West Announces Fourth-Quarter and Full-Year 2020 Results

EXTON, PA — West Pharmaceutical Services, Inc. (NYSE: WST) has announced its financial results for the fourth-quarter, full-year 2020 and introduced full-year 2021 financial guidance.

Fourth-Quarter and Full-Year 2020 Summary (comparisons to prior-year period)

  • Fourth-quarter 2020 net sales of $580.2 million grew 23.3%; organic sales growth was 19.8%. Full-year 2020 net sales of $2.147 billion grew 16.7%; organic sales growth was 16.3%.
  • Fourth-quarter 2020 reported-diluted EPS of $1.29 increased 53.6%. Full-year 2020 reported-diluted EPS of $4.57 increased 42.4%.
  • Fourth-quarter 2020 adjusted-diluted EPS of $1.34 increased 63.4%. Full-year 2020 adjusted-diluted EPS of $4.76 increased 46.9%.
  • Company is introducing full-year 2021 financial guidance of net sales in a range of $2.500 billion to $2.525 billion and reported-diluted EPS in a range of $6.00 to $6.15.

“Adjusted-diluted EPS” and “organic sales growth” are Non-U.S. GAAP measurements.  See discussion under the heading “Non-U.S. GAAP Financial Measures” in this release.

“We had a successful 2020 with tremendous execution, dedication and resiliency of our team and, most importantly, the trust of our customers across the globe.  I am proud that we finished the year with record full-year net sales, organic sales growth and operating profit margin.  Fourth quarter results were robust, led by strong growth in our Biologics and Generics market units.  In addition, we experienced an acceleration in COVID-19-associated sales of high-value product (HVP) components used for vaccines and therapeutics,” said Eric M. Green, President and Chief Executive Officer.

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Mr. Green concluded, “As we look ahead, we believe there is strong momentum in our base business and uptake of our HVP components and devices.  We will continue to operate with excellence and a sense of urgency to maintain the supply of life-saving solutions that our customers, and ultimately patients, rely upon during these challenging times.”

Proprietary Products Segment
In the fourth-quarter 2020, net sales grew by 28.7% to $454.1 million. Organic sales growth was 25.1%, with currency translation increasing sales growth by 360 basis points. HVP components and devices represented over 65% of segment sales and generated double-digit organic sales growth.

The Company’s Biologics market unit had strong double-digit organic sales growth, led by Flurotec®, Westar®, Daikyo® and NovaPure® components. West’s Generics market unit posted double-digit organic sales growth, led by Flurotec and Westar components. The Company’s Pharma market unit had low single-digit organic sales growth, led by Westar and Flurotec components and Crystal Zenith® containers.

In the full-year 2020, net sales grew 17.9% to $1.649 billion. Organic sales growth was 17.6%, with currency translation increasing sales growth by 20 basis points. HVP components and devices represented 66% of segment sales and generated double-digit organic sales growth.

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Contract-Manufactured Products Segment
In the fourth-quarter 2020, net sales grew by 7.0% to $126.1 million. Organic sales growth was 4.1%, with currency translation increasing sales growth by 290 basis points. Segment performance was led by strong sales of healthcare-related injection and diagnostic devices.

In the full-year 2020, net sales grew by 12.9% to $498.6 million. Organic sales growth was 12.1%, with currency translation increasing sales growth by 80 basis points.

Full-Year 2020 Financial Highlights
Operating cash flow was $472.5 million, an increase of 28.7%. Capital expenditures were $174.4 million. Free cash flow (operating cash flow minus capital expenditures) was $298.1 million, an increase of 23.8%.

Full-Year 2021 Financial Guidance 
Full-year 2021 net sales are expected to be in a range of $2.500 billion to $2.525 billion.

    • Organic sales growth is expected to be in a range of 13% to 14%.
    • Net sales guidance includes an estimated full-year 2021 benefit of $75 million based on current foreign exchange rates.
  • Full-year 2021 reported-diluted EPS is expected to be in a range of $6.00 to $6.15.
    • Full-year reported-diluted EPS guidance range includes an estimated benefit of approximately $0.23 based on current foreign currency exchange rates.
    • This reported-diluted EPS guidance range assumes a full-year 2021 tax rate of 23%, which does not include potential tax benefits from stock-based compensation.  As in prior years, the Company is not including potential 2021 tax benefits from stock-based compensation, as they are out of the Company’s control.  Any tax benefits associated with stock-based compensation that they receive in 2021 would provide a positive adjustment to their full-year EPS guidance.
    • Full-year 2021 capital spending is expected to be in a range of $230 million to $240 million.  This includes incremental capital spending to support capacity expansions at existing HVP facilities to produce components to be used with treatments and vaccines related to COVID-19.
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