Attached files
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| 8-K - 8K JEFFERIES CONFERENCE - WEST PHARMACEUTICAL SERVICES INC | jefferies8k.htm |
| EX-99.1 - PRESS RELEASE JEFFERIES - WEST PHARMACEUTICAL SERVICES INC | prjefferies.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
Jefferies 2010 Global Life Sciences Conference
June 9, 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.
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.
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.
Safe Harbor Statement
3
Corporate Profile
• For more than eighty years, a
global leader in the
development and manufacture
of components and systems for
injectable drug delivery
global leader in the
development and manufacture
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 $1.4 billion
• Diverse, stable customer base
• Global footprint
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Devices
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Proprietary
Products
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4
West Pharmaceutical Services Today
● 32 plants in 10 countries
● 34 sales offices
● 7 technical centers
6,000 employees worldwide
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Sales and Income from Continuing Operations
($ in millions)
($ in millions)
6
First Quarter 2010 Results
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$ millions, except per share data
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2010
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2009
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Net Sales
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$274.7
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$242.4
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Gross Margin
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30%
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29%
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Research & Development
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$5.4
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$4.3
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Selling, General & Administrative Exp.
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$46.6
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$42.9
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Net Income
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$19.8
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$15.4
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Diluted EPS - GAAP
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$0.57
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$0.46
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Diluted EPS - Non-GAAP
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$0.58
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$0.42
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First quarter 2010 diluted EPS - Non-GAAP excludes a net ($0.01) per share for restructuring charges.
First quarter 2009 diluted EPS - Non-GAAP excludes a net $0.04 per share for discrete tax benefits and Tech
restructuring charges.
restructuring charges.
7
Consolidated First Quarter 2010 Operating Results
($ millions)
($ millions)
• Ex-Currency, Growth was:
$ 10.0 Gross Profit (14.4%)
$ 6.0 Adjusted Operating Profit (27.4%)
• Currency translation added:
$ 9.8 Revenue
$ 2.9 Gross Profit
$ 1.6 Operating Profit
• Comparative result drivers:
– Favorable volume and mix,
increased pricing and increased
efficiencies
increased pricing and increased
efficiencies
– Increasing labor, overhead and
depreciation costs
depreciation costs
– SG&A cost containment
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• Global economic conditions unsettled, however
• 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)
• Managing through:
– Impact of US healthcare legislation
– Industry mergers and consolidation
– Changing customer order/inventory patterns
Challenging Business Environment
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2010 Priorities
• Establishing the new organization
• Evolution of a global, cross-business
unit selling model
unit selling model
• Crystal Zenith® syringe system
• The Global Quality Initiative
10
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Pharmaceutical Packaging
Systems (How drugs are contained)
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Primary Container Solutions
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Pharmaceutical Delivery
Systems (How drugs are administered)
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Administration Systems
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Business Unit Re-alignment
• Safety systems (NovaGuard, éris)
• 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
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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%
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Pharmaceutical
Packaging Systems
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Primary Container Solutions
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Pharmaceutical Delivery
Systems |
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Administration Systems
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Consolidated 2014 Planning Objectives
• 2014 Sales: $1.6 billion
• 2014 Operating Margin: 19%
• 2014 Consolidated ROIC: 17%
12
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.
13
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Category
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Key Customers
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Projected
Growth |
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Diabetes
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> 10 %
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Oncology
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> 10 %
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Vaccines
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> 10 %
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Autoimmune
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> 8%
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IMS April 2010 Report; Business Insights 2009; GBI Research 2009
Therapeutic Category Growth Expectations
14
Packaging Systems 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 manufacturing footprint
• Global technical support
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Pharmaceutical Packaging
Systems (How drugs are contained)
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Primary Container Solutions
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• Therapeutic segment focus
• Generate incremental value per
unit
unit
• Leverage changing regulatory
environment
environment
• Optimize manufacturing
productivity
productivity
• Strategic acquisitions
• Geographic expansion
• China
• India
15
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
16
High-Value Products Drive Growth
Westar® RS
State of the art
ready-to-sterilize
elastomer closures
Westar® RU
State of the art
ready-to-use
syringe plungers
and closures
Envision™
Technically advanced,
automated vision
inspection system
NovaPure™
Unrivaled
quality….by
design
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Faster Growth of High-Value Products
Pharmaceutical Packaging Systems
Pharmaceutical Packaging Systems
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Delivery Systems 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
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Pharmaceutical Packaging
Systems |
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Primary Container Solutions
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Pharmaceutical Delivery
Systems |
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Administration Systems
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• Therapeutic segment focus
• Generate incremental value per
unit
unit
• Leverage changing regulatory
environment
environment
• Optimize manufacturing
productivity
productivity
• Strategic acquisitions
• Geographic expansion
• China
• India
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CZ Syringe +
ConfiDose®
ConfiDose®
West Solutions to Biopharma
Lifecycle Management
Lifecycle Management
$1,000,000
Components
Components
$55,000,000
20
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)
21
Daikyo Crystal Zenith® Insert Needle Syringe
Drug and Pharma Company Benefits
• Silicone oil free
• Tungsten free
• Glue free
• Lower dead space
• Reduced risk: breakage, waste, recall
Auto-Injector Benefits
• Consistent break loose and glide forces
• Break resistant
• Tight dimensional tolerances
• Design flexibility of plastics
Highest Quality
• 100% vision inspection
• X-ray inspection of needle
• Automated, clean production process
Daikyo Crystal Zenith, Crystal Zenith and CZ are trademarks and registered trademarks of Daikyo Seiko Ltd.
22
Our Long Term 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 that regularly exceed weighted
average cost of capital.
average cost of capital.
– Align incentives with financial performance and value creation
23
Summary
• Well positioned
– Substantial market share
– Proprietary technology
– Diversified customer base
– Global footprint
• Significant Growth Potential
– Strength in new product pipeline
– Preferred products for biologics
• The financial strength to invest
– Reliable operating cash flow
– Balance sheet strength
• An experienced team
Injectable Container Solutions
Advanced
Injection
Systems
Injection
Systems
Prefillable Syringe Systems
Safety and Administration
Systems
Systems
24
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
Jefferies 2010 Global Life Sciences Conference
June 9, 2010
NYSE: WST
westpharma.com