Attached files
| file | filename |
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| EX-99.1 - PRESS RELEASE - WEST PHARMACEUTICAL SERVICES INC | pressrel.htm |
| 8-K - FORM 8K BARCLAYS CAPITAL - WEST PHARMACEUTICAL SERVICES INC | form8k.htm |
1
Donald E. Morel
Chairman and Chief Executive Officer
William J. Federici
Vice President and Chief Financial Officer
Investor Relations Contact:
Michael A. Anderson
Vice President and Treasurer
mike.anderson@westpharma.com
Barclays 2010 Global Healthcare Conference
Miami, FL
March 24, 2010
NYSE: WST
westpharma.com
All trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., unless noted otherwise.
2
This presentation contains forward-looking statements, within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, that are based on management’s beliefs and assumptions, current
expectations, estimates and forecasts. Statements that are not historical facts, including
statements that are preceded by, followed by, or that include, words such as “estimate,”
“expect,” “intend,” “believe,” “plan,” “anticipate” and other words and terms of similar
meaning are forward-looking statements. West’s estimated or anticipated future results,
product performance or other non-historical facts are forward-looking and reflect our
current perspective on existing trends and information.
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, that are based on management’s beliefs and assumptions, current
expectations, estimates and forecasts. Statements that are not historical facts, including
statements that are preceded by, followed by, or that include, words such as “estimate,”
“expect,” “intend,” “believe,” “plan,” “anticipate” and other words and terms of similar
meaning are forward-looking statements. West’s estimated or anticipated future results,
product performance or other non-historical facts are forward-looking and reflect our
current perspective on existing trends and information.
Many of the factors that will determine the Company’s future results are beyond the ability
of the Company to control or predict. These statements are subject to known or unknown
risks or uncertainties, and therefore, actual results could differ materially from past results
and those expressed or implied in any forward-looking statement. You should bear this in
mind as you consider forward-looking statements. A non-exclusive list of important factors
that may affect future results may be found in West’s filings with the Securities and
Exchange Commission, including our annual report on Form 10-K and our periodic reports
on Form 10-Q and Form 8-K.
of the Company to control or predict. These statements are subject to known or unknown
risks or uncertainties, and therefore, actual results could differ materially from past results
and those expressed or implied in any forward-looking statement. You should bear this in
mind as you consider forward-looking statements. A non-exclusive list of important factors
that may affect future results may be found in West’s filings with the Securities and
Exchange Commission, including our annual report on Form 10-K and our periodic reports
on Form 10-Q and Form 8-K.
You should evaluate any statement in light of these important factors.
Forward Looking Statements
3
Corporate Profile
• For more than eighty years, a
global leader in the development
and manufacturing of
components and systems
for injectable drug delivery
global leader in the development
and manufacturing of
components and systems
for injectable drug delivery
– Vial
closure systems
– Prefillable
syringe components
– Components
for diagnostics
– Devices
and device sub-
assemblies
assemblies
– Safety
and administration
systems
systems
• Market capitalization $1.4 billion
• Diverse, stable customer base
• Global footprint
|
|
|
Devices |
|
Proprietary
Products |
4
West Pharmaceutical Services Today
● 32 plants in 10 countries
● 34 sales offices
● 7 technical centers
6,000 employees worldwide
5
• Challenges:
– Adverse
effects of pension expense, currency effects
– Recession
impacted customer order patterns
• Tighter
cost, working capital and inventory management
• Some
major programs delayed or cancelled
– First
half sales declines
• Full year revenues grew by 3.5 % excluding currency
– H1N1-related
sales growth
– Customer
cyclical inventory adjustments moderating
– Year
end backlog at highest level in recent quarters
• Pharma mergers and consolidation
• Key developments:
– Validated
Daikyo Crystal Zenith 1ml single cavity manufacturing cell
• Four
cavity cell installed late Q4; commercial production should start Q3 2010
– Plastef
acquisition completed
– Officially
opened China Plastics facility
– Announced
plans to restructure and re-align operating segments in Q4
2009 in Retrospect
6
2009 Revenue Growth vs. Prior Year Period
by Business Segment
by Business Segment
7
• Ex-Currency, Growth was:
$ 32.2 Revenue (13.2%)
$ 10.2 Gross Profit (14.7%)
$ 2.2 Adjusted Operating
Profit (7.9%)
• Currency translation added:
$ 16.3 Revenue
$ 4.1 Gross Profit
$ 1.8 Operating Profit
• Major Changes:
– H1N1-related, prefillable component,
and metal seal sales
and metal seal sales
– Lower relative SG&A costs
8
Sales and Income from Continuing Operations
($ in millions)
($ in millions)
9
• Global economic conditions remain soft, but show
signs of improvement
signs of improvement
• Analyzing future impact of US healthcare
legislation
legislation
• Global pharmaceutical revenue growth projected to
be 4-6% (per IMS) on modest unit growth
be 4-6% (per IMS) on modest unit growth
• North America growth projected at 4.5 - 5.5%
• Europe growth moderate 2-4%
• Emerging economies should grow > 10% (India,
China, Brazil)
• Return to more normalized order patterns
• Further consolidation - e.g Teva - Ratiopharm
2010 Business Environment
10
2010 Expectations and Milestones
• Revenue Growth: 3% to 5% (excluding currency)
– Consolidated revenues: $1,090 - $1,120 million1
• Consolidated Gross Margin of 30.5%
• Adjusted Diluted2 EPS: $2.19
to $2.39
• Validate new Daikyo CZ production cell
• Secure first Daikyo CZ commercial program
• Break ground on China rubber facility
1. The principal currency assumption in these estimates
is for the translation of the Euro at $1.40 for
2010.
2010.
2. “Adjusted Diluted EPS” refers to earnings
per share excluding expected restructuring charges of
between $0.02 and $0.04 per share.
between $0.02 and $0.04 per share.
11
|
Pharmaceutical Packaging
Systems (How drugs are contained) |
|
Primary Container Solutions |
|
Pharmaceutical Delivery
Systems (How drugs are administered) |
|
Administration Systems |
Business Unit Re-alignment
• Safety
systems (NovaGuard, Eris)
• Reconstitution
systems -
MediMop
MediMop
• CZ
prefillable syringe systems
• Advanced
Injection Systems
(Confidose)
(Confidose)
• Tech
Group Contract
Manufacturing
Manufacturing
• Small
volume parenteral
packaging
packaging
• Large
volume parenteral
packaging
packaging
• Prefillable
syringe components
• Disposable
medical device
components
components
• Diagnostic,
dental, veterinary
packaging
packaging
12
Five-Year Growth Opportunity
$2 billion combined markets for safety,
prefilled and auto-injectors, with unit
growth 6-12%, depending on product and
therapeutic segment
prefilled and auto-injectors, with unit
growth 6-12%, depending on product and
therapeutic segment
Strategic Planning Goals:
• Projected
2014 sales of $0.6 billion
• Projected
2014 Operating margin: 20%
$1.5 billion market for components with unit
growth 0% to 8% per year, depending on
product and therapeutic segment
growth 0% to 8% per year, depending on
product and therapeutic segment
Strategic Planning Goals:
• Projected
2014 sales of $1.0 billion
• Projected
2014 Operating margin: 20%
|
Pharmaceutical
Packaging Systems |
|
Primary Container Solutions |
|
Pharmaceutical Delivery Systems |
|
Administration Systems |
Consolidated 2014 Planning Objectives
• 2014
Sales: $1.6 billion
• 2014
Operating Margin: 19%
• 2014
Consolidated ROIC: 17%
13
Long Term Business Drivers
• Demographics
• Growth in Biologics & Vaccines
• Requirement for easy, safe,
accurate dosing
accurate dosing
• Combination product growth
• Generic growth
• Increasing global access to
advanced healthcare
advanced healthcare
West supplies sophisticated
packaging systems for the top 20
biologic drugs (by sales) currently
on the market.
packaging systems for the top 20
biologic drugs (by sales) currently
on the market.
14
Therapeutic Category Drivers
|
Category |
Key Customers |
Projected Growth |
|
Diabetes |
|
8 - 10% |
|
Oncology |
|
6 - 8% |
|
Vaccines |
|
4 - 6% |
|
Autoimmune |
|
6 - 8% |
15
Our Growth Strategy
West’s Competitive Advantages:
• Unmatched
expertise in drug -
material interactions
material interactions
• Market
leader in packaging for
biologics
biologics
• Protected
IP: Proprietary materials
and processing technology - Drug
Master File (DMF) 1546
and processing technology - Drug
Master File (DMF) 1546
• Regulatory
barriers to entry:
US NDAs and ANDAs
require proof of stability
require proof of stability
• Global
technical support
|
Pharmaceutical Packaging
Systems (How drugs are contained) |
|
Primary Container Solutions |
• Therapeutic
segment focus
• Generate
incremental value per
unit
unit
• Leverage
changing regulatory
environment
environment
• Optimize
manufacturing
productivity
productivity
• Strategic
acquisitions
• Geographic
expansion
• China
• India
16
Value Proposition
PROPRIETARY
PRODUCTS
Revenue and
Margin
Opportunity
Opportunity
Disposable Device
Disposable Device
Components
Components
Westar® RS
Mix2Vial®
NovaGuard™
éris™
Westar® RU
Standard
Components
Components
Standard
Components
Components
Consumer
Consumer
Products
Products
Packaging
Delivery
17
Our Growth Strategy
• Concentrate
on systems for unmet
market needs
market needs
• Build
market share in multi-
component systems for drug
administration utilizing Daikyo CZ as
a platform technology
component systems for drug
administration utilizing Daikyo CZ as
a platform technology
• Production
supported by existing
design, multi-material molding, and
assembly capabilities
design, multi-material molding, and
assembly capabilities
• Expand
through innovation and
strategic technology acquisitions
strategic technology acquisitions
|
Pharmaceutical Packaging Systems |
|
Primary Container Solutions |
|
Pharmaceutical Delivery Systems |
|
Administration Systems |
• Therapeutic
segment focus
• Generate
incremental value per
unit
unit
• Leverage
changing regulatory
environment
environment
• Optimize
manufacturing
productivity
productivity
• Strategic
acquisitions
• Geographic
expansion
• China
• India
18
Pharmaceutical Delivery Systems
Key Programs
Vial2Bag™
Mix2Vial®
MixJect®
NovaGuard™ Safety
Needle Device
Needle Device
(luer-lock syringe)
ConfiDose®
Auto-injector
Auto-injector
Daikyo Crystal Zenith®
éris™
Safety Needle Device
(fixed-needle syringe)
19
Management Focus
• Pharmaceutical Packaging Systems
– Organic
growth (on average) of 3-5% per year
– Margin
expansion through improved operating efficiency, product mix
– Capital
investments targeted at enhanced quality and value
• Pharmaceutical Delivery Systems
– Deliver
the potential of Daikyo CZ products
– Increase
healthcare-consumable contract manufacturing revenue
– Grow
proprietary safety and delivery system businesses
• Financial discipline
– Operating
cash flow: Discretionary SG&A, R&D and capital spending
that are supported by revenue growth.
that are supported by revenue growth.
– Deliver
returns on invested capital (“ROIC”) that regularly exceed
weighted average cost of capital (“WACC”).
weighted average cost of capital (“WACC”).
– Align
incentives with financial performance and value creation
20
Summary
• A valuable franchise
– Substantial
market share
– Proprietary
technology
– Diversified
Customer Base
– Global
footprint
• Positioned to grow
– Strength
in new product
pipeline
pipeline
– Preferred
products for
biologics
biologics
• With the financial strength to
invest
invest
– Reliable
operating cash
flow
flow
– Balance
sheet strength
• Led by an experienced
management team
management team
– Aligned
incentives
Injectable Container Solutions
Advanced
Injection
Systems
Injection
Systems
Prefillable Syringe Systems
Safety and
Administration Systems
Administration Systems
21
Donald E. Morel
Chairman and Chief Executive Officer
William J. Federici
Vice President and Chief Financial Officer
Investor Relations Contact:
Michael A. Anderson
Vice President and Treasurer
mike.anderson@westpharma.com
Barclays 2010 Global Healthcare Conference
Miami, FL
March 24, 2010
NYSE: WST
westpharma.com
All trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., unless noted otherwise.