West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Lehman Healthcare Conference 2006
37 slides from West Pharmaceutical Services's conference presentation, Mar 8, 2006
Slide 1: Corporate Overview, Lehman Healthcare Conference
Corporate Overview Lehman Healthcare Conference March 8, 2006 NYSE: WST www.westpharma.com Exhibit 99.1 Donald E. Morel, Jr., Ph.D. Chairman and Chief Executive Officer
Slide 2: Forward-looking statements
Certain statements contained in this presentation and certain statements that may be made by management of the Company orally during this presentation are forward-looking statements that set forth anticipated results based on management’s plans and assumptions. Such statements give our current expec
Slide 3: Who are we?
Each and every day millions of West products are used to enhance healthcare around the world. Who are we?
Slide 4: Corporate Profile
World's premier manufacturer of components and systems for injectable drug delivery Stoppers and seals for vials Disposable components used in syringe, IV, blood collection and diagnostic systems Founded in 1923 HQ in Lionville, PA 2005 sales $700M Market capitalization approx $1.05B Corporate Profi
Slide 5: Diverse Customer Base
Company Estimated Market Share: 70% in Pharma; 70% in Device; 95% in Biotech medtronic Diverse Customer Base
Slide 6: Global Presence
32 manufacturing sites 34 sales offices 7 technical centers 5,5 00 employees worldwide Global Presence
Slide 7: Key Company Developments
Acquisition of Monarch Laboratories Acquisition of The Tech Group Acquisition of Medimop Sale of GFI Clinical Unit Sale of Contract Manufacturing Operations New management team Restructuring and increased CAPEX Sale of OTC Research Services Group Kinston explosion Kinston restart 2-for-1 stock split
Slide 8: Strong Sales Growth 2002-2005
Strong Sales Growth 2002-2005
Slide 9: Business Segments
FY05 Net sales: Approx. $700 MM Business Segments
Slide 10: Pharmaceutical Systems Profile
8-12% 0-2% 6-8% Our Growth (2005-2007) 10-50% Small Not determined Lab and Other Services 10-20% Market Leader $150 million, Growing 0-2% Disposable Medical Device Components 25-50+% Market Leader $1 to $1.5 billion. Growing 2-5% Pharma Systems Gross Margin Range Our Share Market Size*/ Long-Term Gr
Slide 11: Geographic Sales Mix
Geographic Sales Mix (2005, based on point of sale)
Slide 12: Corporate Growth Strategy: Core Pharmaceutical Systems Business
Maximize the value of West’s core business (Company Estimated Market: $1.1 BN) Market segmentation Generate maximum value from key growth drivers New product innovation Lean manufacturing Geographic expansion Strategic acquisitions MediMop Medical Projects Ltd Corporate Growth Strategy Core Pharmace
Slide 13: Growth Drivers: Global demographics, Diabetes
Global demographics Diabetes Growth Drivers
Slide 14: Diabetes
Components for Pen System Applications Components for Traditional System Applications Entire Systems Diabetes
Slide 15: Growth Drivers: Biotechnology drugs, Oncology
Growth in biotechnology drugs Oncology Pre filled syringe systems Reconstitution systems Medimop Medical Projects Ltd Growth Drivers Global demographics Diabetes
Slide 16: Biotechnology/Oncology
Closures and Components for Traditional and Prefilled Systems Seals Syringe plungers, needle shields Flip-Off ® Buttons Stoppers FluroTec ® and Barrier Coatings Westar ® Processing Closures and Components for Biotechnology and Oncology Systems Biotechnology/Oncology
Slide 17: Biotechnology/Oncology: Reconstitution Aides
Reconstitution Aides Biotechnology/Oncology
Slide 18: Medimop Product Portfolio
Vial Adapters Needleless Drug Transfer and Mixing Medimop Product Portfolio
Slide 19: Growth Drivers: Anti-counterfeiting needs
Anti-counterfeiting needs Growth Drivers Global demographics Diabetes Growth in biotechnology drugs Oncology
Slide 20: Growth Opportunities
Closures with built-in product tracking, authentication and anti-counterfeiting features Growth Opportunities
Slide 21: West's Competitive Edge
Unmatched experience/expertise: Ability to components from locations Protected : West’s components and systems Regulatory : NDA and ANDA filing must include reference to all packaging/components in contact with the drug: West Drug Master File (DMF) 1546 is confidential West DMF includes functionalit
Slide 22: Corporate Growth Strategy: Tech Group Business
Build market share in multi-component systems for drug delivery (Company Estimated Market: $4.5 BN) Leverage customer base Develop a portfolio of proprietary systems for injectable, transmucosal, and pulmonary delivery Pursue selected consumer opportunities License or acquire innovative technologies
Slide 23: Tech Complements West
The Tech Group West Device Group FY04 Sales: $74.2 MM FY04 Sales: $65.0 MM Tech Complements West
Slide 24: Tech Customer Base
Pharmaceutical Device Consumer Tech Customer Base
Slide 25: Tech Group Growth Drivers
Organic Growth New Product Portfolio Insulin delivery systems Tech Group Growth Drivers
Slide 26: Tech Product Portfolio
Health Care Consumer Tech Product Portfolio
Slide 27: Exubera Inhaled Insulin
Joint development with Pfizer & Nektar Class III medical device part of NDA Recent events Received EMEA and FDA approval for marketing Initial launch targeted for mid year Key questions are: Market acceptance – Doctors and patients Patient acceptance may expand market Increased patient compliance –
Slide 28: 2006 – Where We Stand
Key elements of the “Sustainable Growth” strategy are now in place: West’s core pharmaceutical systems business is an established global franchise Tech Group adds new customers, products and capabilities in the key device segment Medimop adds new technologies and products in the key biotechnology an
Slide 29: 2006 Operating Priorities
Execute business plan and strategy Retain focus on growth of core injectable business Capitalize on Tech and Medimop programs and opportunities Generate margin expansion through lean programs Pursue opportunities for geographic expansion China – India – Brazil – Russia/Eastern Europe Continue to inn
Slide 30: Investment Considerations
Investment Considerations
Slide 31: Investment Considerations
Core injectable packaging and delivery systems business is globally established Significant regulatory and capital barriers to entry Strong, diversified customer base West’s product development cycle mirrors new drug development timeline Value-added products, technologies and services that enhance g
Slide 32: Full Year 2005 Results
$1.39 $1.09 EPS–contg Ops $ 43 $ 30 Income from continuing Ops 10.3% 5.3% 17.5% 8.9% 4.4% 16.4% % of sales 72 9 94 48 3 79 Operating Profit 27.5% 13.4% 31.6% 28.8% 13.6% 30.5% % of sales 193 23 170 156 9 147 Gross Profit 9.0% 4.4% 11.9% % growth $ 700 $ 170 $ 538 $ 542 $ 68 $ 481 Net Sales Consolida
Slide 33: Guidance
2006 revenue forecast - $810- $830 million Expect gross margins of 32% from Pharm Systems segment and 16.5% from Tech segment EPS from continuing operations: $1.60 - $1.70 Estimates exclude first quarter pre-tax charge from refinancing our Senior debt of approximately $6mm; currency effects; any sig
Slide 34: Financial Objectives
Grow sales 6-8% in our core injectable business before the effects of currency and acquisitions Improve margins by using Lean to eliminate waste and control discretionary spending Selectively invest in innovative new products and technologies Reduce debt to total cap ratio, exclusive of any new acqu
Slide 35: Management Performance Metrics
Short term (Annual) Corporate – EPS, cash flow Operations – net sales, operating profit, cash flow Long term 50% restricted stock, 50% options Compounded annual growth rate (CAGR) Return on invested capital (ROIC) Stock ownership guidelines for all executive officers and Directors Management Perform
Slide 36: Summary
2006 should produce strong results Revenue growth to $810-$830million 15-20 % EPS growth ($1.60-$1.70) excluding impact of debt refinancing Management focus is on execution of business plan Optimize growth and profitability of the core business Deliver benefits of recent acquisitions Continue emphas
Slide 37: Corporate Overview Lehman Healthcare Conference
Corporate Overview Lehman Healthcare Conference March 8, 2006 NYSE: WST www.westpharma.com Donald E. Morel, Jr., Ph.D. Chairman and Chief Executive Officer
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