WST - Earnings call transcript Q2 2022 | West Pharmaceutical Services, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Q2 2022 West Pharmaceutical Services Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. to Quintin conference Relations. Lai, like speaker to now today, for Vice would hand over the your I President, Investor

may begin. You

Quintin Lai

presentation press XX-K, results regarding today’s subject, XX-Q is company in release those past to the in control as beliefs any other our an and quarter factors financial on present made full and Eric by law. Actual our could differ Birkett are Slide the as Thank made company’s Please financial results of to Harbor Safe slide our results has and This been issued are morning, on management on morning, that expectations, risks accompanying outlook Good reports. the implied release by federal results, available to materially the website well for based and financial as XXXX U.S. call Investors expressed meaning will XXXX. Statements the located a company. These in presentation statement. second our update update many westpharma.com. on on of statements on which today’s forward-looking and section our influenced future morning, statements Investors here. business securities an assumptions, you, including or from is as beyond Bernard this We company’s a conference review the the Green of this by is of within and accompanies the and results year well refer contain provide the presentation On and section X The statement forecasts. disclosures posted our the our copy is call. made the Towanda. X-K website. and of estimates call current West’s it remaining that There welcome forward-looking at any our

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

Eric Green

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

pleased will X. We organically grew start XX% quarter. sales that Products delivered over organic on Proprietary second XX% Slide an report I’m excellent we to in with our segment. growth We

decline more continues solid market all a offsets base slight led to sales. growth. impressive And the Biologics, again, high-value our than have across demand in three Generics, and units: to Our COVID-XX-related which business Pharma this way products

strength to thank our focus in action our and impact. lockdowns like with during efforts enabled us minimal to our our customers their and who West for reopen our is of in in example to our purpose team An relentless and I The to West customers resilience the members patients. serve to a have of meaningful leader. difference drugs Our our customers highlights trusted proven It innovate, the supply as is to of strategy our which necessary ensuring that components continues team continued of in reliable to the the success strength guided by execute, market set deliver our a our us apart One purpose grow, sites April inspiring China, commitment May. One of makes and would in culture the continue

quarter. made Slide the great progress second to moving We X. in Now

briefly share a Let me few highlights.

across we customers, Envision, demand as HVP along self-injection productivity our deliver the our QX, investments up, of spend with Zenith ramping key to including Biologics by in are global a With order book capital we and driven benefits and operations. Crystal Pharma NovaPure, continue Daikyo components strong primarily drivers the for optimize We seeing of devices. growth our Generics our

complete forward now installation is to expansion our complete expansion. driving we’re of Our the XXXX XXXX and capital

Turning Zenith. to Crystal

of At to our Bile injections We fewer uptake able new needle of expanding of as to X reliable the experience. syringe trend our robust. large patients more with injections syringe patient to an been a a has been customer ml Zenith The answer market frequent will larger the for patients capacity less the system our CZ International needs syringe customers XXXX bring solution. with containment were Daikyo and Conference, dose insert Crystal safe the system easier help ml X.XX enabling product have with volume we or launched

customers, continue X.XX we newly to ml XXXX. we to drug that with in I’m customer combination standard approved a As the share advance, using targeted for system our have pleased with our CZ patients care of launch launched

company with SmartDose of our on website. have our addition, and and corporate on XXXX progress end FDA-approved using biologic subcu to the seeing responsibility we our Slide good Shifting three June, delivery now X update technology. ESG. the report system on-body In we’re At published an drugs

proud as we We efforts. success and better of makes Directors I’m member. announced we elected targets, how our for that our a our environmental and I’m Dr. charitable initiatives. future. the One our Together, newest inclusion performing pleased share also and our progress into our culture Stephen fulfill to must to goals, five-year this connected purpose that of are our has towards sustainability has our our company effectively, well Lockhart around today and yesterday, know West ESG Board tracking with organization We diversity

Health a California, Board. expertise As valuable the Officer to addition in Medical will of our his Sutter be former Chief

XXXX I it second turn some guidance. full to thoughts updated to I and implied Before over want outlook our on provide Bernard, high-level half year

FX and have headwinds: We slowing COVID-XX demand. two

of has the half units year, the expect Generics and half been On strong dynamics. the first business our only resources to Pharma with positive, but base additional the to better the even year market also of address in we demand in the not perform the second

million headwind. we’re full $XX taking a down year. by $XXX Incremental for to For overall sales going is million be guidance, FX our the

to COVID-XX XXXX. growth seeing we’re assumed decline a our compared modest addition, outlook In over demand that as in April

stoppers expect To or of $XX decline orders some excess to and vials to we COVID-XX guidance. for in in XX% meaningful sales fewer seeing for of sales not from overall smaller do a doses, assume COVID an hold sales XXXX we’re sales our in well impact While sum negative million full are it FX year $XXX up, change XXXX causing of million changes headwinds levels. and

that the market even On second and year helping stronger the from Biologics, expecting of Pharma we’re units moderate all business side, positive the this growth in guidance Generics base impact. to three half is of

our I’ll over Now, call to turn it Bernard.

Bernard Birkett

Thank you, good Eric, morning. and

quarter And saw more Biologics at performance Let’s look sales We’ll review detail. profits, another Generics we revenues profit our led XXXX take our some by of growth first will strong QX to the numbers and and quarter in guidance. an update in drivers units. where as provide you will market I the as sheet through we takeaways. well balance XXXX the finally, in

QX. up, First

the net organic are X, Slide of sales measures and million, described XX.X%. results of on $XXX.X GAAP financial Our are sales XX growth summarized of representing We Slides reconciliation in non-U.S. XX. recorded to

Generics proprietary Looking products, Proprietary X. of market in XX.X% at in solid momentum Biologics QX. which and grew High-value the sales across quarter, had approximately Slide Products the double-digits units in XX% and grew up sales by made product organically quarter.

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

led of unit West We Daikyo and and are sales also The continue biotech and double-digit market Westar growth strong many high-value to biopharma Generics product experienced by components. work with customers using FluroTec offerings. who

point profit, the from year XX.X% same our year. of Pharma with sales $XXX.X with profit same adjusted quarter by the X% period period components. period components a in was a million adjusted products, for NovaPure in year. of contract a led in $XXX.X to $X.X We a saw reduction for X.X% mid-single-digit for increase. profit high-value unit second this of saw $XXX devices. or year. gross Our profit manufacturing XX last improvement of recorded increase point quarter market above growth X.X% same QX XX.X% XXX And operating million last million our due last last including the diagnostic compared operating We margin from margin basis recorded gross sales in declined was basis And to And million the decline

QX, approximately EPS in of adjusted excluding EPS stock-based $X.XX $X.XX compensation by QX, grew Finally, for diluted grew X%. tax benefit

and Let’s XX, sales Slide percentage points mix contributions $XX.X points growth of quarter. both sales revenue of Volume growth contributed drivers percentage million or profit. review to in and we On and show the increases growth quarter. the the in price contributed X.X the $XX.X in X.X or million,

the for profit margin raw was pressures XX.X% materials, XX.X% Products margin caused improvement quarter profit of our in than of quarter XXXX. and impacting quarter second of down XXXX. The plant from is basis in mix margin fees COVID was mix, in surcharges margin and benefit with The in product associated approximately gross supply period. XX points XXXX. of onetime offsetting of points XX.X% the sold costs, and all margin including profit points of achieved the Proprietary basis lower gross Partially in price margin below of profit XX.X%, decline in Contract XX achieved these consolidated gross products QX overheads. our inflationary second Products’ agreements. inflationary headwinds XXX margin performance. by second margin from the second to Looking increases pass labor basis XXXX, largely was at quarter Slide shows decrease Manufacturing XX attributed in gross Proprietary the through QX

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

earnings, performance period flow payments. Our benefited income the capital operating in and our working timing tax of increased from cash

by capital of year-to-date from June the due and accounts reductions period inventory by XX, $XX.X $X.X Our primarily spending Working last offset to XX, quarter approximately increases higher $XXX.X than million same XXXX, year. receivable $XX.X capital cash. our second was increased XXXX, in million, billion December in XXXX million at

our share cash decrease due million offset in flow by balance. at balance CapEx XX, December $XXX.X in The the period. repurchase and our program primarily cash than strong cash is was million, higher XXXX Our $XX.X operating our June lower to

Slide to high-level Turning XX a summary. provides guidance.

of There of updating our $X.XXX and full estimated a prior rates of are million. of compared billion. guidance $XXX our on range is compared current billion We be sales headwind guidance based prior to sales estimated in net $X.XXX billion to $XXX and exchange range to $X.XX expect foreign headwind billion an million year to $X.XX a XXXX net

growth guidance XX% organic prior to approximately expect to sales XX% to We XX%. compared be of approximately

for our EPS expect includes tax CapEx first our guidance We to at half current an $X.XX year in the Also, of $X.XX. $X.XX prior XXXX range key to of approximately are to million $XXX of impact range EPS adjusted impact based $X.XX to compared our revised EPS on to you I of some prior $X $X.XX to Estimated foreign bring FX be your full guidance from attention to remains of guidance headwind a diluted This guidance. our a want as stock-based a headwind estimated $X.XX. elements benefits has compensation. year. positive There compared rates, review exchange currency on increased

full to tax back excludes diluted in pillars of like future and growth than in expect stock-based grow. line sales and EPS, to with We execute, headwinds approximately innovate growth summarize in cash And To million adjusted our and XXXX would be lower call proprietary, $XX flow, top guidance in the Eric. despite key line quarter, turn compensation. year I solid benefits to profit, takeaways sales. inflationary strong for now over from FX delivering the the COVID-XX-related growth operating our operating

Eric Green

Thank summarize the our on of you, positioned Slide QX us has half in To for XX, well second year. the performance Bernard.

global robust deliver current a you. have leveraging growth. accelerate time strong spending have and of foundation our Towanda, take to Thank operations of continue book to a a orders anticipated to across model over and benefits meet with base we’re the to committed the strategy which testament the to future and questions. continue to We capital ready built the right business, is we execution, operating

Operator

the from with line America. you. Instructions] Derik Bank de first Bruin Our of Thank comes [Operator question of

Your is open. line

Derik de Bruin

taking everyone. Thanks question. for the good morning, Hi,

Eric Green

Derik. morning, Good

Derik de Bruin

Hi.

bit a looks use, It specific to you number to So boost could trying to I’m revenue to included – from bit like a more more out prior business. the trying organic better I for you like core to growth work into be – guide it. I us roughly specific $XX prior your make little called little on a X% And prior. your increase guide. growth And the but give with back you have backing but just math sure million just just a some I’m if the bit the headwind? basically, mean where you little COVID guide, out versus a you more

Eric Green

little think approximately give on me reduction What for let seeing a revenues is COVID visibility we’re Derik, and more Yes, XX% based right discussions about XXXX, you was XXXX we $XX we’re that. million. the If our we look color about customers, a in this and looking that seeing the at at million. current on we’re in $XXX based that of kind which about variability the industry number, And of again, that’s – on – now. if with is

forward the XXXX, reduction by XXXX it’s number. we maybe another for XX% If believe or of XX% you think do up about moving to

And business right particularly Biologics This glide kind is COVID-XX the that’s are – and what now. we’re Generics So increase. with stronger seeing with base see there’s of half. and the in demand you second a around correct, Pharma path implied that’s an we

if XX% quarter. So that it business, that the that’s the around for continue proprietary, proprietary the growth and roughly at robust we the And year. look balance the in of would we’re for was ex-COVID second seeing

Derik de Bruin

the is Well, COVID going that. to be pre-empting question, thanks Great. follow-up my for to XXXX which

So for thanks that.

the on goes then there get XXXX, have $XX you like also question, for that downside I enough de-risked that the so million? And further but right? to number Is

Bernard Birkett

this it, going and that landscape right COVID. conservative that believe around have now, view, what’s COVID based on probably there’s information I happen year have see a to XXXX. on enough. de-risked on changing into the And the we But this we again, based have think Well, would is we it we facts with taken always depending we

Derik de Bruin

Got Was it. basis in from fee quarter like And PP. you projects? a COVID called that to a it looks might to XX out have margin cancellation point related that the boost come

Bernard Birkett

Yes. That’s correct.

Derik de Bruin

stocking, frequently I of excess signs sort terms anything supply this up issues chain? terms comes the in in any my up of inventory incoming just in And this of of is terms any – in Okay. mean coming questions, customer of

Eric Green

Yes. No, – on is one book we’re today, are Derik, order focused we look times. the at that area our lead the

you As of the certain prioritize to and portfolio. imagine, with years COVID we product last the couple in had our pivot can parts demand, of

demand back but So installed about, our focus should us times to now right hear have is And being where as they is we talk our also capability in that us reduce you higher why will we and lead speak, that’s give on on particularly we’re around into products. customers and XXXX, seeing more the particular Biologics which end support to high-value the increasing of be. capacity

don’t and So underlying see right with not on We that’s we core customers, business. concept restocking with demand focus the now large based on discussions have. going it’s the the a

Derik de Bruin

big client. how a just Great. you was? a Can And a question the would number just from cancellation, qualify that

Bernard Birkett

It’s approximately $XX million.

Derik de Bruin

much. very Great. Thank you

Eric Green

you, Thank Derik.

Operator

question comes Thank of Our next you. with [Operator from KeyBanc. Instructions] Knight line the Paul

open. is line Your

Paul Knight

Eric, Hi thanks time. for the

biosimilars. benefit qualitative Can How in the seeing quantitative Biologics is around have to and the we biosimilar be West? read Regarding numbers the seems is you strong. XX% big growth, a to one market are obviously, approval or to on tailwinds? But that get area proprietary biosimilar

Eric Green

you, question. No, the biosimilar Paul, of thank the approvals into and the seeing No, for entry Yes. we’re the marketplaces. benefits

I relatively of in the Biologics say portfolio. Although, product And it’s small adoption. high-value scheme would there’s entire a the

near think see the we when with about with the identical biosimilars. our So packaging biologic it’s customers, to what you configurations

Paul Knight

syringe your single-dose changing up to pretty in And trend is view? the or dramatic

Eric Green

adoption space tremendous and a there’s NovaPure. That’s specific on for where looking specifically – that what we’re syringes. plungers. And a biosimilar to saying high that really the prefilled is it’s of one And NovaPure we’re space areas and – supports you’re heavily it area movement investing Biologics give towards in is a you

our are that’s going. So where investments

getting XXXX, going of the also installations in curve in with start XXXX on have but We customers. to ahead our

Paul Knight

Okay. minus was And year, you million way that it’s the the then $XXX this – Is guide last, for Bernard, for million full earlier? the now what we year. FX said $XXX and

Bernard Birkett

That’s correct.

Paul Knight

you. thank Okay,

Eric Green

you, Paul. Thank

Operator

line of comes from question next Securities. Solow Our CJS Instructions] with [Operator you. the Thank Larry

Your line is open.

Larry Solow

Thanks questions. morning. the taking good Hi, for

$XX other sales is million, so guess, net the that? is the for so less a base million? It’s impact I $XX just through you I you’re get did from then back $XX of adding business, – then impact, can guidance, am that couple currency balancing right? $XX million And COVID. calls, is Eric, capturing review, I million And Just the essentially the that plus

Eric Green

Larry. correct, That’s

You have that accurate.

Larry Solow

there you Okay. Great. just be And called demand then in think said, then XXXX. then you you on kind – out vaccine-related of this year, XX% mentioned And in of in like drop terms you sales, dropping another sales may COVID-related XX%. volume

that And prefilled the there XXXX. in doses I you just in is see sort then still on on? update good to happening offset give the an vial. think a XXXX and the more like on dose? you a pretty would that us obviously, see as move we’ll side I you per go or some offset be hopefully, the little of on to less how a single sounds that, It COVID right. we transforming caught transformation that Can Are ranges bit to confident

Eric Green

you though. Larry, – variability. XX%. to add just there’s In we XXXX, that a a it’s X summarized want to again, comment lot well. XX% do of more It’s Yes, of range think I

doses trying our is your per to we’re valid a to but there that vial. that be is shift So occur – is point on starting with conservative less

variable a to to moved the syringe. and What and configuration do we you’re as want more prefilled seeing key that stopper. vial, the And So there’s a doses data be configuration as number right, cases, XXXX the is some get patients that we’re is taking is the that some in the little XX-millimeter uptake and now. from into versus widely I beyond. is right less But speak obviously, about seeing to of now you’re in right dose. available also West. through yet state, is But market, in we customers XXXX which see down to just determined now We XX-millimeter benefit a has unpredictable right is the XXXX. vial into per net very

Bernard Birkett

mentioned add Eric we’re demand just of in That’s to move is Biologics. uptake capacity. answering and Let through – increased business core within into me a prefilled in lot seeing other XXXX our layering when that, where as syringe XXXX, the move within questions really

core for that’s So business.

Larry Solow

Right. Right.

So that’s right.

on certainly space happen. a So will your there’s that that talking us Biologics the increasing you or while. like just on itself, the know still some strings for penetration just are maybe that penetration, NovaPure the more you can HVPs? percentages it hopeful give I penetrated Westar your of stages. – the we’re not we talk like you’re of vaccine, compare And macro trend, And like sort of COVID idea, it just a but I’m one big say, with in just Can across we’re talked highly of that you trend, prefilled break specifically an and switch don’t can NovaPure then qualitatively which certainly sure seems seems to, that about multiyear relatively level, that, like out like early general you customers, in FluroTec and but

Eric Green

that and that next year to plungers. capacity NovaPure, the expanded of the making pipeline to NovaPure lines When what’s I already committed product to in portfolio. nicely this around percentage investments the is in the we’ve installation and/or drugs the other approved parts a year significantly. at utilizing And market lower up look the ramping very that’s the would percentage higher a newly the are the you there’s have marketplace, commercial up that than say particularly now, quite high-value and right we’re

are where journey. in that’s So we that

we value in a particularly and to customers, is tremendous the very it’s that’s the proposition has why While pipeline space. see our biologic percentage, attractive, lower it

Larry Solow

it self-injectables. you the sort lastly, just the CZ Where us SmartDose? give sort and Thanks. spoke a you sounds new – a that? the like that And can you on X.XX-milliliter the outlook talked over stand of years? see about you an Can just then you’re And mentioned, about And how Great. us update lot know a unfolding I few lot with really enthusiastic give you insert. next a Eric, just of the we of you for sort about

Eric Green

on new that Larry, and is mechanism we approvals molecules of a this IV market, from area life X years. actually the around is that we’ve is delivery of our and the in And at device have cycle remarks we about now combination it you a what an recently – working talked And with Biologics. to subcu number about particularly hence, taking quite ways think current mentioned customers molecules, when but looking been move management. that are more in reformulate exciting. also an prepared And on for call the I

commercial development gain I customers, still working a momentum the around at projects towards And of now to into is products environment gravitating we’re existing the start in so When in to it the moving number we’re starting versus molecules more it’s cycle larger on the with development. volumes, life management. look and marketplace

it’s I good right we to going to definitely really but time some revenues, large we’re part and meaningful get portfolio. are the exciting. in investments in of believe take into it’s a work that the more point to direction time. So occur, in with needed The

Larry Solow

appreciate all the Great. I Thanks. color. Excellent.

Eric Green

Thank you, Larry.

Operator

with of Instructions] Blair. from line Thank William question next you. comes [Operator Justin Our the Lin

line open. Your is

Justin Lin

the rest I’ll a any have of price one. to just increases plans simple on I simple plans with your quarter. any in morning. for off with start Congrats the have a assumed sense of the you – do I any just a guess, trying start off do good further Hi, year? one. guidance. I’ll Just you get what’s guess, for

Bernard Birkett

move pretty on of surcharges the something there price inflationary implement costs increases. as review strategy the half we some if now, with had for as through to continue And lag that any about Again, as customers, second need there’s moment. continue we we tracking when to increase itself. then increase the of when as pricing offsetting hit that it And right specific cost before, year. us these on that say it’s something Well, that’s And we there’s as it we but to then progress as cost to sometimes announce and fluid. we can we’ve through. closely increase further price we’re we we But And we’ve at as talking to we and pass where again, it’s a much through we’ve working monitor XXXX, monthly can. increases are experience are nothing a again, specific general done the to the it’s I’ve continuing basis.

Justin Lin

it. us margin we And costs, remind Got freight, chain? can the are should think supply and what about for guess, of rest how material cadence the you around the year? raw I And assumptions overall underlying

Eric Green

Yes.

see step improve continue to since will remainder communicating and So our efficiency as have through to happening see in of based what continue levels we up we move that that’s margin year. we guidance year. been we the on this we Again, that February we And of extra in of gave as capacity. the layer

other COVID Some out we’ve our called decreasing within as fill that in with we the now there replace network. demand to we’ve is the and started facilities. that just products the to of that’s been growth And embedded. of and demand that right QX, through And continue QX is doing we’re that will it’s having things – guidance QX. that essentially our reflected many progress is do as to demand other the And to

Justin Lin

Got last it. That’s one just one helpful. for me. very And

predicated continued improving? alone that supply increase situation pressure that you inflation in high-value products the In achieve XXXX? can other along longer with on of that, bps help in uptick easing of and efficiency? XXX guess, term, year. without chain of improvement that obviously, Sort words, Or is drive in will each sort continued I the the margin

Bernard Birkett

is case. would the expectation that be Our that,

points. us what But we or of on can swan continue in different based on the today, expand that’s today to control, our is that a to basis margins XXX Our of what expansion. continue target based is basis happens, black that’s we that’s intention XXX point by see event story. to have some now And something outside front

Justin Lin

you. Thank good. Sounds

Bernard Birkett

Thank you, Justin.

Operator

of the next Johnson Our Instructions] Stephens. [Operator Jacob you. from comes with line Thank question

is line Your open.

Jacob Johnson

Hey, good morning.

housekeeping one first. quick question Just

the On ballpark? revenue were seemed the the revenues to Proprietary that million That XX% in XQ, COVID growth COVID and in talked ex-COVID the you $XXX in maybe that Is imply about Products. quarter.

Bernard Birkett

it’s close. Yes, pretty

Jacob Johnson

And to mentioned the you. the potential demand and end you Thank you resources year? adding markets you in this in there? second half constrained and capacity up for half first were those the the adding somewhat you’re Okay. resources there. of pick some just And for then, Generic year, you the talk mentioned Pharma about Eric, Can also of

Eric Green

Yes.

is been So specifically the Pharma. and that deliver around bill has us, demand customer are the discrete to there demand in And resource to more given Generics projects. on the

good work was feeling that to demands we we’re allocate deliver to of resources year. Generics. the So this the with of half those That about ahead that’s us, but the do intent for appropriately need that particularly second of and comment, Pharma

those were a in half, the than will year to second growing lot two they units first half. compared take the the be the you if of first So half faster

U.S. plants, – in That’s just occurring So from that that’s the clear. Europe I sure make going both States. to or was United be our the want to and

Jacob Johnson

Okay. for And last That’s question then Bern. helpful.

sequentially. expense, flattish of Just they’re on kind R&D

remember I line, some be if going some other correctly, investments flowing through around think maybe Corning are the R&D efforts. and to relationship I there the

Just maybe we how should of about XXXX? back think year expense R&D half this into

Bernard Birkett

the been at in for QX. and happen Yes, QX delivery then really to two will that that’s there the looking of be we’ll it’s planned in the our the half and seeing devices in Glass second year expect that. going year, around DAs through level And we’re place, second in in Corning the of adding partnership guidance, in our year, that then is be so the we to the pipeline. additional are coming all drivers on embedded also have that we but half it and take the than of that up costs. would One more it’s Again,

Jacob Johnson

for taking Thanks the Perfect. Okay. question.

Bernard Birkett

you, Thank Jacob.

Operator

comes Thank of Dave you. Instructions] question Jefferies. Our from next [Operator the line Windley with

is open. line Your

Dave Windley

prefilled much for syringe how mentioned, predominantly bit and what traditionally CZ syringe, glass be NovaPure I to hoping uptick as much was anything light Good prefilled or morning, also syringes on of uptick comments to Just can that you that appreciated. excuse resin more that you Or shine that you’re a NovaPure bias you is – workaround thanks try clients related? Like plungers driving supplying me, have, Hi, my and the there. is so is toward Like question. CZ taking that in little gentlemen. want there in NovaPure around syringes? would still add high value? stoppers but

Eric Green

Yes.

when is you CZ – is start about preference investments what it’s Dave, still work the is, great glass. doing application partnering Corning. with Hence, the we’re a and So – with from But the thinking silicon-free.

applications there that certain well certain So of are is that we’re particularly CZ to for, able capture and some demand. positioned molecules,

it comment the more biosimilars solution also around Now anything plungers the and to the comes glass else. around when than and PFS biologics really is NovaPure

Dave Windley

flow times us to up space forward How that help of there? is, and your base of much difference demand. make to, the activity of kind to your million freed bridge accelerating And to in was $XX comments addressing mean, it lead weakness. of is lead around that around is for bridge Paul’s the sure, of steady-state I’ll pulling clients Okay. want then, the the makes Eric, help I Can for lowering productive the shorten versus I base business sounds I COVID up underlying it by maybe or like shortening the times. and understand because capacity Larry’s say, you some to think of

Eric Green

the Dave, to X%. believe we in long-term X% construct, Yes, still

of line. business last be order entire area confirmed just is we lead that you a those quarter some year. Biologics a core specific XX% So outsizing the capacity, talking further, units, is freeing approved proprietary that two be that newly about bring we particular elements which have having three There’s COVID, strong for is the And But that recently. not of to to oversupply the will high-value What launched been a or be really customers. it When marketplace. of not not you portfolio, preparing in management bit do probably our we think the – in One the obviously to the any – about secondly, that end one and And I on drugs a the for dig customer. market dedicated very it’s of to is There pipeline the able our combination up started from when will think our the around support is for And biologics. in increase some molecules to by construct. of that. is to in last strong. we drivers products. two position mean COVID, in were times order one believe always to but able still long-term obviously continues It’s more when and the excluding to approved the is major it success recently going are inventory little of or would say approved is book, years, that are I about with

of state the across the lead that in trying constant especially we’re I times underlying That’s is and all on business want to growth to we’re healthy back bring in line. the biologics. So markets but extremely focused that work

Dave Windley

it. Got

So they than that because just to that are to times I be so dependent understocked point on for that made, version comfortable. enough the basically would or, I were you’re lead customers not, stocking question you you say, that to are flip of guess them Maybe guess, a couldn’t kind confident rephrase last of overstock. produce longer

catching if kind saying. And is should be. and back them of normal – shored getting up to sounds It what what so you’re up like you’re

Eric Green

those that why capital the the of the support year, Biologics highlighted cases, the get in There is or reasons on establish the that ahead but this made as And some to and are that’s are are really to we where and had in through of right. the with are whole we alleviate in there’s with correct. schedules also investments to relationships we’ve to any we’re across our committed that’s the in growth you – some needed there that cases is you but Dave, space, and of was Yes, not in, curve. some we that, speak. portfolio, there Dave, rolling tight sure very of definitely next one we working issues that stay of customers material, make availability to creating particularly to into of we’re schedules NovaPure not year robust some to

Dave Windley

it. Got Yes.

Bernard Birkett

is it times having and to be frame are than times would actually pre then maintain bring to to times growing those I business is way the able lead us to back The COVID lead where rather as lead they the out. back go

So we to layer have that’s where in capacity. the

So just not it’s actually managing once. two It’s things at one.

to they going plus the comfortable stock period seeing instantaneous That’s thing. take in trying some in time. an that’s if levels our growth where not this customers case. to a to get feel areas But that’s we’re acceleration So of business of

Dave Windley

Sure. And layering the COVID capacity. change or projects bringing to or expectations on Bernard, your does amount those in point relative additional the all of this CapEx confirm, the at change on in to this just your capacity, pacing of investment change in on – your

Bernard Birkett

does inherent to Eric that change that plunger particularly changes around capacity. mentioned the in we’re projects that’s and projects the – that’s specifically those. the The layer we’re the growth we’re any And it right that now about, in we on not that continuing of have seeing. that market now, right side, And

today. there’s And if do demand there. beneficial the us if is change for onboarding, there could no accelerate we that be would that because could actually more So we that

Dave Windley

sign. like a for seems and me. regard that stoppers syringe. In prefilled plungers It components for supply to question strong versus you Last

we past I there? think nuance that is is think that Or in form agnostic answered that to you’ve should there relatively the economically factor, about any you’re true?

Bernard Birkett

No, between aren’t holds that true. different vastly the two. The economics that

Dave Windley

my answering questions. Thanks. all I Okay. appreciate you’re

Eric Green

you, Dave. Thank

Bernard Birkett

you. Thank

Operator

I’m questions Lai to call the Quintin Thank showing turn like you. I closing for over in no back remarks. queue. would further now the to

Quintin Lai

will Have our joining broadcast An be call. a available Investors thank section. conference westpharma.com this you concludes of on and for archive Towanda, on us day. Thanks, at in That website online the call. the today’s nice

Operator

Ladies call. Thank and participation. gentlemen, today’s this for concludes your conference you

disconnect. may now You

West Pharmaceutical Services (WST) 28 Jul 222022 Q2 Earnings call transcript