19 slides from West Pharmaceutical Services's earnings presentation, Feb 18, 2016
Slide 1: Fourth Quarter 2015 Analyst Conference Call
1 Speakers: Eric M. Green Chief Executive Officer William J. Federici Senior Vice President and Chief Financial Officer All trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., unless noted otherwise. West Pharmaceutical Services, Inc. Fourth Quarter 2015 Anal
Slide 2: Cautionary Statement
2 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 li
Slide 3: Q4 2015 highlights
3 Net sales of $360 million, constant-currency growth of 9.7% • PPS sales growth of 9.8% • PDS sales growth of 9.2% Gross margin of 33.3%, an increase of 1.9 margin points from last year Adjusted diluted EPS of $0.47 • FX headwinds reduced EPS by $0.05 • Excluding FX impacts, adj. diluted EPS
Slide 4: Full-year 2015 highlights
4 Net sales of $1.4 billion, constant-currency sales growth of 7.2% • PPS sales growth of 8.5% • PDS sales growth of 4.1% Gross margin of 32.6%, an increase of 1.1 margin points from last year Adjusted diluted EPS of $1.83 • FX headwinds reduced EPS by $0.29 • Excluding FX impacts, adj. dilute
Slide 5: Long-term strategy
5 Long-term strategy Market Focus Customer Experience Operational Excellence Product & Service Differentiation Become the world leader in integrated containment and delivery of injectable medicines
Slide 6: Market-focused commercial team
6 Commercial team Market-focused Biologics are expected to account for 50% of the top 100 selling drugs in 2016. The injectable drug volume market is growing at a 6% CAGR. Generics expected to represent 10.5% of total prescriptions by 2020. West can address these unique market needs with tailored pr
Slide 7: West net sales by category 2015
7 West net sales by category 2015 Net Sales by Category Proprietary Product Net Sales at Constant Currency Grew 7.6% in 2015 7% 32% 7% 33% High-Value Components Standard Packaging Disposable Components Proprietary Devices Contract Manufacturing Proprietary Products 21%
Slide 8: Global operations: Investing in our future
8 Global operations Investing in our future Expanding and optimizing capacity of our manufacturing plants Establishing centers of excellence to serve key markets New campus facility in Waterford, Ireland Expanded & upgraded Kinston, NC & Singapore Lean and operational excellence initiative
Slide 9: Innovation & technology: Differentiated products
9 Innovation & technology Differentiated products
Slide 10: 2016 Outlook
10 2016 Outlook Reaffirmed 2016 constant-currency sales growth of 6% to 8% • Expect high-value products growth in the high-single digit to low double-digit range Expect to expand both gross and adjusted operating income margin 2016 adjusted diluted EPS expected to be in the range of $2.10 to $
Slide 11: Fourth quarter 2015 summary results
11 Fourth quarter 2015 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 17 to 19 and the discussion under the heading “Non-GAAP Financial Measures” in today
Slide 12: Change in consolidated sales
12 Change in consolidated sales Fourth quarter 2014 to 2015 ($ millions) $359.7 ($23.9) $28.7 $5.1 $349.8 2014 Volume & Mix Sales Price Currency 2015
Slide 13: Change in consolidated gross profit margin
13 Change in consolidated gross profit margin % Fourth quarter 2014 to 2015 33.3% (0.3%) (1.7%) 2.5% 1.0% 0.4% 31.4% 2014 Volume & Mix Sales Price Raw Material Currency & Other Labor & Overhead 2015
Slide 14: Change in SG&A costs
14 Change in SG&A costs Fourth quarter 2014 to 2015 ($ millions) $62.4 $2.7 $2.5 $1.9 $1.2 $0.4 $0.3 $58.8 2014 Incentive & Stock Comp Other Comp All Other IT Projects US Pension Currency 2015
Slide 15: Cash flow and balance sheet metrics
15 Cash flow and balance sheet metrics ($ millions) CASH FLOW ITEMS (UNAUDITED) (in millions) BALANCE SHEET ITEMS (UNAUDITED) (in millions) (2) Net debt and total invested capital are Non-GAAP measures. Net debt is determined by reducing total debt by the amount of cash and cash equivalents, and for
Slide 16: 2016 Full-year financial guidance
16 2016 Full-year financial guidance(3) ($ millions, except EPS) Estimated 2016 Revenue(3) Estimated Gross Profit % Pharmaceutical Packaging Systems Segment $1,065 - $1,080 38.3% to 38.8% Pharmaceutical Delivery Systems Segment $420 - $430 20.7% to 21.7% Consolidated $1,485 - $1,510 33.3% - 34.0 % C
Slide 17: Notes to Non-GAAP Financial Measures
17 Notes to Non-GAAP Financial Measures For additional details, please see today’s press release & Safe Harbor Statement Today’s press release, these presentation materials and associated presentation use the following financial measures that have not been calculated in accordance with generally acc
Slide 18: Notes to Non-GAAP Financial Measures: reconciliation
18 Notes to Non-GAAP Financial Measures RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) See “Notes to Non-GAAP Financial Measures” (Slide 17), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. Reconciliation of Net Sales to Net Sales at
Slide 19: Reconciliation of adjusted diluted EPS guidance
19 (5) Guidance includes various currency exchange rate assumptions, most significantly the Euro at $1.12 for the remainder of 2016. Actual results will vary as a result of exchange rate variability. (6) Please refer to “Notes to Non-GAAP Financial Measures” on slides 17 and 18, and “Non-GAAP Financ