West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Lazard Capital Markets 9th Annual Healthcare Conference (November 2012)
27 slides from West Pharmaceutical Services's conference presentation, Nov 13, 2012
Slide 1: Lazard Capital Markets 9th Annual Healthcare Conference
1 WEST PHARMACEUTICAL SERVICES, INC. Lazard Capital Markets 9th Annual Healthcare Conference New York, NY November 13, 2012
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement 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 i
Slide 3: About West Pharmaceutical Services
3 About West Pharmaceutical Services • Preeminent supplier of products used in containing and administering small- volume parenteral drugs • Strong competitive position Diversified customer base Proprietary technology Global footprint Significant barriers to entry • Stability with growth pot
Slide 4: A Diverse, Stable Customer Base
4 PHARMACEUTICAL / BIOTECHNOLOGY GENERIC MEDICAL DEVICE A Diverse, Stable Customer Base (representative healthcare customers)
Slide 5: West Transition
5 West Transition • Founded in Philadelphia (1923) and listed on NYSE since 1980 • Initiated strategic transformation in 2001 to become a leading global supplier of value-added pharmaceutical packaging systems and components ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ’11 ‘12 2001 $376 M 2011 $1.2 B Kinston rec
Slide 6: Business Segments Products and Services
6 Business Segments Products and Services 2011 Revenues ($ millions) Pharmaceutical Delivery Systems • Contract manufacturing for: • Rx injection systems • Diagnostics • Other medical/surgical • Consumer • Proprietary products: • Drug reconstitution and fluid transfer • Needle safety • Daikyo Crysta
Slide 7: Revenue Drivers 2013-2017
7 Company: Demographics, increasing prevalence of chronic disease, increasing use of biologics to treat those diseases, better access to healthcare Revenue Drivers 2013-2017 – Expanding Westar® and Envision® capacity, introducing NovaPure® components (HVP’s) – Escalating regulatory and quality deman
Slide 8: Pharmaceutical Packaging Systems
8 $337 $857 Pharmaceutical Packaging Systems Packaging Components for Small Volume Parenterals 2011 Revenue ($ millions) •Long-standing market leader •Global manufacturing base •Recurring revenue† •Steady growth in base: •Value-added per unit sold (mix); •Geographic expansion; •Serves growing therap
Slide 9: Growth of High-Value Products
9 Growth of High-Value Products Pharmaceutical Packaging Systems Disposable Components Standard Pharma Packaging High-Value Pharma Packaging -5.0% 0.0% 5.0% 10.0% 15.0% 0% 10% 20% 30% 40% 50% 60% 5 Y r C A G R Category Gross Margin % Left Axis: 5 Year Sales CAGR % Through 2011, excluding Fx Bubble S
Slide 10: Growth of High-Value Products
10 2010 2011 2012E 2013E 2014E 2015E 2016E 2017E Growth of High-Value Products Pharmaceutical Packaging Systems Estimated CAGR ‘12-’17 9.9 % CAGR ‘07-’11 9.4 %
Slide 11: Geographic Expansion: Asia-Pacific
11 Geographic Expansion: Asia-Pacific Singapore: 1. High-value Product Focus 2. Asia-Pacific market & special items 3. R&D hub & technical center China IV Plastic: Global supply China Elastomer: China Market, Efficiency focus India Elastomers for: 1. Domestic standard products & local support for mu
Slide 12: Pharmaceutical Delivery Systems
12 Pharmaceutical Delivery Systems Contract Manufacturing Services Proprietary Reconstitution, Safety and Administration • Contract manufacturing base • Customer owned IP • Project management • Automated assembly • Regulated products 2011 Revenue ($ millions) $337 • Proprietary Products •Multiple pl
Slide 13: Corporate Evolution
13 Corporate Evolution Components Elements of the delivery system Integrated Delivery System • CZ® syringe + other AI • ConfiDose® + glass • SmartDose® + glass • B.Safe® + glass • Molded systems • SmartDose® + CZ® cartridge • ConfiDose® + CZ® • B.Safe® + CZ® • Novel system • Co-development Level of
Slide 14: Effect of Increasing Proprietary Device Sales
14 Revenue per-unit Contract Manufacturing Mix2Vial® CZ vials CZ Syringes Effect of Increasing Proprietary Device Sales Gro ss M argi n % Auto-injector platform technologies Contract Manufacturing Proprietary Devices Products SmartDose
Slide 15: Daikyo CZ Solution with Daikyo Flurotec Barrier Film
15 Daikyo CZ Solution with Daikyo Flurotec® Barrier Film Reduces: • drug exposure to extractables • risk of protein aggregation caused by silicone oil in the drug product • returns and in-process clean-ups caused by broken glass • risk of delamination and glass-particulate contamination Consiste
Slide 16: Products Approved in Daikyo Crystal Zenith
16 Products Approved in Daikyo Crystal Zenith hyaluronic acid MRI contrast media bone cement 6 Contrast Media 5 MRI 2 Hyaluronic Acid 1 Calcitonin 1 Proton Pump Inhibitor fluconazole oncology anticoagulant 2 oncology 1 acyclovir hyaluronic acid 3 oncology API Container Japan MHLW Europe EMEA US FDA
Slide 17: SmartDose Electronic Patch Injector Technology Platform
17 SmartDose® Electronic Patch Injector Technology Platform Programmed by PDA or PC Dose may be customized Applied and activated by patient • Controlled, subcutaneous, micro-infusion delivery of high volumes and high viscosity drugs • Prefilled cartridge, no need for user filling • Based on Daikyo C
Slide 18: First Nine Months of 2012
18 First Nine Months of 2012 Sales Grew 5.4% (9.9% at constant currency) • High-value product growth and price were key components • Backlog growing, longer-lead times, customer inventory building Adjusted EPS(1) at $2.15 vs. $1.74 prior year Pharmaceutical Packaging and Device markets: • Cust
Slide 19: Cash Flow Metrics
19 Cash Flow Metrics ($ millions) Nine Months Ended September 30, 2012 2011 Depreciation and amortization $56.7 $57.3 Operating cash flow $117.6 $88.9 Capital expenditures $98.4 $62.0
Slide 20: Summary Balance Sheet Information
20 Summary Balance Sheet Information ($ millions) As of September 30, 2012 December 31, 2011 Cash and cash equivalents $143.2 $91.8 Debt $401.4 $349.4 Equity $717.1 $654.9 Net debt to total invested capital† 26.5% 28.2% Working capital $281.7 $228.8 † Net debt to total Invested capital is a Non-GAAP
Slide 21: Our Long-Term Focus
21 Our Long-Term Focus Pharmaceutical Packaging Systems • Organic growth of 3-5% per year • Margin expansion from efficiency, product mix • Capital investments target enhanced quality and value Pharmaceutical Delivery Systems • Deliver the potential of Daikyo CZ products • Stronger mix of health
Slide 22: Take-Away Messages
22 Take-Away Messages Designed-in supply chain partner to pharmaceutical, biotech and medical device customers Achieving profitable growth by increasing the quality and value of our products to customers Growing base of proprietary products: R&D and acquisition Increasing presence in fast-gr
Slide 23: Lazard Capital Markets 9th Annual Healthcare Conference
23 WEST PHARMACEUTICAL SERVICES, INC. Lazard Capital Markets 9th Annual Healthcare Conference New York, NY November 13, 2012
Slide 24: Non-GAAP Financial Measures
24 Non-GAAP Financial Measures(1) Nine-Months Ended September 30, 2012 and 2011 (in millions, except per share data) (1) See “Notes to Non-GAAP Financial Measures” on the following slides, and Slide 2. As Reported September 30, 2012 Restructuring, impairment & related charges Acquisition- related co
Slide 25: Notes to Non-GAAP Financial Measures
25 NOTES TO NON-GAAP FINANCIAL MEASURES For additional details, please see Safe Harbor Statement (slide 2) (continued on following slide) These presentation materials and associated presentation may use the following financial measures that have not been calculated in accordance with generally accep
Slide 26: Notes to Non-GAAP Financial Measures
26 NOTES TO NON-GAAP FINANCIAL MEASURES For additional details, please see Safe Harbor Statement (Slide 2) Restructuring, impairment & related charges - During the nine months ended September 30, 2012, we incurred restructuring, impairment and related charges of $5.2 million, the majority of which r
Slide 27: Discrete tax items
27 Discrete tax items - During the nine months ended September 30, 2012, we recorded discrete tax charges of $1.8 million resulting from the impact of a dividend from one of our foreign subsidiaries on our previously recorded U.S. foreign tax credit deferred tax asset, and of a change in the enacted