West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Q4 2010 Earnings Presentation
16 slides from West Pharmaceutical Services's earnings presentation, Feb 17, 2011
Slide 1: Fourth-Quarter 2010 Analyst Conference Call
Speakers: Donald E. Morel, Jr. Chairman and Chief Executive Officer William J. Federici 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. Fourth-Quarte
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act of 1995
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 limi
Slide 3: Summary Results
Three Months Ended December 31 2010 2009 Net Sales $ 276.8 $ 293.4 Gross Profit 78.0 83.9 Reported Operating Profit 5.9 21.7 Adjusted Operating Profit (1) 20.6 32.0 Reported Diluted EPS $ 0.18 $ 0.59 Adjusted Diluted EPS (1) $ 0.42 $ 0.67 Summary Results $ millions, except per-share data (1) See “No
Slide 4: Fourth Quarter Results
Fourth Quarter Results • Comparative Sales Reduced by: – Non-recurring 2009 H1N1-related volumes – Currency translation and exchange variability • Modest Growth Excluding Those Items – Packaging Systems customers deferred purchases – Stronger Delivery Systems sales compensated – Overall profitabilit
Slide 5: 2011 Full-year Financial Guidance
($ millions, except EPS) 2011 Revenue (1) Gross Profit % (1) Pharmaceutical Packaging Systems Segment $ 810 - $ 830 33.4% Pharmaceutical Delivery Systems Segment $325 - $340 20.5% Consolidated $1,140 - $1,170 29.7% 2011 Adjusted Diluted EPS (1)(2) $2.25 - $2.45 2011 Full-year Financial Guidance (1)
Slide 6: Proprietary Product Development Highlights
Proprietary Product Development Highlights • Westar RU Progress Toward 2011 Commercial Scale • Progress on Daikyo Crystal Zenith® Insert Needle Syringe – Glass-related recall activity continues to high-light problems – Demand for validated stability samples is consuming capacity – Production capacit
Slide 7: Fourth Quarter Adjusted Diluted EPS
Fourth quarter 2009 adjusted diluted EPS $ 0.67 Non-recurring 2009 sales (H1N1) (0.09) Foreign currency effects (0.06) Stock-based compensation (share price only) (0.03) Research & Development (0.03) Other, net ( 0.04) Fourth quarter 2010 adjusted diluted EPS $ 0.42 Fourth Quarter Adjusted Diluted E
Slide 8: Consolidated Revenues: Fourth-Quarter Revenue Changes 2009-2010
== West =) Delivering Innovative Solutions Consolidated Revenues Fourth-Quarter Revenue Changes 2009 - 2010 1.2 0.6 $1.8 $ $ ($7.9) 2009 Sales = Other Price Acquired H1N1 Currency 2010 Sales Volume/ Business Sales Mix
Slide 9: Consolidated Fourth Quarter Gross Margin % 2009-2010
__—_ West =) Delivering Innovative Solutions Consolidated Fourth Quarter Gross Margin % 2009 - 2010 0.3% a. ” — 28.6% (1.5%) 28.2% (0.2%) 2% 2009 Volume/ Mix Sales Price Material Costs Labor / Overhead/ 2010 Efficiency Other
Slide 10: Consolidated SG&A Fourth Quarter 2009-2010 Costs Reconciliation
=== West =) Delivering Innovative Solutions ConsolidatedSG&A Fourth Quarter 2009 - 2010 Costs Reconciliation ($ millions) a — 23 oy — 2009 Other Stock-based Outside All Other Currency Pension 2010 Compensation Compensation Services
Slide 11: Summary Balance Sheet Information
December 31, 2010 2009 Cash and cash equivalents $ 110.2 $ 83.1 Debt $ 358.4 $ 379.6 Equity $ 625.7 $ 579.1 Net debt to total invested capital 28.4% 33.9% Working capital $ 266.9 $ 226.1 Summary Balance Sheet Information
Slide 12: Cash Flow Metrics
Year Ended December 31, 2010 2009 Depreciation and amortization $ 73.2 $ 68.1 Operating cash flow $ 138.3 $ 137.7 Capital expenditures $ 71.1 $ 104.9 Cash Flow Metrics ($ millions)
Slide 13: 2011 Full-year Financial Guidance
($ millions, except EPS) 2011 Revenue (1) Gross Profit % (1) Pharmaceutical Packaging Systems Segment $ 810 - $ 830 33.4% Pharmaceutical Delivery Systems Segment $325 - $340 20.5% Consolidated $1,140 - $1,170 29.7% 2011 Adjusted Diluted EPS (1)(2) $2.25 - $2.45 2011 Full-year Financial Guidance (1)
Slide 14: Non-GAAP reconciliation: As Reported to Non-GAAP, December 31, 2010 and 2009
As Reported December 31, 2010 Restructuring and related charges Discrete tax items Non-GAAP (1) December 31, 2010 Operating profit $5.9 $14.7 $- $20.6 Interest expense, net 4.4 - - 4.4 Income before income taxes 1.5 14.7 - 16.2 Income tax expense (benefit) (3.6) 5.3 1.1 2.8 Equity in net income of a
Slide 15: Notes to Non-GAAP Financial Measures
NOTES TO NON-GAAP FINANCIAL MEASURES For additional details, please see today’s press release and Safe Harbor Statement. These use non-GAAP financial measures. West believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain bus
Slide 16: Full Year 2011 Guidance Reconciliation
Full Year 2011 Guidance (1) Diluted Earnings Per Share Adjusted guidance $2.25 to $2.45 Restructuring, net of tax (0.05) - (0.06) Reported guidance $2.19 to $2.40 NOTES TO NON-GAAP FINANCIAL MEASURES For additional details, please see today’s press release and Safe Harbor Statement. Reconciliation o
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