West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Lehman Brothers 11th Annual Global Healthcare Conference (March 2008)
29 slides from West Pharmaceutical Services's conference presentation, Mar 18, 2008
Slide 1: Lehman Brothers 11th Annual Global Healthcare Conference
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 Lehman Brothers 11 th Annual Global Healthcare Conference Miami Be
Slide 2: Forward-looking statements
Certain statements in the following slides and certain statements that may be made by management of the Company orally during this presentation contain some forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Excha
Slide 3: Company Overview
Founded in 1923 HQ in Lionville, PA Company Overview
Slide 4: Who we are
Who we are World’s premier manufacturer of components and systems for injectable drug delivery Closure systems and prefillable syringe components Components for disposable systems Devices and device sub-assemblies Safety and administration systems Record 2007 sales - $1.02 billion Market cap at 12/3
Slide 5: Diverse, Stable Customer Base
Diverse, Stable Customer Base Company Estimated Market Share: 70% in Pharma; 70% in Device; 95% in Biotech
Slide 6: Global Revenue Breakdown
Global Revenue Breakdown Based on 2007 sales South America: $55.3 million (5%) North America: $496.4 million (49%) Europe: $430.6 million (42%) Asia/Pacific: $37.8 million (4%)
Slide 7: 2007 Overview – A Year of Contrasts
2007 Overview – A Year of Contrasts Achieved record sales and earnings Extended Daikyo sales and technology agreements to 2017 Acquired Pharma Pen Technology Raised $161.5 million, 4% convertible junior sub debenture Repurchased 1 million shares China land use application approval and groundbreaking
Slide 8: Four Strategic Growth Platforms
Advanced Injection Systems Injectable Container Solutions Prefillable Syringe Systems Safety + Administration Systems Four Strategic Growth Platforms
Slide 9: West's Competitive Advantage
West’s Competitive Advantage Unmatched experience/expertise: drug - material interface Ability to source components globally from multiple locations Protected IP: West’s components and systems Regulatory barrier to entry: NDA and ANDA filing must include reference to all packaging/components in cont
Slide 10: Growth Platform – Injectable Container Solutions
Growth Platform 1 – Injectable Container Solutions West FluroTec ® Components Seal - Stopper - Vial Daikyo Crystal Zenith ® Vials Estimated Market Size – $1.5 BN CAGR – 4% Source: Company estimate for vial systems only West Spectra™ Seals
Slide 11: Growth Platform – Safety and Administration Systems
Growth Platform 2 – Safety and Administration Systems Vial2Bag™ Mix2Vial™ MixJect™ Total Market – $1.5 BN CAGR – 11% Source: Greystone Associates and Company estimate Project Orion
Slide 12: Future Growth Drivers
Future Growth Drivers Aging population creates an increasing number of patients with chronic illnesses such as diabetes and cancer Biologic drug growth and a resurgence in vaccine research
Slide 13: West: drug categories served
West® =e Oncology & Hematology Auto-Immune Vaeti accines (RA, MS, AllD) DiabetesiInsulin
Slide 14: Future Growth Drivers
Future Growth Drivers Demand for ultra clean silicone free packaging and delivery systems
Slide 15: Pharma/biotech Customer Trends
Pharma/biotech Customer Trends Integration of container/closure system into delivery system Reduction of drug waste and improved operational throughput High quality packaging to ensure drug stability No extractables or leachables No silicone oil Value-added devices and systems for product/brand diff
Slide 16: Growth Platform - Prefillable Syringe Systems
Growth Platform 3 - Prefillable Syringe Systems FluroTec ® Plungers Needle Shields – Tip Caps Daikyo Crystal Zenith ® Staked Needle Syringe Estimated Market Size – $900 MM CAGR – 8% Source: Company estimates RU Daikyo Crystal Zenith ® luer lock syringe
Slide 17: Future Growth Drivers
Future Growth Drivers Build the right capacity in the right areas: Europe, North America, China, India
Slide 18: Investments in Operations
Investments in Operations Europe and Asia Expansion Projects China Greenfield China plastics in Qingpu USA Expansions IT Platforms – SAP and Shop Floor MES Jurong, Singapore Bodmin, England Kovin, Serbia LeNouvion, France Eschweiler, Germany Jersey Shore, Pennsylvania Clearwater, Florida Kinston, No
Slide 19: Future Growth Drivers
Future Growth Drivers Point-of-care shift: Hospital Specialty Clinic Home Safety; ease of use; dosing accuracy; compliance Convergence of the primary container and delivery device West migration from component production to device systems
Slide 20: Convergence of Primary Containers and Delivery Systems
Convergence of Primary Containers and Delivery Systems Disposable Syringe-based Auto Injectors Traditional Injection System Components for Pen System Applications
Slide 21: Growth Platform - Advanced Injection Systems
Growth Platform 4 - Advanced Injection Systems Estimated Market Size - $210 million CAGR – 8% Source: Greystone Associates and Company estimates Pre-filled Syringe Pre-filled Syringe (PFS) as Primary Drug Container with elastomeric components (plunger and needle shield)
Slide 22: Future Growth Drivers
Future Growth Drivers Shift Tech Group business model to proprietary products
Slide 23: Tech Group Synergies
Tech Group Synergies Orion Safety Needle Salvus Tech Safety & Admin. Systems Auto Injector In-house with Pharma-Pen Advanced Injection Unique Silicone Oil Free, Tungsten Free Syringe System Daikyo Crystal Zenith Prefillable Syringe Systems Reconstitution Medimop Safety & Admin. Systems Manufactured
Slide 24: Full Year Comparisons
Full Year Comparisons ($ in millions, except per share data) $1.83 $2.06 EPS from Continuing Operations - GAAP 11.1 16.1 R&D 147.8 152.5 SG&A $1.93 $2.37 EPS from Continuing Operations - Non-GAAP 61.5 71.2 Income from Continuing Operations 29.0% 28.6% Gross Margin % $913.3 $1,020.1 Net Sales Full ye
Slide 25: Capital Management
Capital Management $129.4 $90.3 Full Year Spending Capital Expenditures: 31.1% 36.9% Net Debt to Total Capital $419.3 $490.9 Total Equity & Minority Interests $236.3 $395.1 Total Debt 12/31/06 12/31/07 ($millions)
Slide 26: 2008 - 2012 Management Operating Priorities
Grow revenues and earnings despite reduced sales of certain products Organic growth and sales mix will offset lost revenue associated with Exubera, ESA drugs etc. Offset cost increases (RM, labor, energy) with lean programs, operating efficiencies and pricing Generate Tech Group performance improvem
Slide 27: 2008 Annual Guidance
2008 Annual Guidance Revenue estimated between $1.05 and $1.07 billion Estimated adjusted earnings per diluted share is between $2.40 and $2.50. This estimate: Excludes anticipated restructuring costs of an approximately $8.6 million Includes exchange rate assumption of $1.40/1 Euro Includes between
Slide 28: Summary
Summary Working through short-term revenue challenges Long term business drivers remain in place Strategic Product Platforms create sustainable growth opportunities West’s competitive advantages uniquely position the Company to capitalize on these opportunities: Daikyo partnership Global manufacturi
Slide 29: Donald E. Morel, Jr., Ph.D.
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 Lehman Brothers 11 th Annual Global Healthcare Conference Miami Be