West Pharmaceutical Services, Inc. · NYSE:WST

West Pharmaceutical Services — Q2 2013 Earnings Presentation

17 slides from West Pharmaceutical Services's earnings presentation, Aug 1, 2013

  1. Slide 1: Second-Quarter 2013 Analyst Conference Call

    1 Speakers: Donald E. Morel, Jr. Chairman and 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. Seco

  2. Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act of 1995

    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

  3. Slide 3: Quarterly Highlights

    3 Quarterly Highlights  Good operating results in both businesses: • Sales growth driven by pre-filled components, proprietary products • Significant gross margin gain • Adjusted diluted EPS grew 8.9%  $20 million exclusivity fee for SmartDoseTM  Raising our annual EPS guidance  Stock to split i

  4. Slide 4: Second-Quarter Summary Results

    4 Second-Quarter Summary Results (1) These are Non-GAAP measurements. See “Non-GAAP Financial Measures” and “Notes to Non-GAAP Financial Measures” (Slides 15-17), “Cautionary Statement” (Slide 2) and see “Non-GAAP Financial Measures” in today’s press release for an explanation and reconciliation of

  5. Slide 5: Second-Quarter Operating Results

    5 Second-Quarter Operating Results  Overall sales growth 5.7% (All growth rates are based on comparisons excluding currency) • Pharmaceutical Packaging Systems up 6.3%  High-value products growth slowed to 3.3% vs. strong prior-year quarter  Pre-fillable syringe components led 7.4% growth in stan

  6. Slide 6: Expansion and Product Development

    6 Expansion and Product Development  Geographic expansion: • China producing validation samples for customers • India plant is on schedule  Metals production in 2014  Elastomers to follow in 2015  Proprietary systems • Growing share of PDS sales • SmartDose exclusivity fee milestone • Pre-commer

  7. Slide 7: 2013 Outlook

    7 2013 Outlook  Sales growth 6% to 9%, excluding currency  Pharmaceutical Systems: • High-value products growth expected to improve sales mix • Margins improving on mix, raw material costs and efficiencies • Efforts to shorten order lead-times will continue  Delivery Systems: • Proprietary produc

  8. Slide 8: Change in Consolidated Sales Second-Quarter 2012 to 2013

    8 Change in Consolidated Sales Second-Quarter 2012 to 2013 ($ millions) $344.5 $12.5 $6.0 $1.2 $324.8 2012 Sales Volume & Mix Sales Price Currency 2013 Sales

  9. Slide 9: Change in Consolidated Gross Profit Margin % Second-Quarter 2012 to 2013

    9 Change in Consolidated Gross Profit Margin % Second-Quarter 2012 to 2013 32.2% (0.1%) 1.2% 0.5% 0.2% 30.4%

  10. Slide 10: Change in SG&A Costs Second-Quarter 2012 to 2013

    10 Change in SG&A Costs Second-Quarter 2012 to 2013 ($ millions) $59.7 $1.8 $1.1 $0.9 $0.7 $0.8 $54.4

  11. Slide 11: Cash Flow Metrics

    11 Cash Flow Metrics ($ millions) Six Months Ended June 30, 2013 2012 Depreciation and amortization $41.2 $37.4 Operating cash flow $98.4 $66.0 Capital expenditures $83.8 $69.4

  12. Slide 12: Summary Balance Sheet Information

    12 Summary Balance Sheet Information ($ millions) As of June 30, 2013 December 31, 2012 Cash and cash equivalents $190.6 $161.9 Debt $394.8 $411.5 Equity $784.2 $728.9 Net debt to total invested capital† 20.7% 25.5% Working capital $394.6 $295.5 † Net debt to total invested capital is a Non-GAAP mea

  13. Slide 13: 2013 Full-year Financial Guidance

    13 2013 Full-year Financial Guidance ($ millions, except EPS) Estimated 2013 Revenue(1) Estimated Gross Profit %(1) Pharmaceutical Packaging Systems Segment $990 - $1,020 35.5% to 36.0% Pharmaceutical Delivery Systems Segment $360 - $370 20.3% to 21.3% Consolidated $1,350 - $1,390 31.5% - 32.0% 2013

  14. Slide 14: Selected Factors Expected to Impact Second-Half of 2013

    14 Selected Factors Expected to Impact Second-Half of 2013  High-value packaging and proprietary products are expected to drive sales and profitability • Sales growth slowed in Q2 • Certain proprietary product sales expectations at higher risk  Price increases are less significant than in 2012  C

  15. Slide 15: Non-GAAP Financial Measures

    15 Non-GAAP Financial Measures(1) Three Months Ended June 30, 2012 (in millions, except per share data) (1) See “Notes to Non-GAAP Financial Measures” (Slides 16-17), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. Three-months ended J

  16. Slide 16: Notes to Non-GAAP Financial Measures

    16 NOTES TO NON-GAAP FINANCIAL MEASURES For additional details, please see today’s press release and 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

  17. Slide 17: Notes to Non-GAAP Financial Measures

    17 NOTES TO NON-GAAP FINANCIAL MEASURES For additional details, please see today’s press release and Safe Harbor Statement. Reconciliation of 2013 Adjusted Diluted EPS Guidance to 2013 Reported Guidance Full Year 2013 Guidance (1)(2) Adjusted diluted EPS guidance $3.10 to $3.25 Extinguishment of deb

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