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| 8-K - 8-K - WEST PHARMACEUTICAL SERVICES INC | form8kinvestorconfjanuary2.htm |
West Pharmaceutical Services, Inc.
J.P. Morgan Healthcare Conference
Eric M. Green, President & CEO
January 11, 2017
J.P. Morgan HC Conference 2 |
Safe Harbor Statement
Cautionary Statement Under the Private Securities Litigation Reform Act of 1995
This presentation and any accompanying management commentary contain “forward-looking statements” as that term is defined in the Private
Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about product development and operational
performance. Each of these statements is based on preliminary information, and actual results could differ from any preliminary estimates. We
caution investors that the risk factors listed under “Cautionary Statement” in our press releases, as well as those set forth under the caption
"Risk Factors" in our most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission and as revised or
supplemented by our quarterly reports on Form 10-Q, could cause our actual results to differ materially from those estimated or predicted in the
forward-looking statements. You should evaluate any statement in light of these important factors. Except as required by law or regulation, we
undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.
Non-U.S. GAAP Financial Measures
Certain financial measures included in these presentation materials, or which may be referred to in management’s discussion of the Company’s
results and outlook, have not been calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), and therefore
are referred to as non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation or as an alternative to
such measures determined in accordance with GAAP. Please refer to “Reconciliation of Non-GAAP Measures” at the end of these materials for
more information.
Trademarks
Registered trademarks used in this report are the property of West Pharmaceutical Services, Inc. or its subsidiaries, in the United States and
other jurisdictions, unless noted otherwise. Daikyo Crystal Zenith® is a registered trademark of Daikyo Seiko, Ltd. Crystal Zenith technology is
licensed from Daikyo Seiko, Ltd.
Our Mission
By your side…
Pharmaceutical, biotechnology, generic and medical device
companies trust West and our ability to deliver consistent
high-quality and technologically advanced containment and
delivery solutions.
We share the commitment of our customers to improve the
health of patients worldwide.
Become the
world leader
in integrated
containment
and delivery
of injectable
medicines
J.P. Morgan HC Conference 3 |
A 90-Year History
J.P. Morgan HC Conference 4 |
An Integral Part of the Healthcare Industry
Top 35
Injectable biologics
rely on West and
Daikyo components
~ 40 Billion
Components
manufactured
annually
Top 75
Supplier to the top 75
pharmaceutical & biotech
injectable companies
J.P. Morgan HC Conference 5 |
West’s Role in Delivering Medicines to Patients
Proprietary
Products
Stoppers
Seals
Caps
Syringe components
Daikyo CZ vials & syringes
Reconstitution systems
Self-injection devices
Contract-Manufactured
Products
Project management
Engineering
Injection molding
Device assembly
Advanced technologies
$0.3B
$1.1B
~8,000
Product
SKUs
J.P. Morgan HC Conference 6 |
Source: Based on 2015 consolidated net sales
Net Sales*
By Product
Category
Net Sales*
By Geography
Americas
Europe, Middle East, Africa
Asia Pacific
54% 39%
7%
Net Sales*
By Market
Group
High-Value Components
Standard Packaging
Delivery Devices
Contract-Manufactured Products
P
R
OPRI
E
T
A
R
Y
P
R
O
D
U
C
T
S
Pharma
Generics
Biologics
Contract-Manufactured Products
23%
P
R
OPRI
E
T
A
R
Y
P
R
O
D
U
C
T
S
West Business at a Glance
J.P. Morgan HC Conference 7 |
20%
7%
34%
39%
20%
35%
* Based on first nine months 2016 consolidated net sales @ $1.10/Euro
>2,000 Customers
Largest Customer:
~7% of Total Sales
50 Locations
28 Manufacturing Sites
>7,100 Employees
22%
Long-term Strategy
Market Led
and Exceptional
Customer
Experience
Operational
Effectiveness
Product
and Service
Differentiation
Drive
Shareholder
Value
Become the
world leader
in integrated
containment
and delivery
of injectable
medicines
J.P. Morgan HC Conference 8 |
Addressing Unique Customer Needs
Quality – A High Bar Set By Our Customers
GENERICS
Speed to
market
Efficient
manufacturing
BIOLOGICS
Packaging
solutions for
sensitive
molecules
Self-injection
technologies
PHARMA
Total cost of
ownership
Life cycle
management
Quality
manufacturing
Design for
manufacturing
CONTRACT
MANUFACTURING
Patient Focus
J.P. Morgan HC Conference 9 |
Novel Injectable
Approvals
2014 2015 2016
Biologics
18 25 14
Small Molecules (NMEs) 9 7 6
TOTAL 27 32 20
West Participation on Newly Approved
Injectable Medicines
West continues to
increase its
participation on newly
approved injectable
medicines
Known West
Participation
20
74%
24
75%
18
90%
J.P. Morgan HC Conference 10 |
Sources: FDA website and West internal estimates
West solutions:
Integrated containment & delivery
Increasing levels of
customer intimacy
Increasing
value to West
STANDARD
est Differentiated Solutions:
Standard Packaging—Stoppers & Seals
J.P. Morgan HC Conference 11 |
West solutions:
Integrated containment & delivery
Increasing levels of
customer intimacy
Increasing
value to West
STANDARD
est Differentiated Solutions:
High-Value Components
J.P. Morgan HC Conference 12 |
STERILIZED
WASHED
COATED
West solutions:
Integrated containment & delivery
Increasing levels of
customer intimacy
Increasing
value to West
STANDARD
est Differentiated Solutions:
Increasing Quality & Inspection
J.P. Morgan HC Conference 13 |
STERILIZED
WASHED
COATED
CAMERA
INSPECTED
QUALITY
BY DESIGN
West solutions:
Integrated containment & delivery
ADMINISTERED
SELF
INJECTION
est Differentiated Solutions:
Reconstitution & Self Injection Devices
J.P. Morgan HC Conference 14 |
Increasing levels of
customer intimacy
Increasing
value to West
CONTAINMENT
Contract Manufacturing: By the Numbers
50 Years
OF PROVIDING
INNOVATIVE
SOLUTIONS
8 Billion
COMPONENTS
MANUFACTURED
ANNUALLY
$302 Million
IN NET SALES
IN 2015
1 Million
SQUARE FEET
MANUFACTURING
SPACE
1,600 EMPLOYEES
ACROSS 8
MANUFACTURING
FACILITIES AROUND
THE WORLD
J.P. Morgan HC Conference 15 |
West solutions:
Integrated containment & delivery
STERILIZED
WASHED
COATED
ADMINISTERED
CAMERA
INSPECTED
QUALITY
BY DESIGN
CONTAINMENT
SELF
INJECTION
INJECTION MOLDING
MULTI-COMPONENT ASSEMBLY
STANDARD
est Differentiated Solutions:
Integrated Containment & Delivery
J.P. Morgan HC Conference 16 |
Increasing levels of
customer intimacy
Increasing
value to West
Circles reflect relative size of 2015 net sales
Product Net Sales & Margin Growth
2011-2015 compound annual net sales growth rates
(excludes currency)
High-value components
have driven growth
Proprietary devices
present significant growth
opportunity
Steady Contract
Manufacturing
and standard packaging
businesses
J.P. Morgan HC Conference 17 |
Global Operations
40 billion
Number of
components
manufactured
annually
290
Annual customer
audits
28
Manufacturing
sites servicing our
worldwide
customer base
< 0.1
Parts per million of
out-of-spec parts
J.P. Morgan HC Conference 18 |
2016 Highlights
Realigned to a market-led strategy, while
continuing to grow the business to record levels
Completed expansions in Kinston and Dublin to
build capacity; on track with Waterford build
Reduced lead times AND improved quality
metrics
Improved corporate-wide safety metrics and
reduced incident rates to record lows
Expanded high-value product offerings,
including NovaPure® 1-3mL plungers
FDA approvals by our customers using Crystal
Zenith® and SmartDose® technology
Developing next-generation self-injection
devices and advanced formulations
J.P. Morgan HC Conference 19 |
0%
100%
200%
300%
400%
500%
2011 2012 2013 2014 2015 20162011 2012 2013 2014 2015
Net Sales
Sustained, Consistent Growth
2011 2012 2013 2014 2015
Adjusted Diluted EPS*
(Non-GAAP)
Constant Currency
CAGR 6.7%*
Comparison of Cumulative
Five-Year Total Return
S&P MidCap
400 Index
West Pharmaceutical
Services, Inc. (WST)
*Actual net consolidated sales 5-year CAGR was 4.8%
Sources: IR Insight, Company estimates; **Please refer to “Reconciliation of Non-GAAP Measures” at the end of these materials for more information.
J.P. Morgan HC Conference 20 |
Adjusted Diluted EPS
CAGR 11.8%**
Building for the Future
Global operations
expanding capacity
to meet growing
customer demand
Market-led
strategy
addressing the
specific needs of
pharmaceutical,
biotechnology,
generic and
medical device
customers
Strong competitive
position
Quality culture
Designed into
regulated
products
Scientific and
technical
expertise
Proprietary
products and
contract
manufacturing
expected to drive
net sales growth
and margin
expansion
Financial
strength to invest
with a strong
balance sheet and
operating
cash flow
Innovations in
integrated
containment and
delivery driving
new products and
services for long-
term growth
Create Value for Customers, Patients, Employees and Shareholders
J.P. Morgan HC Conference 21 |
Appendix: Reconciliation of Non-GAAP Measures
2015 2014 2013 2012 2011
Diluted EPS Reported (GAAP) $1.30 $1.75 $1.57 $1.15 $1.08
Pension settlement charge 0.43 - - - -
Executive retirement and related costs 0.09 - - - 0.03
License costs - 0.01 - - -
Discrete tax items 0.01 0.02 0.06 0.03 0.02
Restructuring, impairment and related
charges
- - - 0.05 0.05
Acquisition-related contingencies - - - 0.01 (0.01)
Extinguishment of debt - - - 0.14 -
Diluted EPS Adjusted (Non-GAAP) $1.83 $1.78 $1.63 $1.38 $1.17
J.P. Morgan HC Conference 22 |