WST - Earnings call transcript Q4 2024 | West Pharmaceutical Services, Inc.

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Operator

Thank you for standing by, and welcome to West Pharmaceuticals Fourth Quarter 2024 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].

I would now like to hand the call over to John Sweeney, Vice President, Investor Relations. ahead. go Please

John Sweeney

on welcome XXXX and results Fourth and westpharma.com. been Quarter this company's of Good located website Conference to Call. Year at posted has release Earnings and financial Investors We Full section morning, the morning, the West's the issued early our

a There's review today's On and outlook financial present will results, of a presentation an accompanies our copy 'XX. that slide call and is West's the the we update presentation provide call our page for financial Investor today, website. available for business the FY our on of

well On These the and statement. future Statements past X-K it the statements Actual many company. here. results the made our as beliefs are which Slide U.S. release current within made statements call contain safe to by factors presentation beyond of the statements forward-looking based estimates company's forward-looking in on Please including on regarding X of expressed as The is XX-K, assumptions, and forecasts. materially refer made our other company risks today's the could from or accompanying by the results as and subject, the law. by and disclosures expectations, any influenced press to securities implied results harbor are as control meaning management is well XX-Q differ the those reports. federal

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

Green. over to turn Please Eric. the Eric now I'll go CEO, our ahead, call

Eric Green

joining I I'll guidance. financial outlook. by Fiscal some on close you, Quarter today. final John, thoughts like everyone. and and with begin business XXXX comments Then on Year review good followed Bernard's us would detailed the to some our Thanks for Fourth and morning, Thank XXXX, with

on X. Starting Slide

West key executed XXXX, Looking on back initiatives. strategic several at

with First, approved Biologics. molecules, on and market continued rate opportunities in we GLP-X capitalize the our on win strong newly particularly fast-growing

Second, made COVID we returning patterns. industry-wide believe end close generally some to And times, ordering to in destocking a reduce we great as for customers our levels. is lead normalized that case to manufacturing now strides the more are

returned our shareholders expect million through share we Third, investments made And year. we years for drive additional we come. growth capacity, in over to during program incremental repurchase finally, our which to HVP $XXX the strategic will

several Proprietary basis. Shifting Slide quarter were the in There Product to largely improving our on return destocking. driven a a growth. on as year-over-year X. to in as quarter. quarterly revenue of were And Proprietary marked fourth the an represents X.X% trend increased This organic decreased the organic declined above notable expectations by quarter continued achievements. revenues quarters X each revenues organic fourth revenues X.X% Products of Results XXXX,

year. operating in margin adjusted was with roughly Finally, XX.X%, line prior profit

we report HVP pleased long-term components, is components, segment X. delivery starting growth and show broken important down I'm strengthening, HVP Proprietary continue. Products. Slide can X categories: West's to to Moving to that momentum of be most devices Products contributor this to West signs Standard into the positive to and HVP expect

single HVP high will to shift component a continued that we that HVP expectation see current revenues XXXX grow and anticipate digits and in is we XXXX, will beyond. Our mid- to in mix

market. driver is the Biologics performance key A

XX% entering high to continue to to win market this molecules of participating low rate, And end strong double grow this market. expect single a have digits. approximately we We digit consistently on new

adopting to note multiyear an and that well a remain category. continued the market just to this performing is acceleration with progress business elastomer their in would expansion agreed particularly the of due our for encouraged GLP-X HVP we with I Our expect GLP-X needs. customers manufacturers we growth elastomer the X. of contract from We all for primary largest Annex one packaging of terms have

GMP of sterile sterile EU drugs facilities the regulations risk plans companies documented prevent define it X, of with manufacturing the unfamiliar that contamination their European the X a strategy of filling medicines to products. govern set to Annex that is in Annex control Union. those contagion develop in sterile a and For requires action the assesses

various in we Currently, over X XXX customers. Annex have stages their projects with

went X. in have pipeline. for the now as they additional about early the shift Annex in customers standard adopters effect It address months August were regulation in generally of takes to XXXX, to from HVP customers HVP, shift into we XX While a and some towards customers products

to Slide injector The wearable this XXXX devices. growth business our for High-Value biggest driver is SmartDose. Moving delivery in X. on-body

efficiencies. working are new in capacity with double later stream on will our XXXX, than We line coming to manufacturing drive our SmartDose process optimize our automation more and which

expect categorize HVP in XXXX, will we and we dilutive. SmartDose that margin as an view product, While be it

are economics taking steps improve We our device all the are options delivery table. on to and

These the customers. to network. on the lower be our that products our we bulk of end These mainly are used by products pharma The across and are and components Standard tend to Products. Moving standard price produce the generic manufacturing margin. global

business. In In investments these online continue now Dublin, There come X GLP-X both accounts customers and year. and device GLP-X monitoring Ireland, strongly growth Contract Michigan our X. The develop in contract as to Rapids, approximately large cases, we continuous customers is devices. glucose to Grand Slide are of have during next-generation the anticipate Manufacturing, investments that significant We growing serve. we build manufacturing. made total our the out business for our to Turning XX%

thresholds not cannot decision going forward as have be financial to our We participate the made achieved.

and CM actively of closely customers One exit in these margin started to opportunities their in mid-XXXX. with let more our of return intention We're us has exit to have pursuing the capital that align other and know requirements.

components we return expect a of the factors, to these business. organic our by all driven account into all growth Taking HVP strength

core that through a bridge business impacts. will these profitable West We highly have temporary

and We will expect we to taking in address with coming finish momentum. improve be XXXX where to to years steps areas returns, we the the solid want

Now the Bernard. turn call I'll to Bernard? over

Bernard Birkett

Eric, I sales drivers and Thank as some good you, sheet And impacting year XXXX morning. we well will full through you margin the balance as finally, and our the quarter takeaways. will and quarter in first review guidance. take

First up QX.

of are the summarized financial in XX. sales results sales net X.X%. of million Our on representing We recorded Slide quarter, growth organic $XXX.X

included delivery net XX, X.X%. incentive. Fourth proprietary which quarter. products, approximately was at up Proprietary Slide mid-single-digit customer device devices delivery High-Value sales Products platforms. generally strong growth of generated revenues self-injection a by function XX% XQ Looking the made sales of increased for of $XX This sales and a improving in demand by a demand million benefit organic device quarter product from led

Pharma by at growth of platforms. Looking performance the sales market, organic net in driven systems. self-injection Westar administrative mid-single-digit mid-single-digit had net volumes products driven organic in sales lower by device decline net a Generics products. and driven of increases of experienced FluroTec increase by growth, sales sales organic Biologics high saw by single-digit an sales

increased was recorded and with consistent $XXX.X year. XXX low period Manufacturing and declined Contract profit gross profit operating to quarter, XX.X%, by the profit basis last gross million same Adjusted in down operating profit Our single was $XXX.X digits. this of We million XX.X% adjusted year-over-year. margin points segment margin

Finally, stock-based compared tax impact year. period on had adjusted to EPS same QX. diluted compensation The the for benefit last X.X% no declined EPS

incentive sales price quarter. lower in HVP The Now was let's Sales proportion is sales and price contributions $XX delivery sales mix the the volume performance. million, in percentage of with pricing profit the in XX, drivers components customer a million by volume higher review by growth and achieving Slide negative million On associated X.X $XX.X lower-margin both levels. increases to a partially driven $XX.X of revenue or show of Included impact drug benefit a devices. we offset points. contributed

addition, we faced in foreign In million $X.X currency the headwind of approximately a quarter.

product fourth decline of gross Manufacturing margin XXXX. was XX. than margin The points XX% was at points in XX.X% Products the the XXX of lower fourth than key profit Contract achieved the for margin quarter quarter fourth driver Looking margin XX gross fourth profit on margin performance XXXX. of quarter basis basis the Proprietary in lower mix. was the quarter of achieved Slide

On Slide expenditures, Operating cash some primarily metrics. $XXX.X of decline decline to cash a we increase XXXX, spent XXXX. in key capital in we flow over have million In a XX, million million XXXX, flow listed a X.X% on results. was due $XXX.X operating $XXX

our leverage reduction by to to High-Value XXXX, and capacity. Working in to CapEx product million We million decreased of approximately Contract a balance. mainly due $XXX from our capital increase cash $XXX our continue Manufacturing

decrease The $XXX.X share $XXX.X balance our offset lower million due XXXX December capital million at in primarily balance. cash December and cash of Our million than was cash operations. from XXXX, our by to $XXX.X repurchases of expenditures, is XX,

XX summary. $XX guidance. an is Slide million Turning rates. on provides There high-level guidance headwind $X.XXX XXXX net $X.XXX is expected of be based foreign estimated billion of a in to and range to current sales exchange Full a billion. year

performance. sales components by organic X% to expand, organic in to compared This year expect margins X%. HVP by to up growth We of abate. the be will driven anticipate to prior that gross be components margins guidance improving Products approximately to Proprietary revenues Biologics, and are We impact and driven segment product Annex-X. Proprietary HVP our continues destocking increase as GLP-Xs HVP growth expected organic as assumes acceleration slightly in to

glucose to for expected due single digits diabetes. as lower is obesity continuous in points to revenue expected self-injection margins in FY monitoring Contract up decreased in XXX Manufacturing decline Contract devices 'XX utilization. is expected growth to year-over-year revenue business offset Manufacturing 'XX, FY low compared to be are basis as and

the as on our both the XXXX Auto-injector benefit quarters. of into XXXX, through will Dublin, to pain revenues the continue is business. has we and up building expect note from running. production and the CM Just move third ramp-up margins X drug to to of and the we Late and portion sites. ramp now commenced ramp-up the handling In fourth and in and

in is in we These expansion first also Rapids of will revenues and our revenues as achieve Grand quarter The mid-XXXX. increase scale third XXXX. operational, the we had

new with installations full experience up Our close take to to they achieve to capacity. XX is that months

Slide Moving on XX. to

exciting incremental guidance our you update $X.XX. on in anticipated we EPS a in materialize. opportunities in not and range have this should note to several XXXX, For will $X we XXXX of to incorporated these now they guidance Please be is

the XX headwind factors our currency offset are anticipates monitoring Slide by of by XXXX accelerate to about progression the In is XXXX and $X.XX. SG&A transition revenues, not XXXX in Products drug incentive EPS. EPS of totaled reduced and incorporated improving than margin compensation, down to range incremental to in The which guidance delivery headwinds stock-based investments get of incentive impact $X.XX. the on incentive drug This device and from total, compensation range. $X.XX. XXXX XXXX these $X.XX device tax in benefit glucose to excluding XXXX plus $X.XX guidance The with and the Proprietary adding 'XX more $X.XX our our breaks guidance was that us to guidance delivery R&D EPS $X about the

a path are we of support X% to million, down on CapEx of plan. CapEx, long-range For X% revenues down back now from million our traditional $XXX glide XXXX. anticipate to XXXX We to $XXX our

will over several growth the our initiatives be year peak We XXXX expect years. for investment next the that

million, to the are anticipated and adjusted in EPS expected quarter X% which $XXX revenues today, first and XXXX $X.XX guidance in the million first we to revenue introducing quarter to into translates range range quarter XXXX is of organic $X.XX. be to growth first X% of $XXX Finally,

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

Eric Green

Slide confident XXXX we on year. strong the with pleased ahead, Thank West. you, we with summarize will on XX, Bernard. for a the And I'm finish deliver are opportunities to To the successful

that a and seeing and Biologics, areas encouraging, future important We on positions adoption the success. and our in intend Proprietary in additional company to strengths year our GLP-Xs to that growth continued return that performance because is the components will success of in the anticipate business to Our HVP for be of we XXXX capitalize require X. are continue We attention. Annex our address an

they In thank patients' to closing, a our as difference in the to improving globe continue dedication I make would members team lives. across for like unwavered their

our Thank With that, question. you. for ready are we operator, first

Operator

Instructions]. [Operator

the from Michael of Ryskin BofA Research. comes question first Global of Our line

Michael Ryskin

a I'm going I'm to to it's -- to one be here. ask question, lot unpack going to but A one. ask going big

is What just moving the 'XX versus a pieces. progression well the So guide, if get look EPS a reset new appreciate the I of onetime the 'XX, expectations. obviously, below base. it's to at year of 'XX, at I sort want color I bridge, fiscal what's on the like to a

the R&D, of issue new outside SG&A say We that of I fair CGM $X, part it look manufacturing seems moving models tax, the sort a new can that from? comp. $X.XX like FX, that's to that right? we're the if of debate and Is for investments, that incentive at So guide everything contract of is the sort model, base

can And air if on give so, us pocket. anything color additional you Contract Manufacturing that

I in said prepared XXX there's think the just remarks, a margin about impact. you bps

sort of Just else that EPS able some being your of regain outlook in to to of that hole something air that into for what's sort you're patch pocket bring getting?

Bernard Birkett

the for question, Michael. Thanks Yes.

a is XXXX, initiatives impact We're more the guide, ongoing And a we delivery if we're we're at at look looking more particularly. adding 'XX, of So automation, term medium the you're in when expand number at look are looking at but drug to that that lot impacting we of device, looking in you mix impacts a customers. at business. profitability scale, have these

expect would time. to we So that improve over

Now a it will that. little bit us to time do for of take

back improves our single seeing And we in out HVP slightly we that we look that our offset and So we as last to growth high scripts, mix expanding Eric there impact the as be we're EPS They're in the HVP, about mix about, I are with the addressing. the again, of And that half, to business. expect or second called again, we expect If also over the driving in margins growth talked the mid- with really for improves I that think, areas in are in But would year that. time, XXXX. business. at mix to in his would were [indiscernible]. seeing impact improve towards half

with to Manufacturing. that be. investment our would so Contract the with on see over those here business again, And would term, replace that margins more line improving. we what impact short expect has return CGM margins on that's business The in Again, would in we time, thresholds that

Michael Ryskin

walk because additional I is decision reading Okay. way metrics. I'm the I it the sort mean your of a financial to CGM away provide was color any issue. it mean from -- contracts on of the you can those

customers. Just, X maybe I marketplace And creates how in it bad know that pocket the CGM given are an we pretty was or is air players. mean, these concentrated just given existing X

can doesn't got line you've replace like That's if flex customers, So seem something you there. can you X another something it that's to product CGM? outside of

Eric Green

question. exactly the ramp on. the our good what marketplace. Mike, support to XX-plus And technologies customers introduced for had that's CGM focused early the in in CGM were up particular, in ability that We've past on the years, with Yes, we're the of

thresholds. the So in is appropriate financial take space. our just manufacturing that based we've new that had we our that technologies to strong preserve provide we by business on economics a were that did that our but wanted not we financial position sure meet developed the contract construct, We for decision the is customers. we was And as taken decision that lightly, not make believe, did

as really generation So in-sourcing ramp scheduled therefore, of it. we're into a some the they can through whether next doing well they're move down

In fact, cases, in-sourcing. in many they're

put on be So being available, we'll future -- that to to there manufacturing would and able is me Product that we decision and reuse which going it worked that contract forward. let state is a the with support space -- and customers we looked into future that was clearly, be portfolios at though, made, launches will is other

some bringing offsetting CM in. growth business we'll of the it. and the and GLP-X we're be through move will impact that So with other in It's XXXX,

Operator

comes line question CJS next of Securities. Solow from Larry of Our the

Lawrence Solow

any side, the but I inventory as positive. that guide obviously, segments, is question, or first we is just the we guess Product like bit guess know forward? seasonal slower, there a I continue sounds general just it Or move QX you on the through year? to don't go Proprietary again, wane And there up that scale that little sequentially to but does outlook issues as usually

question second margins. a sounds equation, side more a the it that part that is color little too. the be of transition is SmartDose there a and like Maybe can of you okay, core And bit HVP lower will little us give but of doing on on the then

Eric Green

thanks question. and Larry, the for you, Thank

So you're absolutely correct.

number thesis we that and prospects Let's take a years, Proprietary that place. still whole. in feel about a of West strong drivers for a look our at of business HVP with has been we as for will The the -- the really current start key the pipeline have That and components. of is growth we

Biologics. Number What's driving one, it?

been As strong we rate past just market, that particular for that have of in We still that that. high we and new customers participation do around And all to together very we're because position year, plus. looking us. economics to think same the mentioned our want XX% the and past we quarter, on a are about still our value approved put continued launches just proposition Biosimilars the I the have at Biologics be clear

We top Biologics when of Biologics robust. think are the and that developed is about on being pipeline are you the quite of

will about And that. in term continue of well the beyond so That this really XXXX, we space. but good near feel growth

to their continue but all forward. Proprietary HVP our customers is lever going We customer And long-term their working largest contract another space. for in have in of a are the with in plungers needs Proprietary that the in we prepared providing with did is not as have secured the remarks Contract a needs elastomers we GLP-X the a -- position our primarily to of foothold majority of one provide second GLP-X's. we players in very And comment elastomers, space. strong Manufacturing, The GLP-Xs this have in the

little Proprietary. give a there, digit of of And So it's size mid-single you the the from -- a is in XXXX against of GLP-Xs. that business about context the all to

going The it, X, instead the XXX, We're third but and projects turn talked we're we quite Annex XXXX. increase interest the more about into launched the actually will that -- projects of talking had well about about area we've projects just of We digit actual expansion XXXX. is growth point I And quarter to last about to of particular some over pipeline, the sorry, see in sort revenues those basis in encouraged. XX% give yes, revenues starting an duration mentioned. believe double us in of than from that the of throughout around I'm roughly will that's turn into XXX the XXX area. -- We

HVP components, forward. So strong going very

You pharma asked are or become previous on of we more about normalized and We we then the believe we destocking. the today. It's customers with Biologics will Generics throughout normalized more quarters. we consistent what have -- normalized And pharmaceutical believe where said XXXX. becoming as duration

on consistent of more said the And So have our what that's ordering we to forward. customers based consistent all going before. patterns

topic. ramp-up as We half efficiencies of onboarded a of on to manual in have asked Phoenix of you I XXXX. do get part mode to you in first been It we want because particular of in touch was know latter XXXX, the expansion another takes SmartDose about a site full processes. SmartDose, site. time that to it

automation, be going automation driving will we will pretty Bernard down. talked when much in So drive them house. to if can more forward, take costs about, towards to will. bring But take we It we XXXX, we're that's

us our We more in new And for scale as are significantly customers. are looking midterm, at addition, looking increasing at for we're customers. volumes the

determining value. will best say device the is increase specifically looking ultimately to But shareholder -- at portfolio, around forward this the actions and I are we it

supporting So patients. customers their and on that's our focus our and maintaining while here

I topics those any asked. other you So Any Larry, other... covered that key believe I are the

Lawrence Solow

P&L? can just guess That of specific follow tease anything you bunch maybe the good just in add guidance. to was there Any is just that a different we color. up, really a Or little not is opportunity things included is there? a on -- could point across where I the anything incremental

Eric Green

and way business to It's clear of don't want do do we need areas, to up we that X do have projects, I this I mentioned that create expect wider at I GLP-Xs visibility in we very I'm a of to the growth very and to devices that business. team. is in done. believe These fix Annex one execute a Larry, very against. a that of is believe we want we very part I that our here. lot the our that a driver we showing and can are I do guidance XXXX, time and for initiatives on we not a confident HVP confident say look we strongly focus have have discrete not early have around. that is just hands -- and range and the Yes, our profitability improve drive. to X. then that particularly to the Biologics, they portfolio, components And team, of get

the that's to So the [indiscernible]. teams to overdeliver, And that. I it leave I'll but expect

Bernard Birkett

term based on are opportunities. installed follow we'll HVP to of particularly just years. sites in that, medium-term quicker opportunities, -- the over have transpiring then more but as we we've and in capacity to the to in number to Larry, the respond the past of as year ability put go these probably update we they're short our the the than And are And through how we in up on some with number more just context, that have some last it

times we So have come down considerably. our that lead or have ability

take better opportunities to present position of a advantage in we're themselves. they those when So

Operator

Our next the Patrick line Donnelly of from question comes of Citi.

open Patrick. is line Your

Patrick Donnelly

did there's a Maybe you that about we a relative Can the near Proprietary on a and see of the what side, orals, just little how lead-outs you out? frame think how moment side, the particularly few of term. that just talk you and amount to in bit playing guys market going GLP the oral impact in just means in up then growth be the here that questions on diving side? about from for get the decent there. Maybe And you're market, seeing a

Eric Green

our question. We delivery of oral do with injectable. that the We believe, Patrick, do and a from built the the in of will be our for believe lens the there speaking market. majority are that shared a Yes, will And customers models two. impact be our portion thanks an around however,

that of So safeguard clear looked for at our a how in requirements investments, in that's we of build the do CM, put need we to have sure support we we demand to capital that volume take-or-pay of levels environments type how be kind make particular we where very around or GLP-Xs number of years.

in So area. that we're protected

that in perspective as we from the has And around up, to about of you going CM is the is really Grand ramp lot CM, the a whole ramp-up get for And lot of particularly XXXX, in expansion as roughly online. to is the profile I in Proprietary capabilities which with portfolio infrastructure But know, Rapids of mid-single those but the a are about is exciting been towards have the their Proprietary resources more if GLP-Xs. we're elastomers, But expansions, CM XX%. elastomers of an fungible. capabilities our I end think more drug good now, as the margin and of feel we side capabilities XXXX, better Proprietary, Right mentioned, of Dublin, handling come West. early

them units. that both are a And with area be Actually, with customers' about win in fastest think rate versus line in customers. is and the side, that's rate going of X positioned success the growth from XXXX of a you it's X/X the with us. both -- expectations to Proprietary penetration a between what call I for our On X/X

Patrick Donnelly

Okay. talk as I we right the talk exit away earlier just year progression rate about margin. into pieces build the the manufacturing the again, year? be as this again, right think 'XX. mix those about Just we you just And go I'm to is driven and would ramp? this through maybe That's moving way through helpful. product just build to And the Bernard, question the guess, build Mike's on helpful. maybe, about, then trying work Can on to

Bernard Birkett

Yes.

a a And margin guide space So improvement on expect generics, challenged based talked the to Biologics, impacting would to that QX in little is of to bit on products, particularly the our growth the still guide, of high-value X and the particularly We as we we front. margin little and side. year out GLP-X, see to growth return we that's as Eric biologic put maybe that destocking, and containment from perspective. Annex the see in a get through bit in the progress then about, through with And the around on year. we coupled the the HVP the areas progress most

Operator

line comes -- the Doug. question line next Doug from Our of your is open,

Unknown Analyst

Thank you for -- I'm doing well.

So think I once. X through at them I'll all quick rattle just ones,

tariff want X have in you you're facilities potential any impact how just First, your in Mexico. see I to capturing guidance.

one. So that's

GLP-Xs impactful prepared as you size percentage are willing And about the incremental the lead us could in to The second that's guidance that make about be? right. your exciting math in things then a is, talked you opportunities I think like looks sales I talked want those be sure of how you based on some up not remarks. several of chance included would as the to Any conclude just third about disclosures the is to it XX%. slide deck, would in

Eric Green

Yes, excellent. Doug, you. thank

we So the years. first above have a question about do it's Mexico, a relationship, actually Mexico, relationship company XX-year a with XX in

business. We are minority that in the stakeholder

that The we market local. but it materials them support is So a to it's -- be for the support immaterial. local to and lot of able

digits. But overall mentioned, is that about and it's, CM, the with about of the is GLP-Xs, of of I mid-single X%. ballpark growth XX% The you're very the as business. Proprietary the that accurate. GLP-Xs above XX% On in attractive. It's The growth

expansion from couple on the... at basis points of We -- a will look to 'XX 'XX

Bernard Birkett

the On GLP-X.

I GLPs revenues revenue. total of Manufacturing, contra-manufacturing Then GLPs I the our represent proprietary look ago, growth, revenues. seeing different. traction of the around GLPs back a our our mid-single if GLP-X Contract elastomer lot comments are and and the And a think overall total, economics ] providers. of of not minutes total your little at revenue. both think about we the then it's few like businesses the where where the with like are those -- we XX% bit then around really about most a the [ side And we're primary GLPs is digits And obviously, mid-teens really to Eric's see in with it's

Eric Green

mean, obviously, question the bunch GLP-X will we expansion the with And in help throughout potential they as the time, third Annex planned point launches the growth. additional obviously, opportunities. components, think continue customers levers on -- within -- we'll I provide we think of respond probably to also but that of with X. on that's growth HVP Those around we we're some on have our about if accelerate I and the will some this accordingly focus that growth see The regulatory can XXXX. a partnering we them at with work

Bernard Birkett

to we numbers. our get as update We'll closer on having them an impact

kind hard give it's of you are sense a to they now. of So what

Operator

line from comes Capital Paul next Our of KeyBanc question the Knight of Markets.

Paul Knight

X% Hi of have construct a growth. of a our organic X% Eric, long-term you had guide to

in GLP-X XXXX do capacity with leave X% additions place elastomer that What to business and about feel you the we place. construct? As in X%

Eric Green

be think thesis type transition and able I growth we X%, you And to to very components if term, the X% And your key going direction. XXXX, metrics. top strong return that feel the around proprietary. those think I of will line ourselves we'll HVP to to of about point, is to performance particularly, long believe be that I the see into in

multiple for particular And It's strong. early areas, multiple drugs marketplace. the not it's are and area, XXXX very one the categories in signs multiple customers, so

to feel that which we had that get back we're a us more will historically. growth getting environment, So we normalized to that to allow algorithm

Paul Knight

commenting you the on Bernard site. Dublin think I GLP-X maybe were then new And

You're kind of half capacity the to is year? for what XXXX, on of your relative it's be utilization it going What's in producing potential expecting about view what revenue? to

Bernard Birkett

year, back Paul, into early Yes, half it at we the where moment. when And We're and coming would think more as started the business. handling the year. 'XX the we of see to early get material at on back around of the particularly in then of 'XX I we auto-injector half stages of as around later in ramping And the the get into drug element becomes we of see the that's part into board. ramp the

So it a won't at into the ramp lot see 'XX. But we'll through seen first see go end of 'XX, start that of time. we that starting we Dublin, from as facility, I back year. think, Grand continue Rapids a take and We've really the does this to for half

Paul Knight

signed And it? is the your Is handling. Does drug finish. mean you've doing complete not last assembly would question component fill be, this

Bernard Birkett

It's final not it's finish. No, packaging. drug fill

So fill we're not doing finish.

Operator

comes question of the Matthew of Blair William from line next Company. & Larew Your

Matthew Larew

device been big that's investment that the last been couple been of on Obviously, about know the side. to years excited there. over in a and the Going future theme start you've there's I space,

challenges should some an today, converting Eric, more be line. to it of maximizing that think company the you well of the operational had to as automated existential terms financial you've term in I or the as as question would you near the think is which as the options, You sort competency are like whether guess maximize in is, use referenced word profitability? the I made of to profile about be shareholder of decisions would a sounds need that core value to about long term question an there

Eric Green

automated will which deliver And are in area we we're there's go that efficiencies. execution Yes. focused to to to there's the be what as on. able -- product have we One so high-quality is customers to points our we increasing because other of for in the a in process, that. on our produce Matthew, consistently the more near is flawless excellence term, to automation we and from be fully scale that drive operational X demand drivers manual hands can to a going

also do we that As But see and device particular one the around to better we for pretty systems. device, is us economics. test. what have have devices that, get do dose do beyond to we drug will have [indiscernible]. delivery we call We just a scale, What's product. attractive like for self just [indiscernible] because portfolio future look beyond the We continue pressure that

drug this we're particular really determine best the long-term delivery you think now product option one for if right device what West. is So is focused about area, the to that on

Matthew Larew

duration really Could for and give frame multiyear what -- just what And you -- of on your sense mentioned. Understood. contract the participation would contract that GLP rate compare is Okay. like you incremental prior? how a your Just then there? contract to

Eric Green

been provide components that the we historically particular -- and the Well, in have elastomer all case, customer. on were on all for our

And so it this does is what secures for that position years. multiple

exactly quite not lengthy. articulated duration, is the it have but We

time customer. that that to it takes a that And a credibility you in so it of chain. supply as And isn't build report, long our know, departure drastic

we make It that and secure feel progression the the and to that with really patients on was relationship can drug at expectations of the it another comfortable. future natural just their help they that ensure sure aligned we of end day support and a end both launches. our support we're So to them one can

So long it is in duration.

their of that long, continuation majority participation, customer. very of We it years, articulated but basically a exactly it our market is in haven't that needs number and which all is is at with

Bernard Birkett

in I very about. growth market construct it Matt, supports talked into it's we to -- the that long-term also the think, and the GLP-X important feeds

As now there, one we've the key that. drivers ring-fenced of

was And so for really around get growth long And over HVP it's that the so done. it again, very term. us that supporting important to

Operator

of of from comes the Bowers question next Deutsche Bank. Our line Justin

Justin Bowers

on a mandate to kick referring then And said Just that contract of related it a products the also and basis contribution? XXX specifically? the in of is business well? Prop is Eric, part a device or that sort XXXX manufacturing of there points on Annex to of that that like of as longer-term side you there's to expansion couple business, the the clarifications from off. the growth X, is here Or

Eric Green

points XXX of XXXX. XXX Yes. No, basis thanks reference, is the XXX for really to The question.

So year a give that visibility XX you our for takes to bit the were just sharing do these are little wanted with revenues customers. XX and converting to months transition, about projects with last we actual into sometimes longer to 'XX. It they're now

realize dimension that's to becoming to it's it want enough that term. why so to starting And I impactful near for us

growth do but long-term long-term we that products. high-value contemplated on really frame of this, our as that we growth algorithm it's as speak, And there's -- but for believe trajectory in been we haven't

device side, around the around clear, proprietary that specifically And the -- platform. devices. it's comment my very On was specifically to is our be SmartDose

Justin Bowers

that. to follow-up a then And Okay.

unrelatedly, -- about there? [ XXXX. That Is and digit, single to growth -- low that the incentive you talked run XX any And half chances is Biologics, year out prepared called the million that? more price this ring-fenced Or With ] then high in rate remarks, there double. to to there? to back HVP there restock those mid-single in and headwinds. you get are And mid-single-digit then to in second levels? back of Or is the

Eric Green

of progress We start the we growth one first, natural more mind. algorithm through that that Biologics to back don't last expect if believe you I'll with the XXXX. and with a it's HVP

don't this do it we a see restock So we believe as more normalized. becomes since

As tend on you duration to the for you're on that market. know, the the once molecule, that drug you be of in

And really needs chain harmonize to going what starting so supply their it's forward.

Not -- to the you the mentioned the question $X.XX on EPS. think all is. the but it is On related on I majority first device, of

smaller out this the CGM and end -- it, of a good that to sorry, the year transitioning tail related portion I'm also we on -- it of -- year. see year transition of little the is is So next towards a business the some last then portion

customers that So to new locations construct. the those fill contracts, meet impact with -- but that new our financial we'll obviously asset at use

at kind of that's year. headwind $X.XX you how look that So this

Operator

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

David Windley

few. I in. squeeze can have I I them hope a

the get converted of one into and as the of value you that ramping production second first I wearable didn't. supply fee around math that guidance fee your price. from My on-body were kind you client question. base were of that the would that so. kind seeing was on on hope this or the one, been that of key this last giving believe gather you're to So messaging $X.XX the of the that you half incentive year in last worth have Justin's your ramp I incentive some you suggests the to

did be you of Did more some all? out, not And if into little that it you Or specific? baked wondering, how I'm play so mind? a you can base price, don't but get

Eric Green

Yes. is the David, the we XXXX. far exceed the The in would established have -- that way price that so that respond far I to incentives base

going dimension the of exceed So forward the the pricing. further, XXXX any latter I part but as incentives in is new it won't did ramp

Bernard Birkett

line, the improving seeing price. efficiencies also we're the on as that, David, side But on as to that also we're cost production better and yield well

also it perspective. -- price we're how at when from at and both economics a It's this around we cost improve looking So device. the looking do perspective a from

So on working areas different we're of in a that. couple

to gets that XX. that us So

David Windley

Got started have it. with I should this probably one.

in be do maybe around, to not of the specifically? now? it's timing and made to R&D, So jump the but SG&A why what And those to those, investments talk those are need like

Eric Green

Yes.

So integrated build and of the of in for systems. that the the investment early XXXX next is launch we're R&D area, at specifically be to out incremental or prepared our this year end making the year largest in

timetables a have borosilicate we largest from -- to last is on continue R&D So to launch. it's but come execute systems that But on of the actually sure customers. and this the as for this is of with the piece And year, was human year, is not clearly. we've customers our probably engagement launch year working use, the to years incremental And new, established that strong. our product And get high. hit quite with prefilled to receptivity did we to this The with point. the been exciting. adoption that we comfortable earlier very very for we couple were really It's early, planned more human that path is this reception prefilled make we system with use syringe therefore, that the ago

David Windley

And the side? SG&A on Okay.

Bernard Birkett

Yes.

costs the side, costs of incremental as SG&A fully had were we David, a through that lot is being were annualization XXXX, getting getting we the of On annualized. the there towards

not a We adding of step-up perspective. there, have near little resources merit there's increases. normal additional some from a and an SG&A bit any We're

annual there really then are through, merit you're [indiscernible] costs So and are that increase. carrying just our

David Windley

Got it.

Okay.

of bit a question or kind little little a in, Larry's back bringing device and back coming the is Matt then this So of bit question.

the I time. long for believe, a company I if So covered

that of the strategic I of think I is believe basis to the -- capability you back have your of injection for contract devices parley, molded business. dating of to group speak, And so tech market. bringing the is foundation to like to proprietary import on-body of XXXXs, the the the fact, in your into manufacturing to you're acquisition some that kind the the

that guess gets be business I Contract proving So it use the question lumpy. is the existential to back Manufacturing to

is now to tolerate wearable You're not but into on kick Contract doesn't device Manufacturing a I that Proprietary business. moving the want that it just the contribution understand Product going for would be can you of the but seem. on-body pursuing, to out where enough what side, client the CGM, And justify are concentration high attractive to very in margins

requirement? just question, given sorry lumpiness so the the And and the so portfolio guess, very it? at lowest wanting for I to wearable, sense understand margins, those pursue, I basic but come this worth your direct XX%. the I something -- strategic pursuit on is really guess to I because to on-body in question correctly, continue makes is that probably like answer to And margins why if the are your back CapEx the based understand

Eric Green

but as it, David, an expectations. That at impact the scale-up not we has two separate the on making Yes, met on-body the wearable for the technology on the look our economics side. Proprietary is

through mentioned, have to we therefore, efficiencies operational excellence, and as scale. automation, are driving through so improve ways to, we And Bernard

fit your portfolio about at to all this options term. part the However, looking the now of question, we are of right long

there's think companies It they're we us out looking the they're on of our because Proprietary -- buildup it's have of the a side. line. to -- able It to with them Manufacturing and Contract support still and resources support a of allows some -- does it drug both support on the also Manufacturing back. some used portfolio actually larger, of the relationship while to to independent, is diversifying robust West top largest On and the when come us be the also more while side to group did about side, Contract that that skills

globe. very does of position customer that So engagements collective in basis, drug us a our some companies with the largest well on across in the our conversations,

we different they does decisions have robust have returns when do And have to like expect make for have CGM. investments economics that we to those -- [indiscernible] So to did while our don't, we different proprietary, we business. those economics, they with

on do [indiscernible] of our top believe both being businesses. same those with really are of focused customer at I positioned for So segment, we of injectable line, diversification point but spirit strategically and this well

David Windley

the on it. your Got questions. patience Thank I appreciate for you illumination. the

Operator

Our final Stephens, question comes of Jacob line Inc. from of the Johnson

Jacob Johnson

this like following higher that going you're multiyear a higher Could historically, more kind kind are a what's Eric, for after a of strategy low of in projects seems up Maybe that on that we the happened synergistic grower. than related and business, seems change this question this Was to strategic and Products. as of growth market with on period? kind in something strategy over GLP-X some Proprietary given in comment going a Contract single-digit out has on just now it Manufacturing, just been of with it return sticking maybe deliberate bit you is maybe made Or point? a look growth, this more opportunistic a margin, historically, segment, shift at be there, lower lower that

Eric Green

a with think are at you probably see minus further downstream. in and been, the long our packaging excellent our in stage. plus question. device it to And We We single-digit And about No, a or value correct start we customers focus bit looking Manufacturing out you're I term. little with go we're Contract proving started it's has drug X growth, think which One while is assembly conversations things for type early to capability. is here. space. a position, higher shifting towards

gave drug customers These do their of delivery devices. details Bernard to into conversations we're to about we us As bring drug where with you now line asked we selling the be are talked can expect active existing manufacturing having in have the about, and with handling. But equation. expansion, that Dublin the the

differentiated and to still whole we that leveraging actually a relationships question, global large as from West shifting answer more to incremental value while and an yes, companies have business be perspective. looking your this at to this drug So we're bring the enterprise

Operator

you. to Thank turn Sweeney John now remarks. for the back closing I would call to Sir? like

John Sweeney

joining for on available archive much Investors broadcast very call. section. in westpharma.com is the you the An our us of on online today Thank the website at

provided That and conference dial-in Additionally, concludes following great access days ID for at presentation a Thank XX using call. end the may have numbers you you, the today's the earnings of by the day. release. a replay and

Operator

Thank you participating. for

disconnect. now may You

West Pharmaceutical Services (WST) 13 Feb 252024 Q4 Earnings call transcript