West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Jefferies 2012 Global Healthcare Conference
28 slides from West Pharmaceutical Services's conference presentation, Jun 4, 2012
Slide 1: West Pharmaceutical Services, Inc. - Jefferies 2012 Global Healthcare Conference
WEST PHARMACEUTICAL SERVICES, INC. Solutions for Injectable Drug Delivery NYSE:WST www.westpharma.com © 2012 by West Pharmaceutical Services, Inc., Lionville, PA. All rights reserved. This material is protected by copyright. No part of it may be reproduced, stored in a retrieval system, or transmitt
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: Pharmaceutical Packaging Systems and Delivery Systems
Pharmaceutical Packaging Systems Pharmaceutical Delivery Systems • A globally diverse manufacturer of products used primarily in containing and administering small-volume parenteral drugs • Strong competitive position – Substantial market shares – Proprietary technology – Diversified customer base –
Slide 4: A Diverse, Stable Customer Base
PHARMACEUTICAL / BIOTECHNOLOGY GENERIC MEDICAL DEVICE A Diverse, Stable Customer Base (representative healthcare customers)
Slide 5: Business Segments
$857 $337 Packaging Systems Business Segments 2011 Revenues ($ millions) Delivery Systems • Contract manufacturing base • Multi-material • Project management • Automated assembly • Regulated products • Capabilities + IP = proprietary delivery devices • Proprietary devices are expected to drive growt
Slide 6: Summary Results
Three Months Ended March 31, 2012 2011 Net Sales $ 316.3 $ 295.4 Gross Profit 101.1 88.0 Reported Operating Profit 41.7 28.8 Adjusted Operating Profit (1) 42.3 30.7 Reported Diluted EPS $ 0.81 $ 0.56 Adjusted Diluted EPS (1) $ 0.83 $ 0.60 Summary Results $ millions, except per-share data (1) These a
Slide 7: 2012 Outlook and Challenges
2012 Outlook and Challenges First-quarter results: • Sales Grew 7.1% (9.1 % at constant currency) – Customer inventory building contributes to sales, backlog • Operating leverage yielded sharply higher Adjusted Diluted EPS Full-year / longer-term issues: • Pharmaceutical Packaging and Device markets
Slide 8: Selected Factors That Impact Margin % in 2012
Selected Factors That Impact Margin % in 2012 (2) (2) See “Cautionary Statement” on slide 2. This is not an exclusive list of risks associated with forward looking statements made in connection with these slides.
Slide 9: Convertible Debenture Tender Offer
Convertible Debenture Tender Offer • Announced on May 8, 2012 – Offer to purchase any and all of $161.5 million of outstanding convertible debentures – All-cash offer, fixed plus variable component, based on interim share price – Pricing on June 1, 2012; Tender period closes on June 5, 2012 – Inform
Slide 10: What will drive growth?
– Growth in emerging markets – Escalating regulatory and quality demands – Adding plants: China, India – Expanding Westar ® and Envision ® capacity, introducing NovaPure ® components – Growth in combination products: • safety, dosing accuracy, ease of use, • deliver cost savings • product differenti
Slide 11: Therapeutic Category Growth Drivers
Category Key Customers Projected Growth Diabetes > 10 % Oncology > 10 % Vaccines > 10 % Autoimmune > 8% Generics >10% IMS April 2010 Report; Business Insights 2009; GBI Research 2009 Therapeutic Category Growth Drivers
Slide 12: Packaging Segment Overview
Packaging Systems $857 Packaging Segment Overview 2011 Revenue ($ millions ) • Market leader • Strong recurring revenue base • Global manufacturing • Steady growth in base • Future growth will be driven by: added value per unit sold; geographic expansion; and growth in key therapeutic segments
Slide 13: Pharmaceutical Packaging Systems
Pharmaceutical Packaging Systems Packaging Components for Small Volume Parenterals Plungers, Tip caps, Needle shields for Glass Syringes Plungers, lined seals for Glass Cartridges for Pens Primary packaging components (those that touch the drug) are typically proprietary to West and are “designed in
Slide 14: Standard vs High-Value Products
Standard High-Value Products Products Revenue Opportunity ($ per unit) Plungers and sleeve stoppers Stoppers Seals RU seals Westar ® RU
Slide 15: Faster Growth of High-Value Products
Faster Growth of High-Value Products Pharmaceutical Packaging Systems
Slide 16: Delivery Systems Segment Overview
$337 Delivery Systems Segment Overview • Contract manufacturing base • Customer owned IP • Project management • Automated assembly • Regulated products • Proprietary Product Development • West owned IP • Multiple use platforms • Focus on unmet needs for biologics 2011 Revenue ($ millions )
Slide 17: Delivery Systems
Delivery Systems Daikyo Crystal Zenith ® Life-cycle Containment Solutions West MixJect ® and Vial2Bag ® Custom Manufacturing of Components and Devices Proprietary Components, Devices and Systems West ConfiDose ® auto-injector platform technology SmartDose ® electronic patch injector platform technol
Slide 18: Effect of Increasing Proprietary Device Sales
Revenue per-unit Consumer product manufacturing Medical device manufacturing Mix2Vial ® CZ vials CZ Syringes Effect of Increasing Proprietary Device Sales Contract Manufacturing Proprietary Devices Products Auto-injector platform technology Electronic patch injector technology
Slide 19: Concerns With Glass Syringes
Concerns With Glass Syringes • Interaction with sensitive biologics • Protein aggregation (silicone oil) • Residual chemicals (tungsten, glue) • Glass flakes • Dimensional variation • Variable silicone distribution • High Cost of Quality • Breakage • In process/handling • Within auto-injector system
Slide 20: Daikyo CZ Solution
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 • Consistent
Slide 21: Pharma Industry Drug Life-Cycle Management
Phase I Phase II Phase III Post-Market Life Cycle Management Pharma Industry Drug Life-Cycle Management 8 - 10 years 2 - 3 years 2 - 3 years Regulatory Approval Discovery
Slide 22: SmartDose Electronic Patch Injector Technology Platform
Programmed by PDA or PC Dose may be customized Applied and activated by patient SmartDose ® Electronic Patch Injector Technology Platform • Controlled, subcutaneous, micro-infusion delivery of high volumes and high viscosity drugs • Prefilled cartridge, no need for user filling • Based on Daikyo CZ
Slide 23: Our Long-Term Focus
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 healthcar
Slide 24: Summary
Pharmaceutical Packaging Systems Pharmaceutical Delivery Systems • Strong competitive position • Stability with growth potential • New products well positioned to meet future market needs • The financial strength to invest Summary
Slide 25: Non-GAAP Financial Measures
As Reported March 31, 2012 Restructuring and related charges Acquisition- related contingencies Discrete tax items Non-GAAP March 31, 2012 Operating profit $41.7 $0.4 $0.2 $- $42.3 Interest expense, net 3.9 - - - 3.9 Income before income taxes 37.8 0.4 0.2 - 38.4 Income tax expense 9.8 0.1 0.1 (0.3)
Slide 26: Notes to Non-GAAP Financial Measures
NOTES TO NON-GAAP FINANCIAL MEASURES See also “Safe Harbor Statement” (slide 2) These slides use non-GAAP financial measures. West believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain business trends relating to West’s fi
Slide 27: Notes to Non-GAAP Financial Measures (continued)
NOTES TO NON-GAAP FINANCIAL MEASURES (continued) Restructuring and related charges : During the three months ended March 31, 2012, we incurred restructuring and related charges of $0.4 million associated with the restructuring plan announced in December 2010. Charges associated with the plan for the
Slide 28: West Pharmaceutical Services, Inc.
WEST PHARMACEUTICAL SERVICES, INC. Solutions for Injectable Drug Delivery NYSE:WST www.westpharma.com © 2012 by West Pharmaceutical Services, Inc., Lionville, PA. All rights reserved. This material is protected by copyright. No part of it may be reproduced, stored in a retrieval system, or transmitt
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