West Pharmaceutical Services (WST) 15 Feb 242023 Q4 Earnings call transcript

Thank you for standing by, and welcome to West Pharmaceutical Services Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Vice President, Strategy and Investor Relations, Quintin Lai. Please go ahead.

Thank you, Latif. Good morning, and welcome to West's Fourth Quarter and Full Year 2023 Conference Call. will results the and company's our Investors at full morning, financial been release website XXXX. business our results, year financial westpharma.com. This in financial outlook present posted section we on and issued provide this update an the morning, has located provide -- We an our update on our review on the the for section available of and slide website. On a today's copy on presentation the presentation the a is Investors There's X call, is our statement. Slide our that of harbor accompanies safe management the by the forward-looking made meaning on presentation within Statements this call in statements accompanying and of U.S. contain federal securities law. our and statements based on current assumptions forecasts. beliefs These estimates expectations, are and results The are influenced company's the the future company. factors many beyond by control of materially those from well forward-looking differ in any as results expressed made implied could here. as statement past results or Actual XX-Q well Please any including the to release which as it company other disclosures XX-K, X-K refer press subject regarding to by the risks and today's is reports. as made our

During Green. conformity will make Eric provided adjusted non-GAAP measures most results growth, and organic non-GAAP to today's and to of call, including this adjusted release. I in CEO, are the comparable our adjusted profit, turn margin profit earnings the the limitations operating prepared now financial management EPS. financial to sales Reconciliations operating GAAP to measures, diluted in financial reference morning's call over

to Slide us our values members X. slide. our care we one good strong succeed who by each and I health Quintin, many connected proud also help highlights is year, morning, day. everyone. continue start want Thanks Last team recap shared shown responsibility you, that of on and us West's Thank thank of on which are joining this XXXth to for celebrated innovation, groundbreaking anniversary today. We'll

X first, Now main Slide will the drivers cover XXXX. I'll turning we of examine topics: X, where to

financial XXXX. that ahead construct discuss return West will we challenges of long-term growth will to the and in margin we'll the expansion about we drivers And XXXX. in of third, sales Second, talk

strong base offset of begin results. Let's million. our XXXX, than financial COVID-XX-related with in decline approximately growth pleased with sales $XXX of which the more I am a

had demand the strong high-value in this our for growth sales both product Driving customer and is expanding services. base and offerings, we base contract overall sales, for growth the our devices pandemic-related Excluding organic manufacturing mid-teens. components

great global During network. our we the expansion year, across made our with strides plans capital

For Kinston, capacity, capacity significant customer's brought we new online example, our a expanded XXXX, site injection in a and our which manufacturing footprint in we're HVP capacity. to we Grand our for the new XXXX. process in in device with contract NovaPure processing At of in expansion growth Rapids contributed late

to address thanks has to expansion, normalized This we We have have and with successfully been start for lead times. of work the times both the the and our of our exited the lead hard been also teams through pandemic, certain a of long year able since challenge optimization products. backlog capacity

to X. Moving Slide

This the growth percentage changing points X in X% to As for preliminary sales XXXX, outlook about X to from of we our our to greater With as X% difference outlook. full are our October. several preliminary factors. model year or organic market our attention challenges to we X turn lower indicated visibility main the facing comes landscape, expect from than we growth

decline, to organic sales decrease X% flat expected COVID-related sales. had this Instead, point which about resulted we in in year. First, demand continues

headwind. HVP been customer percentage device online, manufacturing of point of out, has to pushed timing Second, causing coming a satisfy capacity demand

X destocking points to a customer's is a higher a X point HVP caused of upgrade causing percentage headwind. more finally; tier percentage to approximately a fourth, has timing of of And widespread Third, headwind.

our segment have Towards management industry, trend science companies other injectable now and value the inventory been tools the into January, of life reached drug the the of end experiencing year chain. and has

thought which the being surprised were to forecast. speed forecast changes change with we handed that breadth, the the at In see to their some were latitude same at we sentiment of and express we cases, While customers us customers amount XXXX, in several impact might of these them.

overall for to will that as to HVP look device XXXX, timing capacity we quarterly and HVP as customer-led well As expect negative largest pacing impact the we new have due upgrade. QX destocking of

products in single proprietary down decline. QX be expect that high by We will

and products And of the effect, expect growth. financial some the long-term expect we second QX degree to with in in positive to line year have but a QX We consolidated our growth with lesser construct. with proprietary half organic better

guidance set our our expectations. see support cadence, several we quarterly and XXXX we As areas that

our order prior than has year the ratio a higher half second for pre-pandemic coverage book February First, of levels. the

Second, expected we year be drugs are to produce the that some customers as to able more have progresses.

that HVP our we're achieve not to process half implement year not organic in will that we the expect we we sales device expansion Third, in disappointed modifications am the -- usual capacity I and designed second as improve year to improve throughput. of margin full manufacturing XXXX. were

the As related some demand upgrades. COVID impact I've of outside to of of new time outlined, customer capacity is reduction, further and timing

this an change situation, drug industry-wide As not for is demand in volumes. a patient or destocking, market for share

of growth year our another Looking have construct. investments XXXX, we to active XXXX. bullish beyond teams continue And be capital in our on will

Slide X. to Moving

expansion well projects be as expanding Eschweiler HVP major projects Shore other in global with as and Jersey will industry-leading network. We across our capacity the

and making expected the of and we to device in XXXX have that a this difference multiple self-dose expansion systems, XXXX Another And sales. growth driver our SmartDose, delivery for increase includes HVP solutions device represent HVP containment online admin year, part integral future from with combination second are Less projects come half online patients. that organic devices a Zenith and drug customers' had with some products devices, to are the our platforms had in capacity admin fully overall an strong capital our XXXX. now of of growth in injection systems. very comes which of Crystal sales platforms, in XX% will bright double-digit

the platform. contract had at manufacturing at growth customer's to capacity from Grand contribution mentioned site our Rapids outset, As injection support our new device

facility, started to contracted have at expansion which future significant our device dedicated Dublin Looking excited injection manufacturing. a already ahead, to demand for is we're

We some validated to a places to our want drivers expect HVP XXXX, to to dynamics growth. XXXX for time take in in I demand us position also which great talk related be completed and future for about of the growth components.

expect years in of you the As for We so volume HVP have and been do runway know, over to to we continue capacity a years. building see robust XXXX. growth several few next it

treatment reach expect drugs existing As and of volume increasing populations, and aging conditions. guidelines market a evolving we with patient growth expanding foundation, geographical

to experience have see growth, to continue In volume certain overall we addition drugs and breakthrough growth.

and are demand surge obesity. a we experiencing drugs example, in with components associated For treating similar diabetes for

as our our most industry with to primary and future the Our incremental is potential packaging leader support to And prepared is growth shift. for the be jumps in for responsibility HVP in the area lastly, mix demand. capacity

newly enter us For historically that The higher and from approved compared from mix legacy has shift, HVP we to standard upgrade either smaller see or shift drugs. drugs drugs a component lower a combination the to legacy of contributor been for category. HVP a market of new contribution a volume mix from that from to

year. we upgrade several considering quality take form of shift our particulate in will new regulations from anticipate a are modern changes at for our financial components we primary time, annual mix equipped We This assert construct organic the but could shift at continue volume, over of to with challenges HVP processes. of formulation points accelerate. combination growth from few of fuel growth billions least to operating that benefit next drivers our to can enforced. years, mix containment estimate XXX confidently will we our this and standard HVP price their more long-range recognize shift, therefore, primary sales X% X% are that new and However, higher will standardized industry as we be look and When the By landscape the introducing expansion mix well margin regulation basis and standard that and lower adoption navigate to changing, looking we per And customers solutions. regulators components. to are

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

you, Thank morning. Eric, good and

and an impacting sales review guidance. balance in detail. numbers profit. well through we look EPS as operating and and you XXXX And low We'll Let's quarter where margin in single-digit some the and XXXX diluted sheet take sales revenues profits, QX drivers our finally, the in at saw will organic growth as increase I more takeaways. first review we the will

First of QX.

compared reconciliation XX to financial Our revenues to the representing estimated non-U.S. X.X%. growth the recorded and organic $X on measures to net $XXX reduction described million been quarter XX. results in X approximately million are Slides in GAAP in year. approximately are We net COVID-related have the sales and Slide are prior of $XX quarter, of summarized million the sales of

the declined Looking in Products quarter. organic at by net Slide Proprietary XX. sales X.X%

destocking HVP we by inventory the our by made High-value low in led we single-digit COVID and demand of certain of to quarter. which a the decline, XX% growth, components proprietary the of up anticipated, product products, customers fourth As addition approximately in sales quarter, during generated to continue experience devices. customer for

in respectively, a by of the Daikyo generics components, the market growth to and units The sales sales in at demand and Looking market unit partially to due by vaccine. units, related NovaPure low performance and for experienced related declines, offset COVID-XX market reduction the a COVID. single-digit low single-digit mid-single-digit had to reduction led biologics pharma

QX showed period single-digit the net sales point gross was from margin in segment or sales $XXX.X our an We device in gross $XX.X was million increase led high increase higher million recorded year. profit than and Manufacturing growth, year. Contract of XXX which products. diagnostic Our And by of same last medical a XX% X.X% basis last of profit,

million adjusted quarter to period operating $XXX.X million same in compared increased the this to $XXX.X year. last profit Our

decrease of operating same year. XX profit margin point basis XX.X% period adjusted the from a was last Our

diluted X.X% adjusted rose QX. for Finally, EPS

in increased tax $X.XX compensation QX, benefit stock-based by X.X%. of approximately Excluding EPS

contributed million. tailwind our profit Slide by review a to million, of of contributions growth quarter. customers. was price revenue of let's Sales due or percentage did demand On X.X performance. of growth COVID-XX-related the the primarily Offsetting certain a $XX in points million foreign XX, of the increases and net both our a trends the show sales negative in impact to currency the $XX.X in in mix sector destocking approximately reduction million drivers $XX.X and price we as Now $XX quarter in

let's done margin $XXX.X attributed quarter increases and million for XX, working in over performance Proprietary products sheet balance sales fourth fourth capital we increases, gross than management. greater points basis our cash Looking in achieved key compared proprietary some the how profit for of XXXX. in last flow the year, Slide we driver Products on than the mix to the from terms On of of increase. year, and XX.X% price quarter points margin flow The was COVID period basis at revenues. is million favorable margin fourth pressures benefited at an XX.X% a cash period inflationary gross can flow to in In million The cash XXXX, of profit same fourth margin generating Operating profit in in a by quarter a of more increase increase Slide $XXX XXX the favorable sales listed Manufacturing margin was key to look XXXX. increase primarily related in be on the expenditures, higher at margin margin spent Operating gross cash. capital XX. $XX.X have the review offset Contract of plants the X.X% XXXX. XXX sold. And reduction XX.X% metrics. we've from increase mix the price our quarter and of achieved products

our product billion We increase $X.XX high-value capital CapEx portion current our our increase debt leverage capacity million continue Working primarily of decreased manufacturing our contract balance. of from reduction to to in and an capacity. XXXX, long-term approximately manufacturing by and/or due $XXX.X in to cash

XXst, December cash our to than December $XX.X $XXX.X balance. increased repurchases, lower by capital The million, at was working primarily XXXX balance is in CapEx decrease million cash share management. due offset Our our and

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

We organic sales growth be expect approximately to to X% X%.

has diluted EPS $X.XX tax back EPS the currency $X.XX an guidance. review to We call Eric. in our expect the guidance exchange $XXX I range million attention your are a foreign on CapEx Estimated $X.XX. headwind is you and for want our turn approximately FX Also, based current over of year. There some year XXXX to to adjusted compensation. I of benefits be key elements our guidance as stock-based would bring rates our excludes impact to guidance from like now to on future to full

is our XX, deliver our headwinds on book. is Thank committed sector, summarize the robust the you, Bernard. To by of excited we as about meet breadth confident Despite Thank evidenced these health unique we're proven obstacles the high-quality the order questions. continue to to value, committed challenges make continues anticipated globe. Latif, to you. product and ready for to This our I'm strategy to a overcome a offerings. difference expectations. West the team growth take growth across to the in and future patient Slide

first comes Instructions] of [Operator David Jefferies. Our line question the Windley from of

an one level higher a easier with then start to one. and going I'm

or cadence So comments around Eric, us the appreciate of in the recovery that I gave you reacceleration 'XX.

you -- where because you organic through think negative to growth, correctly, of double -- proprietary the fourth if like Could quarter. talked to sounds like will you all where products. fourth overall you in how digits It understood Just sales to talk XQ in? in one normal that I said you so in would to be the gets it And then growth quarter? ramp call does what you

to want understand that precisely. Just more

correction. -- hopeful that our Yes, destocking. The hopefully the I'm of clear. just Dave, And high is performance say single-digit make would view majority proprietary be in QX has decline, to clear. anticipated [Indiscernible] products from to I come in change I And want just one it

XX% and While from I other mentioned coming majority X the it's customers. is destockings factors, destocking, specifically X of

to that want just little kind around want I you of a do So cover? give to you color aspect. Bernard,

would year between back we expect X% X% growth as we growth X% see construct to in would as QX. X% then to in we a And and the see the to QX. consolidated negative basis, On or we Yes. getting decline said, move ramping through to

Okay. in about your Eric, more little change emphatic That's patient market helpful. comments, you demand. share, in a you were a And said change in then conceptually, not not a

the said forecasts. not magnitude are customers would and their forecast. breadth, later patient confidence that though, demand speed changing in the your changes with interactions it's also, You you I what I guess those their from in if change curious of that the about clients in be own draw a

and is portfolio? destocking So in destocking, value, end the the product And to low kind that. of bulk I lower then still or or dealing understand either this want of standard products, are destocking in high-value with more now up down you

Yes, David.

a a our they -- look regards an conversations So One what they're to to of is, first as more of all, in combination when with factors. X see at customers, we it's -- capital working leverage have little management. they their levels, inventory opportunity

both demand. bring lead now to and well deployment optimization that able to keeping with before to probably addition you those and Xx. to we successfully been times do pre-pandemic the and all levels. of the In up significantly XXXX, factor of higher, that, in lead to due in add times, were what beginning the that Xx X is And able were to capital online our we've -- on We

confidence aggressive a be our And you be those able look management. From that add on it inventory together, them gave more to at X to if so you're portfolio, factors right. therefore, destocking

more that on areas the standard bulk seeing in some the portfolio. of parts we're was in of in was areas, our but also HVP One cases it pronounced

of and So area would broader -- say, I primary it's been has a the the area. set, the I but would say bulk it a cross, is standard

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

CapEx, earlier? a 'XX? it CapEx last this Eric, translate Is year, you're alluding when then on into second it half higher example, and the this revenue? $XXX like, it Is million for does what to think when this, does I of year, little last was year's

Yes. Paul, thanks.

of transition. context. about would million. XX% just give capacity, the of we're is approximately growth year, is When XX% approximately million look is $XXX $XXX to maintenance seeing in same at capital. I still forecasting the kind putting And This did a and you we're capital what type So we of we're last on say that algorithm HVP year, about that we -- XX%

which year. got in we're for we broader HVP now completed NovaPure last is portfolio. finishing So the And important processing,

line -- will really that in And in be beyond. XXXX line in 'XX in but some and benefit so and really 'XX, is

area I growth contract just capital, we kind clear already and of other it's on, X/X be capital that highlighted utilized. Grand manufacturing business. called is our should Rapids is our going that The roughly we've into about of up running and expanded fully

major demand feet the square We significant have that committed. Dublin project of be a facility, underway a will that in XXXX. This has at already is XXX,XXX validated end

So to we're of that end pretty producing and product for confident XXXX. year up the of and get all the running

of in long good going time. probably So X are term. But near Those more it that period be on. return projects the yes, term a short it's a bigger will are than

last long-term to of up your of so, couple out X% that class follow-up to guidance be, I the period of guess growth GLP-Xs same of to a demand guided or my with this emerged last square historical question yet and in X% therapeutic. there? with as Does significant X% X%, rate a would you've years GLP-X the have of

is not We customers talked as well that that could with Paul, feel about is very very upside do just we've feel in proprietary that evolves. area that feel be participating confident that in do always an our an incremental are are quite I we products. that our Well, market confident. we space, that that

different As whether a you think uses, formats, or with pen syringes. it's cartridges prefilled so an multiple about auto-injector the and

participating large proprietary kind on making some we're where participate do today. manufacturing these we're driving we the side, also of in side, that is contract So investments of the but which --

of kind that period. more COVID effect a that that time the So because would breakout similar to we construct our had see is of during a upside consider we we long-term drug,

of Jacob Stephens. comes Our the from next line question Johnson of

contract future last about following we a in you're on now. Maybe, segment that of right That's that manufacturing. the outlook. up don't capital most deploying into the first growth But Eric, into clearly, visibility business, have comment maybe terms just

So of profile next growing should above of there? how we and about think making about you're kind think investments their should term years, or for business on the couple its historical that range these we capacity

would like Bernard, to please? take one, that Yes. you

Yes.

our be a that investments to contract making and very that And to said, are area have the the type and level tied make specific of So with construct. and investments, and commitment within get customers this Eric specific does business expect business. as would growth that we're ties long-term construct. we're to in of that support visibility our we grown we before we manufacturing as The going in of

Now again, investments. will. and we more, these point, there's it at if to can we always And feel more, important opportunity say what to we we do make do this is

is accelerated order it. on around that kind of Can just dynamics there's concluding the that. and back year. the as talk investors know visibility before order your you kind And half the we and Got your some destocking have unique And think firm bottomed a get this portfolio I ] some year? then how the is last subsiding destocking Spartissue of half [ maybe visibility book and back it a kind maybe into took this. of kind of of bit and kind to but the year book, of us from about of this really of of destocking bottom different into the the numbers before found maybe while just the bioprocessing peers, than I we

Yes.

we to order ahead the and we actually pre-COVID. The today when just we're stronger, pre-COVID we where the where at book, and book where be that rates. are order we of on bit we were back of on compared So looks half versus would a and the trends order compare so book the for year look thought Jacob,

giving in back but the of that our half rates. back I that's to us confidence So to a say construct [ the -- and trending seeing won't ] back level rebound, normal growth acceleration a or

construct, being year. we this through problem. long-term We it trending said see analysis, based that a QX. as half it as in that the that we into in we would so particularly don't expect And back And on get

Derik question comes De of next Bruin Our America. of Bank of the from line

we how you're I and being XXXX, of analyst that Kingston we last we So do the some doesn't that suffering doesn't this linger not a from margin at fully headwinds about in proprietary this back the to It a the the Are this bit have you utilized. mean, from impact think some sounds little talk half cadence taking margin like and rate assuming obviously, normalized exiting question should can exiting from products. and some about just to headwind visibility think How and about more year? year. back margin linger the you're

revenue to And what we QX, we that's high we see we're trending Derek, be a of margin be correlation see. normal to perspective, is through think, there. back obviously, Yes. to But seeing from based see a of will margin on pressured point I rates going from more progress we again, expect operating would view a what as it year. do shift, it quarter-over-quarter. the a gradual

on the you couple mean fine. or I'll can I the customers? -- but that's pricing? And just mean, you've of more it. -- I pushback talk then that. better-than-expected we getting do years? sort sustainable, for pricing of from last are enjoyed that about Is any help, just Got

going -- we guided between are X% were the year, to mean we we year I know last X% I Derik, before. as to

and we're between X%. think X% I

you the Before or know, we're levels. history back returning that, history We're X%. of probably X% this not as the company, to

a do more shift we're classify that price. pricing any that So near not -- be net mix contribution. mark from the to X-plus probably just we And price clear, as occurs,

price So price pure net contribution. is this

that just confidence the that the surprised as going more I forward? XQ the commentary moved vendors going what in through mean, of little gets not is I breadth there can like it. I and a pickup the just last are limited And on like of take is mean since your seems customers. X and you're -- that bit XX% say to the I you there given chance level you're that time, bioprocessing this things mean, sort Got it this again you seeing get stuff, the is of appreciate there. of out tied a to are CDMOs I and were just mean, going

can just do of are surprised you I sort with conversations of get people, your you confidence? again? your So level these what mean like

Derik. market. not -- Yes, the I this pleased much impact we we're mean us, pride it's absolutely large with it's a of on Absolutely. continued QX not part pretty some focus us. customers, had data on based at to We have the as And pronounced access a for ourselves our will and has looking there however, we've with in been conversations the but the in be some that QX. still destocking,

So it's a really that seeing really -- most phenomenon. it we're of is QX

line question of from comes of next Our Blair. William Matt Larew the

here. book order the about Asking

shoots I saw and referencing those started think early bioprocessing to signs. of company is turn for or green point into sort the then took just for a orders some one green thing the during or longer of convert indicators shoots that at some side to demand we ordering dollar on Saga of

that pre-pandemic So levels, today coverage. coming just sort in outpacing level written that's of of P&L as or understanding to that What confidence, order the you see in. else the book revenue something whether good of convert activity contractually will order them sort dollars is the

pressure of Yes. Once confirmed orders we've that. a at tested stage, are the this lot

into convert confidence that good in So period. level they of a that we will have revenues

move expectation, that that's is of case, so that think over make be here the I done our will to what we've that pressure a month the testing and or sure So lot the last X of said, order where book as will Again, continue our pre-pandemic. confidence ahead But were as I level the on. year. we we are of to through basing we're we build

we think piece it up capacity What want get up of initially scope a capacity. was, of bringing be? HVP said from I back another past the I thought. little and obviously, manufacturing of Kinston then and this to you online, expansion think sort And some that to back if this of of the capacity And X% to you quicker Okay. you year dial sort catching end where you than to

Yes.

devices the approved our new these SmartDose on into and what with automation down manufactured customers, is and specifically with or -- the SelfDose are specific also devices. devices our that So customers. putting percent a combination for like our lines, proprietary we've These HVP are drug molecule it

So right build able that's need area to in hand, about customers. when is of be get support caught to the our be that's additional now. demand specific to to that brought ongoing and in we going capacity you up think to -- expansion, there

us make And that up is in and on that to we so XXXX validated. sure and execute get that running

to and the support that due lead are We revenues kind running. actually commercial other and that do expect right, processing a than From of volumes larger good, specific breakout they for The shift drug drugs, of of sites, Kinston to half perspective, HVP year also of XXXX that higher to could we components this that and we us customers call we'll have end year, help categories. really have them further that more a completion getting mix a validation. those That the anticipated is validated launches as second up future what to products. certain from in our last HVP referenced times very we and and about was and

able the ourselves in near to we're we So future. to that support positioning well be anticipate growth coming that

next question John Our from UBS. of Sourbeer comes the line of

Maybe just the dialing there in last the on HVPs question. on

the to year? I and there XQ. play capacity I shift around for were right the mean, about level or in that make new is think that down XX% for with of mix the up Or could XXXX? destocking think the dynamics they in are

in in because business, proprietary, kind products growth. the high-value particularly percentage, or the broad the it John, categories. look destocking component side. minus, same to growth of is it's in is relatively across leading is plus our the That And led by at when we the

space know you very best attractive biologics. the is are in of fastest-growing within the subsegment the and one we injectable As market a injectable that

where very remains is that's shift so. high, on HVP growth rate be occurring, mix a is margin. lot And of the participation Our to the continues which causing a

to portfolio. overall So we of our be still robust anticipate percentage that

I segments, the biologics, then the faster I details to guess, pharma just it's any in product the now broad Do then Appreciate to the trends on proprietary by biologics. us saw you more followed this think or expect that. additional side for impact in recover destocking And specific perspective. and segment generic and various a pharma

Yes. That's questions. good

happened You're segments the us multiple look the is destocking half we effect when it of spot on. customer this first -- segments. that's market across in absolutely But for year, at

not cases, it's -- in generics both some it's So the the and but also pharma, just biologics. in

talk and in biologics, pharma much and say would I value generics. is us across are pretty the that So chain, for the about sectors, we we X where all

guess you recovery would more or you expect there, I you versus big another? just the see similarly, the all -- shoots segment which X back green to come on one is impacting do them

very Very similar coming of similar all X, back. staging

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

So have positive XQ wanted clarify But in I in and first, to I the I here. the prepared be cadence overall remarks. X-parter a would thought positive. be heard would I products

And just book. So sort I then of on be the clarify just order that. follow-up XQ question wanted the then from the XQ to growth? step-up on And to would

or at across you and like you XX-month which higher ratio that forward You said Help is help, understand just just or pre-pandemic Can a a guys us X look that. forward it what it than do internally businesses? months, has coverage how levels. sort of

QX. expect would we yes, to return question, first your in growth to Answering proprietary positive

only. not Now it's over see -- spike to to going a years, so going step huge as up the we said, it's we're and

destocking. of still So again, a there's level

would book, single-digit in basis, returning growth low a proprietary. at looking on And XX-month in consolidated QX. then growth a see we're to probably then order And we also, on at basis. looking really the So

rolling So XX months.

end. the it the And I like expansion normalized to roughly back into missing right play margins, EPS there I'm XXX points still then XX on rate, if just to, of is of margin helpful. in I'm tax That's Okay. that math? other too. getting a sort to basis here? the getting guide, with that on I'm the clarify low Or Is looks dynamics there some to

For the year?

Yes.

be margin would flat to yes. expect we No, year-over-year, operating

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

that you're that expecting rate, interpret clarify Around the the to the just ask couple about mean to broader horn I Eric, audience. here. I of on When talk product. a follow-ups. for participation you wanted to

a West You important or big and talked to translate customer, have and help I a Can position. share. big sole-source us to between you likes in participation of products translate how about position be on

Yes. are basically. when in file pretty a customers secondary at it percentage towards have if test all. Do pretty, that we I very filings. rate, our participation regulatory a I when source West to the say, be the the look would yes. large to their the secondary of let's product. a But look is say the and/or share that, doses source, when when not tends they -- their market filings, it's pointing we of customers that for usually it rate tend therefore, share, when is say our a And number we in say participation we volume at of large of -- that's

for that. partners, and by molecule been we've pretty Daikyo, the So It's rate when that's what our win -- mean what it's historically, we say level, we us, we tracking ourselves consistent And -- absolutely. a both that's participation. for at and Dave.

it. changed market higher not number then is -- maybe you've share time, a XX%. a that has in your really well, Got talked even that. very That's And about than long

about being participation better. talked XX% or by You've logic

out little your of bit rate in room, it ask of your Just and market for that I recently more that, have gather suppose, I about talked a throw significant sounds I like recently been that there competitor's kind large -- want included elephant participation sounds molecule about just share the very a conference project prepared remarks, GLP-X, a but GLP-Xs. take. sounds addressing a and we're they a call on in to launched in specificity

strong. Yes. used be that No, by components provided packaging other final in there are very our configuration that might someone are in is the the GLP-X And rate in participation else been on -- manufacturing with our But historically proprietary way is components very that but contract also that's strong our we side. true. are market customers in on particular positioned space the for the

towards just a at than would containment, X it. all that that packaging we've whole would approach components X like we're an look multiple more elements when system. to into you primary towards. Hence, final as integrated been system We go there's more or the about items that I why reason say building So on have talking of driving in cases,

but with own products, pretty I position. I'm yes, So really our with be their where participate we probably feel others will -- are comfortable

-- apologize. From question for last me. -- I then maybe allocation And it. a X-parter, you've capital a Got is standpoint,

You've talked about CapEx.

number that you're of You've That extent lot what capacity. understand kind CapEx catching in XXXX. growth. I being of talked about relatively high a continues on to be to to I guess up want

like in is talked uses capacity of still and lead stock demand you're mismatch some of news. on to free flow, hand then that, a is aggressively about talked risk terms of things this as dislocated times, cash long on alternative get or CapEx? there spending You've And of about going you

How XXXX. as management buy want growth the outlook. stock and sign confidence a long-term to back in step stock aggressively in back bought of You in might

percentage at to that then me second part. let it to part XXXX, in is true our for address have that on capital high I'll Dave, as the able like range. back it us I the to Bernard When a first single-digit over to maybe the be and today million, $XXX capital we the of look we front the of sales get turn would

while However, term that support. more is with, whether it's growth. working our build around we still or that near are percent customers capital midterm, of were need These our commitments XX-plus to

we to So upon it's ahead contract These so clear, us immediately number for need in years product very of a place manufacturing them. contracts producing the the for that agreed are capacity in it's can very start near installed we term. we have get side, of

we've the will that investments proprietary volumes are the drug make. to that are occur. side, support, occurring and of to asked able future need on And we based types to these be new with On the we anticipating been growth launches are

that today in is example, us that the the any mix particulates for new on not ability And this growth shift a on effect portfolio So, it's drug play, but then also is just are are support to categories lower going but quality, that requiring processing regulations volume, launches, NovaPure HVP these meet growth also -- the just higher place. HVP not have on our take outsized particular going build rates. to due and to to changes regulatory

for customers. are the our Bernard, touch investments us we're investments on And making drivers the we those feel lens on positive because have. these confident good, return currently So the about we want we that's that know and for the why obviously are the very to, capital? you Do

think XX to time It way, layer Yes. XX ] in it's months. this realize in [ the important Dave, takes CapEx takes for to I it to us capacity. growth deploy to

based so back And this to in layer comments, just we need from seeing Eric's perspective, on that at demand what we're a to time.

and opportunities. capture the we So into the like times in difficult not market growth experienced we don't COVID then to respond in to lead all actually it's run long and

So there next that from outlined areas. expect to the the kind all we that's XXXX a around and possibly input be our thinking very feedback it And continue analysis we our again, CapEx have to approach part of we for question? off because review level after capacity. in we a customers, We in or on of to behind on to years. as the deployment. very it's this we've a And of of basis. on. investment again, layering And here specific lot capital do number have but And Was another XXXX need based deploying disciplined deliberate it's prepped regular

Share repurchase.

Yes.

that process that. where continue deploy to And when we are, a see we will the to it we appropriate. On and to and on we buyback. do how again, have deploy the and to as we buyback, a quarterly where review basis very deliberate

We X for question. have time just more

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

wait an of wait. appreciate -- great sales I a subject, to topics. Long a a of the products give something kind a switch outlook. but of gears good over, coming more There you us it just terms of regulatory have Eric, really going market? sort worth shift. for for that. of maybe some lower a to just little you switching not the low that requirements legacy I couple or -- is. more guess ongoing that Can impact more first new just this Has the on accelerated couple to Really of that's guess is to there, a all, And of follow-up of thank description color in to of you little the is the on mentioned just just driving products particulate. -- the sort on drive

your Yes, thanks a Larry, and good for it's that, question, thanks patience. for

Absolutely.

absolutely. No,

-- to service the components would a mentioned in year each have lot Europe, meet what be We we So but particulates as And there's classify large these means billions some of a what driver Annex high-value product of to to we be portfolio. part called we regulatory being shift classify requirements that higher required of the up multinationals obviously regulations. is it's we lower the when to of a really neighbor a that's to going portfolio occurring globe. across because the standard that be X, of produce able out pretty our a move that our quality that for driven of

will our the on West has volume the The biologics mix as that and shift years. new margin. a of for have we've ASP, HVP these the number years. it's at historically, success a Now goes when to that And look been at higher seeing of in last because launches. you benefit West of molecules, shift of that and particular What seeing really rate segment, in several for demand because that will we about higher for been years continue continue participation number we of talked of it that mix more new going we're particularly forward, with our

market. of because it will drugs in being existing being shift the regulatory require are changed now, the changes and enforced are policies also a effect mix We

to to work them that's into So to to all opportunity a customers meet them standards. our us or exceed be great able were packaging with allows necessary transition that more a for configuration appropriate the

last particularly with coincide is just going. historically usually change. the would introduced when one I components, products And if at new market look the opportunity. our more share of this we particularly on here we regulatory it, will or comment, We [Indiscernible] make it's where HVP West, investments much aligned So processing. we're excited support the to that at some quite to the very We're on capabilities about the need

patients. always So position regulations and they'll from us our have evolved requirements, good time, over a their put a customers as portfolio those evolved has has exceeded the ultimately our with in support and which --

not feeling that able take does good we're or ready several to but go about a this years. to be we're So it will X-year It It's on this X-year years, but I'm event event. ready this a that. several address item, to take

some year growth price on in to and squeak basis in, of sounds just comes a devices on XX% proprietary But fruition extra period. multiple it's It a an if sales. high-value if more like over the layer could it annual reaching I X

the driving significant nice SmartDose, a more that that X? is really that's driven milestone. Is by that growth What's combination think of SelfDose, forward? I going

been -- It's actually and it's drivers excited. interesting. actually but biggest we're It's through all have year, actually last of the them, quite

been area of on is but health seeing on care we've to in focused years, administration now. a curve. that number of an market. systems growth a right well of SelfDose, market grow XX-millimeter we're continues on customers of volume point with now new to a then to in in our the category And ahead [Indiscernible] an we're for sorry, I'm launches. uptick And We relaunched area nice In SmartDose systems, real our that focused inflection version get Our we partners that well. discrete their laser is at have just that X-millimeter, and hospital admin that we're demand into which -- a drug the the that

online We we be these growth more have us the of equipment automated coming -- a quality manual dedicated to to be team the to can higher efficient, launches. higher with volume, support allows able new remove so these processes,

kind to it's traction. exciting starting it gain So across it to multiple and is see areas, of

for like Lai closing to the would remarks. Quintin to turn back Thank you. now Sir? I conference

That our be at you days westpharma.com.com today's may joining earnings nice a the and end replay provided numbers will Have of section you, online you presentation on at concludes us on for the Thank in and Latif, following website by broadcast conference thank An today's call. XX Additionally, archive access ID release. the the the day. call. archive available conference Investors of dial-in today's for a using

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now disconnect. may You