent separate
performance obligations. The Company also sells separately-priced service
contracts which qualify as service-type warranties and represent separate
performance obligations. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
204 Notes to the Consolidated Financial Statements
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We sell our products and services both directly to customers and through
distributors generally under agreements with payment terms typically less than
90 days and, in most cases, not exceeding one year and therefore contracts do
not contain a significant financing component. Consumable and Related Revenue
Consumable Products: In the last three years, revenue from consumable product
sales has accounted for between 78-81% of our net sales and revenue is
recognized when performance obligations under the terms of a contract with a
customer are satisfied. The majority of our contracts have either a single
performance obligation to transfer a single consumable product or multiple
performance obligations to transfer multiple products concurrently.
Accordingly, we recognize revenue when control of the products has transferred
to the customer, which is generally at the time of shipment of products as
this is when title and risk of loss have been transferred. In addition,
invoicing typically occurs at this time so this is when we have a present
right to payment. Revenue is measured as the amount of consideration we expect
to receive in exchange for transferring products and is generally based upon a
negotiated formula, list or fixed price. Related Revenue: Revenues from
related products include software-as-a-service (SaaS), licenses, intellectual
property and patent sales, royalties and milestone payments and over the last
three years has accounted for between 7-10% of our net sales. SaaS
arrangements: Revenue from SaaS arrangements, which allow customers to use
hosted software over the contract period without taking possession of the
software, is recognized over the duration of the agreement unless the terms of
the agreement indicate that revenue should be recognized in a different
pattern, for example, based on usage. Licenses: Licenses for on-site software,
which allow customers to use the software as it exists when made available,
are sold as perpetual licenses or term licenses. Revenue from on-site licenses
is recognized at the later of when the software is made available to the
customer or the beginning of the license term. When a portion of the
transaction price is allocated to a performance obligation to provide support
and/or updates, revenue is recognized as the updates/ support are provided,
generally over the life of the license. Fees from research collaborations
include payments for technology transfer and access rights. Royalties from
licensees of intellectual property are based on sales of licensed products and
revenues are recognized at the later of (i) when the related sales occur, or
(ii) when the performance obligation to which some or all of the royalty has
been allocated has been satisfied (or partially satisfied). Milestone
Payments: At the inception of each companion diagnostic co-development
arrangement that includes development milestone payments, which represent
variable consideration, we evaluate whether the milestones are probable of
being reached and estimate the amount to be included in the transaction price
using the most likely amount method. If it is probable that a significant
revenue reversal would not occur, the associated milestone value is included
in the transaction price. Milestone payments that are not within our control,
such as milestones which are achieved through regulatory approvals, are
considered to be constrained and excluded from the transaction price until
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the required approvals are received. Revenue is recognized following the input
method as this is considered to best depict the timing of the transfer of
control. This involves measuring actual hours incurred to date as a proportion
of the total budgeted hours of the project. At the end of each subsequent
reporting period, the proportion of completion is trued-up. We also
re-evaluate the probability of achievement of development milestones and any
related constraint on a periodic basis and, if necessary, adjust our estimate
of the overall transaction price. Any such adjustments are recorded on a
cumulative catch-up basis, which would affect revenues and earnings in the
period of adjustment. Instruments Revenue from instrumentation includes the
instrumentation equipment, installation, training and other instrumentation
services, such as extended warranty services or product maintenance contracts
and, over the last three years, has accounted for 12% of net sales. Revenue
from instrumentation equipment is recognized when the customer obtains control
of the instrument which is predominantly at the time of delivery or upon
customer acceptance, where applicable. Service revenue is recognized over the
term of the service period as the customers benefit from the service
throughout the service period. Revenue related to services performed on a
time-and-materials basis is recognized when performed. Contract Estimates The
majority of our revenue is derived from contracts (i) with an original
expected length of one year or less and (ii) contracts for which we recognize
revenue at the amount in which we have the right to invoice as product is
delivered. We have elected the practical expedient not to disclose the value
of remaining performance obligations associated with these types of contracts.
However, we have certain companion diagnostic co-development contracts to
provide research and development activities in which our performance
obligations extend over multiple years. As of December 31, 2023, remaining
performance obligations totaled $55.5 million for which the transaction price
is not constrained related to these contracts which we expect to recognize
over the next 12 to 18 months. Revenue expected to be recognized in any future
year related to remaining performance obligations, excluding revenue
pertaining to contracts that have an original expected duration of one year or
less, contracts where revenue is recognized as invoiced and contracts with
variable consideration related to undelivered performance obligations, is not
material. Contract Balances The timing of revenue recognition, billings and
cash collections can result in billed accounts receivable, unbilled
receivables (contract assets), and customer advances and deposits (contract
liabilities) in the consolidated balance sheet. Contract assets as of December
31, 2023 and 2022 totaled $15.0 million and $9.8 million, respectively, and
are included in other current assets in the accompanying consolidated balance
sheets and relate to the companion diagnostic co-development contracts
discussed above. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 206 Notes to
the Consolidated Financial Statements
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Contract liabilities primarily relate to non-cancellable advances or deposits
received from customers before revenue is recognized and are primarily related
to instrument service and software-as-a-service (SaaS) arrangements. As of
December 31, 2023 and 2022, contract liabilities totaled $82.1 million and
$84.2 million, respectively, of which $66.4 million and $69.0 million is
included in other current liabilities, respectively, and $15.7 million and
$15.2 million in included in other non-current liabilities, respectively.
During the years ended December 31, 2023 and 2022, we satisfied the associated
performance obligations and recognized revenue of $66.8 million and $57.6
million, respectively, related to advance customer payments previously
received. Disaggregation of Revenue We disaggregate our revenue based on
product type and customer class as shown below for the years ended December
31, 2023 and 2022: (in thousands) 2023 2022 Consumables and related revenues
$951,366 $1,031,293 Instruments 84,111 96,436 Molecular Diagnostics 1,035,477
1,127,729 Consumables and related revenues 774,847 859,133 Instruments 154,987
156,158 Life Sciences 929,834 1,015,291 Total net sales $1,965,311 $2,143,020
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Additionally, we disaggregate our revenue based on product category as shown
below for the years ended December 31, 2023 and 2022: (in thousands) 2023 2022
Sample technologies $662,991 $798,434 Diagnostic solutions 697,630 660,879 PCR
/ Nucleic acid amplification 300,204 390,804 Genomics / NGS 238,910 224,797
Other 65,576 68,106 Total net sales $1,965,311 $2,143,020 Refer to Note 21
"Reportable Segment" for disclosure of revenue by geographic region. 5.
Acquisitions We undertake acquisitions to complement our own internal product
development activities. Our acquisitions have historically been made at prices
above the fair value of the acquired net assets, resulting in goodwill, due to
expectations of synergies of combining the businesses. These synergies include
use of our existing infrastructure, such as sales force, business service
centers, distribution channels and customer relations, to expand sales of an
acquired business' products; use of the infrastructure of the acquired
businesses to cost-effectively expand sales of our products; and elimination
of duplicative facilities, functions and staffing. For acquisitions which have
been accounted for as business combinations, the acquired companies' results
have been included in the accompanying consolidated income statements from
their respective dates of acquisition. 2023 Business Combination On January 3,
2023, we acquired 100% of the shares of Verogen, Inc., a leader in the use of
next-generation sequencing (NGS) technologies to drive the future of human
identification (HID) and forensic investigation. Verogen, a privately held
company founded in 2017 and based in San Diego, California, supports the
global human identification community with NGS tools and professional services
to help resolve criminal and missing-persons cases. The cash consideration,
net of cash acquired was $149.5 million. The acquisition is not significant to
the overall consolidated financial statements and as of September 30, 2023,
the allocation of the purchase price was final. At the acquisition date, all
the assets acquired and liabilities assumed were recorded at their respective
fair values and our consolidated results of operations include the QIAGEN N.V.
| IFRS Annual Report 2023 Overview Management Report Corporate Governance
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operating results from the acquired company from the acquisition date. The
acquisition did not have a material impact to net sales, net income or
earnings per common share and therefore no pro forma information has been
provided herein. 2022 Business Combination On May 11, 2022, we acquired 100%
of BLIRT S.A., a supplier of standardized and customized solutions for
proteins and enzymes as well as molecular biology reagents located in GdaDsk,
Poland. Its offering includes proteins and enzymes that are critical to the
life sciences industry and diagnostic kit manufacturers. The cash
consideration, net of cash acquired was $63.7 million. The acquisition was not
significant to the overall consolidated financial statements. At the
acquisition date, all the assets acquired and liabilities assumed were
recorded at their respective fair values and our consolidated results of
operations include the operating results from the acquired company from the
acquisition date. The acquisition did not have a material impact to net sales,
net income or earnings per common share and therefore no pro forma information
has been provided herein. 6. Restructuring As part of our restructuring
activities, we incur expenses that qualify as constructive obligations under
IAS 37 arising from a restructuring program including severance and employee
costs, contract and other costs (primarily contract termination costs),
inventory write-offs and other implementation costs primarily related to
consulting fees. Personnel costs (principally termination benefits) primarily
relate to cash severance and other termination benefits including accelerated
share-based compensation. We also incur expenses that are an integral
component of, and are directly attributable to, our restructuring activities
which do not qualify as constructive obligations under IAS 37. These expenses
consist of asset-related costs such as intangible asset impairments and other
asset related write-offs. Termination benefits are recorded when it is
probable that employees will be entitled to benefits and the amounts can be
reasonably estimated. Estimates of termination benefits are based on the
frequency of past termination benefits, the similarity of benefits under the
current plan and prior plans, and the existence of statutory required minimum
benefits. Other benefits which require future service and are associated to
non-recurring benefits are recognized ratably over the future service period.
Other assets, including inventory, are impaired or written-off if the carrying
value exceeds the fair value. All other costs are recognized as incurred. 2022
Restructuring Plan During the fourth quarter of 2022, we initiated a
restructuring plan to discontinue our third-party instrument service business
and realign certain management positions and personnel in order to improve the
overall management structure. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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209 Notes to the Consolidated Financial Statements
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The table below shows the pre-tax restructuring charges recorded in 2023 and
2022 in the accompanying consolidated income statements. (in thousands) 2023
2022 Cost of sales $- $391 Restructuring, acquisition, integration and other,
net 6,095 4,612 Total restructuring charges $6,095 $5,003 Cost of sales
charges in 2022 were for inventory write-downs. A summary of the restructuring
liability, which is recorded in other current liabilities in the accompanying
consolidated balance sheets, as of December 31, 2023 and 2022 is as follows:
(in thousands) Personnel related Contract and other costs Total Liability at
December 31, 2021 $- $- $- Cost incurred in 2022 4,121 491 4,612 Foreign
currency translation adjustment 24 3 27 Liability at December 31, 2022 $4,145
$494 $4,639 Costs incurred in 2023 6,604 160 6,764 Release of accruals (662)
(7) (669) Payments (3,667) (500) (4,167) Foreign currency translation
adjustment 137 - 137 Liability at December 31, 2023 $6,557 $147 $6,704 No
further charges related to this program are expected to be incurred in 2024.
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7. Financial Assets (in thousands) 2023 2022 Current financial assets:
Unquoted debt securities $389,698 $607,997 Quoted debt securities - 79,600
Total current financial assets 389,698 687,597 Non-current financial assets:
Unquoted equity securities 4,435 5,329 Total non-current financial assets
4,435 5,329 Total financial assets $394,133 $692,926 At December 31, 2023,
we held unquoted debt securities of $389.7 million. At December 31, 2022, we
held unquoted debt securities valued at $608.0 million and quoted debt
securities of $79.6 million. Unquoted Debt Securities The unquoted debt
securities are highly liquid deposits and fixed-income securities consisting
of money market deposits and commercial paper due from financial and
nonfinancial institutions. These instruments are classified as current assets
in the accompanying balance sheet as they have an original maturity of less
than one year. Money market deposits are interest-bearing deposit accounts,
valued at amortized cost with interest income accrued as earned. Interest
income is determined using the simple interest rate method. Investments in
commercial paper, a marketable debt security, are financial assets accounted
for at amortized cost. Interest income is calculated and accrued using the
effective interest method. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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211 Notes to the Consolidated Financial Statements
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(in thousands) 2023 2022 Balance at beginning of the year $607,997 $184,785
Unquoted debt securities acquired 839,399 1,118,317 Unquoted debt securities
redeemed (1,054,946) (694,026) Loss on sales of unquoted debt securities -
(6,230) Interest redeemed (15,661) - Additions from accrued interest 11,669
5,151 Foreign currency translation adjustment 1,240 - Balance at end of the
year $389,698 $607,997 Quoted Debt Securities The quoted debt securities are
fixed-income securities consisting of commercial paper due from financial and
nonfinancial institutions. Investments in commercial paper, a marketable debt
security, are financial assets accounted for at amortized cost. Interest
income is calculated and accrued using the effective interest method. (in
thousands) 2023 2022 Balance at beginning of the year $79,600 $- Quoted debt
securities acquired 137,049 267,611 Quoted debt securities redeemed (215,605)
(189,056) Interest redeemed (4,395) - Additions from accrued interest 3,351
1,045 Balance at end of the year $- $79,600 Unquoted Equity Securities At
December 31, 2023 and 2022, we had investments in non-publicly traded
companies that do not have readily determinable fair values with carrying
amounts that totaled $4.4 million and $5.3 million, respectively. These
investments are required to be accounted for at fair value through profit and
loss unless the investment is not held for trading, and the holder elects at
initial recognition to account for it at fair value through other
comprehensive income. As this election has not been made, these investments
are accounted for at fair value through profit and loss in other financial
results. There was no observable fair value change in these unquoted equity
investments during 2023. All other changes in these investments for the years
ended December 31, 2023 and 2022 are as follows: QIAGEN N.V. | IFRS Annual
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(in thousands) 2023 2022 Balance at beginning of year $5,329 $3,945
Impairments (4,158) - Cash investments in equity securities, net 491 52 Shares
received in exchange for services performed 2,604 1,475 Foreign currency
translation adjustments 169 (143) Balance at end of year $4,435 $5,329 During
2023, we fully impaired an investment following adverse changes in an
investee's solvency that indicated that the carrying value was no longer
recoverable. The impairment of $4.2 million is recorded in other financial
results in the accompanying consolidated income statement. We made additional
investments of $0.5 million and $0.1 million in unquoted equity securities for
the years ended December 31, 2023 and 2022, respectively. Additionally,
during 2023 and 2022, we received shares amounting to $2.6 million and $1.5
million, respectively, as payment for services performed. 8. Trade Accounts
Receivable We sell our products worldwide through sales subsidiaries and
distributors. There is no concentration of credit risk with respect to trade
accounts receivable as we have a large number of internationally dispersed
customers. Trade accounts receivable are non-interest bearing and mostly have
payment terms of 30 to 90 days. Notes receivable are non-interest bearing and
mostly have payment terms of up to one year. QIAGEN N.V. | IFRS Annual Report
2023 Overview Management Report Corporate Governance Financial Statements
Appendices Page 213 Notes to the Consolidated Financial Statements
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(in thousands) 2023 2022 Trade accounts receivable $395,568 $340,194 Notes
receivable 3,605 6,436 Allowance for doubtful accounts (17,296) (22,880) Total
trade accounts receivable, net $381,877 $323,750 The changes in the allowance
for doubtful accounts are as follows: (in thousands) 2023 2022 Balance at
beginning of year $22,880 $23,124 Additions charged to expense (2,873) 4,483
Deductions from allowance(1) (2,378) (2,685) Currency translation adjustments
and other (333) (2,042) Balance at end of year $17,296 $22,880 (1) Write-offs
for which an allowance was previously provided. QIAGEN N.V. | IFRS Annual
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9. Other Current and Non-current Assets Other current assets at December 31,
2023 and 2022 consist of the following: (in thousands) Notes 2023 2022 Cash
collateral (26) $87,666 $21,083 Income taxes receivable (17) 60,639 53,394
Other receivables 38,166 19,016 Value-added tax 19,911 28,130 Prepaid expenses
18,832 20,994 Contract assets (4) 15,039 9,768 Total other current assets
$240,253 $152,385 Other non-current assets at December 31, 2023 and 2022
consist of the following: (in thousands) 2023 2022 Other non-current assets
$21,539 $15,095 Prepaid licenses and royalties 7,797 8,585 Non-current
deposits and escrow payments 3,852 3,396 Prepayment of intangibles 121 851
Total other non-current assets $33,309 $27,927 QIAGEN N.V. | IFRS Annual
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10. Property, Plant and Equipment Cost (in thousands) Land and buildings
Machinery and equipment Furniture and office equipment Leasehold improvements
Construction in progress Total January 1, 2022 $343,615 $343,969 $106,016
$54,950 $92,064 $940,614 IAS 29 Hyperinflationary accounting - 6,607 863 251 -
7,721 Currency adjustments (12,059) (20,480) (5,041) (4,176) (4,415) (46,171)
Additions 344 28,827 7,168 439 48,186 84,964 Business combinations 976 1,545
23 - 76 2,620 Disposals (16,120) (86,216) (27,457) (6,510) (1,684) (137,987)
Transfers 25,738 26,541 9,594 1,078 (62,951) - December 31, 2022 342,494
300,793 91,166 46,032 71,276 851,761 Currency adjustments 7,370 4,486 2,072
981 1,726 16,635 Additions 52 24,710 5,871 2,745 37,757 71,135 Business
combinations - 547 - - - 547 Disposals (256) (39,047) (10,603) (926) (1,891)
(52,723) Transfers 8,415 24,760 3,552 2,395 (39,122) - December 31, 2023
$358,075 $316,249 $92,058 $51,227 $69,746 $887,355 QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
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Accumulated depreciation (in thousands) Land and buildings Machinery and
equipment Furniture and office equipment Leasehold improvements Construction
in progress Total January 1, 2022 ($117,292) ($238,425) ($75,549) ($17,975)
($16) ($449,257) IAS 29 Hyperinflationary accounting - (3,920) (555) (100) -
(4,575) Currency adjustments 4,269 14,144 3,160 1,075 1 22,649 Depreciation
(8,619) (33,535) (10,672) (4,661) - (57,487) Impairment losses - (141) - - -
(141) Disposals 15,912 79,946 27,249 6,510 15 129,632 December 31, 2022
(105,730) (181,931) (56,367) (15,151) - (359,179) Currency adjustments (2,138)
(1,942) (1,399) (99) - (5,578) Depreciation (6,562) (26,700) (11,913) (5,088)
- (50,263) Disposals 256 36,712 10,457 924 - 48,349 December 31, 2023
(114,174) (173,861) (59,222) (19,414) - (366,671) Net book value (in
thousands) December 31, 2022 $236,764 $118,862 $34,799 $30,881
$71,276 $492,582 December 31, 2023 $243,901 $142,388 $32,836 $31,813 $69,746
$520,684 The residual values, useful lives and methods of depreciation are
reviewed annually and adjusted if appropriate. Impairment of $0.1 million
during 2022 was related to our business in Russia. No property, plant and
equipment was pledged as security against non-current financial debts at
December 31, 2023 and 2022. Construction in progress primarily includes
amounts related to projects to expand production lines and increase the
capacity of manufacturing as well as ongoing software development projects.
For the year ended December 31, 2023, interest capitalized in connection with
these projects totaled $1.2 million. No significant interest was capitalized
for the year ended December 31, 2022. Additions to purchases property, plant
and equipment of $71.1 million include $37.8 million of additions that were
accrued as of December 31, 2023 together with $33.3 million of cash paid for
additions during the year ended December 31, 2023. Net cash paid for property,
plant and equipment totaled $41.4 million, of which $11.7 million is related
to current year payments for assets that were accrued as of December 31, 2022
partially offset by $2.7 million on foreign currency translation adjustments
and $0.9 million from grant proceeds, net of purchases of related assets.
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11. Equity Accounted Investments We have made strategic investments in certain
companies that are accounted for using the equity method of accounting. The
method of accounting for an investment depends on the level of influence. We
hold investments in entities where, though we lack a controlling financial
interest, we do have rights to direct the relevant activities including the
power to appoint key management personnel, and therefore have concluded that
we have significant influence over these investments. We monitor changes in
circumstances that may require a reassessment of the level of influence. We
periodically review the carrying value of these investments for impairment,
considering factors such as the most recent stock transactions and book values
from the recent financial statements. Amounts from equity method investments
considered in the financial statements are as follows: (in thousands) Equity
investments as of December 31, Share of income (loss) for the years ended
December 31, Ownership percentage 2023 2022 2023 2022 PreAnalytiX GmbH 50.00 %
$3,422 $6,856 $4,977 $4,377 Apis Assay Technologies Ltd 19.90 % 2,408 4,102
(1,694) 389 TVM Life Sciences Ventures III 3.10 % 7,198 3,872 947 (901) Suzhou
Fuda Business Management and Consulting Partnership 33.67 % 2,581 2,608 49 -
Actome GmbH 12.50 % 586 779 (216) (201) Hombrechtikon Systems Engineering AG
19.00 % (275) (311) 100 94 $15,920 $17,906 $4,163 $3,758 Of the net $15.9
million of amounts from equity method investments, the investment assets of
$16.2 million are included in equity accounted investments and the amount of
$0.3 million, for the investment where we are committed to fund losses, is
included in other non-current liabilities in the accompanying consolidated
balance sheet as of December 31, 2023. Our share of income of $4.2 million in
2023 and $3.8 million in 2022 is included in gain from equity accounted
investments in the accompanying consolidated income statements. TVM Life
Science Ventures III (TVM) is a limited partnership and we account for our
3.1% investment under the equity method as we have the ability to exercise
significant influence over the limited partnership. This investment is valued
at net asset value (NAV) reported by the counterparty, adjusted as necessary.
During the years ended December 31, 2023 and 2022, we made $2.4 million and
$1.1 million, respectively, in additional cash payments to TVM, and, as of
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December 31, 2023, have $6.8 million of unfunded commitments through 2029
related to this investment. We do not have the right to redeem these funds
under the normal course of operations of this partnership. During the years
ended December 31, 2023 and 2022, we received dividends of $9.1 million and
$7.5 million, respectively, from PreAnalytix GmbH. These dividends are
included in other items, net including fair value changes in derivatives in
the accompanying consolidated statements of cash flows as they are a return on
investment and therefore classified as cash flows from operating activities.
The below tables shows the changes in our equity method investments for the
years ended December 31, 2023 and 2022: (in thousands) 2023 2022 Balance at
beginning of year $17,906 $21,137 Purchases of investments 2,379 1,104
Dividend distribution received (9,097) (7,492) Share of profit 4,163 3,758
Exchange rate differences / other 569 (601) Balance at end of year $15,920
$17,906 The table below reflects the financial information (at 100%) of all
individually immaterial equity method investments in the aggregate: None of
the equity method investments are considered to be individually material to
our financial statements. (in millions) Joint Venture Associates 2023 2022
2023 2022 Total assets $33.8 $38.5 $263.4 $193.9 Shareholders' equity $24.9
$27.6 $251.1 $185.8 Net sales $30.0 $32.6 $21.9 $22.4 Net result $18.8
$17.7 ($8.6) ($0.5) QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 219 Notes to
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12. Goodwill and Other Intangible Assets The changes in the carrying amount of
goodwill for the years ended December 31, 2023 and 2022 are as follows: (in
thousands) 2023 2022 Balance at beginning of year $2,380,162 $2,376,440 IAS 29
Hyperinflationary accounting - 1,484 Goodwill acquired during the year 95,136
42,201 Purchase adjustments (4,350) (303) Currency adjustments 32,090 (39,660)
Balance at end of year $2,503,038 $2,380,162 The changes in the carrying
amount of goodwill during the year ended December 31, 2023 resulted primarily
from the acquisition of Verogen, Inc. in January 2023 and foreign currency
translation adjustments driven by changes in the euro, Swiss franc and British
pound. The changes in goodwill during the year ended December 31, 2022
resulted primarily from the acquisition of BLIRT S.A. in May 2022 and foreign
currency translation adjustments. In the fourth quarter of 2023, we performed
our annual impairment assessment of goodwill (using data as of October 1,
2023) in accordance with the provisions of IAS 36. No events or changes in
circumstances indicated that the acquired goodwill might be impaired.
Management monitors and makes decisions regarding the Company's operations on
a functional specific and global level. Goodwill is monitored and assessed for
the entire consolidated group as a whole because the Company and its
subsidiaries together compose a single cash-generating unit. In testing for
potential impairment, we measured the estimated fair value of the
cash-generating unit based upon discounted future operating cash flows using a
discount rate reflecting our estimated average cost of funds. For impairment
testing, the recoverable amount of goodwill allocated to the cash-generating
unit (higher of the cash- generating unit's fair value less selling costs and
its value in use) is compared to the carrying amount of the net assets
employed (including goodwill) of the cash-generating unit. Value in use is
normally assumed to be higher than the fair value less selling costs;
therefore, fair value less selling costs is only investigated when value in
use is lower than the carrying amount of the cash-generating unit. QIAGEN N.V.
| IFRS Annual Report 2023 Overview Management Report Corporate Governance
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Key assumptions used in the value in use calculations The value in use is
calculated based on estimated future cash flow projections expected to result
from the use of the cash- generating unit, discounted using an appropriate
long-term pre-tax discount rate. The value in use calculations use cash flow
projections based on financial budgets and models over the projection period
(five years) as available for internal reporting purposes and in accordance
with standard valuation practices. The growth rates used are based on industry
growth forecasts for the projected period as well as for the subsequent period
(long-term growth rate of 3% in 2023 and 2022). The discount rates used are
based on the pre-tax weighted average cost of capital (8.2% in 2023 and 7.5%
in 2022) and are verified against external analyst reports. Sensitivity to
changes in assumptions Changes in assumptions used in projecting future
operating cash flows and cost of funds could have a significant impact on the
determination of impairment amounts. In estimating future cash flows, we used
our internal budgets. Our budgets were based on recent sales data for existing
products, planned timing of new product launches and customer commitments
related to new and existing products. The calculation of value in use is most
sensitive to the discount rates and growth rates used. Discount rates reflect
management's estimate of the risks profile for the respective valuation
object. The growth rates used are based on industry growth forecasts for the
projected period as well as for the subsequent period. We concluded that no
impairment existed. We believe that any reasonably possible change in the key
assumptions would not have an impact on reported goodwill. Even if our
estimates of projected future cash flows in respect of discount and growth
rates were too high by 10%, there would be no impact on the reported value of
goodwill at December 31, 2023. Due to the numerous variables associated with
our judgments and assumptions relating to the valuation of the cash-
generating unit and the effects of changes in circumstances affecting these
valuations, both the precision and reliability of the resulting estimates are
subject to uncertainty and, as additional information becomes known, we may
change our estimates. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
221 Notes to the Consolidated Financial Statements
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Other Intangible Assets Cost (in thousands) Developed technology, patent and
license rights Computer software Development costs Other intellectual
properties Total January 1, 2022 $1,108,406 $329,985 $42,909 $325,817
$1,807,117 IAS 29 Hyperinflationary accounting - 57 - - 57 Currency
adjustments (34,776) (15,818) (2,107) (13,920) (66,621) Additions 19,585
72,887 8,821 47 101,340 Business combinations 12,186 21 - 5,061 17,268
Disposals (121,619) (65,936) - (28,300) (215,855) December 31, 2022 983,782
321,196 49,623 288,705 1,643,306 Currency adjustments 15,283 9,072 1,667 5,862
31,884 Additions 11,034 108,312 6,605 43 125,994 Business combinations 57,200
- - 800 58,000 Disposals (65,943) (36,722) (255) (21,355) (124,275) December
31, 2023 $1,001,356 $401,858 $57,640 $274,055 $1,734,909 QIAGEN N.V. | IFRS
Annual Report 2023 Overview Management Report Corporate Governance Financial
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Accumulated amortization (in thousands) Developed technology, patent and
license rights Computer software Development costs Other intellectual
properties Total January 1, 2022 ($602,590) ($183,159) ($13,979) ($204,197)
($1,003,925) IAS 29 Hyperinflationary accounting - (35) - - (35) Currency
adjustments 24,374 7,968 837 11,381 44,560 Amortization (78,584) (34,099)
(3,358) (15,130) (131,171) Impairment losses (12,817) - - (12) (12,829)
Disposals 121,584 58,858 - 28,300 208,742 December 31, 2022 (548,033)
(150,467) (16,500) (179,658) (894,658) Currency adjustments (10,223) (4,393)
(674) (4,218) (19,508) Amortization (82,839) (35,351) (5,383) (10,916)
(134,489) Disposals 65,943 33,074 - 21,355 120,372 December 31, 2023
($575,152) ($157,137) ($22,557) ($173,437) ($928,283) Net book value (in
thousands) December 31, 2022 $435,749 $170,729 $33,123 $109,047 $748,648
December 31, 2023 $426,204 $244,721 $35,083 $100,618 $806,626 During 2022, we
recorded a charge to restructuring, acquisition, integration and other, net in
the accompanying consolidated income statements, to fully impair a license
with a carrying value of $12.8 million. This license was to use technology of
Ellume Limited, Australia. In connection with Ellume starting insolvency
proceedings in September 2022, we decided to cease all product development and
manufacturing activities associated with this license and determined that
there was no alternative use nor recoverable value. Accordingly, the license
was fully impaired. Amortization expense on intangible assets is included in
the line items cost of sales, research and development expense, sales and
marketing expense or general and administrative expense in the accompanying
consolidated income statements depending on the nature and use of the asset.
In 2023, purchased intangibles amortization related to developed technology
and patent and license rights acquired in a business combination is included
in cost of sales in the amount of $64.2 million (2022: $60.5 million) and
purchased intangibles amortization of trademarks and customer base acquired in
a business combination is recorded in sales and marketing expense in the
amount of $10.8 million (2022: $14.5 million). QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 223 Notes to the Consolidated Financial Statements
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Amortization of capitalized development costs have been recorded to cost of
sales in the amount of $5.4 million in 2023 (2022: $3.4 million). Cash paid
for intangible assets excluding development costs during the year ended
December 31, 2023 totaled $121.4 million which includes $119.1 million of cash
paid for additions during the year ended December 31, 2023 and $2.3 million of
current year payments for assets that were accrued as of December 31, 2022.
Intangible additions excluding development costs of $92.5 million includes
$83.8 million of cash paid for additions during the year ended December 31,
2022 together with $7.0 million of additions which were previously recorded as
prepayments and $1.7 million of additions that were accrued as of December 31,
2022. Cash paid for intangible assets excluding development costs during the
year ended December 31, 2022 totaled $93.0 million, of which $4.8 million is
related to current year payments for assets that were accrued as of December
31, 2021 and $4.4 million is related to prepayments recorded in other
non-current assets in accompanying consolidated balance sheet. 13. Leases
Nature of Existing Leases We have leases primarily for real estate. The leases
generally have terms which range from one year to 15 years with some including
options to extend or renew and some including options to early terminate the
leases. As of December 31, 2023 and 2022, no such options have been recognized
as part of the right-of-use assets and lease liabilities. Leases can contain
variable lease charges based on index like consumer prices or rates. During
the years ended December 31, 2023 and 2022, amounts recorded as variable lease
payments not included in the lease liabilities were not material. When the
interest rate implicit in each lease is not readily determinable, we apply our
incremental borrowing rate in determining the present value of lease payments.
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
Governance Financial Statements Appendices Page 224 Notes to the Consolidated
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Supplemental balance sheet and other information related to leases as of
December 31 are as follows: (in thousands, except lease term and discount
rate) Location in balance sheet 2023 2022 Right-of-use assets Right-of-use
assets $102,919 $93,982 Office and buildings $89,122 $83,318 Cars and all
other assets $13,797 $10,664 Current lease liabilities Other current
liabilities $22,268 $22,220 Non-current lease liabilities Other non-current
liabilities $79,063 $71,406 Weighted average remaining lease term 6.80 years
6.92 years Weighted average discount rate 2.85 % 2.08 % The components of
lease expense for the years ended December 31, 2023 and 2022 are as follows:
(in thousands) 2023 2022 Amortization of right-of-use assets $26,592 $25,375
Office and buildings 20,231 19,472 Cars and all other assets 6,361 5,903
Interest on lease liabilities ($2,521) ($1,753) Supplemental cash flow
information related to leases for the years ended December 31, 2023 and 2022
are as follows: (in thousands) 2023 2022 Cash paid for amounts included in the
measurement of lease liabilities: Financing cash flows from principal portion
of lease payments $26,779 $26,842 Operating cash flows from interest portion
of lease payments 2,521 1,753 Total cash outflow for leases $29,300 $28,595
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
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Maturities of lease liabilities as of December 31 were as follows: Year ending
December 31, (in thousands) Lease Liabilities 2024 $25,123 2025 20,876 2026
15,049 2027 11,531 2028 8,162 Thereafter 29,159 Total lease payments 109,900
Less: Imputed interest (8,569) Total $101,331 As of December 31, 2023, we do
not have any material leases that have not yet commenced. 14. Provisions As of
December 31, 2023 and 2022, provisions per the accompanying consolidated
balance sheets totaled $5.2 million and $6.0 million, respectively, and
included amounts related to our warranty and acquisition related provisions.
For all provisions, it is expected that the respective amounts will be
utilized in the next year. Warranty Provision In the ordinary course of
business, we provide a warranty to customers that our products are free of
defects and will conform to published specifications. Generally, the
applicable product warranty period is one year from the date of delivery of
the product to the customer or the date of site acceptance, if required.
Additionally, we typically provide limited warranties with respect to our
services. We provide for estimated warranty costs at the time of the product
sale. At the time product revenue is recognized, a provision for estimated
future warranty costs is recorded in cost of sales based on historical
experience. We periodically review the provision and adjust, if necessary,
based on actual experience and estimated costs to be incurred. We believe our
warranty reserves as of December 31, 2023 and 2022 appropriately QIAGEN N.V.
| IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 226 Notes to the Consolidated Financial
Statements
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reflect the estimated cost of such warranty obligations. The changes in the
carrying amount of warranty obligations for the years ended December 31, 2023
and 2022 are as follows: (in thousands) 2023 2022 Balance at beginning of year
$4,899 $6,324 Provision charged to cost of sales 3,947 4,606 Usage (3,451)
(4,517) Adjustments to previously provided warranties, net (1,501) (1,277)
Currency translation adjustment 50 (237) Balance at end of year $3,944 $4,899
Acquisition Related Provisions The provision for acquisition relates to
restructuring programs and similar arrangements for personnel and related
expected costs. These provisions generally have a term of one to two years.
(in thousands) 2023 2022 Balance at beginning of year $1,068 $391 Provision
charged to expenses 3,689 3,736 Usage (3,455) (3,061) Currency translation
adjustment and other - 2 Balance at end of year $1,302 $1,068 QIAGEN N.V. |
IFRS Annual Report 2023 Overview Management Report Corporate Governance
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15. Other Current and Non-current Liabilities Other current liabilities at
December 31, 2023 and 2022 consist of the following: (in thousands) Notes 2023
2022 Payroll and related accrued liabilities $81,377 $99,885 Accrued expenses
70,007 62,469 Deferred revenue (4) 66,432 69,000 Other liabilities 56,657
51,315 Current lease liabilities (13) 22,268 22,220 Accrued contingent
consideration and milestone payments (25) 18,359 8,181 Income tax payable (17)
12,475 13,980 Accrued royalties (20) 9,699 12,877 Accrued interest on
non-current financial debt (16) 8,518 5,431 Cash collateral liability (26)
5,440 21,755 Advanced license payments 63 1,905 Total other current
liabilities $351,295 $369,018 Other non-current liabilities at December 31,
2023 and 2022 consist of the following: (in thousands) Notes 2023 2022 Accrued
expenses $85,830 $91,175 Non-current lease liabilities (13) 79,063 71,406
Deferred revenue (4) 15,676 15,244 Non-current employee benefit obligations
14,029 12,355 Accrued contingent consideration - 9,907 Advanced license
payments - 388 Other non-current liabilities $194,598 $200,475 QIAGEN N.V. |
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16. Financial Debts At December 31, 2023 and 2022, total non-current financial
debts, net of debt issuance costs of $4.0 million and $6.6 million,
respectively, consist of the following: (in thousands) 2023 2022 0.500% Senior
Unsecured Cash Convertible Notes due 2023 $- $389,552 1.000% Senior Unsecured
Cash Convertible Notes due 2024 483,019 464,331 0.000% Senior Unsecured
Convertible Notes due 2027 443,818 443,285 German Private Placement (2017
Schuldschein) 120,956 116,699 German Private Placement (2022 Schuldschein)
407,950 393,532 Total financial debts 1,455,743 1,807,399 Less: Current
portion of financial debts 587,970 389,552 Total non-current financial debts
$867,773 $1,417,847 Total amount secured $- $- Unused lines of credit for
short-term financing $456,365 $455,438 The notes are all unsecured obligations
that rank pari passu. Interest expense on non-current debt was $52.4 million
and $55.1 million for the years ended December 31, 2023 and 2022,
respectively. Refer to Note 27 "Capital Management" for a schedule of the
changes in total current and non-current financial debts during 2023.
Repayments of non-current debts for the years ended December 31, 2023 and 2022
consisted of: (in thousands) 2023 2022 German Private Placement (2017
Schuldschein) $- $153,003 0.500% Senior Unsecured Cash Convertible Notes due
2023 400,000 - 3.75% Series B Senior Notes due October 16, 2022 - 300,000
3.90% Series C Senior Notes due October 16, 2024 - 27,000 Total repayment of
non-current debt $400,000 $480,003 QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
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The principal amount, carrying amount and fair values of non-current debt
instruments as of December 31, 2023 and 2022 are summarized below. 2023 (in
thousands) Fair value Principal amount Unamortized debt discount and issuance
costs Carrying amount Amount Leveling Cash Convertible Notes due 2024 $500,000
($16,981) $483,019 $513,500 Level 1 Convertible Notes due 2027(1) 445,949
(2,131) 443,818 453,185 Level 1 German Private Placement (2017 Schuldschein)
121,009 (53) 120,956 118,978 Level 2 German Private Placement (2022
Schuldschein) 408,846 (896) 407,950 401,684 Level 2 $1,475,804 ($20,061)
$1,455,743 $1,487,347 2022 (in thousands) Fair Value Principal amount
Unamortized debt discount and issuance costs Carrying amount Amount Leveling
Cash Convertible Notes due 2023 $400,000 ($10,448) $389,552 $493,436 Level 1
Cash Convertible Notes due 2024 500,000 (35,669) 464,331 596,485 Level 1
Convertible Notes due 2027(1) 445,949 (2,664) 443,285 471,545 Level 1 German
Private Placement (2017 Schuldschein) 116,821 (122) 116,699 112,401 Level 2
German Private Placement (2022 Schuldschein) 394,638 (1,106) 393,532 378,302
Level 2 $1,857,408 ($50,009) $1,807,399 $2,052,169 (1) The initial fair value
liability of the embedded conversion options for the 2027 Notes was $54.1
million which simultaneously reduced the carrying value of the Convertible
Notes as discussed further below. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 230 Notes to the Consolidated Financial Statements
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Future maturities of non-current debt stated at the carrying values as of
December 31, 2023 and future interest as of December 31, 2023 are as follows:
Future contractual cash obligations Years ending December 31, (in thousands)
Carrying value Loans (fixed and floating-rate) Convertible notes (fixed-rate)
Total 2024 $587,970 $121,912 $487,352 $609,264 2025 56,836 71,511 - 71,511
2026 - 13,336 - 13,336 2027 560,749 128,564 443,818 572,382 2028 - 9,714 -
9,714 Thereafter 250,188 272,454 - 272,454 $1,455,743 $617,491 $931,170
$1,548,661 Future maturities of non-current debt stated at the carrying values
as of December 31, 2022 and future interest as of December 31, 2022 are as
follows: Future contractual cash obligations(1) Years ending December 31, (in
thousands) Carrying value Loans (fixed and floating-rate) Convertible notes
(fixed-rate) Total 2023 $389,552 $14,776 $395,952 $410,728 2024 565,587
115,058 468,664 583,722 2025 54,803 66,882 - 66,882 2026 - 11,129 - 11,129
2027 556,083 122,453 443,285 565,738 Thereafter 241,374 275,113 - 275,113
$1,807,399 $605,411 $1,307,901 $1,913,312 (1) Future 2022 contractual cash
obligations include only amounts due in cash. The 2023 Notes that became
convertible pursuant to the indenture on January 1, 2022 and are classified as
current as of December 31, 2021, are only convertible during the triggered
conversion period and are thus not included as a cash payment until the 2023
date in the table above. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
231 Notes to the Consolidated Financial Statements
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Interest expense for the years ended December 31, 2023 and 2022 related to the
2027 Notes and the Cash Convertible Notes was comprised of the following: (in
thousands) 2023 2022 Coupon interest $4,169 $7,000 Amortization of original
issuance discount 27,341 30,170 Amortization of debt issuance costs 2,328
2,593 Total interest expense related to the convertible notes $33,838 $39,763
Convertible Notes due 2027 On December 17, 2020, we issued zero coupon
convertible notes in an aggregate principal amount of $500.0 million with a
maturity date of December 17, 2027 (2027 Notes). The 2027 Notes carry no
coupon interest. The net proceeds of the 2027 Notes totaled $497.6 million,
after payment of debt issuance costs of $3.7 million. Because the Convertible
Notes contain an embedded conversion option, we have determined that the
embedded conversion option is a derivative financial instrument, which is
required to be separated from the Convertible Notes and accounted for
separately as a derivative liability, with changes in fair value reported in
our consolidated income statements until the conversion option transaction
settles or expires. The initial fair value liability of the embedded
conversion options for the 2027 Notes was $54.1 million which simultaneously
reduced the carrying value of the Convertible Notes. For further discussion of
the derivative financial instruments relating to the Convertible Notes, refer
to Note 26 "Financial Risk Factors and Use of Derivative Financial
Instruments." The effective interest rate of the 2027 Notes is 1.65%, which is
imputed based on the amortization of the fair value of the embedded conversion
option over the remaining term of the 2027 Notes. The 2027 Notes are
convertible into common shares based on an initial conversion rate, subject to
adjustment, of 2,477.65 shares per $200,000 principal amount of notes (which
represented an initial conversion price of $80.7218 per share, or 6.2 million
underlying shares). Following the January 2024 synthetic share repurchase
discussed in Note 18 "Equity," the adjusted conversion rate became 2,475.26
shares per $200,000 principal amount of notes, which represents an adjusted
conversion price per share of $80.7996. At conversion, we will settle the 2027
Notes by repaying the principal portion in cash and any excess of the
conversion value over the principal amount in shares of common shares. The
notes may be redeemed at the option of each noteholder at their principal
amount on December 17, 2025 or in connection with a change of control or
delisting event (as further described in the 2027 Notes). QIAGEN N.V. | IFRS
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The 2027 Notes are convertible in whole, but not in part, at the option of the
noteholders on a net share settlement basis, at the prevailing conversion
price in the following circumstances beginning after January 27, 2021 through
June 16, 2027: . if the last reported sale price of our common shares for at
least 20-consecutive trading days during a period of 30- consecutive trading
days ending on the last trading day of the immediately preceding calendar
quarter is greater than or equal to 130% of the conversion price on each
applicable trading day; or . if we undergo certain fundamental changes,
including a change of control, as defined in the agreement; or . if a parity
event or trading price unavailability event, as the case may be occurs during
the period of 10 days, including the first business day following the relevant
trading price notification date; or . if we distribute assets or property to
all or substantially all of the holders of our common shares and those assets
or other property have a value of more than 25% of the average daily
volume-weighted average trading price of our common shares for the prior 20
consecutive trading days; or . in case of early redemption in respect of the
outstanding notes at our option, where the conversion date falls in the period
from (and including) the date on which the call notice is published to (and
including) the 45th business day prior to the redemption date; or . if we
experience certain customary events of default, including defaults under
certain other indebtedness, until such event of default has been cured or
waived. The noteholders may convert their notes at any time, without
condition, on or after June 17, 2027 until the 45th business day prior to
December 17, 2027. No Contingent Conversion Conditions were triggered for the
2027 Notes as of December 31, 2023 or December 31, 2022. Cash Convertible
Notes due 2023 and 2024 On September 13, 2017, we issued $400.0 million
aggregate principal amount of Cash Convertible Senior Notes which were due and
repaid in September 2023 (2023 Notes). The net proceeds of the 2023 Notes were
$365.6 million, after payment of the net cost of the Call Spread Overlay
described below and transaction costs. On November 13, 2018, we issued $500.0
million aggregate principal amount of Cash Convertible Senior Notes which is
due in 2024 (2024 Notes). The net proceeds of the 2024 Notes were $468.9
million, after payment of the net cost of the Call Spread Overlay described
below and transaction costs. We refer to the 2023 Notes and 2024 Notes
collectively as the "Cash Convertible Notes." QIAGEN N.V. | IFRS Annual Report
2023 Overview Management Report Corporate Governance Financial Statements
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Interest on the Cash Convertible Notes is payable semi-annually in arrears and
will mature on the maturity date unless repurchased or converted with their
terms prior to such date. The interest rate and corresponding maturity for
each of the Notes are summarized in the table below. The Cash Convertible
Notes that remain outstanding as of December 31, 2023 are solely convertible
into cash in whole, but not in part, at the option of noteholders under the
circumstances described below and during the contingent conversion periods as
shown in the table below. Cash convertible notes Annual interest rate Date of
interest payments Maturity date Contingent conversion period Conversion rate
per $200,000 principal amount(1) 2024 Notes 1.000 % May 13 and November 13
November 13, 2024 From December 24, 2018 to August 2, 2024 4,360.3098 (1)
Following the January 2024 synthetic share repurchase discussed in Note 18
"Equity," the conversion rate was adjusted to 4,356.8531. Additionally,
conversion may occur at any time following a Contingent Conversion Period
through the fifth business day immediately preceding the applicable maturity
date. Upon conversion, noteholders will receive an amount in cash equal to the
Cash Settlement Amount, calculated as described below. The Cash Convertible
Notes are not convertible into shares of our common stock or any other
securities. Noteholders may convert Cash Convertible Notes into cash at their
option at any time during the Contingent Conversion Periods described above
only under the following circumstances (Contingent Conversion Conditions): .
if the last reported sale price of our common shares for at least
20-consecutive trading days during a period of 30- consecutive trading days
ending on the last trading day of the immediately preceding calendar quarter
is greater than or equal to 130% of the conversion price on each applicable
trading day; or . if we undergo certain fundamental changes, including a
change of control, as defined in the agreement; or . if a parity event or
trading price unavailability event, as the case may be occurs during the
period of 10 days, including the first business day following the relevant
trading price notification date; or . if we elect to distribute assets or
property to all or substantially all of the holders of our common shares and
those assets or other property have a value of more than 25% of the average
daily volume-weighted average trading price of our common shares for the prior
20 consecutive trading days; or . if we elect to redeem the Cash Convertible
Notes; or . if we experience certain customary events of default, including
defaults under certain other indebtedness until such event has been cured or
waived or the payment of the Cash Convertible Notes have been accelerated.
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For the 2023 Notes, the Contingent Conversion Period expired on March 13, 2023
and, as of March 31, 2023, the Contingent Conversion Conditions for the 2023
Notes could no longer be triggered. No Contingent Conversion Conditions were
triggered for the 2023 Notes as of December 31, 2022. No Contingent Conversion
Conditions were triggered for the 2024 Notes as of December 31, 2023 or
December 31, 2022. The Contingent Conversion Conditions in the 2023 Notes and
2024 Notes noted above have been analyzed under IFRS 9 Financial Instruments,
and, based on our analysis, we determined that each of the embedded features
listed above are clearly and closely related to the 2023 Notes and 2024 Notes
(i.e., the host contracts). As a result, pursuant to the accounting provisions
of IFRS 9, these features noted above are not required to be bifurcated as
separate instruments. Upon conversion, holders are entitled to a cash payment
(Cash Settlement Amount) equal to the average of the conversion rate
multiplied by the daily volume-weighted average trading price for our common
shares over a 50-day period. The conversion rate is subject to adjustment in
certain instances but will not be adjusted for any accrued and unpaid
interest. In addition, following the occurrence of certain corporate events
that may occur prior to the applicable maturity date, we may be required to
pay a cash make-whole premium by increasing the conversion rate for any holder
who elects to convert Cash Convertible Notes in connection with the occurrence
of such a corporate event. We may redeem the Cash Convertible Notes in their
entirety at a price equal to 100% of the principal amount of the applicable
Cash Convertible Notes plus accrued interest at any time when 20% or less of
the aggregate principal amount of the applicable Cash Convertible Notes
originally issued remain outstanding. Because the Cash Convertible Notes
contain an embedded cash conversion option, we have determined that the
embedded cash conversion option is a derivative financial instrument, which is
required to be separated from the Cash Convertible Notes and accounted for
separately as a derivative liability, with changes in fair value reported in
our consolidated income statements until the cash conversion option
transaction settles or expires. The initial fair value liability of the
embedded cash conversion option was $74.5 million for the 2023 Notes and $98.5
million for the 2024 Notes, which simultaneously reduced the carrying value of
the Cash Convertible Notes (effectively serving as an original issuance
discount). For further discussion of the derivative financial instruments
relating to the Cash Convertible Notes, refer to Note 26 "Financial Risk
Factors and Use of Derivative Financial Instruments." As noted above, the
reduced carrying value on the Cash Convertible Notes resulted in a debt
discount that is amortized to the principal amount through the recognition of
non-cash interest expense using the effective interest method over the
expected life of the debt, six years for both the 2023 Notes and 2024 Notes.
This resulted in our recognition of interest expense on the Cash Convertible
Notes at an effective rate approximating what we would have incurred had
nonconvertible debt with otherwise similar terms been issued. The effective
interest rate is 3.997% for 2023 Notes and QIAGEN N.V. | IFRS Annual Report
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4.782% for the 2024 Notes, which is imputed based on the amortization of the
fair value of the embedded cash conversion option over the remaining term of
the Cash Convertible Notes. We incurred approximately $6.2 million and $5.7
million in transaction costs for the 2023 Notes and 2024 Notes, respectively.
Such costs have been allocated to the Cash Convertible Notes and deferred and
are being amortized to interest expense over the terms of the Cash Convertible
Notes using the effective interest method. Cash Convertible Notes Call Spread
Overlay Concurrent with the issuance of the Cash Convertible Notes, we entered
into privately negotiated hedge transactions (Call Options) with, and issued
warrants to purchase shares of our common stock (Warrants) to, certain
financial institutions. We refer to the Call Options and Warrants collectively
as the "Call Spread Overlay." The Call Options are intended to offset any cash
payments payable by us in excess of the principal amount due upon any
conversion of the Cash Convertible Notes. The Call Options and Warrants are
derivative financial instruments and are discussed further in Note 26
"Financial Risk Factors and Use of Derivative Financial Instruments." Aside
from the initial payment of a premium, we will not be required to make any
cash payments under the Call Options, and will be entitled to receive an
amount of cash, generally equal to the amount by which the market price per
share of our common shares exceeds the exercise price of the Call Options
during the relevant valuation period. The exercise price under the Call
Options is initially equal to the conversion price of the Cash Convertible
Notes. During the third quarter of 2023, we received $36.8 million in cash
upon the exercise of Call Options in connection with the repayment of 2023
Notes. In the same transaction, we paid $36.8 million for the intrinsic value
of the 2023 Notes' embedded conversion option. We issued Warrants as
summarized in the table below. The number of warrants and exercise prices are
subject to customary adjustments under certain circumstances. Cash convertible
notes Issued on Number of share warrants (in millions) Exercise price per
share Proceeds from issuance of warrants, net of issuance costs (in millions)
Warrants expire over a period of 50 trading days beginning on 2023 September
13, 2017 9.7 $ 49.9775 $ 45.3 June 26, 2023 2024 November 13, 2018 10.9 $
50.2947 $ 72.4 August 27, 2024 The Warrants that were issued with our Cash
Convertible Notes, could have a dilutive effect to the extent that the price
of our common stock exceeds the applicable strike price of the Warrants. For
each Warrant that is exercised, we will deliver QIAGEN N.V. | IFRS Annual
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to the holder a number of shares of our common stock equal to the amount by
which the settlement price exceeds the exercise price, plus cash in lieu of
any fractional shares. We will not receive any proceeds if the Warrants are
exercised. U.S. Private Placement On October 16, 2012, we completed a private
placement through the issuance of new senior unsecured notes at a total amount
of $400.0 million with a weighted average interest rate of 3.66% (settled on
October 16, 2012). The notes were issued in three series: (1) $73.0 million
7-year term due and paid in October 16, 2019 (3.19%); (2) $300.0 million 10-
year term due and paid on October 16, 2022 (3.75%); and (3) $27.0 million
12-year term due on October 16, 2024 (3.90%) but called and paid in October
2022. We paid $2.1 million in debt issuance costs which were amortized using
the effective interest method through interest expense over the lifetime of
the notes. The note purchase agreement contained certain financial and
non-financial covenants, including but not limited to, restrictions on
priority indebtedness and the maintenance of certain financial ratios. We were
in compliance with these covenants at December 31, 2022. German Private
Placement (2017 Schuldschein) In 2017, we completed a German private placement
bond (2017 Schuldschein) which was issued in several tranches totaling $331.1
million due in various periods through 2027. In the first half of 2021, we
repaid $41.1 million for two tranches that matured. In October 2022, we repaid
$153.0 million for the four tranches that matured. The euro tranches are
designated as a foreign currency non-derivative hedging instrument that
qualifies as a net investment hedge as described in Note 26 "Financial Risk
Factors and Use of Derivative Financial Instruments." Based on the spot rate
method, the change in the carrying value of the euro-denominated tranches
attributed to the net investment hedge as of December 31, 2023 totaled $1.0
million of unrealized gain and is recorded in equity. We paid $1.2 million in
debt issuance costs which are being amortized through interest expense over
the lifetime of the notes. A summary of the tranches as of December 31, 2023
is as follows: Currency Notional amount Interest rate Maturity 2023 2022 EUR
64.0 million Fixed 1.09% June 2024 $70,704 $68,215 EUR 31.0 million Floating
EURIBOR + 0.7% June 2024 34,247 33,041 EUR 14.5 million Fixed 1.61% June 2027
16,005 15,443 $120,956 $116,699 Carrying value (in thousands) as of December
31, QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
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German Private Placement (2022 Schuldschein) In July and August 2022, we
completed another German private placement bond (2022 Schuldschein) which was
issued in several tranches totaling 370.0 million due in various periods
through 2035. The 2022 Schuldschein consists of euro- denominated tranches
which have either a fixed or floating rate. All tranches except for the 70.0
million fixed 3.04% tranche due August 2035 are ESG-linked wherein the
interest rate is subject to adjustment of +/- 0.025% if our ESG rating
changes. The euro tranches are designated as a foreign currency non-derivative
hedging instrument that qualifies as a net investment hedge as described in
Note 26 "Financial Risk Factors and Use of Derivative Financial Instruments."
Based on the spot rate method, the change in the carrying value of the
euro-denominated tranches attributed to the net investment hedge as of
December 31, 2023 totaled $36.2 million of unrealized loss and is recorded in
equity. We paid $1.2 million in debt issuance costs which are being amortized
through interest expense using the effective interest method over the lifetime
of the notes. A summary of the tranches as of December 31, 2023 is as follows:
Carrying value (in thousands) as of December 31, Currency Notional amount
Interest rate Maturity 2023 2022 EUR 51.5 million Floating 6M EURIBOR + 0.55%
July 2025 $56,836 $54,803 EUR 62.0 million Fixed 2.741% July 2027 68,388
65,967 EUR 29.5 million Floating 6M EURIBOR + 0.70% July 2027 32,539 31,388
EUR 37.0 million Fixed 3.044% July 2029 40,803 39,365 EUR 103.0 million
Floating 6M EURIBOR + 0.85% July 2029 113,586 109,585 EUR 9.5 million Fixed
3.386% July 2032 10,475 10,107 EUR 7.5 million Floating 6M EURIBOR + 1.0% July
2032 8,269 7,979 EUR 70.0 million Fixed 3.04% August 2035 77,054 74,338
$407,950 $393,532 QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Revolving Credit Facility Our credit facilities available and undrawn at
December 31, 2023 total 413.0 million (approximately $456.4 million). This
includes a 400.0 million syndicated ESG-linked revolving credit facility
expiring December 2025 and two other lines of credit amounting to 13.0 million
with no expiration date. The 400.0 million facility can be utilized in euro
and bears interest of 0.550% to 1.500% above EURIBOR, and is offered with
interest periods of one, three or six months. The commitment fee is calculated
based on 35% of the applicable margin. Commitment fees of $0.9 million were
paid in each of the years ended December 31, 2023 and 2022. The revolving
facility agreement contains certain financial and non- financial covenants
including, but not limited to, restrictions on the encumbrance of assets and
the maintenance of certain financial ratios. We were in compliance with these
covenants at December 31, 2023. The credit facilities are for general
corporate purposes and no amounts were utilized at December 31, 2023. 17.
Income Tax Major components of income tax expense, as presented in the income
statements for the years ended December 31, 2023 and 2022, are: (in thousands)
2023 2022 Current income tax charge $72,637 $98,642 Adjustment in respect of
current income tax of previous years 1,196 (5,447) Current income tax expense
73,833 93,195 Origination and reversal of temporary differences 14,915 (1,267)
Changes in tax rates 896 (943) Deferred income tax expense 15,811 (2,210)
Total income tax expense $89,644 $90,985 Deferred tax related to items charged
or credited directly to equity during 2023 and 2022 shown in the statement of
comprehensive income totaled $1.1 million and $0.3 million, respectively.
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The applicable statutory income tax rate in the Netherlands was 25.8% in 2023
and 2022. The principal items comprising the differences between income taxes
computed at the Netherlands statutory rate and the effective tax rate for the
years ended December 31, 2023 and 2022 are as follows: (in thousands) 2023
2022 Amount Percent Amount Percent Income before tax $574,452 $666,646 At
Dutch statutory income tax rate of 25.8% $148,209 25.8 % $171,995 25.8 %
Taxation of foreign operations, net(1) (32,700) (5.7) % (25,116) (3.8) % Tax
impact from (deductible) non-deductible items(2) (30,795) (5.4) % (47,826)
(7.2) % Prior year taxes 1,196 0.2 % (5,447) (0.8) % Changes in tax rates
impacting deferred taxes 896 0.2 % (943) (0.1) % Other 2,838 0.5 % (1,678)
(0.3) % Total income tax $89,644 15.6 % $90,985 13.6 % (1) Our effective tax
rate reflects our global operations where certain income or loss is taxed at
rates higher or lower than the Netherlands' statutory income tax rate as well
as the benefit of some income being partially exempt from income taxes. These
foreign tax benefits are due to a combination of favorable tax laws,
regulations and exemptions in certain jurisdictions. Partial tax exemptions
exist on foreign income primarily derived from operations in Germany. (2)
During 2023 and 2022, tax benefits of $36.5 million and $41.6 million are
related to changes in fair values of warrants and the embedded conversion
option related to convertible notes due in 2023, 2024 and 2027 as discussed in
Note 16 "Financial Debts" and Note 26 "Financial Risk Factors and Use of
Derivative Financial Instruments." We conduct business globally and, as a
result, file numerous consolidated and separate income tax returns in the
Netherlands, Germany and the U.S. federal jurisdiction, as well as in various
other state and foreign jurisdictions. In the normal course of business, we
are subject to examination by taxing authorities throughout the world. Tax
years in the Netherlands are potentially open back to 2011 for income tax
examinations by the Netherlands taxing authority. The German group is open to
examination for the tax years starting in 2017 and in 2022, the German taxing
authority commenced an examination for the 2017 to 2019 tax years. The U.S.
consolidated group is subject to federal and most state income tax
examinations by taxing authorities beginning with the year ending December
31, 2020 through the current period. In late 2023, the U.S. Internal Revenue
Service commenced a U.S. federal income tax examination for the periods 2014
to 2020. The examination was triggered by our 5-year net operating loss
carryback under the CARES Act. Our other subsidiaries, with few exceptions,
are no longer subject to income tax examinations by taxing authorities for
years before 2019. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Changes in the amount of unrecognized tax benefits for the years ended
December 31, 2023 and 2022 are as follows: (in thousands) 2023 2022 Balance at
beginning of year $79,283 $103,618 Additions based on tax positions related to
the current year 9,632 9,754 Additions for tax positions of prior years 7,839
4,544 Decrease for tax position of prior years (3,832) (8,958) Decrease
related to settlements (119) (23,346) Decrease due to lapse of statute of
limitations - (580) Increase (decrease) from currency translation 2,755
(5,749) Balance at end of year $95,558 $79,283 As of December 31, 2023 and
2022, our net unrecognized tax benefits totaled approximately $95.6 million
and $79.3 million, respectively, which, if recognized, would favorably affect
our effective tax rate in any future period. It is reasonably possible that
approximately $30.8 million of the unrecognized tax benefits may be released
or utilized during the next 12 months due to lapse of statute of limitations
or settlements with taxing authorities. However, various events could cause
our current expectations to change in the future. The above unrecognized tax
benefits, if ever recognized in the financial statements, would be recorded in
the income statement as part of income tax expense. Also, we have accrued
interest and penalties of $3.3 million and $3.5 million related to these
uncertain tax positions at December 31, 2023 and 2022, respectively. QIAGEN
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We have recorded net deferred tax assets of $41.4 million and $63.3 million at
December 31, 2023 and 2022, respectively. The components of the net deferred
assets and liabilities at December 31, 2023 and 2022 are as follows: (in
thousands) 2023 2022 Change Deferred tax assets: Intangibles $30,084 $33,510
($3,426) Net operating loss and credit carryforward 29,730 31,890 (2,160)
Inventory 28,121 30,194 (2,073) Equity awards 26,766 27,734 (968) Accrued
liabilities 25,375 27,544 (2,169) Depreciation and amortization 2,249 4,032
(1,783) Convertible debt 2,173 3,621 (1,448) Disallowed interest carryforwards
1,157 1,511 (354) Other 7,133 6,479 654 Offsetting (89,214) (77,075) (12,139)
Total deferred tax assets 63,574 89,440 (25,866) Deferred tax liabilities:
Depreciation and amortization (55,860) (42,453) (13,407) Intangibles (50,723)
(55,921) 5,198 Other (4,757) (4,817) 60 Offsetting 89,214 77,075 12,139 Total
deferred tax liabilities (22,126) (26,116) 3,990 Net deferred tax assets
$41,448 $63,324 ($21,876) QIAGEN N.V. | IFRS Annual Report 2023 Overview
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The movements in deferred income tax assets and liabilities during 2023 and
2022 are as follows: (in thousands) 2023 2022 Change in deferred tax
recognized in income ($15,811) $2,210 Change in deferred tax recognized in
equity(1) (5,396) (7,764) Change in deferred tax related to business
combinations(2) (669) (3,249) Change in deferred tax ($21,876) ($8,803) (1)
The change in deferred tax recognized in equity represents changes in
components of other comprehensive income or loss, equity awards and foreign
currency translation adjustments. (2) The change in deferred tax related to
business combinations represents the deferred tax liability on the fair value
of identifiable intangible assets acquired and the deferred tax asset on tax
loss carryforwards as discussed in Note 5 "Acquisitions." At December 31,
2023, we had $486.4 million in total net operating loss (NOL) carryforwards
which included $237.3 million for Germany, $144.1 million for the U.S., $30.5
million for the U.K., $15.2 million for the Netherlands and $59.3 million for
other foreign jurisdictions. We did not recognize tax benefits related to the
NOL carryforwards in Germany of $5.8 million and in other foreign
jurisdictions of $47.7 million. The NOL carryforwards in Germany, the
Netherlands and the U.K. carryforward indefinitely. The entire NOL
carryforward in the U.S. is subject to limitations under Section 382 of the
U.S. Internal Revenue Code which limits the amount that can be used each year.
The NOL carryforwards in the U.S. expire between 2024 and 2034. NOL
carryforwards of $21.3 million in other foreign jurisdictions expire between
2024 and 2031 while the remainder can be carried forward indefinitely. At
December 31, 2023, tax credits total $6.7 million and expire between 2032 and
2041. At December 31, 2022, we had $375.1 million in total net operating loss
(NOL) carryforwards which included $90.3 million for Germany, $131.9 million
for the U.S., $49.4 million for the U.K., $39.5 million for the Netherlands
and $64.0 million for other foreign jurisdictions. We did not recognize tax
benefits related to the NOL carryforwards in the Netherlands of $39.5 million
and in other foreign jurisdictions of $45.1 million. A deferred tax asset can
only be recognized to the extent it is "more likely than not" that the assets
will be realized. Judgments around realizability depend on the availability
and weight of both positive and negative evidence. In 2023, we fully
recognized $15.2 million of tax benefit NOL carryforward in the Netherlands
due to current year taxable income and expected future taxable income. QIAGEN
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OECD Global Anti-base Erosion Rules In December 2021, the Organization for
Economic Co-operation and Development (OECD) Inclusive Framework released
model rules focused on "Addressing the Challenges of the Digitalization of the
Economy." The breadth of the OECD project extends beyond pure digital
businesses and is likely to impact most large multinational businesses by both
redefining jurisdictional taxation rights and establishing a 15% global
minimum tax (referred to as Pillar Two). The Netherlands formally enacted the
Pillar Two legislation into domestic law and certain aspects of Pillar Two are
effective January 1, 2024, and other aspects effective January 1, 2025. Under
the legislation, we may, briefly stated, be required to pay top-up tax on
profits that are taxed at an effective tax rate of less than 15%. In the 2023
financial statements, we have used the exemption under IAS 12 for recognizing
and disclosing information about deferred tax assets and liabilities related
to Pillar Two income taxes. We expect to be subject to the top-up tax in
relation to our operations in the United Arab Emirates (UAE), where the Pillar
Two effective tax rate is below 15%. Had the Pillar Two legislation been
effective for the year ended December 31, 2023, the effective tax rate under
IFRS, including the top-up tax on our operations in the UAE, is estimated to
have been approximately 17% which would have been approximately 1% higher than
the reported tax rate of 15.6%. 18. Equity Shares The authorized classes of
our shares consist of Common Shares (410 million authorized), Preference
Shares (450 million authorized) and Financing Preference Shares (40 million
authorized). All classes of shares have a par value of 0.01. No Financing
Preference Shares or Preference Shares have been issued. Common Shares are
translated to U.S. dollars at the foreign exchange rates in effect when the
shares are issued. Treasury Stock The cost of repurchased shares is included
in treasury stock and reported as a reduction in total equity when a
repurchase occurs. Repurchased shares will be held in treasury in order to
satisfy various obligations, which include exchangeable debt instruments,
warrants and employee share-based remuneration plans. Synthetic Share
Repurchase In January 2024, we completed a synthetic share repurchase that
combined a direct capital repayment with a reverse stock split. The
transaction was announced on January 7, 2024 and involved an approach used by
various large, multinational Dutch companies to provide returns to all
shareholders in a faster and more efficient manner than traditional
open-market repurchases. $295.2 million was returned to shareholders through
the transaction, which reduced the total QIAGEN N.V. | IFRS Annual Report 2023
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number of issued Common Shares by approximately 3% to 223.9 million (of which
2.5 million Common Shares are held in Treasury Shares) as of January 31, 2024.
Appropriation of Profit of 2022 The financial statements for the reporting
year 2022 have been adopted by the Annual General Meeting on June 22, 2023.
The Annual General Meeting has adopted the appropriation of profit after tax
as proposed by the Managing Board. Proposal for Profit Appropriation The
General Meeting of Shareholders will be asked to approve the following
appropriation of the 2023 net income for the period: an amount of $484.8
million to be added to retained earnings. 19. Earnings per Common Share We
present basic and diluted earnings per common share. Basic earnings per common
share is calculated by dividing the net income by the weighted average number
of common shares outstanding. Diluted earnings per common share reflect the
potential dilution of earnings that would occur if all "in the money"
securities to issue common shares were exercised. QIAGEN N.V. | IFRS Annual
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The following schedule summarizes the information used to compute earnings per
common share for the years ended December 31, 2023 and 2022: (in thousands,
except per share data) 2023 2022 Net income $484,808 $575,661 Weighted average
number of common shares used to compute basic earnings per common share
228,146 227,577 Dilutive effect of stock options and restricted stock units
2,473 2,555 Dilutive effect of outstanding warrants - 4 Weighted average
number of common shares used to compute diluted earnings per common share
230,619 230,136 Outstanding options and awards having no dilutive effect, not
included in above calculation 1 146 Outstanding warrants having no dilutive
effect, not included in above calculation 17,562 20,556 Basic earnings per
common share $2.12 $2.53 Diluted earnings per common share $2.10 $2.50 For
purposes of considering the 2027 Notes, as discussed further in Note 16
"Financial Debts," in determining diluted earnings per common share, only an
excess of the conversion value over the principal amount would have a dilutive
impact using the treasury stock method. Since the 2027 Notes were out of the
money and anti-dilutive during the period from January 1, 2022 through
December 31, 2023, they were excluded from the diluted earnings per common
share calculation in 2022 and 2023. 20. Commitments and Contingencies
Licensing and Purchase Commitments We have licensing agreements with
companies, universities and individuals, some of which require certain
up-front payments. Royalty payments are required on net product sales ranging
from 0.45 percent to 25 percent of covered products or based on quantities
sold. Several of these agreements have minimum royalty requirements. The
accompanying consolidated balance sheets include accrued royalties relating to
these agreements in the amount of $9.7 million and $12.9 million at December
31, 2023 and 2022, respectively. Royalty expense relating to these agreements
amounted to QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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$13.9 million and $15.5 million, for the years ended December 31, 2023 and
2022, respectively. Royalty expense is primarily recorded in cost of sales,
with a small portion recorded as research and development expense depending on
the use of the technology under license. Some of these agreements also have
minimum raw material purchase requirements and requirements to perform
specific types of research. At December 31, 2023, we had commitments to
purchase goods or services and to make future license and royalty payments.
They are as follows: Years ending December 31, (in thousands) Purchase
commitments License & royalty commitments 2024 $37,396 $1,926 2025 35,992
1,453 2026 13,150 783 2027 11,383 766 2028 903 560 Thereafter - 1,729 $98,824
$7,217 Commitments calculated at December 31, 2022, the prior year, were as
follows: Years ending December 31, (in thousands) Purchase commitments License
& royalty commitments 2023 $49,311 $3,804 2024 32,559 2,075 2025 22,362 1,718
2026 11,296 1,133 2027 11,508 1,170 Thereafter 211 8,641 $127,247 $18,541
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Contingent Consideration Commitments Pursuant to the purchase agreements for
certain acquisitions we could be required to make additional contingent cash
payments for a previous business combination based on the achievement of
certain FDA approval milestones. Potential milestone payments total $20.7
million and may be triggered by the end of 2024. The total milestone payments
of $18.4 million is included in other current liabilities in the accompanying
consolidated balance sheet as of December 31, 2023. Refer to Note 25 "Fair
Value Measurements" for changes in the contingent consideration liabilities.
Employment Agreements Certain of our employment contracts contain provisions
which guarantee payments in the event of a change in control, as defined in
the agreements, or if the executive is terminated for reasons other than
cause, as defined in the agreements. At December 31, 2023, the commitment
under these agreements totaled $11.5 million (2022: $9.4 million). Litigation
From time to time, we may be party to legal proceedings incidental to our
business. As of December 31, 2023, certain claims, suits or legal proceedings
arising out of the normal course of business have been filed or were pending
against QIAGEN N.V. or subsidiaries. These matters have arisen in the ordinary
course and conduct of business as well as through acquisition. Because
litigation is inherently unpredictable and unfavorable resolutions could
occur, assessing litigation contingencies is highly subjective and requires
judgments about future events. Although it is not possible to predict the
outcome of such litigation, we assess the degree of probability and evaluate
the reasonably possible losses that we could incur as a result of these
matters. We accrue for any estimated loss when it is probable that a liability
has been incurred and the amount of probable loss can be estimated. Litigation
accruals recorded in other current liabilities as of December 31, 2023 and
2022 totaled $4.8 million and $6.5 million, respectively. As of December 31,
2023, $4.7 million was accrued in other non-current liabilities in the
accompanying consolidated balance sheet. We are not party to any material
legal proceeding as of the date of this report except for the matters listed
below. Patent Litigation ArcherDX In 2018, ArcherDX (a company which spun out
as an independent company in conjunction with QIAGEN's acquisition of
Enzymatics in 2015 and was later acquired by Invitae in 2021) and
Massachusetts General Hospital (MGH) sued QIAGEN for patent infringement. In
August 2021, a federal jury ruled that QIAGEN infringed two patents owned by
ArcherDX and awarded damages of $4.7 million which were accrued in 2021 and
as of December 31, 2023, are included in other non-current liabilities in the
accompanying consolidated balance sheet. We filed an appeal in August 2023
after the verdict was entered. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Bio-Rad Laboratories, Inc. In April 2022, QIAGEN filed a lawsuit in a U.S.
federal court against Bio-Rad Laboratories, Inc. (Bio-Rad) seeking a
declaratory judgment of non-infringement of certain Bio-Rad patents related to
digital PCR technology. In July 2023, the parties agreed to a settlement that
provided for a cross-licensing agreement granting each company mutual rights
to their respective digital PCR technologies. Other Litigation Matters For all
other matters, a total of $4.8 million is accrued as of December 31, 2023 in
other current liabilities. The estimated range of possible losses for these
other matters as of December 31, 2023 is between $4.0 million and $10.1
million. Based on the facts known to QIAGEN and after consultation with legal
counsel, management believes that such litigation will not have a material
adverse effect on our financial position or results of operations above the
amounts accrued. However, the outcome of these matters is ultimately
uncertain. Any settlements or judgments against us in excess of management's
expectations could have a material adverse effect on our financial position,
results of operations or cash flows. 21. Reportable Segment We operate as one
reportable segment in accordance with IFRS 8 Operating Segments. As a result
of our continued restructuring and streamlining of the growing organization,
our chief operating decision maker (CODM) continues to make decisions with
regards to business operations and resource allocation based on evaluations of
QIAGEN as a whole. Accordingly, we operate as one reportable segment.
Summarized geographic information is shown in the tables below. Geographical
Information Net sales are attributed to countries based on the location of the
customer. Our primary manufacturing facilities are located in Germany, China,
and the United States and supply products to customers as well as QIAGEN
subsidiaries in other countries. The intercompany portions of such net sales
are excluded to derive consolidated net sales. No single customer represents
more than ten percent of consolidated net sales. Our country of domicile is
the Netherlands, which reported net QIAGEN N.V. | IFRS Annual Report 2023
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sales of $20.3 million and $31.5 million for the years ended 2023 and 2022,
respectively, and these amounts are included in the line item Europe, Middle
East and Africa as shown in the table below. (in thousands) 2023 2022
Americas: United States $935,281 $909,616 Other Americas 84,774 88,139 Total
Americas 1,020,055 997,755 Europe, Middle East and Africa 624,573 734,971 Asia
Pacific, Japan and Rest of World 320,683 410,294 Total net sales $1,965,311
$2,143,020 Long-lived assets include property, plant and equipment, goodwill,
other intangible assets, right-of-use assets, equity accounted investments,
non-current financial assets and other non-current assets. The Netherlands,
which is included in the line item other Europe, Middle East and Africa,
reported long-lived assets of $17.0 million and $15.2 million for the years
ended 2023 and 2022, respectively. (in thousands) 2023 2022 Americas: United
States $2,341,040 $2,240,041 Other Americas 11,066 9,874 Total Americas
2,352,106 2,249,915 Germany 786,974 694,025 Other Europe, Middle East and
Africa 615,399 593,403 Asia Pacific, Japan and Rest of World 232,727 229,504
Total long-lived assets $3,987,206 $3,766,847 QIAGEN N.V. | IFRS Annual Report
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22. Share-Based Payments We adopted the QIAGEN N.V. Amended and Restated 2005
Stock Plan (the 2005 Plan) in 2005 and the QIAGEN N.V. 2014 Stock Plan (the
2014 Plan) in 2014. The 2005 Plan expired by its terms in April 2015 and no
further awards will be granted under the 2005 Plan. The 2014 Plan expires in
May 2024. The QIAGEN N.V. 2023 Stock Plan (the 2023 Plan) was approved at the
June 2023 Annual General Meeting and at December 31, 2023, we had
approximately 20.9 million Common Shares reserved and available for issuance
under the 2005, 2014 and 2023 Plans. The plans allow for the granting of stock
rights and incentive stock options, as well as non-qualified options, stock
grants and stock-based awards, generally with terms of up to 3 years, with
previous grants through 2020 having terms of 5 years subject to earlier
termination in certain situations. The vesting and exercisability of certain
stock rights will be accelerated in the event of a Change of Control, as
defined in the plans. All option grants were at the market value on the grant
date or at a premium above the closing market price on the grant date. We
issue Treasury Shares to satisfy option exercises and award releases. Stock
Units Stock units represent rights to receive Common Shares at a future date
and include restricted stock units which are subject to time-vesting only and
performance stock units which include performance conditions in addition to
time-vesting. The final number of performance stock units earned is based on
the performance achievement which for some grants can reach up to 200% of the
granted shares. There is no exercise price and the fair market value at the
time of the grant is recognized over the requisite vesting period. The fair
market value is determined based on the number of stock units granted and the
market value of our shares on the grant date. Pre-vesting forfeitures were
estimated to be approximately 6.0% (2022: 6.9%). At December 31, 2023, there
was $59.8 million remaining in unrecognized compensation cost including
estimated forfeitures related to these awards, which is expected to be
recognized over a weighted average period of 1.34 years (2022: $79.7 million
over a weighted average of 1.58 years). The weighted average grant date fair
value of stock units granted during the year ended December 31, 2023 2022was
$44.37 (2022 $45.49). The total fair value of stock units that vested during
the years ended December 31, 2023 and 2022 was $39.4 million and $55.8
million, respectively. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
251 Notes to the Consolidated Financial Statements
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A summary of stock units as of December 31, 2023 and 2022, and changes for the
years then ended, is presented below. (in thousands) 2023 2022 Outstanding at
January 1 3,771 3,981 Granted 1,185 955 Released (864) (1,164) Forfeited (77)
(1) Outstanding at December 31 4,015 3,771 Vested and expected to vest at
December 31 3,744 3,467 We net share settle for the tax withholding upon the
vesting of awards. Shares are issued on the vesting dates net of the
applicable statutory tax withholding to be paid by us on behalf of our
employees. As a result, fewer shares are issued than the number of stock units
outstanding. We record a liability for the tax withholding to be paid by us as
a reduction to treasury shares. Stock Options We have not granted stock
options since 2013. A summary of the status of employee stock options as of
December 31, 2023, and changes for the year then ended, is presented below.
Stock options Number of shares (in thousands) Weighted average exercise price
Outstanding at January 1, 2023 9 $18.68 Exercised (9) $18.68 Outstanding at
December 31, 2023 - $- QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
252 Notes to the Consolidated Financial Statements
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A summary of the status of employee stock options as of December 31, 2022, and
changes for the year then ended, is presented below. Stock options Number of
shares (in thousands) Weighted average exercise price Outstanding at January
1, 2022 18 $17.79 Exercised (7) $16.55 Expired (2) $18.68 Outstanding at
December 31, 2022 9 $18.68 Vested at December 31, 2022 9 $18.68 Vested and
expected to vest at December 31, 2022 9 $18.68 The total intrinsic value of
options exercised was $0.2 million in each of the years ended December 31,
2023 and 2022. The actual tax benefit for the tax deductions from option
exercises totaled $0.1 million in each of the years ended December 31, 2023
and 2022. At December 31, 2023, there was no unrecognized share-based
compensation expense related to employee stock option awards. There were no
options outstanding at December 31, 2023. At December 31, 2022, 9 thousand
options were exercisable at a weighted average price of $18.68 per share.
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
Governance Financial Statements Appendices Page 253 Notes to the Consolidated
Financial Statements
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Compensation Expense Share-based compensation expense before taxes for the
years ended December 31, 2023 and 2022 totaled approximately $47.1 million
and $49.5 million, respectively, as shown in the table below. (in thousands)
2023 2022 Cost of sales $3,296 $2,577 Research and development 7,484 6,504
Sales and marketing 14,495 16,076 General and administrative 21,825 24,350
Share-based compensation expense 47,100 49,507 Less: Income tax benefit(1)
9,751 10,670 Share-based compensation expense, after tax $37,349 $38,837 (1)
Does not include the excess tax benefit realized for the tax deductions of the
share-based payment arrangements which totaled $1.3 million and $2.7 million
for the years ended December 31, 2023 and 2022, respectively. 23. Employee
Benefits and Personnel Costs We maintain various benefit plans, including
defined contribution and defined benefit plans. Our U.S. defined contribution
plan is qualified under Section 401(k) of the Internal Revenue Code and
covers substantially all U.S. employees. Participants may contribute a portion
of their compensation not exceeding a limit set annually by the Internal
Revenue Service. This plan includes a provision for us to match a portion of
employee contributions. Total expense under the 401(k) plans were $4.5 million
for each of the years ended December 31, 2023 and 2022. We also have a defined
contribution plan which covers certain executives. We make matching
contributions up to an established maximum. Matching contributions made to the
plan, and expensed, totaled approximately $0.1 million for each of the years
ended December 31, 2023 and 2022. We have seven defined benefit, non-contributor
y retirement or termination plans that cover certain employees in Germany,
France, Italy, Japan, Poland, Philippines and the United Arab Emirates. These
defined benefit plans provide benefits to covered individuals satisfying
certain age and/or service requirements. For certain plans, we calculate the
vested benefits to which employees are entitled if they separate immediately.
The benefits accrue on a pro-rata basis during the employees' employment
periods based on the individuals' salaries, adjusted for inflation. All
defined benefit plans are unfunded. The liability under the defined benefit
plans was $7.4 million and $7.2 million as of December 31, 2023 and QIAGEN
N.V. | IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 254 Notes to the Consolidated Financial
Statements
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2022, respectively, and is included as a component of other non-current
liabilities in the accompanying consolidated balance sheets. Personnel Costs
For the years ended December 31, 2023 and 2022, personnel costs amounted to
$617.9 million and $616.7 million, respectively. As of December 31, 2023,
there were 5,967 employees within the Group (2022: 6,178). (in thousands) 2023
2022 Salaries and wages $371,855 $338,894 Social security and pension 103,686
137,987 Share-based payment expense 47,100 49,507 Termination costs 5,942
4,121 Other 89,297 86,148 Total personnel costs $617,880 $616,657 The
personnel costs are allocated to the functional areas in which the respective
employees are working or, in the case of the incremental termination benefits
which are the result of restructuring activities as discussed in Note 6
"Restructuring," are recorded in restructuring, acquisition, integration and
other costs. Personnel costs included in the accompanying consolidated income
statements for the years ended December 31, 2023 and 2022 are as follows: (in
thousands) 2023 2022 Cost of sales $142,825 $149,484 Research and development
expense 113,102 102,936 Sales and marketing expense 282,214 283,366 General
and administrative expense 79,739 80,871 Total personnel costs $617,880
$616,657 QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 255 Notes to the
Consolidated Financial Statements
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The number of employees within the Company at December 31, 2023 and 2022 are
as follows: Employees 2023 2022 Headcount at December 31 5,967 6,178 Thereof
employed in the Netherlands 55 62 24. Related Party Transactions From time to
time, we have transactions with other companies in which we hold an interest,
as summarized in the table below. Net sales to related parties for the years
ended December 31, 2023 and 2022 are as follows: (in thousands) 2023 2022 Net
sales $9,039 $8,474 As of December 31, 2023 and 2022, balances with related
parties are as follows: (in thousands) 2023 2022 Trade accounts receivable
$2,890 $5,136 Other current assets $78 $11,929 Trade and other accounts
payable $700 $2,708 Other current liabilities $2,893 $3,518 Other current
assets include loans receivable and supplier advances from companies with
which we have an investment or partnership interest. As of December 31, 2022,
other current assets included a $10.6 million convertible note from Ellume
Limited, Australia, which bears interest at 10% and was due on December 31,
2022. As of December 31, 2022, we retained the loan receivable, while fully
reserved, as we awaited the outcome of voluntary administration and any
creditor arrangement. During 2023, we had no possibility of collection from
Ellume and no expectation of any recovery of the defaulted amount.
Accordingly, the loan receivable was fully written off against the reserve in
2023. Additional financial impacts of these proceedings with this related
party for the fiscal year ended December 31, 2022 included a $4.6 million
write off on advances to suppliers and a $12.8 million impairment loss on
intangible assets, both recognized in restructuring, QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 256 Notes to the Consolidated Financial Statements
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acquisition, integration, and other, net in the accompanying consolidated
income statement. Refer to Note 12 "Goodwill and Intangible Assets."
Remuneration of Managing Board and Supervisory Board Disclosure of the total
board remuneration is based on section 383 book 2 of the Dutch Civil Code.
Furthermore, the Chief Executive Officer, Chief Financial Officer and the
Supervisory Board meet the definition of key management personnel as defined
in IAS 24 `Related Parties'. During 2020, our Chief Executive Officer joined
our Chief Financial Officer on the Managing Board effective June 30, 2020. The
total short-term employee benefits (fixed salary and short-term variable cash
bonus), post-employment (defined contribution expenditure), and share-based
payment cost (share-based compensation) in accordance with IAS 24 are reported
in the tables below for the years ended December 31, 2023 and 2022. Key
management personnel compensation and total board remuneration Remuneration of
the Managing Board The tables below state the amounts earned on an accrual
basis by our key management personnel and Managing Board members in 2023 and
2022. For the year ended December 31, 2023 (in thousands) Thierry Bernard
Roland Sackers Fixed Salary $979 $588 Other(1) 33 40 Total fixed income 2023
1,012 628 Short-term variable cash bonus 780 320 Total short-term income 2023
1,792 948 Defined contribution on benefit plan 200 117 Total compensation
(excluding long-term share-based compensation) $1,992 $1,065 (1) Amounts
include, among others, car lease and reimbursed personal expenses such as tax
consulting. We also occasionally reimburse our Managing Directors' personal
expenses related to attending out-of-town meetings but not directly related to
their attendance. Amounts do not include the reimbursement of certain expenses
relating to travel incurred at the request of QIAGEN, other reimbursements or
payments that in total did not exceed $10,000, or tax amounts paid by the
Company to taxing authorities in order to avoid double-taxation under
multi-tax jurisdiction employment agreements. QIAGEN N.V. | IFRS Annual Report
2023 Overview Management Report Corporate Governance Financial Statements
Appendices Page 257 Notes to the Consolidated Financial Statements
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For the year ended December 31, 2022 (in thousands) Thierry Bernard Roland
Sackers Fixed Salary $950 $557 Other(1) 37 40 Total fixed income 2022 987 597
Short-term variable cash bonus 1,545 617 Total short-term income 2022 2,532
1,214 Defined contribution on benefit plan 143 114 Total compensation
(excluding long-term share-based compensation) $2,675 $1,328 (1) Amounts
include, among others, car lease and reimbursed personal expenses such as tax
consulting. We occasionally reimburse our Managing Directors' personal
expenses related to attending out-of-town meetings but not directly related to
their attendance. Amounts do not include the reimbursement of certain expenses
relating to travel incurred at the request of QIAGEN, other reimbursements or
payments that in total did not exceed $10,000 or tax amounts paid by the
Company to tax authorities in order to avoid double-taxation under multi-tax
jurisdiction employment agreements. The total recognized compensation expense
in accordance with IFRS 2 for share-based compensation in the year 2023 (2022)
for long-term compensation of stock units amounted to $6.8 million ($7.5
million) for Mr. Bernard and $6.0 million ($7.1 million) for Mr. Sackers. The
total compensation including share-based compensation expenses in the year
2023 (2022) was $15.9 million ($18.7 million), and amounts to $8.8 million
($10.2 million) for Mr. Bernard and $7.1 million ($8.4 million) for Mr.
Sackers. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 258 Notes to the
Consolidated Financial Statements
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Remuneration of the Supervisory Board The tables below state the amounts
earned on an accrual basis by the members of the Supervisory Board in 2020 and
2019 (excluding long-term share-based compensation): For the year ended
December 31, 2023 (in thousands, except for number of share grants) Fixed
remuneration Committee Chair Committee membership Total(1) Number of
restricted stock units granted Lawrence A. Rosen $150.0 18.0 20.5 $188.5 7,917
Dr. Metin Colpan $57.5 18.0 11.0 $86.5 7,917 Thomas Ebeling(2) $28.8 - 5.5
$34.3 7,917 Dr. Toralf Haag $57.5 25.0 - $82.5 7,917 Dr. Ross L. Levine $57.5
- 11.0 $68.5 7,917 Dr. Elaine Mardis $57.5 - 22.0 $79.5 7,917 Dr. Eva Pisa
$57.5 - 11.0 $68.5 7,917 Stephen H. Rusckowski(3) $40.6 - 5.5 $46.1 -
Elizabeth E. Tallett $57.5 18.0 26.0 $101.5 7,917 (1) Supervisory Board
members are reimbursed for travel costs and for any value-added tax to be paid
on their remuneration. These reimbursements are excluded from the amounts
presented herein. (2) Thomas Ebeling did not stand for re-appointment at AGM
in June 2023. (3) Stephen H. Rusckowski joined the Supervisory Board in April
2023, and was not eligible for the equity grant for 2023. QIAGEN N.V. | IFRS
Annual Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 259 Notes to the Consolidated Financial Statements
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For the year ended December 31, 2022 (in thousands, except for number of share
grants) Fixed remuneration Committee Chair Committee membership Total(1)
Number of restricted stock units granted Lawrence A. Rosen $150.0 18.0 26.0
$194.0 6,980 Dr. Metin Colpan $57.5 18.0 11.0 $86.5 6,980 Thomas Ebeling $57.5
- 11.0 $68.5 6,980 Dr. Toralf Haag $57.5 25.0 - $82.5 6,980 Dr. Ross L. Levine
$57.5 - 11.0 $68.5 6,980 Dr. Elaine Mardis $57.5 - 22.0 $79.5 6,980 Dr. Eva
Pisa(2) $28.8 - 5.5 $34.3 - Elizabeth E. Tallett $57.5 18.0 26.0 $101.5 6,980
(1) Supervisory Board members are reimbursed for travel costs and for any
value-added tax to be paid on their remuneration. These reimbursements are
excluded from the amounts presented herein. (2) Dr. Eva Pisa joined the
Supervisory Board in June 2022. The total recognized share-based compensation
expense in accordance with IFRS 2 in 2023 (2022) amounted to $2.8 million
($1.8 million) and includes $708.2 thousand ($349.6 thousand) for Mr. Rosen,
$364.3 thousand ($222.7 thousand) for Mr. Colpan, $356.9 thousand ($349.6
thousand) for Mr. Levine, $356.9 thousand ($349.6 thousand) for Ms. Mardis,
$364.3 thousand ($222.7 thousand) for Ms. Tallett, $253.2 thousand ($157.2
thousand) for Dr. Haag, $293.5 thousand ($148.4 thousand) for Mr. Ebeling, and
$63.8 thousand for Dr. Pisa. The total recognized compensation expense,
including share-based compensation, for members of the Supervisory Board in
2023 (2022) totaled $3.5 million ($2.5 million) and includes amounts of $896.7
thousand ($543.6 thousand) for Mr. Rosen, $450.8 thousand ($309.2 thousand)
for Mr. Colpan, $425.4 thousand ($418.1 thousand) for Mr. Levine, $436.4
thousand ($429.1 thousand) for Ms. Mardis, $465.8 thousand ($324.2
thousand) for Ms. Tallett, $335.7 thousand ($239.7 thousand) for Dr. Haag,
$327.8 thousand ($216.9 thousand) for Mr. Ebeling, $132.3 thousand ($34.3
thousand) for Dr. Pisa, and $46.1 thousand for Mr. Rusckowski who joined the
Supervisory Board in April 2023. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 260 Notes to the Consolidated Financial Statements
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25. Fair Value Measurements Assets and liabilities are measured at fair value
according to a three-tier fair value hierarchy which prioritizes the inputs
used in measuring fair value as follows: . Level 1. Observable inputs, such as
quoted prices in active markets; . Level 2. Inputs, other than the quoted
price in active markets, that are observable either directly or indirectly;
and . Level 3. Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own assumptions. QIAGEN N.V.
| IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 261 Notes to the Consolidated Financial
Statements
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The following table shows the carrying amounts and fair values of financial
assets and financial liabilities, including their levels in the fair value
hierarchy as of December 31, 2023. It does not include fair value information
for financial assets and financial liabilities carried at amortized cost.
Carrying amount Fair value (in thousands) FV hedging instrument Amortized cost
Fair value through profit or loss Total Level 1 Level 2 Level 3 Total Assets:
Cash and cash equivalents $- $667,320 $- $667,320 $- $- $- $- Trade accounts
receivable - 381,877 - 381,877 - - - - Financial assets, current - 308,675
81,023 389,698 - 81,023 - 81,023 Financial assets, non-current - - 4,435 4,435
- - 4,435 4,435 Equity options - - 39,759 39,759 - 39,759 - 39,759 Foreign
exchange forwards and options - - 3,471 3,471 - 3,471 - 3,471 Interest rate
contracts - cash flow hedge 3,083 - - 3,083 - 3,083 - 3,083 Total financial
assets $3,083 $1,357,872 $128,688 $1,489,643 $- $127,336 $4,435 $131,771
Liabilities: Lease liabilities(1) $- ($101,331) $- ($101,331) $- $- $- $-
Trade accounts payable - (84,155) - (84,155) - - - - Foreign exchange forwards
and options - - (9,944) (9,944) - (9,944) - (9,944) Interest rate contracts -
cash flow hedge (98,908) - - (98,908) - (98,908) - (98,908) Equity options - -
(39,830) (39,830) - (39,830) - (39,830) Warrants and embedded conversion
option - - (45,157) (45,157) - (45,157) - (45,157) Contingent consideration -
- (18,359) (18,359) - - (18,359) (18,359) Total financial liabilities
($98,908) ($185,486) ($113,290) ($397,684) $- ($193,839) ($18,359) ($212,198)
(1) Separate disclosure of fair value of lease liabilities is not required.
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
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The following table shows the carrying amounts and fair values of financial
assets and financial liabilities, including their levels in the fair value
hierarchy as of December 31, 2022. It does not include fair value information
for financial assets and financial liabilities carried at amortized cost.
Carrying amount Fair value (in thousands) FV hedging instrument Amortized cost
Fair value through profit or loss Total Level 1 Level 2 Level 3 Total Assets:
Cash and cash equivalents $- $730,271 $- $730,271 $- $- $- $- Trade accounts
receivable - 323,750 - 323,750 - - - - Financial assets, current - 15,000
672,597 687,597 79,600 592,997 - 672,597 Financial assets, non-current - -
5,329 5,329 - - 5,329 5,329 Equity options - - 221,769 221,769 - 221,769 -
221,769 Foreign exchange forwards and options - - 8,946 8,946 - 8,946 - 8,946
Interest rate contracts - cash flow hedge 12,256 - - 12,256 - 12,256 - 12,256
Total financial assets $12,256 $1,069,021 $908,641 $1,989,918 $79,600 $835,968
$5,329 $920,897 Liabilities: Lease liabilities(1) $- ($93,626) $- ($93,626) $-
$- $- $- Trade accounts payable - (98,734) - (98,734) - - - - Foreign exchange
forwards and options - - (8,356) (8,356) - (8,356) - (8,356) Interest rate
contracts - cash flow hedge (36,982) - - (36,982) - (36,982) - (36,982) Equity
options - - (222,632) (222,632) - (222,632) - (222,632) Warrants and embedded
conversion option - - (186,776) (186,776) - (186,776) - (186,776) Contingent
consideration - - (18,088) (18,088) - - (18,088) (18,088) Total financial
liabilities ($36,982) ($192,360) ($435,852) ($665,194) $- ($454,746) ($18,088)
($472,834) (1) Separate disclosure of fair value of lease liabilities is not
required. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 263 Notes to the
Consolidated Financial Statements
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Our assets and liabilities measured at fair value on a recurring basis consist
of quoted debt securities which are classified as Level 1 of the fair value
hierarchy; unquoted debt securities, discussed in Note 7 "Financial Assets,"
which are classified in Level 2 of the fair value hierarchy; derivative
contracts used to hedge currency and interest rate risk and derivative
financial instruments entered into in connection with the Cash Convertible
Notes discussed in Note 16 "Financial Debts," which are classified in Level 2
of the fair value hierarchy; contingent consideration accruals which are
classified in Level 3 of the fair value hierarchy; and unquoted equity
securities remeasured during the years ended December 31, 2023 and 2022
classified within Level 3 in the fair value hierarchy. There were no transfers
between levels for the year ended December 31, 2023. In determining fair value
for Level 2 instruments, we apply a market approach, using quoted active
market prices relevant to the particular instrument under valuation, giving
consideration to the credit risk of both the respective counterparty to the
contract and the Company. To determine our credit risk, we estimated our
credit rating by benchmarking the price of outstanding debt to publicly-availabl
e comparable data from rated companies. Using the estimated rating, our credit
risk was quantified by reference to publicly-traded debt with a corresponding
rating. The Level 2 derivative financial instruments include the Call Options
asset, the Warrants liability and the embedded conversion option liability.
See Note 16 "Financial Debts" and Note 26 "Financial Risk Factors and Use of
Derivative Financial Instruments" for further information. The derivatives are
not actively traded and are valued based on an option pricing model that uses
observable market data for inputs. Significant market data inputs used to
determine fair values included our common stock price, the risk-free interest
rate, and the implied volatility of our common stock. The Call Options asset
and the embedded cash conversion option liability were designed with the
intent that changes in their fair values would substantially offset, with
limited net impact to our earnings. Therefore, the sensitivity of changes in
the unobservable inputs to the option pricing model for such instruments is
substantially mitigated. Our Level 3 instruments include unquoted equity
investments for which we estimate the value based on valuation methods using
the observable transaction price at the transaction date and other
unobservable inputs. Under the measurement alternative, the carrying value is
measured at cost, less any impairment, plus or minus changes resulting from
observable price changes in orderly transactions for the identical or a
similar investment of the same issuer. Adjustments are determined primarily
based on a market approach as of the transaction date. Our Level 3 instruments
also include contingent consideration liabilities. We value contingent
consideration liabilities using unobservable inputs, applying the income
approach, such as the discounted cash flow technique, or the probability-
weighted scenario method. Contingent consideration arrangements obligate us to
pay the sellers of an acquired entity if specified future events occur or
conditions are met such as the achievement of technological or revenue
milestones. We use various key assumptions, such as the probability of
achievement of the milestones (0% to 100%) and the discount rate (between 6.5%
and 6.6%), to represent the non-performing risk factors and time value when
applying the income QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 264 Notes to
the Consolidated Financial Statements
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approach. We regularly review the fair value of the contingent consideration,
and reflect any change in the accrual in the consolidated income statements in
the line items commensurate with the underlying nature of milestone
arrangements. For contingent consideration liabilities with Level 3 inputs,
the following table summarizes the activity as of December 31, 2023 and 2022,
all of which is related to 2018 acquisition of STAT-Dx: (in thousands) 2023
2022 Balance at beginning of year ($18,088) ($24,100) Changes in fair value
(271) 112 Payments - 5,900 Balance at end of year ($18,359) ($18,088) As of
December 31, 2023, $18.4 million was accrued for contingent consideration and
is included in other non-current liabilities in the accompanying balance
sheet. As of December 31, 2022, $18.1 million was accrued for contingent
consideration, of which $8.2 million was included in other current liabilities
and $9.9 million was included in other non- current liabilities in the
accompanying consolidated balance sheet. The estimated fair value of
non-current financial debts as disclosed in Note 16 "Financial Debts" was
based on current interest rates for similar types of borrowings. The estimated
fair values may not represent actual values of the financial instruments that
could be realized as of the balance sheet date or that will be realized in the
future. The fair values of the financial instruments are presented in Note 16
"Financial Debts" and were determined as follows: Cash Convertible Notes and
Convertible Notes: Fair value is based on an estimation using available
over-the-counter market information on the Cash Convertible Notes due in 2024
as well as the Convertible Notes due in 2027. German Private Placement: Fair
value is based on an estimation using changes in the euro swap rates. There
were no adjustments in the years ended December 31, 2023 and 2022 for
nonfinancial assets or liabilities required to be measured at fair value on a
nonrecurring basis. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 265 Notes to
the Consolidated Financial Statements
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26. Financial Risk Factors and Use of Derivative Financial Instruments 26.1.
Financial Risks Our risk management approach embodies the key elements of a
sound risk management system including (1) active Supervisory Board and senior
management involvement; (2) adequate policies and procedures; (3) adequate
risk management, monitoring and information systems; and (4) comprehensive
internal controls. Refer to the detail discussion under the header Risk
Management within the Management Report included in this annual report. Market
risk Our market risk relates primarily to interest rate exposures on cash,
short-term investments and borrowings, and foreign currency exposures.
Financial risk is centrally managed and is regulated by internal guidelines
which require a continuous internal risk analysis. The overall objective of
our risk management is to reduce the potential negative earnings effects from
changes in interest and foreign exchange rates. Exposures are managed through
operational methods and financial instruments relating to interest rate and
foreign exchange risks. In the ordinary course of business, we use derivative
instruments, including swaps, forwards and/or options, to manage potential
losses from foreign currency exposures and interest rates. The principal
objective of such derivative instruments is to minimize the risks and/or costs
associated with global financial and operating activities. We do not utilize
derivative or other financial instruments for trading or other speculative
purposes. All derivatives are recognized as either assets or liabilities in
the balance sheet and are measured at fair value with any change in fair value
recognized in earnings in the period of change, unless the derivative
qualifies as an effective hedge that offsets certain exposures. In determining
fair value, we consider both the counterparty credit risk and our own
creditworthiness, to the extent that the derivatives are not covered by
collateral agreements with respective counterparties. Foreign currency
exchange rates As a global enterprise, we are subject to risks associated with
fluctuations in foreign currencies with regard to our ordinary operations.
This includes foreign currency-denominated receivables, payables, debt, and
other balance sheet positions as well as future cash flows resulting from
anticipated transactions including intra-group transactions. We manage our
balance sheet exposure on a group-wide basis primarily using foreign exchange
forward contracts, options and cross- currency swaps. Foreign currency
transactions for the year ended December 31, 2023 resulted in a net loss of
$4.1 million and a net gain of $2.7 million for the year ended December 31,
2022. These amounts are included in other financial results in the
accompanying consolidated income statements. Russia's February 2022 invasion
of Ukraine and the sanctions imposed in response have led to a decline in the
value of the ruble which is expected to remain highly volatile. In 2022, we
suspended our activities in Russia and Belarus, with sales in these countries
(along with Ukraine) representing less than 1% of total annual sales. As of
January 1, 2022, the QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 266 Notes to
the Consolidated Financial Statements
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results of our subsidiary in Turkiye are reported under highly inflationary
accounting as the prior three-years cumulative inflation rate exceeded 100
percent. A significant portion of our revenues and expenses are earned and
incurred in currencies other than the U.S. dollar. The euro is the most
significant such currency, with others including the British pound, Chinese
renminbi, Japanese yen, and Swiss franc. Fluctuations in the value of the
currencies in which we conduct our business relative to the U.S. dollar have
caused and will continue to cause U.S. dollar translations of such currencies
to vary from one period to another. Due to the number of currencies involved,
the constantly changing currency exposures, and the potential substantial
volatility of currency exchange rates, we cannot predict the effect of
exchange rate fluctuations upon future operating results. In general terms,
depreciation of the U.S. dollar against our other foreign currencies will
increase reported net sales. However, this effect is, at least partially,
offset by the fact that we also incur substantial expenses in foreign
currencies. We have significant production and manufacturing facilities
located in Germany and intercompany sales of inventory also expose us to
foreign currency exchange rate risk. Intercompany sales of inventory are
generally denominated in the local currency of the subsidiary purchasing the
inventory in order to centralize foreign currency risk with the manufacturing
subsidiary. We use an in-house bank approach to net and settle intercompany
payables and receivables as well as intercompany foreign exchange swaps and
forward contracts in order to centralize the foreign exchange rate risk to the
extent possible. We have entered in the past and may enter in the future into
foreign exchange derivatives including forwards, swaps and options to manage
the remaining foreign exchange exposure. For the presentation of market risks,
IFRS 7 requires sensitivity analyses that show the effects of hypothetical
changes of relevant risk variables on profit or loss and shareholders' equity.
Currency risks as defined by IFRS 7 arise on account of financial instruments
being denominated in a currency that is not the functional currency and being
of a monetary nature; differences resulting from the translation of financial
statements into the Company's presentation currency are not taken into
consideration. Relevant risk variables are generally all non-functional
currencies in which QIAGEN has financial instruments. QIAGEN is exposed to
currency risks from financial derivatives. If each of the respective currency
pairs for which the Company has financial derivatives in place, which do not
qualify for hedge accounting in accordance with IFRS 9, varied from the rates
used for the preparation of the consolidated financial statements, this would
have had an effect on the net income of the Company. Any effect would have
been almost fully off-set by corresponding valuation adjustments in the
positions, which economically had been hedged by these financial derivatives.
Accordingly, the net effect of such variance in currency rates would not have
been material. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 267 Notes to
the Consolidated Financial Statements
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If, at December 31, 2023, the U.S. dollar had gained or lost 10% against all
identified major currencies, the estimated effect on the fair value of the
financial derivatives would have been as follows: As of December 31, 2023 As
of December 31, 2022 (in thousands) 10% higher 10% lower 10% higher 10% lower
Currency Euro (EUR) ($12,182) $12,213 ($9,088) $9,081 Australian
Dollar (AUD) 913 (913) 846 (846) Swedish Krona (SEK) 275 (336) 567 (693)
Japanese Yen (JPY) (115) 96 (96) 94 Canadian Dollar (CAD) 341 (416) 167 (205)
Singapore Dollar (SGD) (618) 755 (539) 660 Swiss Franc (CHF) 2,959 2,876
(1,982) 2,430 Pound Sterling (GBP) (1,503) 1,502 (2,210) 2,210 South Korean
Won (KRW) 169 (205) 177 (190) Chinese Yuan (CNY) (2,652) 7,573 (3,545) 4,402
Norwegian Krone (NOK) 129 (158) 152 (186) Polish Zloty (PLN) 69 (85) (254) 311
Thai Baht (THB) 1,923 (1,754) 1,982 (1,861) Indian Rupee (INR) 74 (95) (137)
167 Danish Krone (DKK) 337 (392) - - Total ($8,876) $19,420 ($12,770) $13,940
Interest rates The Company is exposed to interest rate risk by floating rate
financial debt and floating rate financial assets. This exposure is managed by
varying the proportion of fixed and floating rate debt, while all
non-derivative financial assets pay interest on floating rates. Net financial
income earned on the Company's net financial assets is generally affected by
changes in the level of interest rates, principally the euro and the U.S.
dollar interest rate. At December 31, 2023, we had $667.3 million in cash and
cash equivalents (2022: $730.3 million). Interest income earned on our cash
investments is affected by changes in the relative levels of market interest
rates. We only invest in high- QIAGEN N.V. | IFRS Annual Report 2023 Overview
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grade investment instruments. A hypothetical adverse 10% movement in market
interest rates would have impacted our financial statements by approximately
$5.7 million. Borrowings against lines of credit are at variable interest
rates. We had no amounts outstanding against our lines of credit at December
31, 2023 and 2022. A hypothetical adverse 10% movement in market interest
rates would not have materially impacted our financial statements. At December
31, 2023, we had $1.5 billion in current and non-current financial debt (2022:
$1.8 billion), of which of which $245.5 million is floating interest rate debt
(2022: $236.8 million). A hypothetical adverse 10% movement in market interest
rates would not have materially impacted our financial statements. Liquidity
risk To date, we have funded our business primarily through internally
generated funds, debt and the private and public sales of equity. Our primary
use of cash has been to support continuing operations and our investing
activities including capital expenditure requirements and acquisitions. As of
December 31, 2023 and 2022, we had cash and cash equivalents of $667.3 million
and $730.3 million, respectively. We also had current financial assets of
$389.7 million and $687.6 million, respectively. Cash and cash equivalents are
primarily held in euros and U.S. dollars, other than those cash balances
maintained in the local currency of subsidiaries to meet local working capital
needs. As of December 31, 2023 and 2022, we had working capital of $1.0
billion and $1.3 billion, respectively. We have a 400.0 million syndicated
ESG-linked revolving credit facility expiring with a contractual life until
December 2025 of which no amounts were utilized at December 31, 2023. We have
additional credit lines totaling 13.0 million with no expiration date, none of
which were utilized as of December 31, 2023. We also have repayment
obligations of $1.5 billion of financial debt (2022: $1.8 billion), of which
$0.6 billion is current as of December 31, 2023. As of December 31, 2023, our
future contractual cash obligations are as follows: Contractual Obligations
(in thousands) Payments Due by Period Total 2024 2025 2026 2027 2028
Thereafter Financial debt(1) $1,548,661 $609,264 $71,511 $13,336 $572,382
$9,714 $272,454 Purchase obligations 98,824 37,396 35,992 13,150 11,383 903 -
Lease obligations 109,900 25,123 20,876 15,049 11,531 8,162 29,159 License and
royalty payments 7,217 1,926 1,453 783 766 560 1,729 Total contractual cash
obligations $1,764,602 $673,709 $129,832 $42,318 $596,062 $19,339 $303,342 (1)
Amounts include required principal, stated at current carrying values, and
interest payments. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 269 Notes to
the Consolidated Financial Statements
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Pursuant to the purchase agreements for certain acquisitions we could be
required to make additional contingent cash payments for a previous business
combination based on the achievement of certain FDA approval milestones.
Potential milestone payments total $20.7 million and may be triggered by the
end of 2024. The total milestone payments of $18.4 million are included in
other current liabilities in the accompanying consolidated balance sheet as of
December 31, 2023. Refer to Note 25 "Fair Value Measurements" for changes in
the contingent consideration liabilities. We believe that funds from
operations, existing cash and cash equivalents, together with the proceeds
from our public and private sales of equity, and availability of financing
facilities, will be sufficient to fund our planned operations and expansion
during the coming year. However, any global economic downturn may have a
greater impact on our business than currently expected, and we may experience
a decrease in the sales of our products, which could impact our ability to
generate cash. If our future cash flows from operations and other capital
resources are not adequate to fund our liquidity needs, we may be required to
obtain additional debt or equity financing or to reduce or delay our capital
expenditures, acquisitions or research and development projects. If we could
not obtain financing on a timely basis or at satisfactory terms, or implement
timely reductions in our expenditures, our business could be adversely
affected. Credit risk Financial instruments that potentially subject us to
concentrations of credit risk are cash and cash equivalents, financial assets,
and accounts receivable. We attempt to minimize the risks related to cash and
cash equivalents and financial assets by dealing with highly rated financial
institutions, and investing in a broad and diverse range of financial
instruments. We have established guidelines related to credit quality and
maturities of investments intended to maintain safety and liquidity.
Concentration of credit risk with respect to accounts receivable is limited
due to a large and diverse customer base, which is dispersed over different
geographic areas. Allowances are maintained for potential credit losses and
such losses have historically been within expected ranges. There were no
significant concentrations of credit risk during the reporting period. The
maximum exposure to credit risk is represented by the carrying amount of each
financial asset in the balance sheet. Credit risk is managed on a Company
basis, except for credit risk relating to accounts receivable balances. Each
local entity is responsible for managing and analyzing the credit risk for
each of their new clients before standard payment and delivery terms and
conditions are offered. Further discussion of the allowance for doubtful
accounts can be found in Note 8 "Trade Accounts Receivable." Counterparty risk
The financial instruments used in managing our foreign currency, equity and
interest rate exposures have an element of risk in that the counterparties may
be unable to meet the terms of the agreements. To the extent that derivatives
are not subject to mutual collateralization agreements, we attempt to minimize
this risk by limiting the counterparties to a diverse group of QIAGEN N.V. |
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highly rated international financial institutions. The carrying values of our
financial instruments incorporate the non- performance risk by using market
pricing for credit risk. However, we have no reason to believe that any
counterparties will default on their obligations and therefore do not expect
to record any losses as a result of counterparty default. In order to minimize
our exposure with any single counterparty, we have entered into all derivative
agreements, with the exception of the Call Spread Overlay, under master
agreement which allow us to manage the exposure with the respective
counterparty on a net basis. Most of these master agreements, include
bilateral collateral agreements. Fair values The fair values of financial
assets and financial liabilities are determined in accordance with the
accounting policies stated under Note 3.12 "Financial Instruments -
Recognition and Initial Measurement" and Note 3.13 "Financial Instruments -
Classification and Subsequent Measurement." Equity prices The Warrants issued
as part of the Call Spread Overlay discussed in Note 16 "Financial Debts" and
Note 26.2 "Use of Derivative Financial Instruments" expose us to income
statement volatility due to changes in our own equity price. Changes in the
fair value of the Warrants are recognized in other financial results. Assuming
a hypothetical 10% increase or decrease in equity prices at December 31, 2023,
the estimated effect would have been approximately $13.8 million loss or $5.0
million gain, respectively (2022: $84.4 million loss or $69.3 million gain).
Commodities We have exposure to price risk related to anticipated purchases of
certain commodities used as raw materials in our business. A change in
commodity prices may alter the gross margin, but due to the limited exposure
to any single raw material, a price change is unlikely to have a material
unforeseen impact on earnings. However, the volatility in product availability
and pricing continued in 2023, and we expect some level of market constraints
to continue in 2024. 26.2 Use of Derivative Financial Instruments Derivatives
and Hedging Objective and Strategy In the ordinary course of business, we use
derivative instruments, including swaps, forwards and/or options, to manage
potential losses from foreign currency exposures and interest bearing assets
or liabilities. The principal objective of such derivative instruments is to
minimize the risks and/or costs associated with our global financial and
operating activities. We do not utilize derivative or other financial
instruments for trading or other speculative purposes. We recognize all
derivatives as either assets or liabilities on the balance sheet on a gross
basis, measure those instruments at fair value and recognize the change in
fair value in earnings in the period of change, unless the derivative
qualifies as an effective hedge QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
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that offsets certain exposures. We have agreed with almost all of our
counterparties with whom we had entered into cross- currency swaps, interest
rate swaps or foreign exchange contracts, to enter into bilateral
collateralization contracts under which we will receive or provide cash
collateral, as the case may be, for the net position with each of these
counterparties. As of December 31, 2023, cash collateral positions consisted
of $5.4 million recorded in other current liabilities and $87.7 million
recorded in other current assets. As of December 31, 2022, we had cash
collateral positions consisting of $21.8 million recorded in other current
liabilities and $21.1 million recorded in other current assets in the
accompanying consolidated balance sheet. Non-Derivative Hedging Instrument Net
Investment Hedge We are party to a foreign currency non-derivative hedging
instrument that is designated and qualifies as net investment hedge. The
objective of the hedge is to protect part of the net investment in foreign
operations against adverse changes in the exchange rate between the euro and
the functional currency of the U.S. dollar. The non-derivative hedging
instrument is the German private corporate bond (2017 Schuldschein) which was
issued in 2017 in the total amount of $331.1 million as described in Note 16
"Financial Debts." Of the $331.1 million, which is held in both U.S. dollars
and euros, 255.0 million was designated as the hedging instrument as of
December 31, 2022 against a portion of our euro net investments in our foreign
operations. As further described in Note 16, four tranches of the 2017
Schuldschein matured and were paid in October 2022 and two tranches of the
2017 Schuldschein matured and were paid during 2021. As a result, 109.5
million remained designated as a hedging instrument as of December 31, 2023.
In July 2022, we issued an additional 370.0 million German private corporate
bond (2022 Schuldschein) as described in Note 16, and it is designated in its
entirety as the hedging instrument against a portion of our euro net
investments in our foreign operations. The relative changes in both the hedged
item and hedging instrument are calculated by applying the change in spot rate
between two assessment dates against the respective notional amount. The
effective portion of the hedge is recorded in the cumulative translation
adjustment account within other accumulated comprehensive loss. Based on the
spot rate method, the unrealized loss recorded in equity as of December 31,
2023 and 2022 is $35.2 million and $22.6 million, respectively. Since we are
using the debt as the hedging instrument, which is also remeasured based on
the spot rate method, there is no hedge ineffectiveness related to the net
investment hedge as of December 31, 2023 and 2022. Derivatives Designated as
Hedging Instruments Net Investment Hedge In September 2022, we entered into a
one-month interest rate derivative contract for a total notional amount 135.0
million, that matured in October 13, 2022, which qualified as net investment
hedge. The objective of the hedge was to protect the additional investments in
foreign operations in September 2022 against adverse changes in the exchange
rate between the euro and the functional currency of the U.S. dollar. The
relative changes in both the hedged QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
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item and derivative hedging instrument were calculated by applying the change
in spot rate between two assessment dates against the respective notional
amount. The effective portion of the hedge is recorded in the cumulative
translation adjustment account within other accumulated comprehensive loss and
will be reclassified to earnings upon the disposal or liquidation of the
foreign operations. In October 2022, the interest rate derivative contract
expired and the unrealized gain recorded in equity was $5.8 million as of
December 31, 2022. Cash Flow Hedges As of December 31, 2023 and 2022, we held
derivative instruments that are designated and qualify as cash flow hedges,
where the effective portion of the gain or loss on the derivative is reported
as a component of other comprehensive loss and reclassified into earnings in
the same period or periods during which the hedged transaction affects
earnings. Gains and losses on the derivative representing either hedge
ineffectiveness or hedge components excluded from the assessment of
effectiveness are recognized in current earnings. To date, we have not
recorded any hedge ineffectiveness related to any cash-flow hedges in
earnings. Based on their valuation as of December 31, 2023, we expect
approximately $2.1 million of derivative gains included in accumulated other
comprehensive loss will be reclassified into income during the next 12 months.
The cash flows derived from derivatives are classified in the consolidated
statements of cash flows in the same category as the consolidated balance
sheets account of the underlying item. We use interest rate derivative
contracts to align our portfolio of interest bearing assets and liabilities
with our risk management objectives. Since 2015, we have been a party to five
cross currency interest rate swaps through 2025 for a total notional amount of
180.0 million which qualify for hedge accounting as cash flow hedges. In
September 2022, we entered into five new cross currency interest rate swaps
through 2025 for a total notional amount of CHF 542.0 million which qualify
for hedge accounting as cashflow hedges. We determined that no ineffectiveness
exists related to these swaps. As of December 31, 2023 and 2022, interest
receivables of $8.4 million and $5.5 million, respectively are recorded in
other current assets in the accompanying consolidated balance sheets. Fair
Value Hedges Until October 2022, we held derivative instruments that qualified
for hedge accounting as fair value hedges. For derivative instruments that are
designated and qualify as a fair value hedge, the effective portion of the
gain or loss on the derivative is reflected in earnings. This effect on
earnings is offset by the change in the fair value of the hedged item
attributable to the risk being hedged that is also recorded in earnings. The
cash flows derived from derivatives are classified in the consolidated
statement of cash flows in the same category as the consolidated balance sheet
account of the underlying item. We held interest rate swaps which effectively
fixed the fair value of a portion of our fixed rate private placement debt and
qualified for hedge accounting as fair value hedges. These interest rate swap
derivative instruments expired along with the QIAGEN N.V. | IFRS Annual Report
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repayment of the private placement debt in October 2022, as described in Note
16 "Financial Debts." There has been no ineffectiveness related to the
interest rate swaps. Derivatives Not Designated as Hedging Instruments Call
Options and Warrants We entered into Call Options which, along with the sale
of the Warrants, represent the Call Spread Overlay entered into in connection
with the Cash Convertible Notes. In these transactions, the Call Options are
intended to address the equity price risk inherent in the cash conversion
feature of each instrument by offsetting cash payments in excess of the
principal amount due upon any conversion of the Cash Convertible Notes.
Accordingly, the derivative is presented as either current or non-current
based upon the classification of the related debt. Aside from the initial
payment of premiums for the Call Options, we will not be required to make any
cash payments under the Call Options. We will, however, be entitled to receive
under the terms of the Call Options, an amount of cash generally equal to the
amount by which the market price per share of our common stock exceeds the
exercise price of the Call Options during the relevant valuation period. The
exercise price under the Call Options is equal to the conversion price of the
Cash Convertible Notes. The Call Options and Warrants, for which our common
stock is the underlying security, are derivative assets and liabilities,
respectively, that require mark-to-market accounting treatment. The
derivatives are measured and reported at fair value on a recurring basis,
within Level 2 of the fair value hierarchy. The change in fair value of these
instruments is recognized immediately in our consolidated income statements in
other financial results. The Warrants are more fully described in Note 16
"Financial Debts." Cash Convertible Notes Embedded Cash Conversion Option The
embedded cash conversion option within the Cash Convertible Notes discussed in
Note 16 "Financial Debts" is required to be separated from the Cash
Convertible Notes and accounted for separately as a derivative liability, with
changes in fair value reported in our consolidated income statements in other
financial results until the cash conversion option settles or expires. The
embedded cash conversion option is measured and reported at fair value on a
recurring basis, within Level 2 of the fair value hierarchy. Because the terms
of the Cash Convertible Notes' embedded cash conversion option are
substantially similar to those of the Call Options, discussed above, we expect
the effect on earnings from these two derivative instruments to mostly offset
each other. In September 2023, the 2023 Notes and the related Call Options
have been settled as described in Note 16 and we recognized $0.9 million as
gain in other financial results in the accompanying consolidated income
statement. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 274 Notes to the
Consolidated Financial Statements
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Foreign Currency Derivatives As a globally active enterprise, we are subject
to risks associated with fluctuations in foreign currencies in our ordinary
operations. This includes foreign currency-denominated receivables, payables,
debt, and other balance sheet positions including intercompany items. We
manage balance sheet exposure on a group-wide basis using foreign exchange
forward contracts, foreign exchange options and cross-currency swaps. We are
party to various foreign exchange forward, option and swap arrangements which
had an aggregate notional value of $590.9 million at December 31, 2023, which
expire at various dates through September 2024. At December 31, 2022, these
arrangements had an aggregate notional value of $466.0 million, which expired
at various dates through July 2023. The transactions have been entered into to
offset the effects from short-term balance sheet exposure to foreign currency
exchange risk. Changes in the fair value of these arrangements have been
recognized in other financial results. Fair Values of Derivative Instruments
The following table summarizes the fair value amounts of derivative
instruments reported in the consolidated balance sheets as of December 31,
2023 and 2022: 2023 2022 (in thousands) Current Asset Non-current Asset
Current Asset Non-current Asset Assets: Derivative instruments designated as
hedges Interest rate contracts - cash flow hedge(1) - 3,083 - 12,256 Total
derivative instruments designated as hedges - 3,083 - 12,256 Undesignated
derivative instruments Equity options 39,759 - 102,671 119,098 Foreign
exchange forwards and options 3,471 - 8,946 - Total undesignated derivative
instruments 43,230 - 111,617 119,098 Total derivative assets $43,230 $3,083
$111,617 $131,354 QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 275 Notes to
the Consolidated Financial Statements
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(in thousands) 2023 2022 Current Liability Non-current Liability Current
Liability Non-current Liability Liabilities: Derivative instruments designated
as hedges Interest rate contracts - cash flow hedge(1) $- ($98,908) $-
($36,982) Total derivative instruments designated as hedges - (98,908) -
(36,982) Undesignated derivative instruments Cash convertible notes embedded
conversion option (39,830) - (102,896) (119,736) Warrants and embedded
conversion option (23,687) (21,470) (49,769) (137,007) Foreign exchange
forwards and options (9,944) - (8,356) - Total undesignated derivative
instruments (73,461) (21,470) (161,021) (256,743) Total derivative liabilities
($73,461) ($120,378) ($161,021) ($293,725) (1) The fair value amounts for the
interest rate contracts do not include accrued interest. 27. Capital
Management The primary objectives of the Group's capital management are to
safeguard the Group's ability to continue as a going concern and to ensure
financial flexibility to execute the Group's strategic growth targets. We
regularly review our capital structure to ensure a low cost of capital to
enhance shareholder value. The Group's overall strategy remains unchanged from
2022 and we are not subject to any externally imposed capital requirements.
All common shares issued are fully paid. In July and August 2022, we completed
a German private placement bond (2022 Schuldschein), which was issued in
various tranches totaling 370.0 million ($371.5 million) that have maturities
through 2035 as described more fully in Note 16 "Financial Debts." The
interest rate is linked to our ESG performance. As of December 31, 2023, a
total of $408.0 million is outstanding. In 2022, we repaid $480.0 million of
non-current debt including $327.0 million for the remaining U.S. Private
Placement and $153.0 million for the four tranches of German Private Placement
(2017 Schuldschein) that matured in October 2022. In September 2023, we repaid
$400.0 million of 2023 Notes at maturity. QIAGEN N.V. | IFRS Annual Report
2023 Overview Management Report Corporate Governance Financial Statements
Appendices Page 276 Notes to the Consolidated Financial Statements
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In January 2024, we completed a synthetic share repurchase that combined a
direct capital repayment with a reverse stock split. The transaction was
announced on January 7, 2024, and involved an approach used by various large,
multinational Dutch companies to provide returns to all shareholders in a
faster and more efficient manner than traditional open-market repurchases.
$295.2 million was returned to shareholders through the transaction, which
reduced the total number of issued Common Shares by approximately 3% to 223.9
million (of which 2.5 million are held in Treasury Shares) as of January 31,
2024. An important indicator of capital management efforts is the ratio of
shareholders' equity compared to total assets as shown on the consolidated
balance sheet: (in thousands, except of ratio) 2023 2022 Shareholders' equity
attributable to equity holders of the parent $3,867,151 $3,389,293 Total
assets $6,174,153 $6,351,748 Shareholders' equity ratio in % 63 % 53 % Total
financial debt consists of convertible notes, cash convertible notes and
private placements as discussed in Note 16 "Financial Debts." The changes in
financial debts reconciled to the cash flows arising from financing activities
as follows: Reconciliation of Liabilities Arising from Financing Activities
Total financial debt consists of cash convertible notes and private placements
as discussed in Note 16. The changes in financial debts reconciled to the cash
flows arising from financing activities as follows: QIAGEN N.V. | IFRS Annual
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(in thousands) At December 31, 2022 Cash flows Amortization of debt discount
and issuance costs(1) Foreign currency and other(2) At December 31, 2023 Cash
convertible notes $853,883 ($400,000) $29,136 $- $483,019 Convertible notes
443,285 - 533 - 443,818 German Private Placement (Schuldschein) 510,231 - 279
18,396 528,906 Total non-current debt 1,807,399 (400,000) 29,948 18,396
1,455,743 Lease liability 93,626 (26,779) - 34,484 101,331 Total liabilities
from financing activities $1,901,025 ($426,779) $29,948 $52,880 $1,557,074 (1)
Total amortization of debt discount and issuance costs for the year ended
December 31, 2023 totaled $30.2 million, which included $0.2 million costs
related to the 400.0 million syndicated multi- currency revolving credit
facility expiring December 2025. No amounts were utilized at December 31,
2023. (2) For the year ended December 31, 2023, the Convertible notes are net
of debt issuance costs. Also during 2023, the German Private Placement
experienced unrealized foreign currency losses totaling $18.4 million. (in
thousands) At December 31, 2021 Cash flows Amortization of debt discount and
issuance costs(1) Foreign currency and other(2) At December 31, 2022 Cash
convertible notes $821,652 $- $32,231 $- $853,883 Convertible notes 442,753 -
532 - 443,285 Private Placement 326,839 (327,000) 161 - - German Private
Placement (Schuldschein) 294,504 218,449 196 (2,918) 510,231 Total non-current
debt 1,885,748 (108,551) 33,120 (2,918) 1,807,399 Lease liability 98,582
(28,595) - 23,639 93,626 Total liabilities from financing activities
$1,984,330 ($137,146) $33,120 $20,721 $1,901,025 (1) Total amortization of
debt discount and issuance costs for the year ended December 31, 2022 totaled
$33.7 million which included $0.6 million costs related to the 400.0 million
syndicated multi- currency revolving credit facility expiring December 2025.
No amounts were utilized at December 31, 2022. (2) For the year ended December
31, 2022, the Convertible notes are net of debt issuance costs. Also during
2022, the German Private Placement experienced unrealized foreign currency net
losses totaling $14.7 million. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
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28. Consolidated Companies The following is a list of the Company's
subsidiaries as of December 31, 2023, other than certain subsidiaries that did
not in the aggregate constitute a significant subsidiary. Amnisure
International LLC USA 100 % 100 % Life Biotech Partners B.V. Netherlands 100 %
100 % DIALUNOX GmbH(1) Germany 100 % 100 % NeuMoDx Molecular Inc. USA 100 %
100 % STAT-Dx Life S.L. Spain 100 % 100 % Verogen, Inc. USA 100 % 100 % QIAGEN
Aarhus A/S Denmark 100 % 100 % QIAGEN AB Sweden 100 % 100 % QIAGEN AG
Switzerland 100 % 100 % QIAGEN Australia Holding Pty. Ltd. Australia 100 % 100
% QIAGEN Benelux B.V.(2) Netherlands 100 % 100 % QIAGEN Beverly LLC USA 100 %
100 % QIAGEN Biotecnologia Brasil Ltda. Brazil 100 % 100 % QIAGEN China
(Shanghai) Co. Ltd. China 100 % 100 % QIAGEN Deutschland Holding GmbH Germany
100 % 100 % QIAGEN Distribution B.V.(2) Netherlands 100 % 100 % QIAGEN France
S.A.S. France 100 % 100 % QIAGEN Gaithersburg LLC USA 100 % 100 % QIAGEN
GdaDsk Sp. z.o.o. Poland 100 % 100 % QIAGEN GmbH(1) Germany 100 % 100 % QIAGEN
Hamburg GmbH(1) Germany 100 % 100 % QIAGEN Hong Kong Pte. Ltd. China 100 % 100
% QIAGEN Inc. Canada 100 % 100 % Company Name Jurisdiction of Incorporation
Ownership Voting Rights QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
279 Notes to the Consolidated Financial Statements
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QIAGEN Healthcare Biotechnologies Limited(3) U.K. 100 % 100 % QIAGEN
Healthcare Biotechnologies Systems Limited(3) U.K. 100 % 100 % QIAGEN India
Pvt. Ltd. India 100 % 100 % QIAGEN K.K. Japan 100 % 100 % QIAGEN Korea Ltd.
Korea (South) 100 % 100 % QIAGEN LLC USA 100 % 100 % QIAGEN Ltd. UK 100 % 100
% QIAGEN Luxembourg SARL Luxembourg 100 % 100 % QIAGEN Manchester Ltd. UK 100
% 100 % QIAGEN Manila Inc. Philippines 100 % 100 % QIAGEN North American
Holdings Inc. USA 100 % 100 % QIAGEN Pty. Ltd. Australia 100 % 100 % QIAGEN
Redwood City, Inc. USA 100 % 100 % QIAGEN S.r.l. Italy 100 % 100 % QIAGEN
Sciences LLC USA 100 % 100 % QIAGEN Singapore Pte. Ltd. Singapore 100 % 100 %
QIAGEN Taiwan Co. Ltd. Taiwan 100 % 100 % QIAGEN Business Management MEA Ltd.
UAE 100 % 100 % QIAGEN Wroclaw Sp.z.o.o. Poland 100 % 100 % Company Name
Jurisdiction of Incorporation Ownership Voting Rights (1) QIAGEN GmbH
(registered under HRB 45822 Trade Register Duesseldorf, Germany), DIALUNOX
GmbH (registered under HRB 590384 Trade Register Freiburg im Breisgau,
Germany) and QIAGEN Hamburg GmbH (registered under HRB 71271 Trade Register
Duesseldorf, Germany) are exempt from the audit of individual accounts
requirements under Section 264 (3) of the German Commercial Code. (2) QIAGEN
Benelux B.V. (registered under #12053316 in the Netherlands Chamber of
Commerce) and QIAGEN Distribution B.V. (registered under #64026795 in the
Netherlands Chamber of Commerce) are exempt from the audit of individual
accounts requirements under Section 403 of the Dutch Civil Code. (3) QIAGEN
Healthcare Biotechnologies Limited (registration #11561466) and QIAGEN
Healthcare Biotechnologies Systems Limited (registration #11562019) are exempt
from the audit of individual accounts requirements under Section 479A of the
2006 U.K. Companies Act. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
280 Notes to the Consolidated Financial Statements
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29. Fees Paid to External Auditors At our 2023 Annual General Meeting of
Shareholders on June 22, 2023, our shareholders appointed KPMG Accountants
N.V. to serve as our external auditor for our statutory consolidated financial
statements prepared in accordance with International Financial Reporting
Standards as adopted by the EU for the year ended December 31, 2023. Set forth
below are the total fees billed (or expected to be billed), on a consolidated
basis, by the independent auditor or their affiliates for providing audit and
other professional services in each of the last two years. (in thousands) 2023
2022 Audit fees $2,923 $2,771 thereof KPMG Accountants N.V. 334 312
Audit-related fees 20 42 Tax fees 173 314 All other fees - - Total fees paid
to external auditors $3,116 $3,127 Audit fees consist of fees and expenses
billed for the annual audit and quarterly review of QIAGEN's consolidated
financial statements. They also include fees billed for other audit services,
which are those services that only the statutory auditor can provide.
Audit-related fees consist of fees and expenses billed for assurance and
related services that are related to the performance of the audit or review of
QIAGEN's financial statements and include consultations concerning financial
accounting and reporting standards and review of the opening balance sheets of
newly acquired companies. Tax fees include fees and expenses billed for tax
compliance services, including assistance on the preparation of tax returns
and claims for refunds and tax consultations, such as assistance and
representation in connection with tax audits and appeals. All other fees
include various fees and expenses billed for services, such as transaction due
diligence, as approved by the Audit Committee. QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 281 Notes to the Consolidated Financial Statements
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30. Subsequent Events Events that occurred after the balance sheet date that
provide no information on the actual situation at the balance sheet date are
not recognized in the financial statements. When those events are relevant for
the economic decisions of users of the financial statements, the nature and
the estimated financial effects of those events are disclosed in the financial
statements. In January 2024, we completed a synthetic share repurchase that
combined a direct capital repayment with a reverse stock split as discussed in
Note 18 "Equity." QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 282 Notes to
the Consolidated Financial Statements
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QIAGEN N.V. Company Financial Statements QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 283
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QIAGEN N.V. Company Balance Sheets (Before appropriation of net income) (in
thousands) As of December 31, Notes 2023 2022 Assets Fixed assets: Intangible
fixed assets: Goodwill (2) $240,510 $229,407 Tangible fixed assets: Property,
plant and equipment (3) 537 624 Right-of-use assets (3) 623 989 Financial
fixed assets: Non-current financial assets (4) 656 656 Financial fixed assets
(4) 5,317,420 5,129,791 Derivative financial instruments (9) 3,083 131,354
Deferred tax assets 5,230 - Other financial fixed assets (4) 4,713 4,098 Total
fixed assets 5,572,772 5,496,919 Current assets: Trade and other receivables:
Receivables from group companies (5) 1,225,817 226,697 Prepaid and other
current assets (5) 110,970 29,020 Securities: Current financial assets (4)
389,698 687,597 Derivative financial instruments (9) 43,230 111,617 Cash and
cash equivalents: Cash and cash equivalents 587,287 632,535 Total current
assets 2,357,002 1,687,466 Total assets $7,929,774 $7,184,385 The accompanying
notes are an integral part of these company financial statements. QIAGEN N.V.
| IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 284 Company Financial Statements
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QIAGEN N.V. Company Balance Sheets (Before appropriation of net income) (in
thousands) As of December 31, Notes 2023 2022 Liabilities and equity
Shareholders' equity: Common shares (6) $2,496 $2,433 Share premium (7)
1,965,581 1,921,972 Legal reserves (7) (347,069) (314,821) Other reserves (7)
812 645 Treasury shares (133,023) (160,188) Retained earnings 1,893,546
1,363,591 Net income for the period 484,808 575,661 Total shareholders' equity
3,867,151 3,389,293 Non-current liabilities: Non-current financial debts (8)
867,773 1,417,847 Deferred tax liabilities 191 - Derivative financial
instruments (9) 120,378 293,725 Other non-current liabilities 361 10,530 Total
non-current liabilities 988,703 1,722,102 Current liabilities: Current portion
of non-current financial debts (8) 587,970 389,552 Accounts payable trade 752
772 Payables to group companies 2,374,690 1,477,217 Derivative financial
instruments (9) 73,461 161,021 Accrued liabilities 37,047 44,428 Total current
liabilities 3,073,920 2,072,990 Total liabilities and shareholders' equity
$7,929,774 $7,184,385 The accompanying notes are an integral part of these
company financial statements. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
285 Company Financial Statements
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QIAGEN N.V. Company Income Statements (in thousands) Years ended December 31,
Notes 2023 2022 Other income $- $- Operating expenses: Sales and marketing
expense (637) (518) General and administrative expense (9,804) (11,233)
Restructuring, acquisition, integration and other, net (2,916) (10,086) Other
operating expense (153) (108) Total operating expenses, net (13,510) (21,945)
Loss from operations (13,510) (21,945) Financial income (4) 160,550 118,134
Financial expense (8) (108,853) (74,291) Other financial results (9) 145,597
168,533 Total finance income, net 197,294 212,376 Income before income taxes
(10) 183,784 190,431 Income tax expenses (1,581) (3,916) Income after income
tax 182,203 186,515 Share in results from participating interests, after tax
(4) 302,605 389,146 Net income for the period $484,808 $575,661 The
accompanying notes are an integral part of these company financial statements.
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
Governance Financial Statements Appendices Page 286 Company Financial
Statements
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QIAGEN N.V. Company Statements of Changes in Equity (in thousands) Common
shares Share premium Retained earnings Net Result Legal reserves Other
reserves Treasury shares Total shareholders' equity Notes Shares Amount Shares
Amount Balance at December 31, 2021 230,829 $2,731 $1,877,704 $916,839
$537,054 ($285,118) ($588) (3,755) ($189,730) $2,858,892 IAS 29 Hyperinflationar
y accounting (1) (30,359) 43,951 13,592 Balance at January 1, 2022 230,829
2,731 1,877,704 886,480 537,054 (241,167) (588) (3,755) (189,730) 2,872,484
Appropriation of prior year net loss - - - 537,054 (537,054) - - - - - Net
income for period - - - - 575,661 - - - - 575,661 Effect from capitalized
development costs (7) - - - (5,463) - 5,463 - - - - Effect from foreign
currency translation (7) - (298) - 298 - (62,235) - - - (62,235) Effect from
derivative hedges (7) - - - - - (16,882) - - - (16,882) Effect from pension
reserve (7) - - - - - - 1,233 - - 1,233 Tax benefit of employee stock plans -
- (5,239) - - - - - - (5,239) Stock awards and options - - 49,507 (54,778) - -
- 1,171 54,899 49,628 Tax withholding related to vesting of stock awards - - -
- - - - (529) (25,357) (25,357) Balance at December 31, 2022 230,829 $2,433
$1,921,972 $1,363,591 $575,661 ($314,821) $645 (3,113) ($160,188) $3,389,293
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
Governance Financial Statements Appendices Page 287 Company Financial
Statements
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Common shares Share premium Retained earnings Net Result Legal reserves Other
reserves Treasury shares Total shareholders' equity Notes Shares Amount Shares
Amount Balance at January 1, 2023 230,829 $2,433 $1,921,972 $1,363,591
$575,661 ($314,821) $645 (3,113) ($160,188) $3,389,293 Appropriation of prior
year net income - - - 575,661 (575,661) - - - - - Net income for period - - -
- 484,808 - - - - 484,808 Effect from capitalized development costs (7) - - -
(967) - 967 - - - - Effect from foreign currency translation (7) - 63 - (63) -
(11,481) - - - (11,481) Effect from derivative hedges (7) - - - - - (21,734) -
- - (21,734) Effect from pension reserve (7) - - - - - - 167 - - 167 Purchase
of treasury shares - - - - - - - - - - Tax benefit of employee stock plans - -
(3,491) - - - - - - (3,491) Stock awards and options - - 47,100 (44,676) - - -
873 44,840 47,264 Tax withholding related to vesting of stock awards - - - - -
- - (387) (17,675) (17,675) Balance at December 31, 2023 230,829 $2,496
$1,965,581 $1,893,546 $484,808 ($347,069) $812 (2,627) ($133,023) $3,867,151
The accompanying notes are an integral part of these company financial
statements. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 288 Company
Financial Statements
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1. Accounting Policies These company financial statements have been prepared
in accordance with Part 9 of Book 2 of the Dutch Civil Code. For setting the
principles for the recognition and measurement of assets and liabilities and
determination of results for its separate financial statements, the Company
makes use of the option provided in section 2:362(8) of the Dutch Civil Code.
This means that the principles for the recognition and measurement of assets
and liabilities and determination of the result (hereinafter referred to as
principles for recognition and measurement) of the separate financial
statements of the Company are the same as those applied for the consolidated
EU-IFRS financial statements. These principles also include the classification
and presentation of financial instruments, being financial assets, loans and
receivables, cash and financial liabilities and commitments. In case no other
principles are mentioned, refer to the accounting principles as described in
the consolidated financial statements. For an appropriate interpretation of
these statutory financial statements, the company financial statements should
be read in conjunction with the consolidated financial statements. Information
on the use of financial instruments and on related risks for the group is
provided in the notes to the consolidated financial statements of the group.
All amounts are presented in U.S. dollars rounded to the nearest thousand,
unless otherwise indicated. Participating interests in group companies Group
companies are all entities in which the Company has directly or indirectly
control. The Company controls an entity when it is exposed, or has rights, to
variable returns from its involvement with the group company and has the
ability to affect those returns through its power over the group company.
Group companies are recognized from the date on which control is obtained by
the Company and derecognized from the date that control by the Company over
the group company ceases. Participating interests in group companies are
accounted for in the company financial statements according to the net equity
value, with separate presentation of the goodwill component under intangible
fixed assets, with the principles for the recognition and measurement of
assets and liabilities and determination of results as set out in the notes to
the consolidated financial statements. Participating interests with a negative
net asset value are valued at nil. This measurement also covers any
receivables provided to the participating interests that are, in substance, an
extension of the net investment. In particular, this relates to loans for
which settlement is neither planned nor likely to occur in the foreseeable
future. A share in the profits of the participating interest in subsequent
years will only be recognized if and to the extent that the cumulative
unrecognized share of loss has been absorbed. If the Company fully or
partially guarantees the debts of the relevant participating interest, or if
has the constructive obligation to enable the participating interest to pay
its debts (for its share therein), then a provision is recognized accordingly
to the amount of the estimated payments by the Company on behalf of the
participating interest. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
289 Notes to the Company Financial Statements December 31, 2023
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Share of result of participating interests The share in the result of
participating interests consists of the share of the Company in the result of
these participating interests. Results on transactions involving the transfer
of assets and liabilities between the Company and its participating interests
and mutually between participating interests themselves, are eliminated to the
extent that they can be considered as not realized. 2. Intangible Fixed Assets
Goodwill The changes in the carrying amount of goodwill for the years ended
December 31, 2023 and 2022 are as follows: (in thousands) 2023 2022 Balance at
the beginning of year $229,407 $198,888 Goodwill acquired during the year -
42,201 Purchase price adjustments - (303) Currency adjustments 11,103 (11,379)
Balance at end of year $240,510 $229,407 In 2023, the changes in goodwill
resulted from foreign currency translation. In 2022, the changes in goodwill
resulted from goodwill acquired during the year partially offset by foreign
current translation. All goodwill is monitored and tested in the consolidated
Group as disclosed in Note 12 "Goodwill and Intangible Assets" to the
Consolidated Financial Statements. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 290 Notes to the Company Financial Statements
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3. Tangible Fixed Assets Property, Plant and Equipment The changes in
property, plant and equipment for the years ended December 31, 2023 and 2022
are as follows: (in thousands) 2023 2022 Balance at the beginning of year $624
$476 Additions 3 214 Depreciation (90) (66) Balance at end of year $537 $624
During 2023 and 2022, $0.1 million and $2.4 million of fully depreciated
tangible fixed assets were retired, respectively. The historic cost as of
December 31, 2023 and 2022 for property, plant and equipment was $1.8 million
and $1.9 million, respectively. As of December 31, 2023 and 2022, accumulated
amortization was $1.3 million and $1.2 million, respectively. Right-of-use
Assets Right of use assets consist primarily of office and buildings, subject
to lease arrangements. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
291 Notes to the Company Financial Statements
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4. Financial Fixed Assets Financial Assets At December 31, 2023 and 2022, the
Company holds investments as summarized in the following table: (in thousands)
2023 2022 Unquoted equity securities $656 $656 Unquoted debt securities
389,698 607,997 Quoted debt securities - 79,600 Financial assets $390,354
$688,253 thereof current financial assets $389,698 $687,597 thereof
non-current financial assets $656 $656 Information on the accounting for these
financial assets is provided in Note 7 "Financial Assets" to the Consolidated
Financial Statements of the Group. Financial Fixed Assets Financial fixed
assets include our investments in subsidiaries, loans to our subsidiaries and
investments in other interests where we have a significant influence. The
financial fixed assets are presented in the balance sheet based on either
their net asset value in accordance with the aforementioned accounting
principles of the Consolidated Financial Statements, or at amortized cost.
There are no indications the fair value of the financial assets are lower than
the values as presented in the balance sheet as of December 31, 2023. QIAGEN
N.V. | IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 292 Notes to the Company Financial
Statements
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(in thousands) Total Participating interests in group companies Loans
receivable Other participating interests January 1, 2022 $5,344,330 $3,250,445
$2,086,503 $7,382 Capital payments / additions 231,827 209,820 20,903 1,104
Sales / repayments (184,267) (41,898) (142,369) - Dividends received (604,599)
(604,599) - - Results from participating interests, after tax 389,145 389,657
- (512) Net actuarial gains 1,233 1,233 - - Effect of exchange rates (62,235)
(58,851) (3,384) - Other 14,357 14,357 - - December 31, 2022 $5,129,791
$3,160,164 $1,961,653 $7,974 (in thousands) Total Participating interests in
group companies Loans receivable Other participating interests January 1, 2023
$5,129,791 $3,160,164 $1,961,653 $7,974 Capital payments / additions 213,227
191,298 19,550 2,379 Sales / repayments (190,848) (4,052) (186,796) -
Dividends received (175,923) (175,923) - - Results from participating
interests, after tax 302,605 303,352 - (747) Net actuarial gains 167 167 - -
Effect of exchange rates 70,535 (8,399) 78,934 - Other (32,134) (32,134) - -
December 31, 2023 $5,317,420 $3,434,473 $1,873,341 $9,606 Loans receivable are
related to loans with subsidiaries and comprise loans denominated in euro,
Swiss franc, British pound, and U.S. dollar with maturities between February
2024 and January 2028, repayable at maturity or at any time prior to maturity.
Interest on loans receivable is calculated based upon agreed contractual
interest rates, with intercompany loans priced at arm's length, taking into
account factors like the credit quality of the counterparty, tax implications,
swap rates, country risks and currency risks. QIAGEN N.V. | IFRS Annual Report
2023 Overview Management Report Corporate Governance Financial Statements
Appendices Page 293 Notes to the Company Financial Statements
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Refer to Note 11 "Subsidiaries" for a list of our main subsidiaries. Other
Financial Fixed Assets Other financial fixed assets primarily consist of
prepayments and as of December 31, 2023 and 2022 totaled $4.7 million and $4.1
million, respectively. 5. Trade and Other Receivables The receivables are
carried at amortized cost, which is a reasonable approximation of fair value
given the short maturities of the positions. All receivables have a maturity
shorter than one year. Receivables from Group Companies The receivables from
group companies includes intercompany accounts receivables, receivables from
the group related to amounts due under stock plan reimbursement agreements and
intercompany short-term loans receivable. At the consolidated Group, cash and
liquidity needs are managed through in-house banking agreements, including
observing and managing intercompany receivables and intercompany payables
across the various group companies. In this process, intercompany balances can
earn interest income or incur interest expense depending on the position, with
interest charged at arms-length interest rates. QIAGEN N.V. recorded a net
settlement of $7.2 million and $5.0 million of financial income from these
transactions for the years ended December 31, 2023 and 2022, respectively. (in
thousands) 2023 2022 Intercompany accounts receivable $1,119,897 $138,806
Intercompany receivables related to stock plan reimbursement agreements
105,920 65,659 Intercompany short-term loans receivable - 22,232 Receivables
from Group Companies $1,225,817 $226,697 QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
Appendices Page 294 Notes to the Company Financial Statements
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Prepaid and Other Current Assets Prepaid expenses and other current assets are
summarized as follows as of December 31, 2023 and 2022: (in thousands) 2023
2022 Cash collateral $87,666 $21,083 Other receivables 17,090 6,911 Income
taxes receivable 4,392 - Prepaid expenses 1,670 936 Value-added tax 152 90
Other current assets $110,970 $29,020 The cash collateral asset represent
amounts we may receive under bilateral collateralization contracts that we
have agreed with almost all of our counterparties with whom we had entered
into cross-currency swaps, interest rate swaps or foreign exchange contracts.
Under these contracts, we will receive or provide cash collateral, as the case
may be, for the net position with each of these counterparties. As of December
31, 2022, other current assets included a current loan receivable related to a
$10.6 million convertible note from Ellume Limited, Australia, which bears
interest at 10% and was due on December 31, 2022. As of December 31, 2022, we
retained the loan receivable, while fully reserved, as we awaited the outcome
of voluntary administration and any creditor arrangement. During 2023, we had
no possibility of collection from Ellume and no expectation of any recovery of
the defaulted amount. Accordingly, the loan receivable was fully written off
against the reserve in 2023. QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
295 Notes to the Company Financial Statements
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6. Common Shares The authorized classes of our shares consist of Common
Shares, Preference Shares and Financing Preference Shares. No Financing
Preference Shares or Preference Shares have been issued. The Company had the
following authorized shares issued and outstanding as of December 31, 2023 and
2022: Authorized, (in thousands) 2023 2022 Common shares 410,000 410,000
Preference shares 450,000 450,000 Financing preference shares 40,000 40,000 At
December 31st 900,000 900,000 Issued and outstanding, (in thousands) 2023 2022
Common shares issued 230,829 230,829 Treasury shares (2,627) (3,113)
Outstanding at December 31st 228,202 227,716 Par value in EUR per share 2023
2022 Common shares 0.01 0.01 Preference shares 0.01 0.01 Financing preference
shares 0.01 0.01 Par value (in thousands) 2023 2022 Common shares issued at
December 31st in EUR 2,308 2,308 Common shares issued at December 31st in USD
2,496 2,433 QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
Corporate Governance Financial Statements Appendices Page 296 Notes to the
Company Financial Statements
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7. Equity Share Premium The share premium concerns the income from the issuing
of shares in so far as this exceeds the nominal value of the shares (above par
income). Of share premium, no legal restrictions apply to the distribution
thereof and therefore can be considered freely distributable. Legal Reserves
Legal reserves as of December 31, 2023 and 2022 were $(347.1) million and
$(314.8) million, respectively, and include the following amounts: (in
thousands) 2023 2022 Cumulative foreign currency translation adjustment
($353,180) ($341,699) Capitalized development costs related to subsidiaries
43,482 42,515 Cash flow hedge reserve (37,371) (15,637) Legal reserves
($347,069) ($314,821) The legal reserves set up in connection with the
capitalized development costs related to subsidiaries as described in Note 12
"Goodwill and Intangible Assets" to the Consolidated Financial Statements of
the Group. As a result of the capitalization and subsequent amortization of
these capitalized development costs, the net impact on the legal reserves was
$1.0 million and $5.5 million for the years ended December 31, 2023 and 2022,
respectively. Other Reserves Other reserves as of December 31, 2023 and 2022
include the amounts as follows. (in thousands) 2023 2022 Pension reserve, net
of tax $812 $645 QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
Report Corporate Governance Financial Statements Appendices Page 297 Notes to
the Company Financial Statements
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8. Financial Debts and Payables to Group Companies Financial Debts Information
on the current and non-current portions of our financial debts are provided
under Note 16 "Financial Debts" to the Consolidated Financial Statements of
the Group. Certain of our debt agreements contain financial and non-financial
covenants, including but not limited to, restrictions on the encumbrance of
assets, restrictions on priority indebtedness and maintenance of certain
financial ratios. We were in compliance with these covenants at December 31,
2023. Of the total $1.5 billion financial debts as of December 31, 2023, $0.6
billion is included in current liabilities and $0.9 billion is included in
non-current liabilities in the accompanying balance sheet of QIAGEN N.V.
During the years ended December 31, 2023 and 2022, financial income of $160.6
million and $118.1 million, respectively, is included in the accompanying
income statement of QIAGEN N.V. and includes $76.8 million and $82.6 million,
respectively, of interest on our intercompany loans with subsidiaries, as
discussed in Note 4. Financial Fixed Assets. Financial expense of $108.9
million and $74.3 million was incurred for the years ended December 31, 2023
and 2022, respectively, and is primarily composed of interest charged on
current and non-current third-party loans and on intercompany payables due to
group companies. Payables to Group Companies The payables to group companies
include intercompany accounts payable and intercompany short-term loans
payable. The payables are carried at amortized cost, which is a reasonable
approximation of fair value given the short maturities of the positions. At
the consolidated Group, cash and liquidity needs are managed through in-house
banking agreements, including observing and managing intercompany receivables
and intercompany payables across the various group companies. In this process,
intercompany balances can earn interest income or incur interest expense
depending on the position, with interest charged at arms-length interest
rates. QIAGEN N.V. recorded a net settlement of $53.3 million and $16.5
million of financial expense from these transactions for the years ended
December 31, 2023 and 2022, respectively. QIAGEN N.V. | IFRS Annual Report
2023 Overview Management Report Corporate Governance Financial Statements
Appendices Page 298 Notes to the Company Financial Statements
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(in thousands) 2023 2022 Intercompany accounts payable $2,327,679 $1,434,457
Intercompany short-term loans payable 47,011 42,760 Payables to group
companies $2,374,690 $1,477,217 9. Financial Instruments Information on the
use of financial instruments and on related risks is provided in Note 26
"Financial Risk Factors and Use of Derivative Financial Instruments" to the
Consolidated Financial Statements of the Group and includes information about
the Group's exposure to these risks, the Group's objectives, policies and
processes for measuring and managing risk, and the Group's management of
capital. These risks, objectives, policies and processes for measuring and
managing risk, and the management of capital apply also to the separate
financial statements of QIAGEN N.V. In the ordinary course of business, we use
derivative instruments to manage potential losses from foreign currency
exposures and interest bearing assets or liabilities as further described in
Note 26 to the Consolidated Financial Statements of the Group. For the years
ended December 31, 2023 and 2022, gains and losses on these derivatives
instruments are included in Other financial results in the accompanying income
statements of QIAGEN N.V. Guarantees It is our general group policy to ensure
that our subsidiaries have access to sufficient financial and other resources
to conduct their respective business. It is our intention to provide necessary
support to ensure that subsidiaries continue as a going concern and from time
to time, the Company has issued letters of comfort to third parties in
connection with transactions entered into by our subsidiaries. The Company has
issued 7.7 million (approximately $8.5 million) of letters of credit
guaranteeing various beneficiaries to cover for nonpayment on behalf of QIAGEN
N.V. as well as its designated subsidiaries in the event of a default. QIAGEN
N.V. has issued financial support letters and declarations of joint and
several liability in accordance with article 403 Part 9 of Book 2 of The Dutch
Civil Code with respect to the following Dutch subsidiaries: QIAGEN
Distribution B.V. and QIAGEN Benelux B.V. As of December 31, 2023, there are
no actual liabilities arising from the issuance of these letters and
declarations. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Furthermore, QIAGEN N.V. has guaranteed all liabilities outstanding at
December 31, 2023, until all are satisfied in full, as follows: . in
accordance with section 264 III of the German Commercial Code with respect to
the following German subsidiaries: QIAGEN GmbH (registered under HRB 45822
Trade Register Dusseldorf, Germany), DIALUNOX GmbH (registered under HRB
590384 Trade Register Freiburg im Breisgau, Germany) and QIAGEN Hamburg GmbH
(registered under HRB 71271 Trade Register Dusseldorf, Germany); and . in
accordance with section 479C of the U.K. Companies Act 2006 with respect to
the following U.K. subsidiaries: QIAGEN Healthcare Biotechnologies Limited
(registration #11561466) and QIAGEN Healthcare Biotechnologies Systems Limited
(registration #11562019). 10. Income Tax The reconciliation of income taxes
from the Dutch statutory rate to the effective tax rate is as follows: (in
thousands) 2023 2022 Amount Percent Amount Percent Income before income taxes
$183,784 $190,431 At Dutch statutory income tax rate 47,416 25.8 % 49,131 25.8
% Deductible expenses (35,972) (19.6) % (40,391) (21.2) % Tax exempt income
(193) (0.1) % (232) (0.1) % Adjustment in valuation of deductible losses
(9,601) (5.2) % (3,132) (1.6) % Other items (69) - % (1,460) (0.8) % Total
income tax $1,581 0.9 % $3,916 2.1 % Together with Life Biotech Partners B.V.,
the Company forms a fiscal unity for corporate income tax purposes. For value-
added tax purposes, the fiscal unity includes all Dutch subsidiaries of the
Company. The standard conditions of fiscal unity stipulate that each of the
companies is liable for the tax payable of all companies belonging to the
fiscal unity. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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11. Subsidiaries The following is a list of the Company's subsidiaries as of
December 31, 2023, other than certain subsidiaries that did not in the
aggregate constitute a significant subsidiary. A list of subsidiaries has been
filed with the Chamber of Commerce in Roermond, the Netherlands, in April 2023
and is available from the company upon request. Amnisure International LLC USA
100 % 100 % Life Biotech Partners B.V. Netherlands 100 % 100 % NeuMoDx
Molecular Inc. USA 100 % 100 % STAT-Dx Life S.L. Spain 100 % 100 % Verogen,
Inc. USA 100 % 100 % QIAGEN Aarhus A/S Denmark 100 % 100 % QIAGEN AB Sweden
100 % 100 % QIAGEN AG Switzerland 100 % 100 % QIAGEN Australia Holding Pty.
Ltd. Australia 100 % 100 % QIAGEN Benelux B.V. Netherlands 100 % 100 % QIAGEN
Beverly LLC USA 100 % 100 % QIAGEN Biotecnologia Brasil Ltda. Brazil 100 % 100
% QIAGEN China (Shanghai) Co. Ltd. China 100 % 100 % QIAGEN Deutschland
Holding GmbH Germany 100 % 100 % QIAGEN Distribution B.V. Netherlands 100 %
100 % QIAGEN France S.A.S. France 100 % 100 % QIAGEN Gaithersburg LLC USA 100
% 100 % QIAGEN GdaDsk Sp. z.o.o. Poland 100 % 100 % QIAGEN GmbH Germany 100 %
100 % QIAGEN Hamburg GmbH Germany 100 % 100 % QIAGEN Hong Kong Pte. Ltd. China
100 % 100 % QIAGEN Inc. Canada 100 % 100 % QIAGEN India Pvt. Ltd. India 100 %
100 % Company Name Jurisdiction of Incorporation Ownership Voting Rights
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QIAGEN K.K. Japan 100 % 100 % QIAGEN Korea Ltd. Korea (South) 100 % 100 %
QIAGEN LLC USA 100 % 100 % QIAGEN Ltd. UK 100 % 100 % QIAGEN Luxembourg SARL
Luxembourg 100 % 100 % QIAGEN Manchester Ltd. UK 100 % 100 % QIAGEN Manila
Inc. Philippines 100 % 100 % QIAGEN North American Holdings Inc. USA 100 % 100
% QIAGEN Pty. Ltd. Australia 100 % 100 % QIAGEN Redwood City, Inc. USA 100 %
100 % QIAGEN S.r.l. Italy 100 % 100 % QIAGEN Sciences LLC USA 100 % 100 %
QIAGEN Singapore Pte. Ltd. Singapore 100 % 100 % QIAGEN Taiwan Co. Ltd. Taiwan
100 % 100 % QIAGEN Business Management MEA Ltd. UAE 100 % 100 % QIAGEN Wroclaw
Sp.z.o.o. Poland 100 % 100 % Company Name Jurisdiction of Incorporation
Ownership Voting Rights 12. Employee Information Employees The average number
of employees employed in the Netherlands during the year ended December 31,
2023 was 59 (2022: 60). Personnel Costs Personnel costs for the Company
amounted to $2.3 million in 2023 (2022: $2.4 million) as further detailed
below by functional area in which the respective employee works. QIAGEN N.V. |
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(in thousands) 2023 2022 Salaries and wages $2,180 $2,214 Social security and
pension 126 108 Other 13 103 Personnel costs $2,319 $2,425 The employee
pension plans are financed through contributions to external pension insurance
companies. The contribution due is accounted for in the profit and loss as an
expense. Prepaid contributions are recognized as deferred assets if these lead
to a refund or reduction of future payments. Contributions that are due but
have not yet been paid are presented as liabilities. 13. Related Party
Transactions Information on related party transactions including remuneration
of the members of the Managing and Supervisory Board is provided under Note 24
"Related Party Transactions" to the Consolidated Financial Statements of the
Group. Information on the remuneration policy is provided in the Corporate
Governance Report. 14. Auditor Fees Information on auditor fees is provided
under Note 29 "Fees Paid to External Auditors" to the Consolidated Financial
Statements of the Group. 15. Subsequent Events Based on the Company's review,
no events or transactions have occurred subsequent to December 31, 2023 other
than those described in Note 30 "Subsequent Events" to the Consolidated
Financial Statements, that would have a material impact on the financial
statements as presented. QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Signatures Venlo, the Netherlands, April 26, 2024 QIAGEN N.V. Thierry Bernard
Roland Sackers Chief Executive Officer Chief Financial Officer QIAGEN N.V. |
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QIAGEN N.V. Other information QIAGEN N.V. | IFRS Annual Report 2023 Overview
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Provisions in the Articles of Association Governing the Appropriation of Net
Income According to Article 40 till 42 of the Articles of Association, the
allocation of net income will be as follows. Subject to certain exceptions,
dividends may only be paid out of profits as shown in our annual report as
adopted by the General Meeting of Shareholders. Distributions may not be made
if the distribution would reduce the shareholders' equity below the sum of the
paid-up capital and any reserves required by Dutch Law or the Articles. Out of
profits, dividends must first be paid on any outstanding Preference Shares
(the "Preference Share Dividend") in a percentage (the "Preference Share
Dividend Percentage") of the obligatory amount (call) paid up on such shares
at the beginning of the fiscal year in respect of which the distribution is
made. The Preference Share Dividend Percentage is equal to the Average Main
Refinancing Rates during the financial year for which the distribution is
made. Average Main Refinancing Rate shall be made understood to mean the
average value on each individual day during the financial year for which the
distribution is made of the Main Refinancing Rates prevailing on such day.
Main Refinancing Rate shall be understood to mean the rate of the Main
Refinancing Operation as determined and published from time to time by the
European Central Bank. If and to the extent that profits are not sufficient to
pay the Preference Share Dividend in full, the deficit shall be paid out of
the reserves, with the exception of any reserve, which was formed as share
premium reserve upon the issue of Financing Preference Shares. If in any
fiscal year the profit is not sufficient to make the distributions referred to
above and if no distribution or only a partial distribution is made from the
reserves referred to above, such that the deficit is not fully made good no
further distributions will be made as described below until the deficit has
been made good. Out of profits remaining after payment of any dividends on
Preference Shares such amounts shall be kept in reserve as determined by the
Supervisory Board. Out of any remaining profits not allocated to reserve, a
dividend shall be paid on the Financing Preference Shares in a percentage over
the par value, increased by the amount of share premium that was paid upon the
first issue of Financing Preference Shares, which percentage is related to the
average effective yield on the prime interest rate on corporate loans in the
United States as quoted in the Wall Street Journal. If and to the extent that
the profits are not sufficient to pay the Financing Preference Share Dividend
in full, the deficit may be paid out of the reserves if the Managing Board so
decides with the approval of the Supervisory Board, with the exception of the
reserve which was formed as share premium upon the issue of Financing
Preference Shares. Insofar as the profits have not been distributed or
allocated to the reserves as specified above, they are at the free disposal of
the General Meeting of Shareholders, provided that no further dividends will
be distributed on the Preference Shares or the Financing Preference Shares.
The General Meeting may resolve, on the proposal of the Supervisory Board, to
distribute dividends or reserves, wholly or partially, in the form of QIAGEN
shares. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Memorandum and Articles of Association We are a public company with limited
liability (naamloze vennootschap) incorporated under Dutch law and registered
with the Dutch Trade Register under file number 12036979. Set forth below is a
summary of certain provisions of our Articles of Association, as lastly
amended on January 29, 2024 (the Articles), and Dutch law, where appropriate.
The below also contains information on provisions of the Dutch Corporate
Governance Code 2022, (the Dutch Code), which contains principles of good
corporate governance and best practice provisions that regulate relations
between the Managing Board, the Supervisory Board and the Shareholders. The
principles and provisions are aimed at defining responsibilities for
sustainable long-term value creation, risk control, effective management and
supervision, remuneration and the relationship with Shareholders, including
the General Meeting, and other stakeholders. A listed company should either
comply, or if not, explain in its management report why and to what extent it
does not comply, with the principles of the Dutch Code. The Dutch Code has
been taken into account in the summary below. This summary does not purport to
be complete and is qualified in its entirety by reference to the Articles,
Dutch Law and the Dutch Code. Corporate Purpose Our objectives include,
without limitation, the performance of activities in the biotechnology
industry, as well as incorporating, acquiring, participating in, financing,
managing and having any other interest in companies or enterprises of any
nature, raising and lending funds and such other acts as may be conducive to
our business. Managing Directors QIAGEN shall be managed by a Managing Board
consisting of one or more Managing Directors under the supervision of the
Supervisory Board. The Managing Board is responsible for our continuity and
our affiliated enterprise. The Managing Board focuses on our sustainable
long-term value creation and our affiliated enterprise, and takes into account
the impact the actions of the Company and its affiliated enterprise have on
people and the environment as well as our stakeholders' interests that are
relevant in this context, which include but are not limited to our
shareholders. Managing Directors shall be appointed by the General Meeting
upon the joint meeting of the Supervisory Board and the Managing Board (Joint
Meeting), having made a binding nomination for each vacancy. However, the
General Meeting may at all times overrule the binding nature of such a
nomination by a resolution adopted by at least a two- thirds majority of the
votes cast, if such majority represents more than half the issued share
capital. This is different from the provisions of many American corporate
statutes, including the Delaware General Corporation Law, which give the
directors of a corporation greater authority in choosing the executive
officers of a corporation. Under our Articles, the General Meeting may suspend
or dismiss a Managing Director at any time by a resolution adopted by at least
a two-thirds majority of the votes cast, if such majority represents more than
half of the issued share capital, or by a simple majority of votes cast
without any quorum requirements required to be satisfied, if the suspension or
dismissal is proposed by the Joint Meeting. The Supervisory Board shall also
at all times be entitled to suspend (but not to dismiss) a Managing Director.
The Articles provide that the Supervisory Board may adopt management board
rules governing the internal organization of the Managing Board. Furthermore,
the Supervisory Board shall determine the salary, the bonus, if any, and the
other compensation terms and conditions of service of the Managing Directors
within the scope of the remuneration policy. The current remuneration policy
of the Managing Board was adopted in our Annual General Meeting on June 29,
2021. Resolutions of the Managing Board shall be validly adopted, if adopted
by simple majority of votes, at least one of whom voting in favor of the
proposal must be the Chairman. Each Managing Director has the right to cast
one vote. Under Dutch law, in the event that there is a conflict of interest
between a Managing Director and us and our business on a certain matter, that
Managing Director shall not participate in the discussions and voting on that
matter. If all Managing Directors have a conflict of interest, such resolution
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by the Supervisory Board. If all Supervisory Directors have a conflict of
interest as well, the General Meeting will be authorized to resolve on the
matter. According to the Dutch Code, any conflict of interest or apparent
conflict of interest between the Company and Managing Directors should be
prevented. To avoid conflicts of interest, adequate measures should be taken.
Under the Dutch Code, the Supervisory Board is responsible for the
decision-making on dealing with conflicts of interest regarding Managing
Directors, Supervisory Directors and majority shareholders in relation to us.
A Managing Director should report any potential conflict of interest in a
transaction that is of material significance to the Company and/or to such
Managing Director to the Chairman of the Supervisory Board and to the other
members of the Managing Board without delay. The Supervisory Board should
decide, outside the presence of the Managing Director, whether there is a
conflict of interest. All transactions in which there are conflicts of
interest with Managing Directors shall be agreed on terms that are customary
in the sector concerned. Decisions to enter into transactions under which a
Supervisory Director would have a conflict of interest that are of material
significance to QIAGEN and/or to the Managing Director concerned, require the
approval of the Supervisory Board. Supervisory Directors The Supervisory Board
shall be responsible for supervising the policy pursued by the Managing Board
and our general course of affairs. Under our Articles, the Supervisory
Directors are required to serve the interests of our Company and our business
and the interest of all stakeholders (which includes but is not limited to our
shareholders) in fulfilling their duties. The Supervisory Board shall consist
of such number of members as the Joint Meeting may from time to time
determine, with a minimum of three members. The Supervisory Directors shall be
appointed by the General Meeting upon the Joint Meeting having made a binding
nomination for each vacancy. However, the General Meeting may at all times
overrule the binding nature of such a nomination by a resolution adopted by at
least a two-thirds majority of the votes cast, if such majority represents
more than half the issued share capital. If during a financial year a vacancy
occurs in the Supervisory Board, the Supervisory Board may appoint a
Supervisory Director who will cease to hold office at the next Annual General
Meeting, provided that the number of Supervisory Directors that may be
appointed in this manner is limited to one-third of the number of Supervisory
Directors determined by the Joint Meeting. This is different from the
provisions of many American corporate statutes, including the Delaware General
Corporation Law, which provides that directors may vote to fill vacancies on
the board of directors of a corporation. Under our Articles, the General
Meeting may suspend or dismiss a Supervisory Director at any time by a
resolution adopted by at least a two-thirds majority of the votes cast, if
such majority represents more than half of the issued share capital, or by a
simple majority of votes cast without any quorum requirements required to be
satisfied, if the suspension or dismissal is proposed by the Joint Meeting.
Under Dutch law, in the event that there is a conflict of interest between a
Supervisory Director and us and our business on a certain matter, that
Supervisory Director shall not participate in the discussions and voting on
that matter. Under the Dutch Code, a Supervisory Director should report any
conflict of interest or potential conflict of interest in a transaction that
is of material significance to the Company and/or to such Supervisory Director
to the Chairman of the Supervisory Board without delay. The Supervisory Board
should decide, outside the presence of the Supervisory Director concerned,
whether there is a conflict of interest. If all Supervisory Directors have a
conflict of interest, the relevant resolution shall be adopted by the General
Meeting. All transactions in which there are conflicts of interest with
Supervisory Directors shall be agreed on terms that are customary in the
sector concerned. Decisions to enter into transactions under which a
Supervisory Director would have a conflict of interest that are of material
significance to QIAGEN and/or to the Supervisory Director concerned, require
the approval of the Supervisory Board. In accordance with Dutch law and the
Dutch Code, the General Meeting determines the compensation of the Supervisory
Directors upon the proposal of the Compensation Committee with due observance
of the remuneration policy for Supervisory Directors as adopted at the 2021
Annual General Meeting. Under the Dutch Code, any shares held by a Supervisory
Director in the Company on whose board he or she sits should be long-term
investments. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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Liability of Managing Directors and Supervisory Directors Under Dutch law, as
a general rule, Managing Directors and Supervisory Directors are not liable
for obligations we incur. Under certain circumstances, however, they may
become liable, either towards QIAGEN (internal liability) or to others
(external liability), although some exceptions are described below. Liability
towards QIAGEN Failure of a Managing Director or Supervisory Director to
perform his or her duties does not automatically lead to liability. Liability
is only incurred in the case of a clear, indisputable shortcoming about which
no reasonably judging business-person would have any doubt. In addition, the
Managing Director or Supervisory Director must be deemed to have been grossly
negligent. Managing Directors are jointly and severally liable for failure of
the Managing Board as a whole, but an individual Managing Director will not be
held liable if he or she is determined not to have been responsible for the
mismanagement and has not been negligent in preventing its consequences.
Supervisory Directors are jointly and severally liable for failure of the
Supervisory Board as a whole, but an individual Supervisory Director will not
be held liable if he or she is determined not to have been responsible for the
mismanagement and has not been negligent in preventing its consequences.
Liability for Misrepresentation in Annual Accounts Managing Directors and
Supervisory Directors are also jointly and severally liable to any third party
for damages suffered as a result of misrepresentation in the annual accounts,
management commentary or interim statements of QIAGEN, although a Managing
Director or Supervisory Director will not be held liable if found not to be
personally responsible for the misrepresentation. Moreover, a Managing
Director or Supervisory Director may be found to be criminally liable if he or
she deliberately publishes false annual accounts or deliberately allows the
publication of such false annual accounts. Tort Liability Under Dutch law,
there can be liability if one has committed a tort (onrechtmatige daad)
against another person. Although there is no clear definition of "tort" under
Dutch law, breach of a duty of care towards a third party is generally
considered to be a tort. Therefore, a Dutch corporation may be held liable by
any third party under the general rule of Dutch laws regarding tort claims. In
exceptional cases, Managing Directors and Supervisory Directors have been
found liable on the basis of tort under Dutch common law, but it is generally
difficult to hold a Managing Director or Supervisory Director personally
liable for a tort claim. Shareholders cannot base a tort claim on any losses
which derive from and coincide with losses we suffered. In such cases, only we
can sue the Managing Directors or Supervisory Directors. Criminal Liability
Under Dutch law, if a legal entity has committed a criminal offense, criminal
proceedings may be instituted against the legal entity itself as well as
against those who gave order to or were in charge of the forbidden act. As a
general rule, it is held that a Managing Director is only criminally liable if
he or she played a reasonably active role in the criminal act. Indemnification
Article 27 of our Articles provides that we shall indemnify every person who
is or was a Managing Director or Supervisory Director against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any threatened pending or completed action, suit or proceeding
as well as against expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement of an action
or proceeding, if such person acted in good faith and in a manner he or she
reasonably could believe to be in or not opposed to our best interests. An
exception is made in respect to any claim, issue or matter as to which such
person shall have been adjudged to be liable for gross negligence or willful
misconduct in the performance of his or her duty to us. Classes of Shares The
authorized classes of our shares consist of Common Shares, Financing
Preference Shares and Preference Shares. No Financing Preference Shares or
Preference Shares have been issued. QIAGEN N.V. | IFRS Annual Report 2023
Overview Management Report Corporate Governance Financial Statements
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Common Shares Common Shares are issued in registered form only. No share
certificates are issued for Common Shares and Common Shares are registered in
either our shareholders register with Equiniti Trust Company, LLC, our
transfer agent and registrar in New York, or our shareholder register with TMF
Fund Services B.V., Westblaak 89, 3012 KG Rotterdam, the Netherlands. The
transfer of registered shares requires a written instrument of transfer and
the written acknowledgment of such transfer by us or the New York Transfer
Agent (in our name). Financing Preference Shares No Financing Preference
Shares are currently issued or outstanding. If issued, Financing Preference
Shares will be issued in registered form only. No share certificates are
issued for Financing Preference Shares. Financing Preference Shares must be
fully paid up upon issue. The preferred dividend rights attached to Financing
Preference Shares are described under "Dividends" below. We have no present
plans to issue any Financing Preference Shares. Preference Shares No
Preference Shares are currently issued or outstanding. If issued, Preference
Shares will be issued in registered form only. No share certificates shall be
issued for Preference Shares. Only 25% of the nominal value thereof is
required to be paid upon subscription for Preference Shares. The obligatory
payable part of the nominal amount (or the call) must be equal for each
Preference Share. The Managing Board may, subject to the approval of the
Supervisory Board, resolve on which day and up to which amount a further call
must be paid on Preference Shares which have not yet been paid up in full. The
preferred dividend rights attached to Preference Shares are described under
"Dividends" below. Pursuant to our Articles, QIAGEN's Supervisory Board is
entitled, if and in so far as the Supervisory Board has been designated by our
General Meeting, to resolve to issue Preference Shares in the event that (i)
any person who alone or with one or more other persons, directly or
indirectly, have acquired or given notice of an intent to acquire (beneficial)
ownership of an equity stake which in aggregate equals 20% or more of our
share capital then outstanding, or (ii) the Supervisory Board has determined a
person to be an "adverse person." For this purpose, an "adverse person" is
generally any (legal) person, alone or together with affiliates or associates,
with an equity stake in our Company which the Supervisory Board considers to
be substantial, which must be at least 10% of the issued share capital, and
where the Supervisory Board is of the opinion that this (legal) person has
engaged in an acquisition that is intended to cause or pressure QIAGEN to
enter into transactions intended to provide such person with short-term
financial gain under circumstances that would not be in the interest of QIAGEN
and our shareholders or whose ownership is reasonably likely to cause a
material adverse impact on our business prospects. Currently the Supervisory
Board has not been designated to issue Preference Shares. On August 2, 2004,
we entered into an agreement (Option Agreement) with Stichting Preferente
Aandelen QIAGEN (SPAQ) which was most recently amended on June 4, 2012.
Pursuant to the Option Agreement, SPAQ was granted an option to acquire such
number of Preference Shares as are equal to the total number of all
outstanding Common Shares minus one in our share capital at the time of the
relevant exercise of the right. SPAQ may exercise its right to acquire the
Preference Shares in all situations that it believes that our interest or our
stakeholders' interests are at risk (which situations include but are not
limited to (i) receipt of a notification from the Managing Board that a
takeover is imminent, and (ii) receipt of a notification from the Managing
Board that one or more activist shareholders take a position that is not in
the interest of QIAGEN, our shareholders or our other stakeholders), provided
that the conditions mentioned in the previous paragraph have been met. Due to
the implementation of the EC Directive on Takeover Bids in Dutch legislation,
the exercise of the option to acquire Preference Shares by SPAQ and the
subsequent issuance of Preference Shares to SPAQ needs to be done with due
observance and in consideration of the restrictions imposed by the Public
Offer Rules. SPAQ was incorporated on August 2, 2004. Its principal office is
located at Hulsterweg 82, 5912 PL Venlo, The Netherlands. Its statutory
objectives are to protect our interests and our enterprise and the enterprises
of companies which QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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are linked to us. SPAQ shall attempt to accomplish its objectives by way of
acquiring Preference Shares in the share capital of QIAGEN and to exercise the
voting rights in our interests and the interests of our stakeholders. The
board of SPAQ shall consist of at least two directors. Upon incorporation of
SPAQ, two members were appointed to the board of SPAQ who resigned in 2019. In
December 2019, two new members were appointed. After serving on the board of
SPAQ for four years, these board members were reappointed at the end of 2023
for an additional two year term each. The board of SPAQ may appoint additional
members to the board. Board resolutions will be adopted by unanimity of the
votes cast. SPAQ will be represented either by its board or by the chairman of
its board. Issuance of shares Under our Articles, the Supervisory Board has
the power to issue Shares and determine the issue price and further conditions
of such issuance, provided that it has been authorized by the General Meeting
to do so. The authorization referred to in the preceding sentence can only be
granted for a specific period of time not exceeding five years and may be
extended in the same manner. If there is no designation of the Supervisory
Board to issue shares in force, the General Meeting shall have authority to
issue shares, but only upon the proposal of, and in accordance with the issue
price and further conditions as determined by, the Supervisory Board. For
these purposes, issuances of shares include the granting of rights to
subscribe for shares, such as options and warrants, but not the issue of
shares upon exercise of such rights. On June 22, 2023, the General Meeting
resolved to authorize the Supervisory Board until December 22, 2024, to issue
Common Shares and Financing Preference Shares or grant rights to subscribe for
such shares, the aggregate par value of which shall be equal to the aggregate
par value of 50% of the shares issued and outstanding in the capital of the
Company as of December 31, 2022, as included in the Annual Accounts for
Calendar Year 2022. Pre-emptive Rights Under our Articles, existing holders of
Common Shares will have pre-emptive rights in respect of future issuances of
Common Shares in proportion to the number of Common Shares held by them,
unless limited or excluded as described below. Holders of Common Shares shall
not have pre-emptive rights in respect of future issuances of Financing
Preference Shares or Preference Shares. Holders of Financing Preference Shares
and Preference Shares shall not have pre-emptive rights in respect of any
future issuances of share capital. Pre- emptive rights do not apply with
respect to shares issued against contributions other than in cash or shares
issued to employees of the Company or one of our group companies. Under our
Articles, the Supervisory Board has the power to limit or exclude any
pre-emptive rights to which shareholders may be entitled, provided that it has
been authorized by the General Meeting to do so. The authority of the
Supervisory Board to limit or exclude pre-emptive rights can only be exercised
if at that time the Supervisory Board's authority to issue shares is in full
force and effect. The authority to limit or exclude pre-emptive rights may be
extended in the same manner as the authority to issue shares. If there is no
designation of the Supervisory Board to limit or exclude pre-emptive rights in
force, the General Meeting shall have authority to limit or exclude such
pre-emptive rights, but only upon the proposal of the Supervisory Board.
Resolutions of the General Meeting (i) to limit or exclude pre-emptive rights
or (ii) to designate the Supervisory Board as the corporate body that has
authority to limit or exclude pre-emptive rights, require a majority of at
least two-thirds of the votes cast in a meeting of shareholders if less than
50% of the issued share capital is present or represented. For these purposes,
issuances of shares include the granting of rights to subscribe for shares,
such as options and warrants, but not the issue of shares upon exercise of
such rights. On June 22, 2023, the General Meeting resolved to grant the
authority to restrict or exclude pre-emptive rights until December 22, 2024.
However, the General Meeting has limited this authority in a way that the
Supervisory Board can only exclude or limit the pre-emptive rights in relation
to no more than 10% of the aggregate par value of all shares issued and
outstanding in the capital of the Company as of December 31, 2022. Acquisition
of Our Own Shares We may acquire our own shares, subject to certain provisions
of Dutch law and our Articles, if (i) shareholders' equity less the payment
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acquisition does not fall below the sum of paid-up and called-up capital and
any reserves required by Dutch law or the Articles, and (ii) we and our
subsidiaries would not thereafter hold shares with an aggregate nominal value
exceeding half of our issued share capital. Shares that we hold in our own
capital or shares held by one of our subsidiaries may not be voted. The
Managing Board, subject to the approval of the Supervisory Board, may effect
the acquisition of shares in our own capital. Our acquisitions of shares in
our own capital may only take place if the General Meeting has granted to the
Managing Board the authority to effect such acquisitions. Such authority may
apply for a maximum period of eighteen months and must specify the number of
shares that may be acquired, the manner in which shares may be acquired and
the price limits within which shares may be acquired. Dutch corporate law
allows for the authorization of the Managing Board to purchase a number of
shares equal to up to 50% of the Company's issued share capital on the date of
the acquisition. On June 22, 2023, the General Meeting resolved to extend the
authorization of the Managing Board in such manner that the Managing Board
may, for an 18-month period beginning June 22, 2023, until December 24, 2024,
cause us to acquire shares in our own share capital, up to 10% of the
Company's issued share capital on the date of the acquisition and provided
that the Company or any subsidiary shall not hold more than 10% of the
Company's issued share capital at any time, without limitation at a price
between one euro cent (euro 0.01) and one hundred ten percent (110%) of the
higher of the average closing price of our shares on the New York Stock
Exchange or, as applicable, the Frankfurt Stock Exchange, for the five trading
days prior to the day of purchase, or, with respect to Preference and Finance
Preference shares, against a price between one euro cent (euro 0.01) and three
times the issuance price and in accordance with applicable provisions of Dutch
law and our Articles. Synthetic Share Repurchase During the Annual General
Meeting held on June 22, 2023, the General Meeting approved a proposal to
allow the Managing Board, subject to the approval of the Supervisory Board,
to, during a period of 18 months from the date of the Annual General Meeting,
i.e. until December 22, 2024, adjust the Company's capital structure and to
repay capital to our shareholders via a synthetic share repurchase within
predetermined boundaries, and with the key consequences of such synthetic
share repurchase being that: (i) an amount to be determined by the Managing
Board, subject to the approval of the Supervisory Board, of up to a maximum
$300 million would be paid to our shareholders as a capital repayment, and
(ii) the number of outstanding Common Shares would at least be decreased by a
number of Common Shares approximately equal to the number of Common Shares
that the Company, theoretically, could have repurchased for the aggregate
amount repaid to our shareholders. For more information on the synthetic share
repurchase, we refer to the explanatory notes to agenda item 14 in the proxy
statement relating to the Annual General Meeting of June 22, 2023 as well as
our press release of January 18, 2024. Capital Reduction Subject to the
provisions of Dutch law and our Articles, the General Meeting may, upon the
proposal of the Supervisory Board, resolve to reduce the issued share capital
by (i) canceling shares, or (ii) reducing the nominal value of shares through
an amendment of our Articles. Cancellation with repayment of shares or partial
repayment on shares or release from the obligation to pay up may also be made
or given exclusively with respect to Common Shares, Financing Preference
Shares or Preference Shares. Cancellation of Fractional Common Shares Prior to
the synthetic share repurchase described above, the Company held fractional
Common Shares and as part of the synthetic share repurchase, the Company
acquired additional fractional Common Shares. In an effort to, as much as
possible, clean up the composition of the Company's share capital, the General
Meeting of June 22, 2023 resolved to reduce the issued share capital of the
Company by cancelling all fractional Common Shares (i) the Company holds in
its own capital at the date of the 2023 Annual General Meeting, or will hold
in its own share capital following execution of certain steps making- whole
the then issued and outstanding fractional Common Shares, and (ii) the Company
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repurchase described above and the execution of certain steps making-whole the
then issued and outstanding fractional Common Shares. The cancellation may be
implemented in one or more tranches, at the discretion of the Managing Board.
Financial Year, Annual Accounts and Independent Registered Public Accounting
Firm Our financial year coincides with the calendar year. Dutch law requires
that within four months after the end of the financial year, the Managing
Board must make available a report with respect to such financial year,
including our financial statements for such year prepared under International
Financial Reporting Standards and accompanied by a report of an Independent
Registered Public Accounting Firm. The annual report is submitted to the
Annual General Meeting for adoption. The General Meeting appoints the external
auditor of our statutory financial statements prepared in accordance with
International Financial Reporting Standards and to issue a report thereon. On
June 22, 2023, our shareholders appointed KPMG Accountants N.V. to serve as
our external auditor for our statutory consolidated financial statements
prepared in accordance with International Financial Reporting Standards for
the year ending December 31, 2023. Dividends and Other Distributions Subject
to certain exceptions, dividends may only be paid out of profits as shown in
our annual financial statements as adopted by the General Meeting.
Distributions may not be made if the distribution would reduce shareholders'
equity below the sum of the paid-up and called-up capital and called-up and
any reserves required by Dutch law or our Articles. Out of profits, dividends
must first be paid on any outstanding Preference Shares (the Preference Share
Dividend) in a percentage (the Preference Share Dividend Percentage) of the
obligatory call amount paid up on such shares at the beginning of the
financial year in respect of which the distribution is made. The Preference
Share Dividend Percentage is equal to the average main refinancing rates
during the financial year for which the distribution is made. Average main
refinancing rate shall be understood to mean the average value on each
individual day during the financial year for which the distribution is made of
the main refinancing rates prevailing on such day. The main refinancing rate
shall be understood to mean the rate of the Main Refinancing Operation as
determined and published from time to time by the European Central Bank. If
and to the extent that profits are not sufficient to pay the Preference Share
Dividend in full, the deficit shall be paid out of the reserves, with the
exception of any reserve, which was formed as share premium reserve upon the
issue of Financing Preference Shares. If in any financial year the profit is
not sufficient to make the distributions referred to above and if no
distribution or only a partial distribution is made from the reserves referred
to above, such that the deficit is not fully made good, no further
distributions will be made as described below until the deficit has been made
good. Out of profits remaining after payment of any dividends on Preference
Shares, the Supervisory Board shall determine such amounts as shall be kept in
reserve as determined by the Supervisory Board. Out of any remaining profits
not allocated to reserve, a dividend (the Financing Preference Share Dividend)
shall be paid on the Financing Preference Shares equal to a percentage (the
Financing Preference Share Dividend Percentage) over the nominal value of the
Financing Preference Shares, increased by the amount of share premium that was
paid upon the first issue of Financing Preference Shares. The Financing
Preference Shares Dividend Percentage which percentage is related to a fixed
average effective yield on the prime interest rate on corporate loans in the
United States as quoted in the Wall Street Journal as set forth in article
40.4 of our Articles. If and to the extent that the profits are not sufficient
to pay the Financing Preference Share Dividend in full, the deficit may be
paid out of the reserves if the Managing Board so decides with the approval of
the Supervisory Board, with the exception of the reserve which was formed as
share premium upon the issue of Financing Preference Shares. Insofar as the
profits have not been distributed or allocated to reserves as specified above,
the General Meeting may act to allocate such profits, provided that no further
dividends will be distributed on the Preference Shares or the Financing
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The Managing Board may, with due observance of Article 2:105 of the Dutch
Civil Code and with the approval of the Supervisory Board, distribute an
interim dividend, if and to the extent that the profits so permit. Interim
dividends may be distributed on one class of shares only. The General Meeting
may resolve, on the proposal of the Supervisory Board, to distribute dividends
or reserves, wholly or partially, in the form of shares. Distributions as
described above are payable as from a date to be determined by the Supervisory
Board. Distributions will be made payable at an address or addresses in the
Netherlands to be determined by the Supervisory Board, as well as at least one
address in each country where the shares are listed or quoted for trading. The
Supervisory Board may determine the method of payment of cash distributions.
Distributions in cash that have not been collected within five years and two
days after they have become due and payable shall revert to QIAGEN. Dutch law
provides that the declaration of dividends out of the profits that are at the
free disposal of the General Meeting is the exclusive right of the General
Meeting. This is different from the corporate law of most jurisdictions in the
United States, which permits a corporation's board of directors to declare
dividends. Shareholder Meetings, Voting Rights and Other Shareholder Rights
The Annual General Meeting is required to be held within six months after the
end of each financial year for the purpose of, among other things, adopting
the annual accounts and filling of any vacancies on the Managing Board and
Supervisory Board. Extraordinary General Meetings are held as often as deemed
necessary by the Managing Board or Supervisory Board, or upon a request to the
Managing Board or Supervisory Board by one or more shareholders and other
persons entitled to attend meetings jointly representing (i) at least 40% of
our issued share capital, with those persons jointly being authorized to
convene such meeting themselves in case the Boards do not timely comply with
the request, in accordance with the Articles of Association, or (ii) at least
10% of our issued share capital, with those persons jointly being authorized
to convene such meeting themselves in case the Boards do not timely comply
with the request, but only if and to the extent authorized thereto by a
competent Dutch court in accordance with the laws of the Netherlands. General
Meetings are held in Amsterdam, Haarlemmermeer (Schiphol Airport), Arnhem,
Maastricht, Rotterdam, Venlo or The Hague. The notice convening a General
Meeting must be given in such manner as shall be authorized by law including
but not limited to an announcement published by electronic means no later than
the forty-second day prior to day of the general meeting. The notice will
contain the agenda for the meeting or the notice is published along with the
agenda. The agenda shall contain such subjects to be considered at the General
Meeting, as the persons convening or requesting the meeting shall decide.
Under Dutch law, holders of shares representing solely or jointly at least
three hundredth part of the issued share capital may request QIAGEN not later
than on the sixtieth day prior to the day of the General Meeting, to include
certain subjects in the notice convening a meeting. No valid resolutions can
be adopted at a General Meeting in respect of subjects which are not mentioned
in the agenda. Dutch corporate law sets a mandatory (participation and voting)
record date for Dutch listed companies fixed at the twenty-eighth day prior to
the day of the shareholders' meeting. Shareholders registered at such record
date are entitled to attend and exercise their rights as shareholders at the
General Meeting, regardless of a sale of shares after the record date. General
Meetings are presided over by the Chairman of the Supervisory Board or, in his
absence, by any person nominated by the Supervisory Board. At the General
Meeting, each share shall confer the right to cast one vote, unless otherwise
provided by law or our Articles. No votes may be cast in respect of shares
that we or our subsidiaries hold, or by usufructuaries and pledgees. All
shareholders and other persons entitled to vote at General Meetings are
entitled to attend General Meetings, to address the meeting and to vote. They
must notify the Managing Board in writing of their intention to be QIAGEN N.V.
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present or represented not later than on the third day prior to the day of the
meeting, unless the Managing Board permits notification within a shorter
period of time prior to any such meeting. Subject to certain exceptions,
resolutions may be passed by a simple majority of the votes cast. Except for
resolutions to be adopted by the meeting of holders of Preference Shares, our
Articles do not allow the adoption of shareholders resolutions by written
consent (or otherwise without holding a meeting). A resolution of the General
Meeting to amend our Articles, dissolve QIAGEN, issue shares or grant rights
to subscribe for shares or limit or exclude any pre- emptive rights to which
shareholders shall be entitled is valid only if proposed to the General
Meeting by the Supervisory Board. A resolution of the General Meeting to amend
our Articles is further only valid if the complete proposal has been made
available for inspection by the shareholders and the other persons entitled to
attend General Meetings at our offices as from the day of notice convening
such meeting until the end of the meeting. A resolution to amend our Articles
to change the rights attached to the shares of a specific class requires the
approval of the relevant class meeting. Resolutions of the General Meeting in
a meeting that has not been convened by the Managing Board and/or the
Supervisory Board, or resolutions included on the agenda for the meeting at
the request of shareholders, will be valid only if adopted with a majority of
two-thirds of votes cast representing more than half the issued share capital,
unless our Articles require a greater majority or quorum. A resolution of the
General Meeting to approve a legal merger or the sale of all or substantially
all of our assets is valid only if adopted by a vote of at least two-thirds of
the issued share capital, unless proposed by the Supervisory Board, in which
case a simple majority of the votes cast shall be sufficient. A shareholder
shall upon request be provided, free of charge, with written evidence of the
contents of the share register with regard to the shares registered in its
name. Furthermore, any shareholder shall, upon written request, have the
right, during normal business hours, to inspect our share register and a list
of our shareholders and their addresses and shareholdings, and to make copies
or extracts therefrom. Such request must be directed to our Managing Directors
at our registered office in the Netherlands or at our principal place of
business. Financial records and other company documents (other than those made
public) are not available in this manner for shareholder review, but an
extract of the minutes of the General Meeting shall be made available.
According to Dutch law and our Articles, certain resolutions of the Managing
Board regarding a significant change in the identity or nature of us or our
enterprise are subject to the approval of the General Meeting. The following
resolutions of the Managing Board require the approval of the General Meeting
in any event: (1) the transfer of our enterprise or practically our entire
enterprise to a third party; (2) the entry into or termination of a long-term
cooperation by us or one of our subsidiaries (dochtermaatschappijen) with
another legal person or partnership or as a fully liable general partner of a
limited partnership or a general partnership, if such cooperation or
termination is of a far-reaching significance for us; and (3) the acquisition
or divestment by us or one of our subsidiaries (dochtermaatschappijen) of a
participating interest in the capital of a company with a value of at least
one-third of the sum of our assets according to our consolidated balance sheet
and explanatory notes in our last adopted annual accounts. No Derivative
Actions; Right to Request Independent Inquiry Dutch law does not afford
shareholders the right to institute actions on behalf of us or in our
interest. Shareholders, acting alone or together, holding at least one-tenth
of our issued capital, or shares representing an aggregate nominal value of
EUR 225,000 may inform the Managing Board and the Supervisory Board of their
objections as to our policy or the course of our affairs and, within a
reasonable time thereafter, may request the Enterprise Chamber of the Court of
Appeal in Amsterdam to order an inquiry into the policy and the course of our
affairs by independent investigators. If such an inquiry is ordered and the
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investigators conclude that there has been mismanagement, the shareholders can
request the Enterprise Chamber to order certain measures such as a suspension
or annulment of resolutions. Dissolution and Liquidation The General Meeting
may resolve to dissolve QIAGEN upon the proposal of the Supervisory Board. If
QIAGEN is dissolved, the liquidation shall be carried out by the person
designated for that purpose by the General Meeting, under the supervision of
the Supervisory Board. The General Meeting shall upon the proposal of the
Supervisory Board determine the remuneration payable to the liquidators and to
the person responsible for supervising the liquidation. During the liquidation
process, the provisions of our Articles will remain applicable to the extent
possible. In the event of our dissolution and liquidation, the assets
remaining after payment of all debts and liquidation expenses will be
distributed among registered holders of Common Shares in proportion to the
nominal value of their Common Shares, subject to liquidation preference rights
of holders of Preference Shares and Financing Preference Shares, if any.
Restrictions on Transfer of Preference Shares The Supervisory Board, upon
application in writing, must approve each transfer of Preference Shares. If
approval is refused, the Supervisory Board will designate prospective
purchasers willing and able to purchase the shares, otherwise the transfer
will be deemed approved. Limitations in our Articles on Rights to Own
Securities Other than with respect to usufructuaries and pledgees who have no
voting rights, our Articles do not impose limitations on rights to own our
securities including the rights of non-resident or foreign shareholders to
hold or exercise voting rights on the securities imposed by foreign law or by
the charter or other constituent document of the Company or state. Provisions
which May Defer or Prevent a Change in Control The Option Agreement and our
Articles could, under certain circumstances, prevent a third party from
obtaining a majority of the voting control of our shares by issuing Preference
Shares. Under the Option Agreement, SPAQ could acquire Preference Shares
subject to the provisions referred to under "Preference Shares." If SPAQ
acquires the Preference Shares, the bidder may withdraw its bid or enter into
negotiations with the Managing Board and/or Supervisory Board and agree on a
higher bid price for our shares. Shareholders who obtain control of a company
are obliged to make a mandatory offer to all other shareholders. The threshold
for a mandatory offer is set at the ability to exercise 30% of the voting
rights at the general meeting of shareholders in a Dutch public limited
company (naamloze vennootschap) whose securities are admitted to trading on a
regulated market in the EU, such as QIAGEN. Ownership Threshold Requiring
Disclosure Our Articles do not provide an ownership threshold above which
ownership must be disclosed. However, there are statutory requirements to
disclose share ownership above certain thresholds under Dutch law - see
"Obligation of Shareholders to Disclose Major Holdings." Obligation of
Shareholders to Disclose Major Holdings Holders of our shares or rights to
acquire shares (which include options and convertible bonds - see also below)
may be subject to notification obligations under the Dutch Financial Markets
Supervision Act (FMSA). Pursuant to the FMSA, any person who, directly or
indirectly, acquires or disposes of an interest (including a potential
interest, such as options and convertible bonds) in our issued share capital
or voting rights must notify the Netherlands Authority for the Financial
Markets (AFM) without delay, if as a result of such acquisition or disposal,
the percentage of capital interest or voting rights held by such person in
QIAGEN reaches, exceeds or falls below any of the following thresholds: 3%,
5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%. The notifications
should be made electronically through the notification system of the AFM.
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A notification requirement also applies if a person's capital interest or
voting rights reaches, exceeds or falls below the above-mentioned thresholds
as a result of a change in our total issued share capital or voting rights.
Such notification has to be made no later than the fourth trading day after
the AFM has published our notification as described below. Under the FMSA, we
are required to notify the AFM without delay of the changes to our total
issued share capital or voting rights if our issued share capital or voting
rights changes by 1% or more since our previous notification. We must
furthermore quarterly notify the AFM within eight days after the end of the
relevant quarter, in the event our issued share capital or voting rights
changed by less than 1% in that relevant quarter since our previous
notification. Furthermore, each person who is or ought to be aware that, as a
result of the exchange of certain financial instruments, such as options for
shares, his actual capital or voting interest in QIAGEN, reaches, exceeds or
falls below any of the following thresholds: 3%, 5%, 10%, 15%, 20%, 25%, 30%,
40%, 50%, 60%, 75% and 95%, vis-a-vis his most recent notification to the AFM,
must give notice to the AFM no later than the fourth trading day after he
became or ought to be aware of this change. Controlled entities, within the
meaning of the FMSA, do not have notification obligations under the FMSA, as
their direct and indirect interests are attributed to their (ultimate) parent.
Any person may qualify as a parent for purposes of the FMSA, including an
individual. A person who has a 3% or larger interest in our share capital or
voting rights and who ceases to be a controlled entity for these purposes must
notify the AFM without delay. As of the date of that notification, all
notification obligations under the FMSA will become applicable to that entity.
For the purpose of calculating the percentage of capital interest or voting
rights, the following interests must, inter alia, be taken into account: (i)
our shares or voting rights on our shares directly held (or acquired or
disposed of) by a person, (ii) our shares or voting rights on our shares held
(or acquired or disposed of) by such person's controlled entity, or by a third
party for such person's account or by a third party with whom such person has
concluded an oral or written voting agreement (including a discretionary power
of attorney), and (iii) our shares or voting rights on our shares which such
person, or any subsidiary or third party referred to above, may acquire
pursuant to any option or other right held by such person (or acquired or
disposed of, including, but not limited to, on the basis of convertible
bonds). Special rules apply with respect to the attribution of our shares or
voting rights on our shares which are part of the property of a partnership or
other community of property. A holder of a pledge or right of usufruct
(vruchtgebruik) in respect of our shares can also be subject to the
notification obligations of the FMSA, if such person has, or can acquire, the
right to vote on our shares or, in the case of depository receipts, our
underlying shares. The acquisition of (conditional) voting rights by a pledgee
or usufructuary may also trigger the notification obligations as if the
pledgee or beneficial owner were the legal holder of our shares or voting
rights on our shares. A holding in certain cash settled derivatives (such as
cash settled call options and total equity return swaps) referencing to our
shares should also be taken into account for the purpose of calculating the
percentage of capital interest. Gross short positions in our shares must also
be notified to the AFM. For these gross short positions, the same thresholds
apply as for notifying an actual or potential interest in our issued share
capital and/or voting rights as referred to above, and without any set-off
against long positions. In addition, pursuant to Regulation (EU) No 236/2012,
each person holding a net short position amounting to 0.2% of our issued share
capital is required to report such position to the AFM. Each subsequent
increase of this position by 0.1% above 0.2% will also need to be reported.
Each net short position equal to 0.5% of our issued share capital and any
subsequent increase of that position by 0.1% will be made public via the AFM
short selling register. To calculate whether a natural person or legal person
has a net short position, their short positions and long positions must be
set-off. A short transaction in a share can only be contracted if a reasonable
case can be made that the shares sold can actually be delivered, which
requires confirmation of a third party that the shares have been located.
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The AFM does not issue separate public announcements of the above
notifications. However, it does keep a public register of all notifications
made pursuant to the above disclosure obligations under the FMSA on its
website www.afm.nl. Third parties can request to be notified automatically by
e-mail of changes to the public register in relation to a particular company's
shares or a particular notifying party. Non-compliance with the notification
obligations under the FMSA may lead to criminal fines, administrative fines,
imprisonment or other sanctions. In addition, non-compliance with the
shareholding disclosure obligations under the FMSA may lead to civil
sanctions, including suspension of the voting rights relating to our shares
held by the offender for a period of not more than three years and a
prohibition applicable to the offender to acquire any of our shares or voting
rights on our shares for a period of up to five years. Management
Notifications Pursuant to the FMSA, each Managing Director and each
Supervisory Director must notify the AFM: (a) within two weeks after his or
her appointment of the number of our shares or rights to acquire shares he or
she holds and the number of votes he or she is entitled to cast in respect to
our issued share capital, and (b) subsequently, each change in the number or
our shares or rights to acquire shares such member holds and of each change in
the number of votes he or she is entitled to cast in respect of our issued
share capital, immediately after the relevant change. If a Managing Director
or Supervisory Director has notified the AFM of a change in shareholding under
the FMSA as described above under "Obligation of Shareholders to Disclose
Major Holdings," such notification is sufficient for the purposes as described
in this paragraph. Furthermore, pursuant to European Union Regulation (EU) No
596/2014 (the Market Abuse Regulation) and the regulations promulgated
thereunder, any Managing Director and Supervisory Director, as well as any
other person discharging managerial responsibilities in respect of QIAGEN who
has regular access to inside information relating directly or indirectly to
QIAGEN and power to take managerial decisions affecting future developments
and business prospects of QIAGEN, must notify the AFM and QIAGEN by means of a
standard form of any transactions conducted for his or her own account
relating to the shares or debt instruments of QIAGEN or to derivatives or
other financial instruments linked thereto. In addition, pursuant to the
Market Abuse Regulation, certain persons who are closely associated with
Managing Directors and Supervisory Directors or any of the other persons as
described above, are required to notify the AFM and QIAGEN of any transactions
conducted for their own account relating to the shares or debt instruments of
QIAGEN or to derivatives or other financial instruments linked thereto. The
Market Abuse Regulation covers, inter alia, the following categories of
persons: (i) the spouse or any partner considered by national law as
equivalent to the spouse; (ii) dependent children; (iii) other relatives who
have shared the same household for at least one year at the relevant
transaction date; and (iv) any legal person, trust or partnership whose, among
other things, managerial responsibilities are discharged by a person referred
to under (i) to (iii) above or by the relevant Managing Directors and
Supervisory Directors or other person discharging the managerial responsibilitie
s in respect of QIAGEN as described above. The notifications pursuant to the
Market Abuse Regulation described above must be made to the AFM no later than
the third business day following the relevant transaction date. Under certain
circumstances, these notifications may be postponed until all transactions
within a calendar year have reached a total amount of 5,000 (calculated
without netting). Any subsequent transaction must be notified as set forth
above. If a Managing Director or Supervisory Director has notified a change in
the number of our shares or options to acquire shares such member holds or a
change in the number of votes he or she is entitled to cast to the AFM under
the FMSA as described in the first paragraph above, such notification - but
only to the extent there is an overlap with the notifications obligations
under the Market Abuse Regulation - is sufficient for the purposes of the
Market Abuse Regulation as described in this paragraph. QIAGEN N.V. | IFRS
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Taxation The following is a general summary of certain material United States
federal income tax consequences to holders of our Common Shares who are "U.S.
Holders" (as such term is defined below) and certain material Netherlands tax
consequences to holders of our Common Shares who are "non-resident
Shareholders" or "Shareholders" (as each term is defined below). This summary
does not discuss every aspect of such taxation that may be relevant to such
holders. Therefore, all prospective purchasers of our Common Shares described
above are advised to consult their own tax advisors with respect to the United
States federal, state and local tax consequences, as well as the Netherlands
tax consequences, of the ownership of our Common Shares. The statements of the
Netherlands and United States tax laws set out below are based on the laws in
force as of the date of this Annual Report on Form 20-F, and as a consequence
are subject to any changes in United States or the Netherlands law, or in the
taxation conventions concluded by the United States and the Netherlands,
occurring after such date. Tax considerations associated with currently
enacted laws which are not in force as of this date have not been addressed in
this description. Netherlands Tax Considerations The following describes the
material tax consequences under Netherlands law of an investment in our Common
Shares. Such description is based on current understanding of Netherlands tax
law currently in force as interpreted under officially published case law and
in published policy, and is limited to the tax implications for an owner of
our Common Shares who is not, or is not deemed to be, a resident of the
Netherlands for purposes of the relevant tax laws (a "non-resident
Shareholder" or "Shareholder"). Dividend Withholding Tax General Upon
distribution of dividends, we are obligated to withhold 15% dividend tax at
source and to pay the amount withheld to the Netherlands taxing authorities.
The term "dividends" means income from shares or other rights participating in
profits, as well as income from other corporate rights that is subjected to
the same taxation treatment as income from shares by the laws of the
Netherlands. Dividends include dividends in cash or in kind, constructive
dividends, certain repayments of capital qualified as dividends, interest on
loans that are treated as equity instruments for Netherlands corporate income
tax purposes and liquidation proceeds in excess of, for Netherlands tax
purposes, recognized paid-in capital. Stock dividends are also subject to
withholding tax, unless derived from our paid-in share premium that is
recognized as equity for Netherlands tax purposes. No dividend withholding tax
should apply on the proceeds resulting from the sale or disposition of our
Common Shares to persons other than QIAGEN and our affiliates. A disposition
of our Common Shares to QIAGEN or to our affiliates should in general be
subject to withholding tax. A domestic exemption from Netherlands dividend
withholding tax may apply when dividends are paid to a corporate Shareholder
that owns 5% or more of the nominal paid-up share capital and qualifies as a
beneficial owner and is solely resident in an EU/EEA Member State or in a
country with which the Netherlands has concluded a tax convention that
includes a dividend article. This general exemption does not apply to abusive
structures. A structure is deemed abusive if a corporate Shareholder owns our
Common Shares with the main purpose or one of the main purposes to avoid tax
for another person and the structure is considered artificial (i.e., not put
into place for valid commercial reasons that reflect economic reality). This
domestic exemption may under conditions further not apply in case of hybrid
mismatches. A corporate Shareholder may also be eligible for relief of
Netherlands dividend withholding tax under Netherlands tax law, or under a tax
convention that is in force between the country of residence of the
Shareholder and the Netherlands. Specific for U.S. Shareholders The regular
15% dividend withholding tax is withheld by us on dividends we pay to a
resident of the United States. For a corporate U.S. Shareholder that cannot
benefit from the Dutch domestic exemption (as explained above), QIAGEN N.V. |
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withholding tax on dividends may still be reduced to 5% or 0% if the recipient
is entitled to benefits under the Tax Convention between the Netherlands and
the United States (the Convention), and the relevant specific conditions are
met. Dividends we pay to U.S. pension funds and U.S. tax-exempt organizations
may be eligible for an exemption from dividend withholding tax under the
Convention. Dividend Stripping A refund, reduction, exemption, or credit of
Netherlands dividend withholding tax on the basis of Netherlands tax law or on
the basis of a tax convention between the Netherlands and another state, will
only be granted if the dividends are paid to the beneficial owner
("uiteindelijk gerechtigde") of the dividends. A recipient of a dividend is
amongst others not considered to be the beneficial owner of a dividend in an
event of "dividend stripping." In general terms, "dividend stripping" can be
described as the situation in which a foreign or domestic person (usually, but
not necessarily, the original shareholder) has transferred in return for a
consideration its shares or its entitlement to the dividend distributions to a
party that has a more favorable right to a refund or reduction of Netherlands
dividend withholding tax than the foreign or domestic person. In these
situations, the foreign or domestic person (usually the original shareholder)
avoids Netherlands dividend withholding tax while retaining an interest in the
shares and the dividend distributions, by transferring its shares or its
entitlement to the dividend distributions in exchange for a consideration.
Income Tax and Corporate Income Tax General A non-resident Shareholder will
not be subject to Netherlands income tax or corporate income tax with respect
to dividends we distribute on our Common Shares or with respect to capital
gains derived from the sale or disposition of our Common Shares, provided
that: a. the non-resident Shareholder does not carry on or have an interest in
a business in the Netherlands through a permanent establishment or a permanent
representative to which or to whom the Common Shares are attributable or
deemed to be attributable; b. the non-resident Shareholder does not have a
direct or indirect substantial or deemed substantial interest ("aanmerkelijk
belang," as defined in the Netherlands tax law) in our share capital or, in
case of an individual, such a substantial interest, such interest is a
"business asset," or, in case of a corporate Shareholder, the arrangement or a
series of arrangements are not put in place with the main purpose or one of
the main purposes to avoid Netherlands income tax for another person or cannot
be considered artificial. An arrangement or series of arrangements are
considered artificial to the extent not put in place for valid commercial
reasons that reflect economic reality; and c. the non-resident Shareholder is
not entitled to a share in the profits of an enterprise, to which our Common
Shares are attributable and that is effectively managed in the Netherlands,
other than by way of securities or through an employment contract. In general
terms, a substantial interest ("aanmerkelijk belang") in our share capital
does not exist if the Shareholder (individuals as well as corporations), alone
or together with his partner, does not own, directly or indirectly, 5% or more
of the issued capital of (a class of) our shares, and does not have the right
to acquire 5% or more of the issued capital of (a class of) our shares and
does not have the right to share in our profit or liquidation revenue
amounting to 5% or more of the annual profits or liquidation revenue. There is
no all-encompassing definition of the term "business asset"; whether this
determination can be made in general depends on the facts presented and in
particular on the activities performed by the Shareholder. If the Shareholder
materially conducts a business activity, while the key motive of his
investment in our Shares is not be his earnings out of the investment in our
Shares but our economic activity, an investment in our Shares will generally
be deemed to constitute a business asset, in particular if the Shareholder's
involvement in our business will exceed regular monitoring of his investment
in our Shares. A non-resident Shareholder that holds a substantial interest in
our share capital may be eligible for an exemption or a reduction of
Netherlands income tax or corporate income tax under a tax convention. QIAGEN
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Specific for U.S. Shareholders U.S. Shareholders that do not own a substantial
interest should not be subject to Dutch Personal Income Tax or Dutch Corporate
Income Tax (as explained above). For U.S. Shareholders that do own a
substantial interest, Dutch Personal Income Tax or Dutch Corporate Income Tax
could be due. However, U.S. Shareholders that are entitled to benefits of the
Convention may be eligible for tax relief. Gift and Inheritance Tax A gift or
inheritance of our Common Shares from a non-resident Shareholder should
generally not be subject to a Netherlands gift and inheritance tax, provided
that the Shareholder is not considered a (deemed) resident of the Netherlands.
The Netherlands has concluded a tax convention with the United States based on
which double taxation on inheritances may be avoided if the inheritance is
subject to Netherlands and/or U.S. inheritance tax and the deceased was a
resident of either the Netherlands or the United States. United States Federal
Income Tax Considerations The following summary describes certain U.S. federal
income tax considerations generally applicable to U.S. Holders (as defined
below) of our Common Shares. This summary deals only with our Common Shares
held as capital assets within the meaning of Section 1221 of the Internal
Revenue Code of 1986, as amended (the Code). This summary also does not
address the tax consequences that may be relevant to holders in special tax
situations including, without limitation, dealers in securities; traders that
elect to use a mark-to-market method of accounting; pass-through entities such
as partnerships, S corporations, disregarded entities for U.S. federal income
tax purposes and limited liability companies (and investors therein); holders
that own our Common Shares as part of a "straddle," "hedge," "conversion
transaction," or other integrated investment; banks or other financial
institutions; individual retirement accounts and other tax-deferred accounts;
insurance companies; tax- exempt organizations; U.S. expatriates; holders
whose functional currency is not the U.S. dollar; holders subject to the
alternative minimum tax; holders that acquired our Common Shares in a
compensatory transaction; holders subject to special tax accounting rules as a
result of any item of gross income with respect to the Common Shares being
taken into account in an applicable financial statement; or holders that have
owned or will (directly, indirectly or constructively) own 10% or more of the
total voting power or value of our Common Shares. This summary is based upon
the Code, applicable U.S. Treasury regulations, administrative pronouncements
and judicial decisions, in each case as in effect on the date hereof, all of
which are subject to change (possibly with retroactive effect). No ruling will
be or has been requested from the Internal Revenue Service (IRS) regarding the
tax consequences described herein, and there can be no assurance that the IRS
will agree with the discussion set out below. This summary does not address
any consequences other than U.S. federal income tax consequences (such as the
estate and gift tax, the Medicare tax on net investment income, state and
local tax, or non-U.S. tax). Except as specifically set forth below, this
summary does not discuss applicable tax reporting requirements. As used
herein, the term "U.S. Holder" means a beneficial owner of our Common Shares
that is, for U.S. federal income tax purposes, (i) a citizen or resident of
the United States, (ii) a corporation or other entity taxable as a corporation
created in or organized under the laws of the United States or any state
thereof or therein or the District of Columbia, (iii) an estate the income of
which is subject to U.S. federal income taxation regardless of its source, or
(iv) a trust (a) that is subject to the supervision of a court within the
United States and the control of one or more United States persons as
described in Section 7701(a)(30) of the Code, or (b) that has a valid election
in effect under applicable U.S. Treasury regulations to be treated as a United
States person. If an entity or other arrangement classified as a partnership
for U.S. federal income tax purposes acquires our Common Shares, the tax
treatment of a partner in the partnership generally will depend upon the
status of the partner and the activities of the partnership. Partners of a
partnership considering an investment in our Common Shares should consult
their tax advisors regarding the U.S. federal income tax consequences of
acquiring, owning and disposing our Common Shares. QIAGEN N.V. | IFRS Annual
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Taxation of Dividends Subject to the discussion below under "Passive Foreign
Investment Company Status," the sum of any cash plus the fair market value of
any property that we distribute (before reduction for Netherlands withholding
tax) to a U.S. Holder with respect to our Common Shares generally will be
included in the U.S. Holder's gross income as a dividend, taxable as ordinary
income from foreign sources to the extent of our current or accumulated
earnings and profits (as determined for U.S. federal income tax purposes).
Dividends paid to a non-corporate U.S. Holder by a "qualified foreign
corporation" may be subject to a reduced rate of tax if certain conditions are
met including the following: QIAGEN must not be classified as a "passive
foreign investment company" (PFIC) (discussed below), QIAGEN must be a
"qualified foreign corporation" (as defined below), the U.S. Holder must
satisfy a holding period requirement, and the distribution must not be treated
to the U.S. Holder as "investment income" for purposes of the investment
interest deduction rules. A "qualified foreign corporation" generally includes
a foreign corporation (other than a foreign corporation that is a PFIC with
respect to the relevant U.S. Holder for the taxable year in which the
dividends are paid or for the preceding taxable year) (i) whose Common Shares
are readily tradable on an established securities market in the United States,
or (ii) which is eligible for benefits under a comprehensive U.S. income tax
treaty that includes an exchange of information program and which the U.S.
Treasury Department has determined is satisfactory for these purposes. Our
Common Shares are expected to be readily tradable on the NYSE, an established
securities market. U.S. Holders should consult their own tax advisors
regarding the availability of the reduced tax rate on dividends in light of
their particular circumstances. Dividends on our Common Shares generally will
not be eligible for the dividends received deduction available to corporations
in respect of dividends received from other U.S. corporations. Distributions
in excess of our earnings and profits (as determined for U.S. federal income
tax purposes) will be treated as a non-taxable return of capital to the extent
of the U.S. Holder's adjusted tax basis in our Common Shares and thereafter as
capital gain. However, we do not intend to calculate our earnings and profits
under U.S. federal income tax principles. Therefore, U.S. Holders should
expect that a distribution will generally be treated as a dividend even if
that distribution would otherwise be treated as a non-taxable return of
capital or as capital gain under the rules described above. Foreign Tax Credit
Subject to the PFIC rules discussed below, a U.S. Holder that is subject to
Netherlands withholding tax with respect to dividends paid on the Common
Shares generally will be entitled, at the election of such U.S. Holder, to
receive either a deduction or a credit for such Netherlands withholding tax.
Generally, subject to the limitations described in the next paragraph, a
credit will reduce a U.S. Holder's U.S. federal income tax liability on a
dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder's
income subject to U.S. federal income tax. This election is made on a
year-by-year basis and generally applies to all foreign taxes paid (whether
directly or through withholding) or accrued by a U.S. Holder during a year.
Limitations apply to the foreign tax credit, including the general limitation
that the credit cannot exceed the proportionate share of a U.S. Holder's U.S.
federal income tax liability (determined before application of the foreign tax
credit) that such U.S. Holder's "foreign source" taxable income bears to such
U.S. Holder's worldwide taxable income. In applying this limitation, a U.S.
Holder's various items of income and deduction must be classified, under
complex rules, as either "foreign source" or "U.S. source" and the limitation
is calculated separately for each with respect to specific categories of
income. Generally, dividends paid by a foreign corporation should be treated
as foreign source for this purpose, and gains recognized on the sale of stock
of a foreign corporation by a U.S. Holder should generally be treated as U.S.
source for this purpose, except as otherwise provided in an applicable income
tax treaty or if an election is properly made under the Code. However, the
amount of a distribution with respect to the Common Shares that is treated as
a "dividend" may be lower for U.S. federal income tax purposes than it is for
Netherlands tax purposes, resulting in a reduced foreign tax credit allowance
to a U.S. Holder. QIAGEN N.V. | IFRS Annual Report 2023 Overview Management
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Each U.S. Holder should consult its own U.S. tax advisor regarding the foreign
tax credit rules. Disposition of our Common Shares Subject to the PFIC rules
discussed below, upon the sale or other disposition of our Common Shares, a
U.S. Holder will recognize capital gain or loss for U.S. federal income tax
purposes equal to the difference between the amount realized on the
disposition of our Common Shares and the U.S. Holder's adjusted tax basis in
our Common Shares. Such capital gain or loss generally will be subject to U.S.
federal income tax. In general, capital gains recognized by a non-corporate
U.S. Holder, including an individual, are subject to a lower rate under
current law if such U.S. Holder held shares for more than one year. The
deductibility of capital losses is subject to limitations. Any such gain or
loss generally will be treated as U.S. source income or loss for purposes of
the foreign tax credit. A U.S. Holder's initial tax basis in Common Shares
generally will equal the cost of such shares. Passive Foreign Investment
Company Status We may be classified as a PFIC for U.S. federal income tax
purposes if certain tests are met. We will be a PFIC with respect to a U.S.
Holder if, for any taxable year in which the U.S. Holder held our Common
Shares, either (i) 75% or more of our gross income for the taxable year is
passive income; or (ii) the average value of our assets (during the taxable
year) which produce or are held for the production of passive income is at
least 50% of the average value of all assets for such year. Passive income
means, in general, dividends, interest, royalties, rents (other than rents and
royalties derived in the active conduct of a trade or business and not derived
from a related person), annuities, and gains from assets which would produce
such income other than sales of inventory. Passive assets for this purpose
generally include assets held for the production of passive income.
Accordingly, passive assets generally include any cash, cash equivalents and
cash invested in short-term, interest- bearing debt instruments or bank
deposits that are readily convertible into cash. For the purpose of the PFIC
tests, if a foreign corporation owns at least 25% (by value) of the stock of
another corporation, the foreign corporation is treated as owning its
proportionate share of the assets of the other corporation, and as if it had
received directly its proportionate share of the income of such other
corporation (the "look-through rule"). The effect of the look-through rule
with respect to QIAGEN and our ownership of our subsidiaries is that, for
purposes of the income and assets tests described above, we will be treated as
owning our proportionate share of the assets of our subsidiaries and of
earning our proportionate share of each of our subsidiary's income, if any, so
long as we own, directly or indirectly, at least 25% of the value of the
particular subsidiary's stock. Active business income of our subsidiaries will
be treated as our active business income, rather than as passive income. Based
on our income, assets and activities, we do not believe that we were a PFIC
for our taxable years ended December 31, 2021, December 31, 2022, and December
31, 2023, and do not expect to be a PFIC for the current taxable year. No
assurances can be made, however, that the IRS will not challenge this position
or that we will not subsequently become a PFIC. Following the close of any tax
year, we intend to promptly send a notice to all shareholders of record at any
time during such year, if we determine that we are a PFIC. If we are
considered a PFIC for any taxable year that a U.S. Holder holds our Common
Shares, any gain recognized by the U.S. Holder on a sale or other disposition
of our Common Shares would be allocated pro-rata over the U.S. Holder's
holding period for our Common Shares. The amounts allocated to the taxable
year of the sale or other disposition and to any year before we became a PFIC
would be taxed as ordinary income. The amount allocated to each other taxable
year would be subject to tax at the highest rate in effect for individuals or
corporations, as appropriate, for that taxable year, and an interest charge
would be imposed with respect to any amount allocated to any prior taxable
year that we were a PFIC. Further, if we are a PFIC for any taxable year, to
the extent that any distribution received by a U.S. Holder on our Common
Shares exceeds 125% of the average of the annual distributions on our Common
Shares received during the preceding three years or the U.S. Holder's holding
period, whichever is shorter, such excess amount would be subject to taxation
in the same manner as gain on the sale or other disposition of Common Shares
if we were a PFIC, described above. Certain elections may be available that
would result in alternative treatments (such as mark-to-market treatment) of
our Common Shares. If we are treated as a PFIC with respect to a U.S. Holder
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any taxable year, the U.S. Holder will be deemed to own shares in any of our
subsidiaries that also are PFICs. A timely election to treat us as a qualified
electing fund under the Code would result in an alternative treatment.
However, we do not intend to prepare or provide the information that would
enable U.S. Holders to make a qualified electing fund election. If we are
considered a PFIC, a U.S. Holder also will be subject to annual information
reporting requirements. Prospective purchasers of our Common Shares are urged
to consult their tax advisors regarding the potential application of the PFIC
rules to an investment in the Common Shares. Foreign Currency Issues If
dividends on our Common Shares are paid in euros, the amount of the dividend
distribution included in the income of a U.S. Holder will be the U.S. dollar
value of the payments made in euros, determined at a spot, euro/U.S. dollar
rate applicable to the date such dividend is includible in the income of the
U.S. Holder, regardless of whether the payment is in fact converted into U.S.
dollars. Generally, gain or loss (if any) resulting from currency exchange
fluctuations during the period from the date the dividend is paid to the date
such payment is converted into U.S. dollars will be treated as ordinary income
or loss. Backup Withholding and Information Reporting U.S. backup withholding
and information reporting requirements generally apply to payments made to
non-corporate holders of Common Shares that are paid within the United States
or through certain U.S. related financial intermediaries. Information
reporting will apply to payments of dividends on, and to proceeds from the
disposition of, Common Shares by a paying agent within the United States (or
through certain U.S. related financial intermediaries) to a U.S. Holder, other
than U.S. Holders that are exempt from information reporting and properly
certify their exemption. A paying agent within the United States (or through
certain U.S. related financial intermediaries) will be required to withhold at
the applicable statutory rate, currently 24%, in respect of any payments of
dividends on, and the proceeds from the disposition of, Common Shares to a
U.S. Holder (other than U.S. Holders that are exempt from backup withholding
and properly certify their exemption) if the holder fails to furnish its
correct taxpayer identification number or otherwise fails to comply with
applicable backup withholding requirements. U.S. Holders who are required to
establish their exempt status generally must provide a properly completed IRS
Form W-9. Backup withholding is not an additional tax. Amounts withheld as
backup withholding may be credited against a U.S. Holder's U.S. federal income
tax liability. A U.S. Holder generally may obtain a refund of any amounts
withheld under the backup withholding rules that exceed such U.S. Holder's
income tax liability by filing a refund claim with the IRS in a timely manner
and furnishing required information. Foreign Financial Asset Reporting Certain
U.S. Holders who hold "specified foreign financial assets" (as defined in
Section 6038D of the Code), including stock of a non-U.S. corporation that is
not held in an account maintained by a U.S. "financial institution" (as
defined in Section 6038D of the Code), whose aggregate value exceeds $50,000
on the last day of the taxable year or $75,000 at any time during the tax
year, may be required to attach to their tax returns for the year certain
specified information (on IRS Form 8938) (higher thresholds apply to married
individuals filing a joint return and certain individuals residing outside of
the United States). Persons who fail to timely furnish the required
information may be subject to substantial penalties. Additionally, in the
event a U.S. Holder does not file such a report, the statute of limitations on
the assessment and collection of U.S. federal income taxes of such U.S. Holder
for the related tax year may not close before such report is filed. U.S.
Holders (including entities) should consult their own tax advisors regarding
their reporting obligations and the possible application of such reporting
obligations to the holding of Common Shares. Government Regulations We are
subject to a variety of laws and regulations in the European Union, the United
States and other countries. The level and scope of the regulation varies
depending on the country or defined economic region, but may include, among
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other things, the research, development, testing, clinical trials,
manufacture, storage, recordkeeping, approval, labeling, promotion and
commercial sales and distribution, of many of our products. European Union
Regulations In the European Union, in vitro diagnostic medical devices (IVDs)
had been regulated under EU-Directive 98/79/EC (IVD Directive) and
corresponding national provisions. The IVD Directive required that medical
devices meet the essential requirements, including those relating to device
safety and efficacy, set out in an annex of the Directive. According to the
IVD Directive, EU Member States have presumed compliance with these essential
requirements for devices that are in conformity with the relevant national
standards transposing the harmonized standards, such as ISO 13485:2016, the
quality system standard for medical device manufacturers. IVD medical devices,
other than devices for performance evaluation, must bear the CE marking of
conformity when they are placed on the European market. The CE mark is a
declaration by the manufacturer that the product meets all the appropriate
provisions of the applicable legislation implementing the relevant European
Directive. As a general rule, the manufacturer must follow the EU declaration
of conformity procedure to obtain or apply a CE mark. In May 2022, the
Directive was replaced by the In Vitro Diagnostic Device Regulation (IVDR)
(EU) 2017/746 that was published in May 2017 and given a 5-year transition
period until its full implementation on May 26, 2022. Unlike the IVD
Directive, the IVDR has binding legal force throughout every Member State. The
major goal of the IVDR was to standardize diagnostic procedures within the EU,
increase reliability of diagnostic analysis and enhance patient safety. Under
the IVDR as enacted by the European Commission (EC), IVDs are subject to
additional legal regulatory requirements. Among other things, the IVDR
introduces a new risk-based classification system and requirements for
conformity assessments. Under the IVDR and subsequent amendments, IVDs already
certified by a Notified Body under the IVD Directive may remain on the market
until May 26, 2025, and IVDs certified without the involvement of a Notified
Body may be placed on, or remain in, the market for up to three years (until
May 26, 2028) depending on the classification of the IVD. More recently on
January 23, 2024 the European Commission has published a legislative proposal
which would extend the time for legacy IVDs to transition to the IVD
regulation. Nonetheless, the manufacturers of such devices must comply with
specific requirements in the IVDR according to the timelines established, but
ultimately, such products, as with all new IVDs, will have to undergo the
IVDR's conformity assessment procedures. Under the IVD Directive the majority
of QIAGEN products were classified as self-declared, while under the IVDR most
of QIAGEN products will require pre-approval, and those that are in the
highest risk class will have to be tested by a Designated Reference
Laboratory. In addition, the IVDR imposes additional requirements relating to
post-market surveillance and submission of post-market performance follow-up
reports. The EC has designated twelve (12) Notified Bodies to perform
conformity assessments under the IVDR, including QIAGEN's Notified Bodies, TUV
Rheinland and BSI. MedTech Europe has issued guidance relating to the IVDR in
several areas, e.g., clinical benefit, technical documentation, state of art,
accessories, and EUDAMED. On December 5, 2023, the European Commission adopted
Implementing Regulation (EU) 2023/2713 designating five EU Reference
Laboratories covering the following types of high risk, class D IVDs:
hepatitis and retroviruses; herpesviruses; bacterial agents; respiratory
viruses that cause life-threatening diseases. The designated EU Reference
Laboratories are responsible for verifying performance of IVDs in accordance
with common specifications, batch testing of class D IVDs, collaborating with
Notified Bodies to develop best practices for IVD conformity assessments, and
providing scientific and technical assistance on the implementation of the
IVDR. The General Data Protection Regulation (GDPR) of the European Union,
imposes restrictions on the transfer, access, use, and disclosure of health
and other personal information. We have implemented the requirements set forth
by the GDPR, which took effect on May 25, 2018. GDPR and other EU data privacy
and security laws impact our business either directly or indirectly. Our
failure to comply with applicable privacy or security laws or significant
changes in these laws could significantly impact our business and future
business plans. For example, we may be subject to regulatory action, fines, or
lawsuits in the event we fail to comply with applicable privacy laws. We may
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liability in the event any of the personal information we maintain is lost or
otherwise subject to misuse or other wrongful use, access or disclosure.
United Kingdom The U.K.'s withdrawal from the EU has major ramifications for
IVD manufacturers. Among other things, companies now have to follow new
procedures that apply in the U.K., including appointment of a U.K. Responsible
Person rather than relying on European Authorized Representatives, to manage
their compliance efforts in the U.K. The U.K. Medicine and Healthcare Products
Regulatory Agency (MHRA) issued guidance on how the country will regulate IVDs
after January 1, 2021. According to MHRA, IVDs will require certification in
the U.K., which is defined as England, Scotland and Wales, while companies
will still be able to sell tests in Northern Ireland under existing EU IVD
regulations. Under subsequent amendments to MHRA guidance, MHRA will continue
to recognize CE marks for IVDs certified under the IVD Directive until the
earlier of June 30, 2028 or the expiration of the certificate and for IVDs
certified under the IVDR until June 30, 2028. Companies must register with the
MHRA before placing IVDs on the U.K. market. To continue marketing CE marked
IVDs in the U.K. once the designated MHRA recognition period has lapsed,
companies selling in the U.K. will have to obtain a new marking authorization,
called a U.K. Conformity Assessed mark (UKCA), for each IVD product. United
States In the United States, in vitro diagnostic products are subject to
regulation by the FDA as medical devices to the extent that they are intended
for use in the diagnosis, treatment, mitigation or prevention of disease or
other conditions. Certain types of tests, like some that we manufacture and
sell for research use only in the United States, are not subject to the FDA's
premarket review and controls because we do not promote these tests for
clinical diagnostic use, and they are labeled "For Research Use Only," or RUO,
as required by the FDA. Other tests, known as laboratory developed tests
(LDTs), which are IVDs that are designed, manufactured and used within a
single, CLIA-certified, clinical laboratory that meets applicable requirements
to perform high-complexity testing, have generally been subject to enforcement
discretion and not actively regulated by the FDA. As LDTs have increased in
complexity, the FDA has taken steps towards developing a risk-based approach
to the regulation of LDTs; however, most LDTs currently remain under FDA
enforcement discretion. Congress has also signaled interest in clarifying the
regulatory landscape for LDTs. Following several years of inaction by Congress
on this issue, the FDA issued a proposed rule in October 2023 to regulate LDTs
under the current medical device framework and proposing to phase out the
current enforcement discretion policy; the public comment period ended in
early December 2023. The FDA's proposal envisions that the LDT enforcement
policy phase-out process would occur in gradual stages over a total period of
four years, with premarket approval applications for high-risk tests to be
submitted by the 3.5-year mark, although more details are expected to be
provided with the upcoming final rule. However, the likelihood of the FDA
finalizing the proposed rule in April 2024 (as is currently projected), as
well as potential litigation challenging the agency's authority to take such
action, is uncertain at this time. Separately, members of Congress have been
working with stakeholders for several years on a possible bill to regulate in
vitro clinical tests including LDTs. For example, legislation called the
Verifying Accurate, Leading-edge IVCT Development (VALID) Act, as drafted and
re-introduced for consideration by the current Congress, would codify into law
the term "in vitro clinical test" (IVCT) and establish a new regulatory
framework for the review and oversight of IVCTs separate and apart from the
medical device framework under the Food, Drug and Cosmetic Act (FDCA). The new
IVCT product category would include products currently regulated as IVDs, in
addition to LDTs. The proposed regulatory framework adopts various concepts
from the FDCA, utilizing a risk- based approach that aims to ensure that all
marketed IVCTs have a reasonable assurance of both analytical and clinical
validity. It is unclear whether the VALID Act will be passed by Congress in
its current form or signed into law by the President; if enacted, however, it
is expected to require clinical laboratories to spend significant time,
resources, and money towards ensuring compliance. Until the FDA finalizes LDT
regulations through its recently initiated notice-and-comment rule making
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other legislation is passed reforming the federal government's current
regulatory approach to LDTs, it is unknown how the FDA may regulate LDT
products in the future or what testing and data may be required to support
clearance or approval for such products. Medical devices, including IVDs, are
classified into one of three classes depending on the controls deemed by the
FDA to be necessary to reasonably assure their safety and effectiveness. Class
I devices are generally exempt from premarket review and are subject to
general controls, including adherence to the FDA's Quality System Regulation
(QSR), which describes device-specific current good manufacturing practices,
as well as regulations requiring facility registration and product listing,
reporting of adverse medical events, and appropriate, truthful and
non-misleading labeling, advertising and promotional materials. Class II
devices are generally subject to premarket notification (or 510(k) clearance),
general controls and special controls, including performance standards,
post-market surveillance, patient registries or FDA guidance documents
describing device-specific special controls. Class III devices are subject to
most of the previously identified requirements as well as to premarket
approval (PMA). The payment of a user fee, which is typically adjusted
annually, to the FDA is usually required upon filing a premarket submission
(e.g., premarket notification, premarket approval application, or De Novo
classification request) for FDA review. 510(k) Premarket Notification. A
510(k) premarket notification requires the sponsor to demonstrate that a
medical device is substantially equivalent to another marketed device, termed
a "predicate device," that is legally marketed in the United States and is not
subject to premarket approval. A device is substantially equivalent to a
predicate device if its intended use(s), performance, safety and technological
characteristics are similar to those of the predicate; or has a similar
intended use but different technological characteristics, where the
information submitted to the FDA does not raise new questions of safety and
effectiveness and demonstrates that the device is at least as safe and
effective as the legally marketed device. If the FDA determines that the
device (1) is not substantially equivalent to a predicate device, (2) has a
new intended use compared to the identified predicate, (3) has different
technological characteristics that raise different questions of safety and
effectiveness, or (4) has new indications for use or technological
characteristics and required performance data were not provided, it will issue
a "Not Substantially Equivalent" (NSE) determination. If the FDA determines
that the applicant's device is substantially equivalent to the identified
predicate device(s), the agency will issue a 510(k) clearance letter that
authorizes commercial marketing of the device for one or more specific
indications for use. De Novo Classification If a previously unclassified new
medical device does not qualify for the 510(k) premarket notification process
because no predicate device to which it is substantially equivalent can be
identified, the device is automatically classified into Class III. However, if
such a device would be considered low or moderate risk (in other words, it
does not rise to the level of requiring the approval of a PMA), it may be
eligible for the De Novo classification process. The De Novo classification
process allows a device developer to request that the novel medical device be
reclassified as either a Class I or Class II device, rather than having it
regulated as a high risk Class III device subject to the PMA requirements. If
the manufacturer seeks reclassification into Class II, the classification
request must include a draft proposal for special controls that are necessary
to provide a reasonable assurance of the safety and effectiveness of the
medical device. Premarket Approval The PMA process is more complex, costly and
time consuming than either the 510(k) process or De Novo classification. A PMA
must be supported by more detailed and comprehensive scientific evidence,
including clinical data, to demonstrate the safety and efficacy of the medical
device for its intended purpose. A clinical trial involving a "significant
risk" device may not begin until the sponsor submits an investigational device
exemption (IDE) application to the FDA and obtains approval to begin the
trial. After the PMA is submitted, the FDA has 45 days to make a threshold
determination that the PMA is sufficiently complete to permit a substantive
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review. If the PMA is complete, the FDA will file the PMA and begin the
substantive review process. The FDA is subject to a performance goal review
time for a PMA that is 180 days from the date of filing, although in practice
this review time is longer. Questions from the FDA, requests for additional
data and referrals to advisory committees may delay the process considerably.
The total process may take several years and there is no guarantee that the
PMA will ever be approved. Even if approved, the FDA may limit the indications
for which the device may be marketed. The FDA may also request additional
clinical data as a condition of approval or after the PMA is approved. Any
changes to the medical device may require a supplemental PMA to be submitted
and approved before the modified device may be marketed. Any products
manufactured and sold by us pursuant to FDA clearances or approvals will be
subject to pervasive and continuing regulation by the FDA, including quality
system requirements, record-keeping requirements, reporting of adverse
experiences with the use of the device and restrictions on the advertising and
promotion of our products. Device manufacturers are required to register their
establishments and list their devices with the FDA and are subject to periodic
inspections by the FDA and certain state agencies. Noncompliance with
applicable FDA requirements can result in, among other things, warning
letters, fines, injunctions, civil penalties, recalls or seizures of products,
total or partial suspension of production, refusal of the FDA to grant for new
devices, withdrawal of existing marketing authorizations and criminal
prosecution. As a result of the COVID-19 pandemic, the Secretary of the U.S.
Department of Health and Human Services declared a public health emergency and
authorized the FDA to issue emergency use authorizations (EUAs) to provide
more timely access to critical medical countermeasures (including medicines
and diagnostic tests) when there are no adequate, approved, and available
alternative options. EUAs remain in effect until the device emergency use
declarations related to COVID-19 under Section 564 of the FDCA are terminated,
unless the FDA decides to revise or revoke an EUA at an earlier point as the
agency considers public health needs during the emergency and new data on an
authorized product's safety and effectiveness, or as products meet the
criteria for FDA approval or clearance. Manufacturers of several types of
SARS-CoV-2 assays have been granted EUAs, including QIAGEN. The FDA has
indicated the withdrawal of EUAs for COVID-19 countermeasures will be done in
a gradual, phased process and issued final guidance on a transitional plan.
Regulation of Companion Diagnostic Devices If a sponsor or the FDA believes
that a diagnostic test is essential for the safe and effective use of a
corresponding therapeutic product, the sponsor of the therapeutic product will
typically work with a collaborator to develop an in vitro companion diagnostic
device. The FDA defines an IVD companion diagnostic device as a device that
provides information that is essential for the safe and effective use of a
corresponding therapeutic product. The FDA has also introduced the concept of
complementary diagnostics that are distinct from companion diagnostics because
they provide additional information about how a drug is used or identify
patients who are likely to derive the greatest benefit from therapy without
being required for the safe and effective use of that drug. The FDA has not
yet provided much guidance on the regulation and use of complementary
diagnostics, but several have been approved. The FDA indicated that it will
apply a risk-based approach to determine the regulatory pathway for IVD
companion diagnostic devices, as it does with all medical devices. This means
that the regulatory pathway will depend on the level of risk to patients,
based on the intended use of the IVD companion diagnostic device and the
controls necessary to provide a reasonable assurance of safety and
effectiveness. We expect that any IVD companion diagnostic device that we
develop will utilize the PMA pathway and that a clinical trial performed under
an IDE will have to be completed before the PMA may be submitted. The FDA
expects that the therapeutic sponsor will address the need for an IVD
companion diagnostic device in its therapeutic product development plan and
that, in most cases, the therapeutic product and its corresponding IVD
companion diagnostic device will be developed contemporaneously. If the QIAGEN
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companion diagnostic test will be used to make critical treatment decisions
such as patient selection, treatment assignment, or treatment arm, it will
likely be considered a significant risk device for which a clinical trial will
be required. The sponsor of the IVD companion diagnostic device will be
required to comply with the FDA's IDE requirements that apply to clinical
trials of significant risk devices. If the diagnostic test and the therapeutic
drug are studied together to support their respective approvals, the clinical
trial must meet both the IDE and IND requirements. Regulation of Research Use
Only Products Some of our products are sold for research purposes in the
United States, and labeled "For Research Use Only" (RUO) or "for molecular
biology applications." RUO refers to devices that are in the laboratory phase
of development, while investigational use only, or IUO, refers to devices that
are in the product testing phase of development. These types of devices are
exempt from most regulatory controls pursuant to long-standing FDA guidance on
RUO/ IUO diagnostics. Because we do not promote our RUOs for clinical
diagnostic use, or provide technical assistance to clinical laboratories with
respect to these tests, we believe that these tests are exempt from FDA's
premarket review and other requirements. If the FDA were to disagree with our
designation of any of these products, we could be forced to stop selling the
product until we obtain appropriate regulatory clearance or approval. Further,
it is possible that some of our RUOs may be used by some customers without our
knowledge in their LDTs, which they may then develop, validate and promote for
clinical use. However, QIAGEN does not promote these products for use in LDTs
or assist in the development of such LDTs for clinical diagnostic use. HIPAA
and Other Privacy and Security Laws The Health Insurance Portability and
Accountability Act of 1996 (HIPAA), established comprehensive federal
standards for the privacy and security of health information. The HIPAA
standards apply to health plans, healthcare clearing houses, and healthcare
providers that conduct certain healthcare transactions electronically (Covered
Entities,), as well as individuals or entities that perform services for them
involving the use, or disclosure of, individually identifiable health
information or "protected health information" under HIPAA. Such service
providers are called "Business Associates." Title II of HIPAA, the
Administrative Simplification Act, contains provisions that address the
privacy of health data, the security of health data, the standardization of
identifying numbers used in the healthcare system and the standardization of
certain healthcare transactions. The privacy regulations protect medical
records and other protected health information by limiting their use and
release, giving patients the right to access their medical records and
limiting most disclosures of health information to the minimum amount
necessary to accomplish an intended purpose. The HIPAA security standards
require the adoption of administrative, physical, and technical safeguards and
the adoption of written security policies and procedures to maintain the
security of protected health information. Congress subsequently enacted
Subtitle D of the Health Information Technology for Economic and Clinical
Health Act (HITECH) provisions of the American Recovery and Reinvestment Act
of 2009. HITECH expanded and strengthened HIPAA, created new targets for
enforcement, imposed new penalties for noncompliance and established new
breach notification requirements for Covered Entities and Business Associates.
Under 'HITECH's breach notification requirements, Covered Entities must report
breaches of protected health information that has not been encrypted or
otherwise secured. Required breach notices must be made as soon as is
reasonably practicable, but no later than 60 days following discovery of the
breach. Reports must be made to affected individuals and to the Secretary and,
in some cases depending on the size of the breach, they must be reported
through local and national media. Breach reports can lead to investigation,
enforcement and civil litigation, including class action lawsuits. Our Redwood
City entity serves in some cases as a Business Associate to customers who are
subject to the HIPAA regulations. In this capacity, we maintain an active
compliance program that is designed to identify security incidents and other
issues in a timely fashion and enable us to remediate, mitigate harm or report
if required by law. We are subject to prosecution and/ or administrative
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non-compliance, including a four-tiered system of monetary penalties adopted
under HITECH. We are also subject to enforcement by state attorneys general
who were given authority to enforce HIPAA under HITECH. To avoid penalties
under the HITECH breach notification provisions, we must ensure that breaches
of protected health information are promptly detected and reported within the
company, so that we can make all required notifications on a timely basis.
However, even if we make required reports on a timely basis, we may still be
subject to penalties for the underlying breach. California has also adopted
the California Consumer Privacy Act of 2018, or CCPA, which took effect on
January 1, 2020 and became enforceable by the state attorney general on July
1, 2020. The CCPA establishes a new privacy framework for covered businesses
by creating an expanded definition of personal information, establishing new
data privacy rights for consumers in the State of California, imposing special
rules on the collection of consumer data from minors, and creating a new and
potentially severe statutory damages framework for violations of the CCPA and
for businesses that fail to implement reasonable security procedures and
practices to prevent data breaches. The regulations issued under the CCPA have
been modified several times. Additionally, a new privacy law, the California
Privacy Rights Act, or CPRA, was approved by California voters in the election
on November 3, 2020. The CPRA imposes additional data protection obligations
on companies doing business in California, including additional consumer
rights processes, limitations on data uses, new audit requirements for higher
risk data, and opt outs for certain uses of sensitive data. It also created a
new California data protection agency authorized to issue substantive
regulations and could result in increased privacy and information security
enforcement. The majority of the provisions became effective on January 1,
2023, and additional compliance investment and potential business process
changes may be required. Similar laws have been adopted in other states (for
example, Nevada, Virginia, Connecticut, Utah and Colorado) or proposed in
other states and at the federal level, and if passed, such laws may have
potentially conflicting requirements that would make compliance challenging.
Many states have also implemented genetic testing and privacy laws imposing
specific patient consent requirements and protecting test results by strictly
limiting the disclosure of those results. State requirements are particularly
stringent regarding predictive genetic tests, due to the risk of genetic
discrimination against healthy patients identified through testing as being at
a high risk for disease. We believe that we have taken the steps required of
us to comply with health information privacy and security statutes and
regulations, including genetic testing and genetic information privacy laws in
all jurisdictions, both state and federal. However, these laws constantly
change, and we may not be able to maintain compliance in all jurisdictions
where we do business. Failure to maintain compliance, or changes in state or
federal laws regarding privacy or security could result in civil and/or
criminal penalties, significant reputational damage and could have a material
adverse effect on our business. U.S. Fraud and Abuse Laws and Other Healthcare
Regulations A variety of state and federal laws prohibit fraud and abuse
involving state and federal healthcare programs, as well as commercial
insurers. These laws are interpreted broadly and enforced aggressively by
various federal and state agencies, including the Centers for Medicare &
Medicaid Services (CMS), the Department of Justice (DOJ), and the Office of
Inspector General for the U.S. Department of Health and Human Services (OIG).
The Company seeks to conduct its business in compliance with all applicable
federal and state laws. State and federal fraud and abuse laws may be
interpreted and applied differently, and arrangements and business practices
could be subject to scrutiny under them by federal or state enforcement
agencies. Sanctions for violations of these laws could result in a wide range
of penalties, including but not limited to significant criminal sanctions,
civil fines and penalties. The Anti-Kickback Statute The federal Anti-Kickback
Statute (AKS) is a criminal statute that prohibits, in pertinent part, persons
from knowingly and willfully soliciting, receiving, offering or paying
remuneration, directly or indirectly, in cash or in kind, in exchange for or
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. To refer an individual to a person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made by federal
healthcare programs; or . To purchase, lease, order, or arrange for or
recommend purchasing, leasing, or ordering, any good, facility, service, or
item for which payment may be made by a federal healthcare program. A person
or entity does not need to have actual knowledge of the AKS or specific intent
to violate it to have committed a violation. Recognizing that the AKS is broad
and potentially applies to innocuous or beneficial arrangements, the OIG
issued regulations, commonly known as "safe harbors," which set forth certain
requirements that, if fully met, insulate a given arrangement or conduct from
prosecution under the AKS. The AKS also has statutory exceptions that provide
protection similar to that of safe harbors. If, however, an arrangement does
not meet every requirement of an exception or safe harbor, the arrangement
does not necessarily violate the AKS. A facts-and-circumstances analysis is
necessary to determine AKS compliance or lack thereof. Potential statutory
penalties for violating the AKS include imprisonment and criminal fines. In
addition, through application of other laws, conduct that violates the AKS can
give rise to civil monetary penalties and possible exclusion from
participation in Medicare, Medicaid, and other federal healthcare programs.
Claims including items or services resulting from a violation of the AKS also
constitute a false or fraudulent claim for purposes of the False Claims Act.
In addition to the federal AKS, many states have their own anti-kickback laws.
Often, these laws closely follow the language of the federal law, although
they do not always have the same scope, exceptions, safe harbors or sanctions.
In some states, these anti-kickback laws apply to both state healthcare
programs and commercial insurers. The penalties for violating state
anti-kickback provisions can be severe, including criminal and civil penalties
(including penalties under the state false claims law), imprisonment, and
exclusion from state healthcare programs. The False Claims Act The federal
False Claims Act (FCA) imposes civil liability on any person or entity that,
among other things, knowingly presents, or causes to be presented, to the
federal government, claims for payment that are false or fraudulent; knowingly
makes, uses or causes to be made or used, a false statement or record material
to a false or fraudulent claim or obligation to pay or transmit money or
property to the federal government; or knowingly conceals or knowingly and
improperly avoids or decreases an obligation to pay money to the federal
government. The FCA also prohibits the knowing retention of overpayments
(sometimes referred to as "reverse false claims"). In addition, the FCA
permits a private individual acting as a "whistleblower" (also referred to as
a "relator") to bring FCA actions on behalf of the federal government under
the statute's qui tam provisions, and to share in any monetary recovery. The
federal government may elect or decline to intervene in such matters, but if
the government declines intervention, the whistleblower may still proceed with
the litigation on the government's behalf. Penalties for violating the FCA
include payment of up to three times the actual damages sustained by the
government, plus substantial per-claim statutory penalties, as well as
possible exclusion from participation in federal healthcare programs. Various
states have enacted similar laws modeled after the FCA that apply to items and
services reimbursed under Medicaid and other state healthcare programs, and,
in several states, such laws apply to claims submitted to any payor, including
commercial insurers. There is also a federal criminal false claims statute
that prohibits, in pertinent part, the making or presentation of a false
claim, knowing such claim to be false, to any person or officer in the civil,
military, or naval service or any department or agency thereof. Potential
penalties for violating this statute include fines or imprisonment. Health
Care Fraud and False Statements The federal healthcare fraud statute
criminalizes, in pertinent part, knowingly and willfully defrauding a
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include commercial insurers. A violation of this statute may result in fines,
imprisonment, or exclusion from participation in federal healthcare programs.
The federal criminal statute prohibiting false statements relating to health
care matters prohibits, in pertinent part, knowingly and willfully (i)
falsifying, concealing, or covering up a material fact, or (ii) making a
materially false, fictitious, or fraudulent statement or representation, or
making or using any materially false writing or document knowing that writing
or document to contain any materially false, fictitious, or fraudulent
statements, in connection with the delivery of or payment for healthcare
benefits, items, or services. A violation of this statute may result in fines
or imprisonment. Civil Monetary Penalties Law The federal Civil Monetary
Penalties Law (CMP Law) prohibits, among other things, (1) the offering or
transfer of remuneration to a beneficiary of Medicare or a state healthcare
program if the person knows or should know it is likely to influence the
beneficiary's selection of a particular provider, practitioner, or supplier of
services reimbursable by Medicare or a state healthcare program, unless an
exception applies; (2) employing or contracting with an individual or entity
that the provider knows or should know is excluded from participation in a
federal healthcare program; (3) billing for services requested by an
unlicensed physician or an excluded provider; and (4) billing for medically
unnecessary services. The potential penalties for violating the CMP Law
include exclusion from participation in federal healthcare programs,
substantial fines, and payment of up to three times the amount billed,
depending on the nature of the offense. Physician Payments Sunshine Act The
federal Physician Payments Sunshine Act (Sunshine Act) imposes reporting
requirements on manufacturers of certain devices, drugs, biologics, and
medical supplies for which payment is available under Medicare, Medicaid, or
the Children's Health Insurance Program (CHIP), with certain exceptions.
Manufacturers to which the Sunshine Act applies must collect and report
annually certain data on certain payments and transfers of value by them (and
in some cases their distributors) to physicians, teaching hospitals, and
certain advanced non-physician healthcare practitioners, as well as ownership
and investment interests held by physicians and their immediate family
members. For reporting beginning January 1, 2022, U.S.-licensed physician
assistants, clinical nurse specialists, certified nurse-midwives, certified
nurse anesthetists, and nurse practitioners must be included in the provider
types subject to Sunshine Act reporting. The reporting program (known as the
Open Payments program) is administered by CMS. There are also an increasing
number of state "sunshine" laws that require manufacturers to provide reports
to state governments on pricing and marketing information. Several states have
enacted legislation requiring manufacturers, including medical device
companies to, among other things, establish marketing compliance programs,
file periodic reports with the state, make periodic public disclosures on
sales and marketing activities, and to prohibit or limit certain other sales
and marketing practices. Failure to comply with the Sunshine Act or state
equivalents could result in civil monetary penalties, among other sanctions,
depending upon the nature of the violation. Foreign Corrupt Practices Act
Despite extensive procedures to ensure compliance, we may also be exposed to
liabilities under the U.S. Foreign Corrupt Practices Act (FCPA), which
generally prohibits companies and their intermediaries from making corrupt
payments to foreign officials for the purpose of obtaining or maintaining
business or otherwise obtaining favorable treatment, and requires companies to
maintain adequate record-keeping and internal accounting practices to
accurately reflect the transactions of the company. We are also subject to a
number of other laws and regulations relating to money laundering,
international money transfers and electronic fund transfers. These laws apply
to companies, individual directors, officers, employees and agents.
Environment, Health and Safety We are subject to laws and regulations related
to the protection of the environment, the health and safety of employees and
the handling, transportation and disposal of medical specimens, infectious and
hazardous waste and radioactive materials. For example, the U.S. Occupational
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and Health Administration (OSHA) has established extensive requirements
relating specifically to workplace safety for healthcare employers in the U.S.
This includes requirements to develop and implement multi-faceted programs to
protect workers from exposure to blood-borne pathogens, such as HIV and
hepatitis B and C, including preventing or minimizing any exposure through
needle stick injuries. For purposes of transportation, some biological
materials and laboratory supplies are classified as hazardous materials and
are subject to regulation by one or more of the following agencies: the U.S.
Department of Transportation, the U.S. Public Health Service, the United
States Postal Service and the International Air Transport Association. The
U.S. Environmental Protection Agency (EPA) has also promulgated regulations
setting forth importation, labelling, and registration requirements, among
others, which may apply to certain products and/or establishments of the
company. Rest of the World Regulation In addition to regulations in the United
States and the EU, we are subject to a variety of regulations governing
clinical studies and commercial sales and distribution of molecular testing
instruments, consumables and digital solutions in other jurisdictions around
the world. These laws and regulations typically require the licensing of
manufacturing facilities, as well as controlled research, testing and
governmental authorization of product candidates. Additionally, they may
require adherence to good manufacturing, clinical and laboratory practices. We
must obtain approval from regulatory authorities in all countries where we
distribute our products. The requirements governing the conduct of product
authorization, pricing and reimbursement vary greatly from country to country.
If we fail to comply with applicable regulatory requirements, we may be
subject to, among other things, fines, suspension or withdrawal of regulatory
approvals, product recalls, seizure of products, operating restrictions, or
criminal prosecution. Reimbursement United States In the United States,
payments for diagnostic tests come from several sources, including commercial
insurers, (which might include health maintenance organizations and preferred
provider organizations); government healthcare programs (such as Medicare or
Medicaid); and, in many cases, the patients themselves. For many years,
federal and state governments in the United States have pursued methods to
reduce the cost of healthcare delivery. For example, in 2010, the United
States enacted major healthcare reform legislation known as the Patient
Protection and Affordable Care Act (ACA). Such changes have had, and are
expected to continue to have, an impact on our business. In addition, in
August 2011, the Budget Control Act of 2011, among other things, created
measures for spending reductions by Congress. A Joint Select Committee on
Deficit Reduction, tasked with recommending a targeted deficit reduction of at
least $1.2 trillion for the years 2013 through 2021, was unable to reach
required goals, thereby triggering the legislation's automatic reduction to
several government programs. This includes aggregate reductions of Medicare
payments to providers up to 2% per fiscal year, and, due to subsequent
legislative amendments, will remain in effect through 2032 unless additional
Congressional action is taken. We frequently identify value propositions on
our products and communicate them to payors, providers, and patient
stakeholders and attempt to positively impact coverage, coding and payment
pathways. However, we have no direct control over payor decisions with respect
to coverage and payment levels for our products. The manner and level of
reimbursement may depend on the site of care, the procedure(s) performed, the
final patient diagnosis, the device(s) and/or drug(s) utilized, the available
budget, or a combination of these factors, and coverage and payment levels are
determined at each payor's discretion. Changes in reimbursement levels or
methods may positively or negatively affect sales of our products in any given
country for any given product. At QIAGEN, we work with several specialized
reimbursement consulting companies and maintain regular contact with payors.
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As government programs seek to expand healthcare coverage for their citizens,
they have at the same time sought to control costs by limiting the amount of
reimbursement they will pay for particular procedures, products or services.
Many third-party payors have developed payment and delivery mechanisms to
support cost control efforts and to focus on paying for quality. Such
mechanisms include payment reductions, pay-for-performance metrics,
quality-based performance payments, restrictive coverage policies, studies to
compare effectiveness and patient outcomes, and technology assessments. These
changes have increased emphasis on the delivery of more cost-effective and
quality-driven healthcare. Code Assignment In the United States, a third-party
payor's decisions regarding coverage and payment are impacted, in large part,
by the specific Current Procedural Terminology (CPT) code used to identify a
test. The American Medical Association (AMA) publishes the CPT, which
identifies codes, along with descriptions, for reporting medical services and
procedures. The purpose of the CPT is to provide a uniform language that
accurately describes medical, surgical, and diagnostic services and therefore
to ensure reliable nationwide communication among healthcare providers,
patients, and third-party payors. CMS uses its own Healthcare Common Procedure
Coding System (HCPCS) codes for medical billing and reimbursement purposes.
Level I HCPCS codes are comprised of current CPT codes, while Level II HCPCS
codes primarily represent non-physician services and Level III HCPCS codes are
local codes developed by Medicaid agencies, Medicare contractors and
commercial insurers. Proprietary Laboratory Analyses (PLA) Codes are an
addition to the CPT(R) code set approved by the AMA CPT(R) Editorial Panel.
They are alpha- numeric CPT codes with a corresponding descriptor for labs or
manufacturers that want to more specifically identify their test. A
manufacturer of in vitro diagnostic kits or a provider of laboratory services
may request establishment of a Category I CPT code for a new product or a PLA
Code or both. In addition, Z-Code identifiers are unique five-character
alphanumeric tracking codes associated with a specific molecular diagnostic
test. When a claim is submitted, it includes the associated CPT code and the
Z- Code identifier is entered as a device code. Assignment of a specific CPT
code ensures routine processing and payment for a diagnostic test by both
commercial insurers and government payors. The AMA has specific procedures for
establishing a new CPT code and, if appropriate, for modifying existing
nomenclature to incorporate a new test into an existing code. If the AMA
concludes that a new code or modification of nomenclature is unnecessary, the
AMA will inform the requestor how to use one or more existing codes to report
the test. While the AMA's decision is pending, billing and collection may be
sought under an existing, non-specific CPT code. A manufacturer or provider
may decide not to request assignment of a CPT code and instead use an
existing, non-specific code for reimbursement purposes. However, use of such
codes may result in more frequent denials and/or requests for supporting
clinical documentation from the third-party payor and in lower reimbursement
rates, which may vary based on geographical location. CMS reimbursement rates
for clinical diagnostic tests are defined by CPT and HCPCS codes in the
Clinical Laboratory Fee Schedule (CLFS). In 2012, the AMA added 127 new CPT
codes for molecular pathology services that became effective on January 1,
2013. These new CPT codes are biomarker specific and were designed to replace
the previous methodology of billing for molecular pathology testing, which
involved "stacking" a series of non-biomarker specific CPT codes together to
describe the testing performed. CMS issued final national reimbursement prices
for the new CPT codes in November 2013. These federal reimbursement amounts
are widely acknowledged to be lower than the reimbursement obtained by the now
outdated "stacking" method, but commercial insurers and Medicare contractors
are still in the process of solidifying their coverage and reimbursement
policies for the testing described by these new CPT codes. As of January 1,
2018, in accordance with the Protecting Access to Medicare Act of 2014 (PAMA),
applicable laboratories are required to report to CMS commercial insurer
payment rates and volumes for their tests. CMS uses the data reported and the
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weighted median payment rate for each test, which is used to establish revised
Medicare CLFS reimbursement rates for certain clinical diagnostic laboratory
tests (CDLTs), subject to certain phase-in limits. For a CDLT that is assigned
a new or substantially revised CPT code, the initial payment rate is assigned
using the gap-fill methodology. If the test at issue falls into the category
of new advanced diagnostic laboratory test (ADLT) instead of CDLT, the test
will be paid based on an actual list charge for an initial period of three
quarters, before being shifted to the weighted median commercial insurer rate
reported by the laboratory performing the ADLT. Laboratories offering ADLTs
are subject to recoupment if the actual list charge exceeds the weighted
median private payor rate by a certain amount. Since December 2019, Congress
has passed a series of laws to modify PAMA's statutory requirements related to
the data reporting period and phase- in of payment reductions under the CLFS
for CDLTs that are not ADLTs. Most recently, the Further Continuing
Appropriations and Other Extensions Act of 2024 (Pub. L. 118-22, enacted on
November 16, 2023) further delayed the reporting requirement as well as the
application of the 15 percent phase-in reduction. Under these statutory
provisions, the next data reporting period for CDLTs that are not ADLTs will
be January 1, 2025 through March 31, 2025, and will be based on the most
recent data collection period of January 1, 2019 through June 30, 2019. After
this data reporting period, the three-year data reporting cycle for these
tests will resume (e.g., 2028, 2031, etc.). This same series of laws passed
since December 2019 also modified the phase- in of payment reductions
resulting from private payor rate implementation so that a 0.0 percent
reduction limit was applied for calendar years 2021 through 2023, as compared
to the payment amounts for a test the preceding year. The Further Continuing
Appropriations and Other Extensions Act of 2024 further applied a 0.0
reduction limit for calendar year 2024. As a result, payment may not be
reduced by more than 15 percent per year for calendar years 2025, 2026, and
2027, as compared to the payment amount established for a test the prior year.
CMS's methodology under PAMA (as well as the willingness of commercial
insurers to recognize the value of diagnostic testing and pay for that testing
accordingly) renders commercial insurer payment levels even more significant.
This calculation methodology has resulted in significant reductions in
reimbursement, even though CMS imposed caps on those reductions. Given the
many uncertainties built into PAMA's price-setting process, it is difficult to
predict how payments made by CMS under the CLFS may change from year to year.
Coverage Decisions When deciding whether to cover a particular diagnostic
test, third-party payors generally consider whether the test is a medically
necessary and, if so, whether the test will directly impact clinical decision
making. For coverage, the testing method should be considered scientifically
valid to identify the specific gene biomarker or gene mutation, and must have
been demonstrated to improve clinical outcomes for the patient's condition.
Coverage of a drug therapy and its companion diagnostic for cancer treatment
indications may be validated by a NCCN category 1, 2A or 2B recommendation.
However, most third-party payors do not cover experimental services. Coverage
determinations are often influenced by current standards of practice and
clinical data, particularly at the local level. CMS has the authority to make
coverage determinations on a national basis, but most Medicare coverage
decisions are made at the local level by contractors that administer the
Medicare program in specified geographic areas. Commercial insurers and
government payors have separate processes for making coverage determinations,
and commercial insurer may or may not follow Medicare's coverage decisions. If
a third-party payor has a coverage determination in place for a particular
diagnostic test, billing for that test must comply with the established
policy. Otherwise, the third-party payor makes reimbursement decisions on a
case-by-case basis. Payment Payment for covered diagnostic tests is determined
based on various methodologies, including prospective payment systems and fee
schedules. In addition, commercial insurers may negotiate contractual rates
with participating providers, establish fee schedule rates, or set rates as a
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charge. Diagnostic tests furnished to Medicare inpatients generally are
included in the bundled payment made to the hospital under Medicare's
Inpatient Prospective Payment System, utilizing Diagnosis Related Groups
(DRGs) depending on the patient's condition. Payment rates for diagnostic
tests furnished to Medicare beneficiaries in outpatient settings are the
lesser of the amount billed, the local fee for a geographic area, or a
national limit. Each year, the fee schedule is updated for inflation and could
be modified by Congress in accordance with the CLFS rules and provisions.
Medicaid programs generally pay for diagnostic tests based on a fee schedule,
but reimbursement varies by geographic region. European Union In the European
Union, the reimbursement mechanisms used by private and public health insurers
vary by country. For the public systems, reimbursement is determined by
guidelines established by the legislator or responsible national authority. As
elsewhere, inclusion in reimbursement catalogues focuses on the medical
usefulness, need, quality and economic benefits to patients and the healthcare
system. Acceptance for reimbursement comes with cost, use, and often volume
restrictions, which again can vary by country. Controls and Procedures
Disclosure Controls and Procedures Our Managing Directors, with the assistance
of other members of management, performed an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures. Based
on that evaluation, they concluded that as of December 31, 2023, our
disclosure controls and procedures were effective to ensure that information
required to be disclosed by us in the reports that we file is recorded,
processed, summarized and reported in a timely manner and is accumulated and
communicated to our management, including our Managing Directors, as
appropriate to allow timely decisions regarding required disclosure. There are
inherent limitations to the effectiveness of any system of disclosure controls
and procedures, no matter how well designed, such as the possibility of human
error and the circumvention or overriding of the controls and procedures.
Therefore, even those systems determined to be effective may not prevent or
detect misstatements and can provide only reasonable assurance of achieving
their control objectives. In addition, any determination of effectiveness of
controls is not a projection of any effectiveness of those controls to future
periods, as those controls may become inadequate because of changes in
conditions or that the degree of compliance with the policies or procedures
may deteriorate. Changes in Internal Control over Financial Reporting There
has been no change in our internal control over financial reporting during
2023 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting. QIAGEN N.V. | IFRS
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Sustainability Statement - Annex Detailed Tax Disclosure (country-by-country
reporting) Country-by-country reporting (CbCR) requires multinational
enterprises in line with the OECD/ G20 Base Erosion and Profit Shifting (BEPS)
to report aggregated data on the global allocation of income, profit, taxes
paid and economic activity among tax jurisdictions in which they operate. This
requires QIAGEN N.V., the parent of the QIAGEN Group, to file an annual CbCR
report to the Dutch tax authorities. The data which have been filed are based
on U.S. generally accepted accounting principles (GAAP) and presented with a
reconciliation to the sales revenues according IFRS. The following tables
represent QIAGEN's country-by-country reporting of the financial, economic,
and tax-related information for each jurisdiction in which they operate:
Canada NA $24,899 $221 $25,120 $25,118 $71 $25,189 United States NA 911,236
913,938 1,825,174 939,382 821,238 1,760,620 Brazil LATAM 20,586 5,108 25,694
22,305 6,098 28,403 Mexico LATAM 12,576 20 12,596 11,469 70 11,539 Austria
EMEA 23,192 - 23,192 88,799 - 88,799 Belgium EMEA 17,388 - 17,388 18,813 -
18,813 Denmark EMEA 16,786 9,924 26,710 13,690 8,628 22,318 Egypt EMEA (84)
311 227 - 474 474 Finland EMEA 7,197 - 7,197 8,906 - 8,906 France EMEA 59,155
191 59,346 62,131 215 62,346 Germany EMEA 267,286 726,839 994,125 305,942
1,005,623 1,311,565 Italy EMEA 38,576 120 38,696 37,679 90 37,769 Luxembourg
EMEA (1) 765 764 - 81 81 Netherlands EMEA (23,195) 803,688 780,493 180,863
891,997 1,072,860 Norway EMEA 5,535 - 5,535 7,069 - 7,069 Poland EMEA 9,090
56,656 65,746 9,422 36,449 45,871 Romania EMEA (34) 8,553 8,519 - 7,948 7,948
Country (in thousands) 2023 2022 Region Revenues - Unrelated Party Revenues -
Related Party Revenues - Total Revenues - Unrelated Party Revenues - Related
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Russia EMEA (333) 4,426 4,093 2,087 162 2,249 South Africa EMEA 7,599 1 7,600
5,505 3 5,508 Spain EMEA 14,407 44,785 59,192 9,454 206,551 216,005 Sweden
EMEA 16,271 7,790 24,061 12,379 239 12,618 Switzerland EMEA 26,667 1,157
27,824 34,969 6,567 41,536 Turkiye EMEA 32,079 - 32,079 28,858 - 28,858 UAE
EMEA (646) 68,096 67,450 - 51,490 51,490 United Kingdom EMEA 121,829 29,388
151,217 119,158 23,120 142,278 Australia APAC 33,354 1,815 35,169 54,739 1,446
56,185 China APAC 118,652 9,474 128,126 147,554 6,707 154,261 India APAC
22,000 831 22,831 22,169 869 23,038 Japan APAC 46,623 162 46,785 55,554 365
55,919 South Korea APAC 28,604 8 28,612 29,443 76 29,519 Malaysia APAC 6,179
942 7,121 5,042 774 5,816 New Zealand APAC 2,454 11 2,465 2,228 - 2,228
Philippines APAC 3 13,273 13,276 - 10,337 10,337 Singapore APAC (10,062) 9,153
(909) 22,260 7,480 29,740 Taiwan APAC 11,914 80 11,994 11,950 15 11,965
Thailand APAC 13,896 383 14,279 20,488 465 20,953 Total $1,881,678 $2,718,109
$4,599,787 $2,315,425 $3,095,648 $5,411,073 Country (in thousands) 2023 2022
Region Revenues - Unrelated Party Revenues - Related Party Revenues - Total
Revenues - Unrelated Party Revenues - Related Party Revenues - Total QIAGEN
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Reconciliation of revenues for unrelated parties as filed with the country-by-
country reporting to the sales revenues disclosed in the audited financial
statements: (in thousands) 2023 2022 Sales revenues, unrelated parties CbCR
$1,881,678 $2,315,425 Certain consolidation measures (3,545) (1,288) Other
income reclass for CbCR 166,170 (138,359) Interest income reclass for CbCR
(78,992) (32,758) Total net sales in consolidated income statement under IFRS
$1,965,311 $2,143,020 Tables may contain rounding differences. QIAGEN N.V. |
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Canada NA $1,635 $378 ($89) $1,400 $261 ($42) United States NA 228,624 36,487
2,229 239,796 27,107 21,034 Brazil LATAM 3,871 1,426 666 290 819 592 Mexico
LATAM 1,234 29 847 (952) 139 707 Austria EMEA 2,225 754 448 8,892 229 595
Belgium EMEA 1,211 173 (3) 970 410 206 Denmark EMEA 1,993 296 (168) (2,303) -
(190) Egypt EMEA (94) - - (164) - - Finland EMEA 404 2,693 99 776 69 (86)
France EMEA 1,626 1,677 103 4,388 (194) (565) Germany EMEA 47,867 17,953
29,808 4,664 55,510 11,072 Italy EMEA 2,041 706 (282) (2,648) 284 (346)
Luxembourg EMEA 638 (53) (56) (269) (1,749) 43 Netherlands EMEA 64,142 18,501
4,800 59,695 7,114 (3,094) Norway EMEA 209 90 (84) 537 - (116) Poland EMEA
5,271 953 (503) (5,464) 277 (539) Romania EMEA 341 - (30) 174 - (42) Russia
EMEA 5,277 - (826) (2,865) - - South Africa EMEA 166 158 108 (267) 67 104
Spain(1) EMEA 674 1,801 12,024 150,716 21,911 12,356 Sweden EMEA (3,822)
(1,807) 1,558 1,164 1,361 831 Switzerland EMEA (11,672) 154 (4,369) (10,028)
2,197 (4,115) Turkiye EMEA 1,208 289 255 (3,876) 496 61 UAE EMEA 41,830 - -
27,604 - - United Kingdom EMEA 8,150 (4,035) 5,124 3,152 (1,986) 4,651
Australia APAC 2,121 682 62 2,277 877 (236) Country (in thousands) 2023 2022
Region Profit (Loss) before Income Tax Cash Paid for Income Tax Income Tax
Accrued Profit (Loss) before Income Tax Cash Paid for Income Tax Income Tax
Accrued QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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China APAC 8,386 2,267 (964) 16,617 4,438 (1,988) India APAC 1,676 153 (243)
1,333 - - Japan APAC 212 106 (1,878) 443 - (1,341) South Korea APAC 1,535 104
(235) 948 287 (14) Malaysia APAC 123 (26) (4) (5) 37 88 New Zealand APAC 30 55
33 38 - (20) Philippines APAC 1,870 243 (94) 75 177 (37) Singapore APAC
(14,153) 16 (45) (396) 70 (14) Taiwan APAC 843 141 (128) 666 102 (96) Thailand
APAC (371) 45 - (66) 166 (45) Total $407,321 $82,409 $48,163 $497,312 $120,476
$39,414 Country (in thousands) 2023 2022 Region Profit (Loss) before Income
Tax Cash Paid for Income Tax Income Tax Accrued Profit (Loss) before Income
Tax Cash Paid for Income Tax Income Tax Accrued Tables may contain rounding
differences. (1) Cash paid for income tax for 2022 has been adjusted for Spain
to agree to the numbers reported in the Consolidated Financial Statement.
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Canada NA $37 $7,830 $339 $37 $8,755 $321 United States NA 4,948,358 774,023
347,453 4,935,353 596,846 332,338 Brazil LATAM 62,226 (29,841) 10,163 66,278
(32,287) 9,525 Mexico LATAM 9,185 3,388 2,675 9,185 7,352 2,570 Austria EMEA -
887 1,271 - 845 1,006 Belgium EMEA - 8,958 740 - 7,929 762 Denmark EMEA
181,407 (110,431) 11,398 181,407 (114,287) 10,886 Egypt EMEA 6 (116) - 6 (22)
348 Finland EMEA - 2,868 475 - 2,191 559 France EMEA 104,902 (62,397) 4,951
107,705 (64,278) 2,805 Germany EMEA 774,523 (561,451) 681,707 774,523
(489,118) 549,256 Italy EMEA 38,819 (15,519) 4,587 38,819 (17,012) 4,889
Luxembourg EMEA 2,606,858 109,471 - 2,420,062 106,674 - Netherlands EMEA
2,811,684 2,234,539 80,856 2,785,357 2,046,386 94,182 Norway EMEA - 3,645 203
- 3,063 197 Poland EMEA 74,563 2,893 17,775 74,563 (1,429) 16,083 Romania EMEA
13 2,036 171 13 1,765 298 Russia EMEA (842) (1,791) - (842) (6,249) - South
Africa EMEA 5,347 (665) 1,762 5,347 (723) 1,642 Spain EMEA 194,753 (22,023)
24,732 194,753 (22,429) 30,242 Sweden EMEA 35,085 (22,370) 15,530 30,282
(17,054) 16,043 Switzerland EMEA 411,273 83,224 1,312 227,140 92,480 1,065
Turkiye EMEA 99,509 (30,713) 7,468 99,509 (31,901) 8,009 UAE EMEA 964,386
51,087 155 765,633 63,160 139 Country (in thousands) 2023 2022 Region Stated
Capital Accumulated Earnings Tangible Assets other than Cash and Cash
Equivalents Stated Capital Accumulated Earnings Tangible Assets other than
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United Kingdom EMEA 145,412 (6,266) 61,023 145,412 (10,182) 59,906 Australia
APAC 685,722 (14,267) 5,095 687,081 (15,606) 5,971 China APAC 46,029 72,202
33,629 46,029 65,516 39,783 India APAC 17,427 843 6,783 17,427 (399) 8,135
Japan APAC 84 415 10,212 84 364 12,017 South Korea APAC 4,168 6,704 3,750
4,168 8,069 3,437 Malaysia APAC 440 462 1,359 440 401 1,433 New Zealand APAC
118 43 98 118 22 143 Philippines APAC 4,153 3,596 6,021 4,153 2,030 1,350
Singapore APAC 10,618 3,131 3,491 11,648 2,615 4,415 Taiwan APAC 3,384 3,427
1,668 3,384 2,757 1,574 Thailand APAC 113 (4,423) 7,080 113 (4,026) 7,867
Total $14,239,760 $2,493,399 $1,355,932 $13,635,187 $2,192,218 $1,229,196
Country (in thousands) 2023 2022 Region Stated Capital Accumulated Earnings
Tangible Assets other than Cash and Cash Equivalents Stated Capital
Accumulated Earnings Tangible Assets other than Cash and Cash Equivalents
Tables may contain rounding differences. QIAGEN N.V. | IFRS Annual Report 2023
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Canada NA 21 19 United States NA 1,202 1,244 Brazil LATAM 73 74 Mexico LATAM
33 35 Austria EMEA 19 15 Belgium EMEA 9 13 Denmark EMEA 76 78 Egypt EMEA - 3
Finland EMEA 14 12 France EMEA 92 96 Germany EMEA 1,509 1,533 Italy EMEA 61 61
Luxembourg EMEA - - Netherlands EMEA 47 49 Norway EMEA 5 5 Poland EMEA 660 673
Romania EMEA 99 106 Russia EMEA 1 9 South Africa EMEA 16 13 Spain EMEA 219 213
Sweden EMEA 121 131 Switzerland EMEA 26 23 Turkiye EMEA 73 111 UAE EMEA 27 22
United Kingdom EMEA 379 390 Australia APAC 39 48 China APAC 473 499 India APAC
105 113 Country Number of Employees Region 2023 2022 QIAGEN N.V. | IFRS Annual
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Japan APAC 107 117 South Korea APAC 34 36 Malaysia APAC 29 27 New Zealand APAC
3 3 Philippines APAC 274 284 Singapore APAC 62 61 Taiwan APAC 22 22 Thailand
APAC 37 40 Total 5,967 6,178 Country Number of Employees Region 2023 2022
Tables may contain rounding differences. QIAGEN N.V. | IFRS Annual Report 2023
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GRI Content Index Statement of use: QIAGEN has reported the information cited
in this GRI content index for the period of January 1, 2023 to December 31,
2023 with reference to the GRI Standards. GRI 1 used: Foundation 2021 GRI 2:
General Disclosures 2021 2 - 1 Organizational details Financial Report 2023:
Management Report - Business and Operating Environment 2 - 2 Entities included
in the organization's sustainability reporting Financial Report 2023:
Management report - Business and Operating Environment Sustainability
Statement 2023: General Approach to Sustainability - Sustainability Governance
- Reporting boundaries Financial Report 2023: FN 28 Consolidated Companies 2 -
3 Reporting period, frequency and contact point Sustainability Statement 2023:
General Approach to Sustainability - Sustainability Governance - Reporting
boundaries With the Sustainability Statement 2023 as part of the Management
Report, QIAGEN is presenting its activities, key figures, targets, risks and
opportunities in the area of sustainability. The data relate to all QIAGEN
production sites, research centers and offices. The focus is on the 2023
financial year (January 1, 2023 to December 31, 2023); Publication date: April
26, 2024 2 - 4 Restatements of information Sustainability Statement 2023:
Environment - Environmental Responsibility - Minimize Carbon Footprint -
Status 2023 Comparison period results for Scope 1 and 2 emissions and certain
Scope 3 emissions have been adjusted to align with improved measurements and
calculation methods applied in 2023. 2 - 5 External assurance Sustainability
Statement 2023 - Annex: External Assurance (selected KPIs) 2 - 6 Activities,
value chain and other business relationships Financial Report 2023: Management
Report - Operating and Financial Review - Operating Results Sustainability
Statement 2023: Governance - Sustainable Procurement - Supply chain management
2 - 7 Employees Financial Report 2023: Consolidated Financial Statements
Sustainability Statement 2023: Social - Investing in People - Employees 2 - 8
Workers who are not employees We employ non-employee workers only to a minor
degree. 2 - 9 Governance structure and composition Financial Report 2023:
Corporate Governance Report - Governance Structure 2 - 10 Nomination and
selection of the highest governance body Financial Report 2023: Corporate
Governance Report GRI Standard Location / Comment QIAGEN N.V. | IFRS Annual
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2 - 11 Chair of the highest governance body Financial Report 2023: Corporate
Governance Report 2 - 12 Role of the highest governance body in overseeing the
management of impacts Financial Report 2023: Corporate Governance Report
Sustainability Statement 2023: General Approach to Sustainability -
Sustainability governance - Sustainability anchored in two-tier corporate
governance structure 2 - 13 Delegation of responsibility for managing impacts
Sustainability Statement 2023: General Approach to Sustainability -
Sustainability governance - Sustainability anchored in two-tier corporate
governance structure 2 - 14 Role of the highest governance body in
sustainability reporting Sustainability Statement 2023: General Approach to
Sustainability - Sustainability governance - Sustainability anchored in
two-tier corporate governance structure 2 - 15 Conflicts of interest Financial
Report 2023: Corporate Governance Report - Board-Related Matters - Conflicts
of Interest, Loans or Similar Benefits 2 - 16 Communication of critical
concerns Financial Report 2023: Corporate Governance Report - Corporate
Governance Statement Sustainability Statement 2023: General Approach to
Sustainability - Sustainability governance 2 - 17 Collective knowledge of the
highest governance body Financial Report 2023: Corporate Governance Report -
Corporate Governance Statement 2 - 18 Evaluation of the performance of the
highest governance body Financial Report 2023: Remuneration Report 2 - 19
Remuneration policies Financial Report 2023: Remuneration Report 2 - 20
Process to determine remuneration Financial Report 2023: Remuneration Report 2
- 21 Annual total compensation ratio Financial Report 2023: Remuneration
Report 2 - 22 Statement on sustainable development strategy Financial Report
2023: Corporate Governance Report - Supervisory Board Report - Message from
the Chair 2 - 23 Policy commitments Financial Report 2023: Management Report -
Risks and Risk Management - Risk Management Sustainability Statement 2023:
Governance - Compliance, Anti-corruption and Anti-trust Sustainability
Statement 2023: Governance - Sustainable Procurement Sustainability Statement
2023: Governance - Human Rights Sustainability Statement 2023: Governance -
Business Ethics 2 - 24 Embedding policy commitments Sustainability Statement
2023: General Approach to Sustainability - Sustainability governance 2 - 25
Processes to remediate negative impacts Sustainability Statement 2023: General
Approach to Sustainability - Our Material Topics 2 - 26 Mechanisms for seeking
advice and raising concerns Financial Report 2023: Management Report - Risks
and Risk Management - Risk Management Sustainability Statement 2023:
Governance - Compliance, Anti-corruption and Anti-trust - QIAGEN Integrity
Line 2 - 27 Compliance with laws and regulations There were no significant
instances of non-compliance with laws and regulations during the reporting
period. 2 - 28 Membership associations Sustainability Statement 2023:
Governance - Compliance, Anti-corruption and Anti-trust Sustainability
Statement 2023: Governance - Business Ethics Sustainability Statement 2023:
Social - Serving Society - Access to Healthcare - Collaborations Sustainability
Statement 2023: Governance - Data and Cyber Security GRI Standard Location /
Comment QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report
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2 - 29 Approach to stakeholder engagement Sustainability Statement 2023:
General Approach to Sustainability - Stakeholder engagement 2 - 30 Collective
bargaining agreements Sustainability Statement 2023: Social - Investing in
People - Employees GRI Standard Location / Comment GRI 3: Material Topics 2023
GRI Standard Location / Comment 3 - 1 Process to determine material topics
Sustainability Statement 2023: General Approach to Sustainability - Our
Material Topics 3 - 2 List of material topics Sustainability Statement 2023:
General Approach to Sustainability - Our Material Topics GRI 200 - Economic
GRI 201: Economic Performance GRI Standard Location / Comment 201 - 1 Direct
economic value generated and distributed Financial Report 2023 201 - 2
Financial implications and other risks and opportunities due to climate change
Sustainability Statement 2023: Environment - Environmental Responsibility -
Minimize Carbon Footprint 201 - 4 Financial assistance received from
government Sustainability Statement 2023: Governance - Tax - Financial
assistance from governments GRI 205: Anti-Corruption 2016 GRI Standard
Location / Comment 3 - 3 Management of material topics Sustainability
Statement 2023: General Approach to Sustainability - Our Material Topics
Sustainability Statement 2023: Governance - Compliance, Anti-corruption and
Anti-trust - Risk Management 205 - 1 Operations assessed for risks related to
corruption Sustainability Statement 2023: Governance - Compliance,
Anti-corruption and Anti-trust - Risk Management 205 - 3 Confirmed incidents
of corruption and actions taken Sustainability Statement 2023: Governance -
Compliance, Anti-corruption and Anti-trust - Risk Management QIAGEN N.V. |
IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 362 Appendices
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GRI 206: Anti-Competitive Behavior 2016 GRI Standard Location / Comment 3 - 3
Management of material topics Sustainability Statement 2023: General Approach
to Sustainability - Our Material Topics Sustainability Statement 2023:
Governance - Compliance, Anti-corruption and Anti-trust - Risk Management 206
- 1 Legal actions for anti-competitive behavior, anti-trust, and monopoly
practices Sustainability Statement 2023: Governance - Compliance,
Anti-corruption and Anti-trust - Risk Management GRI 207: Tax 2019 GRI
Standard Location / Comment 3 - 3 Management of material topics Sustainability
Statement 2023: General Approach to Sustainability - Our Material Topics
Sustainability Statement 2023: Governance - Tax - Tax accountability,
governance and compliance Sustainability Statement 2023: Governance - Tax -
Tax management 207 - 1 Approach to tax Sustainability Statement 2023:
Governance - Tax - Tax accountability, governance and compliance 207 - 2 Tax
governance, control, and risk management Sustainability Statement 2023:
Governance - Tax - Tax accountability, governance and compliance 207 - 3
Stakeholder engagement and management of concerns related to tax Sustainability
Statement 2023: Governance - Tax - Tax management 207 - 4 Country-by-country
reporting Sustainability Statement 2023 - Annex: Detailed Tax Disclosure
(country-by-country reporting) GRI 300 - Environmental GRI 301: Materials 2016
GRI Standard Location / Comment 3 - 3 Management of material topics
Sustainability Statement 2023: General Approach to Sustainability - Our
Material Topics Sustainability Statement 2023: Environment - Environmental
Responsibility - Approach to environmental protection 301 - 1 Materials used
by weight or volume QIAGEN does collect weight or volume data on raw material,
auxiliary materials or semi-finished products, but not information on
renewable or non-renewable used. Sustainability Statement 2023: Environment -
Environmental Responsibility - Minimize Carbon Footprint - Status 2023 QIAGEN
N.V. | IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 363 Appendices
-------------------------------------------------------------------------------
GRI 302: Energy 2016 GRI Standard Location / Comment 3 - 3 Management of
material topics Sustainability Statement 2023: General Approach to
Sustainability - Our Material Topics Sustainability Statement 2023:
Environment - Environmental Responsibility - Minimize Carbon Footprint -
Energy - Energy efficiency 302 - 1 Energy consumption within the organization
Sustainability Statement 2023: Environment - Environmental Responsibility -
Minimize Carbon Footprint - Energy - [Table] Energy Consumption by Source GRI
303: Water and Effluents 2018 GRI Standard Location / Comment 303 - 1
Interactions with water as a shared resource Sustainability Statement 2023:
Environment - Environmental Responsibility - Water consumption 303 - 2
Management of water discharge-related impacts Sustainability Statement 2023:
Environment - Environmental Responsibility - Water consumption 303 - 5 Water
consumption Sustainability Statement 2023: Environment - Environmental
Responsibility - Water consumption GRI 305: Emissions 2016 GRI Standard
Location / Comment 3 - 3 Management of material topics Sustainability
Statement 2023: General Approach to Sustainability - Our Material Topics
Sustainability Statement 2023: Environment - Environmental Responsibility -
Minimize Carbon Footprint - Management of Scope 1 and 2 emissions
Sustainability Statement 2023: Environment - Environmental Responsibility -
Minimize Carbon Footprint - Management of Scope 3 emissions 305 - 1 Direct
(Scope 1) GHG emissions Sustainability Statement 2023: Environment -
Environmental Responsibility - [Table] Corporate Carbon Footprint by Emissions
category 305 - 2 Energy indirect (Scope 2) GHG emissions Sustainability
Statement 2023: Environment - Environmental Responsibility - [Table] Corporate
Carbon Footprint by Emissions category 305 - 3 Other indirect (Scope 3) GHG
emissions Sustainability Statement 2023: Environment - Environmental
Responsibility - [Table] Corporate Carbon Footprint by Emissions category 305
- 4 GHG emissions intensity Sustainability Statement 2023: Environment -
Environmental Responsibility - Minimize Carbon Footprint - Status 2023 305 - 5
Reduction of GHG emissions Sustainability Statement 2023: Environment -
Environmental Responsibility - Minimize Carbon Footprint - Status 2023 QIAGEN
N.V. | IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 364 Appendices
-------------------------------------------------------------------------------
GRI 306: Waste 2020 GRI Standard Location / Comment 3 - 3 Management of
material topics Sustainability Statement 2023: General Approach to
Sustainability - Our Material Topics Sustainability Statement 2023:
Environment - Environmental Responsibility - Waste 306 - 1 Waste generation
and significant waste-related impacts Sustainability Statement 2023:
Environment - Environmental Responsibility - Waste 306 - 2 Management of
significant waste-related impacts Sustainability Statement 2023: Environment -
Environmental Responsibility - Waste 306 - 3 Waste generated Sustainability
Statement 2023: Environment - Environmental Responsibility - Waste GRI 308:
Supplier Environmental Assessment 2016 GRI Standard Location / Comment 3 - 3
Management of material topics Sustainability Statement 2023: General Approach
to Sustainability - Our Material Topics Sustainability Statement 2023:
Governance - Sustainable Procurement - Supply chain management 308 - 1 New
suppliers that were screened using environmental criteria Sustainability
Statement 2023: Governance - Sustainable Procurement - Due Diligence in the
supply chain GRI 400 - Social GRI 401: Employment 2016 GRI Standard Location /
Comment 3 - 3 Management of material topics Sustainability Statement 2023:
General Approach to Sustainability - Our Material Topics Sustainability
Statement 2023: Social - Investing in People - Employees Sustainability
Statement 2023: Social - Investing in People - Employee Attraction and
Development - Our Approach Sustainability Statement 2023: Social - Investing
in People - Diversity & Inclusion 401- 1 New employees hired and employee
turnover Sustainability Statement 2023: Social - Investing in People -
Employee Attraction and Development - Employee satisfaction and retention
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
Governance Financial Statements Appendices Page 365 Appendices
-------------------------------------------------------------------------------
GRI 402: Labor / Management Relations 2016 GRI Standard Location / Comment 3 -
3 Management of material topics Sustainability Statement 2023: Social -
Investing in People - Employees Sustainability Statement 2023: EU Taxonomy -
Taxonomy-eligibility and Taxonomy-alignment 402- 1 Minimum notice periods
regarding operational changes Our goal is to inform employees about
significant operational changes as early as possible and in alignment with
local and legal requirements, as well as collective agreements. Compliance is
always at the forefront of our business decisions. If possible, we provide
employees with more notice than required. GRI 403: Occupational Health and
Safety 2018 GRI Standard Location / Comment 3 - 3 Management of material
topics Sustainability Statement 2023: General Approach to Sustainability - Our
Material Topics Sustainability Statement 2023: Social - Investing in People -
Occupational Health and Safety - Management Approach/ Strategy Sustainability
Statement 2023: Social - Investing in People - Occupational Health and Safety
- Impact, risk and opportunities 403- 1 Occupational health and safety
management system Sustainability Statement 2023: Social - Investing in People
- Occupational Health and Safety - Management Approach/ Strategy 403 - 3
Occupational health services The functions of occupational health services
vary between sites. 403 - 4 Worker participation, consultation, and
communication on occupational health and safety Employees are involved in OHS
management through the joint management-worker Health and Safety Committee
meetings, regular safety inspections including interviews with employees, and
two-way communication through the official EHS email address and the global
EHS incident reporting portal. 403 - 5 Worker training on occupational health
and safety OHS training is managed on a local basis. 403 - 6 Promotion of
worker health Sustainability Statement 2023: Social - Investing in People -
Occupational Health and Safety - Promotion of employees' health 403 - 7
Prevention and mitigation of occupational health and safety impacts directly
linked by business relationships Sustainability Statement 2023: Social -
Investing in People - Occupational Health and Safety - Impact, risk and
opportunities 403 - 9 Work-related injuries Sustainability Statement 2023:
Social - Investing in People - Occupational Health and Safety - [Table] Safety
indicators for full-time employees and temporary workers vs. contractors
QIAGEN N.V. | IFRS Annual Report 2023 Overview Management Report Corporate
Governance Financial Statements Appendices Page 366 Appendices
-------------------------------------------------------------------------------
GRI 404: Training and Education 2016 GRI Standard Location / Comment 3 - 3
Management of material topics Sustainability Statement 2023: General Approach
to Sustainability - Our Material Topics Sustainability Statement 2023: Social
- Investing in People - Employee Attraction and Development - Our Approach
404- 2 Programs for upgrading employee skills and transition assistance
programs Sustainability Statement 2023: Social - Investing in People -
Employee Attraction and Development - Employee Development GRI 405: Diversity
and Equal Opportunity 2016 GRI Standard Location / Comment 3 - 3 Management of
material topics Sustainability Statement 2023: General Approach to
Sustainability - Our Material Topics Sustainability Statement 2023: Social -
Investing in People - Diversity & Inclusion 405- 1 Diversity of governance
bodies and employees Financial Report 2023: Corporate Governance Report -
Board-Related Matters - Diversity within the Managing Board and Supervisory
Board Sustainability Statement 2023: Social - Investing in People - Diversity
& Inclusion GRI 412: Human Rights Assessment 2016 GRI Standard Location /
Comment 3 - 3 Management of material topics Sustainability Statement 2023:
General Approach to Sustainability - Our Material Topics Sustainability
Statement 2023: Social - Investing in People - Employees Sustainability
Statement 2023: Governance - Sustainable Procurement Sustainability Statement
2023: Governance - Human Rights 412- 2 Employee training on human rights
policies or procedures Sustainability Statement 2023: Governance - Human
Rights Sustainability Statement 2023: Governance - Sustainable Procurement
Sustainability Statement 2023: Social - Investing in People - Employees GRI
414: Supplier Social Assessment 2016 GRI Standard Location / Comment 3 - 3
Management of material topics Sustainability Statement 2023: General Approach
to Sustainability - Our Material Topics Sustainability Statement 2023:
Governance - Sustainable Procurement 414- 2 Negative social impacts in the
supply chain and actions taken Sustainability Statement 2023: Governance -
Sustainable Procurement QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
367 Appendices
-------------------------------------------------------------------------------
GRI 416: Customer Health and Safety 2016 GRI Standard Location/Comment 3 - 3
Management of material topics Sustainability Statement 2023: General Approach
to Sustainability - Our Material Topics Sustainability Statement 2023: Social
- Serving Society - Quality and product safety - Our approach to quality 416 -
1 Assessment of the health and safety impacts of product and service
categories Sustainability Statement 2023: Social - Serving Society - Quality
and product safety - Our approach to quality Sustainability Statement 2023:
Social - Serving Society - Quality and product safety - Chemical product
safety 416 - 2 Incidents of non-compliance concerning the health and safety
impacts of products and services Sustainability Statement 2023: Social -
Serving Society - Quality and product safety - Chemical product safety -
Regulatory context GRI 417: Marketing and Labeling 2016 GRI Standard Location
/ Comment 3 - 3 Management of material topics Sustainability Statement 2023:
General Approach to Sustainability - Our Material Topics Sustainability
Statement 2023: Social - Serving Society - Quality and product safety
Sustainability Statement 2023: Social - Serving Society - Quality and product
safety - Chemical product safety 417- 1 Requirements for product and service
information and labeling Sustainability Statement 2023: Social - Serving
Society - Quality and product safety - Chemical product safety - Access to
information and responsible marketing practices 417 - 2 Incidents of
non-compliance concerning product and service information and labeling
Sustainability Statement 2023: Social - Serving Society - Quality and product
safety - Chemical product safety - Regulatory context GRI 418: Customer
Privacy 2016 GRI Standard Location / Comment 3 - 3 Management of material
topics Sustainability Statement 2023: General Approach to Sustainability - Our
Material Topics Sustainability Statement 2023: Governance - Data and Cyber
Security 418- 1 Substantiated complaints concerning breaches of customer
privacy and losses of customer data Sustainability Statement 2023: Governance
- Data and Cyber Security QIAGEN N.V. | IFRS Annual Report 2023 Overview
Management Report Corporate Governance Financial Statements Appendices Page
368 Appendices
-------------------------------------------------------------------------------
Sustainability Accounting Standards Board (SASB) Index Affordability & Pricing
Description of how price information for each product is disclosed to
customers or to their agents HC-MS-240a.2 Discussion and Analysis n/a
www.QIAGEN.com/products Product Safety Number of recalls issued, total units
recalled HC-MS-250a.1 Quantitative Number Sustainability Statement 2023:
Quality and Product Safety - Our Approach to quality Products listed in the
FDA's Med-Watch Safety Alerts for Human Medical Products database HC-MS-250a.2
Discussion and Analysis n/a In 2023, no QIAGEN products were listed in the
U.S. FDA's MedWatch Safety Alerts for Human Medical Products database. Number
of fatalities related to products as reported in the FDA Manufacturer and User
Facility Device Experience HC-MS-250a.3 Quantitative Number There were no
fatalities related to products as reported in the FDA Manufacturer and User
Facility Device Experience. Number of FDA enforcement actions taken in
response to violations of current Good Manufacturing Practices (cGMP), by type
HC-MS-250a.4 Quantitative Number None. Ethical Marketing Total amount of
monetary losses as a result of legal proceedings associated with false
marketing claims HC-MS-270a.1 Quantitative Number QIAGEN has not been subject
to any legal proceedings regarding the U.S. False Claims Act or any other
false marketing claims laws in any country during the reporting period.
Description of code of ethics governing promotion of off-label use of products
HC-MS-270a.2 Discussion and Analysis n/a QIAGEN Corporate Code of Conduct and
Ethics Sustainability Statement 2023: Governance - Business Ethics
Sustainability Statement 2023: Governance - Compliance, Anti-corruption and
Anti-trust - Compliance Program Sustainability Statement 2023: Governance -
Compliance, Anti-corruption and Anti-trust - Compliance training courses
QIAGEN defines off-label use of products as the marketing of a product for an
unapproved use. It requires that promotion of IVD/Regulated Products must
follow relevant regulations and consistent with intended uses. All product
claims must be substantiated. Any violation of the policy by employees may
trigger disciplinary action including termination of employment Topic Metric
Code Category Unit of Measure Content / Report/ Location QIAGEN N.V. | IFRS
Annual Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 369 Appendices
-------------------------------------------------------------------------------
Product Design & Lifecycle Management Discussion of process to assess and
manage environmental and human health considerations associated with chemicals
in products, and meet demand for sustainable products HC-MS-410a.1 Discussion
and Analysis n/a Sustainability Statement 2023: Quality and Product Safety -
Our Approach to quality Total amount of products accepted for take-back and
reused, recycled, or donated, broken down by: (1): devices and equipment and
(2) supplies HC-MS-410a.2 Quantitative Metric tons The Waste Electrical
Electronic Equipment EU Directive (WEEE) requires that producers of WEEE have
a take-back plan at end of life. QIAGEN has processes to meet these
obligations. In 2023, a total of 11.7 tons of EEE was reclaimed and recycled
in Europe. WEEE category (in kg) 2023, 2022, 2021 Screens, monitors and
equipment containing screens having a surface greater than 100 cm^2 2023: None
2022: None 2021: 27 Small equipment (no external dimension greater than 50 cm)
2023: 11,730 2022: 2,084 2021: 9,297 Small IT and telecommunications equipment
2023: None 2022: None 2021: 348 Total 2023: 11,730 2022: 2,084 2021: 9,672
Topic Metric Code Category Unit of Measure Content / Report/ Location QIAGEN
N.V. | IFRS Annual Report 2023 Overview Management Report Corporate Governance
Financial Statements Appendices Page 370 Appendices
-------------------------------------------------------------------------------
Supply Chain Management Percentage of (1) entity's facilities and (2) Tier I
suppliers' facilities participating in third-party audit programs for
manufacturing and product quality HC-MS-430a.1 Quantitative Percentage (%)
Sustainability Statement 2023: Governance - Sustainable Procurement - Due
Diligence in the supply chain - Supplier assessment and audits 100% of QIAGEN
production sites are participating in third- party audit programs (1), and
100% of our Class A suppliers either maintain a quality system certificate
(ISO 9001/13485/170325) or are audited by QIAGEN's Supplier Quality unit (2).
Description of efforts to maintain traceability within the distribution chain
HC-MS-430a.2 Discussion and Analysis n/a For each new batch of raw material,
semi-finished goods and final products, a batch number is assigned that is
unique to the material. For raw materials, either the supplier lot number is
adopted into QIAGEN's ERP system or the ERP system assigns a new QIAGEN batch
number. The combination of material number and batch number is unique. At each
manufacturing step, a new batch number is assigned to the respective component
by the ERP system. Batch numbers are printed on all sellable items and ensure
full batch traceability from customer information to raw material. Description
of the management of risks associated with the use of critical materials
HC-MS-430a.3 Discussion and Analysis n/a Sustainability Statement 2023:
Sustainable Procurement - Conflict Minerals Business Ethics Total amount of
monetary losses as a result of legal proceedings associated with bribery or
corruption HC-MS-510a.1 Quantitative Presentation currency In the reporting
period, QIAGEN had 0 (no) legal actions pending or completed regarding
antitrust or corruption. Description of code of ethics governing interactions
with health care professionals HC-MS-510a.2 Discussion and Analysis n/a QIAGEN
Corporate Code of Conduct and Ethics Topic Metric Code Category Unit of
Measure Content / Report/ Location Activity Metric Code Category Measure
Content / Report/ Location Number of units sold by product category
HC-MS-000.A Quantitative Number Not reported yet QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 371 Appendices
-------------------------------------------------------------------------------
TCFD Index Topic Accounting Metric QIAGEN CDP questionnaire 2023 Governance
Board's oversight of climate-related risks and opportunities C1.1a, C 1.1b
Management's role in assessing and managing climate-related risks and
opportunities C 1.2, C1.3, C1.3a Strategy Climate-related risks and
opportunities the organization has identified over the short, medium and long
term C2.1, C2.1a, C2.2a, C2.3, C2.3b, C2.4, C2.4a Impact of climate-related
risks and opportunities on the organization's business, strategy and financial
planning C2.3, C2.3b, C 2.4, C2.4a, C3.1, C3.3, C3.4 Resilience of the
organization's strategy, taking into consideration different climate-related
scenarios, including a 2°C or lower scenario C3.1, C3.2, C3.2a, C3.2b Risk
Management Organization's processes for identifying and assessing
climate-related risks C2.1, C2.1a, C2.1b, C2.2, C2.2a Organization's processes
for managing climate related risks C2.2, C2.2a How processes for identifying,
assessing and managing climate-related risks are integrated into the
organization's overall risk management C2.2, C2.2a Metric & Targets Metrics
used by the organization to assess climate-related risks and opportunities in
line with its strategy and risk management process C3.5, C3.5a, C3.5c Scope 1,
Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the
related risks C4.3, C4.3a, C4.3b, C5.2, C5.3, C6.1,C6.2, C6.3, C6.4, C6.4a,
C6.5, C6.10, C7.2, C7.3, C7.3b, C7.6, C7.6b, C7.7a, C7.9a, Targets used by the
organization to manage climate-related risks and opportunities and performance
against targets C4.1, C4-1a, C4.1b, C4.2. C4.2b, C4.2c The QIAGEN CDP Climate
questionnaire can be found online at www.cdp.net. QIAGEN N.V. | IFRS Annual
Report 2023 Overview Management Report Corporate Governance Financial
Statements Appendices Page 372 Appendices
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