WST - Earnings call transcript Q1 2020 | West Pharmaceutical Services, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2020 West Pharmaceutical Services' Earnings Conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

pleasure Vice my Relations, of now Lai. Quintin is to President introduce Investor It

Quintin Lai

Good welcome at results morning Quarter Andrew. the posted you, Thank and Section Investors' Call. the has on issued on and the XXXX website to We our morning financial located this company's release been westpharma.com. Conference First West's

year and copy review of XXXX. call for an update provide This Eric and Green, results, slide outlook a morning, is and Investors presentation financial CFO, our There our available present business presentation CEO, the today’s Section update on the website. full Bernard of Birkett, will accompanies is our on our that that a

in release other Harbor company as Statements the to are and forward-looking our future slide contain assumptions, well results reports. materially are the of the well statements regarding beyond forecasts. past refer is differ and from actual here. any it within On today’s could which any by by subject, the statement estimates, the and factors X-K our results company’s Federal on made as Please current statements accompanying statements. to the press These two expectations, Securities Law. the XX-K, is implied and as many XX-Q, made expressed meaning results, presentation management forward-looking Safe and by disclosures beliefs or U.S. those based our made of in risk call as company on control including influenced this The

limitations the conformity morning’s results comparable profit earnings EPS. this adjusted the to management sales non-GAAP non-GAAP operating adjusted in are today’s financial margin, to financial financial operating of will and measures call, provided measures growth, to diluted in reference adjusted release. Reconciliations and prepared GAAP organic During profit, make most including

Eric? I now Eric and over the to call CEO Green. West's President, turn

Eric Green

good today. us and Thank you you, Thank morning, Quintin, everyone. for joining

across communities for plays clear importance the we unprecedented challenging the times. the these some XX. the circumstances most of face difficult COVID care several West related made our past of health months have has been role to during and world the global The times as pandemic of criticality This

Our mission XXX to times for on of that than the innovative, we solutions to injectable have meaningful all today. delivery any in and pride the like be remains great high-quality lives our for focused products more Despite We take and patient team West delivering years the improve cannot nearly medicines. value COVID-XX challenges, provided containment creating stakeholders. and

us guiding this West has are priorities pandemic. two through that

focused across on of the and well-being team First we're our and members safety foremost, the globe.

management crisis implementing teams. engaged across measures team our Our was protect our the outset company to at precautionary

needs learned the one serve our unwavering but to inspirational, not West testament team One I'm their safety is meet of another. the mission. seems team they It only while our their urgent stepping great day patients components another nearly of about every up way commitment the critical the strength as These the and to collective customers are out looking for our to and of for deliver to I that grateful moments a

In philanthropy time, response members has community our skills addition, unique team involvement knowledge local efforts. support culture and our of of in offering and their

four. slide to Turning

to network today's in strategy and priority and are led of of market of of tenets business the West's supply climate. components The manufacturing resiliency solutions is Our the continuity contributing second strong our to manufacturing and customers. of globalization our the

the the of growth that throughout the to trends quarter continued I'm remains year balance have for and pleased outlook first positive. XXXX say we experienced the the in

normal capacity. the maintain been Despite challenges to have current so able far, at we operations

in our have and we increase right demand. network flexibility to up of capabilities, been benefit world-class able manufacturing leverage keep the scale the the to global by For customers, our enabling

of on the integral effect continuity Because daily and of of These within part the are make supply conduct plans required. chain Daikyo impact this foresee our global as at our partner economy, Throughout and constantly direct our sites business from including are assessments and our not have months, impact and each an indirect monitored operations time, do they close several analyses we the its suppliers. business any adjustments environment network. past changing negative or we

an we the As as orders expected has in recent customer intensified pandemic seen have increase weeks. in

the We demand are that we're ensure products. order flow true our addressing monitoring to for

environment, had the report we uncertain XX% sales. a in adjusted and first to that shown had strong for in quarter first resulted slide I in EPS quarter. well-positioned. the sales growth quarter am we We through organic quarter performance double-digit largely the five, on As despite product strong This today's first entered pleased second high-value growth

across the As solid products for second day companies seems Each be develop our as urgency sense quarter, of new the continues COVID-XX want and manage we enter government existing both to issues. customers to opportunities with bring well operating emphasize to chain, to that West, I from solutions. demand we're looking challenges; to these new supply as from regulations. transportation, a address And

to CFO, detail quarter Bernard? performance. first who Now financial it Birkett over our I'll Bernard on our turn more will provide

Bernard Birkett

Eric you, and time. this is Thank healthy morning. safe good and everyone hope I during

well saw first primarily we let's revenue profits led growth and Contract we more XXXX sales at So where performance I units balance sheet EPS numbers finally, QX growth Generics And in review will we'll Biologics look for the as We'll guidance quarter our Manufacturing. takeaways. saw review and take strong through in you and as strong and margin in by some XXXX. detail. the revenues market the

First up, QX.

of and summarized are We recorded are to XX million XX. six in growth measures slides XX non-U.S. and $XXX.X net of growth. results sales representing organic XX.X% of sales points of slide financial described Our the GAAP basis on reconciliation inorganic

quarter. Products momentum grew than more Proprietary and grew units products, Proprietary in of market Products throughout QX. sales by across double-digits make High-value had which organically the XX% XX.X% sales up solid all

market Biologics units, growth. the the market unit performance double-digit strong the Looking of delivered at

who and We continue Daikyo many high-value biopharma customers West and using offerings. product to work with are biotech

market experienced me, sales FluroTec growth Generics single-digit units The led and components. excuse Westar -- high by of

by sales products had care-related of including: components. led organic first mid led and diagnostic the Our quarter sales NovaPure systems. growth health once Pharma double-digit Manufacturing services market for FluroTec high-value unit Contract by again sales and And injection growth saw with and single-digit Westar,

to Moving slide seven.

basis We of continue the to margin see recorded profit We expansion $XXX in same with improvements above million gross gross gross period a year XX.X% in last and of million from or profit. last profit $XX XX year. point XX% QX

in a compared adjusted operating improvement same million quarter in million this $XX.X reported increase. saw to We period the with profit year or XX.X% $XX last

of XXX diluted point And basis the EPS from a same operating profit for period last margin XX.X% XX% increase adjusted year. grew was QX. Our finally, adjusted

benefit, stock Excluding approximately by EPS tax XX%. grew

$X.X revenue percentage profit? On the to both points we in sales growth the $XX.X reduction price driving of million contributions or points. slide points million growth in the Sales of or growth. X.X of rates what's foreign contributed increases contributed show mix sales and eight, in by growth. million or percentage $X.X changes and XX.X And exchange percentage a quarter. So X.X Volume reduced currency

quarter QX points in consolidated shows growth QX slide achieved products. of XXXX. Products' gross of at Proprietary of were basis Products first gross products profit of for high-value by XXX XX% Looking favorable the margin performance, was up drivers gross XX.X% first in margin margin XX.X% XXXX, above mix profit our from nine the Proprietary improvement quarter key profit driven sold in of XXXX. continued margin The in the margin

points sales basis quarter margin gross the above and of XX in first offset efficiencies costs, achieved profit Production Contract price increases, XX.X% increased quarter the was XXXX. by overhead partially Manufacturing's of first margin

was of period Proprietary basis increase our margin last largely Our the from XX.X% adjusted Products' point a attributable profit operating expansion. XXX profit year, to gross same

flow done terms the balance last of business. we to period generating the of look XX% same how first quarter review, key a was $XX.X for of slide an million cash have year, we've flow let's $X.X listed Now On million more for in and Operating increase. XXXX, our metrics. some compared the increase XX, at sheet cash cash

line same guidance. was year $X.X higher QX with XXXX spending the Our capital than last million, and $XX.X period in million

$XXX.X cash of March Working XX, than December due reduction at to XXXX a lower XX, million equivalents. was XXXX, in primarily and cash capital million $XX at our

of our to $XXX December program. of million our due balance, expenditures share balance under $XXX.X XX cash primarily of million repurchase less XXXX Our than million was $XXX.X March

Our capital and financial strong. remains resources including overall liquidity

high-level estimated compared current million foreign year net Turning Full forecasted be to XXXX between a provides of $XX guidance, summary. which based to This headwind. billion guidance $XX continues includes million to XX in and $X.XX rates, $X.XX Slide on headwind of exchange guidance. a sales a range prior billion. an

sales approximately organic expect X%. be growth We to

will compared of be of to EPS million expect our guidance to to $X.XX be $X.XX. Capital the to million. full expenditure to reported XXXX of in $X.XX range diluted guidance $XXX prior $X.XX $XXX year in a range We

Estimated our elements from key headwind on attention $X.XX rates, want guidance to a based I also to benefits quarter impact of on bring our as There exchange $X.XX, guidance has includes first to The you compared guidance. currency your FX some approximately an of foreign revised are $X.XX. prior stock-based impact current EPS review tax EPS from compensation.

organic line in operating long-term summarize EPS in Contract performance and the construct improvement, and growth both key quarter. profit sales diluted EPS to and growth our with Strong sales and in top Proprietary EPS approximately line profit growth and X% operating the Manufacturing, XXXX first are in growth cash free and growth for takeaways to flow, gross our X% So for margin of adjusted expansion. margin, projections in

like call Eric. now I'd to over the back to turn

Eric Green

Bernard. you, Thank

the not granted. more for pursuit and company financially is Our taken our ever, is Today, mission than priority strong. of

needed many administration are for life-saving products by and cases the globe medicines. the of West patients across in

we around ensure leader the customers to of continuity globe. our supply market the As committed to are

customers and many COVID-XX components addition, we that supporting antiviral for vaccines. potential are developing address diagnostics, with therapeutics In to are our solutions

confident long-term in are strategy. We our growth

trying to supporting dedicated as pandemic. are doing these industry, this Although works is to what optimistic resolve healthcare global and it the are we times, necessary

stronger. healthy wish emerge And and safe, team will collectively members this of that our ahead. stay in on is you it We the West, the experience behalf of at from all days

you. to ready take we're Thank Andrew, questions.

Question-and-Answer Session

Operator

question Securities. [Operator line with Instructions] And CJS from the comes of Solow Larry our first

Larry Solow

morning good quarter, And for congrats taking guys. on thanks a good and questions Hey start. my good

Eric Green

you Great, thank Larry.

Larry Solow

side, Just I and XXX sales from And very I'm the the coming Obviously growth QX that good side was side. very on margin year growth the the year-over-year. suspects usual it. particularly think, with a bps quarter. impressed good also And on last up, Proprietary of here. question

was trends that. -- basis a So, these mix onion of on lot a a bit seems up peel back full I'm the little not it asking bps. driving what over it is will continue. just you But XXX year like obviously if

and mix to to you stuff like but maybe high-value percentage mix products your within And up more more you is on NovaPure that products say as of little go like color a high-value within only Can that? increase us that? just the give not scale

Eric Green

Yes, good and Larry. Good morning it's thank to hear for question, the voice. you your

what's really correct. happening is being absolutely are -- simultaneously. two levers pulled You're Proprietary There's with

the margins. is and mix but with we're importantly product contribution high-value even the have products higher One growth is more that growth that of increased effect seeing that

about Zenith, thinking NovaPure, FluroTec. start Crystal You Daikyo, the even

And with a much say those it half when the you at when that's high-value totality, comes to higher roughly growth margin. about let's and in incremental the look of products

shift mix higher-margin products, is even the more high-value the that pronounced portfolio. occurring of subsets So but with through

doing lean The this journey second on you for as of of lever globalization a are is a couple And team holding the been is operations. job this really we we've phenomenal a good allowing know, our that processes and throughput. done effective which has job be to and team the and more more implementing efficient initiatives to plants start is across higher and and us now our years

what's as us combination And the giving is what FluroTec the me the both self-injection the them we about type about the think is business. of pipeline Proprietary. that margin So exciting CZ in And the is portfolio. trajectory that's this around of future if the expansion growth we excites of it long-term think NovaPure of really

Larry Solow

of you true couple gears in questions if -- of then Okay. impact? just true gauge just may surge How there. Great, and demand I do versus any sort just of timing a orders sort switching of sort on COVID-XX,

and even that is is guys you And and in is moving that in the for potential up therapies vaccines short gear the diagnostics run? the -- needle

I on in drop I And significant look out the quarters. effect assume that next in would drop but lag there'll would some to -- guys be oil, you we benefit then lastly that with a on, few Thanks. the as the COVID realize oil

Eric Green

We as COVID-XX, and to had much with in we're did and the approach, did some specifically But and In a products with but In working I support we've about revenue sales being as can in therapeutics costs. due the COVID-XX. company and Yes, detail, units see start we additional little three Bernard granular Larry. around to QX, mentioned around areas the actively have we not and also now all we're discussions get -- with incremental our diagnostics, more -- what QX, introduced any some a market taken vaccines. And we have customers. our thinking able more seeing right three we this to corridors. with QX are frankly

the that about an won't the been setting. introduced have our business Manufacturing pipe. you the specific speak couple on that diagnostics used the of in the recently but clinic introduced been in example in give scaling consumable in recently have of To is Contract currently into in products these arm We the devices customer, up are market hospitals a any the

supporting that going they're as are has a you in tests to market clinical already through to comes we're to few in combat ability COVID-XX therapeutics commercialized been it those a but that know, see areas. the there and and are When we're currently,

lastly and vaccines, then the little And vaccine those long-term technology candidate the XXXX. as And FluroTec perfect look market. our we a for more is out a are

be kind XXXX in of and will approach -- and but some in we'll see it's of So benefit the most of XXXX. staged a it

You oil want about talk impact. to Bernard the

Bernard Birkett

Yes.

also be there going there to that some -- tailwind offset oil, we're is see there'll a but So that. are some from to headwinds

and pandemic. the with absorbing side to impact around was will I there most chain some supporting we just QX COVID also through But itself but freight, some that. benefit, And are up primarily our and then, there employees other products see offsets particularly some were again, on it seeing headwinds impacted well-documented as the some there given increased is which and we're that. we're probably showed in margin, we're managing the and costs the having So supply our We and CM saw costs in we have of the on other that logistics customers think, issues getting in by some gross there.

Larry Solow

Got it.

Appreciate you it. Great. Thank guys. Okay.

Eric Green

Larry. you, Thank

Operator

Thank Paul question you. with comes And next the our of Janney. line Knight from

Paul Knight

you about What you of room facilities? facility do risk sites. minimize clean operating in do higher? do alternate Hi. shutdown. Eric, have go you to many your effectively risk you're I talk to you you could But another a operation to know, need the to And do shifts? in these what a step reduce for

Eric Green

Yes. particularly We we learned and that took social good multiple we've the to taken morning. split shift interaction -- temperature as is South and correct. in from that proactive our in taken. approach Paul, is we've our ago China, so very absolutely Thank handovers No, -- and monitoring. Also, you, minimize months a done a you're What very minimize steps Asia, Qingpu facility did started One when they to -- we've distancing important. in there's is in we see what also colleagues Singapore. the shifts

program in to that facility. the were into go a put allowed place employees also We only essential

we and put plants individuals at can XX that very the plants all you that can immediately. actually we these world but around important so roles, are have the imagine in from work So remotely, place our

the element feel One in come office. into or place put are question ensuring don't that focused pressure well we that other health on really their when not is they about feeling to our there's we some colleagues

if members. So care somebody improved. of themselves policies. the for we relaxed family our We had period taking some home COVID time of and/or of a We our expanded attendance stay their with compensation, to

we in is absenteeism we place have should are levers tell maybe crisis This it risk people for different ensure there's outside. in we be mitigating site. can to those place and that any from the in plants any So the in that also management the We put coming you, and in team issues are many plants put daily. that monitoring particular if

sites. employees and and in several and support the I doing normal And very this I down purpose last the it real pleased in back in multiple to a And weeks, the the know our went really which very on came am why of rates testament humbled community. absenteeism actually up to is slightly, well we're it understand low how Europe but is

Paul. this of going we're that pull, intensity issue of So, not we afford our approach, point. levers just let the there's there's not to And -- a off an cannot we on one many. It's lot have solution of at a because to

Paul Knight

industry And in lastly QX? regarding in there could the on if you was stocking going tell

Eric Green

you why. stock Yes, and see tell Paul. I'll We not do

You well, know very we're to order. business it's really that, our make

of QX we three So over at following months. to to manufacture the November look really that we is and the demand period time need December when four

this place. you with because intensified that coming put not have stock, commercial conversations in where times and do us working customers tell their the will categorizing job our of increased, done recent has have alleviate of organization network global a not and I concerns our we the increasing to weeks to customers because where In great though. are lead that's to safety

and is in categorize and and it therapies, on increasing keeping pronounced. eye at back we to enablement, XXXX. an stocks XXXX lesson vaccines, due frankly We've learned has hospital this in were also incremental our That safety supporting been that's and So as what able time. any revenues point therapeutics, to we're

to And monitor that so very and and this. have of conscious right the in we're manage we programs place through

Paul Knight

you. Thank

Operator

Thank you.

Our Windley from David with next question of Jefferies. comes the line

Danlei Yan

is for for question. Hi. Danlei our taking Thanks Good Dave. This morning. Yan

in or growth a the little And that being line? product that is you I is? how I improving HVPs. as expansion then driven think us Proprietary what by Products? of percentage a mix to Can And that your in the products is toward of existing want large Proprietary give an And growth portfolio you hone the of a on Products sense bit. mentioned is higher-margin in NovaPure

Eric Green

expanding is, XXXX One back NovaPure or for absolute Nova portfolio if the about and -- an with dollar it's think close it's we're a actually to twofold. brand it that seeing quarter the products started and currently and XXXX. late additional that a you double capabilities. trend But it's in that's during Danlei, is NovaPure, value

I'll give plunger which on continue portfolio we you an believe a X which have growth NovaPure participation one with help believe we product rate a is example new to this ml, And have with can we continue. rate -- launched one high very NDAs. we

lot and a portfolio, a is of area. ahead that but there's this of in positive very So -- us runway

Bernard Birkett

high-value growth And in other we've also products. seen

systems. CZ, RU, self-injection with FluroTec, So

growth those So growth QX in seen in in units. various unit. we've many strong just one it's -- the market represented through all It's -- in of areas of and market the not

Danlei Yan

follow-up Great. Thanks a but maybe The guidance the had strong company for was really detail. had reaffirmed. first a quarter, question. I revenue

wondering I so and in the if of puts was of of takes was? guiding the some give context strong And us you QX how that could

Eric Green

We last information we is us QX I led us will want do we drive year. well And the a globalization I the the tenets growth digitization, -- in that think analytics in when that to believe and saw talk puts it's real-time team allowing you which look is me saw I more Bernard Yes. and to better I these and if are the business the then start and at want to get truly resiliency operations under the to in just place -- you similar the that QX. -- executing market little takes. really growth. how allowing and let caution. absolutely of put about about mean circumstances of

it's so a believe we And continuation.

the is is in frankly that environment today But everybody difficult. speaking operating

my we next that prudent to data and year. several from stick what this that the go there's know time and can over more the -- trajectory some get I will information balance we'll the of next to the that Bernard months weeks we have on be better And how for elements of call, go so we points so -- additional want get will to view, with guided. we want through and we we've point be

Bernie you puts want to takes. give some and

Bernard Birkett

$XX that piece other has forecasted you've the to $XX on that have And got is moved headwind million. the million from we to FX remember Yes.

we're and So if billion. you while guidance maintaining $X.XX between and billion that absorbing take that into account $X.XX

times is guidance essentially said, unknowns it's there. a So We're And revenue. lot raising it the of as in year. on Eric early still with unprecedented in out

year to it order how again, where we're of that maintain progresses. So, book thing is is solid. right our what do we But see the felt seeing we was the and are to remainder the

some again operation expectations point. But first units storms are manufacturing and don't in higher with it and our line think they functioning and the weathered at Our much it's as raise should to this appropriate I in we quarter.

-- you've got think to to on piece got remember FX. You've the that

Danlei Yan

Great. color. Got it. Thanks for the

Bernard Birkett

you. Thank

Operator

Avendano comes you. the Thank with line of And from of America. Juan Bank next our question

Juan Avendano

on this Hi. role that pandemic. thank morning. the for playing Hello, Congrats good you and through quarter you're the

Eric Green

you. Thank that. appreciate really We

Juan Avendano

you I you your an guess such an rate us annually my customer across to is and used your us XXXX pharma? on give different first participation across give Can generics update for question biologics, segments. update

that to do the participation related development? among and currently on this are vaccines in that COVID-XX but this I question rate long-term is drugs to have what COVID-XX anticipate And vaccines know you a opportunity

Eric Green

last Yes. the participation XXXX, it this on way. year in put I'll Juan rate

Our is has biologics been higher. bit equal to a or participation it than higher little rate

the then as pharma space the improved. generics and they get. it's XXX% we So in close And actually in to

is participation it our rate So improve. -- continued to

vaccine In But into trials of around customer we on specifically develop going that. clinical give participate the can and I that that regards currently customer, many products out won't we'll as be COVID-XX names. hopefully on tell you soon we're to we we can that

technology. good, characteristics I participation is rate think the required is a the a FluroTec the technology coating on the is is strong reason why very of we elastomer. one in market-leading And vaccines have

in really that feeling we're good So regard.

about ability can sites as our going XX-plus we to to on it's demand vaccines urgency using these components the produce technology. when be thinking FluroTec's gives year, or the And materials criticality challenge a that multiple operations. size, too to that start building of it's a important not have while products considering global these the good it's much get we're it a we billion flex manufactured, around the Secondly us

So participation rate. that's from would at how for perspective I it the vaccine the look

Juan Avendano

you. Got Thank it.

in Your of backlog by an committed your did Proprietary could you XXXX of committed I wondering, update on was that that to XX-K year-over-year increase us according your orders on give XX% you Proprietary filed. Products, are Products first What the is an the change lead it of has quarter? average And receive you what production it? produce the magnitude the ship of of the been? from remind until can us time order it you orders if and time backlog end as your you

Eric Green

Yes.

won't I update number consistent. the it's we solid. So quarterly but can It's say

In the in some that that therapeutics we're to used vaccines regards stays of for fact solid. number would with and/or products discussions that having that ensure

to a lead think done think we around times I are a XX I that. -- job at capabilities we're weeks on great from basis. weeks has say, the a we of -- this monitor to X on if very we in would average. We're weekly on eight about on it you about and time. this It I pretty provide where additional But team that and stable weeks the a does think product today XX the based range is at point

Juan Avendano

Okay. All Thank you. right.

Bernard Birkett

got from are actually Customers customers that is You orders into with order us. patterns also take longer changing slightly. the account placing to

and over actually four not three, it's or not two quarters -- So they're It's beyond. our one quarters. maybe just

weeks customer average. XX the gives demand on times within us visibility the a of that positive to So is lot weeks meet and the for of X able to that lead real it being greater

Juan Avendano

Biologics embedded XXXX us tell far Can you do as your -- expect? you What as and Okay. growth mean by for in what's revenue growth outlook Generics revenue I the guidance segment? customer Good. guidance Pharma.

Bernard Birkett

Generics low will mid-single looking to single-digit possibly to Pharma single Manufacturing high growth. we're double-digit mid Contract double-digit growth. And digits growth. Biologics, then on be So high at be digits. will early is

Juan Avendano

maybe higher Got in Can And It bit growth sales pricing how contribution seems talk can products the components? points, it. much on get was XQ percentage a your pricing is than your that the pricing you in average. this X.X the high-value Thank which about historical dynamics you. and revenue environment? given you little

Eric Green

Yes.

pricing, when four X% the minus think or last after look at or I you plus it's years. three historically

little -- that. You're it's end more a higher X.X at the right of it's on

not to a and think now very that be we're right tend -- So particularly products it's new you molecules. about I areas seeing that when the it's I growth think the spoke is But seeing of big Bernard we're in a high-value what these variance.

So contribution kick-in a on those from is anniversary status. products, a a right? to bring customer year until two when new the we price or product that out doesn't later, So

structure you So plus going high-value quarter. we're about higher maintain to X.X think in to I It'll the the more that minus we're And that our forward. of convert able be of focus or to customers first pricing when products. consider our is end

Juan Avendano

in to growth before? -- high-value on gross estimate Products. light come guess, I and mean, that see Okay. teens the and good my bit to I to we product last how I may. Proprietary the is Contract mean nitpick, little a was my Manufactured your my high on not in XXXX question relative if But the good Good. organic product And mid when to one it margin by I margin segment. before relative segment you're could gross getting margin did conversion driven expansion

Bernard Birkett

through we QX, that across in some impact In Yes. -- well go had absorbed operational was COVID-XX. there as we supporting particular costs we CM a regarding all within employees units our and

our and there. So have a in that. costs normal those we north as we business and CM do incurred it by If decision decision management of some And have XX%. would been costs exclude to was right the margin if was that

delivering us mid to the to to that teams high our within encouragement right teens. on we're impact Proprietary that the The to the business know are was get so a But less. -- on track and Contract lot Manufacturing gives

it We throughout -- on the XXXX we track. onetime will there early But be are XXXX. making right was were into and That progress cost.

Juan Avendano

Okay.

and Thank follow-up will good. very I offline. Congratulations. much you Sounds

Bernard Birkett

Thanks, Juan.

Eric Green

Thank you.

Operator

from you. Courtney Owens our question comes Blair. next the Thank And line of with William

Courtney Owens

Good morning. guys. Hi,

Eric Green

Courtney. morning, Good

Courtney Owens

else's kind little Good this but kind question, morning. the for My on of know I like about kind to the you is side. somebody updated guidance. answered top bit a of talk question wanted organic of line around first more just earlier

the COVID-related So, you yet didn't I see very in strong. any think started revenues Eric said remarks year guys you in really that And you prepared guys your QX.

towards So that X% say or to business? look of I but higher kind it's your the that probably guess guys will rest base the year if hard to it the quarter? more mix that you which of that by as you have that Or that your like organic the that COVID-related on is about between at the to you end like organic opposed to talked you guidance that is of X%, of it that really for incremental is demand? point, that of Thanks. confidence X% have be that vantage to you'll long-term your you if just from the to driven does the side get kind so demand X% fall pick have X% guys you last more Or to related confidence

Eric Green

would Yes. business. the the I Courtney core business on confidence say on that base the is

through time. -- We regards towards. or when and therapeutics that our the environment a customers that's But to which to fluid working dynamic comes what therapies it COVID-XX are additional solutions vaccines opportunities aware will get in and the at of and/or are and

into when better that the clarity around visibility bring then we'll so we And have that discussion. and

QX that you what touching maybe up Proprietary on relatively looking we consistent. Bernard high-single-digits, core it's underlying built on back of year On has going traditionally that core, look side, come a XX% will the in the probably a the been full would at down side, mark. year and the than it's But little I think earlier QX last QX the and CM said business, the higher if see. been momentum at to the And bit -- little bit we that

through that opportunity it guidance out. the the me Bernard confidence So gives XXXX a that walked really lot taking us pull is of the to

Bernard Birkett

And it's like hard to estimate that.

of here. still and see through there's discussions that in progress a we more more as moving need around into we'll of pieces you concrete, visibility I give get -- There's lot better COVID on Now a probably and But quarter insight area. lot the QX early. that our it'll that call. we it's think And something to a second

Courtney Owens

Okay. Got it. Thanks guys.

Eric Green

you. Thank

Operator

Thank no you. time. further this questions at And I'm showing

to that, I'll the for over Lai Quintin remarks. call turn back with So closing

Quintin Lai

Andrew. you, online broadcast you of archive our Investors' in conference today's call. on Thank available website joining for at the be on us the Thank will section. An westpharma.com

a access the April ID Have healthy. numbers earnings XX provided concludes the today's nice stay end at this Thursday replay using may a conference you of Stay Additionally safe, today. by That and day. call through dial-in release.

Operator

gentlemen, may program, conference. and you day. the and today's disconnect. conclude in Everyone wonderful participating you This a Ladies have for all does thank

West Pharmaceutical Services (WST) 23 Apr 202020 Q1 Earnings call transcript