West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Lehman Global Healthcare Conference 2007
26 slides from West Pharmaceutical Services's conference presentation, Mar 20, 2007
Slide 1: Lehman Global Healthcare Conference
Donald E. Morel, Jr., Ph.D. Chairman & Chief Executive Officer William J. Federici Vice President & Chief Financial Officer Lehman Global Healthcare Conference March 20, 2007 NYSE: WST westpharma.com Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 Certain statements contained in this presentation and certain statements that may be made by management of the Company orally during this presentation are forward-looking statements that set forth anticipated results based on management’s plans and assumptions. Such statement
Slide 3: Corporate Profile
Corporate Profile World's premier manufacturer of components and systems for injectable drug delivery Closure systems and prefilled syringe components Components for disposable systems Devices and device sub-assemblies Founded in 1923 HQ in Lionville, Pa. 2006 sales $913M Market cap as of March 16,
Slide 4: Diverse Customer Base
Diverse Customer Base Company Estimated Market Share: 70% in Pharma; 70% in Device; 95% in Biotech 4
Slide 5: Global Presence
Global Presence 32 manufacturing sites 34 sales offices 5 technical centers Partner locations Future China plants 6,000 employees 5
Slide 6: Key Company Developments
Key Company Developments FY 2001 - 2005 New management team Divestiture of non-core businesses Focus returned to injectable packaging and delivery Increased capital expenditures and capacity build in Europe Strategic acquisitions Strong revenue and profit growth FY 2006 Debt restructuring Integratio
Slide 7: Strong Sales Growth
(in millions) Strong Sales Growth $227 $107 7 $376 $413 $483 $542 $593 $686 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 2001 2002 2003 2004 2005 2006 Acquisitions Core Business
Slide 8: Segment Revenues 2006
Segment Revenues 2006 8 Pharma Systems $644M 71% Tech Group $279M 29%
Slide 9: Geographic Sales Mix
Geographic Sales Mix 9 North America 51% Europe 40% South America 5% Asia Pacific 4%
Slide 10: Corporate Growth Strategy
Corporate Growth Strategy Pharmaceutical Systems Segment Market segmentation Generate maximum value from key growth drivers New product innovation Lean manufacturing Geographic expansion Strategic acquisitions Tech Group Segment Leverage West customer base to build market share in multi-material/mul
Slide 11: Market Dynamics Support West's Continued Growth
Market Dynamics Support West’s Continued Growth Increasing number of patients with chronic illnesses such as diabetes and cancer Increasing demand for biologics (2006 Market:$56B)* Biologics: fastest growing segment of the pharma market out to 2010 (13% CAGR)* Injectables currently account for ~15%
Slide 12: Dosage Form Migration
Dosage Form Migration Reconstitution System Vial – Stopper – Seal Prefillable Syringe Ampoule Auto-injector 12
Slide 13: West's Competitive Advantage
West’s Competitive Advantage Unmatched experience/expertise: drug material interface Ability to source components from multiple locations globally Protected IP: West’s components and systems Regulatory barrier to entry: NDA and ANDA filing must include reference to all packaging/components in contac
Slide 14: Strategic Objectives: Biotechnology Leadership
Strategic Objectives Continue to maintain market leadership position in the biotechnology space Components for Prefillable Syringes * FluroTec technology is licensed from Daikyo Seiko, Ltd. FluroTec* and Barrier Coatings Westar® Processing 14
Slide 15: Strategic Objectives: Insulin/Diabetes Care
Strategic Objectives Expand position in the insulin/diabetes care segment Components for Pen System Applications Components for Traditional System Applications Devices 15
Slide 16: Strategic Objectives: Expand IP Position
Strategic Objectives Aggressively expand IP position via innovation and selective acquisitions Anti-Counterfeiting Closures Reconstitution Systems CZ Resin* Systems * CZ Resin technology is licensed from Daikyo Seiko, Ltd. 16
Slide 17: Strategic Objectives: Build Manufacturing Capabilities
Strategic Objectives Build manufacturing capabilities to meet market growth 17
Slide 18: Strategic Objectives: Financial Flexibility
Create financial flexibility through conservative balance sheet management Strategic Objectives 18
Slide 19: 2006 Results
2006 Results ($M except per share) $46.0 $65.0 Income from Continuing Operations $1.41 $1.93 E.P.S. Continuing Operations – Non GAAP $73.4 $101.0 Operating Profit $120.3 $155.9 SG&A 28.7% Gross Margin Net Sales 2006 E.P.S. continuing operations – Non GAAP excludes a $0.12 charge related to the refin
Slide 20: Capital Management
Capital Management $54.1 $90.3 Capital Expenditures $90.3 45.0% 36.0% $344.0 $419.3 Total Equity & Minority Int $419.3 $281.0 $236.3 Total Debt $386.3 12/31/05 12/31/06 ($M) As if Adjusted 20 Debt to Total Capital 47.9% Debt to EBITDA Ratio 2.5x 1.5x 2.3x
Slide 21: Convertible Debt Offering Summary
Convertible Debt Offering Summary Security Convertible Junior Sub Debt due March 15, 2047 Size $150mm Over allotment option $22.5mm Coupon 4% Conversion premium 32.5% ($56.07 per share) Call feature 5 yr “hard”, 35 yr “soft” call (at 150% of conversion price) - no put feature Use of proceeds General
Slide 22: Convertible Debt Offering Rationale
Convertible Debt Offering Rationale Reviewed long-term financial requirements, reserves and capacity Acquisitions/ development of technology or products Expansion activities beyond those already planned Considered debt, convertible instruments, equity Concluded to issue these securities, which are:
Slide 23: Operating Priorities
Core business growth Segmentation/therapeutic category management Tech Group profit margin Improve product mix: healthcare and proprietary products Global capacity utilization Execute on European capacity expansion and China initiative Innovation programs Operating Priorities 23
Slide 24: 2007 Guidance
2007 Guidance – as of February 20, 20071 Revenues – Approximately $1.0 Billion Estimated consolidated gross margin of 28.8% Fully diluted earnings per share of $2.20 1 to $2.35 1 Capital spending of of $130 to $135 million Note 1 – Guidance provided on Feb 20, 2007 does not include approximately $0.
Slide 25: Summary
Summary Start 2007 following a record year West’s competitive advantages uniquely position the Company to capitalize on growth drivers in key market segments Global manufacturing capability Solid balance sheet Management incentives closely tied to growth in shareholder value Strong corporate governa
Slide 26: Donald E. Morel, Jr., Ph.D. and William J. Federici
Donald E. Morel, Jr., Ph.D. Chairman & Chief Executive Officer William J. Federici Vice President & Chief Financial Officer Lehman Global Healthcare Conference March 20, 2007 NYSE: WST westpharma.com
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