West Pharmaceutical Services, Inc. · NYSE:WST

West Pharmaceutical Services — FY2016 Earnings Presentation

19 slides from West Pharmaceutical Services's earnings presentation, Feb 16, 2017

  1. Slide 1: Fourth-Quarter and Full-Year 2016 Analyst Conference Call

    West Pharmaceutical Services, Inc. Fourth-Quarter and Full-Year 2016 Analyst Conference Call 9 a.m. Eastern Time, February 16, 2017 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 a

  2. 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

  3. Slide 3: Full-Year 2016 Highlights

    Full-Year 2016 Highlights * Excluding the impact from translational changes in foreign exchange  Implemented market-led strategy and aligned into Commercial, Global Operations and Innovation & Technology  Record-high net sales of $1.509 billion, representing 9.1% organic sales growth* ‒ Proprietar

  4. Slide 4: Sustained, Consistent Growth

    0% 100% 200% 300% 400% 500% 2011 2012 2013 2014 2015 20162012 2013 2014 2015 2016 Net Sales Sustained, Consistent Growth 2012 2013 2014 2015 2016 Adjusted Diluted EPS* (Non-GAAP) Constant Currency CAGR 6.8% Comparison of Cumulative Five-Year Total Return S&P MidCap 400 Index West Pharmaceutical Serv

  5. Slide 5: Full-Year 2016 Highlights

    Full-Year 2016 Highlights Proprietary Products, 79% of total sales BIOLOGICS Double-digit organic sales growth GENERICS Double-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

  6. Slide 6: Global Operations

    Global Operations  Global manufacturing network of 28 plants across U.S., Europe, Asia and South America  Increased industry-leading quality metrics  Increased capacity and efficiencies, reducing lead times and backlog levels for high-value products  Global Supply Chain and Procurement drove low

  7. Slide 7: Innovation & Technology

    Innovation & Technology  Expanded high-value product offerings, including NovaPure® 1-3mL plungers  Developing new high-value product component offerings and administration and safety devices  FDA approvals by our customers using Crystal Zenith® and SmartDose® technology  Developing next-generat

  8. Slide 8: STERILIZED WASHED COATED ADMINISTERED CAMERA INSPECTED QUALITY BY DESIGN CONTAINMENT SELF INJECTION 8 |

    STERILIZED WASHED COATED ADMINISTERED CAMERA INSPECTED QUALITY BY DESIGN CONTAINMENT SELF INJECTION 8 | Increasing levels of customer intimacy Increasing value to West Next Generation of Self-Injection Delivery Devices Our pipeline of new products is robust INJECTION MOLDING MULTI-COMPONENT ASSEMBLY

  9. Slide 9: 2017 Outlook

    2017 Outlook  Raising full-year 2017 net sales organic sales growth to a new range of 7% to 9%, above West’s long-term target of 6% to 8%  2017 net sales range: $1.585 billion to $1.610 billion  2017 gross profit margin of 34.4% to 34.8%, an expansion of 120 to 160 basis over 2016  2017 adjusted

  10. Slide 10: Fourth-Quarter 2016 Summary Results

    Fourth-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 16-19 and the discussion under the heading “Non-GAAP Financial Measures” in today’s p

  11. Slide 11: Change in Consolidated Sales Fourth-quarter 2015 to 2016

    $382.3 ($4.9) $25.8 $1.7 $359.7 2015 Volume & Mix Sales Price Currency 2016 Change in Consolidated Sales Fourth-quarter 2015 to 2016 ($ millions) 11 |

  12. Slide 12: Change in Gross Profit Margin % Fourth-quarter 2015 to 2016

    32.3% (0.6%) (0.7%) (1.4%) 1.3% 0.3% 0.1% 33.3% 2015 Volume & Mix Sales Price Raw Material Start-Up Costs & Contract Tooling JPY Denominated Materials Plant Overhead & Other 2016 Change in Gross Profit Margin % Fourth-quarter 2015 to 2016 12 |

  13. Slide 13: Change in SG&A Costs Fourth-quarter 2015 to 2016

    Change in SG&A Costs Fourth-quarter 2015 to 2016 ($ millions) $60.9 ($2.9) $1.0 $0.4 $62.4 2015 Comp and Benefits Currency & Other Incentive & Stock Comp 2016 17.4% of Sales 15.9% of Sales 13 |

  14. Slide 14: Cash Flow and Balance Sheet Metrics

    Cash Flow and Balance Sheet Metrics ($ millions) CASH FLOW ITEMS (UNAUDITED) (in millions) FINANCIAL CONDITION (UNAUDITED) (in millions) Twelve Months Ended December 31, 2016 2015 Depreciation and amortization $90.7 $89.9 Operating cash flow $219.4 $212.4 Capital expenditures $170.2 $131.6 As of Dec

  15. Slide 15: 2017 Full-Year Guidance

    2017 Full-Year Guidance ($ millions, except EPS) (1) (2) Proprietary Products net sales $1,245 to $1,260 Contract-Manufactured Products net sales $340 to $350 Consolidated net sales $1,585 to $1,610 Consolidated gross profit margin (% of net sales) 34.4% to 34.8% Full-year Reported Diluted EPS (1) (

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

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

    Notes to Non-GAAP Financial Measures RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) See “Notes to Non-GAAP Financial Measures” (Slide 16-19), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. 17 | Reconciliation of Reported and Adjusted

  18. Slide 18: Notes to Non-GAAP Financial Measures

    Notes to Non-GAAP Financial Measures RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) See “Notes to Non-GAAP Financial Measures” (Slide 16-19), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. 18 | Reconciliation of Net Sales to Net Sale

  19. Slide 19: Notes to Non-GAAP Financial Measures

    Notes to Non-GAAP Financial Measures RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) See “Notes to Non-GAAP Financial Measures” (Slide 16-19), “Cautionary Statement” (Slide 2) and today’s press release for an explanation and reconciliation of these items. 19 | Reconciliation of Reported and Adjusted

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