17 slides from West Pharmaceutical Services's earnings presentation, Oct 27, 2016
Slide 1: Third Quarter 2016 Analyst Conference Call
West Pharmaceutical Services, Inc. Third Quarter 2016 Analyst Conference Call 9 a.m. Eastern Time, October 27, 2016 Speakers: Eric M. Green President and Chief Executive Officer William J. Federici Senior Vice President and Chief Financial Officer A webcast of today’s call can be accessed in the “
Slide 2: Safe Harbor Statement
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 inc
Slide 3: Q3 2016 Highlights
Q3 2016 Highlights Net sales of $377 million, organic sales growth* of 10.0% ‒ Proprietary Products organic sales growth of 11.6% ‒ Contract-Manufactured Products organic sales growth of 4.6% Increased gross and operating profit margins Reported diluted EPS of $0.50. Adjusted diluted EPS of $0
Slide 4: Q3 2016 Highlights
Q3 2016 Highlights Proprietary Products, 79% of total sales BIOLOGICS Double-digit organic sales growth GENERICS High-single digit organic sales growth PHARMA Mid-single digit organic sales growth Mid-single digit organic sales growth CONTRACT- MANUFACTURED PRODUCTS 21% of total High-value product o
Slide 5: Global Operations
Global Operations Gross margin +70 basis points Successfully reducing lead times and increasing product availability ‒ Proprietary Products backlog at September 30, 2016 was $388 million, a 2% decline (constant currency) over prior-year quarter ‒ Continue to see strong customer demand for high-v
Slide 6: 2016 Outlook
2016 Outlook Raising full-year 2016 net sales and tightening adjusted diluted EPS(1) guidance 2016 net sales range: $1.510 billion to $1.520 billion − Represents upper end of prior range of 7% to 9% organic sales growth 2016 adjusted diluted EPS(1) range: $2.17 to $2.22 − Represents 19% to 21%
Slide 7: Introducing 2017 Sales Outlook, Reaffirming Long-term 2020 Financial Targets
Introducing 2017 Sales Outlook Reaffirming Long-term 2020 Financial Targets 7 2017 Sales Outlook – expected to grow at the high-end of long-term outlook of 6% to 8% Reaffirming 2020 Financial Targets 2015A 2016 Guidance 2020 Targets Sales ($ millions) 1,399.8 1,510 to 1,520 2,200 to 2,400 Adjust
Slide 8: Third Quarter 2016 Summary Results
Third Quarter 2016 Summary Results ($ millions, except earnings-per-share (EPS) data) (1) “Net sales at constant currency”, “adjusted operating profit”, and “adjusted diluted EPS” are Non-GAAP measures. See slides 14-17 and the discussion under the heading “Non-GAAP Financial Measures” in today’s pr
Slide 9: Change in Consolidated Sales Third Quarter 2015 to 2016
$376.7 ($2.3) $31.6 $2.9 $344.5 2015 Volume & Mix Sales Price Currency Translation 2016 Change in Consolidated Sales Third Quarter 2015 to 2016 ($ millions) 9
Slide 10: Change in Gross Profit Margin % Third Quarter 2015 to 2016
32.1% (1.1%) (1.7%) 2.5% 0.5% 0.5% 31.4% 2015 Volume & Mix Sales Price Raw Material JPY Denominated Materials Plant Overhead & Other 2016 Change in Gross Profit Margin % Third Quarter 2015 to 2016 10
Slide 11: Change in SG&A Costs Third Quarter 2015 to 2016
Change in SG&A Costs Third Quarter 2015 to 2016 ($ millions) $58.3 $0.2 $2.7 $0.7 $0.5 $54.6 2015 Comp and Benefits US Pension Incentive & Stock Comp Currency 2016 15.8% of Sales 15.5% of Sales 11
Slide 12: Cash Flow and Balance Sheet Metrics
Cash Flow and Balance Sheet Metrics ($ millions) CASH FLOW ITEMS (UNAUDITED) (in millions) FINANCIAL CONDITION (UNAUDITED) (in millions) Nine Months Ended September 30, 2016 2015 Depreciation and amortization $67.9 $66.6 Operating cash flow $147.6 $144.4 Capital expenditures $122.7 $86.8 As of Septe
Slide 13: Updated 2016 Full-Year Guidance
Updated 2016 Full-Year Guidance ($ millions, except EPS - Non-GAAP) (1) (2) Estimated 2016 Revenue Estimated Gross Profit % Proprietary Products $1,195 - $1,200 38.0% to 38.2% Contract-Manufactured Products $315 - $320 16.8% to 17.2% Consolidated $1,510 - $1,520 33.6% to 33.7% Est. Capital Spending
Slide 14: Notes on Non-GAAP Measures
Today’s press release, these presentation materials and associated presentation use the following financial measures that have not been calculated in accordance with generally accepted accounting principles (GAAP) accepted in the U.S., and therefore are referred to as non-GAAP financial measures:
Slide 15: Reconciliation of Non-GAAP Measures
Notes to Non-GAAP Financial Measures RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) See “Notes to Non-GAAP Financial Measures” (Slide 14-17), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. Reconciliation of Reported and Adjusted Oper
Slide 16: Reconciliation of Non-GAAP Measures
Notes to Non-GAAP Financial Measures RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) See “Notes to Non-GAAP Financial Measures” (Slide 14-17), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. Reconciliation of Net Sales to Net Sales at
Slide 17: Reconciliation of Non-GAAP Measures
Notes to Non-GAAP Financial Measures RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) See “Notes to Non-GAAP Financial Measures” (Slide 14-17), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. Reconciliation of adjusted diluted EPS guida