West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Investor Presentation (January 2005)
26 slides from West Pharmaceutical Services's investor presentation, Jan 12, 2005
Slide 1: Corporate Overview
NYSE: WST Corporate Overview Donald E. Morel, Jr., Ph.D. Chairman and Chief Executive Officer www.westpharma.com
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this presentation or in other Company documents and certain statements that may be made by management of the Company orally in presenting this material may contain forward-looking statements as defined in the Private Securities Litigation Reform
Slide 3: Corporate Profile
Corporate Profile Founded in 1923, headquartered in Lionville, PA Market leader for the manufacturing of pharmaceutical elastomer closures and syringe components NYSE: WST – as of December 31, 2004 ¡ Stock price: $25.03 (split adjusted) ¡ Market cap: $776 MM ¡ Shares outstanding: 31MM 2003: Record s
Slide 4: Pharmaceutical Products
Pharmaceutical Products Stoppers and seals for drug, diagnostic and laboratory vials Components for syringe, IV and blood collection systems Complex systems for hospital and home drug delivery
Slide 5: West Pharmaceutical Services
West Pharmaceutical Services A Global Diversified Pharmaceutical Technology Company 21 global manufacturing sites 32 global sales offices 4,000 employees worldwide
Slide 6: Global Customer Base
Global Customer Base | AMGEN EEG fohmenafohnen Leg BD Baxter (8 BRAUN Gensias Abbott © avi | PHARMACEUTICALS
Slide 7: West: A Look Inside
West: A Look Inside 2003 Net Sales: $490.7 million
Slide 8: Geographic Sales Mix
Geographic Sales Mix (2003, based on point of sale)
Slide 9: Significant Events 2001-2004
Significant Events 2001-2004 Sale of Paco contract manufacturing operations – November 2001 New Management team – April 2002 Restructuring; Mexico investment; sale of OTC Research Services Group – October 2002 Kinston explosion – January 2003 Kinston restart – January 2004 2-1 stock split – Septembe
Slide 10: Strong Sales Performance
Strong Sales Performance (in millions)
Slide 11: WST FY2004 Stock Performance
WST FY2004 Stock Performance
Slide 12: Today
Today Industry leader in developing and manufacturing packaging and delivery systems for injectable drugs Strong, diversified customer base Substantial market share in key operating segments Value-added products, technologies and services that serve current and future market needs Strong balance she
Slide 13: Growth Strategy
Growth Strategy Management’s goal is to build long-term shareholder value by leveraging: ¡ Our knowledge of the drug-material contact interface ¡ West’s global high-volume precision manufacturing capabilities Creating growth opportunities through: ¡ Value-added technologies, products and services ¡
Slide 14: Growth Drivers
Growth Drivers Global demographics Growth in biotechnology drugs Continued tightening of FDA oversight Emergence of drug package counterfeiting Convergence of pre-filled systems Advances in manufacturing processes
Slide 15: Cost Drivers
Cost Drivers Costs are under pressure ¡ Labor and benefit costs ¡ Materials ¡ Petroleum based materials, fuel costs ¡ Outsourced compounding ¡ Depreciation ¡ IT investment requirements ¡ Compliance costs ¡ Kinston re-start ¡ Pension costs ¡ Rising Interest rates
Slide 16: Growth Opportunities
Growth Opportunities Global Westar® processed components Barrier films and coatings ¡ FluroTec® ¡ LycoTec™ ¡ B2-Coating Anti-counterfeiting closures Lean Manufacturing
Slide 17: Key Considerations
Key Considerations Strong barriers to entry – regulatory guidelines result in high switching costs New product development cycle mirrors new drug development timeline Patent expirations New product pipelines thin and early stage ¡ Pricing pressure on supplier base
Slide 18: Key Considerations (continued)
Key Considerations (continued) Impact on new drug approval process due to recent COX-2 issues National formulary – future impact on the Prescription Drug Benefit Downstream benefits of American Job Creation Act
Slide 19: Pharmaceutical Systems: Regulatory Environment
Pharmaceutical Systems Regulatory Environment Regulation of “drug products” includes delivery devices and components in contact with the drug To obtain marketing approval, NDA/ANDA must include ¡ Demonstrated stability and functionality of drug package and/or delivery device (multi-year studies) ¡ W
Slide 20: Financial Considerations
WEST? rrecutiol( Financial Considerations
Slide 21: Financial Objectives
Financial Objectives Debt to total cap ratio 35% or better, exclusive of any new, acquisition-related debt Grow sales 5-7% before the effects of currency Monitor and control discretionary spending Return on invested capital in excess of our Cost of Capital Deliver on 2004 EPS Guidance ¡ Non-GAAP EPS
Slide 22: Capital Management
Capital Management ($MM) 12/31/03 9/30/04 Total Debt $175.0 $162.7 Total Equity $257.6 $280.9 Debt to Total Capital 40.5% 36.7% Capital Expenditures: YTD Spending $41.0 (including $12.3M related to Kinston
Slide 23: Management Performance Metrics
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
Slide 24: Strong Corporate Governance
Strong Corporate Governance Broad experience base that can contribute to company’s strategy Independent directors meet without management at each meeting Independent directors chair and staff all committees One member from management
Slide 25: Summary
Summary Pharmaceutical Systems is an established and profitable global franchise: ¡ Industry leader in sales, product innovation ¡ Regulatory and capital barriers to entry ¡ Strong, diversified customer base ¡ Value-added products, technologies and services that enhance growth potential Strong balan
Slide 26: www.westpharma.com
NYSE: WST www.westpharma.com
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