Attached files
| file | filename |
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| EX-99.1 - PRESS RELEASE - WEST PHARMACEUTICAL SERVICES INC | pressrelease.htm |
| 8-K - CJS SECURITIES CONFERENCE - WEST PHARMACEUTICAL SERVICES INC | file8kcjs.htm |
1
Donald
E. Morel, Jr., Ph.D.
Chairman and Chief
Executive Officer
William
J. Federici
Vice
President and Chief Financial Officer
Investor
Relations Contact:
Michael
A. Anderson
Vice
President and Treasurer
mike.anderson@westpharma.com
CJS
“New Ideas” Investor Conference
New
York, New York
January
14, 2010
NYSE:
WST
westpharma.com
All
trademarks and registered trademarks are the property of West Pharmaceutical
Services, Inc., unless noted otherwise.
2
This
presentation contains forward-looking statements, within the meaning of
Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, that are based on management’s beliefs and
assumptions, current expectations, estimates and forecasts. Statements that are not
historical facts, including statements that are preceded by, followed by, or that
include, words such as “estimate,” “expect,” “intend,” “believe,” “plan,” “anticipate”
and other words and terms of similar meaning are forward-looking statements. West’s
estimated or anticipated future results, product performance or other non-historical
facts are forward-looking and reflect our current perspective on existing trends and
information.
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, that are based on management’s beliefs and
assumptions, current expectations, estimates and forecasts. Statements that are not
historical facts, including statements that are preceded by, followed by, or that
include, words such as “estimate,” “expect,” “intend,” “believe,” “plan,” “anticipate”
and other words and terms of similar meaning are forward-looking statements. West’s
estimated or anticipated future results, product performance or other non-historical
facts are forward-looking and reflect our current perspective on existing trends and
information.
Many
of the factors that will determine the Company’s future results are beyond
the
ability of the Company to control or predict. These statements are subject to known or
unknown risks or uncertainties, and therefore, actual results could differ materially
from past results and those expressed or implied in any forward-looking statement.
You should bear this in mind as you consider forward-looking statements. A non-
exclusive list of important factors that may affect future results may be found in
West’s filings with the Securities and Exchange Commission, including our annual
report on Form 10-K and our periodic reports on Form 10-Q and Form 8-K.
ability of the Company to control or predict. These statements are subject to known or
unknown risks or uncertainties, and therefore, actual results could differ materially
from past results and those expressed or implied in any forward-looking statement.
You should bear this in mind as you consider forward-looking statements. A non-
exclusive list of important factors that may affect future results may be found in
West’s filings with the Securities and Exchange Commission, including our annual
report on Form 10-K and our periodic reports on Form 10-Q and Form 8-K.
You
should evaluate any statement in light of these important factors.
Forward
Looking Statements
3
Corporate
Profile
• Founded
in 1923
• Leading
global supplier of
components and systems
for injectable drug delivery
components and systems
for injectable drug delivery
– Vial
closure systems
– Prefillable
syringe components
– Components
for diagnostics
– Devices
and device sub-
assemblies
assemblies
– Safety
and administration
systems
systems
• Market
capitalization $1.3 billion
• Diverse,
stable customer base
• Global
footprint
|
|
|
Devices
|
|
Proprietary
Products
|
4
• Challenges:
– Adverse
effects of pension expense, currency effects
– Recession
impacted customer behavior/order patterns
• Tighter
cost/ working capital/inventory management and
• Major
program delays and cancellations
– Slowed
growth coming into 2009 continued through Q2
• Q3
revenues grew by 4.3% excluding currency
– H1N1-related
sales growth
– Customer
cyclical inventory adjustments moderating
• Key
developments:
– Validated
Daikyo Crystal Zenith 1ml single cavity manufacturing cell
• Four
cavity cell installed late Q4; commercial production should
start Q3 2010
start Q3 2010
– Plastef
acquisition completed
– Officially
opened China Plastics facility
– Announced
plans to restructure and re-align operating segments in Q4
Announcement
of Q4 and full-year 2009 results, of financial guidance for 2010,
and the related analyst call are scheduled for February 18, 2010
and the related analyst call are scheduled for February 18, 2010
2009
in Retrospect
5
Long
Term Business Drivers
• Demographics
• Growth
in Biologics & Vaccines
• Requirement
for easy, safe,
accurate dosing
accurate dosing
• Combination
product growth
• Generic
growth
• Increasing
global access to
advanced healthcare
advanced healthcare
West
supplies sophisticated
packaging systems for the top 20
biologic drugs (by sales) currently
on the market.
packaging systems for the top 20
biologic drugs (by sales) currently
on the market.
6
Therapeutic Category Drivers
|
Category
|
Key
Customers
|
Projected
Growth |
|
Diabetes
|
|
8
- 10%
|
|
Oncology
|
|
6
- 8%
|
|
Vaccines
|
4
- 6%
|
|
|
Autoimmune
|
|
6
- 8%
|
7
• Global economic
conditions remain soft, but show signs of
improvement
improvement
• Uncertainty over
pending US healthcare legislation
• Global pharma
revenue growth projected to be 4-6% (per
IMS)
IMS)
• North America growth
projected at 4.5 - 5.5%
• Europe growth
moderate 2-4%
• Emerging economies
should grow > 10% (India, China, Brazil)
• Customer
consolidation increasing focus on large molecule
therapies:
therapies:
• Pfizer -
Wyeth
• Roche - Genentech
• AstraZeneca - Medimmune
• Lilly -
Imclone
• Merck - Schering
Plough
2010
Outlook
8
|
Packaging
Systems
(How drugs are
contained)
|
|
Primary
Container Solutions
|
|
Delivery
Systems
(How drugs are
administered)
|
|
Administration
Systems
|
Business
Unit Re-alignment
• Safety
systems (NovaGuard, Eris)
• Reconstitution
systems -
MediMop
MediMop
• CZ
prefillable syringe systems
• Advanced
Injection Systems
(Confidose)
(Confidose)
• Tech
Group Contract
Manufacturing
Manufacturing
• Small
volume parenteral
packaging
packaging
• Large
volume parenteral
packaging
packaging
• Prefillable
syringe components
• Disposable
medical device
components
components
• Diagnostic,
dental, veterinary
packaging
packaging
9
Five-Year
Growth Opportunity
$2
billion combined markets for safety,
prefilled and auto-injectors, with unit
growth 6-12%, depending on product and
therapeutic segment
prefilled and auto-injectors, with unit
growth 6-12%, depending on product and
therapeutic segment
Strategic
Planning Goals:
• Projected
2014 sales of $0.6 billion
• Projected
2014 Operating margin: 20%
$1.5
billion market for components with unit
growth 0% to 8% per year, depending on
product and therapeutic segment
growth 0% to 8% per year, depending on
product and therapeutic segment
Strategic
Planning Goals:
• Projected
2014 sales of $1.0 billion
• Projected
2014 Operating margin: 20%
|
Packaging
Systems
(How drugs are
contained)
|
|
Primary
Container Solutions
|
|
Delivery
Systems
(How drugs are
administered)
|
|
Administration
Systems
|
Consolidated 2014
Planning Objectives
• 2014
Sales: $1.6 billion
• 2014
Operating Margin: 19%
• 2014
Consolidated ROIC: 17%
10
Our
Growth Strategy
West’s
Competitive Advantages:
• Unmatched
expertise in drug -
material interactions
material interactions
• Market
leader in packaging for
biologics
biologics
• Protected
IP: Proprietary materials
and processing technology - Drug
Master File (DMF) 1546
and processing technology - Drug
Master File (DMF) 1546
• Regulatory
barriers to entry:
US NDAs
and ANDAs
require proof of stability
require proof of stability
• Global
technical support
|
Packaging
Systems
(How drugs are
contained)
|
|
Primary
Container Solutions
|
• Therapeutic
segment focus
• Generate
incremental value per
unit
unit
• Leverage
changing regulatory
environment
environment
• Optimize
manufacturing
productivity
productivity
• Strategic
acquisitions
• Geographic
expansion
• China
• India
11
Value
Proposition
PROPRIETARY
PRODUCTS
Revenue
and
Margin
Opportunity
Opportunity
Disposable
Device
Disposable
Device
Components
Components
Westar®
RS
Mix2Vial®
NovaGuard™
éris™
Westar®
RU
Standard
Components
Components
Standard
Components
Components
Consumer
Consumer
Products
Products
12
Our
Growth Strategy
• Concentrate
on systems for unmet
market needs
market needs
• Build
market share in multi-
component systems for drug
administration utilizing Daikyo CZ as
a platform technology
component systems for drug
administration utilizing Daikyo CZ as
a platform technology
• Production
supported by existing
design, multi-material molding, and
assembly capabilities
design, multi-material molding, and
assembly capabilities
• Expand
through innovation and
strategic technology acquisitions
strategic technology acquisitions
|
Packaging
Systems
(How drugs are
contained)
|
|
Primary
Container Solutions
|
|
Delivery
Systems
(How drugs are
administered)
|
|
Administration
Systems
|
• Therapeutic
segment focus
• Generate
incremental value per
unit
unit
• Leverage
changing regulatory
environment
environment
• Optimize
manufacturing
productivity
productivity
• Strategic
acquisitions
• Geographic
expansion
• China
• India
13
Delivery Systems - Key Programs
Vial2Bag™
Mix2Vial®
MixJect®
NovaGuard™
Safety
Needle Device
Needle Device
(luer-lock
syringe)
ConfiDose®
Auto-injector
Auto-injector
Daikyo
Crystal Zenith®
éris™
Safety
Needle Device
(fixed-needle
syringe)
14
Management
Focus
• Packaging
Systems Segment
– Organic growth (on
average) of 3-5% per year
– Margin expansion
through improved operating efficiency
– Positive mix with
increasing biologic product sales
– Capital investments
targeted at quality improvements
• Delivery
Systems Segment
– Deliver the
potential of Daikyo CZ products
– Contract
manufacturing revenue growth from healthcare consumables
– Growth in
proprietary West systems
• Continued
investment for the future
– Innovation - meeting
the challenge of biologics
– Geographic
expansion
– Technology &
product acquisitions
• Financial
discipline
– Focus on operating
cash flow: Discretionary
SG&A, R&D and capital spending
supported by revenue growth.
supported by revenue growth.
– Maintain a balance
sheet that supports current plans and new
opportunities.
– Invest and execute
to deliver returns on invested capital (“ROIC”) that can and do
regularly exceed weighted average cost of capital (“WACC”).
regularly exceed weighted average cost of capital (“WACC”).
– Align management
incentives with financial performance and value.
15
Summary
• A
valuable franchise
– Substantial
market share
– Proprietary
technology
– Diversified
Customer Base
– Global
footprint
• Positioned
to grow
– Strength
in new product
pipeline
pipeline
– Preferred
products for
biologics
biologics
• With
the financial strength to
invest
invest
– Reliable
operating cash
flow
flow
– Balance
sheet strength
• Led
by an experienced
management team
management team
– Aligned
incentives
Injectable
Container Solutions
Advanced
Injection
Systems
Injection
Systems
Prefillable
Syringe Systems
Safety
and
Administration Systems
Administration Systems
16
Donald
E. Morel, Jr., Ph.D.
Chairman and Chief
Executive Officer
William
J. Federici
Vice
President and Chief Financial Officer
Investor
Relations Contact:
Michael
A. Anderson
Vice
President and Treasurer
mike.anderson@westpharma.com
CJS
“New Ideas” Investor Conference
New
York, New York
January
14, 2010
NYSE:
WST
westpharma.com
All
trademarks and registered trademarks are the property of West Pharmaceutical
Services, Inc., unless noted otherwise.