| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Proprietary Products | **584.8**  **[0000105770-23-000004_exh991q42022earningsrelease.htm:0]**  | **583.1**  **[0000105770-23-000018_exh991q12023earningsrelease.htm:0]**  | **618.0**  **[0000105770-23-000048_wst-20230630.htm:19]**  | **602.5**  **[0000105770-23-000064_exh991q32023earningsrelease.htm:0]** **[0000105770-23-000068_wst-20230930.htm:28]**  | **593.7**  **[0000105770-24-000009_exh991-q42023earningsrelea.htm:0]**  | **559.5**  **[0000105770-24-000031_wst-20240331.htm:17]** **[0000105770-24-000031_wst-20240331.htm:22]**  | **559.7**  **[0000105770-24-000060_exh991-q22024earningsrelea.htm:0]**  | **601.4**  **[0000105770-24-000075_exh991q32024earningsrelease.htm:0]** **[0000105770-24-000081_wst-20240930.htm:28]**  |
| Contract-Manufactured Products | **123.9**  **[WST_3228479_2]**  | **133.5**  **[WST_3247727_2]**  | **135.8**  **[0000105770-23-000048_wst-20230630.htm:19]**  | **144.9**  **[0000105770-23-000064_exh991q32023earningsrelease.htm:0]**  | **138.3**  **[0000105770-24-000009_exh991-q42023earningsrelea.htm:1]**  | **135.9**  **[0000105770-24-000031_wst-20240331.htm:17]** **[0000105770-24-000031_wst-20240331.htm:22]**  | **142.4**  **[0000105770-24-000060_exh991-q22024earningsrelea.htm:0]** **[0000105770-24-000066_wst-20240630.htm:17]** **[0000105770-24-000066_wst-20240630.htm:24]**  | **145.5**  **[0000105770-24-000075_exh991q32024earningsrelease.htm:0]**  |
| Total Net Sales | **708.7**  **[0000105770-23-000004_westq4fyfeb2023final.htm:2]**  | **716.6**  **[0000105770-23-000018_finalwestq12023.htm:2]**  | **753.8**  **[0000105770-23-000048_wst-20230630.htm:19]**  | **747.4**  **[0000105770-23-000064_exh991q32023earningsrelease.htm:0]** **[0000105770-23-000068_wst-20230930.htm:28]**  | **732.0**  **[0000105770-24-000009_exh991-q42023earningsrelea.htm:0]** **[0000105770-24-000009_exh991-q42023earningsrelea.htm:1]** **[0000105770-24-000009_westq4fyfeb2023final.htm:2]**  | **695.4**  **[0000105770-24-000031_wst-20240331.htm:17]** **[0000105770-24-000031_wst-20240331.htm:22]**  | **702.1**  **[0000105770-24-000060_exh991-q22024earningsrelea.htm:0]** **[0000105770-24-000066_wst-20240630.htm:17]** **[0000105770-24-000066_wst-20240630.htm:24]**  | **746.9**  **[0000105770-24-000075_exh991q32024earningsrelease.htm:0]** **[0000105770-24-000081_wst-20240930.htm:28]**  |

725214a0d652e0ff659bfa937f3293f0aea19b9a20cbf14c4b2b4ab9c748f327

| Geographical Segment | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Americas (%)         | **44%**  **[0000105770-23-000023_wst-20230331.htm:4]**  | **44%**  **[0000105770-23-000048_wst-20230630.htm:5]**  | **46%**  **[0000105770-23-000068_wst-20230930.htm:5]**  | N/A     | **43%**  **[0000105770-24-000031_wst-20240331.htm:5]**  | N/A     | **48%**  **[0000105770-24-000081_wst-20240930.htm:6]**  | N/A     |
| EMEA (%)             | **47%**  **[0000105770-23-000023_wst-20230331.htm:4]**  | **46%**  **[0000105770-23-000048_wst-20230630.htm:5]**  | **46%**  **[0000105770-23-000068_wst-20230930.htm:5]**  | N/A     | **48%**  **[0000105770-24-000031_wst-20240331.htm:5]**  | N/A     | **44%**  **[0000105770-24-000081_wst-20240930.htm:6]**  | N/A     |
| Asia Pacific (%)     | **9%**  **[0000105770-23-000023_wst-20230331.htm:4]**   | **10%**  **[0000105770-23-000048_wst-20230630.htm:5]**  | **8%**  **[0000105770-23-000068_wst-20230930.htm:5]**   | N/A     | **9%**  **[0000105770-24-000031_wst-20240331.htm:5]**   | N/A     | **8%**  **[0000105770-24-000081_wst-20240930.htm:6]**   | N/A     |

3026cb1e358df684b0bb587c4c4d0682edec9e148a292a853239f83d5008ce8a

WST is a leading global manufacturer specializing in the design and production of advanced, high-quality containment and delivery systems for injectable drugs and healthcare products. The company operates through two main segments: Proprietary Products and Contract-Manufactured Products, catering to biologic, generic, and pharmaceutical drug customers **[0000105770-24-000015_wst-20231231.htm:37]** **[0000105770-24-000015_wst-20231231.htm:2]** **[0000105770-24-000015_wst-20231231.htm:6]**. WST's product portfolio includes proprietary packaging, containment solutions, drug delivery systems, and custom contract-manufacturing and assembly solutions **[0000105770-24-000015_wst-20231231.htm:3]**. The company emphasizes its global reach, with operations in North America, Europe, Asia, and South America, aligning with its multinational customer base **[WST_3378515_0]**.

1. **Proprietary Products** - Offers proprietary packaging, containment solutions, and drug delivery systems, including stoppers, seals, syringe and cartridge components, and self-injection devices, primarily serving biologic, generic, and pharmaceutical drug customers.
2. **Contract-Manufactured Products** - Focuses on the design, manufacture, and automated assembly of complex devices for pharmaceutical, diagnostic, and medical device customers, providing custom contract-manufacturing and assembly solutions such as multi-component molding and clean room molding.

05554dba7da7b2c4351e0b6fb3a5ede713fc2a9e1db1464f3aa5d89c1866b429

Adjustments for Non-Cash Items [USD, M]

Stock-Based Compensation [USD, M]

Changes in Working Capital [USD, M]

Capital Expenditures (CapEx) [USD, M]

Proceeds from / Repayments of Debt [USD, M]

Share Repurchases [USD, M]

Dividend Payments [USD, M]

Net Change in Cash [USD, M]

3bf521c9d3b68f6ee562136808e8c43301d42cfec7a866619aa43d496574e6da

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

b375b9a75bbf7711228319c74c83df7d9277527655568be386b09a1e73ea9dfd

86a1dcc5185801a1049ee1ce7a31bf8d86725b761eb5b0294976e5690d456a06

1. You mentioned seeing signs of stabilization and customers showing interest in increasing near-term orders, yet destocking with some generic customers is expected to continue into 2025; can you elaborate on the factors driving this continued destocking and how it affects your overall growth outlook?

2. Given that some of the strong Q3 performance was attributed to customers accelerating orders ahead of schedule, how confident are you that this demand pull-forward won't create a shortfall in future quarters, and what measures are you taking to sustain growth?

3. With the significant sequential increase in Contract Manufacturing gross margins driven by scaling capacity and new capabilities, what specific strategies are in place to ensure this margin improvement is sustainable, and how do you see this segment contributing to overall profitability?

4. Considering your plans to reduce CapEx to more normalized levels over the next 12 to 24 months while continuing to invest in growth areas, how will this impact your ability to meet increasing demand in high-growth segments like biologics and GLP-1 drugs?

5. Despite a strong third quarter, you've narrowed your organic growth guidance toward the lower end of the range; are there emerging challenges or shifts in the market that influenced this adjustment, and can you provide more detail on the assumptions behind your guidance for Q4?

ae3358a54719e5a76e2f5d92ee26d15e2223773e6763680784095f8a01e81d70

9b77f95ec7e810e44de76794bf6386cec5f65d0b4231eeaa1790fa3fc3ea2a3a

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Net Sales**: $2.875 billion to $2.905 billion, with an organic sales decline of approximately 1.5% to 2% and an FX headwind of approximately $1 million  **[WST_3403593_4]** .
  2. **Adjusted Diluted EPS**: $6.55 to $6.75, including an FX headwind of $0.02 and EPS of $0.26 from tax benefits  **[WST_3403593_4]** .
  3. **Capital Expenditures (CapEx)**: $375 million  **[WST_3403593_4]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Net Sales**: $2.87 billion to $2.9 billion, with an organic sales decline of approximately 1% to 2% and an FX headwind of approximately $5 million  **[WST_3394317_2]** .
  2. **Adjusted Diluted EPS**: $6.35 to $6.65, including an FX headwind of $0.03 and EPS of $0.22 from tax benefits  **[WST_3394317_2]** .
  3. **Capital Expenditures (CapEx)**: $375 million  **[WST_3394317_2]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Net Sales**: $3 billion to $3.025 billion, with organic sales growth of approximately 2% to 3%  **[WST_3380705_4]** .
  2. **Adjusted Diluted EPS**: $7.63 to $7.88, including an FX headwind of $0.04 and EPS of $0.15 from tax benefits  **[WST_3380705_4]** .
  3. **Capital Expenditures (CapEx)**: $350 million  **[WST_3380705_4]** .
  4. **Foreign Exchange Impact**: FX headwind of approximately $8 million  **[WST_3380705_4]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Net Sales**: $3 billion to $3.025 billion, with an FX headwind of $8 million and organic sales growth of approximately 2% to 3%  **[WST_3373504_5]** .
  2. **Adjusted Diluted EPS**: $7.50 to $7.75  **[WST_3373504_5]** .
  3. **Capital Expenditures (CapEx)**: $350 million  **[WST_3373504_5]** .
  4. **Foreign Exchange Impact**: FX headwind on EPS of approximately $0.02  **[WST_3373504_5]** .
  5. **Proprietary Products**: High single-digit decline expected in Q1 2024  **[WST_3373504_2]** .
  6. **Quarterly Pacing**: Largest negative impact in Q1, with better growth in the second half of the year  **[WST_3373504_2]** .
  7. **Organic Sales Growth**: Decline of 6% to 7% in Q1 2024, with growth ramping up through the year  **[WST_3373504_7]** .

44366c4f9b83aabdc3681141d8a70c0edffbe97723ac85d3a22f2404dab20af5

Americas

- United States

Europe, Middle East, Africa

- Germany

- Ireland

- France

- Other European countries

Asia Pacific

Other

Total Revenue

fd41db68398e8acc9c16838818de5dc496bb34d8721ba3df3b7849f51e86946c

Proprietary Products

Contract-Manufactured Products

- High-Value Product Components

- High-Value Product Delivery Devices

- Standard Packaging

Packaging Systems

Delivery Systems

Intersegment Sales Elimination

40c3ac52c1efd19e78d9fa448abca03a8c2a6bee8ea43f999515d342d974b4d9

| Name                  | Position                                                                 | Start Date       | Short Bio                                                                                                                                                                                                 |
|-----------------------|--------------------------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Silji Abraham         | Senior Vice President, Chief Technology Officer                          | December 2020    | Silji Abraham has been serving as the Senior Vice President and Chief Technology Officer since December 2020. Previously, he was the Senior Vice President, Chief Digital and Transformation Officer from February 2018 to December 2020  **[0000105770-24-000015_wst-20231231.htm:31]** **[0000105770-23-000012_wst-20221231.htm:30]** . |
| Bernard J. Birkett    | Senior Vice President and Chief Financial and Operations Officer         | July 2022        | Bernard J. Birkett has been serving as the Senior Vice President and Chief Financial and Operations Officer since July 2022. He joined the company as Senior Vice President and Chief Financial Officer in June 2018  **[0000105770-24-000015_wst-20231231.htm:31]** **[0001558370-23-003783_wst-20230425xdef14a.htm:56]** .                     |
| Annette F. Favorite   | Senior Vice President and Chief Human Resources Officer                  | October 2015     | Annette F. Favorite has been the Senior Vice President and Chief Human Resources Officer since October 2015. She previously spent over 25 years at IBM Corporation in various strategic and global human resources roles  **[0000105770-24-000015_wst-20231231.htm:32]** **[0000105770-23-000012_wst-20221231.htm:31]** .                |
| Eric M. Green         | President, Chief Executive Officer, and Chair of the Board               | April 2015       | Eric M. Green has been serving as the President and Chief Executive Officer since April 2015 and as the Chair of the Board since May 2022. He previously held senior roles at Sigma-Aldrich Corporation  **[0001558370-24-002264_wst-20240423xpre14a.htm:14]** **[0000105770-24-000015_wst-20231231.htm:32]** .                                  |
| Quintin J. Lai        | Vice President, Strategy and Investor Relations                          | January 2016     | Quintin J. Lai has been serving as the Vice President, Strategy and Investor Relations since January 2016. He also handled Corporate Development responsibilities from January 2016 to September 2021  **[0000105770-24-000015_wst-20231231.htm:32]** **[0000105770-23-000012_wst-20221231.htm:31]** .                                    |
| Kimberly Banks MacKay | Senior Vice President, General Counsel, and Corporate Secretary          | December 2020    | Kimberly Banks MacKay has been serving as the Senior Vice President, General Counsel, and Corporate Secretary since December 2020. She previously held a similar role at the Segal Group in New York  **[0000105770-24-000015_wst-20231231.htm:32]** **[0000105770-23-000012_wst-20221231.htm:31]** .                                    |
| Cindy Reiss-Clark     | Chief Commercial Officer                                                 | May 2022         | Cindy Reiss-Clark has been the Chief Commercial Officer since May 2022. She previously served as Senior Vice President, Global Markets and Commercial Solutions from November 2019  **[0000105770-24-000015_wst-20231231.htm:32]** **[0000105770-23-000012_wst-20221231.htm:31]** .                                                      |
| Chad R. Winters       | Vice President, Chief Accounting Officer and Corporate Controller        | May 2020         | Chad R. Winters has been serving as the Vice President, Chief Accounting Officer and Corporate Controller since May 2020. He initially joined the company as Vice President and Corporate Controller in October 2019  **[0000105770-24-000015_wst-20231231.htm:32]** .                        |
| John Sweeney, CFA     | Vice President, Investor Relations                                       | N/A              | John Sweeney, CFA, serves as the Vice President of Investor Relations. He was present at the Stephens Conference in November 2024, representing the company in his role  **[WST_3409795_0]** .                                                                     |
| Michele Polinsky      | Vice President, Global Communications                                    | N/A              | Michele Polinsky is mentioned as the Vice President of Global Communications, but specific details on her start date or a detailed biography are not provided  **[0000105770-24-000084_exh99112-2024directorappoi.htm:0]** **[0000105770-24-000075_exh991q32024earningsrelease.htm:1]** .                                                                            |

e2c3ae544d081bf3ed3d8af09ec34ae9d715e2ef89e29abace4a0cac0487b210

| Program Details          | Program 1          |
|--------------------------|--------------------|
| Approval Date            | February 2023  **[0000105770-24-000081_wst-20240930.htm:6]**   |
| End Date/Duration        | No expiration date  **[0000105770-24-000081_wst-20240930.htm:6]**  |
| Total additional amount  | **$1.0 billion**  **[0000105770-24-000081_wst-20240930.htm:6]**  |
| Remaining authorization amount | **$55.2 million** (as of September 30, 2024)  **[0000105770-24-000081_wst-20240930.htm:6]**  |
| Details                  | Provides flexibility for incremental share repurchases, maintains a share count-neutral strategy, and potentially enhances shareholder value by returning capital to shareholders.  **[0000105770-24-000015_wst-20231231.htm:34]** **[0000105770-24-000081_wst-20240930.htm:6]** **[WST_3228479_1]**  |

ce773cb61c6aff9875c035636a9addd5dd14ff647bfed1b277f00281a81a8385

**Annual guidance for FY 2024:**
- **Net Sales**: $2.875B–$2.905B  **[WST_3403593_4]**  (raised from $2.87B–$2.90B  **[WST_3394317_2]** )  
- **Organic sales decline**: ~1.5%–2%  **[WST_3403593_4]**  (lowered from ~1%–2%  **[WST_3394317_2]** )  
- **FX headwind**: ~$1M  **[WST_3403593_4]**  (lowered from ~$5M  **[WST_3394317_2]** )  
- **Adjusted Diluted EPS**: $6.55–$6.75  **[WST_3403593_4]**  (raised from $6.35–$6.65  **[WST_3394317_2]** )  
- **Tax benefits**: $0.26  **[WST_3403593_4]**  (raised from $0.22  **[WST_3394317_2]** )  
- **Capital Expenditures (CapEx)**: $375M  **[WST_3403593_4]**  (no change from prior guidance  **[WST_3394317_2]** )  

52f66e3986280ec7c6bb36fb0456f10c2844e5bc6038ec6fd929a98067a66582

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP    | 1963  **[0000105770-24-000015_wst-20231231.htm:99]**    | Present  | Current auditor   |

8a4db8c78d6229bb92399dfd59920767c2f49c14bc1c19a220975baa3659ef80

90c8073f15547c6a9b4160fe65581c39121d041342546252b73f0c6cd1073389

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $746.9 million (0% YoY)  **[0000105770-24-000081_wst-20240930.htm:2]** **[0000105770-23-000068_wst-20230930.htm:2]**   
- Operating Income: $161.3 million (−9% YoY)  **[0000105770-24-000081_wst-20240930.htm:2]** **[0000105770-23-000068_wst-20230930.htm:2]**   
- Net Income: **$136 million (−16% YoY)**  **[0000105770-24-000081_wst-20240930.htm:2]** **[0000105770-23-000068_wst-20230930.htm:2]**   
- Diluted EPS: $1.85 (−14% YoY)  **[0000105770-24-000081_wst-20240930.htm:2]** **[0000105770-23-000068_wst-20230930.htm:2]**   
- Share Repurchases: $52.4 million (−90% YoY)  **[0000105770-24-000081_wst-20240930.htm:4]** **[0000105770-23-000068_wst-20230930.htm:4]**   
- Capital Expenditures: $81.3 million (−84% YoY)  **[0000105770-24-000081_wst-20240930.htm:4]** **[0000105770-23-000068_wst-20230930.htm:4]**   

e3c04649a07306e83c7c4e3cdd80c68da4aa689614d08a204729f892c2c0589b

b462abbecf02d1c45f418813b6d56b2e2a2e5fd140209013f911be394b74dbc5

1. **Destocking Trends**  
   **Q:** Where are we in the destocking process?  
   **A:** The destocking is not uniform across our portfolio. In pharma, small molecule demand has **normalized recently**.  **[WST_3403593_18]**  In biologics, we continue to see destocking in **Q3** and expect a bit more in **Q4**, but it's getting closer to the end.  **[WST_3403593_18]**  However, with generics, destocking may continue into the **first part of 2025**.  **[WST_3403593_18]** 

2. **Margin Outlook**  
   **Q:** When will margins return to 2023 levels?  
   **A:** As demand and mix normalize, margins are expected to adjust back to **2023 levels**.  **[WST_3403593_7]** **[WST_3403593_18]**  This relies on demand normalization and a return to our long-range plan growth.  **[WST_3403593_7]**  We anticipate margin improvements once the biologics engine starts growing again.  **[WST_3403593_18]** 

3. **CapEx Plans**  
   **Q:** Are CapEx levels peaking this year or similar in 2025?  
   **A:** We'll provide **2025 CapEx guidance in February**, but over the next **12 to 24 months**, we aim to return to a more normalized level of CapEx.  **[WST_3403593_10]**  We'll continue investing where we see growth and adjust based on demand.  **[WST_3403593_10]** 

4. **GLP-1 Participation**  
   **Q:** Can you update us on your role in GLP-1 products?  
   **A:** We are a **key player** in GLP-1s, providing elastomers, seals, and contract manufacturing services.  **[WST_3403593_17]**  We supply stoppers for vial configurations and plungers for pens and auto-injectors, with **very high volumes** anticipated.  **[WST_3403593_17]**  This area is **starting to pick up** for us.  **[WST_3403593_17]** 

5. **Q3 Timing Benefits**  
   **Q:** Was Q3 performance boosted by timing of orders?  
   **A:** Yes, some customers accelerated programs, asking us to deliver ahead of schedule, contributing to **additional growth in Q3**.  **[WST_3403593_8]** **[WST_3403593_12]**  These orders were planned for the second half of 2024 but were brought forward.  **[WST_3403593_8]**  It's mostly around timing, and we're ready to respond to future customer needs.  **[WST_3403593_12]** 

6. **Contract Manufacturing Margins**  
   **Q:** What is the potential for contract manufacturing margins?  
   **A:** Over the next **12 to 24 months**, we expect a slight uptick as drug handling business comes on board, which has a different margin profile.  **[WST_3403593_16]**  Scaling this will take time, so margins should remain relatively consistent for now.  **[WST_3403593_16]**  Longer term, we anticipate significant margin improvements with the expansion of drug handling services.  **[WST_3403593_16]** 

7. **Nova-brand Products**  
   **Q:** What is Nova-brand and its impact on growth?  
   **A:** Nova-brand includes our highest-quality products: **NovaPure**, a laminated version with FluroTec, and **NOVACHOICE**, a non-laminated version.  **[WST_3403593_14]**  **NovaPure** is widely adopted in biologics, where we've seen destocking during **2024**.  **[WST_3403593_14]**  **NOVACHOICE** is key in **GLP-1** products, supporting customers as this area ramps up.  **[WST_3403593_14]** 

8. **Order Patterns**  
   **Q:** Have you seen changes in customer ordering behavior?  
   **A:** Current order patterns are more in line with the **pre-COVID period**.  **[WST_3403593_19]**  Customers are placing orders with more confidence due to our reduced lead times of **8 to 12 weeks**, down from **40 to 50 weeks** during the pandemic.  **[WST_3403593_19]**  This reflects a more **normalized and stabilized environment**.  **[WST_3403593_19]** 

f80f230eeb74dcb8001bcfdfca90ce2126d95aa59226a9274e785330b633e87e

- **Management is confident in returning to a 7%-9% growth construct, driven by strong positions in biologics, GLP-1s, and moving up the high-value product (HVP) curve.**  **[WST_3394317_8]**
- **The company is investing significantly in growth initiatives, increasing capital expenditures to $375 million to expand capacity for high-value products, supporting future growth.**  **[WST_3394317_7]**
- **Order coverage ratios are strengthening for Q4 and early 2025, indicating improving demand visibility and recovery.**  **[WST_3394317_9]**

9869df969e7eca74d244d32597e0d2de7874750b423a80bc14ddd6ef4ba910ee

- West Pharmaceutical expects significant growth opportunities due to regulatory changes (Annex 1) that require higher-quality, low-particulate components, driving existing drugs to upgrade to West's high-value products.  **[WST_3373504_26]**
- The company's high-value devices, including SmartDose and SelfDose, now represent **10% of sales**, with growing demand and new automated equipment improving efficiency and capacity.  **[WST_3373504_27]**
- West is participating in the expanding GLP-1 therapeutic market (e.g., diabetes and obesity treatments), which provides potential upside to long-term growth projections and is driving large investments today.  **[WST_3373504_10]**

a56387ac94f79119d2d00693e58176d0d2381ce7bf6a29612ab12e8309ac2023

1. **Destocking Trends**  
   **Q:** When will destocking normalize and impact revenues?  
   **A:** Destocking continued into Q2, but we expect it to wane throughout the year, supported by stronger order patterns in the second half. Sequential revenue growth is anticipated over the next four quarters.  **[WST_3380705_6]** **[WST_3380705_14]** **[WST_3380705_18]** 

2. **Margin Expectations**  
   **Q:** How will margins progress through the year?  
   **A:** We expect margin improvement sequentially as we move through the year, with operating margins stepping up each quarter. Gross margins were impacted by mix and plant absorption in Q1 but were ahead of predictions.  **[WST_3380705_12]** **[WST_3380705_16]** **[WST_3380705_8]** 

3. **Capacity Constraints**  
   **Q:** Are there capacity constraints in high-value products and contract manufacturing?  
   **A:** In contract manufacturing, we have significant investments ongoing in Grand Rapids and Dublin, with validation later this year and commercial revenues in 2025. For high-value proprietary devices, capacity constraints are being addressed, and we expect stronger throughput later this year.  **[WST_3380705_10]** **[WST_3380705_15]** **[WST_3380705_17]** 

4. **GLP-1s and Annex 1 Impact**  
   **Q:** Do GLP-1s and Annex 1 change your long-term outlook?  
   **A:** While we are excited about opportunities in GLP-1s and Annex 1, we do not want to adjust our long-term outlook yet. We are well-positioned to support customers in both areas, but timing and adoption may take time.  **[WST_3380705_9]** **[WST_3380705_19]** 

5. **Competitive Positioning**  
   **Q:** How is your competitive position post-pandemic?  
   **A:** We maintained strong customer relationships during the pandemic, successfully supplying without stockouts. Our win rates and interactions remain very strong. Customers value our multiple sites, reducing dependence on a single site.  **[WST_3380705_7]** 

6. **Pricing Contribution**  
   **Q:** What is the expected price contribution to growth?  
   **A:** We are targeting a **3% to 4%** net price contribution this year, in line with our start of the year, absent any high-value product mix shift.  **[WST_3380705_13]** **[WST_3380705_21]** 

7. **R&D Focus**  
   **Q:** Where is increased R&D spending directed?  
   **A:** R&D spending as a percentage of revenue is expected to remain constant. Increases are focused on integrated systems and our partnership with Corning, supporting and developing that market.  **[WST_3380705_20]** 

f1acee858f3a9aa9b36cd8bc41e5ab6c18160862c4c321d8dd86122af2108518

- **The higher-than-expected growth in Q3 was primarily due to timing issues, with customers pulling orders forward, which may lead to softer revenue in future quarters.**  **[WST_3403593_8]**
- **The company does not anticipate significant margin expansion in its Contract Manufacturing segment in the next 12 to 24 months, limiting near-term profitability improvements.**  **[WST_3403593_16]**
- **Despite a strong Q3 performance, the company narrowed its organic growth guidance towards the lower end of the range, indicating potential challenges in achieving growth targets.**  **[WST_3403593_6]**

78ea368ca2849e3c3b41d54635c32e315299962918a9659ccd952b73d48dca66

- **Margin pressures are expected in Q1 2024 due to revenue declines from destocking and underutilized capacity**, with a gradual recovery anticipated over the year.  **[WST_3373504_13]**
- **Pricing power is diminishing**, with net price contributions expected to decrease from **5-6%** previously to approximately **3%** in 2024.  **[WST_3373504_14]**
- **Regulatory shifts (Annex 1) necessitate significant investments over several years**, which could impact profitability in the near term.  **[WST_3373504_26]**

757c74adfd2e5f87cd3222a0547907b26f560469f7d92c1fb14cf096d62d67ed

1. **Growth Outlook and Destocking Impact**  
   **Q:** What's the expected sales growth and destocking impact?  
   **A:** Management expects a **high single-digit decline in proprietary products in Q1**, mainly due to destocking, with **75% coming from six customers**.  **[WST_3373504_7]**  Consolidated sales are projected to decline **6–7% in Q1**, but they anticipate growth ramping through the year, returning to normal levels by Q4.  **[WST_3373504_7]** 

2. **Margin Outlook and Return to Normal Margins**  
   **Q:** How will margins be affected and recover?  
   **A:** Margins will be **pressured in Q1** due to lower revenues, but management expects a **gradual return to normal operating margins** over the year, reaching typical levels by year-end.  **[WST_3373504_13]** 

3. **Pricing Outlook and Sustainability**  
   **Q:** Is recent pricing strength sustainable?  
   **A:** Despite past price contributions of **5–6% last year** and **3–4% the year before**, management anticipates ongoing net price contributions of **over 3%**, above historical levels, with no significant pushback from customers.  **[WST_3373504_14]** 

4. **CapEx Spending and Return Timeline**  
   **Q:** When will CapEx investments translate to revenue?  
   **A:** With **$350 million in CapEx planned this year** (70% growth, 30% maintenance), major projects like the Dublin facility will be validated by the end of **2024**, contributing revenue in **2025 and beyond**.  **[WST_3373504_9]** 

5. **Destocking Impact on Product Portfolio**  
   **Q:** Which products are affected by destocking?  
   **A:** Destocking is more pronounced in **standard and bulk products** but is also impacting parts of the **High-Value Products (HVP) portfolio**, affecting multiple customer segments  **[WST_3373504_8]** ,.  **[WST_3373504_19]** 

6. **Participation in GLP-1 Demand**  
   **Q:** How does GLP-1 demand affect growth?  
   **A:** GLP-1s present an **incremental upside**, and management is confident in their strong participation through proprietary products and contract manufacturing, viewing GLP-1s as potential **breakout drugs**.  **[WST_3373504_10]** 

7. **Contract Manufacturing Growth Outlook**  
   **Q:** What's the outlook for contract manufacturing?  
   **A:** Contract manufacturing is expected to **grow within the company's long-term construct**, with investments tied to specific customer commitments, supporting sustained growth.  **[WST_3373504_11]** 

8. **Order Book Firmness and Visibility**  
   **Q:** How firm is the order book for H2?  
   **A:** The order book for the second half is **stronger than pre-COVID levels**, giving management confidence in accelerating back to normal growth rates, particularly in Q4.  **[WST_3373504_12]** 

9. **Confidence in Recovery and Risks of Further Destocking**  
   **Q:** Could destocking persist longer than expected?  
   **A:** Management believes destocking is primarily a **Q1 phenomenon**, with some lingering effects in Q2 but less pronounced, based on customer conversations and data.  **[WST_3373504_15]** 

10. **Margin Expansion Timing**  
    **Q:** When will margins expand again?  
    **A:** Operating margins are expected to be **flat year-over-year**, with gradual improvement throughout the year, returning to normal levels by year-end.  **[WST_3373504_22]** 

3d56779af681d91260e0c93a8ff4fdebda2d9892e4fd24713da145702d5624ec

- **Strong Q3 Performance and Execution**: West Pharmaceutical Services had a **solid third-quarter performance with revenues and adjusted EPS coming in at the higher end of expectations**, demonstrating a high level of execution and close collaboration with customers.  **[WST_3403593_5]** ,  **[WST_3403593_1]**
- **Market Leadership in Injectables and Biologics**: The company is the **market leader in injectables with an even stronger position in biologics**, maintaining a high participation rate in new drug launches and serving critical therapeutic areas like immunology, oncology, rare diseases, and obesity.  **[WST_3403593_5]** ,  **[WST_3403593_1]**
- **Investments in High-Growth Areas and Capacity Expansion**: West is **investing capital in higher-growth areas** and is **making significant progress in ramping up production** of high-value delivery devices, addressing new opportunities in GLP-1s and wearable self-injection devices, which are expected to drive future growth.  **[WST_3403593_5]** ,  **[WST_3403593_1]**

e531af20e1fc9e95f6964fbd71a51c1f168a486e0715e0b677ad8b890a59faed

- **West Pharmaceutical Services lowered its full-year 2024 net sales guidance to $2.87 billion to $2.9 billion from a prior range of $3 billion to $3.25 billion, and expects organic sales to decline 1% to 2%, indicating weaker financial performance and reduced growth expectations.**  **[WST_3394317_1]**
- **The company's adjusted operating profit margin decreased by 650 basis points to 18% in Q2 2024 compared to the same period last year, driven by lower production volumes and an unfavorable product mix, which could signal ongoing profitability challenges.**  **[WST_3394317_1]**
- **Management expressed uncertainty about the timing of returning to the long-term growth target of 7% to 9%, unable to specify when growth will resume, raising concerns about the company's future performance.**  **[WST_3394317_16]** **[WST_3394317_18]**

a3060c03c989568697d6bf57c79a3d4f16d5f6a9d47df85946955547c1fa3d5c

- **Continued customer destocking is impacting sales, with destocking expected to persist into Q2, potentially delaying revenue recovery.**  **[WST_3380705_14]** **[WST_3380705_18]**
- **Declining margins due to lower sales volume and unfavorable product mix, with adjusted operating profit margin decreasing by 530 basis points to 17.7% compared to last year.**  **[WST_3380705_3]** **[WST_3380705_8]**
- **Capacity constraints in high-value product devices and contract manufacturing are limiting growth, with significant capacity expansions not contributing to revenue until 2025.**  **[WST_3380705_10]**

93933b7b1d5dfea2c05cfc204b42dd68a8ffda03d0d8899046766908610d1e3a

- **Resolution of constraints in high-value product devices will lead to improved productivity and capacity, supporting future growth.**  **[WST_3380705_15]**
- **The company anticipates strong sequential revenue growth due to improving customer order patterns and a return to typical demand levels in the second half of 2024.**  **[WST_3380705_14]** **[WST_3380705_18]**
- **West maintains strong customer relationships with high win rates, indicating solid competitive positioning and ongoing demand for their products.**  **[WST_3380705_7]** **[WST_3380705_16]**

5b2bc851f022ba2ac3a9e26ecc83f9eea8240e3b6003bdb1fcb2cab9d50c6e30

1. **Destocking Impact and Guidance Revision**  
   **Q:** Why was guidance lowered due to extended destocking?  
   **A:** The company observed that intra-quarter orders were not coming in at the anticipated rate because customers extended their destocking activities, particularly in the Biologics and Generics segments. This led to a decision to lower guidance, reflecting a more gradual recovery and an expectation to return to growth in the fourth quarter.  **[WST_3394317_5]** ,  **[WST_3394317_7]** ,  **[WST_3394317_10]** 

2. **Return to Growth Projections**  
   **Q:** When do you expect to return to growth?  
   **A:** We anticipate sequential improvements over the next few quarters and expect to return to growth in the fourth quarter, driven by the Biologics segment. We are confident in our long-term growth construct of **7% to 9%**, with demand normalizing and strong market positioning in areas like Biologics and GLP-1s.  **[WST_3394317_5]** ,  **[WST_3394317_10]** ,  **[WST_3394317_13]** 

3. **Margins and Cost Management**  
   **Q:** How are margins being affected and managed amid destocking?  
   **A:** Margins are impacted by lower volumes and an unfavorable mix due to destocking in high-value products within Biologics and Generics. While we are managing our cost base tightly and exercising appropriate cost management, we are not making significant cost cuts to ensure we can support growth when demand returns. We expect margins to recover quickly as volumes normalize and mix improves.  **[WST_3394317_9]** ,  **[WST_3394317_12]** 

4. **CapEx Plans and Impact**  
   **Q:** How are you managing CapEx amid weaker demand?  
   **A:** Our current higher CapEx levels, at about **12% to 13% of revenue**, are focused on growth areas such as Biologics, GLP-1s, and capacity expansions in high-value products. We've pulled some CapEx into 2024 to meet customer requirements sooner. Over the next year or two, we expect CapEx to normalize to **6% to 8% of revenue**, supporting our long-term growth targets.  **[WST_3394317_6]** ,  **[WST_3394317_19]** 

5. **Customer Visibility and Lead Times**  
   **Q:** Do you have better visibility into customer orders now?  
   **A:** Yes, recent conversations with customers have provided clearer insights into their inventory levels and ordering patterns. Customers are realigning their reordering based on our improved lead times, which are now **8 to 12 weeks**, compared to **30 to 50 weeks** during the pandemic. This increased visibility gives us confidence in our projections.  **[WST_3394317_8]** ,  **[WST_3394317_11]** ,  **[WST_3394317_16]** 

6. **Impact on Biologics and Generics**  
   **Q:** Is destocking impacting Biologics and Generics more?  
   **A:** Yes, destocking is more pronounced in the Biologics and Generics segments, where customers had built significant safety stock during the pandemic. This has impacted our mix and margins due to lower volumes in these high-value areas, but we expect improvement as demand normalizes and customers adjust their inventory levels.  **[WST_3394317_7]** ,  **[WST_3394317_12]** 

7. **Repositioning COVID Capacity**  
   **Q:** How are you repurposing COVID-related capacity?  
   **A:** We have successfully repurposed our COVID-related capacity to produce other high-value products, such as NovaPure stoppers and plungers. This transition is complete and positions us well to meet future demand in non-COVID applications.  **[WST_3394317_13]** 

8. **Importance of New Capacity**  
   **Q:** Will new capacity in Dublin and other sites drive growth?  
   **A:** While new capacities in Dublin and sites like Grand Rapids will come online in the second half of the year, they are not major drivers for the fourth-quarter revenue ramp. However, they will support growth in the longer term by increasing our ability to meet customer demand in areas like contract manufacturing.  **[WST_3394317_4]** ,  **[WST_3394317_15]** 

9. **Confidence in Long-term Growth**  
   **Q:** Can you return to 7% to 9% growth in 2025?  
   **A:** We are confident we will return to our long-term growth construct of **7% to 9%**, driven by strong participation in Biologics, GLP-1s, and higher-value products. With demand expected to normalize and our capacity in place, we believe we can achieve these growth rates over the next few years.  **[WST_3394317_5]** ,  **[WST_3394317_6]** ,  **[WST_3394317_18]** 

10. **Impact of Smaller Customers**  
    **Q:** Are smaller customers contributing to revenue variability?  
    **A:** While smaller customers are important, the more significant revenue variability has come from larger customers adjusting their forecasts and orders. The impact of smaller customers on overall revenue fluctuations is less pronounced.  **[WST_3394317_16]** ,  **[WST_3394317_18]** 

691a1ac004654b9d104a6abf73435f6d997a673ef976f6c1c1d285d4994287dd

West Pharmaceutical Services Inc (WST)

Financials