![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit9921.jpg)
Donald E. Morel, Jr., Ph.D.
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
Sidoti & Company LLC
6th Annual Palm Beach Emerging Growth Institutional Investor Forum
January 15, 2009 Palm Beach, FL
NYSE: WST
westpharma.com
All trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., unless noted otherwise.
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit9922.jpg)
Certain statements in the following slides and certain statements that may be made by management of the Company orally during this presentation
contain 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 plans and assumptions. Such statements give our current expectations or
forecasts of future events; they do not relate strictly to historical or current facts. We have tried, wherever possible, to identify such statements by using
words such as “estimate,” “expect,” “intend,” “believe,” “plan,” “anticipate” and other words and terms of similar meaning in connection with any
discussion of future operating or financial performance or condition.
contain 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 plans and assumptions. Such statements give our current expectations or
forecasts of future events; they do not relate strictly to historical or current facts. We have tried, wherever possible, to identify such statements by using
words such as “estimate,” “expect,” “intend,” “believe,” “plan,” “anticipate” and other words and terms of similar meaning in connection with any
discussion of future operating or financial performance or condition.
We cannot guarantee that any forward-looking statement will be realized. If known or unknown risks or uncertainties materialize, or if underlying
assumptions are inaccurate, 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. We undertake no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise.
assumptions are inaccurate, 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. We undertake no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise.
Important factors that may affect future results include, but are not limited to, the following: Revenue and profitability: ales demand and our ability to
meet that demand; competition from other providers in the Company’s businesses, including customers’ in-house operations, and from lower-cost
producers in emerging markets, which can impact unit volume, price and profitability; customers’ changing inventory requirements and manufacturing
plans that alter existing orders or ordering patterns for the products we supply to them; the timing, regulatory approval and commercial success of
customer products that incorporate our products, including the availability and scope of relevant public and private health insurance reimbursement for
prescription products, medical devices and components and medical procedures in which our customers’ products are employed or consumed;
average profitability, or mix, of products sold in any reporting period; maintaining or improving production efficiencies and overhead absorption; the
timeliness and effectiveness of capital investments, particularly capacity expansions, including the effects of delays and cost increases associated with
construction, availability and cost of capital goods, and necessary internal, governmental and customer approvals of planned and completed projects,
and the demand for goods to be produced in new facilities ; dependence on third-party suppliers and partners, some of which are single-source
suppliers of critical materials and products, including our Japanese partner and affiliate Daikyo Seiko, Ltd.; the availability and cost of skilled employees
required to meet increased production, managerial, research and other needs of the Company, including professional employees and persons employed
under collective bargaining agreements; interruptions or weaknesses in our supply chain, which could cause delivery delays or restrict the availability
of raw materials and key bought-in components and finished products; raw-material price escalation, particularly petroleum-based raw materials, and
our ability to pass raw-material cost increases on to customers through price increases; and, claims associated with product quality, including product
liability, and the related costs of defending and obtaining insurance indemnifying the Company for the cost of such claims; the cost and progress of
development, regulatory approval and marketing of new products as a result of the Company’s research and development efforts; the defense of self-
developed or in-licensed intellectual property, including patents, trade and service marks and trade secrets; dependence of normal business operations
on information and communication systems and technologies provided, installed or operated by third parties, including costs and risks associated with
planned upgrades to existing business systems; the effects of a prolonged U.S. and global economic downturn or recession; the relative strength of the
U.S. dollar in relation to other currencies, particularly the Euro, British Pound, and Japanese Yen; changes in tax law or loss of beneficial tax incentives;
meet that demand; competition from other providers in the Company’s businesses, including customers’ in-house operations, and from lower-cost
producers in emerging markets, which can impact unit volume, price and profitability; customers’ changing inventory requirements and manufacturing
plans that alter existing orders or ordering patterns for the products we supply to them; the timing, regulatory approval and commercial success of
customer products that incorporate our products, including the availability and scope of relevant public and private health insurance reimbursement for
prescription products, medical devices and components and medical procedures in which our customers’ products are employed or consumed;
average profitability, or mix, of products sold in any reporting period; maintaining or improving production efficiencies and overhead absorption; the
timeliness and effectiveness of capital investments, particularly capacity expansions, including the effects of delays and cost increases associated with
construction, availability and cost of capital goods, and necessary internal, governmental and customer approvals of planned and completed projects,
and the demand for goods to be produced in new facilities ; dependence on third-party suppliers and partners, some of which are single-source
suppliers of critical materials and products, including our Japanese partner and affiliate Daikyo Seiko, Ltd.; the availability and cost of skilled employees
required to meet increased production, managerial, research and other needs of the Company, including professional employees and persons employed
under collective bargaining agreements; interruptions or weaknesses in our supply chain, which could cause delivery delays or restrict the availability
of raw materials and key bought-in components and finished products; raw-material price escalation, particularly petroleum-based raw materials, and
our ability to pass raw-material cost increases on to customers through price increases; and, claims associated with product quality, including product
liability, and the related costs of defending and obtaining insurance indemnifying the Company for the cost of such claims; the cost and progress of
development, regulatory approval and marketing of new products as a result of the Company’s research and development efforts; the defense of self-
developed or in-licensed intellectual property, including patents, trade and service marks and trade secrets; dependence of normal business operations
on information and communication systems and technologies provided, installed or operated by third parties, including costs and risks associated with
planned upgrades to existing business systems; the effects of a prolonged U.S. and global economic downturn or recession; the relative strength of the
U.S. dollar in relation to other currencies, particularly the Euro, British Pound, and Japanese Yen; changes in tax law or loss of beneficial tax incentives;
the conclusion of unresolved tax positions inconsistent with currently expected outcomes; the timely execution and realization of savings anticipated by
the restructuring plan for certain operations and functions of The Tech Group, announced in December 2007; significant losses on investments of
pension plan assets relative to expected returns on those assets, will, if sustained through year-end, result in significantly higher pension expense in
2009 and increase the Company’s pension funding obligations; and, other risks and uncertainties detailed in West’s filings with the Securities and
Exchange Commission, including our annual report on Form 10-K for the year 2007 and our periodic reports on Form 10-Q and Form 8-K. You should
evaluate any statement in light of these important.
the restructuring plan for certain operations and functions of The Tech Group, announced in December 2007; significant losses on investments of
pension plan assets relative to expected returns on those assets, will, if sustained through year-end, result in significantly higher pension expense in
2009 and increase the Company’s pension funding obligations; and, other risks and uncertainties detailed in West’s filings with the Securities and
Exchange Commission, including our annual report on Form 10-K for the year 2007 and our periodic reports on Form 10-Q and Form 8-K. You should
evaluate any statement in light of these important.
Forward Looking Statements
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit9923.jpg)
Who We Are
• Founded in 1923
• Global Headquarters near
Philadelphia
Philadelphia
• Market capitalization $1.2 billion
• World’s premier manufacturer
of components and systems
for injectable drug delivery
of components and systems
for injectable drug delivery
– Closure systems and prefillable
syringe components
syringe components
– Components for disposable systems
– Devices and device sub-assemblies
– Safety and administration systems
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit9924.jpg)
• Stability/efficacy/shelf life
• Safety; “Quality by Design”
• Time to market
• Component selection
• Reconstitution
• Safety (needles and
exposure)
exposure)
• Convenience/Compliance
• Dosing accuracy
• Ease of use
• Compliance
• Convenience
DRUG PACKAGING
DRUG PREPARATION
DRUG ADMINISTRATION
What We Do
Production
Patient
Patient
West’s products and innovations address these needs
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit9925.jpg)
West’s Competitive Advantage
• Global manufacturing footprint
• Unmatched experience/expertise: drug - material interface
– Global regulatory and technical support
• Protected IP: Proprietary materials and technology
• Regulatory barrier to entry: US NDA and ANDA filing must
include reference to all packaging/components in contact
with the drug
include reference to all packaging/components in contact
with the drug
1. West Drug Master File (DMF) 1546 is confidential
2. West DMF includes functionality data (multi-year studies)
3. All primary package changes require new stability/functionality
studies for new filing
studies for new filing
• Engineering expertise in high-volume manufacturing, assembly,
and vision inspection
and vision inspection
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit9926.jpg)
Diverse, Stable Customer Base
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit9927.jpg)
Sales and Income from Continuing Operations
($ in millions)
($ in millions)
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit9928.jpg)
South America
5%
North America
49%
Europe
42%
Asia/Pacific
4%
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit9929.jpg)
2008 Overview
• A challenging year
– Exubera, ESA packaging, diagnostic
component lost sales impact
component lost sales impact
– Commodity, currency market instability
– Global economic downturn
• Strong growth in core component sales
• Tech restructuring completed
• China plant construction underway
• Expansion programs on schedule/budget
Exubera is a registered trademark of Pfizer, Inc.
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99210.jpg)
Market Dynamics Support Future Growth
• Increasing number of patients
with chronic illnesses
with chronic illnesses
• Many of these are treated with
biologic drugs
biologic drugs
• Biologic drugs demand ultra-
clean delivery systems
clean delivery systems
• Point of Care Shift: Hospital to
Specialty Clinic to Home
Specialty Clinic to Home
• Safe, accurate dosing needs
are pushing the market toward
integrating the container/
closure system into the delivery
system
are pushing the market toward
integrating the container/
closure system into the delivery
system
• Generic growth
Source: Datamonitor
Oncology & Hematology
Auto-Immune
(RA, MS, AIID)
(RA, MS, AIID)
Diabetes/Insulin
Vaccines
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99211.jpg)
Drug Packaging
(How it is contained)
Primary Container Solutions
Prefillable Syringe Systems
Drug Delivery
(How it gets into the patient)
Administration Systems
Advanced Injection Systems
Development
Primary Package
Administration
Our Growth Opportunities
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99212.jpg)
Corporate Growth Strategy
Pharmaceutical Systems
Pharmaceutical Systems
• Primary Drug Packaging
– Enhance quality and value of components
– Lean manufacturing
• Innovative materials and systems
• Selective acquisitions
• Geographic expansion
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99213.jpg)
Primary Drug Packaging
West FluroTec®
Components
Components
Seal - - Stopper - Vial
Daikyo Crystal Zenith® Vials
Estimated Market Size - $1.5 billion
CAGR - - 4%
Source: Company estimate for vial systems only
West Spectra™ Seals
Crystal Zenith is a registered trademark of Daikyo Seiko, Ltd.
FluroTec and Crystal Zenith technologies are licensed from Daikyo Seiko, Ltd.
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99214.jpg)
Building Value in the Drug Packaging market
Uncoated 4432/50 V35
$50
$200
4432/50 S2 FluroTec®
Westar RS
Westar RS
$250
4432/50 S2 FluroTec®
Westar RS B2-40 Port Bag
Westar RS B2-40 Port Bag
$300
4432/50 S2 FluroTec®
Westar® RS B2-40
(1000 packs)
Westar® RS B2-40
(1000 packs)
$465
4432/50 Sterile S2 W
(RU) Ready Pack
(1000 packs)
(RU) Ready Pack
(1000 packs)
$2,900
RU Ready Pack System
(small volume sourcing only)
(small volume sourcing only)
$3,500
$360
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99215.jpg)
Corporate Growth Strategy
Pharmaceutical Systems
Pharmaceutical Systems
• Primary Drug Packaging
– Enhance quality and value of components
– Lean manufacturing
• Innovative materials and systems
• Selective acquisitions
• Geographic expansion
– Capacity build - Europe, Singapore, North America
– China Plastics
– India Rubber site selection
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99216.jpg)
Europe Plant Investments
LeNouvion
plant
plant
LeNouvion
clean room
clean room
Eschweiler
molding
molding
Eschweiler plant
Eschweiler, Germany
Compression molding facility
LeNouvion, France
Compression molding facility
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99217.jpg)
Europe Plant Investments
Kovin plant
Kovin packing area
Bodmin tool building
Bodmin, UK
Tool building facility
Kovin, Serbia
Compression molding facility
Bodmin plant
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99218.jpg)
U.S. Plant Investments
Clearwater plant
Kinston plant
Kinston compounding
area
area
Clearwater
seal assembly
seal assembly
Clearwater, FL
Aluminum seal manufacturing
Kinston, NC
Compression
molding facility
molding facility
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99219.jpg)
China Expansion
China plant (rendering)
Suzhou, China
Precision injection
molding facility
molding facility
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99220.jpg)
Plastic Plant - Construction activities
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99221.jpg)
India represents a significant growth opportunity
Two regions being evaluated:
Ahmedabad
Hyderabad
Broad generic infrastructure
Rapidly growing R&D
Strong biologics focus
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99222.jpg)
Corporate Growth Strategy
• Tech Group - Safety and Administration
Systems
Systems
• Build market share in multi-component
systems for drug administration
systems for drug administration
• Expand proprietary product portfolio
through innovation and strategic
technology acquisitions
through innovation and strategic
technology acquisitions
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99223.jpg)
Safety and Administration Systems
Vial2Bag™
Mix2Vial®
MixJect®
Total Market - $1.5 billion
CAGR - - 11%
Source: Greystone Associates and Company estimate
Orion Safety
System
System
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99224.jpg)
New Products
2009 - - 2013
2009 - - 2013
Auto-injector System
Daikyo Crystal Zenith®
prefillable syringes
Daikyo Crystal Zenith® is a registered trademark of Daikyo Seiko, Ltd.
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99225.jpg)
Critical Stability Issues for Biotechnology Drugs
• Aggregation
– Silicone, Tungsten, Glue, Mfg. Processing
• Adsorption - - vials and syringes
– Impacts potency of large molecules
• Immunogenicity/Neurogenicity
• Polysorbate 20 and 80
– Detergents used for mitigating aggregation
– Highly unpredictable
• Too much creates aggregation
• Potential for peroxide creation
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99226.jpg)
Model antibody
Higher extent of aggregation in Glass compared to CZ
Daikyo Crystal Zenith®
Glass
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99227.jpg)
• Generate organic growth
• Improve operating margin
• Continue investing for the future
– Innovation programs
• New product launches
– Geographic expansion: China, India
– Capacity Expansion: Europe, North America
– Information systems
– Selective technology/product acquisitions
• Maximize operating cash flow - tightly manage CapEx
• Maintain a strong balance sheet
Management Operating Priorities 2009
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99228.jpg)
September Results
($ in millions, except per share data)
($ in millions, except per share data)
* 2008 diluted EPS from continuing operations excludes an $0.11 per share net gain on a contract settlement related to a discontinued
product line, a $0.05 per share impact of Tech restructuring charges and $0.09 per share of discrete tax benefits.
product line, a $0.05 per share impact of Tech restructuring charges and $0.09 per share of discrete tax benefits.
2007 diluted EPS from continuing operations excludes $0.18 of discrete tax benefits and an $0.18 unfavorable impact for Brazilian
social security, excise and other tax compliance issues.
social security, excise and other tax compliance issues.
Nine months ended September 30,
2008
2007
Net Sales
$806.3
$764.0
Gross Margin
28.9%
29.0%
Research and Development
14.8
11.5
SG&A
122.5
112.8
Income from Continuing Ops
68.3
65.2
Diluted EPS from Continuing Ops
$1.98
$1.86
Diluted EPS from Continuing Ops (Non-GAAP) *
$1.83
$1.86
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99229.jpg)
Capital Management
($ millions, except %)
9/30/08
12/31/07
Total Debt
$ 382.5
$ 395.1
Total Capitalization
920.5
886.0
Debt to Total Invested Capital
41.6%
44.6%
Cash
$ 102.5
$ 108.4
Net Debt to Total Invested Capital
34.2%
36.9%
Year-To-Date Capital Spending
$ 88.2
$ 129.4
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99230.jpg)
Summary
• Fundamental business drivers remain unchanged
• Long term growth opportunities intact
• Solid balance sheet
• Seasoned, experienced management team
– Incentives closely tied to growth in shareholder value
• Year end call Thursday February 19 9:00AM
![](https://capedge.com/proxy/8-K/0000105770-09-000007/exhibit99231.jpg)
Donald E. Morel, Jr., Ph.D.
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
Sidoti & Company LLC
6th Annual Palm Beach Emerging Growth Institutional Investor Forum
January 15, 2009 Palm Beach, FL
NYSE: WST
westpharma.com
All trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., unless noted otherwise.