0000105770false00001057702024-10-242024-10-24

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) – October 24, 2024
wstlogoq319.jpg
WEST PHARMACEUTICAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania
1-8036
23-1210010
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
530 Herman O. West Drive, Exton, PA
19341-1147
(Address of principal executive offices)
(Zip Code)
 Registrant’s telephone number, including area code: 610-594-2900
Not Applicable
(Former name or address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.25 per shareWSTNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02 Results of Operations and Financial Condition.

On October 24, 2024, West Pharmaceutical Services, Inc. (the “Company”) issued a press release announcing its third-quarter 2024 financial results. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

The information set forth in “Item 2.02 Results of Operations and Financial Condition,” including the exhibit referred to therein, is incorporated herein by reference.

A copy of the Company’s presentation materials used during the call will be available through the Investors link at the Company’s website, http://www.westpharma.com, and is also attached hereto as Exhibit 99.2 and incorporated herein by reference.

The information in this report (including the exhibits attached hereto) is being furnished pursuant to Item 2.02 and Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor will it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific referencing in such filing.

Item 9.01 Financial Statements and Exhibits.
(d)
Exhibit No.
Description
 99.1
West Pharmaceutical Services, Inc. Press Release, dated October 24, 2024.
 99.2
West Pharmaceutical Services, Inc. Presentation, dated October 24, 2024.
 104
The cover page from the Company’s Current Report on Form 8-K, dated October 24, 2024, formatted in Inline XBRL.



2



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


WEST PHARMACEUTICAL SERVICES, INC.
/s/ Bernard J. Birkett
Bernard J. Birkett
Senior Vice President, Chief Financial Officer
October 24, 2024



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EXHIBIT INDEX

Exhibit No.
Description
99.1
99.2
104
The cover page from the Company’s Current Report on Form 8-K, dated October 24, 2024, formatted in Inline XBRL.

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exh991logo.jpg
Exhibit 99.1

West Announces Third-Quarter 2024 Results, Increases Fiscal Year 2024 Guidance and Declares Fourth-Quarter 2024 Dividend
- Conference Call Scheduled for 9 a.m. EDT Today -

Exton, PA, October 24, 2024 – West Pharmaceutical Services, Inc. (NYSE: WST) today announced its financial results for the third-quarter 2024 and declared a fourth-quarter 2024 dividend.

Third-Quarter 2024 Summary (comparisons to prior-year period)
•Net sales of $746.9 million declined 0.1%; organic net sales decline was 0.5%.
•Reported-diluted EPS of $1.85, compared to $2.14 in the same period last year.
•Adjusted-diluted EPS of $1.85, compared to $2.16 in the same period last year.
•As a result of favorable currency movements, the Company increased its full year 2024 net sales guidance range to $2.875 billion to $2.905 billion, up from its previous guidance range of $2.870 billion to $2.900 billion.
•The Company increased its full-year 2024 adjusted-diluted EPS guidance range to $6.55 to $6.75, up from its previous guidance range of $6.35 to $6.65.
•The Company also announced that its Board of Directors has approved a fourth-quarter 2024 dividend of $0.21 per share, a 5.0% increase over the $0.20 per share paid in each of the four preceding quarters. This is the thirty-second consecutive annual increase in the Company's dividend. The dividend will be paid on November 20, 2024, to shareholders of record as of November 13, 2024.

Eric M. Green, President, Chief Executive Officer and Chair of the Board commented; “We are pleased to report solid third quarter results. Our West team across the globe continues to execute at a high-level, motivated by our purpose of improving patient lives. A key aspect of our strategy is West’s team of scientific thought leaders and technical experts who continue to drive strong partnership and close collaboration with our customers. This reinforces my confidence in West’s execution capabilities, as we continue to deliver our proven market-led strategy and attractive long-term potential.”

Proprietary Products Segment
Net sales declined by 0.2% to $601.4 million. Organic net sales decline was 0.5%. High-value products (components and devices) represented over 75% of segment net sales in the period led by customer demand for self-injection device platforms.



The Generics market unit had a mid-single digit organic net sales decline, driven by lower volumes of NovaBrand products. The Biologics market unit had a low-single digit organic net sales decline, driven by lower sales of FluroTec®, Westar® and NovaPure® products, offset by an increase in sales of self-injection device platforms. The Pharma market unit saw mid-single digit organic net sales growth, driven by an increase in sales of NovaBrand products and Administrative Systems.

Contract-Manufactured Products Segment
Net sales grew by 0.4% to $145.5 million. Organic net sales were consistent with our performance in the third quarter of last year. Segment performance was driven by growth in self-injection devices for obesity and diabetes, offset by a decrease in sales of healthcare diagnostic devices.

Financial Highlights (first nine months of 2024)
Operating cash flow was $463.3 million, a decrease of 13.8%. Capital expenditures were $272.1 million, an increase of 7.4% over the same period last year. Free cash flow (operating cash flow minus capital expenditures) was $191.2 million, a decline of 32.7%.

During the first nine months of 2024, the Company repurchased 1,409,786 shares for $506.5 million at an average share price of $359.24 under its share repurchase program.

Full-Year 2024 Updated Financial Guidance
•As a result of favorable currency movements, the Company increased its full year 2024 net sales guidance range to $2.875 billion to $2.905 billion, compared to a prior range of $2.870 billion to $2.900 billion.
◦Anticipating a decrease of approximately 1.5% to 2% for organic net sales.
◦Net sales guidance includes an estimated full-year 2024 headwind of approximately $1.0 million based on current foreign currency exchange rates, compared to previous guidance of a headwind of approximately $5.0 million.
•Full-year 2024 adjusted-diluted EPS is expected to be in a range of $6.55 to $6.75, compared to prior guidance range of $6.35 to $6.65.
◦Our updated adjusted-diluted EPS guidance incorporates a foreign currency exchange rate headwind of $0.02, compared to prior guidance which anticipated a foreign currency exchange rate headwind of $0.03.
◦The updated guidance also includes EPS of $0.26 associated with first nine-months 2024 tax benefits from stock-based compensation.
◦For the fourth-quarter 2024, our EPS guidance range assumes a tax rate of 22% and does not include potential additional tax benefits from stock-based compensation. Any tax benefits associated with stock-based compensation beyond those recorded in the first nine-months of 2024 would provide a positive adjustment to our full-year adjusted-diluted EPS guidance.
•Full-year 2024 capital spending guidance is unchanged and is expected to be $375 million.



Third-Quarter 2024 Conference Call
The live audio-only webcast will be made available via the Company's Investor Relations website at westpharma.com.

To participate in the conference call by asking questions to Management, please register in advance by clicking https://register.vevent.com/register/BI13834a517d804f6781f33c4642cc94ab.

Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that will be used to access the call.

Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, select "Presentations" in the "Investors" section of the Company's website.

A replay of the conference call and webcast will be available on the Company's website for 30 days.

Investor Contact:Media Contact:
John Sweeney, CFAMichele Polinsky
Vice President, Investor RelationsVice President, Global Communications
(484) 790-0373(610) 594-3054
John.Sweeney@westpharma.comMichele.Polinsky@westpharma.com
























Forward-Looking Statements
This release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include such words as “raising,” “positioned,” “updating,” “expected,” “assumes,” “unchanged,” “includes,” “would,” “provide” and other similar terminology. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this release. There is no certainty that actual results will be achieved in-line with current expectations. These forward-looking statements involve a number of risks and uncertainties. The following are some of the factors that could cause our actual results to differ materially from those expressed in or underlying our forward-looking statements: prevailing economic conditions and general uncertainties relating thereto that may be unknown and unforeseeable; customers’ changing inventory requirements and manufacturing plans and customer decisions to move forward with our new products and product categories; disruptions or limitations in the Company’s manufacturing capacity; average profitability, or mix, of the products we sell; dependence on third-party suppliers and partners; increased raw material, energy and labor costs; fluctuations in currency exchange; the ability to meet development milestones with key customers; and the consequences of other geopolitical events, including natural disasters, acts of war, and global health crises. This list of important factors is not all inclusive. For a description of certain additional factors that could cause the Company’s future results to differ from those expressed in any such forward-looking statements, see Part I Item 1A, entitled “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and other filings with the United States Securities and Exchange Commission, including the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K.

Except as required by law or regulation, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-U.S. GAAP Financial Measures
This release contains certain non-GAAP financial measures, including organic net sales and adjusted-diluted EPS. For the purpose of aiding the comparison of our year-over-year results, we may refer to net sales and other financial results excluding the effects of changes in foreign currency exchange rates. Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than the U.S. Dollar at the applicable foreign currency exchange rates in effect during the comparable prior-year period. We may also refer to financial results excluding the effects of unallocated items. The re-measured results excluding effects from currency translation and excluding the effects of unallocated items are not in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and should not be used as a substitute for the comparable U.S. GAAP financial measures. The non-U.S. GAAP financial measures are incorporated into our discussion and analysis as management uses them in evaluating our results of operations and believes that this information provides users a valuable insight into our overall performance and financial position. A reconciliation of these adjusted non-U.S. GAAP measures to the comparable U.S. GAAP financial measures is included in the accompanying tables.


WEST PHARMACEUTICAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in millions, except per share data)

 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2024202320242023
Net sales$746.9 100%$747.4 100%$2,144.4 100%$2,217.8 100%
Cost of goods and services sold482.2 65459.1 611,419.5 661,366.8 62
Gross profit264.7 35288.3 39724.9 34851.0 38
Research and development15.5 216.4 250.6 250.0 2
Selling, general and administrative expenses83.5 1189.0 12253.2 12263.4 12
Other expense (income), net4.4 15.6 110.8 122.5 1
Operating profit161.3 21177.3 24410.3 19515.1 23
Interest (income) expense, net(3.9)(1)(5.9)(1)(11.0)(1)(10.8)(1)
Other nonoperating expense (income)0.7 —(3.8)—0.7 —(3.9)—
Income before income taxes and equity in net income of affiliated companies164.5 22187.0 25420.6 20529.8 24
Income tax expense32.4 429.4 470.7 387.8 4
Equity in net income of affiliated companies(3.9)—(3.7)(1)(12.7)—(14.4)(1)
Net income$136.0 18%$161.3 22%$362.6 17%$456.4 21%
Net income per share:     
Basic$1.87  $2.17  $4.96  $6.13  
Diluted$1.85  $2.14  $4.91  $6.05  
Average common shares outstanding72.8  74.3  73.1  74.4  
Average shares assuming dilution73.4  75.3  73.8  75.5  



WEST PHARMACEUTICAL SERVICES
REPORTING SEGMENT INFORMATION
(UNAUDITED)
(in millions)

Three Months Ended
September 30,		Nine Months Ended
September 30,
Net Sales:
2024202320242023
Proprietary Products$601.4 $602.5 $1,720.6 $1,803.6 
Contract-Manufactured Products145.5 144.9 423.8 414.2 
Consolidated Total$746.9 $747.4 $2,144.4 $2,217.8 
Gross Profit:
Proprietary Products$235.7 $261.4 $649.8 $780.6 
Contract-Manufactured Products29.0 26.9 75.1 71.3 
Unallocated— — — (0.9)
Gross Profit$264.7 $288.3 $724.9 $851.0 
Gross Profit Margin35.4 %38.6 %33.8 %38.4 %
Operating Profit (Loss):   
Proprietary Products$158.2 $181.6 $415.5 $546.5 
Contract-Manufactured Products21.8 21.0 56.1 53.3 
Stock-based compensation expense(5.1)(5.9)(14.4)(21.9)
General corporate costs(13.6)(19.4)(46.9)(62.8)
Reported Operating Profit$161.3 $177.3 $410.3 $515.1 
Reported Operating Profit Margin21.6 %23.7 %19.1 %23.2 %
Unallocated items(0.7)3.5 (0.3)15.6 
Adjusted Operating Profit$160.6 $180.8 $410.0 $530.7 
Adjusted Operating Profit Margin21.5 %24.2 %19.1 %23.9 %



WEST PHARMACEUTICAL SERVICES
RECONCILIATION OF NON-U.S. GAAP MEASURES (UNAUDITED)
Please refer to “Non-U.S. GAAP Financial Measures” for more information
(in millions, except per share data)

Reconciliation of Reported and Adjusted Operating Profit, Net Income and Diluted EPS
Three Months ended September 30, 2024Operating
profit		Income
tax
expense		Net
income		Diluted
EPS
Reported (U.S. GAAP)$161.3 $32.4 $136.0 $1.85 
Unallocated Items:
Restructuring and other charges (1)
(0.9)(0.3)(0.6)(0.01)
Amortization of acquisition-related intangible assets (2)
0.2 0.1 0.7 0.01 
Adjusted (Non-U.S. GAAP)$160.6 $32.2 $136.1 $1.85 
Nine Months ended September 30, 2024Operating
profit		Income
tax
expense		Net
income		Diluted
EPS
Reported (U.S. GAAP)$410.3 $70.7 $362.6 $4.91 
Unallocated Items:
Restructuring and other charges (1)
(0.9)(0.3)(0.6)(0.01)
Amortization of acquisition-related intangible assets (2)
0.6 0.1 2.1 0.03 
Adjusted (Non-U.S. GAAP)$410.0 $70.5 $364.1 $4.93 
Three Months ended September 30, 2023Operating
profit		Income
tax
expense		Net
income		Diluted
EPS
Reported (U.S. GAAP)$177.3 $29.4 $161.3 $2.14 
Unallocated items:
Amortization of acquisition-related intangible assets (2)
0.2 0.1 0.7 0.01 
Legal settlement (3)
— (0.9)(2.9)(0.04)
Cost investment impairment (4)
3.3 — 3.3 0.05 
Adjusted (Non-U.S. GAAP)$180.8 $28.6 $162.4 $2.16 
Nine Months ended September 30, 2023Operating
profit		Income
tax
expense		Net
income		Diluted
EPS
Reported (U.S. GAAP)$515.1 $87.8 $456.4 $6.05 
Unallocated items:
Restructuring and other charges (1)
0.1 (0.3)0.4 — 
Amortization of acquisition-related intangible assets (2)
0.6 0.1 2.1 0.03 
Legal settlement (3)
— (0.9)(2.9)(0.04)
Cost investment impairment (4)
3.3 — 3.3 0.05 
Loss on disposal of plant (5)
11.6 (0.7)12.3 0.16 
Adjusted (Non-U.S. GAAP)$530.7 $86.0 $471.6 $6.25 



(1)Restructuring and other charges were a benefit of $0.9 million in the three and nine months ended September 30, 2024. The net benefit represents the impact of two items, the first of which is a $2.5 million benefit recorded within other expense (income) related to revised severance estimates in connection with the Company's 2022 restructuring plan. This benefit was partially offset by $1.6 million of expense recorded within selling, general and administrative expenses in connection with a plan to optimize the legal structure of the Company and its subsidiaries. The expense consists primarily of consulting fees, legal expenses, and other one-time costs directly attributable to this plan. Restructuring and other charges of $0.1 million for the nine months ended September 30, 2023 represent the net impact of an inventory write down of $0.9 million within cost of goods and services sold and a $0.8 million benefit within other expense (income) for revised severance estimates in connection with its 2022 restructuring plan.

(2)During the three and nine months ended September 30, 2024 and 2023, the Company recorded $0.2 million and $0.6 million, respectively, of amortization expense within operating profit associated with an intangible asset acquired during the second quarter of 2020. During the three and nine months ended September 30, 2024 and 2023, the Company recorded $0.6 million and $1.6 million, respectively, of amortization expense in association with an acquisition of increased ownership interest in Daikyo.

(3)During the three and nine months ended September 30, 2023, the Company recorded a benefit of $3.8 million within other nonoperating expense (income) as a result of a favorable legal settlement related to a matter not included in our normal operations.

(4)During the three and nine months ended September 30, 2023, the Company recorded expense of $3.3 million within other expense (income), as a result of an impairment of one of the Company's cost investments.

(5)During the nine months ended September 30, 2023, the Company recorded expense of $11.6 million within other expense (income), as a result of the sale of one of the Company’s manufacturing facilities within the Proprietary Products segment. The transaction closed during the second quarter of 2023.



WEST PHARMACEUTICAL SERVICES
RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (UNAUDITED)
Please refer to “Non-U.S. GAAP Financial Measures” for more information
(in millions, except per share data)

Reconciliation of Net Sales to Organic Net Sales (6 and 7)

Three Months ended September 30, 2024ProprietaryCMTotal
Reported net sales (U.S. GAAP)$601.4 $145.5 $746.9 
Effect of changes in currency translation rates(2.2)(0.7)(2.9)
Organic net sales (non-U.S. GAAP) (6)
$599.2 $144.8 $744.0 
Nine Months ended September 30, 2024ProprietaryCMTotal
Reported net sales (U.S. GAAP)$1,720.6 $423.8 $2,144.4 
Effect of changes in currency translation rates0.4 (0.6)(0.2)
Organic net sales (non-U.S. GAAP) (6)
$1,721.0 $423.2 $2,144.2 

Nine Months ended September 30, 2023ProprietaryCMTotal
Reported net sales (U.S. GAAP)$1,803.6 $414.2 $2,217.8 
Effect of divestitures and/or acquisitions(4.3)— (4.3)
Net sales excluding divestiture (non-U.S. GAAP) (7)
$1,799.3 $414.2 $2,213.5 
(6)Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than the U.S. Dollar at the applicable foreign currency exchange rates in effect during the comparable prior-year period.

(7)Net sales excluding divestitures represents the 2023 comparative sales figure used in our organic sales growth calculation to eliminate the impact of our 2023 divestiture. As the 2023 divestiture took place in the second quarter of 2023, there was no impact of divestitures and/or acquisitions in the three months ended September 30, 2023.



WEST PHARMACEUTICAL SERVICES
RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (UNAUDITED)
Please refer to “Non-U.S. GAAP Financial Measures” for more information
(in millions, except per share data)

Reconciliation of Reported-Diluted EPS Guidance to Adjusted-Diluted EPS Guidance

2023 Actual
2024 Guidance
% Change
Reported-diluted EPS (U.S. GAAP)$7.88$6.52 to $6.72(17.3)% to (14.7%)
Loss on disposal of plant0.16—
Cost investment activity0.06—
Restructuring and other charges(0.02)(0.01)
Amortization of acquisition-related intangible assets0.040.04
Legal settlement(0.04)—
Adjusted-diluted EPS (Non-U.S. GAAP) (8)
$8.08$6.55 to $6.75(18.9%) to (16.5%)

Notes:

See “Full-year 2024 Financial Guidance” and “Non-U.S. GAAP Financial Measures” in today’s press release for additional information regarding adjusted-diluted EPS.

(8)We have opted not to forecast 2024 tax benefits from stock-based compensation in upcoming quarters, as they are out of the Company’s control. Instead, we recognize the benefits as they occur. In the first nine months of 2024, tax benefits associated with stock-based compensation increased adjusted-diluted EPS by $0.26. Any future tax benefits associated with stock-based compensation that we receive in 2024 would provide a positive adjustment to our full-year EPS guidance. In full-year 2023, tax benefits associated with stock-based compensation increased adjusted-diluted EPS by $0.42.




WEST PHARMACEUTICAL SERVICES
CASH FLOW ITEMS
(UNAUDITED)
(in millions)
 Nine Months Ended
September 30,
 20242023
Depreciation and amortization$114.7 $101.4 
Operating cash flow$463.3 $537.4 
Capital expenditures$272.1 $253.3 
Free cash flow$191.2 $284.1 




WEST PHARMACEUTICAL SERVICES
FINANCIAL CONDITION
(UNAUDITED)
(in millions)
 
As of
September 30, 2024
As of
December 31, 2023
Cash and cash equivalents$490.9 $853.9 
Accounts receivable, net$524.3 $512.0 
Inventories$401.2 $434.7 
Accounts payable$224.3 $242.4 
Debt$202.6 $206.8 
Equity$2,752.1 $2,881.0 
Working capital$1,034.1 $1,264.6 


Trademark Notices
Trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., in the United States and other jurisdictions, unless noted otherwise.

Daikyo®, Daikyo Crystal Zenith® and Daikyo CZ® are registered trademarks of Daikyo Seiko, Ltd. Daikyo Crystal Zenith technologies are licensed from Daikyo Seiko, Ltd.



1 Third-Quarter 2024 Third Quarter Overall Net Sales $746.9M | 0.1% Diluted Earnings Per Share: $1.85 Adjusted Diluted Earnings Per Share: $1.85 Eric M. Green President and Chief Executive Officer Chair of the Board West Pharmaceutical Services, Inc. WST Q3 2024 Earnings 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 include, but are not limited to, statements about product development and operational performance. Each of these statements is based on preliminary information, and actual results could differ from any preliminary estimates. We caution investors that the risk factors listed under “Cautionary Statement” in our press releases, as well as those set forth under the caption "Risk Factors" in our most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission and as revised or supplemented by our quarterly reports on Form 10-Q, could cause our actual results to differ materially from those estimated or predicted in the forward-looking statements. You should evaluate any statement in light of these important factors. Except as required by law or regulation, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, therefore you should not rely on these forward-looking statements as representing our views as of any date other than today. Non-U.S. GAAP Financial Measures Certain financial measures included in these presentation materials, or which may be referred to in management’s discussion of the Company’s results and outlook, have not been calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), and therefore are referred to as non- U.S. GAAP financial measures. Non-U.S. GAAP financial measures should not be considered in isolation or as an alternative to such measures determined in accordance with U.S. GAAP. Please refer to “Reconciliation of Non-U.S. GAAP Financial Measures” at the end of these materials for more information. “We are pleased to report solid third quarter results. Our West team across the globe continues to execute at a high-level, motivated by our purpose of improving patient lives. A key aspect of our strategy is West’s team of scientific thought leaders and technical experts who continue to drive strong partnership and close collaboration with our customers. This reinforces my confidence in West’s execution capabilities, as we continue to deliver our proven market-led strategy and attractive long-term potential.”

 
West Pharmaceutical Services, Inc. Eric M. Green President & CEO, Chair of the Board Bernard J. Birkett Senior VP & Chief Financial Officer Third-Quarter Results 2024 Analyst Conference Call 9 a.m. Eastern Time | October 24, 2024

 
3 West Analyst Conference Call 9 a.m. Eastern Time October 24, 2024 A webcast of today’s call can be accessed in the “Investors” section of the Company’s website: www.westpharma.com To participate on the call by asking questions to Management, please register in advance at: https://register.vevent.com/register/BI13834a517d804f6781f3 3c4642cc94ab Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that will be used to access the call. A replay of the conference call and webcast will be available on the Company’s website for 30 days. These presentation materials are intended to accompany today’s press release announcing the Company’s results for the third quarter 2024 and management’s discussion of those results during today’s conference call. WST Q3 2024 Earnings

 
4 Safe Harbor Statement 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 include, but are not limited to, statements about product development, operational performance and expectations regarding future events. Each of these statements is based on preliminary information, and actual results could differ from any preliminary estimates. We caution investors that the risk factors listed under our “Forward Looking Statements” in our press releases, as well as those set forth under the caption "Risk Factors" in our most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission and as revised or supplemented by our quarterly reports on Form 10-Q, could cause our actual results to differ materially from those estimated or predicted in the forward-looking statements. You should evaluate any statement in light of these important factors. Except as required by law or regulation, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, therefore you should not rely on these forward-looking statements as representing our views as of any date other than today. Certain financial measures included in these presentation materials, or which may be referred to in management’s discussion of the Company’s results and outlook, have not been calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), and therefore are referred to as non-U.S. GAAP financial measures. Non-U.S. GAAP financial measures should not be considered in isolation or as an alternative to such measures determined in accordance with U.S. GAAP. Please refer to “Reconciliation of Non-U.S. GAAP Financial Measures” at the end of these materials for more information. Cautionary Statement Under the Private Securities Litigation Reform Act of 1995 Non-U.S. GAAP Financial Measures Trademarks and registered trademarks used in this report are the property of West Pharmaceutical Services, Inc. or its subsidiaries, in the United States and other jurisdictions, unless noted otherwise. Daikyo Crystal Zenith® and Daikyo CZ® are registered trademarks of Daikyo Seiko, Ltd. Daikyo Crystal Zenith technologies are licensed from Daikyo Seiko, Ltd. Trademarks WST Q3 2024 Earnings

 
5 Financial Highlights WST Q3 2024 Earnings • Third quarter 2024 net sales of $746.9 million declined 0.1%; organic net sales declined 0.5% • Third quarter 2024 reported-diluted EPS of $1.85 compared to $2.14 in the same period last year; adjusted-diluted EPS of $1.85 compared to $2.16 in the same period last year

 
6 Biologics is the fastest growing sub- segment of injectable medicines. West is the market leader in this injectable segment. We are investing in growth capital expansions of our network, to support global volume growth of injectable drugs especially with regulatory changes. Driving Operational Excellence with LEAN programs, automation and capital expansion within our existing infrastructure We are leveraging our HVP Proprietary portfolio with our Glass partners to offer comprehensive integrated systems. Our Growth Drivers in the Near- and Mid-Term HVP mix-shift with new drug launches, growth of recently launched drugs and conversion of existing commercialized drugs driven by regulatory changes Revenue/Market Growth Margin Expansion WST Q3 2024 Earnings

 
7 Third-Quarter 2024 Summary Results ($ millions, except earnings-per-share (EPS) data) Three Months Ended September 30, 2024 2023 Reported Net Sales $746.9 $747.4 Gross Profit Margin 35.4% 38.6% Reported Operating Profit $161.3 $177.3 Adjusted Operating Profit (1) $160.6 $180.8 Reported Operating Profit Margin 21.6% 23.7% Adjusted Operating Profit Margin (1) 21.5% 24.2% Reported-Diluted EPS $1.85 $2.14 Adjusted-Diluted EPS (1) $1.85 $2.16 “Adjusted Operating Profit,” “Adjusted Operating Profit Margin” and “Adjusted-Diluted EPS” are Non-U.S. GAAP financial measures. See accompanying slides and the discussion under the heading “Non-U.S. GAAP Financial Measures” in today’s press release for an explanation and reconciliation of these items. (1) WST Q3 2024 Earnings

 
8 Overall Organic Net Sales Decline: 0.5% (Q3 2024) Proprietary Products Q3 2024 organic net sales decreased by 0.5% driven by destocking of high-value products BIOLOGICS GENERICS PHARMA Organic sales decline driven by lower sales of FluroTec®, Westar® and NovaPure® products, offset by an increase in sales of self- injection device platforms Organic sales decline driven by lower volumes of NovaBrand products Organic sales growth driven by an increase in sales of NovaBrand products and Administrative Systems CONTRACT MANUFACTURING Growth in self-injection devices for obesity and diabetes, offset by a decrease in sales of healthcare diagnostic devices (Low-Single Digit) (Mid-Single Digit) FlatMid-Single Digit Third-Quarter 2024 Organic Net Sales WST Q3 2024 Earnings

 
9 Change in Consolidated Net Sales Third-quarter 2023 to 2024 ($ millions) WST Q3 2024 Earnings

 
10 Gross Profit Update ($ millions) Three Months Ended September 30, 2024 2023 Proprietary Products Gross Profit $235.7 $261.4 Proprietary Products Gross Profit Margin 39.2% 43.4% Contract-Manufactured Products Gross Profit $29.0 $26.9 Contract-Manufactured Products Gross Profit Margin 19.9% 18.6% Consolidated Gross Profit $264.7 $288.3 Consolidated Gross Profit Margin 35.4% 38.6% WST Q3 2024 Earnings

 
11 Cash Flow and Balance Sheet Metrics ($ millions) Cash Flow Items YTD Q3 2024 YTD Q3 2023 Depreciation and Amortization $114.7 $101.4 Operating Cash Flow $463.3 $537.4 Capital Expenditures $272.1 $253.3 Free Cash Flow $191.2 $284.1 Financial Condition September 30, 2024 December 31, 2023 Cash and Cash Equivalents $490.9 $853.9 Debt $202.6 $206.8 Equity $2,752.1 $2,881.0 Working Capital $1,034.1 $1,264.6 WST Q3 2024 Earnings

 
12 2024 Full-Year Guidance WST Q3 2024 Earnings 2024 Full-Year Guidance Consolidated Net Sales $2.875 - $2.905 billion Adjusted-Diluted EPS $6.55 to $6.75

 
13 Delivering Unique Value for Customers to Meet the Changing Market Needs Significant Capital Investments for Future Growth Making a difference to improve patients’ lives WST Q3 2024 Earnings

 
14 Eric M. Green President & Chief Executive Officer, Chair of the Board Bernard J. Birkett Senior VP & Chief Financial Officer John Sweeney VP, Investor Relations Q & A WST Q3 2024 Earnings

 
15 Notes to Non-U.S. GAAP Financial Measures The Non-U.S. GAAP financial measures are incorporated into our discussion and analysis as management uses them in evaluating our results of operations and believes that this information provides users a valuable insight into our overall performance and financial position. A reconciliation of these adjusted Non-U.S. GAAP financial measures to the comparable U.S. GAAP financial measures is included in the accompanying tables. For the purpose of aiding the comparison of our year-over-year results, we may refer to net sales and other financial results excluding the effects of changes in foreign currency exchange rates. Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than the U.S. Dollar at the applicable foreign exchange rates in effect during the comparable prior-year period. We may also refer to financial results excluding the effects of unallocated items. The re-measured results excluding effects from currency translation, the impact from acquisitions and/or divestitures, and the effects of unallocated items are not in conformity with U.S. GAAP and should not be used as a substitute for the comparable U.S. GAAP financial measures. WST Q3 2024 Earnings

 
16 Notes to Non-U.S. GAAP Financial Measures RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (UNAUDITED) See “Notes to Non-U.S. GAAP Financial Measures”, “Safe Harbor Statement” (Slide 4) and today’s press release for an explanation and reconciliation of these items. Reconciliation of Reported and Adjusted Operating Profit, Net Income and Diluted EPS ($ millions, except EPS data) Three months ended September 30, 2024 Operating profit Income tax expense Net income Diluted EPS Reported (U.S. GAAP) $161.3 $32.4 $136.0 $1.85 Unallocated items: Restructuring and other charges (0.9) (0.3) (0.6) (0.01) Amortization of acquisition-related intangible assets 0.2 0.1 0.7 0.01 Adjusted (Non-U.S. GAAP) $160.6 $32.2 $136.1 $1.85 Nine months ended September 30, 2024 Operating profit Income tax expense Net income Diluted EPS Reported (U.S. GAAP) $410.3 $70.7 $362.6 $4.91 Unallocated items: Restructuring and other charges (0.9) (0.3) (0.6) (0.01) Amortization of acquisition-related intangible assets 0.6 0.1 2.1 0.03 Adjusted (Non-U.S. GAAP) $410.0 $70.5 $364.1 $4.93 WST Q3 2024 Earnings

 
17 Notes to Non-U.S. GAAP Financial Measures RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (UNAUDITED) See “Notes to Non-U.S. GAAP Financial Measures”, “Safe Harbor Statement” (Slide 4) and today’s press release for an explanation and reconciliation of these items. Reconciliation of Reported and Adjusted Operating Profit, Net Income and Diluted EPS ($ millions, except EPS data) Three months ended September 30, 2023 Operating profit Income tax expense Net income Diluted EPS Reported (U.S. GAAP) $177.3 $29.4 $161.3 $2.14 Unallocated items: Amortization of acquisition-related intangible assets 0.2 0.1 0.7 0.01 Legal settlement - (0.9) (2.9) (0.04) Cost investment impairment 3.3 - 3.3 0.05 Adjusted (Non-U.S. GAAP) $180.8 $28.6 $162.4 $2.16 Nine months ended September 30, 2023 Operating profit Income tax expense Net income Diluted EPS Reported (U.S. GAAP) $515.1 $87.8 $456.4 $6.05 Unallocated items: Restructuring and other charges 0.1 (0.3) 0.4 - Amortization of acquisition-related intangible assets 0.6 0.1 2.1 0.03 Legal settlement - (0.9) (2.9) (0.04) Cost investment impairment 3.3 - 3.3 0.05 Loss on disposal of plant 11.6 (0.7) 12.3 0.16 Adjusted (Non-U.S. GAAP) $530.7 $86.0 $471.6 $6.25 WST Q3 2024 Earnings

 
18 Notes to Non-U.S. GAAP Financial Measures RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (UNAUDITED) See “Notes to Non-U.S. GAAP Financial Measures”, “Safe Harbor Statement” (Slide 4) and today’s press release for an explanation and reconciliation of these items. Reconciliation of Net Sales to Organic Net Sales (1 and 2) ($ millions) Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than the U.S. Dollar at the applicable foreign exchange rates in effect during the comparable prior-year period. (1) Three months ended September 30, 2024 Proprietary CM Total Reported net sales (U.S. GAAP) $601.4 $145.5 $746.9 Effect of changes in currency translation rates (2.2) (0.7) (2.9) Organic net sales (Non-U.S. GAAP) (1) $599.2 $144.8 $744.0 Nine months ended September 30, 2024 Proprietary CM Total Reported net sales (U.S. GAAP) $1,720.6 $423.8 $2,144.4 Effect of changes in currency translation rates 0.4 (0.6) (0.2) Organic net sales (Non-U.S. GAAP) (1) $1,721.0 $423.2 $2,144.2 WST Q3 2024 Earnings

 
19 Notes to Non-U.S. GAAP Financial Measures RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (UNAUDITED) See “Notes to Non-U.S. GAAP Financial Measures”, “Safe Harbor Statement” (Slide 4) and today’s press release for an explanation and reconciliation of these items. Reconciliation of Net Sales to Organic Net Sales (1 and 2) ($ millions) (2) Net sales excluding divestitures represents the 2023 comparative sales figure used in our organic sales growth calculation to eliminate the impact of our 2023 divestiture. As the 2023 divestiture took place in the second quarter of 2023, there was no impact of divestitures and/or acquisitions in the three months ended September 30, 2023. Nine months ended September 30, 2023 Proprietary CM Total Reported net sales (U.S. GAAP) $1,803.6 $414.2 $2,217.8 Effect of divestitures and/or acquisitions (4.3) - (4.3) Net sales excluding divestiture (Non-U.S. GAAP) (2) $1,799.3 $414.2 $2,213.5 WST Q3 2024 Earnings

 
20 Notes to Non-U.S. GAAP Financial Measures RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (UNAUDITED) See “Notes to Non-U.S. GAAP Financial Measures”, “Safe Harbor Statement” (Slide 4) and today’s press release for an explanation and reconciliation of these items. Reconciliation of Reported-Diluted EPS Guidance to Adjusted-Diluted EPS Guidance 2023 Actual 2024 Guidance % Change Reported-diluted EPS (U.S. GAAP) $7.88 $6.52 to $6.72 (17.3%) to (14.7%) Loss on disposal of plant 0.16 - Cost investment activity 0.06 - Restructuring and other charges (0.02) (0.01) Amortization of acquisition-related intangible assets 0.04 0.04 Legal settlement (0.04) - Adjusted-diluted EPS (Non-U.S. GAAP) (1) $8.08 $6.55 to $6.75 (18.9%) to (16.5%) (1) See “Full-year 2024 Financial Guidance” and “Non-U.S. GAAP Financial Measures” in today’s press release for additional information regarding adjusted-diluted EPS. We have opted not to forecast 2024 tax benefits from stock-based compensation in upcoming quarters, as they are out of the Company’s control. Instead, we recognize the benefits as they occur. In the first nine months of 2024, tax benefits associated with stock-based compensation increased adjusted-diluted EPS by $0.26. Any future tax benefits associated with stock-based compensation that we receive in 2024 would provide a positive adjustment to our full-year EPS guidance. In full-year 2023, tax benefits associated with stock-based compensation increased adjusted-diluted EPS by $0.42. WST Q3 2024 Earnings

 
v3.24.3
Cover
Oct. 24, 2024
Document and Entity Information [Abstract]  
Entity Central Index Key 0000105770
Document Type 8-K
Document Period End Date Oct. 24, 2024
Entity Registrant Name WEST PHARMACEUTICAL SERVICES, INC.
Entity Incorporation, State or Country Code PA
Entity File Number 1-8036
Entity Tax Identification Number 23-1210010
Entity Address, Address Line One 530 Herman O. West Drive
Entity Address, City or Town Exton
Entity Address, State or Province PA
Entity Address, Postal Zip Code 19341-1147
City Area Code 610
Local Phone Number 594-2900
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.25 per share
Trading Symbol WST
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
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