QIAGENers – the name we use proudly for our more than 5,100 employees worldwide – are the reason for our success. The members of the Supervisory Board wish to thank all QIAGENers for their contributions during 2019 toward achieving our vision of making improvements in life possible. We would also like to thank our shareholders, customers, business partners and other stakeholders for honoring QIAGEN with their continued collaboration and trust.
As an important subsequent event to 2019, QIAGEN and Thermo Fisher Scientific Inc. (NYSE: TMO) announced on March 3, 2020, that their boards of directors, as well as the Managing Board of QIAGEN N.V., have unanimously approved Thermo Fisher’s proposal to acquire QIAGEN for €39 per share in cash. The offer price represents a premium of approximately 23% to the closing price of QIAGEN’s common stock on the Frankfurt Prime Standard on March 2, 2020, the last trading day prior to the announcement of the transaction. Thermo Fisher will commence a tender offer to acquire all of the ordinary shares of QIAGEN. At the time of the announcement, the transaction valued QIAGEN at approximately $11.5 billion, which includes the assumption of approximately $1.4 billion of net debt. The transaction, which is expected to be completed in the first half of 2021, is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals, the adoption of certain resolutions relating to the transaction at an Extraordinary General Meeting of QIAGEN’s shareholders, and completion of the tender offer. Thermo Fisher has obtained committed bridge financing. Permanent funding is expected to come from cash on hand and the issuance of new debt. The transaction is not subject to any financing condition.
The members of the Supervisory Board unanimously support this agreement, which will enable QIAGEN to enter a promising new era and will give our employees the opportunity to have an even greater impact. The combination is designed to deliver significant cash value to our shareholders, while enabling QIAGEN to accelerate the expansion of its solutions to provide customers worldwide with breakthroughs that advance our knowledge about the science of life and improve health outcomes.
A key role of the Supervisory Board is to monitor the performance and progress of QIAGEN’s business on a regular basis, and this was done during the course of 2019 with detailed written and oral reports from the Managing Directors, members of the Executive Committee and other senior leaders.
QIAGEN had a challenging year in 2019. During the second half, QIAGEN had to update its outlook to the capital markets to take into account a decision to stop a joint venture for the GeneReader NGS System in China and expectations for a continued reduction in revenues from companion diagnostic co-development projects as a result of the decision to gain access to the clinical next-generation sequencers of Illumina, Inc. through a new partnership. In the end, QIAGEN achieved the revised targets for net sales growth and improvements in adjusted earnings per share (EPS), which excludes purchased intangibles amortization, long-lived asset impairments and other items such as business integration, acquisition-related costs, litigation costs and restructuring. Our teams completed projects during the year to reallocate resources to support business expansion while also improving profitability.
QIAGEN announced in October 2019 that Peer M. Schatz had notified the Supervisory Board that, after 27 years with the Company, he had decided to step down as Chief Executive Officer and Chairman of the Managing Board, and would remain with QIAGEN as a Special Advisor to the Supervisory Board. Thierry Bernard, Senior Vice President, Head of Molecular Diagnostics Business Area, was appointed in October 2019 as Interim CEO and worked in tandem with Roland Sackers, Chief Financial Officer and Member of the Managing Board. Mr. Bernard was named CEO in March 2020, and will be proposed for election as a Managing Director, along with Mr. Sackers, at the next Annual General Meeting scheduled for June 2020.
The members of the Supervisory Board would like to thank Mr. Schatz for his exceptional contributions and dedication to QIAGEN. We all owe him tremendous gratitude for his outstanding leadership and track record that contributed to the creation of a true success story in the life sciences industry and enabled such great advances in science and healthcare. We respect his decision to pursue other interests.
The composition of the Supervisory Board did not change during 2019.
All current members of the Supervisory Board will stand for re-election at the upcoming Annual General Meeting in June 2020. Additionally, all members, with the exception of Metin Colpan and Elizabeth E. Tallett, have served in the Supervisory Board for less than eight years as recommended by the Dutch Corporate Governance Code. QIAGEN values the profound industry experience of Dr. Colpan and Ms. Tallett for their in-depth knowledge, and supports their reappointments.
The target profile of the Supervisory Board can be found on QIAGEN’s website, as well as in the Governance section of this Annual Report. The current composition fully complies with this profile. Further information on the individual members of the Supervisory Board, such as gender, age, nationality and other positions relevant to the performance of their duties as Supervisor Board member, date of initial appointment and current term of office is set forth in the Corporate Governance Report and on our website at www.QIAGEN.com.
QIAGEN has a commitment to developing a diverse leadership team, with a broad range of backgrounds, experience, skills and capabilities. In nominating candidates, QIAGEN is committed to increasing diversity while pursuing individuals to join QIAGEN with a unique blend of scientific and commercial expertise and experience that will contribute to our future business success. Management development programs support the career advancement of leaders regardless of gender and other factors. As a result, a number of women are in key leadership roles around the world, and QIAGEN currently has 29% of management roles held by women. In line with this commitment, the Supervisory Board continues to take diversity into account when proposing members for election or re-election without compromising QIAGEN’s commitment to hiring the best individuals for positions without any discrimination. The current governance structure has led to the size of the Managing Board of two members, so achieving a diversity goal as measured solely by a percentage of overall membership is difficult to achieve. At the same time, QIAGEN has significantly increased the diversity of its senior leadership team and will continue to do so in the future.
As empowered by the Dutch Corporate Governance Code, the Supervisory Board devoted considerable time during 2019 to discussing and assessing QIAGEN’s corporate strategy, main risks and opportunities, and an annual assessment by the Managing Board of the design and effectiveness of internal risk management and control systems as well as any significant changes in them. In addition, the Supervisory Board discussed and reviewed the functioning of its committees and individual members, its current composition, competence, succession schedule and desired profile in various meetings and through written surveys.
The Supervisory Board met seven times during 2019, and conducted 15 telephone conference calls. These meetings also included regular attendance of the members of the Managing Board for certain agenda items. The Supervisory Board also met to review and discuss agenda items in the absence of the Managing Board members, such as performance and strategy as well as to discuss compensation matters. Information about the Supervisory Board members, including positions held on other boards, is included in the Corporate Governance Report. All members of the Supervisory Board had adequate time available to give sufficient attention to the concerns of the Company. The Supervisory Board further discussed the performance of the Managing Board and concluded that it and the Managing Board were functioning properly, especially in view of the regulations set forth in the Dutch Corporate Governance Code.
The Supervisory Board has established an Audit Committee (Chair Lawrence Rosen), a Compensation Committee (Chair Elizabeth E. Tallett), a Selection and Appointment Committee (Chair Håkan Björklund), and a Science and Technology Committee (Chair Metin Colpan) from among its members. The Supervisory Board reserves the right to establish other committees as deemed beneficial, and has approved charters under which each of these committees operates. Charters are available on our website at www.QIAGEN.com.
The deliberations and findings of the committees were reported by the committee chairs to the Supervisory Board in its meetings on a regular basis. All committee members attended all committee meetings in 2019 physically or by phone. Further detailed information on the composition of the Supervisory Board and its committees, the number of committee meetings held in 2019 and the main topics of discussion, the remuneration of its members, as well as other information on the Supervisory Board, can be found in the Corporate Governance Report, which is an integral part of this Annual Report.
Through its Compensation Committee, the Supervisory Board executed and monitored compliance with the Remuneration Policy approved at the Annual General Meeting held on June 25, 2014. Compensation of Managing Board members consists of a fixed salary and variable components. Variable compensation includes one-time and annual payments linked to business performance (bonuses) as well as long-term incentives, such as share-based compensation, and pension plans. The Remuneration Policy and the various aspects of compensation, including the detailed remuneration of individual Managing Board members, are described in the Remuneration Report, which is available on QIAGEN’s website. Information on QIAGEN’s activities was communicated by the Managing Board to the Supervisory Board through regular meetings and business reports.
All members of the Supervisory Board fulfill the independence criteria as defined by the Dutch Corporate Governance Code. The Supervisory Board follows the principle of increasing shareholder value as the members represent the interests of all stakeholders, including shareholders, and has always pursued the highest standards in corporate governance.
QIAGEN is committed to a corporate governance structure that best suits its business and stakeholders, and that complies with relevant rules and regulations. QIAGEN follows the principles described in the Dutch Corporate Governance Code, although some minor deviations, which are explained in detail in our Corporate Governance Report, may result from the impact of factors such as legal requirements imposed on QIAGEN or industry standards.
QIAGEN’s common shares are registered and traded in the U.S. on the New York Stock Exchange (NYSE) as of January 2018 (formerly on the NASDAQ Global Select Market) and in Germany on the Frankfurt Stock Exchange in the Prime Standard segment. Shareholders in Europe and the U.S. hold the majority of common shares. As a result of these listings for its Global Shares, QIAGEN is subject to the rules regarding corporate governance set by the NYSE. QIAGEN believes all of its operations are carried out in accordance with legal frameworks, including Dutch Corporate Law, U.S. laws and regulations, EU regulations and applicable German capital market laws.
In this Annual Report, the financial statements for 2019 are presented as prepared by the Managing Board and audited by KPMG (Independent Registered Public Accounting Firm). We examined the financial statements, the proposal for the use of the distributable profit, the consolidated financial statements and the Management report. We have no objections, thus we concur with the results of the audit, and it has been approved by the Supervisory Board. In closing, the Supervisory Board would like to again thank all QIAGEN employees for the outstanding performance and commitment during an eventful year.
Venlo, the Netherlands, April 2020
The Supervisory Board:
Dr. Håkan Björklund
Chairman of the Supervisory Board
