West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — CL King's 5th Annual Best Ideas Conference 2007
25 slides from West Pharmaceutical Services's conference presentation, Sep 18, 2007
Slide 1: CL King's 5th Annual Best Ideas Conference 2007
CL King's 5th Annual BEST IDEAS CONFERENCE 2007 Donald E. Morel, Jr., Ph.D. Chairman and Chief Executive Officer West Pharmaceutical Services William J. Federici Vice President & Chief Financial Officer West Pharmaceutical Services NYSE: WST westpharma.com
Slide 2: Forward-looking statements
2 Certain statements contained in this presentation and certain statements that may be made by management of the Company orally during this presentation contains some forward-looking statements that set forth anticipated results based on management’s plans and assumptions. Such statements give our c
Slide 3: Corporate Profile
3 Corporate Profile 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 Founded in 1923 HQ in Lionville, Pa. 2006 sales $913M Market cap $1.3 billio
Slide 4: Diverse Customer Base
4 Diverse Customer Base Company Estimated Market Share: 70% in Pharma; 70% in Device; 95% in Biotech
Slide 5: Global Presence
5 Global Presence 32 manufacturing sites 34 sales offices 5 technical centers Partner locations Future China plants 6,000 employees
Slide 6: Key Company Developments
6 Key Company Developments FY 2001 - 2005 New management team Divestiture of non-core businesses Focus returned to injectable packaging and delivery Increased capital expenditures and capacity build in Europe Strategic acquisitions Strong revenue and profit growth FY 2006 Debt restructuring Integrat
Slide 7: Strong Sales Growth
$227 $107 7 (in millions) Strong Sales Growth Acquisitions Core Business
Slide 8: Sales by Segment
WEST? narmaccutical lps Pharma Systems $644 1% Tech \_ Group $279M . \ 29% a .
Slide 9: Sales by Region
WEST? narmaccutical lps North America 51% Europe 40% South America oh Asia Pacific ah
Slide 10: Corporate Growth Strategy
10 Corporate Growth Strategy Pharmaceutical Systems Segment Market segmentation Generate maximum value from key growth drivers New product innovation Lean manufacturing Geographic expansion Strategic acquisitions Tech Group Segment Leverage West customer base to build market share in multi- material
Slide 11: Market Dynamics Support West's Continued Growth
11 Market Dynamics Support West’s Continued Growth Increasing number of patients with chronic illnesses such as diabetes and cancer Increasing demand for biologics (2006 Market: $56B)* Biologics: fastest growing segment of the pharma market out to 2010 (13% CAGR)* Injectables currently account for ~
Slide 12: Dosage Form Migration
12 Dosage Form Migration Reconstitution System Vial – Stopper – Seal Prefillable Syringe Ampoule Auto-injector
Slide 13: West's Competitive Advantage
13 West’s Competitive Advantage Unmatched experience/expertise: drug material interface Ability to source components from multiple locations globally Protected IP: West’s components and systems Regulatory barrier to entry: NDA and ANDA filing must include reference to all packaging/components in con
Slide 14: Strategic Objectives: Biotechnology Market Leadership
14 Strategic Objectives Continue to maintain market leadership position in the biotechnology market Components for Prefillable Syringes * FluroTec technology is licensed from Daikyo Seiko, Ltd. FluroTec * and Barrier Coatings Westar ® Processing
Slide 15: Strategic Objectives: Insulin/Diabetes Care
15 Strategic Objectives Expand position in the insulin/diabetes care segment Components for Pen System Applications Components for Traditional System Applications Devices
Slide 16: Strategic Objectives: Expand IP Position
16 Strategic Objectives Aggressively expand IP position via innovation and selective acquisitions Anti-Counterfeiting Closures Reconstitution Systems Daikyo Crystal Zenith* Systems * Daikyo Crystal Zenith technology is licensed from Daikyo Seiko, Ltd.
Slide 17: Strategic Objectives: Build Manufacturing Capabilities
17 Strategic Objectives Build manufacturing capabilities to meet market growth
Slide 18: Strategic Objectives: Financial Flexibility
18 Create financial flexibility through conservative balance sheet management Strategic Objectives
Slide 19: Prior Years' Results
19 Prior Years’ Results ($M except per share) $46.0 $61.5 Income from Continuing Operations $1.41 $1.93 E.P.S. Continuing Operations – Non-GAAP $73.4 $101.0 Operating Profit $120.3 $155.9 SG&A 27.7% 28.7% Gross Margin $699.7 $913.3 Net Sales 2005 2006 2006 E.P.S. continuing operations – Non-GAAP exc
Slide 20: June 30, 2007 Year-to-Date Results
June 30, 2007 Year-to-Date Results ($M except per share) $35.0 $53.0 Income from Continuing Operations $1.15 $1.45 Non-GAAP E.P.S. from Continuing Operations $60.3 $74.4 Operating Profit $71.2 $75.2 SG&A 30% 30% Gross Margin $463.0 $521.3 Net Sales 2006 2007 Non-GAAP EPS excludes 6 cents of discrete
Slide 21: Capital Management
20 Capital Management ($M) $90.3 $130.0 Full Year Capital Expenditures 31.1% 29.4% Net Debt to Total Capital $419.3 $499.1 Total Equity & Minority Int. $236.3 $384.7 Total Debt $47.1 $177.3 Cash 12/31/2006 6/30/2007
Slide 22: Operating Priorities: Manage core business growth
23 Manage core business growth Segmentation/therapeutic category management Improve Tech Group profit margins Shift product mix: focus on healthcare and proprietary products Maximize global capacity utilization Execute on European capacity expansion and China initiative Execute innovation programs O
Slide 23: 2007 Guidance – as of August 2, 2007
2007 Guidance – as of August 2, 2007 Revenues – approximately $1.0 billion Estimated consolidated gross margin of 29% Fully diluted earnings per share of $2.27 to $2.37 Excluding 6 cents discrete tax benefits R&D spending increased to $17 million Capital spending of $120 to $130 million
Slide 24: Summary
25 Summary 2007 on pace for approximately 20% growth in EPS West’s competitive advantages uniquely position the Company to capitalize on growth drivers in key market segments Global manufacturing capability Solid balance sheet Management incentives closely tied to growth in shareholder value Strong
Slide 25: CL King's 5th Annual Best Ideas Conference 2007
CL King's 5th Annual BEST IDEAS CONFERENCE 2007 Donald E. Morel, Jr., Ph.D. Chairman and Chief Executive Officer West Pharmaceutical Services William J. Federici Vice President & Chief Financial Officer West Pharmaceutical Services NYSE: WST westpharma.com
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