West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Q4 2017 Earnings Presentation
20 slides from West Pharmaceutical Services's earnings presentation, Feb 15, 2018
Slide 1: Fourth-Quarter & Full-Year 2017 Analyst Conference Call
West Pharmaceutical Services, Inc. Fourth-Quarter & Full-Year 2017 Analyst Conference Call 9 a.m. Eastern Time, February 15, 2018 Speakers: Eric M. Green President and Chief Executive Officer William J. Federici Senior Vice President and Chief Financial Officer A webcast of today’s call can be acc
Slide 2: Safe Harbor Statement
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 inc
Slide 3: Fourth-Quarter & Full-Year 2017 Results
Fourth-Quarter & Full-Year 2017 Results Q4 reported net sales of $415.6 million, representing 4.5% organic sales growth ‒ Excluding impact of Venezuela deconsolidation & hurricane- related shut-downs, sales growth would have been 6.0% Full-year 2017 reported net sales of $1.6 billion, representi
Slide 4: Organic Sales Growth
Organic Sales Growth 4 | Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 Overall Organic Sales Growth 7.7% 8.7% 3.9% 3.7% 4.5% 5.2% Biologics DD MSD MSD LSD DD HSD Generics (MSD) (MSD) (MSD) LSD HSD FLAT Pharma HSD DD MSD (LSD) (LSD) MSD Contract Manufacturing DD DD DD DD DD DD Abbreviations: LSD –
Slide 5: Proprietary Products Business Segment
Proprietary Products Business Segment 5 | Growth in High Value Products Net Sales HVP HVP 2013 2017 Net Sales Standard Standard Delivery Delivery 100% Proprietary Product Net Sales 2013-2017 CAGR HVP 11% Delivery 18% Standard 2% High-value product sales grew annually by 11% Drug delivery busines
Slide 6: R&D Portfolio Productivity
R&D Portfolio Productivity New products launched over the past five years contributed more than 100 basis points of organic sales growth in 2017 6 | Advancing Our Core With technical manufacturing advances to produce higher value products Delivery Devices That integrate West’s containment and delive
Slide 7: Growth in Healthcare-Focused Areas
7 | 2013 2017 Growth in Healthcare-Focused Areas Net Sales Net Sales Contract Manufacturing Business Segment 100% Contract Manufacturing Net Sales Healthcare Healthcare Consumer Consumer 2013-2017 CAGR Consumer -2% Healthcare 9% Healthcare business grew annually by 9% Majority of growth is in th
Slide 8: Contract Manufacturing Business Segment
8 | Design & Prototyping Injection Molding of Plastics Product Assembly Project Management Global, Large-scale Capacity Customers’ Commercial Products Contract Manufacturing Business Segment Dublin Contract Manufacturing Facility 5 consecutive quarters of double- digit growth Expanding capabilit
Slide 9: Global Operations
Improved results in service & quality to customers ‒ More than 40% reduction in average lead time across network ‒ Improved quality; less than 80 out-of-spec parts per billion Acceleration of process excellence improvements across global network, driving improvements in customer value stream S
Slide 10: Fourth-Quarter 2017 Summary Results
10 | Fourth-Quarter 2017 Summary Results ($ millions, except earnings-per-share (EPS) data) (1) “Net sales at constant currency”, “adjusted operating profit”, and “adjusted diluted EPS” are Non-GAAP measures. See slides 16-20 and the discussion under the heading “Non-GAAP Financial Measures” in toda
Slide 11: Change in Consolidated Net Sales Fourth-quarter 2016 to 2017
$415.6 $14.9 $15.9 $2.5 $382.3 2016 Volume & Mix Currency Sales Price 2017 Change in Consolidated Net Sales Fourth-quarter 2016 to 2017 ($ millions) 11 |
Slide 12: Change in Gross Profit Margin % Fourth-quarter 2016 to 2017
30.9% (0.2%) (0.3%) (1.0%) (1.3%) 0.7% 0.4% 0.3% 32.3% 2016 Volume & Mix Sales Price Efficiency Net Currency Raw Material Plant OH Other 2017 Change in Gross Profit Margin % Fourth-quarter 2016 to 2017 12 |
Slide 13: Change in SG&A Costs Fourth-quarter 2016 to 2017
Change in SG&A Costs Fourth-quarter 2016 to 2017 ($ millions) $58.9 $0.7 $1.1 $3.1 $1.5 $1.4 $60.9 2016 Comp and Benefits Currency Translation Professional Services U.S. Pension Other 2017 15.9% of Net Sales 14.2% of Net Sales 13 |
Slide 14: Cash Flow and Balance Sheet Metrics
Cash Flow and Balance Sheet Metrics ($ millions) 14 | CASH FLOW ITEMS (UNAUDITED) (in millions) FINANCIAL CONDITION (UNAUDITED) (in millions) Twelve Months Ended December 31, 2017 2016 Depreciation and amortization $96.7 $90.7 Operating cash flow $263.3 $219.4 Capital expenditures $130.8 $170.2 As o
Slide 15: Full-Year 2018 Guidance
Full-Year 2018 Guidance Full-year 2018 reported net sales are expected to be in a range between $1.720 billion to $1.730 billion* Full-year 2018 net sales at constant-currency growth is expected to be within our long-term projected 6-8% range ‒ Excluding 2017 net sales that will not recur in 201
Slide 16: Notes to Non-GAAP Financial Measures
Today’s press release, these presentation materials and associated presentation use the following financial measures that have not been calculated in accordance with generally accepted accounting principles (GAAP) accepted in the U.S., and therefore are referred to as non-GAAP financial measures:
Slide 17: Reconciliation of Non-GAAP Measures
Notes to Non-GAAP Financial Measures RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) See “Notes to Non-GAAP Financial Measures” (Slide 16-20), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. 17 | Reconciliation of Reported and Adjusted
Slide 18: Reconciliation of Non-GAAP Measures
Notes to Non-GAAP Financial Measures RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) See “Notes to Non-GAAP Financial Measures” (Slide 16-20), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. 18 | Reconciliation of Reported and Adjusted
Slide 19: Reconciliation of Net Sales to Net Sales at Constant Currency
Notes to Non-GAAP Financial Measures RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) See “Notes to Non-GAAP Financial Measures” (Slide 16-20), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. 19 | Reconciliation of Net Sales to Net Sale
Slide 20: Reconciliation of Reported Diluted EPS Guidance to Adjusted
20 | Reconciliation of Reported Diluted EPS Guidance to Adjusted Diluted EPS guidance 2017 Actual 2018 Guidance % Change Reported-diluted EPS $1.99 $2.80 to $2.90 40.7% to 45.7% Venezuela deconsolidation 0.15 - Tax law changes impact 0.64 - Adjusted-diluted EPS $2.78 $2.80 to $2.90 0.7% to 4.3% Stoc
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