West Announces Third-Quarter 2020 Results

West Pharmaceutical Services, Inc. (NYSE: WST)

EXTON, PA — West Pharmaceutical Services, Inc. (NYSE: WST) recently announced its financial results for the third-quarter 2020 and updated full-year 2020 financial guidance.

Third-Quarter 2020 Summary (comparisons to prior-year period)

  • Net sales of $548.0 million grew 20.1%; organic sales growth was 18.2%.
  • Reported-diluted EPS of $1.09 increased 45%.
  • Adjusted-diluted EPS of $1.15 increased 46%.
  • Company is raising full-year 2020 net sales guidance to a new range of $2.10 billion and $2.11 billion.
  • Company is raising full-year 2020 adjusted-diluted EPS guidance to a new range of $4.50 and $4.55.

“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.

“Third-quarter results were robust across the entire business, led by High-Value Products (HVP) and Biologics.  Additionally, we benefited from incremental sales related to the COVID-19 pandemic including components used with treatments and supporting therapies as well as potential vaccines currently in clinical trials,” said Eric M. Green, President and Chief Executive Officer.

“I am proud of our team members for their relentless passion and sense of urgency to help our customers and the patients we jointly serve. Continued excellence in executing our market-led strategy and our global operations position us well for the remainder of the year and into 2021.”

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Proprietary Products Segment
Net sales grew by 22.1% to $421.5 million. Organic sales growth was 20.3%, with currency translation increasing sales growth by 180 basis points.  HVP components 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®, Daikyo® and NovaPure® film-coated components, as well as Westar® and Envision® components.  West’s Generics market unit posted high single-digit organic sales growth, and theirPharma market unit grew organic sales by mid-single digits.  Both Generics and Pharma market units were led by sales of film-coated and Westar components.

Contract-Manufactured Products Segment
Net sales grew by 14.0% to $126.6 million.  Organic sales growth was 11.7% with currency translation increasing sales growth by 230 basis points.  Segment performance was led by strong sales of healthcare-related injection and diagnostic devices.

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Financial Highlights (first nine months of 2020)
Operating cash flow was $323.8 million, an increase of 24.2%.  Capital expenditures were $116.7 million.  Free cash flow (operating cash flow minus capital expenditures) was $207.1 million, an increase of 20.4%.

Full-Year 2020 Financial Guidance 
Full-year 2020 net sales guidance is expected to be in a range of $2.10 billion and $2.11 billion, compared to a prior range of $2.035 billion and $2.055 billion.

    • Organic sales growth is expected to be approximately 14% to 15%, compared to a prior guidance of 12%.
    • Net sales guidance includes an estimated full-year headwind of $4 million for the full-year 2020 based on current foreign exchange rates, compared to prior guidance of a headwind of $26 million.
  • Full-year 2020 adjusted-diluted EPS is expected to be in a range of $4.50 and $4.55, compared to a prior range of $4.15 and $4.25.
    • Full-year adjusted-diluted EPS guidance includes an estimated headwind of approximately $0.02 based on current foreign currency exchange rates, compared to prior guidance of a headwind of $0.07.
    • The revised guidance includes an $0.18 EPS impact from tax benefits from stock-based compensation in the first nine months of 2020.
    • For the remainder of the year, the Company’s EPS guidance range assumes a tax rate of 24% and does not include potential tax benefits from stock-based compensation. Any tax benefits associated with stock-based compensation beyond those recorded in the first nine months of 2020 would provide a positive adjustment to their full-year EPS guidance.
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